Technology companies (and others, selling far less important products) can celebrate this morning as the serious stock market numbers climb way back up. KitGuru dons a Bud Fox mask to explain.
August 2008 was a huge turning point for the world. Decades of financial misjudgement came to a head with the collapse of the world markets. Smart folks will probably be able to point to one or two key incidents that started the house of cards falling, but – whatever it was – the months after August just got darker and darker.
Technology companies suffered hugely because of something called credit insurance.
If you want to buy a pint, but you’re nowhere near a cashpoint, then a mate lends you £10. It’s unlikely, as he hands over the piece of paper, that he begins a separate deal with another friend of yours to buy insurance against the possibility of your bringing his tenner back. But in the IT world, that’s exactly what happens. There are a number of companies out there who eeek out a living by decreeing which companies are likely to pay back and how much they should be trusted with.
As the recession bit deep, companies like Hermes ran away screaming “All is doomed, all is doomed!”.
On that basis, every company should have gone under.
As it turns out, the credit insurance companies needed better nappies.
The world did not actually end and, by the start of 2009, many consumers began to realise that “Sky falling, damage estimate to follow” was an overkill. Still, it took everyone a while to find the bottom and begin the slow bounce back.
Cool gadgets like the iPad certainly helped, because against the doom and gloom of Hermes & friends saying “There’s no money or confidence anywhere”, people started buying £600 status symbols like it was going out of fashion.
Anyway, this morning over our cornflakes, KitGuru noticed a tiny graph on the back of the wonderfully orange FT that shows the FTSE 100 share index at its highest point since May 2008.
It’s not all 100% rosy-lee with more traders being investigated for cheating by Wall Street watchdogs and the Anglo Irish Bank admitting that it had lost more than $20 Billion down the side of the sofa, but it is definitely better, in some ways, than it has been for a long, long time.
KitGuru says: We just love innovation. That innovation is, to a certain extent, driven by how much technology gets sold. Better markets mean more confident consumers spending money and, indirectly, paying for boffins to amaze us. We loves to be amazed, so “Rock on !”