Monday, September 22, 2008

Market Mayhem Watch : Day 1

Gold jumped some $30 on the back of fear. If the U.S. government is going to bail out the banks people realised it was time to bail out of U.S. dollars, bonds and stocks. Guido took profit on the spike, probably far too soon. You don’t go broke taking profits too soon though. Gold carried on through $900 without Guido for the ride.

The euro jumped nearly 2.5% or some 300 pips, biggest move ever. Took profit on that and switched to shorting the dollar against sterling on the possibly irrational idea that other speculators will start to eye a $2 pound and the move against the dollar was not as violent as it was vis-a-vis the euro. The position is a little underwater.

Just to prove what an evil speculator Guido is he shorted the FTSE hard. Am still running the short and marked to market am up some 21.5% overall on the day. A profit or loss of that magnitude in a day signals too much leverage in too volatile a market. Strangely traders never mind violent P&L swings when they are to the plus side. Friday’s broad stock market gains evaporated, oil hit $125 a barrel. Tomorrow can’t be this volatile, can it?

The FT’s Alphaville blog (“The Site That Supports our Shorts”) highlights a Downing Street petition to criminalise consenting behaviour between capitalists. They want to criminalise short selling. Some trade union boss told the Labour Party conference he wants to tax us into extinction. Tax us to the Bahamas more likely.

Party Hack Rat Packs Up

Sheila Murphy, Regional Director for the Labour Party’s Northern region has announced she is quitting. Sheila was closely linked to Peter Hain’s ill fated campaign team. She is known to be close to David Evans, the ex-Deputy General Secretary, who is busy working with the rebel MPs to get Brown out.

Will the last Labour Party apparatchik switch off the light?

Vaz : The Ingratitude

Vaz spotted Gordon outside the Midland Hotel Saturday night. He strolled over smiling and said to Brown “Hello Gordon, how are you?” Gordon switched off his smile and walked off without saying word.

This is the man who saved Gordon’s bacon over detention without charge. How rude and ungrateful. Vaz is after all such a paragon of integrity that he has asked the sleaze watchdog to investigate himself.

"So We Adopted."

Peston "Fisks" Marrs Brown Interview

The BBC’s business editor Robert Peston, currently the object of the frustrations of a substantial number of City fund managers who think he should be done for creating a false market in HBOS, has fisked yesterday’s Marr interview with Gordon.
Implicitly critical of Marr for letting Gordon off the hook, Peston makes some good points:-
  • Gordon said it is the right time for the government to borrow – as if he had a choice – the PSBR could reach £100 billion. Double the budget estimate.
  • Gordon took the credit for the FSA’s banning of short selling. Does he take the credit for the FSA’s failure to monitor Northern Rock’s liquidity problems as well?
  • Brown blamed global problems and everyone else, as if he was blameless.
  • He misrepresented the real reason for Bank of England’s flood of liquidity.
Brown rightly resisted EU regulation of London’s financial services, he now says he wants international regulation. Gordon says Britain’s regulation was better than America’s regulation. The FSA allowed Northern Rock to lend 125% against the asset to borrowers. Was that best practice? Peston, Gordon’s biographer, says he is exhausted by the twisting of Brown.

Scottish Labour Facing Annihilation

The SNP is looking at a 14.5% swing towards them in Scotland on the basis of the YouGov / PolitcsHome super-poll of the marginals. That will wipe Scottish Labour out. Gordon will achieve the annihilation of the Labour Party in his homeland for a generation. Could that be why Luke Akehurst’s We Don’t Want a Labour Leadership Election Facebook group had a flood of non-Labour Party applicants? Luke has revoked Guido’s membership and blocked new members, spoilsport…

Market Mayhem Watch: Fear and Greed

Guido can’t resist and is now actively trading once again in financial markets, attracted by the blood on the streets of New York and London. The approach is old fashioned, none of that quantitative analysis using super-computers that you need to lose billions. Just two or three positions on the go at any one time, mainly restricted to financial futures, foreign exchange and commodities rather than individual stocks. Have an aversion to trading stocks because insiders (or friends of Robert Peston) can kill you if you are leveraged – given portfolio leverage varies from none to 20 times – it is essential to employ stop losses. Will report how the portfolio is doing in percentage terms (in the right hand column) as of Tokyo market opening this morning. Because of the leverage employed swings of 20% are not unheard of – unfortunately that is usually on a bad day. Mark to market since this morning’s open is +4% largely on the back of another FTSE short .

Will probably keep the reporting going until this period of extreme disequilibrum in the markets is over or the portfolio is down 50% or up 100%. It will be an interesting experiment to keep a public trading diary.

Sunday, September 21, 2008

Rich & Mark’s Monday Morning View

Marr Does the Usual

“Is it fair to say that the country…..and the economy have been let down by people in the city?” “So why is that if you’ve made the right decisions and the Tories have made the wrong decisions do the polls not reflect this?” …. and so on and so on. Even when Brown told complete lies like “we have reduced debts”, Marr remains mute.

Jeff Randall on Sky really laid into Brown this week when he tried to pull his usual line in “Brownies”, not that it made much difference, Brown just stuck to his lines. The viewer was able to make up their mind who to believe. Marr really should stick to reporting, his interviews are pathetic.

Gordon seemed to be testing out a new line, that he had been telling all the other finance ministers (who were not as brilliant and as far-seeing as him) that we need a global regulator for years. One that would allow 125% mortgages, not monitor liquidity and wrench the central bank away from the government debt markets. If only the Americans had listened to him…

Saturday, September 20, 2008

Work at Sky, Want a Guido T-shirt?

If the video of David Miliband laughing at getting the number of victims of the Pakistan terror attack wrong should fall into Guido’s hands / inbox, there could be more than a T-shirt in it for you.

No questions asked…


Seen Elsewhere

David Cameron’s Draft Resignation Letter | Speccie
Labour HQ to Be Demolished | Asa Bennett
Dirty Politics is a Good Thing | Harry Cole
Media Fear and Loathing in Scotland, Labour Next | Owen Jones
UK Top 10 Influencer Political Blogs | Cision
Redwood Exposes Constitutional Vandalism | Nick Wood
No Campaign Has Been Inept | Mail
PM Faces Friday Bloodbath | Mail
Will Miliband Bottle English Devolution? | Mary Riddell
Why Pollsters Could Be Wrong | John McDermott
Cameron Faces Vote of No Confidence or Rebellion | FT


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The Prime Minister feels the pressure:

“I have to say that after the events I have been facing over the last few days, assassination would be a welcome release.”



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