FTSE 100 @ 5320.03, +157.2 (+3.4%)
DJIA @ 11269.02, +125.71 (+1.13%)
NASDAQ 100 @ 2182.05, +14.98 (+0.69%)
After a hesitant start to the week markets temporarily stabilised and recovered some of their recent losses which, although welcome, has not provided any long term solutions to the current issues which themselves are a continuation of the credit crunch as Governments have bailed out the banks and taken on their mistakes.
As it stands currently, the banking sector's great Ponzi scheme continues but the health of Government finances now appear to be in a more parlous state.
Impossible to back up now but my view has always been that Government stimulus should have been better distributed and put directly into job creation (in the form of public works, tax breaks for employers or employees etc) rather than being used to support the banking industry's corrupt practices.
At least this would have had a measureable output in terms of job creation or tax revenues.
Taking a Darwinian view on Banking the strongest would survive but would also have had to take a long hard look at how they got to us to this stage, then evolve and adapt to a changed economic environment or at least worked harder to attract much needed client funds and custom.
As it stands now nothing appears to have changed (other than their mistakes have been passed on to Governments and taxpayers which is an even bigger threat to us all), and there has been no philanthropic boost to the economy from banking.
Its neither their responsibility nor (more significantly) their objective to take on the responsibility of contributing to recovery and financial solvency, and any impact on the economy is not easily measureable other than by artificially boosting banking profits and bonuses. They fail to see the symbiotic nature of our custom and instead seem to revel in their parasitic profits and bonuses.
I say artificial as, with the help of the BoE they continue to rape savers to fund their profits and bonuses without having made any fundamental changes to behaviours and practices.
In a former working life and discussion around bonuses I recall the explanation that anyone wanting a bonus should first go and look up the definition in a dictionary i.e. "Something given or paid in addition to what is usual or expected!"
Its much too late to do anything different now other than to let this run its course and hope that Government austerity can eventually counter the mistakes created by banking greed and profligacy.
Although I do still think that some of the chaff needs to be allowed to fail rather than being used as a gaming board for speculators seeking to make money out of the view that Governments will continue to bail out sinking ships at a premium that might just bankrupt us all.
Taking another look at the current market correction which strangely mirrors the 1000 point fall at around the same time last year, I have to say that nothing has actually happened yet other than Greece's controlled default. America hasn't defaulted neither has Italy or Spain.
And although extremely concerning situations both Italy, and to a lesser degree Spain, have manufacturing industries with presence in high technology markets like automotive and aerospace so finding a way out of their current GDP imbalance is at least foreseeable (unlike Greece) as they make saleable products in demand. And, certainly in Italy's case there is an argument that there are significant "public" assets.
For me also, manufacturing has a distinct advantage over financial services as it distributes prosperity more evenly, and more directly, in both a geographic and jobs created sense.
It always seems to me that financial services (certainly in the UK's example), concentrates a disproportionate amount of wealth in small geographic pockets amongst a small pocket of people upon which you are then reliant to trickle down into lesser paid service sectors.
I am digressing slightly but in summary I would still say that nothing has actually happened yet other than speculators feeding and benefitting from our fears.
This does make it very difficult to assess whether or not any "default" discount has been priced in.
I suspect that it hasn't though, and that this is a further change in recent times that speculators can profit equally from market falls as well as market rises hence the volatility. Where they can't make money is when there is a lack of volatility as they are effectively taking a contrarian view (think George Soros and sterling) and then in some cases attempting to manipulate the market in their favour by creating volume through leverage.
But, I guess it also supports the view that the market can and will turn around as quickly as it can fall hence the need to take a contrarian view with logic rather than react to emotion.
To that effect I have also added Vodaphone to the virtual portfolio principally for its dividend, cashflows that will eventually reduce its debt (could they be a model for sovereign states?), access to smartphone markets, and its 45% stake in Verizon Wireless that might just be the jewel in its crown.
There are still threats from reduced call and connection charges, and competition, but the forecast 6.6% dividend will provide some support as well as a special dividend courtesy of a dividend due from Verizon Wireless which finally starts to justify Vodaphone's significant investment in a minority ownership.
DJIA @ 11269.02, +125.71 (+1.13%)
NASDAQ 100 @ 2182.05, +14.98 (+0.69%)
After a hesitant start to the week markets temporarily stabilised and recovered some of their recent losses which, although welcome, has not provided any long term solutions to the current issues which themselves are a continuation of the credit crunch as Governments have bailed out the banks and taken on their mistakes.
As it stands currently, the banking sector's great Ponzi scheme continues but the health of Government finances now appear to be in a more parlous state.
Impossible to back up now but my view has always been that Government stimulus should have been better distributed and put directly into job creation (in the form of public works, tax breaks for employers or employees etc) rather than being used to support the banking industry's corrupt practices.
At least this would have had a measureable output in terms of job creation or tax revenues.
Taking a Darwinian view on Banking the strongest would survive but would also have had to take a long hard look at how they got to us to this stage, then evolve and adapt to a changed economic environment or at least worked harder to attract much needed client funds and custom.
As it stands now nothing appears to have changed (other than their mistakes have been passed on to Governments and taxpayers which is an even bigger threat to us all), and there has been no philanthropic boost to the economy from banking.
Its neither their responsibility nor (more significantly) their objective to take on the responsibility of contributing to recovery and financial solvency, and any impact on the economy is not easily measureable other than by artificially boosting banking profits and bonuses. They fail to see the symbiotic nature of our custom and instead seem to revel in their parasitic profits and bonuses.
I say artificial as, with the help of the BoE they continue to rape savers to fund their profits and bonuses without having made any fundamental changes to behaviours and practices.
In a former working life and discussion around bonuses I recall the explanation that anyone wanting a bonus should first go and look up the definition in a dictionary i.e. "Something given or paid in addition to what is usual or expected!"
Its much too late to do anything different now other than to let this run its course and hope that Government austerity can eventually counter the mistakes created by banking greed and profligacy.
Although I do still think that some of the chaff needs to be allowed to fail rather than being used as a gaming board for speculators seeking to make money out of the view that Governments will continue to bail out sinking ships at a premium that might just bankrupt us all.
Taking another look at the current market correction which strangely mirrors the 1000 point fall at around the same time last year, I have to say that nothing has actually happened yet other than Greece's controlled default. America hasn't defaulted neither has Italy or Spain.
And although extremely concerning situations both Italy, and to a lesser degree Spain, have manufacturing industries with presence in high technology markets like automotive and aerospace so finding a way out of their current GDP imbalance is at least foreseeable (unlike Greece) as they make saleable products in demand. And, certainly in Italy's case there is an argument that there are significant "public" assets.
For me also, manufacturing has a distinct advantage over financial services as it distributes prosperity more evenly, and more directly, in both a geographic and jobs created sense.
It always seems to me that financial services (certainly in the UK's example), concentrates a disproportionate amount of wealth in small geographic pockets amongst a small pocket of people upon which you are then reliant to trickle down into lesser paid service sectors.
I am digressing slightly but in summary I would still say that nothing has actually happened yet other than speculators feeding and benefitting from our fears.
This does make it very difficult to assess whether or not any "default" discount has been priced in.
I suspect that it hasn't though, and that this is a further change in recent times that speculators can profit equally from market falls as well as market rises hence the volatility. Where they can't make money is when there is a lack of volatility as they are effectively taking a contrarian view (think George Soros and sterling) and then in some cases attempting to manipulate the market in their favour by creating volume through leverage.
But, I guess it also supports the view that the market can and will turn around as quickly as it can fall hence the need to take a contrarian view with logic rather than react to emotion.
To that effect I have also added Vodaphone to the virtual portfolio principally for its dividend, cashflows that will eventually reduce its debt (could they be a model for sovereign states?), access to smartphone markets, and its 45% stake in Verizon Wireless that might just be the jewel in its crown.
There are still threats from reduced call and connection charges, and competition, but the forecast 6.6% dividend will provide some support as well as a special dividend courtesy of a dividend due from Verizon Wireless which finally starts to justify Vodaphone's significant investment in a minority ownership.
Post Title
→Stock Markets stabilising at the end of a turbulent week?
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→https://national-grid-news.blogspot.com/2011/08/stock-markets-stabilising-at-end-of.html
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