I put an advertisement on Gumtree last week looking for someone to help me out with childcare for 16 hours a week. Usually, as most mothers will know, when you do this you get a trickle of applications, mostly from people you wouldn’t let near your children in a million years.
This time, I’ve had nearly 80. And ten days after I put the advertisement up they’re still coming in. I have heard from an accountant, an intensive-care pediatric nurse and tens of marketing executives, as well as a good 30 unemployed nannies. Most are looking for full-time jobs, but all are prepared to compromise; all are prepared to commit to this very part-time position for at least six months, and I would be happy to employ almost all of them.
So why do all these women want to spend their time singing ‘Twinkle Twinkle’ and dancing the Hokey Cokey? Simple. There are no other jobs available: this is probably the best chance of an income they are going to get this side of an economic recovery. And that could be a very long way off. Great for me. Not so great for everyone else
It is yet one more reminder, were any needed, of just how shocking a state our economy is in. None of these people are going to be doing much Christmas shopping this year – and nor, I would guess, are the friends and families keeping a nervous eye on their predicament. They also certainly aren’t going to be buying houses and if they have mortgages there is every chance that they won’t be able to meet the payments. The same goes for their unsecured debts.
It all makes me even more bearish on the stockmarket than I was already. I’m very tempted by the idea that over the long run value will out. It is just that right now, what’s value? It isn’t the banks. Let’s not forget that, as one unemployed fund-manager friend pointed out this week, over the 16 years of what the Japanese optimistically called their ‘Lost Decade’, the Japanese banks wrote off their entire equity capital not once but twice. Our lot could easily end up doing the same.
It isn’t the retailers. There are mutterings in the US about whole days passing without a single car being sold. Here it can’t be long before a day passes without a single scented candle being sold. In that kind of environment, who knows which retailers represent value? It might be the big oil firms, but if oil goes to $20, maybe even BP will have to cut its dividend. Then it won’t look like value at today’s prices. The stockmarket provides horrible pitfalls for investors – our cover story on page 28 runs through them – and constantly looking for value in an environment in which it is almost impossible to define what value is is one of them. I still believe in long-term value investing. It’s just that right now I believe even more in the power of bear markets to deplete wealth.