This blog entry is brought to you by…

…the letter W and the number 5000

Like many people, I’m currently more interested in the stock and currency markets than I’ve ever been.

I confess to knowing very little about it – although my knowledge is improving – but I think I’ve grasped a few basic principles.

My iPhone came with a handy little app which allows me to see how the FTSE is getting on and I check it almost every day – just to see how things are going.

It’s been a good month for the FTSE, with almost unbroken gains during the past month and I see that it’s already gained 2.76% today, which is a lot.

In fact, it’s knocking the 5000 mark, which it hasn’t seen since about last October.

There’ll be some celebrations then…

But I hear talk of  a W movement in the markets.

It refers to a line graph that appears to plummet, bottom out, rise sharply but then fall to the bottom again, followed by another rise – hence the W.

I think that’s more than likely.

The sheer amount of debt that we now have to carry is staggering and I reckon we’re seeing an Indian Summer on the markets.

No-one – Cameron or Brown – seems to have twigged that unless we show the rest of the world and our creditors that we intend to cut public spending then our credit rating is going fall to a level which means that if we want to borrow any more it’s going to be at punitive rates.

That’s how I read it, anyway.

If anyone wants to expand on or argue with this very inexpert and simplistic forecast then please do so.

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4 Responses

  1. Sounds about right – I keep expecting another massive plunge. I’d much prefer a V or U shape as a few years ago took someone’s advice to take out a stocks and shares ISA – in 3 years it’s lost over a grand, but is clawing its way up a bit now. Still, that’s small fry compared to some.

    Anyway, that’ll teach me for being part of the whole capitalist machine 😉

  2. I’m still wondering why the pound is still doing so well against the euro.

    Is it too much doom mongering about the pound, which deserves to stay where it is?

    Not hearing who shagged the euro is?

    The city just shafting people by keeping the exchange rate bouncing around?

    All three, none?

    (unshared by me) optimism that CallMeDave will grow a pair and actually do something when he gets in?

    The only thing that I am sure of is that Gordon is fucked beyond redemption. Cruddas seems to be the only one left in touch with reality in the party, but I wouldn’t vote for him anyway – they’re fucked. I’d seriously like to see a large number of the ministers charged with wilfull incompetence – far too incompetence much to be accidental

  3. Well, the reason for equities to behave in the way they do at the moment is partly because our enemies have painted over the problem with massive debt accumulation and lots of new fiat money. And partly it’s because of very low interest rates together with UK banks buying housing and real-estate from themselves. Top this off with the continuation of pundits throwing positivism around, and there you have it, although also a bit simplified. You haft to remember that when QE and similar scams are put into play, the ones getting all that money are financial institutes. They do save some of that money, and pay of some debt, but mostly they buy stuff, mainly from each other. If we look at the trading ratio its few companies pulling the weight of all the others.

    When it comes to the pound it remains pretty strong for several reasons. One is that most central banks and governments is doing the same thing, so the status que sort of remains against other currencies, at least temporarily. Secondly if someone, oh, let’s say, a central bank buys lots of their own money, the value is kept up. Thirdly, there is a lot of ways to manipulate markets, through selling and buying certain commodities like say Gold… Fourth, the pound is historically speaking a very strong currency, which does not go away lightly. Lastly, but most importantly, all that printing and debt accumulation has a lagging effect. Historically speaking it take 1-2 years, sometimes even longer, for it to really have an effect on the value of a certain currency. Add it altogether and a nice little picture pops up.

  4. My own advanced financial analysis of global macro and micro economic trends leads me to conclude:

    It will look more like the London Weekend Televison “river” logo of the 70’s…Google it young uns

    BTW This is not good….

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