Outlook: Delusion in the face of market gloom

AMID ALL the gloom, here are a couple of upbeat statements from international business leaders, both issued this week. Michael Dell reckons that world-wide sales of personal computers will rise by 17 per cent a year for the next three years, and that his own sales growth will be much higher. Meanwhile, Wendelin Wiedeking, chairman of Porsche, acknowledges that his sales will be hit in Asia and Latin America, but insists that "order books are filled to the brim" and that the rest of the world will keep the overall position healthy.

Both these companies are obviously exceptional ones that to some extent can be expected to rise above the usual laws of the business cycle. The market for PCs will probably continue to grow worldwide regardless of economic slowdown. This is not just because it has a momentum all of its own - the more people who own a PC, the more everyone else has to have one - but also because constantly falling prices are making them affordable to an ever expanding market.

Michael Dell is an extraordinarily talented young entrepreneur; his vision and energy are boundless. But surely not even someone as highly focused as he can buck the international economy to that extent? The awful truth is that Mr Dell is probably deluding himself.

As for Mr Wiedeking, he must be living on an altogether different planet. Has he not noticed the wealth destruction that has taken place in the City and on Wall Street over the past two-and-a-half months? Some of his best customers have just lost their shirts and he's talking about a healthy outlook for sales of Porsches. What he's seeing in his "brimming" order book right now is the after-effect of last year's boom. Most investment banking bonuses have been paid in shares and they've just lost 50 per cent of their value. Very few people are going to be buying a new Porsche next year.

For the time being, the outlook for equities remains bloody. Because shares have come down so much, and because bonds keep on rising, there is a quite compelling illusion of value out there. As a result, many brokers insist that the present downswing should be seen as a once-in-a-lifetime buying opportunity.

But it is only so if you take the view, as Mr Dell and Mr Wiedeking seem to, that nothing has changed fundamentally, that the US and Europe will continue to see healthy growth, albeit at a reduced pace, regardless of the losses that have been sustained in the banking system and the flood of cheap imports coming at us from the East. Hopefully, this will indeed turn out to be the case, but it is not what the market is telling us will happen.

PROMOTED VIDEO
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Extras
indybest
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits