Friday 26 December 2008

Todays P&L: Nothing at all
Todays booze: 3 large Vodka & Tonics - its only lunch time, I am just getting started!

So that was Christmas. Bah, Humbug! I didn't find myself all overwhelmed with love and peace for my fellow man and I have realised that being unable to trade for even 48 hours is causing me serious problems. Another example of my addicitve personality I guess. The UK government seems to be wholeheartedly supportive of the gambling industry, although I suspect they will turn on it just as they did with cigarettes and booze after exploiting it for all the tax revenue they can.

I am wondering why customers here in the UK even bother repaying their debts to the banks, which are largely nationalised now anyway. Even the banks that haven't taken Government aid are exchanging their worthless securitised paper for gilts! The banks seem to be under the impression that it was just bad luck and circumstances beyond their control that caused these huge losses. Funny that when you use that argument for being unable to repay your credit card debt the banks look the other way and slap a CCJ on you quicker than you can say Ebeneezer Scrooge. I remember those halcyon days when bankers attracted press because of their lifestyles. Anyone remember the 3 Barclays Capital Markets Risk analyts that ran up a £40,000 plus lunch bill at Petrus? The unkind press attention ensured that the lost their jobs bit of a shame really, Barclays really could use some decent risk managers now!

The financial climate has changed so much for anyone who remembers how it used to be, If I had told you two years ago that the 5 Wall Street houses of the holy would no longer exist and that AIG and Fannie May and Freddie Mac would be nationalised I would have been laughed out of the room. And the US, once a capitalist nation apparently, would be prepared to bail-out its worthless industrial titans whatever the cost. It is unthinkable and the scam only works as long as nobody calls on the US to show its cards. We are in a situation where investors are so scared that they actually are paying to lend money to the US. Forget the effects of inflation, 2 year notes have a 98 handle on their yield. The US is effecively printing money without any fiscal responsibility - this can only end badly.

Thursday 25 December 2008

Todays P&L: Hey, it's Christmas
Todays Booze: 1 litre Russian Standard Vodke, 8 pints of dry Cider, 3 cans of Stella Artois

Ok, so the doctors orders didn't last, but you know I feel better than I have in ages being back on the hard stuff. The quacks have said I am dying anyway, so what difference does it make? I have been to Church and recieved absolution, now I just have to make myself worthy.

As far as the markets go, well over December I have had a wild, wild ride. the most I earned was £5,000 in one day and the most I lost £3,000 so I guess I am up. Despite my loving this crazy volatility I am a little disturbed. I genuinely believe that we are heading into a depression that will easily rival that great depression. Even if the clowns in charge mange to band aid things up for a while, the opening of the taps of liquidity have unleashed a dragon of inflation that will flex its coils around us. Bernanke, Paulson, Darling and the likes are only interested in buying time so the problems are those of the next guy in the job. I pity poor Obama because I genuinely believe he will be held responsible for a collapse in the US economy that has nothing to do with him.

The myth of globalisation is becoming apparant all to quickly as the USA and Europe sink into recession, the idea that the BRIC, (Brazil, Russia, India, China), countries will take up the baton is being exposed as a cruel joke. All of these countries are unstable, Russia is of course the joker in the pack. It defaulted in 1998 and I remember a Credit Suisse banker saying to me "we will never trade with these clowns again" but the lure of easy money was too much. Now a country that had the 3rd largest foreign currency reserves has expended nearly 40% in a couple of months trying to defend the Ruble...pathetic. And as for the middle-east forget it. Those fools have squandered their resources quicker than a drunk duke on his birthday. Saudi and Dubai have been chasing which country had the highest skyscraper, the way that in previous oil-booms they chased Park Lane hookers and US or European jet fighters.

So what next? My belief is get ready for the hard times, I don't know how many of us are prepared for in-between years economics. Who am I to speak, I can't even change a plug and when I lived in Indonesia and Thailand I had maids and workers to do everything for me. I did see this coming though, and while everyone is hoping for better times next year, I can only see that the fiscal irresponsibility has placed any bright light further away.