Once the darlings of the west, analysts are now reviled as purveyors of over-hyped stock. But no-one made us greedy

Judging from the number of people who've been in touch about last week's column on meditation (by the way if you're interested, please contact the various centres directly - look up Alternative Medicine in the Golden Pages) it seems that there's a sizeable chunk of the working population out there who are looking for something besides deadlines and targets in their lives.

I doubt very much that troupes of IFSC workers will be sitting in quiet rooms for an hour's peaceful breathing before they race out to beat budget targets in the weeks to come, but maybe employers will start to offer chakra rebalancing and quiet rooms as part of the whole remuneration package in the future along with the bonus plan and the niftily priced options.

Certainly there are many once highly-regarded analysts on Wall Street who could do with a bit of deep breathing and meditation at the moment, since their integrity has been called into question over their dotcom-mania company forecasts. Somewhat unsurprisingly, the once pliant media (along with the regulatory bodies) is now taking a dim view of the analysts who a few years ago featured prominently on the business pages. Now it's a question of bringing to book the people who told you that ratschance.com was a potential bulti-billion pest extermination industry, or that eggsinonebasket.com would revolutionise how you looked at omelettes forever.

The biggest brokerage house in the US, Merrill Lynch, is currently in the firing line. Eliot Spitzer, the New York state attorney-general, is on their case and the case of other financial service companies too. A court order obtained by Mr Spitzer has prompted Merrill Lynch to open a website earlier this week to disclose investment-banking relationships for companies that are covered in its research reports.

From this, he hopes to be able to show that the Merrill analysts gave ridiculously bullish calls on companies with whom the bank did business.

The main job of an analyst is to give ridiculously bullish calls. OK, most analysts will say that their job is to make a measured assessment of a company and recommend what clients should do with the stock - but honestly, if you believe that you're just naive. Yes, analysts will purse their lips and recommend being slightly underweight in a stock, but that's as far as most of them will ever go in telling you to bail out immediately.

I've said it before but anyone who knows anything at all about the market knows this. That's why fund managers yawn widely when they read the research pieces. They usually have their own researchers to give them the in-house view.

Unfortunately, though, during the 1990s it wasn't just the fund managers who were reading the analysts' calls. Fear and greed, those two staples of the markets, gripped the average punter too and the average punter wanted a piece of the action. The analysts were glorified as their every nuance (always a positive nuance) was feverishly reported so that the average punter believed in someone like Henry Blodget of Merrill's when he told them to load up the cart with the latest mania-stock.

The thing was, the latest mania stock was likely being brought to the market by Merrill's investment banking arm. And that meant that - despite the Chinese walls that were meant to exists within the firm - Henry was predisposed towards the stock no matter what running the numbers actually told him. The people who have been burned, and burned badly, are blaming the analysts. Once revered they're now reviled - these days American heroes are firefighters not Fibonacci specialists.

In a recent poll carried out by the Canadian Financial Post, only 9 per cent thought that Spitzer's investigation was an over-reaction. Given that the poll was of business leaders and not consumers, that's a significant result. Additionally, 70 per cent of them felt that it should be made easier to sue brokerage houses where analysts proffered bad advice as a result of a conflict of interest. But perhaps most interestingly brokerage houses received overall ratings of 54 per cent satisfaction - the same as newspaper financial columnists.

Anyway, it's a bad time to be a capitalist, nobody trusts you, nobody loves you and the world economy is still struggling to recover. According to the latest World Economic Outlook report from the IMF, things can only get better. And maybe they are.

The IMF tells us the economic consequences of September 11th were less than had first been feared and that government policies in many industrialised economies helped to get them back on track more quickly than might have been expected.

Additionally (with the exception of Japan whose credit ratings continue to be hammered much to the disgust of the local politicians), many Asian economies are doing quite well. The IMF is anxious to point out that there are still problems, including the potential for over-optimism in the stock markets, which could blow everyone out of the water if profits don't match up to expectations, but their report is certainly less gloomy than it could have been.

It looked at recessions going back to the 19th century to try to draw comparisons with today and decided that the main single cause of a recession is an economic shock. Thanks for that, guys. A shock, naturally, is something you haven't actually predicted, so what the IMF is telling us is that everything is looking sort of OK unless something out of the ordinary happens.

The thing is, no matter how many charts you read or how much research you do or how many factors you tried to work into your equation, shocks happen.I can't think of one political commentator who gave Jean-Marie Le Pen a chance of beating Lionel Jospin in the first round of the French presidential elections, but he did.

That particular shock is one the markets are taking with equanimity on the basis that this leaves the presidency wide open for Chirac again. From an economic viewpoint, Le Pen would turn the analysts' hair white overnight. France out of the EU and the euro - unthinkable.

As unthinkable as shares that were trading at $500-plus suddenly being worth 50 cents? As unthinkable as a Wall Street analyst being fêted for issuing a sell recommendation? Oh, come on. We're in the real world here after all.