BEWARE! THE BANKS ARE OUT TO GET YOU!

[Stanley]

Thanks Wendy, I got a result for INTO so thought it was spelled that way.

[Stanley]

Trump crows about the biggest rise in stack market history as the market readjusts after what looked like a panic reaction. However, we haven't seen the worst of the consequences yet and it's a bit early to forecast what will happen as the economic consequences of actions being taken at the moment filter through the system. I think Trump is being childish and premature, concerned more about re-election than the facts.

[plaques]

You may find that when things return to normal they aren't normal. China is far more flexible in taking advantage of opportunities than America. I think they will adjust to the new conditions faster than other major countries and come out on top. America will try to isolate itself from the changing circumstances, try to pick up where it left off, and continue forcing its hegemony on other countries as though nothing had altered. Watch this space.

[Whyperion]

China could well be being smart buying in Cheap Oil while the west is in an economic slowdown bar the making of loo roll

[Stanley]

I suspect you could well be right P. Very perceptive!
Later, as the news of the eastern markets comes in, there are significant falls this morning in most markets and Futures in NY and London are predicting a fall. The interest rate cuts (US has done another and gone to 0% as well as pumping Billions into the market.) and QE efforts aren't stemming the tide it would appear. So, watch the markets, it's not looking very positive. (It's not academic, it matters to all of us!)
Later, the London markets have fallen on opening, down 7.5% but settled now at -6%.

[Stanley]

Air travel and industry in deep trouble. The government makes noises about protection but the truth is it is beyond them, it would be a spend on a par with 2008 banks. This is not going to end well.
Later, an interesting and worrying piece of news. One current puzzle is that the price of gold has fallen 14% after an understandable rise as money fled to safe havens. I heard an explanation this morning. It is that gold is being sold by traders to raise cash balances because they believe that there are going to be enormous demands on them for cash which are going to have to be met to avoid failures, not only of clients, but for themselves if they default. This is a complete reversal of 'normal' market behaviour and in itself is being seen as yet another instability.
We live in interesting times!
One more thing that catches my attention. Flight radar shows only two red-eyes coming in from the States, one KLM from LA and a United flight from San Francisco. Both no doubt repatriating Europeans, there will be no return traffic. On other fronts, much less activity but one Tui flight has just left Manchester for Alicante. It must be empty and going to repatriate travellers needing to get home.

[Whyperion]

I said in 2008 the banks underlying commercial assets should have been nationalised, with private loans and mortgages turned into social housing, it would have retained inflows of cash back to govt. There would have been loss of banking employment - but that has happened anyway. Darling was either frightend or incompetant, (every Lab chancellor since 1960 has been )

[Stanley]

See THIS BBC report about the closure of Dixon Carphone shops and the loss of many jobs.

[Whyperion]

Noted that NHS were running recruitment adverts at lunchtime, hopefully the odd few employees have skills that can be useful in that environment

[Stanley]

See THIS Report on the High Street. We've been talking about the death of the high street for years. One wonders how much will survive the next twelve months..... Now is the time to support the small traders!

[Stanley]

See THIS report on the US markets yesterday. "Sovereign debt tumbled around the world and municipal bonds extended the deepest rout since 1987 as markets braced for the potential flood of spending. Oil sank 24% to an 18-year low. The dollar strengthened a seventh straight day. The pound hit its lowest level against the greenback since 1985." This is, surprisingly, the elephant in the room at the moment. It is being buried under more sexy infection news but together with Brexit is possibly the most important. Keep an eye on it, it affects all of us.
Breaking news.... The ECB has announced that they will spend a trillion Euros buying EU bonds.
Later.... More thoughts on the strange behaviours in the markets. Many 'experts' are pointing to a fundamental weakness in that the past bull market has been financed by debt which is 60% greater than it was in 2007. They suspect that this is at the root of the fire sale of all normal securities like gold and commodities and the flight to cash Once you have the cash you have to put it somewhere and the favoured destination is the US dollar. This is one of the reasons why the market price of the dollar is holding up so well.
It's expected that today the Pound will 'achieve' parity with the Euro. There's a thought.......
06:30. Asian markets have dropped again on opening.

[Tizer]

Breaking news.... The ECB has announced that they will spend a trillion Euros buying EU bonds.

...and `Fed sets new loan program designed to ease turmoil in money markets' LINK

[Stanley]

Fast moving situation isn't it. BofE reduces bank rate to lowest level ever. I heard a lady shop-keeper reporting on BBC a couple of days ago that she had approached her bank HSBC for a loan and was quoted a rate of 18.9%, so how much good does it do? I get the impression that apart from QE they have fired the last shot in the locker.
See THIS CNN report on the Asian markets this morning. A small recovery, time will tell if this is the bottom of the market.

[Tizer]

It's good sometimes to be with local providers rather than the big firms. I rang our local agent to renew house insurance at 9.10 this morning. I thanked the lady for being there to take my payment. She said `We're in the office but don't worry, if we have to close then you'll get through to us at home.' I probably wouldn't have got that response from a big insurance company. The little businesses go the extra mile.

[Stanley]

I agree Tiz. My broker in Burnley is excellent.
THIS NY times analysis of Trump and the markets is well worth a read.
“If you politically live by the stock market, you can politically die by the stock market,”
Later... I must be on trend! This Trump story is the main item on the 05:00 World Service news.

[Tizer]

A BBC live report at 10.15...
Negotiators in the US Congress have failed to reach agreement on details of a $1 trillion (£858 billion) economic programme to support American households during the coronavirus pandemic. A midnight deadline set for the deal passed with the talks reportedly stuck on how best to distribute financial support and how much it should be. Negotiations are expected to resume later on Saturday. US stock markets recorded their biggest weekly loss for a decade when they closed on Friday – they’re down 17% since Monday.

[plaques]

A midnight deadline set for the deal passed with the talks reportedly stuck on how best to distribute financial support and how much it should be.

Sounds a bit like Charles Dickens's 'Bleak House' .They will prevaricate until the lions share goes to the rich. One of the books picked up for a re-read. Part of the compulsory reading at school. Read it because I had to, not the same as reading for pleasure. Also it just happens to be our house name so I feel obliged to know about it in some detail in case I get buttonholed by one of these bibliophiles.

[Stanley]

I have gone off piste and posted what perhaps should have been on here in Politics Corner.
I have a dreadful feeling that last week is going to pale into insignificance. Perhaps we ain't seen nothing yet! This is a rapidly moving situation and it's all downhill. Tin hats may not be enough this time!
[On re-reading the classics P. I am close behind you. I ordered an old hardback copy of 'Frankenstein. The Modern Prometheus' by Mary Shelly after hearing it discussed by Melvyn and his gang.]

[Stanley]

'Open Outcry Trading' in some metal and commodity markets has led to an increased rate of infection. Not sure as yet if it has been stopped.
Later news is that the Australian has opened down 7% The other eastern markets have falls of up to 10% with the exception of Japan which has risen slightly but this is thought to be a local effect because it's looking as though the Olympic Games are going to be at least postponed. I don't understand why this leads to optimism but there you are!
I heard a report that hedge funds are making a lot of money on collapsing share prices. In particular it is reported that billions of Pounds has been made from short positions on IMG alone (They are the parent company of BA). I don't understand why this type of trading is legal. Like licensing vultures!

[plaques]

I heard a report that hedge funds are making a lot of money on collapsing share prices. In particular it is reported that billions of Pounds has been made from short positions on IMG alone (They are the parent company of BA). I don't understand why this type of trading is legal. Like licensing vultures!

I don't understand why this surprises you. The whole stock exchange is one big gambling casino. You bet they go up, you bet they go down. Considering that most stocks are usually 30% overpriced this gives them plenty of floating buffer before it starts to affect the real economy. The problem now is that we are talking real economy so its a different game but still a game being played on a different board that few have played before. Think back to when asset stripping was in the vogue. These people have no morals.

[Stanley]

I still don't understand how it works and why it is allowed P.
I note that the price of oil has dropped again and is around $25 a barrel.
UK markets opened with another fall. To press stocks have lost almost a third of their 'value' (If they ever were really worth that.).
Easy Jet are asking for bail out money from government and have just paid out a dividend...... How does that work?

[plaques]

I still don't understand how it works and why it is allowed P.

It goes something like this... You agree to sell some stock within a quoted price range. Actually you don't have any stock to sell, This sale is promised to take place at some agreed time in the future. Come this date if the stock has gone down you buy them at this low price and sell them at the price that was agreed previously. The difference is your well earned (gambled) profit. If on the other hand they have actually risen above the agreed price then your gamble has gone down. Why is allowed? don't ask me.

[Tizer]

All investment in stocks and shares is gambling and hedging is just another form of it. By the way, David Cameron's brother-in-law is making a fortune out of it - but that shouldn't surprise us!

[Stanley]

See THIS for the current stock prices and an overview of the High Street.
Why am I not surprised at the news that "Some firms, including Sir Philip Green’s Arcadia group, have already axed staff raising the spectre of spiralling demand and a long-term hit to the economy."
As they say, the usual suspects!

[Tizer]

All British car manufacturing is now shut after Jaguar Land Rover and Bentley closed the doors.