TODAY’S FAYRE – Thursday, 2nd October 2014
“Clown-like, happiest on your hands,
Feet to the stars, and moon-skulled,
Gilled like a fish. A common-sense
Thumbs-down on the dodo’s mode.
Wrapped up in yourself like a spool,
Trawling your dark, as owls do.
Mute as a turnip from the Fourth
Of July to All Fools’ Day,
O high-riser, my little loaf.
Vague as fog and looked for like mail.
Farther off than Australia.
Bent-backed Atlas, our travelled prawn.
Snug as a bud and at home
Like a sprat in a pickle jug.
A creel of eels, all ripples.
Jumpy as a Mexican bean.
Right, like a well-done sum
A clean slate, with your own face on.”
Sylvia Plath – poet – 1932-1963
“It is part of the general pattern of misguided policy that our country is now geared to an arms economy which was bred in an artificially induced psychosis of war hysteria and nurtured upon an incessant propaganda of fear. While such an economy may produce a sense of seeming prosperity for the moment, it rests on an illusionary foundation of complete unreliability and renders among our political leaders almost a greater fear of peace than is their fear of war.”
“Talk of imminent threat to our national security through the application of external force is pure nonsense. Our threat is from the insidious forces working from within which have already so drastically altered the character of our free institutions — those institutions we proudly called the American way of life.” – General Douglas MacArthur – US General – Allied Forces in the Pacific – 1880-1964
I always said that one day I would go to the Conservative Party Conference just to see what it was like. I went yesterday and much enjoyed watching the camaraderie. As an excessive extravaganza, just as the Labour Party bun-fight is, I was not disappointed. One has no idea of the size of these events until you experience one. The commitment and passion of the delegates really surprised me. There are thousands of wonderfully public-spirited people who give their life to their political parties come rain or shine. I salute them. You get a totally different perspective at Conference than is portrayed on television. I never thought I had any empathy with the PM. I must confess I found myself more in ‘synch’ with his thinking than ever before. I know it’s all barnstorming razzmatazz; nonetheless very effective!
With Chinese markets shut this week for its national holiday, it is difficult to equate how much further the Hang Seng would have fallen. By the grace of God there has been no violence to speak of and little police presence at these pro-democracy protests. However these demonstrations have challenged the credibility of HK as an on-going business centre with the Chinese government being very unlikely to yield to the students’ demands. So we have that treat in store for us next week. In the meantime back in the saddle on the Street of Dreams, volumes picked up yesterday, as investors lost their appetite for risk with the HK imponderable, Russian sanctions, Ebola and a sagging EU economy to contend with. US markets have been fairly resilient since their recent ‘highs.’ It is interesting to note that the Russian RTS has fallen by 20% since June and enters bear market territory.
The DOW, after record levels has only surrendered 3.2% since 18th September – just 2 weeks ago. Yesterday it gave back 1.4%, the S&P 500 eased by 1.32% and the NASDAQ by 1.59%. Yesterday’s reverses were probably triggered by the retrenchment of the Russell indices – the best barometer for SMES. Many of the ‘left side’ of the quotes on shares in these indices received a decent slapping. Transportation stocks were also larruped with a few airlines losing as much as 5% in places. Regardless of the gloomy atmosphere on Wall Street there were some great car sales figures from Chrysler, GM and Nissan al up about 19%, though Ford’s efforts did not pass muster.
We are now into our third day of negativity in Europe – I hate that word! The EU’s lack lustre economy does not help, but this does not negate from the fact that sentiment has gone in to reverse, probably as a result of performances excessively enhanced by the presence of QE. The new MPC member the former White House economic advisor Kristin Forbes advised yesterday in a speech that Sterling’s 14% increase in value will have damaged profits from US earnings by UK companies and may well have affected hiring and economic growth. Though GDP for the 2nd quarter of 3.2% was posted on an annualised basis last Tuesday morning that level of growth is unlikely to be sustained in the 3rd and 4th quarter. UK Manufacturing data for September posted yesterday disappointed. Some of the blame was laid at the feet of the EU’s dreary economy. It will be interesting to note what Mario Draghi has to say at today’s ECB meeting. We expect more asset backed securities to be bought in. We are also likely to hear from the ECB President that help is required to buy in toxic debt for Greece and Cyprus! – Heaven forbid! Why should the rest of Europe pay for other’s profligacy?!
Most of yesterday’s headlines were grabbed by Sainsbury. The shares, after news of a 2.8% drop in like for like sales, fell away by 6.5% to 235p – down 38% in the last year. Remember 2006 when Qatar bought 25.9% for circa £3.5 billion at prices nudging 550p? This investment may have fallen in value by £1.5 billion in 8 years. Lord Sainsbury and his family own the best part of 20%, but I shall not shed too many tears as they have had a decent run on the rails. However I fear for some of the 161,000 employees. Tesco, after a profits warning from Blinkx, must surely ditch this motley investment which was partly bought to challenge Amazon by linking in-store with on-line purchasing.
Virgin Money announced its forthcoming IPO, valued at circa £1.5 billion with 10% of the shares coming on the market. I think this bank has received questionable advice to only offer shares to wholesale investors rather than include retail as well. It makes potentially for an uncomfortable share register. Ryanair posted good numbers which augurs well for easyJet’s update tomorrow. Tui Travel also posted a positive trading statement. At 9.30am the FTSE 100 was down 15 points.
These are David Buik personal views
Twitter – @truemagic68
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