FINANCE AND INVESTMENT
THE optimists are still doing their best to rally their scat- tered forces, and it really does look as if markets may have reached a new resistance level. On the home front the unemployment figures, bad as they undoubtedly are, are no worse than anticipated ; in America there are signs, not yet very convincing, that the turning point may not be far off. If the Administration had not set its face against " bear " operations, the behaviour of Wall Street would be a useful guide to what is really happening or about to happen to trade, but these tiny ebbs and flows in stock markets tell us nothing very significant. So we must be content with the knowledge that, for one reason or another, the American investor is unwilling to sell at current prices. One rather feels that even a whisper of really good news could set Wall Street climbing quite vigorously.
Whenever the American recovery comes there will almost certainly be a fairly broad advance in London markets, unless, of course, such a movement were nipped in the bud by a sudden growth of political tension in Europe. At the moment surface tension seems to have eased, although nobody can pretend to like the atmosphere surrounding the debt talks in Berlin. Having seized Austria's gold reserve and quite substantial natural resources, Germany seems bent on default- ing on Austria's external loans ; in other words, having taken the assets, she is jibbing at shouldering the corresponding liabilities. Fortunately, this is a case in which we can strike back by imposing a clearing arrangement under which the British Government will have to impound a proportion of the sterling payable to German exporters for goods sold in this country. The method is legitimate and, if the need arises, should be used.
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