Are these the green shoots of recovery?

After billions of dollars in bailouts and bonuses hit the decks, can we finally say that the worst is behind us? Many of us would like to think so, and possibly they could be right.

I mean how much of this recession, depression, gaping black hole or whatever you want to call it, still sits there stinking? And how much of this is just media-fuelled bleakness anyway.

Think about it. How many of you talked about 'subprime crisis', 'credit crunch', 'toxic assets', 'meltdown' or any of those phrases two years ago?

None of you I bet.

Even in February 2007, speculators were still tipping Northern Rock to carry on growing and returning record results. The risks were unseen and the consequences unknown.

Now we know them. The unknown unknowns are now revealed in all of their stinking glory, and trillions of dollars have been pumped into the system to clean up the mess.

The industry has been fundamentally restructured and the role of governments and regulators redefined.

But the question we all keep asking is: when is this ending?

Well, I’ve said recently that recovery, as in like the good old days of reasonable growth, won’t be with us until around 2014.  I also said it would be flat growth 2011-2013 and negative growth 2009-2010.

So I'm not talking about growth and recession versus depression. 

I'm talking about when will the governments, regulators and banks reach the end of the crisis?

When will the strangulation of wholesale markets become untangled and start to breathe again?

And when will the crisis that started in August 2007 and became a black cloud of woe in September 2008, pass?

Have we passed the worst moment?

No-one knows and definitely not I, but what I will say is that I don’t think it can get any worse. If that’s the case, then that means we’ve reached bottom and things can only get better.

There, I said it.

After the toxic bank and insurance schemes, the $780 billion Obama plan**, the regulations for credit derivatives products, and the complete battering and berating of every banker, we may have reached the bottom.

Or we will have by the time these measures are in play, shortly after the April 2nd 2009 G20 Meeting in London.

It doesn't mean that there won't be more bank failures, but none as spectacular or devastating as Lehman Brothers.

Nor does it mean that banks won't need to recapitalise once more, with BNP Paribas, BBVA, Deutsche Bank and Unicredito all tipped to be the next wave of bank rights issues.

Nor does it mean that banks won't write off more bad debts and toxic assets.

I just get a sense from talking with people this week that they're fed up with the bad news and might be finally giving up the attitude of 'let's all avoid lending to each other' to one of 'if we don't start sorting this out, the governments will shut us down'.

In other words, bankers might finally start to release funds into the commercial world again.  Businesses won't recover overnight - the reason for negative growth in 2009-10 - but they will at least be able to source funds, something that has been hard for the last six months.

If the banking system recovers over the next six months, then the business system will recover 12-18 months after.

That's why I'm thinking that the indices and exchanges might just start seeing a recovery from today, because the various governmental actions are finally starting to demonstrate some form of turn-around.

So I'm taking note, just to see, and clocking the market rates for February 7th 2008:

FTSE 100       4,292 +1.49%             € per £         1.14 +0.01%
DOW             8,281 +2.70%             $ per £         1.48 +1.25%
HANG SENG  13,655 +3.61%            ¥ per $        91.99 +1.00%
DAX               4,645 +2.97%            WTI Crude   40.02 -2.79%

Let's see how they've changed six months from now.

** Barack Obama announced the members of his Economic Recovery
Advisory Board yesterday.  The group, led by Paul Volcker who was the Federal Reserve chairman before Alan Greenspan,
will meet on regularly to give the US President advice on how to
kick-start the economy.

Other representatives include:

• Jeffrey Immelt, the chief executive of
  General Electric
• Martin Feldstein, a Harvard economics professor
•  William Donaldson, a former chairman of the
  Securities and Exchange Commission
• David Swenson, chief
  investment officer at Yale University
• Charles Phillips, president of
  Oracle
• John Doerr, a partner at the venture capital firm Kleiner, Perkins, Caufield and Byers