VIEW FROM THE GROUND FLOOR: While future weather remains unpredictable, weather futures offer would-be meteorologists a chance to brighten the gloom
The prognosis remains mixed for the coming months. A steady stream of increasingly upbeat news from the US means that the bright side is winning out, while looking for reasons to be cautious is considered to be behind the curve. Clearly it's in everyone's interests to have a buoyant US economy, so Europeans are talking up the Stars and Stripes and nodding wisely about the US rebound.
American consumers are still being urged to get out there and spend, and that's what most of them are doing.
Demand for cars, following some extremely cheap financing deals, has been high and that strength of consumer demand is what's spurring the markets to the half-full glass approach.
I keep reading articles that tell me that markets are back to pre-September 11th levels and that there are bargains to be had. Yet (despite my confidence in some of the consumer data) I'm still concerned that corporate America hasn't really lifted itself from the trough.
My mailbox continues to receive notifications of profit downgrades and spending cutbacks. Corporate bond defaults reached a 10-year high in 2001, and more and more companies (like Gateway, for example) are seeing their paper rated as junk.
Alcoa, the huge aluminium company, reported its first quarterly loss since 1994, with sales down 21 per cent, their largest fall in 17 years. The luxury goods company, Gucci, informed us that its revenues had halved and sales were down 8 per cent, while Mitsubishi is to dramatically cut handset production in its French plant.
So I'm stuck wondering whether the current bout of optimism is more due to the fact that there's so much cash out there begging to be put to work in something other than a deposit account than a real belief that corporate profitability will increase in the year ahead.
It was the weight of cash and the low levels of interest rates that caused so many people to take the plunge into equity markets in the 1990s and resulted in soaring but overvalued share prices. The weight of cash argument is always a powerful one and still holds water but I do hope it's not water being held in a leaking bucket!
Because times are so difficult for the corporate sector in almost every area, I was very interested in a recent TV programme about the weather, which highlighted how climatic conditions can impact enormously on corporate profitability.
Clearly there are companies whose profits relate directly to weather conditions - like ice-cream or umbrella manufacturers - but the programme mentioned that cat food sales are also extremely weather-dependent. Apparently if it is too hot, cats cut down on what they eat, preferring instead to curl up and sleep.
As a cat owner (albeit the owner of a once valium-addicted cat) I haven't noticed that my feline dustbin sleeps more and eats less during hot weather. In fact he sleeps for as long as possible at all times of the day or night and in all climatic conditions, only waking to wolf down some food when his need becomes too great; to chase the trespassing white cat from the back wall when observed; and to occasionally eye - with an uncomfortable degree of nutritional assessment - the small birds blithely warbling in the apple tree. This happens regardless of the season.
But maybe the pet-food manufacturers know best and will therefore be making full use of the weather futures exchange recently set up by Liffe. The Chicago Mercantile Exchange already offers weather-derivative products in the US but now companies will be able to deal in futures for average temperatures in London, Paris and Berlin.
The initial attraction for trading in weather derivatives is expected to be from energy suppliers and insurance firms. Apparently a one degree rise in temperature on any day during the winter can cut back power demands by 2 per cent. I'm sure that the mildness of October and November played havoc with both energy companies and sellers of woolly jumpers this year, although, while I have sympathy for woolly jumper manufacturers, I much prefer warmer weather to warmer clothing.
Sadly, weather futures were more of a downfall than a blessing for the US's biggest corporate failure, Enron. Its newly completed Indian Mesa Wind Power Project in West Texas has been acquired for a reported $175 million by American Electric Power, proving, I suppose, that the optimists are right when they tell us bargains are to be had.
Not especially in the sales this year. Maybe I've been spoiled for choice when I go to sales abroad, but price reductions of 5 per cent and 10 per cent leave me cold. I'm a 50 per cent-plus discount merchant myself and so the credit card has stayed in its holder for much of the month.
However, this is actually good news for retailers. The limited amount of goods on offer plus the fact that much was being snapped up by eager buyers at the start of January anyway, does lead one to believe that the retail sector is still buoyant in this country.
Good news (from a personal point of view) is that the book trade had a great year. The first six months were horrible, with the now almost forgotten impact of foot-and-mouth on the tourist trade hurting the retailers, but sales bounced back very strongly in the autumn.
Since (according to Tom Owens, director of the Easons chain) most booksellers account for between 40 per cent and 50 per cent of their sales in the autumn, the rebound came just at the right time.
Still - and I'm not being biased here - what other entertainment medium can offer you so much for such a low price! It gets you hours of enjoyment without the need for batteries, power-points or programmes that crash just as you get to the interesting bit.
I don't know whether Tom will be dealing in weather futures for next summer though; although everyone talks about buying books for the beach, the reality is that when the sun shines people shop less and lie out more.
It's chastening to know just how predictable we really are.
