Ponzi

One of my delightful daughters gave me "Ponzi" for Christmas.  This is the story of Charles Ponzi, Italian immigrant to the USA early in the 20th century, who ran probably the most audacious "pyramid" scheme of all time.  Most of Boston fell for "Deposit your dollars with Ponzi's 'Securities Exchange', and in 90 days time, he will return it with 50% (that's FIFTY percent) interest." The commodity he pretended to trade on his investors' behalf was international postal reply coupons.  His idea worked (in principle) and indeed, he checked it out using French, Italian and Spanish coupons(*) and made himself a few dollars profit before he opened the scheme to all comers.  Thereafter he forgot about trading the coupons, took in the investors money, handed them out their 45 or 90 day promissory notes and . . . well, read it for yerselves!  Available from A**z*n. Like any well thought out pyramid scheme, it hangs together as long as there's a queue of suckers outside the office eager to hand over their hard-earned life savings, which he used to pay off the lucky folk who had joined the pyramid earlier.  Or until the Boston Post got interested in this dapper, 5'4" smiling, charming Italian who seemed to produce money out of nothing. This was in the days before "If it sounds too good to be true, it IS" became the investor's watchword.  There's a picture of the little miscreant elsewhere on this blog.  Let Ponzi be a warning to all. He gave his name to  . . . "Ponzi" schemes. I'll stick to trading FTSE Index options . . .

(*)  Buy International Postal Reply Coupons in European countries using U.S dollars. Redeem the coupons in the US for US postage stamps.  In 1920, when Ponzi was operating, IPRC's could be exchanged for stamps at a favourable rate.  This was a concession, so that European immigrants in the US could write home cheaply.  In other words, Ponzi ended up with MORE stamps for his dollar than  he would have if he'd spent the dollar in the US.  The "extra" stamps were his profit.

Wonderful, Wonderful Copenhagen . . .

. . . way down this blog I modestly pointed out that some things are so predictable you can't pretend you're clever for predicting them.  So here's another.

OUTSIDE OF WEASEL WORDS the Copenhagen Climate Change Championship Conference will achieve precisely nothing beyond bland resolutions to "do something pretty damned quick about climate change and/or global warming" or whatever the latest "scare the pants off 'em is."  And before you all started nodding wisely and agreeing with this prediction . . think about this . . . how many folk do you know who are prepared to change their lifestyles (like stopping flying, giving up the Chelsea Tractor in favour of a pushbike, gagging Jeremy Clarkson and his demented Top Gear Petrolheads blah blah) in the interests of a future more than 48 hours away?

Oh and by-the-way . .  will someone please explain to me using real live numbers exactly how "hybrid" cars save CO2, emissions/energy/oil/pollution or anything else? (And PERLEEEASE don't say "Well, the charge on the battery comes from wind energy."  Wind turbines are a massively inefficient way of generating electricity, and a massive con perpetrated on the Government and the (largely) technically illiterate public by the turbine builders.  Almost any other method of generating "green" energy is better than capturing our balmy breezes.

And a further by-the-way . . . there are MUCH BETTER ways of saving energy/petrol or whatever it is you think petrol/battery hybrids do.  Better ways would use some form of regenerative transmission. Basically, these systems "brake" the vehicle by storing its kinetic energy in a potential energy reservoir.  For instance . .  couple the vehicle to an on-board flywheel which "spins up" as the vehicle slows down etc. (Question . . . spot the downsides!)  Or . .  connect the vehicle to an on-board pressure cylinder.  When the vehicle slows, its energy is stored in the hydraulic fluid.  When the lights go green, this energy is released back into the drive train.  This system can EASILY produce burning rubber levels of acceleration WITHOUT  ANY HELP FROM THE ENGINE.  Prototypes of this system were developed thirty years ago in Glasgow University Department of Mechanical Engineering. The performance of the protoype vehicle was gobsmacking! But the idea never caught on.  I suspect because of obvious vested interests, and because the engineering involved was not "exotic"  It was done with standard "off-the-shelf" hydraulic components.  How do admen glamourise a vehicle that's built out of fork-lift truck bits and bobs, and doesn't "vrrooommm" as you get away from the lights?  Car enthusiasts do not like silence.

At present, all  exisiting types of road vehicle "brake" by converting their kinetic energy {largely) into heat in  the brakepads, discs or drums.  Amazing!  You heat things up to get your SUV going!  You heat things up to stop the bloody thing . . .  and forget-ye-not . . . the car engine is a HEAT ENGINE and cannot be better than about 35% efficient (Laws of Thermodynamics), but the pad/disc/atmosphere system is a HEAT EXCHANGER and so it efficiently wastes 100% of the vehicles kinetic energy when you use the brakes.  Get on yer bikes , ,  the fuel is a lot cheaper!

December 2009 and January 2010 FTSE Index Options

I redeemed my December FTSE 100 Index options 1 week before they expired, and opened 7 x 4800 Puts and 7 x 5800 Calls in the January 2010 series.  Fans and followers who study the option prices on the LIFFE pages will see that the NET of these transactions leaves me better off than if I had waited until the December options expired worthless on Friday 18th. December.  My December profit is £211.60 LESS than it would have been - but my take for the January series is more than it would otherwise have been at the end of next week  I pocket an unassaiable PROFIT of £1076.80 for December, and a potential profit of £2074.80p in January, provided that the FTSE 100 Index lies between 4800 and 5800 at 10.30a.m on January 15th, 2010. Only one slight hitch through the whole of 2009.  IT CAN'T LAST!  Happy New Year, folks!

Splashed Out . . .

. . . on 6000 shares in ARM Holdings.  They develop and license the technology for making the chips in yer actual mobile phones.  So do me a favour, followers and fans.  Throw that clapped out old Mobe in the recycle bin and buy yerselves a new one!  Boost the Doc's ARM dividends.  I paid 166.24p per share, net of expenses.  At the same time I sold 6 Call contracts in the June 2010 180p series on the shares.  This sale netted 8.987p per share. In effect I have paid only 157.25p for the shares.  The usual caveats apply.  I would be ill advised to sell the shares before next June, even if they are showing me a stonking profit, because I could be "called" for the shares at 180p and would have to buy them in the market at a stonking loss to meet the Call! Ideally, I'd like the shares to stay below 180p till next June, by which time I will have collected a dividend . .

I used to be a postman . .

Now I'm a jumped-up postman playing at being a Home Secretary. . . .

so when Washington tells me to deliver Gary McKinnon, I deliver him, geddit?
And if you disagree with that decision . . . observe my two fingers . . .

A Week is a Long Time . . .

 . . . in the stock markets.  The Dubai scare last weekend seems to have evaporated. And the week has been very quiet after Monday's fall.  No need to rearrange any open contracts.  Centrica dividend (£183.00p) has landed in my account. 'Night all!