Anyone for Greengage tart?

GreengageI write to you from my friend's smallholding in Wales. Outside, plums are on the plum trees, greengages on the greengage trees, broad beans on the broad bean plants, and nestling in the straw of the hen coop are eggs 'hot from the bot', as a fellow resident likes to put it.

At the side of my computer screen pulsate lots of angry little red numbers (okay, some of them are green this morning, but I know they’ll be red again before too long). And so, despite the fact I can’t pronounce the name of the nearest village (Bwlych-y-Cibau – we think there was a vowel tax at some point in Welsh history), it’s more than a little tempting to stay.

Chickens, greengage trees: these are the kind of things one can rely on... European governments, grand economic projects: now, that’s another matter.

Schroders’ chief investment officer Alan Brown will not be alone in betraying a certain weariness of tone in his commentary this morning as he notes that, in the general atmosphere of Apocalypse, more favourable news, such as the July industrial production numbers, has gone unnoticed. With natural value investors likely to stay on the sidelines and forced selling from leveraged investors, such ignoring of positive news suggests the danger of the market creating its own (miserable, I assume) reality by hurting confidence.

But adds Brown: “The developments in the Eurozone do continue to be disturbing. The political resolve to continue supporting the peripheral countries is clearly under pressure. Moves by a growing number of countries to demand collateral threatens to undermine the entire bailout package.”

Indeed. So disturbing that Evercore Pan Asset is advising against Euroland investment altogether this morning.

“Germany is not yet prepared to stand behind all the debts and deficits in the zone, whilst there are still troubles in getting credible debt and deficit containment plans working in each stressed country,” says John Redwood, chairman of Evercore Pan Asset and a former cabinet minister in the UK government.

But then, if memory serves, Mr Redwood never was too keen on ‘Euroland’. (Is it just me, or does that term make the Eurozone sound like a not every exciting theme park?)

As the summer draws to a close, it’s quite impossible to tell where it will all end. Have thin August markets compounded the problem, as Schroders’ Alan Brown suggests? Or is it perhaps just as well everyone was away?

Who knows?

I can offer you but one comforting certainty: greengages make a very good tart.

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