JULY/AUGUST 2009 | VOL. 23 NO.7
By Dan Keeler
Many watching the stock markets have been surprised or even alarmed at the surge in confidence in the past few months, a confidence that has fueled a tremendous rally in major indices around the world. The skeptics are anxious that there is little in the economic and financial fundamentals to justify the sharpest quarterly run-up in equity prices on record.
As it turns out, the skeptics are right. The economic fundamentals in mid-2009 are hardly any better than they were at the start of the year. In fact, by some measures they are worse. Unemployment is still rising, many major economies are still contracting and consumers worldwide are choosing in droves to save rather than spend.
But economic fundamentals are only part of the story. Over the past few months, something has begun returning to the financial world that had been absent since the beginning of the credit crunch. It is a basic-but absolutely crucial-element of the business equation: Trust.
In our cover story this month we study the impact that one man-US president Barack Obama-has had on the global economy. His steadfast determination to tackle the financial crisis is beyond dispute, but it is his efforts on a much broader scale that are having the most profound effect on global business. As he tackles contentious issues such as Guantanamo Bay and the US relationship with Iran, as he builds diplomatic bridges with China and Europe, as he works tirelessly to prove to the rest of the world that the United States is more interested in partnership than forceful persuasion, Obama is creating an atmosphere of trust that will do more to revive economic growth-and with it, the prospects for global companies in the US and beyond-than any government policy could.
While one man alone cannot fix the world's problems, Obama is proving he can create an environment where many of them fix themselves. But perhaps the most remarkable thing about Obama's presidency so far is that a leader who businesses would normally fear-a left-leaning, reformist Democrat-is proving their strongest ally in a broader sense.