Larry Kantor, head of research at Barclays Capital, has caused a stir by encouraging investors to "take a more aggressive stance and increase their risk exposure".

It’s a bold statement, encouraged perhaps by the clean bill of health given to Barclays last week by the Financial Services Authority. In my experience, in-house bank economists tend to the bullish side. One said to me a few months ago, "Oh, this is nothing like the seventies when inflation was roaring and unemployment was at three million". Well, we may not be there yet, but I suspect he’d modify his quasi-optimism now.

All that said, Kantor’s position is worth reading. In essence, he says that pent-up global demand should soon start to kickstart some sort of economic activity. "Output growth is now well below that of demand, a situation that tends to bring its own reversal relatively quickly". Already,  he says, consumer demand is stabilising and if you discount Japan (quite a big discount given that it’s the world’s fourth-largest economy), the global economy may have bottomed out. "… non-Japan Asian stock markets, where economy datat shows signs of improvement, have massively outperformined thius far this year."

It’s small, but it’s encouragement.

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