ONE of my son's friends, a hedge fund manager, spent part of New Year's Eve saying how much easier investing must have been in the 1970s, 1980s and 1990s: there was so much less uncertainty and you knew share prices were always going to go up.
It was hard to persuade him it did not feel easy when, in 1976, inflation hit 26 per cent and most of British business faced insolvency; or when the pound collapsed to $1.03 under Mrs Thatcher in spite of the gushing benefit of North Sea oil; or indeed in 1992, when in one 24-hour period, Chancellor Norman Lamont tried to raise interest rates by five per cent, to 15 per cent, before conceding that we would have to leave the European Exchange Rate Mechanism.
And that is without mentioning the 1982 sovereign debt crisis, when according to Paul Volcker, then US Federal Reserve chairman, eight of the world's top 10 banks were technically insolvent. Or the 1987 crash, when markets dropped further in one day than they have before or since.
The point is that it has never been easy. The future is always uncertain, even if some fund managers today seem to think last time was different. In their defence, what makes the current climate so hard for many in finance to deal with is that their formative career years were between 1993 and 2008 -- a 15-year period of unusual calm, when the steady decline in interest rates helped make credit easier and markets seem more predictable.
For them the period since 2008 has been particularly traumatic: the rules of the game appear to have changed completely. Arguably, though, the volatility, economic shocks, social unrest and inability of governments to control events are simply a return to how it always used to be.
This perhaps helps explain one of the more interesting surveys to come out over the holiday. Conducted by Populus for Saga Share Direct, it suggested that the older people are, the more optimistic they tend to be about the financial outlook. There are regional, gender and socio-economic variations but age seems to be the dominant factor.
One can reasonably suspect that this relative optimism stems from the fact that they have seen it all before and so manage to maintain a sense of proportion.
They know from personal experience that even when the headlines scream economic crisis, life for most people goes on pretty much unchanged. And when it doesn't, people adjust.
It is not that the health of the economy does not matter or has no effect on most people. It is rather that it is only one of a large number of things which determine people's sense of wellbeing. It needs to be kept in context.
That indeed was one of the lessons of the year just gone.
For the previous generation, 1966 came to be remembered as the only time England won the World Cup, and people neither know nor care that the economic situation then was dire, with strikes on all sides, the pound in trouble, rising unemployment and huge uncertainty about how Britain was going to pay its way in the world. …