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a personal view of the week's news from Erithacus
Disappointment at the failure of the U.S. Federal Reserve to cut interest rates by more than the 0.5% announced on Tuesday was followed by sharp falls in the stock markets. Near-panic on Thursday produced a fall of 4% for the FTSE100, the largest one-day percentage drop since October 1992 although some confidence had returned by Friday and shares moved upwards again, helped by gains in the U.S. markets and bargain-hunting by many investors. Friday’s close left the FTSE100 85 points up on the day, and, most significantly, the techMARK 100 ended 72.4 points up at 1936.98 as investors showed a preference for many of those tech and telecom shares hit so badly in recent months. The week’s loss of 160 points for the FTSE100 to 5402.3 came as a relief to many who had thought at one point that the world’s stock markets had gone into free-fall, with levels of 20% to 30% down expected by some.
The happier note for the end of the week is not thought by many to be an indication that the bottom of the market slump has yet been reached. While most analysts regard the UK economy as fairly healthy, nervousness in the U.S. continues to worry investors, and economists are concerned that the "globalisation" of economies in recent years now makes the UK and Europe much more dependent on America’s stability. A solid and sustainable bounce-back in the U.S. markets may not happen until the autumn and then may be patchy, say some analysts. Significant moves in recent days by major investors away from traditional "blue chip" companies into "growth and value" techs and telecoms may have unpredictable results. At the same time, worries about debts of telecoms companies as well as potential volatility of oil pricing as a result of OPEC’s decision to limit production again, have created further nervousness.
Adding to general lack of confidence in the UK, the foot-and-mouth crisis has reached unprecedented levels. At time of writing, more than 500 cases of the disease have been confirmed with experts predicting numbers to reach at least 4000 and the outbreak to last for many months. Over half of the UK’s farm animals may be destroyed in efforts to bring the epidemic under control. As well as severe damage to farming and related industries, economists now believe the crisis will reduce UK economic growth to under 2% in the current year, possibly with a further reduction if the present measures to bring the situation under control are not fully effective.
Meanwhile the government’s handling of the crisis is now being
questioned, as are the continuing comments from both Prime Minister Tony
Blair and agriculture minister Nick Brown which still seemed aimed at
"playing down" the seriousness of the disease. After a meeting
in Cumbria with a dozen representatives from farming, tourism, the local
council, the army and vets, Mr Blair said, "There was a fear a week
ago that we were over-reacting with the slaughter policy. But now I
would think people would say 'We want that policy carried out and
carried out quickly'", and added that he thought Nick Brown had
done ""a superb job in extremely difficult
circumstances". Outside the meeting about 40 protesters shouted
"The only good Blair is a dead one", and a farmers’
representative told reporters, "Cumbria is going to be wiped out.
Mr Blair doesn't care tuppence about the north of England. He should
have been here three weeks ago. He didn't even look at us. He hasn't
even got the guts to tell us it's out of control. Get yourself out on to
the farms, Mr Blair, it's carnage." Another protester, holding a
banner asking Mr Blair to postpone the elections, commented, "He
has just come up here for a photocall. We have been ignored."
With most public footpaths closed throughout the British countryside
as one of the precautions against the spread of foot-and-mouth disease,
reports of disputed rights-of-way in Sussex seemed a little out of place
this week. Millionaire Nicholas van Hoogstraten angered local residents
near the village of Framfield as his £30 million "palace", a
unique and extraordinary structure built to his own design, has been
described by some as a "horrific blot on the landscape".
However, the discovery that a disused footpath, almost forgotten and
overgrown, passes near to Mr van Hoogstraten’s home and across land
owned by a company in which he has been involved, prompted his local
opponents to take action. Under the new Countryside and Rights of Way
Act of last year, the Ramblers’ Association took action to force the
re-opening of the footpath despite a previous ruling by the East Sussex
County Council that the route should be diverted. The new ruling means
that gates, a refrigeration unit and a barn will all have to be moved,
and fences, gates and barbed wire must be dismantled within 28 days.
While a local spokesman for the Ramblers’ Association claimed this as
"an historic decision", some others were not so sure. One of
Mr van Hoogstraten’s few supporters said, "This is nothing less
than a witch-hunt. It’s bureaucracy gone mad. The Council’s proposed
re-routing of the footpath was perfectly reasonable under the
circumstances." Mr van Hoogstraten was unavailable for comment.
As the Mir space station fell to Earth this morning (Saturday) precisely on target in the Pacific Ocean, much to the relief of inhabitants of the countries it passed over in its final hours, we hear that another triumph of Russian space technology has been used in Oxford University’s battle to beat Cambridge in today’s annual Boat Race. The device, formerly one of the Cold War’s most closely guarded secrets but smuggled to America after the break-up of the Soviet Union, was originally designed to monitor cosmonauts' health and ability to work in space. Now modified for sportsmen, the Omegawave tracks brainwaves and electrical activity in the heart, and in two minutes produces the same amount of data about a rower's fitness and recovery time after exercise as a lengthy series of blood and tissue samples. Cambridge, allegedly, have no such device. It would, of course, be extremely unfair to suggest that their victory today and in seven of the last eight races, had anything to do with their proven superior ability in the past to produce successful Soviet agents.....
24th March 2001