Posts from — March 2009

As global leaders start to arrive in the UK, London winds up for this week’s G20 meetings.

Yesterday’s profit taking eventually came to an end in US trade last night and although the market suffered quite a sell off yesterday with automakers and banks taking the brunt of the selling.

This morning markets are holding up well in the face of Obama’s tough stance on the US car industry.

The US government seems to be finally coming to terms with the fact that they simply can’t bail out every loss making industry and the recession has to take some casualties.

Unfortunately, it will mean more business failures and huge job losses across the globe, but this is a fact of the recession and there comes a point when the tax payer has to say enough is enough.

Also see today’s market update, Spread Trading.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Difficult to know what to say this morning. Aside from the Barclays news there appears to be little to go on. Trading is actually quite quiet as investors/dealers attempt to take in all the varying pieces of news which have hit the screens in the last week or so.

There is a certain argument that has it that we have stopped falling on bad news which is one of the signs that the bear market may be drawing to a close. On the other hand there has been quite a bit of ‘good news’ since last Monday’s big rally and this does not seem to be pushing us up either.

In this scenario we are possibly looking at continued bumbling along in a tight range for a considerable period of time which would be great for the day trader mentality of many speculative players. An environment where loss making positions could be held until they move into profit would boost confidence for the longer term punters (sorry that should say “investment managers”).

For more on Barclays see today’s market update, Spread Trading.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Ahead of the G20 meeting in London next week there maybe some short covering of any long positions recently picked up from the lows as news of attacks on bankers and plans to bring the City to a grinding halt hit the headlines. On top of this the UK’s most recent gilts auction was very poorly received by the bond market. And just in case you missed it…Mervyn King announced that the UK is bankrupt.

That is enough for anyone who is bullish of equities to take a moment to pause for thought.

Bankers have had a tough time of it and whilst it is understandable that the wider public (myself included) are angry, we ourselves also have to accept the part we’ve played to fuel the financial meltdown.

Having been addicted to credit for well over a decade now and borrowing and spending beyond our means the blame for the consumer credit bubble falls firmly on our laps.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Markets have bounced back from Friday’s unexpected falls. Traders will now be asking whether the continued failures to break back down (makes a change) are evidence that a base might be in the process of being constructed.

The announcement over the weekend of the new ‘asset cleansing’ initiative by the central banks is giving renewed hope to battering banking stock and other sectors are taking their lead from them.

At the moment the bulls have it but we are still sitting in a deep dark hole when we discuss renewed appetite for bank lending. Unfortunately for all the desire for massive regulatory clampdowns on banking activity the authorities must be made to realise that they cannot have their cake and eat it.

If you require banks to put up more capital, spend vast sums on FSA reporting, require approval from authorities for off balance sheet activity, restrict lending to multiples of earnings etc (to name but a few of the various recommendations) then say “oh, do all this and increase lending levels” even the most intellectually challenged of readers would identify a ‘slight’ flaw in the arguments.

Oddly enough now might not be the time to allow the Lord Turners or Hector Sants of the world any input at all. Lessons have been learned, most bank boards will be very acutely aware of the renewed dangers of some of the traded instruments. There is a very strong argument that the best route forward would be to leave it alone.

Also see today’s Spread Trading Update.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

The markets appear to have taken fright at the highs but the pull back has been muted and, given the appalling data out of the US yesterday, must be seen in quite positive light.

On the other hand, President Obama’s first faltering steps are beginning to look rather accident prone. He has only been in office for a few months but his speeches seem to have degenerated into the same 11 word bullet point harangues of the last incumbent and there are only so many usages of the word “change” that you can take before asking “how?”

At the moment congress and the senate seem focussed on a sort of witch-hunt to chastise those they feel have been ‘greedy’ and it is worrying that policy is in danger of degenerating into ‘populist’ moves. Down this route lies beggar thy neighbour isolationism and all the woes to the global economy that this would bring.

This is all clearly a shame because for once, I actually believe in a politician. For all his talents in uniting people he is unfortunately lacking the basic skills needed to help deal with the current crisis.

The huge liquidity injection into the economy, announced on Wednesday, is the really major piece of news. However, fears are growing that the law-makers will set such tight stipulations on the expenditure that foreign competitors will be shut out. This could easily lead to a tit-for-tat scenario which would help few. The days of US primacy over the global economy are fading and many countries will not be as cowed as in the past.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.