Owing to the arrival of some new bedroom furniture, I moved the wastepaper basket from the left hand side to the right hand side of the bed last week. So far I have thrown a used blob of cotton wool at the spot where the basket used to be every single day.
I know, because the furniture is in a slightly different place, that the basket isn't actually there but somehow I can't seem to stop myself from feeling that it should be.
I'm not sure at what point my neural pathways will manage to remember that it's moved but in the meantime I'm getting used to throw and pick-up again each evening.
It's chastening to realise how easy it is to slip into a particular habit and how difficult it is to actually break it. During the boom years we were able to assume that any stock we bought was going to go higher and that the good times could last forever. And, despite the grim changes that have occurred over the past couple of years, we're still blithely hoping for the best. I'm one of those hoping for the best crowd too, even though some of the numbers look pretty awful. But you can't stop yourself from wanting to believe that - while some of the progress was ephemeral to say the least - there were some fundamental changes that will stay with us forever.
I guess a lot of the good things that happened to Ireland Inc happened even though the European economies themselves were not performing half as well (or maybe because of the fact that the European economies weren't performing half as well). But our future economic success does depend on not only the US coming out from the slough of despond as well as the costs of war, but Europe managing to get back on its feet too. The omens aren't especially good though. In the last week or so Renault reported its first-quarter earnings down by 2.9 per cent, Volkswagen said that results would be weak while Fiat announced that it wouldn't be paying a dividend after record losses. It's not just the motor industry, of course. Siemens, Electrolux and Nestlé all made dismal predictions for the year ahead following equally dismal results for what's just gone by.
The European bourses are all mired in gloom. The Dax (Germany) and the Cac (France) are down around 60 per cent from their peaks as corporate earnings continue to decline alarmingly. The German confidence index, the IFO, dropped in March mainly due to poorer expectations in the manufacturing and wholesale sectors. Brokers admit that times are bad but try to tell us that corporate restructuring will, eventually, pay dividends. Yet it's hard to see any changes happening quickly enough to lift those companies which are the backbone of the indexes out of the pit.
As we've noted before, there are tougher labour laws in Europe than in the States and companies find it much, much harder to slash the workforce and bring in new practices. It is an enduringly difficult area to argue - is it better to fire people wholesale, cause a lot of pain and turn a company into a more streamlined organisation with a viable long-term future; or should management continue to do the best it can by trimming the workforce and limping along hoping for a global pickup that might happen years from now? Is it realistic to sustain industries whose time has peaked?
It is interesting to remember the anguish at the time when heavy manufacturing industries such as coal and steel had to bite the bullet of massive layoffs in the face of dwindling demand. Yet the IT industry has seen its workforce decimated in two years while most people simply shrugged their shoulders.
The US has been much more pro-active than Europe in trying to turn things around, albeit by being much less sensitive to their workers. And at the same time the dollar has begun to weaken thanks to the administration allowing wider budget deficits, which in turn has begun to make US goods more attractive in Europe once again. As markets showed last week by their mini-rally on the news that Alan Greenspan would serve another term at the Fed if asked, traders and investors still have a greater faith in his ability to generate a background for recovery than they have in Wim Duisenberg and the ECB. And so, even though things have been pretty dreadful in the States, the Dow is relatively unchanged year-to-date while the Nasdaq (admittedly down 75 per cent from its peak of three years ago) has managed to recover 7 per cent this year. Small crumbs of comfort but at least they exist.
We can at least indulge in a little schadenfreude and say that things aren't as bad as Japan where the 24th monthly decline of consumer demand saw retail sales for March fall by 1 per cent. At this stage you wonder whether there's anything that the Japanese are buying at all. Disposable incomes are down almost 6 per cent from this time last year (the biggest decline in 29 years) while the Nikkei fell to a 20 year low.
It's easy to want to be optimistic and to tell ourselves that things can and will improve. But the problem is that for that to happen we have to have the right structures in place and there has to be a will to implement them. At the moment, I'm not convinced by the most recent offering from the ECB.
Duisenberg said that the present policy was "consistent with the preservation of price stability over the medium term". When it comes to markets we're always being asked to look to the medium term (or, more usually, the long term). Sometimes, though, it'd be nice to think about the next few months instead of the next 10 years. But old habits die hard. As I've found out with the wastepaper basket in the bedroom.
