Diamonds are a Girl's Best Friend

Recession-proofing the Banking Sector

antonne — Fri, 20 Aug 2010 21:55:45 +0000

Now that the banking sector has got over the events of 2007/8, the survivors are being encouraged to retain earnings so as to build up their capital ratios even further as protection against the next recession (whenever that may be). This is nothing more than the time-honoured concept of saving a bit during the good times so [...]

Why is the Unemployment Rate going up when Jobs are being Created?

antonne — Fri, 20 Aug 2010 21:55:27 +0000

Last month’s US employment report once again showed headline growth in jobs in the US economy (with a +110,000 reading) but at the same time the unemployment rate ticked up from 9.7% to 10.X%. How can it be that jobs are being created but more people are becoming unemployed at the same time? This is [...]

Ocado and Horsehair

antonne — Fri, 30 Jul 2010 21:10:51 +0000

Congratulations to the three founders of Ocado, the online grocery delivery business, who last week managed to get their company listed onto the London exchange (with a helping hand from their former employer Goldman Sachs). The shares listed at 180 pence and have since fallen to a low of 155 pence before closing at 167 pence [...]

England Exit Another World Cup

antonne — Fri, 02 Jul 2010 21:06:45 +0000

To mark England’s exit from the 2010 World Cup, here are some hints for the manager (it really doesn’t seem to matter who manages England or what language they speak as the England team never seems to live up to the nation’s expectations)… 1. Never make a player play out of position. They play all season long [...]

NOT Dealing on Inside Information

antonne — Fri, 18 Jun 2010 19:55:47 +0000

Dealing on inside information is illegal in the UK and yet many share prices still move mysteriously sharply upward ahead of a formal announcement that company XYZ is in talks with a bidder who wishes to take them over. Cue an investigation by the FSA which hardly ever results in charges being laid. Is the [...]

Tested Bottom of Trading Range at Dow 9869

antonne — Fri, 28 May 2010 22:09:32 +0000

This week saw the market test the bottom of its recently established 9869-11258 trading range. The low end of this trading range was put in place during an extreme spike down in the US indices on 6 May 2010. This time the support level (roughly equating to the 50-week moving average) was tested during more normal trading [...]

Trading Range Established

antonne — Fri, 07 May 2010 15:55:59 +0000

It has only taken two weeks since the Dow put in a high around its 200-week moving average for the US stockmarkets to fall back to touch their 50-week moving averages. Yesterday’s price action, with a 580-point Dow sell-off in the space of 4 minutes followed by a 580-point bounce-back in the following 8 minutes, printed its V-bottom 42 [...]

This is Going to Hurt – the General Election Hangover

antonne — Fri, 30 Apr 2010 21:09:18 +0000

With a week to go until the result of the 2010 General Election, all the political parties are still too scared to tell the electorate the harsh truth of just how much pain the winner of this year’s election is going to have to administer. Whilst there is agreement that the size of the structural budget [...]

First Class Business in a First Class Way

antonne — Mon, 19 Apr 2010 04:54:16 +0000

Not every banker lacks ethics. The following is an excerpt from statement made by Mr JP Morgan before the Sub-Committee of the Committee on Banking and Currency of the U.S. Senate. on 23 May 1933 (source: JPMorgan.com website) and the words in bold have been highlighted by me. “I have ventured to frame a brief statement of my views on [...]

Is this the Top of the Rally?

antonne — Fri, 16 Apr 2010 16:17:35 +0000

We have now reached a point in this recovery from the recession of 2007/9 where companies are enjoying very favourable trading conditions. GDP growth has resumed and, whilst it may not keep going at the pace seen in the last quarter of 2009 (which was greatly helped by inventories being rebuilt), GDP looks set to continue growing [...]

The Fat Greek Lady Hasn’t Sung Yet

antonne — Fri, 09 Apr 2010 14:56:25 +0000

Its never over until the fat lady sings. Greece still has to raise over 10 bln euros during April & May and the world’s bond investors know this only too well. There is no point in them aggressively bidding up Greek debt and tightening its spread over German bunds whilst there is still an avalanche of supply to be absorbed. The [...]

Euro Membership Has Few Benefits

antonne — Fri, 26 Mar 2010 22:15:46 +0000

Another EU summit passes by and still Greece has yet to get any joy from its fellow euro-zone members. All Greece has been offered is a combination of loans from euro-zone members combined with loans from the IMF at market interest rates. That is not what friends are for – they are supposed to lend [...]

The Bottomless Punchbowl

antonne — Fri, 19 Mar 2010 17:01:16 +0000

There is an old adage about the primary role of a central bank being to play the party-pooper. William McChesney Martin, the Chairman of the Federal Reserve from 1951 to 1970, famously said that the job of a good central banker was to take away the punchbowl just as the party gets going. i.e. Raise [...]

The UK’s Mariana Trench

antonne — Fri, 12 Mar 2010 06:43:17 +0000

The UK’s budget deficit is a very deep hole indeed and it is going to take a very determined politician a long, long time to get the UK back to a balanced budget. The borrowing requirement for 2009/10 is around £175 bln and next year (2010/11) it is forecast to be roughly the same at £180 bln. Take a quick [...]

Triple Bottom at 1.3450 on Euro

antonne — Fri, 05 Mar 2010 16:59:30 +0000

Over the past few weeks the Euro has formed a triple bottom at 1.3450 against the Dollar (the lows were on 19 Feb, 25 Feb and 2 Mar 2010). Triple bottoms are rare in markets because most times a market prints a bottom, bounces off that bottom the first time it is tested but breaks through [...]