Cast your minds back to September 2011.
The warmth of July’s “momentous” Greek bailout had quickly given way to despondency as markets realised that the latest bout of political can kicking had only hoofed the Eurozone crisis a few hundred yards down the road.
Even worse, investors had noticed that both Spain and Italy were adopting the deathly pallor of economies with too much debt and not enough growth; cue CDS spreads on Italian and Spanish debt blowing out to record levels and a frantic race to calculate bank exposure to Eurozone debt contagion.
On the other side of the Atlantic, reckless political posturing had delivered the last remaining super power to the brink of an unthinkable default while rumours of a hard landing for the Chinese economy were beginning to gather pace.
The result? Traders returned from their holidays, markets plunged, screens flashed red and pictures of bankers with heads in their hands dominated the news.
Fast forward six months though and it feels very different; the FTSE100 is heading back towards the 6000 mark, previously moribund M&A activity has burst back into life and banker bonuses are front page news once again.
What has changed?
“Not a lot” say the Bears, noting that the fundamental problems with the weaker members of the Eurozone (too much debt, not enough growth) remain while Germany’s reluctance to bailout its profligate cousins is still undermining attempts to secure the longterm future of the Euro.
Add to this rising tensions in the Middle East and an oil price at a three year high and it’s not hard to conclude that the foundations for a credible global recovery are far from solid.
However, Bulls would counter that the US economy is rebounding strongly, the ECB’s €1 trillion liquidity injection has soothed worries over the Eurozone and China’s policymakers are adroitly managing a gradual slowdown of their economy.
Closer to home, although growth remains elusive and both Fitch and Moody’s have placed the UK’s AAA rating on negative outlook, hopes are high that Wednesday’s budget will outline plans to attract private sector investment in the UK’s decrepit infrastructure, providing a fillip to the beleaguered construction industry and creating new jobs in the process.
On top of this, the expected “feel good factor” of the Olympics and the Queen’s Jubilee are likely to boost consumer spending in the summer, building on the nascent retail recovery.
So are we out of the woods yet then? Too early to say… but the carpet of green shoots sprouting around our ankles bodes well as we head into spring.