Edmund Conway in the Telegraph claims the recession is over, which is about as outrageously optimistic as you can get.
Much of this unfounded optimism seems focused on the fact that the property market has seen a positive bounce over this spring - mortgage lending is up , buyer enquiries are up , and the DCLG reported a 1.1% rise in house prices over April .
The problem is, spring has always been prime home buying time, so to extrapolate this into some form of economic recovery seems absurd. It really does look like a bounce, which means we should expect economic conditions to get a lot worse towards the winter - as the property market traditionally cools.
In the meantime, other economic indicators are looking increasingly adverse.
We've seen repeated claims that the European banks have not properly written down their losses. In the meantime, Eastern Europe looks like it could crash and drag a lot of Europe down with it through a chain reaction. Latvia is already in big trouble and could be the smoking gun to bring the rest of Eastern Europe down with it, and a number of central European banks with them . And that's before we address the issue of existing write-downs the ECB is already severely worried about.
In the meantime, here in the UK, the whole banking sector continues to reshuffle in order to try and adapt to what still remains a crisis.
RBS is looking to split off business deals it claims as "unprofitable" into a separate group - in the meantime, as if the market hadn't already got itself into trouble creating complex debt instruments, this is exactly what is being proposed to get the UK taxpayer money back from semi-nationalised banks such as the RBS and Lloyds Group.
Among the building societies, the government is looking to allow changes to how they fund themselves in mass markets, in order to stop a repeat of the Dunfermline Building society crash . This is not least because others, not least the West Bromwich Building Society and others are also believed to be on the brink of collapse .
The Nationwide Building Society has already raised its mortgage rates sharply this week , close on the heels of other increases in mortgage rates last month. While the Nationwide remained one of the cheapest mortgage loan providers around, it no longer appears to be trying to outcompete other mortgage lenders.
If anything, the entire financial world still seems to be on a downward
spiral. While the potential collapse of the banking sector appears to
have been averted - certainly for now - the global economic picture is
anything but healthy.
Stay tuned.
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