End Of Another Week

FTSE finished the week at 5044.6.   Pretty close to the mid-point of my 4550 - 5550 spread in the November series of FTSE Index option contracts.  The FTSE opened at 5133.9 on the first trading day of October.  So the Index has fallen 1.74% in the month of October.  So in the 26 Octobers of the FTSE's history, the index has risen 19 times and fallen 7.  (See previous post "Historic Octobers", and decide for yourselves whether October is an historically week month or not.)

Red Braces Think Alike . . .

FTSE 100 Index (Top)   and DOW JONES Index

 . . . on 26th. October 2009.   Wall Street (Dow Jones Index) opens at 9.30 a.m (Eastern Seaboard Time) or 1.30 p.m GMT.  I have superimposed the movements in the 2 indicices from Wall Street's opening.  Who's to say whether London tracks Wall Street or vice-versa - but note how the 2 indices move ABSOLUTELY IN LOCK STEP.  Every up or down in one is reflected in t'other index.  Note particularly the big slide on Wall Street at 11.30 EST.  I've said before that (in my view) the FTSE 100 Index has little relation to the British Economy.  These graphs suggest it has more to do with the American . . .  see why I take no notice of economic/business news . . .  (See foot of this blog for more of same . . . )

Ye FTSE Index . .

. . . ended the week at 5246, a trifle down on the week. BorING!

In Out In Out . . . of RANT mode

 . . . and of recession.  The BBC Business News at 6.15a.m today informed us that the UK economy is technically "out of recession" because output or GDP or some equally badly defined "measure" had gone up by an eye-watering 0.2% repeat nought point two percent that's two parts in a THOUSAND in the three months July to September.  Well, Hoo-Bluddi-Ray!  Does anybody really think the measure can be measured that accurately?  Well, apparently it can't because by 1.00p.m the BBC News was telling us that whatever was being measured had gone down in the last quarter.  And what did the FTSE Index make of this sudden surge or decline take your pick in British fortunes?  Well, as I blog, it's soaring about 80 points from last night's close to stand at about 5280. "Why is this?" I hear you cry. Well I'll tell you. The first reason is that Wall Street was up 1.3% yesterday, so the Red Braces of Britain MUST buy shares in case they would otherwise get left behind. The second reason is that rhe FTSE Index of 100 leading shares has absolutely no connection whatsoever to the economy.  Its surge since its low in March has been driven almost entirely by gains in the mining and oil sectors.  Which gives the lie to the nonsense you read in the "Money" sections of the Fat Sundays that "shares are the best investment over the long term"(*) - quoting what has happened to the FTSE Index since it started up in January 1984 in defence of this ridiculous shibboleth..  Shares might be just the thing for a tracker-fund manager with £billions to invest on your behalf in a fund that will last for a thouand years - though I wouldn't bet on it.  But shares aren't a good bet for me, you or the average blogger because we aren't going to live long enough, and we haven't got nearly enough NOT NEARLY ENOUGH disposable wealth to invest in a big enough numbers of shares in a big enough spread of the FTSE to track it's ups and downs.  So forget about buying yer 200 Marks and Spencer shares so that you can retire to Spain next week on the proceeds.

(*) Bonds is best!  I don't mean corporates (remember Lehmans?) or local councils (like Orange County, Calif. or the wise councillors who invested in Landsbanski)  Stick to UK Gilts.  Or if you insist on diversifying, try some more UK Gilts.  The Gilts Market is a proper market.  The Stock Market is not.  You can calculate the cash flow on your Gilts TO THE PENNY over the whole term to maturity.  You can't rely on BA or BAA or Rolls Royce to still be in business this time next week.  Remember GEC-Marconi . . remember RBS  . . . remember Enron?

In an earlier post I suggested that the B(w)ankers of Britain had won the "moral hazard" argument and knew it. The moral hazard argument says essentially, "We the b(w)anks are too big to be allowed to go under, so we can play whatever prat-games we like and lose as much money as it takes and H.M.Government via the taxpayers will ALWAYS bail us out." Well, they're at it again . . so much so that the Governor of the Bank of England is telling them off over the size of bonuses they intend to pay themselve. Listen, fans and followers, get your savings into the Nationwide before its too late. NW is still a mutual and is not governed (so far) by idiots.

It's Starting Again!

The BBC News this a.m is telling us that more and yet more B(w)anks and Bewildering Societies are once again offering applicants 5 x salary mortgages. The next step, if history is to properly repeat itself, will be to offer 5 x salary to "self certifiers." These are applicants who sign a form declaring that their income is £250,000 per annum, so they can buy a £1M pad, when they are actually living on benefits of about £8.50p per week. The applicant hopes to sell the house for £2M before the first payment falls due. The B(w)ank hopes to end up with a repossession they can sell for £8.50p before suing the applicant for the value of the loan plus interest plus costs. This of course, has nothing to do with creating "toxic assets", and if you can hear the sound of a vigourously nodding head, it's Sir Prat Goodwin looking over my shoulder.

November FTSE 100 Index Option Contracts

Opened "short" at about 3.45p.m, 6 contracts in the 4550 Puts and 5550 Calls. Total receipts for these sales was £1528.40p, mine to keep if the FTSE100 Index lies between 4550 and 5550 at 10.30a.m on Friday 20th.November. At close of business (4.30p.m GMT) the Index stood at 5190.

FTSE 100 Index . .

. . . stood at about 5248 at 10.30a.m when the October contracts expired, so I trousered the £1018.40 (see above) that I got 4 weeks ago when I sold a 4500 to 5500 spread with 6 short contracts each end. The next series (November) expire on November 20th - by which time I will have referred fans and followers back to the Merry Angus again! (and see earlier post)

David What'sHisName . . .

. . . can't understand why he has been sacked. Sorry! Been asked to resign from his job as Minister of Silly Dancing (see picture). Sorry again! Been TOLD to resign. I would have thought he was the Ideal Silly Minister. Consider his achievement. He devised a method of channelling £100K of taxpayers money (your money, my money) into his own back pocket without it looking like he actually stole it. First step is - he helps to make up the rules which allow him to do this. Then he votes to approve them. Then he whines he was only operating within the rules. (If you can hear him when his nose is so deeply buried in the Taxpayers' MoneyTrough. Makes our greedy b(w)ankers look like bumbling amateurs, innit?) Dance on, pal. And the Best of British!

Another David

OOPS! Where's he gone? CLICK the links below.

Just a hard working friendly gent, traduced by the media and generally being given a hard time. Life is soooooo unfair, innit? He has recently given up his steady job(*). For details of his misfortunes, see his "Local Guardian." Looks like yer favourite uncle, don't he?

(*) Conscientious MP for Spelthorne, devoted to the interests of his constituents . . . etc., etc. . . but as far as I know, never yet been on "Desert Island Discs"

Bloggers, Fans and Followers . . . and all who believe our banks are just TOO BIG to fail. Lloyds Bank have just tapped Mr. Darling for another £5bn of your money. Read all about it in today's "Guardian." Wonderful invective!

Here's a little riddle . . . which of these 3 do you depend on most?

Honey Bees . . . . . . . . . . . . . SUVs . . . . . . . . . . frozen seas?

Despite the DOW JONES index zooming through 10000 yesterday,

the FTSE 100 Index fell back by 9.30 a.m (GMT) to 5237.

So my OCTOBER spread (4500 to 5500 Put to Call, expiring tomorrow at 10.30 a.m)

looks pretty safe.

Lots of PC Fans out there?

My Mac G4 Powerbook developed a fault. CDs and DVDs weren't recognised and didn't always eject. Drove it to the nearest Mac "Genius Bar" (Google it, all you Dell fans) Diagnosed replacement required. I left the Mac for repair, which they would do "without labour costs, because it's only a two minute job when we get the replacement drive" (Would Acer do that?) No sooner home than the Genius Bar called. "Er . . we may have damaged a connection taking out the old drive. So we will replace the connection as well . . for free . . . and just in case we damaged the logic board when we disconnected, we will put in a new one . . also free." (Sounds familiar, HP fans?) But I would need to return to the Genius Bar to sign additional repair authorisation. Nuisance . . but . . . . while waiting for the paperwork to print out, Genius Dan gave me lots of broadband and other tips. (Presumably PC users have access to similar dedicated young folk falling over themselves to help sort out problems?) And the displays of OSX, iPhone and iPod tips on king-size screens behind the Genius Bar are worth a visit in themselves. By the time paperwork was ready, so was the Mac! (I think they didn't want me to drive home for the second time without it.) One minor gripe. Some Google hits will tell you that Apple's Genius Bars open at 9a.m. They don't. It's 10a.m. One other gripe. When will Apple open a Genius Bar in Leeds? There's one slated for Newcastle-on-Tyne towards the end of the year . . even further than my nearest. The Big Downside to all this, of course, is the usual one. If you're a Mac fan there's only one MacMaker to choose from. No competition between manufacturers means you must be prepared to dig deep for your Mac, compared to Dells, Acers etc.

The Technological Fix strikes again . . .

You will all know by now that NASA recently whacked 2 space vehicles into a crater near the Moon's south pole, hoping that the resulting 6 mile plume of debris would hold evidence of water. Apparently the Moon's south pole is one of the many places in the Solar System where the Sun never shines. Next day . . a BBC announcer or anchor-person or similar technological illiterate announced "That will be good news. It means that the next time astronauts visit the moon, they won't need to take any water with them." As if "visiting the Moon" was a bit like visiting Bognor Regis for the day with your supplies in a hamper in the car boot (trunk) . . . and way-hey! . . . finding a MacDonalds open when you get there! Trouble is . . . there seems to have been very little plume. So on Saturday (10th. October 2009), the "Guardian" reported "One theory is that the impact site was unexpectedly hard." With bated breath, trembling hands and pounding heart, I read on. Was the newspaper article about to suggest that "maybe the water was frozen"? (From time to time I will post more examples of technological barbarians uttering statements from craters where the Sun never shines.)

FTSE 100 Index . .

. . . ended the week at 5162, up 173 points on the week. October options expire at 10.30a.m next Friday. No action needed.

Any Posties Reading This . . .

. . . remember . . . when you go on strike:-

1. NO MORE JUNK MAIL FOR WHILE, T.G!

2. I won't get my Christmas Cards, nor will I send any.

3. You won't get paid, with serious implications for Christmas Stockings etc

4. Your union officials will explain to you that they're not on strike, and in fact

are working harder than usual in defence of your jobs, pay etc and so . . .

5. They will continue to receive their emoluments . .

6. Lots of businesses that rely on sending and receiving mail will find other ways of doing business that don't so rely, and won't be there for you when strike is settled . . . but the best (or worst) is . . . OOPS!

7. Royal Mail could well be one of them!

8. There's always winners and losers, innit?

FTSE Index opened this morning at 5147, a few points down on last nights close, and I look like being one of the winners when the October options expire next Friday.

A lot of 1 through 8 above is ironic, of course. My postman is very friendly and helpful, and I often wonder how he feels, lugging a great sack of processed trees that he knows will be going straight into the bin . . .

"Remember Me . . . ?"

"That's right! Sir Fred "Slasher" Goodwin, former CEO of the RBS. Today's "Guardian" (Money section) reports that I have been referred to as "World's Worst Banker" Not fair to so traduce me - just because I destroyed a business which, in terms of its total assets, was the Biggest in the World!

I'm actually the "Man Who Really Put the 'W' into Banking" And don't you little creeps still working for the RBS ever forget it - or you'll find your pensions get slashed. If they haven't been already. Or you'll lose your jobs. If you haven't already. I know where you all live!"

FTSE 100 Index . .

. . . closed the week at 4988.7, nicely in the middle of my Put to Call spread in the October series - 4500 to 5500, with 6 contracts of each. The contracts have two weeks to run to expiry on 16th. October (Expiry is always the 3rd Friday in the month at 10.30 a.m.). Potential profit is £1018.00

Broadband

Life is full of coincidences! Only one day after hearing on the BBC about the appointment of the UK's first "digital inclusion champion", we hear that "Great" Britain ranks 25th of out 66 countries surveyed for the quality of their broadband infrastructure. South Korea came top. Oh well . . . . at least lumbering, unreliable UK is in the top half.