Today's P&L: GBP 90.00, (I just can't get into it today).
Today's Booze: 2 pints of dry cider, 1 large Talisker Scotch
Today's Soundtrack: Bob James
Somewhere in England a minister is defending actions that he clearly had little to do with to a select committee, giving the impression of justice and democracy. This is the man who asserted that Britain was prepared to use nuclear weapons on Iraq - give him the Nobel Peace Prize.
Meanwhile the guardians of the Cadbury group who derided an initial offer from Kraft have decided that ten percent extra makes all the difference and capitulated. That thirty thousand jobs that will go soon. The Cadbury family were one of the first philanthropic families of the empire, they were responsible for introducing low cost housing, annuities, bank accounts and education for workers and their families. There is no place for social conscience in modern Britain.
The Euro continues to take a beating as the options for Greece look bleaker. In some respects I don't care if the Euro falls through the floor, cheaper French, Italian and Spanish wine and food, but on the other hand I do still have a small house somewhere in Spain which is valued in Euro's. I was doing some consultancy work for an American bank when the Euro was introduced in 1999, (non physical), We had a big party as we were a Euro Clearing House, even then I expressed my reservations. I just couldn't see how the diverse economies of Greece, Italy, Spain, Portugal, France and Germany could link up. Back then I said that the Euro would collapse shortly after the UK joined, but now I think the collapse is inevitable anyway. Greece will be bailed out at some huge cost but the end is on the cards and the longer it takes the harder the break up will be.
I am feeling rather mellow today, I haven't really been following the markets and have spent more time idly reading other peoples blogs and watching online television. I am glad to see the new series of Being Human has started on the BBC. I love that program the idea of a ghost, a werewolf and a vampire living together in a house in Bristol just appeals to me. If you haven't seen it you should check it out.
My mellow mood has been reflected in my main musical choice of the day, Bob James. I know Jazz isn't terribly popular but this is cool, easy listening Jazz. Good for listening to while you have a nice cold drink. My top five Bob James tracks:
Storm Warning - Sung by his daughter, Hilary. This track really brings a lump to my throat, the kind of broken hearted torch song that can make you feel so bad you feel good. "Storm Warning, feels like a heavy rain, Winds on the coast tonight, we might get tossed tonight".
Angela - Or as everyone calls it the music from Taxi. I always loved this, when I was a child I used to watch Taxi mainly to hear the music on the intro and outro and Marilu Henner of course.
Restless - Easy listening Jazz like Shakatak but much more accomplished.
Deja Blue - More of the same, makes me want to get a good scotch
Back To Bali - Doesn't make me think of Bali, just reminds me of stretching out in bed with a girl while this plays quietly in the background.
So Bob James, not to everyone's taste to "elevator music" for some people certainly for the hardcore jazz fans but I like him and I like his approach to music and life.
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8 comments:
Hi Toni,
Sounds as though you are having a nice relaxing day. Could I ask you to explain the Euro thing? I'm pretty ignorant about these things but am just about to buy a house in Italy- basically it means that this will not be worth anything in a couple of years - correct?
Thanks very much!
Also, Toni - would you put euros into sterling now or leave them where they are? Mine are in Italy. Thanks for the advice (again!)
Hi Anonymous, I trade currencies on the futures markets when II have enough cash and through spreadbetting when I am hard-up. Either way, the prices I get are current market prices and not the commercial rates you get. Generally the bank transfer rates attach their on spread, (commission), and are changed once or twice a day so they are rarely what you see on a business channel like CNBC. As I am trying to pre-empt the market, I have to guess how information will impact the exchange rates. It used to be that interest rates were the primary factor behind exchange rates because banks and other financial and corporate institutions will park their excess capital in any currency that has a higher yield, (interest rate). As a result you get the term carry trade this means when a company borrows in a low interest currency such as the Yen and parks it in a higher interest rate currency such as Australian dollars or South African Rand. If you are a company placing a large enough amount, doing this even overnight or for two or three days is worth it. Now most interest rates are low so people are borrowing in US dollars cheaply and investing short-term in riskier investments. Other factors that tend to affect currency rates are political instability and economic problems. The UK has both these factors as the borrowing has gotten out of control and we are heading into an election. Normally I would expect the pound to strengthen, (especially after the inflation data because if inflation is high traditionally the central bank will put up interest rates thus making the pound higher yielding and more attractive). The political situation throws a spanner into the works, a clear election win for either the Tories or labour would strengthen the pound but a hung parliament or small majority would be bad for the pound. I still favour the Pound over the Euro because Europe has its own problems the diverse economies of Europe just don't seem to make sense. Ireland, Spain, Greece and to a lesser extent Italy and Portugal have used low interest rates and Euro stability to have boom economies over the last decade, it seems to me that there is little substance behind this. The core European countries are Germany, France and the Benelux region. And now they are in a situation where they have to protect the integrity of the Euro. For this reason it seems Greece will not disengage from the Euro but will receive fiscal support and/or looser Euro compliance laws But eventually, in the next two to five years the same problems will emerge on the numbers involved will be much bigger and any break up of the Euro block far more damaging.
Remember I am not a financial advisor and am reluctant to give advice as I trade for myself and have nearly been bankrupt on several occasions. I still think that the Euro will decline in value and if you buy a property in Euros obviously the value in GBP or USD terms will also fall, That isn't a bad thing in itself if you buy the house as a property and not an investment. If you are living there and your costs are in Euros and your income in dollars or pounds your money will go much further if the Euro drops. If Italy were to pull out of the Euro your house would be valued in whatever currency they adopted and its value would depend on how that currency did against the pound and dollar. If your money is in Euros and you are living in Europe it doesn't make a huge amount of sense to transfer them into sterling until a clearer idea of where the pound is going emerges. For what its worth in my opinion the pound will strengthen slightly against the Euro until just prior to the election, when it will drop and then if we have a convincing conservative victory it will continue to strengthen. If Greece cannot find a solution to its problems or if any other member country admits to fiscal problems The Euro will weaken quicker rather than slower.
If you want to learn a little more about foreign exchange there are plenty of good free websites such as:
http://www.forex.co.uk
http://www.simple4x.com
http://www.actionforex.com
http://www.global-view.com
Some of the banks also provide free market reports, I used to receive daily reports from HBOS but they seem to have stopped.
If you have any questions feel free to ask. Trading foreign Exchange is not my primary business as I tend to focus on the Equity Index futures but I have a fair amount of experience.
Hi Toni,
I do actually live here in Italy and am paid in Euros so it is basically deciding whether to move my savings to the UK or not. I'll keep an eye on the situation and look at the websites.
Thanks again and hope you have a nice day. The sun is out here!
I am still upset by the Cadburys thing.....
Hey Toni
Good to see that your low alcohol consumption - when is the appointment?
Kitty x
End of February Kitty, thanks for your concern. Glad to see you posting again. Cant you see how all your fans are salivating for your posts
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