Are we back?

With the recent week's news of Portugal and Spain not requiring bail-outs and being able to issue their debt to a receptive market combined with positive indications from the US economy from the Fed's Bernanke and now with news of China raising interest rates - all looks rosy once again for the world, right?

Maybe. However we still need to watch some major economic trends in the world carefully before cracking open the Champagne.

1) Job Growth. Job growth is still slow and there have been FT reports of worry in the UK, and the US job growth was not as quick to pick up (per Bernanke)
2) Capital Spending. The gross capital formation figures bottomed in 2008 at 19% - lower than any year in the last decade. Although there has been a rebound in 2010 this needs to be monitored.
3) Consumer Confidence. At least in the US - the consumer confidence indexes are still just over half what they were in a 1985 and in any boom year since. Europe isn't much better. 

It's time to back some 'slow-businesses' which are plodding along and outfitting for future growth.

What's Up Jono?




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