Prince William, Kate Middleton and Bishop Broadbent

The death of deference cuts both ways...

Above, the man who put the "pric" in "bishopric" - Rt Rev "Pete" Broadbent (fashionably tieless - and somewhat unbuttoned - in the Sun's pic), Bishop of Willesden, who has now apologised for prognosticating the failure of a royal marriage that hasn't yet taken place. His wonderwall is on Facebook here - he seems to have time for such things. He has also put the "twit" in Twitter.

What else does he do? Does he curse infants at christenings, like the wicked fairy at Sleeping Beauty's? Or is his malevolence reserved only for his superiors? Did it occur to him that "Big Ears"'s mother is the Head of the Church of England, and William may one day be so?

Does he quite understand the difference between the C of E and the Labour Party? Perhaps not: "Formerly an Islington Councillor and Chair of its Development and Planning Committee, Peter Broadbent is a member of the Labour Party." ("Cranmer" had a bit of a go at this bien-pensant prelate last year.)

As a "good republican", perhaps he should consider his position, since Anglican bishops also "cost us an arm and a leg" - see "Bishops' office and working costs" and The Times' recent article on same. After all, those who have decamped to the Catholic Church are prepared to "make sacrifices, giving up salaries, additions to their pensions and accommodation." Would he be willing to turn his footsteps that way, like a previous incumbent (Graham Leonard)? Less likely, I suppose, since he seems to be an "evangelical", than the other direction; but in that case, perhaps, following Leonard's example, prudently after retirement and receiving his pension, so costing us an arm and a leg all the way.

As long ago as 2004 the Daily Telegraph revealed that "Newly appointed bishops are currently paid £33,930 a year in addition to which they receive a number of perks and allowances." "Pete" won 30Days' "Golden Mitre Suffragans Award" for his expenses in 2005, claiming £45,207. I don't know if he gets anything extra from his other position as the acting Bishop of Stepney - he has been riding both horses since July this year. King Athelstan must regret having given the parish ten manses.

Still, it's only the same sort of screw as a pole dancer. And, it would seem, for a similar degree of exhibitionism, if manifested in a slightly different way. Perhaps Willesden is his day job and he moonlights as Stepney.

UPDATE: He's been suspended "indefinitely". What price the "early retirement" solution ("Pete" is 58)? Of course, like the publicity-seeking, fast-gabbling controversialist David Jenkins, he may merely leave his episcopal post but continue with his priestly duties. At least Bishop Broadbent hasn't (so far as I know) sworn in sermons or had his church struck by lightning.

Airport X-ray bodyscanning machines may increase cancer rates

Read this.

Is there a science of flavour combining?

You're probably familiar with versions of the colour wheel, first attempted by Sir Isaac Newton in 1666 (left) and since reworked in different ways (example, above).

But can the same be done for food and drink? One thinks of chef Heston Blumenthal's bizarre combinations - snail porridge, bacon and egg ice cream, etc - and wonders whether there is some underlying set of principles.

This seems to be far more difficult, because individual foods are a complex of flavour elements and besides, texture and appearance are important additional factors. Also, all these aspects can change as a result of how they are prepared and cooked. And there are hundreds of ingredients, subdivided into many varieties, so there is a dauntingly large number of potential combinations.

A recent book byNiki Segnit, "The Flavour Thesaurus", attempts a schema of selected foods - see page 8.

But you may find this website useful in your experiments - it allows you to input an ingredient and find a choice of partners for it.

Blowing a stolen trumpet

As others have noted, blogging appears to be undergoing a recession (rage is so tiring); so I am thankful for any scraps of recognition or praise. Perhaps we should look for quality of readership, rather than quantity.

I am ego-boosted by my ranking as 6th/49 in Online MBA's list of "Top 49 Economic Blogs with Visual Aids", and the inclusion of Bearwatch on Alltop's live post-listing of "Top Economics News". We humbly rub shoulders there with some of the real big hitters, and are grateful that nobody's noticed our scuffed shoes.

When I finally suspect I'm an authority, I shall let you know. Until then, I shall continue to stand on the shoulders of giants, and pick their pockets.

Inflation vs deflation revisited

I am flattered to receive attention from the Economic Policy Journal re my recent post on the Weimar hyperinflation of 1923. (I should have made it clearer that the graph is not mine - it comes from the site I linked to in that post, i.e. Now and Futures. Apologies for any misunderstanding, which I didn't intend.)

Some may think that I'm scaremongering, talking about such a scale of inflation; and we must hope that it doesn't come to pass. After all, history cannot be repeated exactly because the later time has the memory of the earlier, a point made elegantly by Jorge Luis Borges' short story "Pierre Menard, Author of the Quixote". But we may simply get to the same destination more slowly - after all, the dollar and pound have lost something like 98% of their value since the beginning of the 20th century.

So I responded to the comments as follows:

You're right, we're in a deflation at the moment, but the undermining of the currency is already showing up as inflation in energy and food prices. Recently (http://www.youtube.com/watch?v=J2-BZEyOnhE) Mike Shedlock and Dr Marc Faber appeared together on an interview and they agreed that inflation was the end stage, the only real difference of opinion between them was over timing.

Deflation would greatly benefit holders of cash (and gold, which seems to be a great each way bet if you buy in at the right price), but pretty much cripple and bust everyone else, so you're right again. Which is why our governments are so very motivated to find a way to restimulate inflation.

This time, the most indebted countries seem to be competing to see who inflates most (so they end up debauching their currencies in parallel), and the creditors who depend on exporting to them are trying to follow suit. The global economy has never been so interconnected before so we're in new teritory.

Faber reckons we are heading for a global bust; in which case I suppose global trade will break down, the focus will be on national and individual self-sufficiency and those who have spare assets will hold commodities of one sort or another until a new, sound currency arises.

Scaremongering? My mother's family lived through the Weimar inflation, but got through OK because they were farmers; until the busted German middle class turned to a new leader. The farm is now in Russian-held territory and we haven't seen it since 1945.

I have hope for the USA because it has natural resources (including land) that could satisfy the reasonable needs of the population; and because you have a Constitution that could be your storm cellar, if you don't let your corrupted elite persuade you to fill it in and build over it.

The State of the Union, in credit terms

First published on The Broad Oak Blog (Nov. 15, 2010):
________________________________________

CMA DataVision's third-quarter report gives the latest assessments of sovereign debt default risk, as measured by the price of credit default insurance. This edition also includes ratings for selected individual States of the USA. I have combined the latter with the former in a ranking below, so that you can see the ratings of States in some sort of context. Please click on the picture to enlarge.



DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Sovereign debt default risk

First published on The Broad Oak Blog (Nov. 15, 2010):
___________________________________________

On October 7, CMA DataVision released their third-quarter report on the credit ratings of sovereign countries. CMA's ratings are worked out by looking at what the credit market charges for insuring against default. This market-based marking is different from the assessments of Standard and Poor's, Moody's, Fitch etc, who are paid by the organisations they rate and whose reputation has been brought into question after the events of 2008.

On page 4, CMA says that four of the 10 most risky nations are in the EU (Greece, Ireland, Portugal, Romania). It's worth remembering that a fifth on that list, Ukraine, is eager to join the EU. (For those who want to know about all the "PIGS", Spain is 21st most risky.) How is the currency and banking of the European Union meant to contain these problems?

The UK is rated 59th most risky (or 13th safest), with an implied credit rating of aa+ (as opposed to the official AAA rating that has helped to keep down the cost of our credit).

Four Nordic countries lead the list of securest debt: Norway, Finland, Sweden and Denmark. Only four other countries share their "implied AAA" rating: Germany, Switzerland, the Netherlands and Australia.

The United States has been downgraded this quarter, from "aaa" to "aa+" - the same as for the United Kingdom.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Gold is merely the thermometer of inflation?

First published on The Broad Oak Blog (Oct. 9, 2010):
________________________________

The vitally important inflation / deflation debate continues. In my last post, I relayed one view, which is that the very rich and powerful will not permit runaway inflation, because it erodes the value of money and the rich have most of the money.

As a corrective, I give below the latest video from the National Inflation Association (NIA), a US group that has warned about credit growth and inflation for a long time. Their motivation appears to be patriotic - a return to sound money as part of what makes individual prosperity and freedom possible.

The NIA argues that the rise in the price of gold is not because of mass speculation, for although a lot of gold has been bought recently, a lot has also been sold. What may be happening now is a transfer of privately-held gold from relatively poor people who need to raise money, to investors who are looking ahead to a time when cash will rapidly depreciate. Think of all those gold-buying outlets (or inlets) you now see on your High Street. As someone said a while ago, the mania will be when those shops start selling you gold instead of buying it from you.

As many have now said, trading nations around the world are devaluing their currencies to keep pace with one another, for fear that their exports will be hit if they don't. So the soaring value of precious metals can be seen as a better indication of inflation than currency exchange rates.

You may think that if currencies are depreciating, then surely prices of goods and services in general must also increase rapidly, and we don't see this yet. But we are in a recession and the threat of unemployment is keeping down wage demands; the self-employed are willing to lower their rates, perhaps especially if paid in cash; and traders in items such as cars and computers are offering discounts to clear stock and keep paying their overheads.

However, the NIA and others say there will come a time when the system begins to crack. Governments are buying their own debt, or lending money to banks to do it for them, to maintain the appearance of normality and control; this can't go on forever. The prediction is that we will get either default or hyperinflation. So the gold bugs say buy gold, silver, maybe oil and agricultural commodities etc - anything tangible that can't be multiplied at will.

I don't think (feel) that the turning point is imminent, because of recession and the attempts by some governments (such as the UK) to retrench. But I fear that these last-ditch attempts are untimately doomed to partial or complete failure. In that case, the gold bugs will probably be vindicated.

The other thing I'd say, as I've said before, is that if the system really does come under severe strain, the price of gold may not be the most important of your concerns. If you accept the inflationists' thesis, you will be quietly making preparations to cope with emergencies of different kinds.



DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Should retirees look to the stockmarket for income?

First published on The Broad Oak Blog (Sept. 7, 2010):
______________________________________
Adapted from my advice to a client this weekend:

Price inflation is not uniform or universal. Food and fuel have risen in cost recently, but State Pension benefits are linked to a cost of living index and should therefore approximately keep pace with increases in the price of basic needs.

In other areas (e.g. cars, cruises) prices have remained stable or even fallen. During what I suspect will turn out to be a long, Japan-style recession, it may be that the price of luxury goods and services will not inflate greatly, except perhaps for the luxuries of the very wealthiest.

Other than cash, what other ways could you invest?

First, one could look at deposits that link to inflation indices. Unfortunately, NS&I recently withdrew their index-linked savings certificates, the first time they have done so in 35 years. National Counties Building Society has an RPI-linked cash ISA (available until 30 September) but this is for a fixed amount (£5,100), runs for a fixed 5 year term and does not permit earlier withdrawals, so it may not fit in with your requirements.

If the government issues new index-linked gilts, these provide income and capital growth in line with RPI. The initial income may be low, however. For further details, please see the website of the Debt Management Office or a stockbroker. Generally, I would not now strongly recommend government bonds on the second-hand market, because the demand for them has become so high in these troubled times that the yield (ratio of income to traded price) is very low. If public finances unravel and interest rates rise, the effect on the capital value of bonds would be very depressing. As it is, the UK is struggling to maintain its official AAA rating and the implied credit rating on the credit default insurance market is actually rather lower already.**

Residential property appears still to be overpriced in historical terms. I think the only reason prices haven’t fallen much further is that interest rates are very low, which allows homeowners to maintain their mortgage payments on large loans. As the budget cuts begin to take effect, I think we will also see a depression in commercial real estate.

The stock market is also in a bubble, I believe. The ratio of price to earnings is still very high and the earnings may not truly reflect the forward position*. Companies are reportedly maintaining some degree of profitability by running down stocks, closing sites and laying off staff, but there is only so far they can go down this road. Many leading companies derive a significant part of their earnings overseas, but world trade is so interconnected these days that a slowdown in Western consumption will also impact on Eastern production.

The general picture appears to be deflationary, and although governments would like to stimulate further inflation in the way they have done over the past 30 years, there are respected economic and investment commentators who say we are now saturated with debt and unless we see outright defaults by sovereign nations (which could still happen), we will have to go through a long and painful process of retrenchment and paying-off debt.

Others look beyond deflation and think that it will ultimately force governments to find some way to increase the monetary base and devalue their currency. It may be significant that both Russia and China have made substantial purchases of gold in the last few months, and China has announced its intention of increasing her holding from c. 1,000 tonnes to six or ten times that amount in the next decade. But here we are in the realms of financial speculation, and the inflation speculators are already buying into agricultural commodities, precious metals, oil etc.

However, extreme or unconventional government strategies to deal with deflation don’t seem imminent and so I think that over the next couple of years, cash savings are likely to be a good way to build up funds for your envisaged discretionary expenditure***. Should there appear to be a major policy change, then we may have to look at investments that could protect against high inflation.

* Albert Edwards at SocGen expects a major reversal, the FT reports today.

** Though CMA DataVision have raised the UK from aa to aa+ in their Q2 report.

*** "There are no longer any “defensive” securities on the planet. The old asset allocation models and the diversification models don’t and won’t work any more and they haven’t for over a decade. I can’t believe that prominent asset managers are still using this approach." - Steven Bauer

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

The State of the Union, in credit terms

CMA DataVision's third-quarter report gives the latest assessments of sovereign debt default risk, as measured by the price of credit default insurance. This edition also includes ratings for selected individual States of the USA. I have combined the latter with the former in a ranking below, so that you can see the ratings of States in some sort of context. Please click on the picture to enlarge.



DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Sovereign debt default risk

On October 7, CMA DataVision released their third-quarter report on the credit ratings of sovereign countries. CMA's ratings are worked out by looking at what the credit market charges for insuring against default. This market-based marking is different from the assessments of Standard and Poor's, Moody's, Fitch etc, who are paid by the organisations they rate and whose reputation has been brought into question after the events of 2008.

On page 4, CMA says that four of the 10 most risky nations are in the EU (Greece, Ireland, Portugal, Romania). It's worth remembering that a fifth on that list, Ukraine, is eager to join the EU. (For those who want to know about all the "PIGS", Spain is 21st most risky.) How is the currency and banking of the European Union meant to contain these problems?

The UK is rated 59th most risky (or 13th safest), with an implied credit rating of aa+ (as opposed to the official AAA rating that has helped to keep down the cost of our credit).

Four Nordic countries lead the list of securest debt: Norway, Finland, Sweden and Denmark. Only four other countries share their "implied AAA" rating: Germany, Switzerland, the Netherlands and Australia.

The United States has been downgraded this quarter, from "aaa" to "aa+" - the same as for the United Kingdom.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Shares as a safeguard against inflation

Previously published on the Broad Oak Blog (Nov. 14, 2010):
_________________________________________________

It is well-known that German money became worthless in 1923, thanks to hyperinflation. The value of cash savings was wiped out; fixed rents also became worthless, which benefitted the ordinary person; but practically all one's income was spent on food, instead (see Table 6 at the bottom of this page).

What is less well known is how investors who didn't have to sell their shares actually gained, after a market pullback.

UPDATE: As Michael Panzer points out, what I called a "pullback" should more properly be termed a horrendous crash! Unless you have the titanium nerve to hold on through such an event, there is a grave danger that you could buy in now and sell in a panic later and lose most of your wealth.

CLARIFICATION / CORRECTION:(I should have made it clearer that the graph above is not mine - it comes from the site I linked to in the text, i.e. Now and Futures. Apologies for any misunderstanding, which I didn't intend.)

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Could shares protect against inflation?

It is well-known that German money became worthless in 1923, thanks to hyperinflation. The value of cash savings was wiped out; fixed rents also became worthless, which benefitted the ordinary person; but practically all one's income was spent on food, instead (see Table 6 at the bottom of this page).

What is less well known is how investors who didn't have to sell their shares actually gained, after a market pullback.

UPDATE: As Michael Panzer points out, what I called a "pullback" should more properly be termed a horrendous crash! Unless you have the titanium nerve to hold on through such an event, there is a grave danger that you could buy in now and sell in a panic later and lose most of your wealth.

CLARIFICATION / CORRECTION:(I should have made it clearer that the graph above is not mine - it comes from the site I linked to in the text, i.e. Now and Futures. Apologies for any misunderstanding, which I didn't intend.)

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Parliament exploded

At last, a journalist tells it like it is, about something important.

"A liar and a cheat"

ONE

Black Dog, in the Mail on Sunday:

A new twist in the resignation from London’s Garrick Club of Guardian editor Alan Rusbridger after he unsuccessfully proposed ex-Labour City Minister Lord Myners as a member.

Now Dog hears of a contretemps over an unpaid dinner bill. When chased by the club some months later, Rusbridger sent a photocopy of the cheque he paid with.

The Garrick could still find no record of receiving the original cheque, so he sent a second one bearing a serial number consecutive to the first. Times are hard at The Guardian.

TWO

Mr Rusbridger himself (editor of The Guardian newspaper) about the collapse of Jeffrey Archer's libel case against that newspaper, in an article titled "A liar and a cheat" (highlights mine):

"The Guardian has never doubted the truth of its original story. We would have produced damning evidence of Mr Hamilton and Mr Greer's lack of integrity if the case had proceeded. No doubt that is why they dropped the action."

This ultimately led to a trial of Lord Archer for perjury. He was found guilty and sentenced to four years in jail.

THREE

Wikipedia, on the philosopher and media personage C.E.M. Joad:

In April 1948, Joad was convicted of travelling on a Waterloo-Exeter train without a valid ticket. Although he was a frequent fare dodger, he failed to give a satisfactory excuse. This made front-page headlines in the national newspapers, and the fine of £2 (£54 as of 2010) destroyed all hopes of a peerage and resulted in his dismissal from the BBC. The humiliation of this had a severe effect on his health, and he soon became bed-confined at his home in Hampstead.

Joad died a few years later, a broken man.
_________________________________________

Why were Mr Rusbridger's two cheques to the Garrick Club sequentially numbered? Is it really the case that he wrote no cheques at all on that account for the intervening months? This could easily be proved by revealing the dates of cheques written immediately before the first cheque to the Garrick.

One would think that the implications of Black Dog's article are potentially quite damaging for the editor of a national newspaper that, whatever its political inclinations, has built a reputation for truthfulness and integrity, qualities it seems to have found lacking in Mr Hamilton and Mr Greer.

I wonder what Mr Rusbridger may be prepared to do to combat the seeming innuendo of Black Dog's article?

In praise of "First Life"

How wonderful, to learn of creatures with rock bodies and crystal eyes, roaming shallow seas in endless variety, an infinite case of intricate, animated jewels.

Prospering during the collapse

Some of the websites I visit seem to be aimed at investors who want to make a killing out of the turmoil. There's even books about it, notably Peter Schiff''s. The mindset is, devil take the hindmost and aren't we the smart ones.

So where are all the wise guys from the Mayans, Toltecs, Aztecs, Inca?

Perhaps their descendants are quartered on some as yet undiscovered Caribbean island, living off the interest on their interest and drunk on Inca Pisco every night. Maybe Dan Brown is working on another thriller about the secret inheritance of the ancients.

Or maybe not. I think we should be told.

Can the elite really control the outcome, as Charles Hugh Smith thinks?

Tea time

Bewildered

Why do they call it "waterboarding"? I've always known it as surfing. So what is "snowboarding"?

The class system

Why, after all the supposed socialist and proto-socialist governments since WWII, do we have such a high and rising gap between rich and poor?

Even our postal service has become class conscious - in 1968 and under a Labour government. You'll note it's not "Express" or "Priority" as with the US system, but "First Class" versus - what is it now - "Steerage"?

Something is completely ripe and succulent in the state of Denmark

UK is more corrupt than Qatar, Barbados or Luxembourg, says Transparency International.

Mind you, at 20th we're way above Italy, which ranks below Rwanda.

Having a go, because they won't

Ex-MP Matthew Parris pleads the case for our Parliamentary representatives. Understandable, since he has simply moved from one profession that imagines it knows better, to another.

As usual, he does coy, paradoxical and faux modest so well; but not well enough to disguise the fact that the Fourth Estate has become as conceited - and part of the in-crowd - as the rest of our masters. I will allow them the first, if they will relinquish the second.

A recurring fantasy pesters me, about the episode (sadly the clip omits the marching, menacing entrance of AC; audio fly on the wall here) in which the now pointedly poppy-less Jon Snow deals with a gatecrashing Alastair Campbell rather differently:

JS (before AC even reaches the desk): Please leave the studio, you have not been invited onto this programme.

AC: I phoned to say I was coming.

JS: And you had your reply. Please leave immediately.

AC: No I won't, there's something that needs to be said right now!

JS: Please leave now, or Security will escort you off the premises.

AC: I'd like to see them try! Now be sensible, Jon -

JS: - We'll take a break. Security!

Instead, we got "And now we are joined by Alastair Campbell - a rare moment - thank you for coming in" etc - and the chummy handshake at the end. Channel 4 News patted itself on the back for a journalistic coup, but out here in the bleachers it just looked as though Campbell felt entitled to treat a news studio like an airport executive lounge.

Reporters Without Borders' "Press Freedom Index" says we've gone backwards since 2003 - and even two points down on 2009. Our national ranking is now 19th, below most of the Nordic and Baltic countries. Is there a link between cold weather and integrity?

It's an ill wind...

(Please click on pictures to enlarge.)

Jesse's sidebar links to a website that shows national indebtedness, e.g.:


But this needs interpreting in the light of money owed both ways (the net international investment position, or NIIP), e.g.:


Recent ONS statistics show that as our pound and stocks devalued, our NIIP improved (if that's an improvement):


... so what counts as good news, and how badly-off are we?

Caravan news

We're heading back into the 60s/70s. Turn on, tune in, drop out. But I'd suggest a twist.

I've often said to others - especially my wife - never mind New Age travellers, let's become old age travellers. That is, no tats, no drugs, no atomkraft nie danke stickers. Just go where you like by caravan, pretending you're on holiday from your drab dwelling in e.g. Birmingham. That way the police will just see you as silly old crumblies and leave you alone. Bless you, love, we're on our way to Bournemouth for a fortnight, that sort of thing. My Mum used to say people always think you're dafter than they are, just play up to it.

In other words, don't challenge the system, just sidestep it unobtrusively. We're all too interconnected to bring down the system without horrible things happening to us, the ones we love and the ones we depend on. Find your niche. As the Chinese saying goes, better to light a small candle than complain about the dark.

It's not consistent, I think, to complain about Communist strategies for mass social subversion on the one hand and then on the other to advocate something very similar oneself, e.g. withdrawing all your cash from the bank on a given date, a move Ian PJ appears to support, though I well understand the temptation.

The point is not to smash the system - we've seen the joy that brought to Russia, China, Cambodia etc - but to encourage it to mutate to our preferences. CAMRA turned the tide on proper beer, people like Hugh Fearnley-Whittingstall got Tesco et al to get more serious about humane and organic food - all without torching the pubs and supermarkets.

The first to operate on the new model will doubtless get a free or cheap ride - see the caravanners who've invaded upmarket Venice Beach, a place where they could never afford to buy houses even before they had theirs repossessed - and then the system will adjust.

There's no need for a hey-guys-let's-all approach: do what you've decided, don't put up with what you don't have to, be prepared to pay the price for your decision. If enough others do the same, society will change appropriately; if not, you've suited yourself. I quit teaching in 1989 because I wasn't prepared to put up with the crap and bullying, and it cost me financially - but who knows what carrying on would have cost me? My life has been incredibly richer experientially as a result of realising that it wasn't all decided for me. We forget how free we are already.

No self-destructive emotional spasms, please, we're British.

He who pays the piper

Why do we talk about British freedom and independence when our political and business leaders have sold the country from under us?

Germany's Deutsche Bahn has owned the Royal Train since 2007 and has now just sacked the manager despite his 30 years' service. Follow the money, and you'll see that you have to pay a Frenchman to get from England to Wales across the Severn. The Frogs also own British Energy. Cadbury's is now American, HP Sauce Dutch, Coca-Cola has just closed down Malvern Water, even the UK's tax offices are owned by a property company based in Bermuda... Banking, car manufacture (or rather, assembly), we could go on. It would be far easier to list the few major enterprises that are still (as ultimate beneficiary) British-owned.

A new book by Matt Taibbi reveals that the same is now going on in America.

Will it eventually become a war of the people against their rulers?

UK banking system overconcentrated

According to the advert on the left of this article, the USA has 7,830 banks of which 437 are judged to be in immediate danger of failing. Assuming that happens, that leaves 7,393 banks servicing a population of 310,592,000 - equivalent to a little over 42,000 people per bank.

The UK has "about 400" banks and building societies (FSA list here) to service a population of 62,008,049 - equivalent to over 155,000 per bank.

In other words, the US has about 3.69 times the number of banks per million head of population - a much smaller average customer base, but a correspondingly larger reserve of lesser-sized organisations to take up the slack if one or more of the big ones goes down.

This suggests that it is even more important for the UK to consider breaking up the biggest outfits, because the fall of one of our greatest trees would create a much bigger clearing in our forest than it would in the States.

Pulling the wool, or something

Is there any evidence that the EU seriously expected to get a 6% increase in its budget? Wasn't this merely a headline figure for the punters, so that Europhile leaders could go back to their nations claiming a bargaining victory?

A straw in the wind

Here it comes, the new colonialism.

Politician requiring tuition

Alan Johnson has said he'll need to buy a book on economics now he's been made Shadow Chancellor. He's not alone, as it seems most of political class know nothing about the subject, even though many must have read PPE at Porterhouse.

What one book would you recommend politicians should read before we let them play with the toy train set of our economy?

I think a new Ladybird book would be a wonderful help - they used to be so clear and concise. So much better than turgid, shut-you-out academic and wrong.

Pin the tail on the economic cycle

Where are we in the cycle, would you say? (Click on pic to enlarge.)

Is there such a thing as law? How about the EU?

James Higham draws our attention to a presentation by "Captain Ranty" in which the latter asserts that any law passed by our rulers has no validity without our specific individual consent.

This position has its attractions for those of us who deny that we ever consented to rule by the EU, but philosophically it has its dangers and I think we'd do better to declare that certain decisions by Parliament are ultra vires, especially the concession of any part of national sovereignty, since this is a form of dilution or abolition of the franchise that legitimises the House of Commons itself.

I attempt a doubtless flawed riposte to the freedom-loving Captain, as follows:

If you're going to take what is I think essentially an existentialist position, then remember that Sartre said (in effect) not only are you free but you cannot choose otherwise than to be free. Canonising Jean Genet means that as far as the laws and taxes are concerned, you merely note the consequences of possible actions and then decide to do whatever you're going to do. Externally you are still ruled, but presumably there is an internal change in that while you accept that some have power over you, you no longer concede them the right. There must be some sense of relief, some conservation of psychic energy in that.

But that position is not a collectivist one, for pace Sartre's aberration during the 1968 riots, otherwise he maintained there is no collective freedom. You say "Soon it will be. Soon there will be a million of us. But long before we get those kind of numbers we will have won." We? Win what? There is no "we" and far from a future victory, freedom is an inescapable initial condition. Existence precedes essence.

I believe Sartre said that you could choose to give up your freedom, but I don't think the logic of his position dictates that we should be bound by a previous decision of a past self, any more than by the diktat of another. "I've changed my mind", you'll smile.

Tiptoeing away from this road to chaos, may I suggest that Americans (which group now includes my brother) might do well to reaffirm the Constitution in all its words and guiding spirit. What wisdom your Founding Fathers had, to set down such a massive and beautifully-carved stone as the basis for the nation; we in Britain are much more vulnerable to top-down plutocratic / neo-aristocratic / bureaucratic corruption and revolution, for here the system merely smiles and tells you it's changed its mind.

The future of the British political elite

One law for them...

"Insider-trading laws don't apply to Congress" - reports Denninger. Is that also true for Parliament?

Just for a laugh

Candidate's exam response, reported in a Monmouthshire village magazine:

Q. What is artificial insemination?

A. When the farmer does it to the bull instead of the cow.

Gold is merely the thermometer of inflation?

The vitally important inflation / deflation debate continues. In my last post, I relayed one view, which is that the very rich and powerful will not permit runaway inflation, because it erodes the value of money and the rich have most of the money.

As a corrective, I give below the latest video from the National Inflation Association (NIA), a US group that has warned about credit growth and inflation for a long time. Their motivation appears to be patriotic - a return to sound money as part of what makes individual prosperity and freedom possible.

The NIA argues that the rise in the price of gold is not because of mass speculation, for although a lot of gold has been bought recently, a lot has also been sold. What may be happening now is a transfer of privately-held gold from relatively poor people who need to raise money, to investors who are looking ahead to a time when cash will rapidly depreciate. Think of all those gold-buying outlets (or inlets) you now see on your High Street. As someone said a while ago, the mania will be when those shops start selling you gold instead of buying it from you.

As many have now said, trading nations around the world are devaluing their currencies to keep pace with one another, for fear that their exports will be hit if they don't. So the soaring value of precious metals can be seen as a better indication of inflation than currency exchange rates.

You may think that if currencies are depreciating, then surely prices of goods and services in general must also increase rapidly, and we don't see this yet. But we are in a recession and the threat of unemployment is keeping down wage demands; the self-employed are willing to lower their rates, perhaps especially if paid in cash; and traders in items such as cars and computers are offering discounts to clear stock and keep paying their overheads.

However, the NIA and others say there will come a time when the system begins to crack. Governments are buying their own debt, or lending money to banks to do it for them, to maintain the appearance of normality and control; this can't go on forever. The prediction is that we will get either default or hyperinflation. So the gold bugs say buy gold, silver, maybe oil and agricultural commodities etc - anything tangible that can't be multiplied at will.

I don't think (feel) that the turning point is imminent, because of recession and the attempts by some governments (such as the UK) to retrench. But I fear that these last-ditch attempts are untimately doomed to partial or complete failure. In that case, the gold bugs will probably be vindicated.

The other thing I'd say, as I've said before, is that if the system really does come under severe strain, the price of gold may not be the most important of your concerns. If you accept the inflationists' thesis, you will be quietly making preparations to cope with emergencies of different kinds.



DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Down with the Bolligarchs!

"Governing is quite simple, really," remarked Kameronski. "It's merely a matter of knouting the krestyan and taxing the burzhuaznyĭ. Some," and he looked about him meaningfully as a dread silence enveloped the room, "fail to understand the necessity of firmness."

The figure on the right in the last image is that of the hapless Osbornski, purged with other moderates and revisionists in the ensuing Party reorganisation. His wilier successor Clarkov, known as "old Stone-Liver", survived until the latter half of the decade.

The Thin Geek Line

I have just finished reading "The Ultimate Utility of Nonutility", by Lisa Colletta (Academe magazine, September-October 2010).

In it, she writes the following:

"A liberal mind is one which is independent and disinterested, aware of the history of thought, action, and reaction, and understanding of ambiguity. The liberal arts are not valuable because they are useful politically or vocationally. They are valuable because they are what constitutes real knowledge.

...I would claim that real knowledge of the real world is emphatically not the domain of the professional fields. The professions teach students skills, skills that may indeed be useful, but are too often uniformed by knowledge or thoughtfulness."

She is not alone in her dismissive attitude towards the sciences and engineering. I have seen similar opinions expressed by David Brooks of The Washington Post, Simon Jenkins of the UK's The Guardian, several other political commentators, and all too many university professors.

They remind me of the ancient Greek philosophers, debating the virtues of democracy, while surrounded by slaves and servants who do the actual work.

Apparently, her 'real' knowledge and grasp of the ephemeral nature of human constructs have failed to make her aware of the frailty of our whole civilization.

Were it not for the excess food and other resources provided by the Agricultural, Scientific and Industrial Revolutions, our comfortable lives would not be possible, the lofty ideals of the Enlightenment would be so much empty rhetoric, and democracy as we know it would not exist. In fact, without the relatively small number of technical experts, the best estimates are that 95% of humanity would starve to death within a few months.

Let her ponder that the next time she pontificates to her students.

Excellent article by Charles Hugh Smith

Charles Hugh Smith explains the current mess in terms of class warfare and entrenched self-interest. In a nutshell:

• The wealthiest top 1% have influenced the tax system so that their investment income is barely touched, especially when there are loopholes and shelters they can use. They and their wealth can stay in the US.
• The bottom 60% depend partly or wholly on what they receive in benefits from the system. They have to stay in the US.
• This puts the burden on the middle-to-upper income-earners. But if the burden gets too heavy, the top half of those earners may choose to flee the country. If so, the system breaks down.

The fear may be overstated.

US citizens have to pay US tax on their earnings anywhere in the world, but if they renounce citzizenship and have over $2 million in net assets (including income-producing assets such as pensions), there is still a one-off ransom tax to pay before they leave.

If they have less than $2 million, they may not have enough to live the idler's dream abroad.

The result is that fewer than 750 Americans chose the escape route in the last year.

But Smith's article is very useful for seeing how the parts of the machine work, and why it resists reconstruction.

What inflation? "Them" won't let it happen

Inflation in food and soon, it is reported, in clothing, is owing to factors such as bad harvests, rising energy costs and government export restrictions.

But if you agree with the monetarists that inflation is caused by the expansion of money and credit, then until people and governments have paid-down (or defaulted) enough debt to feel confident about spending again, we are in a deflationary environment and whoever holds money is going to do well.

That said, there is a subset of monetarists who think that somehow, governments will force-feed money into the system to create inflation, or hyperinflation.

While this is technically possible, people like Mike Shedlock counter that the ruling elite will not allow this to happen, since it would destroy their wealth.

It's a rigged game, not Russian roulette. So barring some catastrophic default, we've got to sweat it out through a new Depression era.

Save money.

"Commercial real estate lags residential and residential real estate has not yet bottomed, and indeed may not bottom for years." - Mike Shedlock

"The most important indicator is “credit growth” or lack thereof. Everything else follows... There is no credit growth, and therefore, according to my long-standing theory, there can be no sustainable economic growth unless and until miraculously credit starts growing. However, given current policies in Washington, that seems unlikely at this time." - Bert Dohmen (htp: Karl Denninger)

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Future issues

White collar work in the West is threatened by lightspeed worldwide communication with countries where wage rates are dramatically lower; and by increasingly powerful computers and programs.

When all but manual and menial work simply and permanently isn't there anymore for very large numbers of people, the moral connexion between work and income is weakened. The issue then will be distribution of wealth: who gets given what, and with what justification?

The embers of socialism are still hot.

Aeolian harp

Stunt preachers

You could almost believe that Pastor Terry Jones and Imam Feisal Abdul Rauf are in cahoots over the controversial Park51/Cordoba House project.

The former is an ex-hotel manager whose sister church cut ties after allegations of his financial impropriety, and who preaches to a congregation of maybe 50 people. His I'll-burn-the-Koran stunt has made a nobody into a somebody.

The latter has allegedly "dedicated his life to building bridges between Muslims and the West and is a leader in the effort to build religious pluralism and integrate Islam into modern society", but his company Cordoba Initiative has a stake in the Park51 project and the recent publicity, athough temporarily polarizing opinion, may ultimately turn out to have been financially useful. Donald Trump reckons so - and he's looking to buy in without getting squeezed for too much extra cash.

It's enough to make a cat laugh.

Goldmans Sachs "fine"

Goldman Sachs is going to pay £20 million to the FSA, says the news. That's not a fine, it's a tip.

Should retirees look to the stockmarket for income?

Adapted from my advice to a client this weekend:

Price inflation is not uniform or universal. Food and fuel have risen in cost recently, but State Pension benefits are linked to a cost of living index and should therefore approximately keep pace with increases in the price of basic needs.

In other areas (e.g. cars, cruises) prices have remained stable or even fallen. During what I suspect will turn out to be a long, Japan-style recession, it may be that the price of luxury goods and services will not inflate greatly, except perhaps for the luxuries of the very wealthiest.

Other than cash, what other ways could you invest?

First, one could look at deposits that link to inflation indices. Unfortunately, NS&I recently withdrew their index-linked savings certificates, the first time they have done so in 35 years. National Counties Building Society has an RPI-linked cash ISA (available until 30 September) but this is for a fixed amount (£5,100), runs for a fixed 5 year term and does not permit earlier withdrawals, so it may not fit in with your requirements.

If the government issues new index-linked gilts, these provide income and capital growth in line with RPI. The initial income may be low, however. For further details, please see the website of the Debt Management Office or a stockbroker. Generally, I would not now strongly recommend government bonds on the second-hand market, because the demand for them has become so high in these troubled times that the yield (ratio of income to traded price) is very low. If public finances unravel and interest rates rise, the effect on the capital value of bonds would be very depressing. As it is, the UK is struggling to maintain its official AAA rating and the implied credit rating on the credit default insurance market is actually rather lower already.**

Residential property appears still to be overpriced in historical terms. I think the only reason prices haven’t fallen much further is that interest rates are very low, which allows homeowners to maintain their mortgage payments on large loans. As the budget cuts begin to take effect, I think we will also see a depression in commercial real estate.

The stock market is also in a bubble, I believe. The ratio of price to earnings is still very high and the earnings may not truly reflect the forward position*. Companies are reportedly maintaining some degree of profitability by running down stocks, closing sites and laying off staff, but there is only so far they can go down this road. Many leading companies derive a significant part of their earnings overseas, but world trade is so interconnected these days that a slowdown in Western consumption will also impact on Eastern production.

The general picture appears to be deflationary, and although governments would like to stimulate further inflation in the way they have done over the past 30 years, there are respected economic and investment commentators who say we are now saturated with debt and unless we see outright defaults by sovereign nations (which could still happen), we will have to go through a long and painful process of retrenchment and paying-off debt.

Others look beyond deflation and think that it will ultimately force governments to find some way to increase the monetary base and devalue their currency. It may be significant that both Russia and China have made substantial purchases of gold in the last few months, and China has announced its intention of increasing her holding from c. 1,000 tonnes to six or ten times that amount in the next decade. But here we are in the realms of financial speculation, and the inflation speculators are already buying into agricultural commodities, precious metals, oil etc.

However, extreme or unconventional government strategies to deal with deflation don’t seem imminent and so I think that over the next couple of years, cash savings are likely to be a good way to build up funds for your envisaged discretionary expenditure***. Should there appear to be a major policy change, then we may have to look at investments that could protect against high inflation.

* Albert Edwards at SocGen expects a major reversal, the FT reports today.

** Though CMA DataVision have raised the UK from aa to aa+ in their Q2 report.

*** "There are no longer any “defensive” securities on the planet. The old asset allocation models and the diversification models don’t and won’t work any more and they haven’t for over a decade. I can’t believe that prominent asset managers are still using this approach." - Steven Bauer

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Kitten climbs Matterhorn

From the Times of London, 60 years ago today:

La Capanna Luigi Amedeo di Savoia a Valtournenche

Mice? Here? Or do they mean (as I hope) that he got back to the hotel in Zermatt?*

* Now (and maybe even then) known as the Hotel Bella Vista, I think. I thought the Times was authoritative?

Simplify and survive

Kunstler:

Let me tell you exactly what is going on "out there." The so-called developed world is watching two giant forces race each other to put an end to business-as-usual for industrial civilization. These two forces are the catastrophe of debt and predicament of oil supplies. They had been running neck-and-neck for a few years, but now the catastrophe of debt is pulling slightly ahead. But even this is an illusion because these two forces are actually hitched in tandem, with the rickety cart of civilization bouncing perilously behind them, and whatever one of these forces does will affect the other. Bad debt will eventually cripple the global oil industry's ability to perform, and the failures of the oil industry will only amplify the killing force of debt. It's that simple.

And the simple moral of the story is that the only sane thing America can do is simplify itself, de-complexify its dangerously hyper-complex organs of daily life. I've stated them before but, briefly, this means simplifying the way we do farming, commerce, transportation, inhabiting the landscape, schooling, medicine, and banking. Everything we do to add additional layers of complexity to these already tottering systems will guarantee an eventual orgy of blood and material destruction to this land. Everything we do to prop up the unsustainable instead of reconstructing the armatures of everyday life will make American life a nightmare in a very few years ahead.

Wish he'd explain the how behind "Bad debt will eventually cripple the global oil industry's ability to perform" (inebriated by the exuberance of his own verbosity, as Disraeli said of Gladstone?) but he's trying to see into the heart of the matter.

The Hitchhiker's Guide to... British politics

We've had ten years of Zaphod Beeblebrox, followed by three years of Marvin the Paranoid Android. Now we're controlled by the two ruthless, multidimensional white mice.

Don't panic.

What James Bond can teach us about sex and money

When gender testing first came to the Olympics in 1966, Ukrainian track and field stars Tamara and Irina Press disappeared from the sports scene. Yet the methodology is still disputed.

I'd like to suggest a quicker and easier test: identifying movie preferences.

Generally speaking, women love films about loss and self-sacrifice (Love Story, Casablanca) whereas men prefer stories of conflict and victory, especially where the hero easily destroys hosts of enemies (James Bond, Arnold Schwarzenegger). For women, tear-jerkers; for men, jerk-tearers.

But don't look down your noses at 007, ladies: Bond has much to teach us about the world. Last night I watched the remake of "Casino Royale", starring Daniel Craig. In this yarn, the superspy ruins his arch-enemy in a high-stakes poker game with a pot of $150 million. When the spoils are stolen, he recovers them in a shootout in Venice that involves sinking a whole building into the marshes.

It's prescient: a movie from 2006 about financial speculation ending in a housing collapse.

There's a further lesson. When you have won all the chips on the table, you don't give them back to your competitors; you stand up and walk away. So it is with investment: now that a tiny elite has cornered most of the income and capital, why on earth would they re-enter the market?

In a nutshell

Brevity is the soul of wit:

"... the USA went broke trying to swindle itself into prosperity."

Killer facts about Prohibition in the USA (1919 - 1933)

The 18th Amendment to the US Constitution allowed you to continue using alcohol, and also to make it for your own consumption. What was prohibited was its commercial manufacture and distribution.

As a result, cirrhosis death rates for men dropped by two-thirds. Admissions to state mental hospitals for alcoholic psychosis halved. The homicide rate, which had soared between 1900 and 1910, did not increase significantly during Prohibition.

Prohibition was ended in order to raise taxes for the Federal Government. It was supported by labor unions and wealthy industrialists.

The 21st Amendment, which repealed the 18th Amendment, made unregulated imports of alcohol illegal.

During Prohibition, national alcohol consumption decreased by an estimated 30 - 50%. After repeal, it increased. In 1989, alcohol was implicated in over 50% of homicides (and drugs in 10 - 20% of them). Alcohol was then also believed to be the cause of over 23,000 motor vehicle deaths - more than twice the number of drink-related homicides.

Iceland banned beer for 73 years (1915 - 1988). But for the first thirty years of its existence, Pakistan allowed the free sale and consumption of alcohol; restrictions were only introduced in 1977.

Hands off the raggle-taggle gypsies

I was, I don't know, six. The teacher asked brightly what we knew about gypsies. Ever eager to show off my knowledge, I stood up and said they stole children. I don't know what story I'd got that from.

Half a century later and we're still giving them prejudice. Dirty thieves etc. France is moving them on; in Istanbul, they're knocking down and rebuilding houses as "transformation projects" and offering the romanies the chance to buy the new houses (which they can't afford) or fresh rentals 40 kilometres away. These people, ironically, had been among the first to abandon their ancient nomadic life.

Here's a couple of gypsy blogs: Pesha's blog and Clearwater Gypsies.

And for those who missed it, here's the recent Channel 4 programme "My Big Fat Gypsy Wedding". A community where even the tough guys fear God and the girls are chaste until they marry.

I've never been happier than when leaving somewhere.

Great music

Several Bloghounds members have been offering musical selections. Try listening to the Al Andaluz Project - seven of their tracks are available to click on. I heard something by them on R3's "World Routes" a fortnight ago.

From the same programme I heard Marko Markovitch's tremendously vibrant jazz band. You can't get it on iPlayer but here's a site with samples, and here's "Romany wedding" which would make even the lame dance.


BOBAN MARKOVIC-RROMANO BIJAV-LA BELLEVILLOISE
Uploaded by aceituna11. - Watch more music videos, in HD!

A response to "Capitalists@Work"

"City Unslicker" has posted a feelgood piece and entitled it "Bearwatch". If this is intended as a tease, looking sideways at my first blog which started three years ago and forewarned of the credit crunch*, banking collapse etc, then it's worked. Not that I claim any wisdom, but a strong gut feeling got me looking around for sources of information other than the useless Press.

Perhaps I should feel flattered that anyone from stockbroking or banking pays me any attention; or maybe it's just a naming coincidence. Nevertheless, here is my reply: you experts can be both right and wrong at the same time.

I'd like to have made a graph for the FTSE over the period I think we should be looking at, but that index only started in 1984. Besides, ours is a mixed economy, doing the hokey-cokey between privatisation and nationalisation, so it's very difficult to discern the reality underlying all the fudge.

So instead, here's the history of the US stockmarket "boom" of 1974. The blue line is the nominal index, and then I reinterpret the figures in the light of the Consumer Price Index. We start at the beginning of 1974 and continue for 10 years.


*"a systemic risk that could have really serious consequences is the possibility of a major failure in the mortgage and credit markets, which could then roll on to the banking sector." - 31 July 2007

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

A green query

Are designer eco-homes more environmentally friendly than not building them?

As Scott Adams says:

The greenest home is the one you don't build. If you really want to save the Earth, move in with another family and share a house that's already built. Better yet, live in the forest and eat whatever the squirrels don't want. Don't brag to me about riding your bicycle to work; a lot of energy went into building that bicycle. Stop being a hypocrite like me.

I prefer a more pragmatic definition of green. I think of it as living the life you want, with as much Earth-wise efficiency as your time and budget reasonably allow.

Is the well-heeled greenie not unlike Marie Antoinette, tending her washed (and "heavily perfumed") sheep in a sylvan fantasy?

I'm only jealous, of course. I can't wait to join the middle-class lotus eaters, as soon as my Lotto ticket pays out the Big One.

Underneath the headlines, debt continues to increase

There's much argument on the wires about the issue of inflation vs deflation. As James Quinn points out, the mainstream media aren't helping much because if they comment at all, they may still misunderstand what they're reporting. The official figures appear to show that debt in the US is reducing, but this needs to be reinterpreted in the light of write-offs:

If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off 5.66% of that debt, total write-offs were $800 billion. If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008. The consumer hasn’t cut back at all. They are still spending and borrowing. It is beyond my comprehension that no one on CNBC or in the other mainstream media can do simple math to figure out that the deleveraging story is just a Big Lie.

Reading around, it seems that a lot of credit card debt has been written-off, but better-risk customers may be increasing their usage, especially business owners (perhaps finding a way around the dearth in other forms of bank lending):

Credit cards are now the most common source of financing for America’s small-business owners. (Source: National Small Business Association survey, 2008)

44 percent of small-business owners identified credit cards as a source of financing that their company had used in the previous 12 months —- more than any other source of financing, including business earnings. In 1993, only 16 percent of small-businesses owners identified credit cards as a source of funding they had used in the preceding 12 months. (Source: National Small Business Association survey, 2008)

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Gold up, shares down?

Hot on the heels of China, which has recently increased its gold hoard to over 1,000 tonnes and intends to accumulate far more, comes Russia, which has acquired an extra 10% in the last seven months.

This is at a time when the wealthy are turning pessimistic about the economy again. As I said two years ago, generally I now see newspapers as useless, except for tidbits like that: "Other than weather forecasts, the last usable information I can remember is from the summer of 1987, when I learned that Sir James Goldsmith had sold all his shares on the Paris Bourse, which confirmed my feelings about the way the market was going - but that item came from Private Eye magazine." The current pessimism is reflected not only in last night's close on the Dow (now below 10,000 again), but also in a surge in demand for safe government bonds, as "Jesse" reports.

I said a few days ago that the price of gold was well above its inflation-adjusted trend, but the interest of foreign countries, bearish millionaires and speculative funds boosted by cheaply borrowed money may keep the market buoyant for some time yet.
And I'm sure we'll all be watching the stockmarket with some interest this autumn.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.