Monday 8 June 2009

Will Brown sink the £ and FTSE?

Even as I write there is speculation of an emergency Cabinet meeting being held this afternoon ahead of the meeting of the Parliamentary Labour Party this evening.
Also the FTSE has been down well over 1% today, dragged down by State owned banks and mining companies on the whole. The £ too has shed over 5% in a week against the dollar on the back of UK Government instability (Now there is a short opportunity I should have seen!).

I think the meetings today are over-hyped and that the media storm will blow itself out and Brown will remain in office but not in power. However,I hope I am wrong and stranger things have happened in politics.

All the whole, the markets have been in a very low volume funk for the last week or so. The power of the bull run from March is clearly at an end as the Summer encroaches upon us. Now is a dangerous time for the rally to be exposed as a Bear Market rally and a new dive in the FTSE and £ could be very dangerous.

At this time, having an unstable Government is about the worst political thing we could have, even more dangerous than Ed Balls as Chancellor. Labour need to sort it out one way or the other. More dithering will chop 5% off the FTSE this week. My short will go on later today at this rate....


Old BE said...

A calamitous fall in the stock market and a bout of hyperinflation quite suits me...

CityUnslicker said...

BE - maybe, not sure how many of us keep our jobs in hyper-inflationary scenario!

Hope your mortgage is on a fixed rate and your credit cards....

Old BE said...

Who needs a job or a fixed rate when the mortgage can be paid off by a couple of hours work?!

measured said...

Sell in May and go away....

Testing the bottom end of its upper range, eh? It might hold for the time being. ;-)

Philipa said...

Do you think a change of leader in the government would be a good thing?

CityUnslicker said...

BE - interest rates at 12% - can yoy pay the interest?!

measured - wobbly.

Philipa - yes definitely. Brown is very incompetent and dangerous. He will spend our childrnes money to get himself elected next year. he is true scum.

Anonymous said...

The basic problem with "western economies" is that increasingly, growth, such as it is is debt based, and therefor largely illusionary.

The manipulation of interest rates over the last 30+years has levered out of the "investment scenario", savings for investment, and replaced it with DEBT issued by banks. This has always been the bankers business model.

The Bof E in 1694 was created to finance and fight wars, and was specifically structured to place war debts on the shoulders of the population. Absent the wide tax base, loans for war mongering were not forthcoming.

In a debt based society, wealth inevitably must flow towards the creators of debt, specifically when interest is charged. As financial power and hegemony increases, banks % of the nations GDP increases to the point where they become a primary industry, instead of a service to productive industries that actually create some economic value.

Their hegemony becomes complete when they own the body politic, as now!

It matters little whether we have a Conservative, or a Socialist government, of whatever name. In a debt based system, the gap between rich and poor becomes inexorably wider.
The maths cannot be denied.

Towards the end of a fiat system, (when devaluation looms) socialism in fact hastens the gap between rich and poor as it tends to destroy the productive capacity of the nation by various means.

The fundamental way to cure the demise of western capitalism is to somehow get out of the issuance of debt based "money" and revert to savings based investments for growth. This in turn eliminates the charges that represent such a high proportion of the populations net disposable income that now effectively flows to the banks under various guises, on realistically every financial transaction made in the nation.

The movements planned by the EU are directly wrong in this respect. They are seeking to regulate a "banking world" without the basic recognition of where the true problems lie. They may not have been bought, to the extent that US and UK politicians have been bought, who knows, but they are direct beneficiaries of a banking world they criminally fail to understand.

Their actions will ultimately bankrupt the EU (for want of a better word), via capital flight, green taxes, over-regulation, yada, yada. They will lose competitive cost structures and their tax base, to the point of feudalism.

Equally, they have NO intention of creating any structure that resembles democracy.

eda said...


Anonymous said...

The basic problem with "western economies" is that increasingly, growth, such as it is is debt based, and therefor largely illusionary.
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