Friday 11 September 2009

Round-up: FTSE, Rover, GM/Vauxhall

Quick round up of C@W views on a few issues of the week, heading into the weekend:

- MG Rover - I can't believe the report cost £16 million. All that money to accountants and lawyers to tell the Government the Directors were a bunch of shysters - exactly the conclusion of the last report! Now Mandy is preparing for the Sunday Newspapers to splash on it and making noises about having them banned a company directors. Boo hoo - how hard is it to get round that, ever heard of nominees etc. In the picture that is Peter Mandelson looking for someone other than himself to blame, as per usual.

- GM/Vauxhall - Lots of panic about GM closing the Luton Van factory which seems overdone to me. Is only 800 jobs when our dole queues are growing at tens of thousands a month. Economically, the vans will be better to be built in Russia. Forward thinking workers should consider going with the plant perhaps? No doubt the Government will hose some more cash at this deal though, copying the German's. Sadly for us, they have the money and we are printing ours still....

FTSE 5000 - Quite a shock to see the FTSE look like it may stay above 5000 at the end of this week. The chances of a retrace grow with such fast upwards movement. However, it does show QE money hitting the economy and being pushed straight into a new asset bubble in shares. House prices are holding much higher than expected too. This is good news all round, it means that we have enough QE for now and the bank should stop its programme.

The FTSE will still have a significant correction in the next 2 months and end the year flat - so 10% down from here is my expectation.


Bill Quango MP said...

Oddly Peter Mandelson seems to be casting a shadow in that picture.

But it looks a bit ..well, phallic?

Steven_L said...

No way am I shorting the FTSE again, what a stupid decision that decision that turned out to be!

I think cfd's and me are through for at least a few months, got a bad case of gamblers remorse now.

Will keep on squirrelling away into my ISA and watching my balance grow at a more realistic rate.

I lost more in a couple of days on that FTSE bet than I just spent buying a complete carp/pike fishing set up that will last me 10 years.

That's the problem with getting up early and eagerly waiting for the market to open! Will be crawling into work for 10am as usual from now on.

Anonymous said...

FTSE 5000 plus?

Gold is telling the story, despite the bullion bank shorts.

Commods hedge against printing.

First the premium attaching to a reserve currency is partly taken away.


But there will be a correction soon.

France is saying a Obama key speech coming monday.

He has to perform, his credibility is zero right now.

Gold and equities to the moon, but in a worthless currency??????????????

James Higham said...

Your optimism is almost catching, CUS.

CityUnslicker said...

SL- I am off ETF's and CFD's too - way to much can go wrong way too quickly. happy with my mining and oil picks at the mo.

Anon - Yup, don't disagree. Still cash will be the loser though, assets may be in a worthless currency, but as you say, to the moon.

JH - Thanks, trying to keep optimisitc as there is scuh bad news out there everywhere!

Budgie said...

Back in the good old, bad old, 50s and 60s Britain had a thriving and successful car industry (and no I won't take any lip from the armchair sneerers). We still do - it's just foreign owned. So along the way we lost the national ability to finance, design and build quality cars and trucks. What went wrong?

Now I believe HBoS (etc, though RBS had ABN) largely failed because of the grossly incompetent Gordon Brown and his government created property bubble. Similarly in the past, the British car industry was ruined by government using the infamous 'stop-go' method of controlling our economy by switching credit off and on.

This created havoc in the high value, discrete, volume production environment of the car industry. I was told that when the government was on its 'stop' phase, management deliberately picked fights with the unions because it was the cheapest way to cut production without having to sack their valuable workforce.

This may have been shortsighted but at the time appeared the only way to deal with government imposed stupidity. It demoralised both management and unions and led directly to the confrontational, politically inspired strikes typical of the late 60s and the 70s. And of course it led to poor quality and lack of finance for future investment. Having broken the car industry Labour then nationalised the British owned parts of it, setting up the long drawn out death throes of Rover.