Dubai.

Well, now . .  property prices in Dubai - if not the properties themselves - are collapsing, and with them, the world's stock markets.  Redbraced Experts are predicting the second stage of the Great Crash of 2008-09 and all is suddenly doom and gloom again with the FTSE down in the 5100's.  So here is a warning, with apologies to Percy Bysshe Shelley . . .

DUBAI, 2009

I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shatter'd visage lies, whose frown
And wrinkled lip, and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamp'd on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.

In the words of John K. Galbraith . . .

. . . from  "The Great Crash, 1929", (p48 in the Penguin paperback edition, available from *m*z*n)

"Wall Street . . . is like a lovely and accomplished woman who must wear black cotton stockings, heavy woolen underwear, and parade her knowledge as a cook, because, unhappily, her supreme accomplishment is as a harlot."

Sell All Your Shares . . .

. . . as soon as you read, or some redbraced financial genius says "This time it's different" or "We're in a new paradigm" or words to that effect.  It means there's a crash, or at best a significant market reversal  coming . . .

Handball

I am pleased and proud to tell my millions of devoted fans that I have never wasted a single penny watching this dirty, cheating, spitting, foul-mouthed, corrupt, unbeautiful game since I was a schoolboy. If handball has been played in those days at the level of shirt-pulling, tripping, blind side kicking, tripping and thumping that disgraces the game today, after ten minutes there would have been two netkeepers on  the pitch, the other twenty overpaid cretins would all have been taking early baths.  Nor do I waste my one precious life watching dumb goons chasing a handball round a television screen.  (Though when the first blind-side slaying happens, I might just watch the replays with considerable satisfaction.  For it will mean one dead and one in the slammer - after the penalty throw has been taken, of course.)  Football, beautiful, beautiful football is a quite different kettle of shit . .  sorry, fish.

FTSE 100 Share Index . . .

 . . . ended the week at 5258.  Centrica shares edged above 260p on Wednesday, but the rise was not sustained, so no threat to my covered calls in this stock at 280p in the March 2010 series.

Yesterday In Parliament . . .

. . . the aptly named Minister for Education sought to discomfit an Opposition oppo on the business  of GCSE exams getting easier.  Mr.Balls asked the Honorable Member for Somewhere, and quoting from actual exam papers:- 1)  To name the enzyme which brought about some particular process of digestion, 2) to explain how a flourine atom becomes a flouride ion, and 3) to work out three quarters of one and two sevenths, or something like that.

The Opposition MP did not rise to the bait, so presumably Balls thought he had proved his point.  Well, sorry Ed - but in the context of the subjects in question, all three questions are  trivial.  The first asks the candidate to regurgitate a bit of physiological fact.  A dumkopff candidate can answer it without knowing anything about enzymes, what they are, what they do, what digestion involves  . . . need I go on? The second asks for information relevant to all chemical processes (electron exchange).  That one knows nothing of chemical physics does not prove the question is difficult - in fact, once again, it is - or should be - trivially easy for a chemistry student. A few more give-away marks. What to say about the third question?  In my day children of 11 or 12 could do this sort of thing - though why we were asked to remains a mystery. These days,  many first year University students in technical subjects can't do this sort of thing.  Some of them can't "cross-multiply." Plenty of engineering students reach the Universities never having heard of "logarithms" - because they use calculators in school for division - and so are totally bemused by elementary differential equations.   The Open University admits students without asking for proof that they can read and write . . radio and TV editors no longer know the difference between "less" and "fewer", "jealous" and "envious", "may" and "might", etc. etc  . . most German truck drivers can speak English better than the Brits . . . but don't get me started.

What's the FTSE doing just now . . . ?   (Hey, Mr.Balls, what's meant by a "covered call"? You perhaps don't know the answer - but that doesn't prove the question is "difficult" - merely that the answer ain't to be found in your extensive specialist knowledge of digestive processes, chemistry or arithmetic.)

And that's another thing!  I wish end-of-life programmes like "Countdown" would stop referring to "maths" when they mean "arithmetic"  Arithmetic is to maths as paintbrushes are to Turner sunsets.

Redeemed . . .

. . . my November short 5550 Calls when the FTSE kicked off this morning up yet again. The FTSE Index stood at about 5340 when I bought back the Calls for 2.5p (i.e. £25 per contract)  Astute fans might be wondering why I redeemed these contracts when they were still 200 points "safe".  Because the buy-back costs rise rapidly as the FTSE Index gets closer to the "strike price"  Interested fans can check this out by examining the dealing prices on the Euronext pages. (Click on the LIFFE OPTIONS PRICES link above) The rises this month have been mostly on the back of the extraction and mining companies and oils.  Net cost of this repurchase was £195.80p, reducing my pocket money on November trades to £1332.60p - see head of this blog. At 4.00pm, with the FTSE at 5365 and the Dow Jones Index in New York still rising, I opened December contracts, 6 "short" in the 4800 Puts and the same number "short" in the 5800 Calls.  This sale netted £1268.40p, which will be my profit if the FTSE Index ends between 4800 and 5800 at 10.30a.m on 18th. December.  That'll buy the Christmas Nosh, innit?

It Isn't Just Me . . .

. . . today's "Guardian", Money Section, page 3, features a fund manager who has set his face firmly against equity investments for decades.He has vastly more experience than I with UK Gilts.  His article reinforces my belief, stated in earlier posts, that Gilts - not shares - should be the bedrock of your investment portfolio. He points out that shares are a good long term investment only so long as you get your timing right.  Worth a read.

Labour Have Won . . .

 . . . Glasgow North East in a by-election  caused by the resignation of Speaker Martin, scapegoated by the Establishment following the MPs' Expenses Scandal. And lo! The Labour benches in Parliament are already celebrating another Great Labour Victory in the next General Election. Don't count chickens, folks! Glasgow NE is (probably) the most underemployed, quasi-literate, welfare dependent constituency in the land.  They would vote for a collie dog, or a caulflower, or a cardboard cut-out of Mickey Mouse as long as it had a Labour ticket hung round its neck. Voting Labour is one of their Great Traditions, along with drink and football-watching.  The exciting aspects of the result are twofold. First, another drubbing handed out to the self-satisfied, self-regarding, Alex Salmond, Tartan Chief of the SNP, aptly described by one wag as "Great Pudding of the Chieftain Race"(*).  Second - the Tories only just pipped the BNP for third place. Nick Griffin always looks like he needs a clean shirt and his suit pressed, but the fact that this dismal politician can give the Tories a close run holds the prospect of exciting times ahead next Spring.

FTSE closed last evening at 5269.  Wall Street;s Dow-Jones index fell 94 points and so my potential profit of £1500 odd on the November FTSE Option contracts is beginning to look fairly safe.  Expiry next Friday, 20th. November

(*)   Misquoting one of Rabbie Burns's less dismal poems.

A Rant about A.I

A.I in the context of something-or-other stands for "artificial intelligence", and Wilkipedia (inter alia) will explain it and link you to scientific and philosophical discourses on the subject.  Well, DREAM ON! As I type this, the "Radio Times" is on the coffee table in front of me. But it is "upside down". Nevertheless I can still read the title.  As I could if the idiot printers had printed "Radio" upside down with respect to "Times" and the whole thing reading from right to left.  Or with every letter printed in a different colour and in a different typeface and with some of the letters upside down and some the right way up and and some of the letters mirror images of themselves and with the odd letter printed twice or in the wrong order and maybe with all the vowels missed out.  (Though not so easy if all the consonants were missed out.  Hmm? That's food for thought, innit?)  Can a machine reader do any of these "human" intelligence tricks? The root of the problem is simple.  The nerds, geeks and A.I Departments in our tenth-rate Techyversities begin by defining "intelligence" as a "something" which they can make a machine simulate. Like - recognising a chair as something to sit on, or walking downstairs without falling over. Then they say,  "Look at my wonderful machine.  And more imnportant, LOOK AT ME!!  Aren't we wonderful?  Aren't we intelligent?"  Well . .  er . .  no!  The techytype with his soldering iron and "Unix for Dummies" textbook may well be, but his quasi-useless machine isn't.

Here's another example of an artificially intelligent system whose I.Q is somewhat lower than a stone.  The other day, I was required to "activate" a new credit card. On keying the 0800 number (freephone to my friends across the Pond), a nicely spoken person asked me what I wanted to do.  Usually they tell you which button on the phone to press, and for a glorious moment I thought I was speaking to a real live girl. But NO!  When I said "I want to activate my new credit card", the voice-simulating machine replied "I'm sorry.  I didn't understand that.  Please try again."  Very slowly and carefully I said,  "Activate. New. Credit. Card"  This went on through several repeat loops.  (Oh . . . I'm sure I wasn't enunciating English any worse than "she" was, and I certainly speak more clearly than most of the interviewees and interviewers that you hear these days on radio and TV resolutely honking and snorting their way through one of the world's most beautiful languages. If you want to hear good English these days on the BBC or BBC World Service, listen out for the Swedish truck drivers and Chinese physicists. They speak English better than the average Estuary Native.)  But I digress.  Eventually "she" gave up and asked me for my card number.  Guess what?  Same routine. No matter how a enunciated the sixteen digits, "she" told me she didn't understand.  Finally I was asked if I would like to "speak to one of our experts"? . .  and wey-hay!! - "she" managed to understand my "Yes"  The point is, of course, that if I had been connected to a normally intelligent human in the first place and had said (something like) - "Oh, hi!  How yer doin'?  Listen, see, er, er, I got my, er, what's it, um, new credit thingy, credit card, you know, and I need to, like, hang on where's it gone, right, got it. What's the word?  Yeah. Activate it, you know, the new card thingy business."  If I had come out with that gobful of ordinary human speech, the "intelligent" human at the other end would have decoded it instantly into what I wanted to do. Artificial Intelligence? Perleeease.  Don't make us laugh!

End Of The Week . .

. . . again, with the FTSE 100 Share Index at 5142.7.  The November contracts expire on 20th.November, and my position is so far safe, and no rearrangements have been required.  The FTSE Index stood at about 5190 when I opened November index option contracts on 16th. October.  The index is going nowhere, which is just the way we "shorters" like it!