28JAN09:
Q1-09 DOW: 8900
Q2-09 DOW: 7250
Q3-09 DOW: 5810
Q4-09 DOW: 3960
CITI NATIONALIZED
OBAMA GETS SICK 27AUG09:
Mini Crash 21SEP09 Predicted correctly:
Bailout=Bonuses
Demise of Bear Stearns
Demise of Lehman Bros.
Demise of AIG
Subprime would cause problems
Date of 2007 crash
CRAs were to blame
G20 riots were a party
Northern Rock run
Northern Rock Nationalization
HBOS and RBS demise
UBS really was Useless
So here I am. It is raining and cold and the city looks very unwell. It reminds me of London. As usual, when I go away catastrophe happens. The FTSE 100 decided that increased taxation and hiring more civil servants was a very good thing for the UK economy, as well as the bail out of a foreign bank, and rose the highest in one day. But that is what has happened to Equities. Volatility of the extreme order. Sometimes I wonder if I live in a 3rd world country. Or is it that the UK is becoming a 3rd world country run by a benign dictator living out his school boy fantasies?
Over the next weeks I will be looking for a new home outside of the UK as will many others. The ever increasing unemployed will be handed out vouchers and credits and encouraged to live off welfare for the rest of their lives while civil servants live in the best houses and drive new cars. The UK debt will go from 40% to 70% and snuggle up with Obamas deficit.
No more do I hear let us save, invest, let us pay off our debts. No, it is let us continue as usual and get others to pay off our debts. You and me that is.
So I can expect bartering and a black economy thriving just as it did in Russia and China. Restricting freedoms and people opt out. However much of a mess we are in, getting back to normal never works with high taxes.
So there you go. Hedge Fund managers will soon be leaving the UK and I will be learning Arabic.
NOW TOP EARNERS COULD PAY 60P IN TAX FOR EVERY £1 THEY MAKE
A three-pronged assault on high earners will leave some paying 60p in tax for every £1 they earn.
A raft of income tax and national insurance rises will strip more than £3,000 a year from the pockets of the very wealthiest by 2011.
'This sends out a message that the Government is not concerned to protect the tax position of those earning over £100,000 a year.'
Tax experts warned the rises could drive Britain's 'wealth creplansators' offshore.
John Whiting of the accountants PricewaterhouseCoopers said: 'There is a risk here. 'It does not make the UK look like a low tax place to come and do business. Taking the personal allowance is nasty.
Fintag says Socialism here we come. As has been shown in history, when taxes are hiked up tax revenues actually fall. This is because however hard a government tries to tax, the really wealthy go elsewhere or find ways not to pay it. Unemployment will also increase because if the senior managers are being taxed hard, they will give themselves bigger wage increases and fire those underneath and offshore them to India.
The good news is we have been given notice that this is coming - unless the opposition Conservative party win the next election and unwind these draconian measures - so will have plenty of time to prepare.
But let us not be too sad, for Obama plans to introduce even higher taxes. So just as we see Canary Wharf emptying out, the housing crash slumping further as disposable incomes fall and mortgages are restricted further, Dubai and Switzerland and Singapore and the Channel Islands will be high fiving with joy.
So what happens next? Well I will certainly be taking out twice as much in drawings and investing it in overseas companies that I own and hold tight until I decide whether to leave the UK like the Rolling Stones did in the 1970's.
Of course this was going to happen, and I have done this already. All my companies are offshore and apart from a UK services company and a rep office for FSA purposes, I am lucky to be able to jump. For the rest of the of the UK citizens, there are two choices. Firstly go bankrupt and live off benefits. Secondly vote out this government.
Let us not forget that both Gordon Brown and his Chancellor are ex Trots and Marxists who hate private wealth creation. Taxing hard those who run companies and play football results in only one thing. The head offices of companies will go abroad and the Premiership becomes second rate. Oh yes, and the lynching of anyone who ever worked in banking.
To conclude, thanks a bunch to Investment Bankers, Credit Rating Agencies, the BBC for all those buying property programmes, third rate retail bankers who wanted to be hedge fund managers (RBS, Citi et al) and Private Equity partnerships for taking things a little bit too far.
Don't expect any Christmas Cards.
telegraph says " Pre-Budget report: Borrowing hits post-war record "
BARACK OBAMA VOWS TO SPEND HIS WAY OUT OF CRISIS WITH $700BN PLAN
Just three weeks after winning the election, Mr Obama said work on resurrecting the US economy would begin immediately because "we do not have a minute to waste".
Introducing the senior members of his economic team, Mr Obama said the economy was in caught in a "vicious cycle" and was facing a "crisis of historic proportions".
Aiming to convince the markets and the American public that there was light at the end of the tunnel, Mr Obama said his stimulus package that would "not only deal with the immediate crisis but lay the groundwork for long-term sustained economic growth".
He refused to put an estimate of the cost, but Larry Summers, the new chairman of the national economic council, has suggested it would need to be as large as $700 billion - in addition to the bail-out of the same amount agreed by Congress last month.
Fintag says So does he print dollars and risk inflation or ramp up taxes? Now let me see ...
As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues that things risk spiralling out of their control
Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.
Fintag says Here are some suggestions. Learn how to knit, use a gun and make a shelter out of marks and spencers plastic bags.
MERRILL LYNCH IS MOST BEARISH AS BANKS' SELL RATINGS SOAR
Merrill Lynch has the most bearish analysts of all the large investment banks, according to research by Financial News.
The US bank rated almost one third of all stocks covered by its analysts underperform at the start of last month, the highest level at any time since then New York Attorney-General Eliot Spitzer campaigned for the independence of research in 2002.
Fintag says OK. This has to stop. The lying has to stop. The marked to market has to stop. The banks should be allowed to offload all their toxic crap into a vehicle that is closed for 10 years. They will then be allowed to write off slowly over 10 years and spread their losses. Taking them all in one go is bad for all of us.
OUT: Accountants. Transparency. MTM.
IN: Closed Ended Funds. Slow death. Stability.
MISUNDERSTOOD HEDGE FUNDS SUFFERED IN MID-MATCH RULE CHANGE
Hedge fund managers are spivs and speculators, directly responsible for creating carnage in the world's financial markets and threatening the future of high street banks. At least, that's what some argue.
But it is, emphatically, not true, according to Christopher Fawcett, the hedge fund executive who has taken on the role of de facto cheerleader for Britain's embattled alternative investment industry.
Such criticism is misplaced, he argues. Investment banks, rather than hedge funds, were behind the surge in gearing, or leverage, that pushed markets to breaking point in the middle of last year. Hedge funds were actually more conservative and only moderately geared.
He goes further: the Financial Services Authority's “draconian” restrictions on the short-selling of financial stocks threaten to undermine the strength of London as a financial centre: the regulator should allow bets on falling share prices to be placed again.
Fintag says That's us. It is good preparation for when you see us hanging around street corners selling tights and boxes of matches.
Global securities regulators launched three task forces to study abusive short selling, unregulated financial products and unregulated financial entities such as hedge funds, the U.S. Securities and Exchange Commission said on Monday.
The working groups were established amid volatile market conditions and designed to support work of the world's 20 largest economies, which have already agreed to step up oversight of the troubled financial system.
One group will focus on aligning global regulators' approach to naked short selling, the SEC said.
Fintag says Given most hedge funds are on cash, we don't care. Seriously, this short selling crack down is the wrong tree to bark at.
The Government offered an olive branch to big business yesterday by pledging tax cuts on foreign subsidiaries but lawyers warned that it will not be enough to staunch the flow of companies relocating abroad.
Alistair Darling said: "I will maintain a focus on the long-term competitiveness of the UK and to increase our attractiveness as a base for global businesses. To do so, I will introduce an exemption for foreign dividends in 2009 for large and medium businesses, and improve our rules for taxing Controlled Foreign Companies."
The policy is expected to cost the Treasury £275m by 2012.
Banks and credit card processors have long predicted that digital money would eventually supplant currency as the primary medium of exchange. Of couse, that was before the credit bubble burst and people realized that the modern day variant made it way too easy to spend more than one could afford. With ancient habits like saving for a rainy day coming back into vogue, is it all that surprising that others are, too? The Associated Press gives us the details in "More Customers Resume Using Old-Fashioned Cash"
Fintag says Cash is back. Cash is the new black. Black is the new economy.
Hedge fund investors pounded by the plummeting value of sterling have abandoned currency hedges, amid heavy cash calls on derivatives designed to limit foreign exchange risk. Listed funds of hedge funds run by Goldman Sachs, Dexion, Gottex, KGR Capital and Thames River have abandoned or cut back currency hedging - leaving investors in sterling and euro share classes less protected against a fall in the dollar.
According to investors, several unlisted offshore funds of hedge funds have the same problem. At the same time, other funds have had to increase their borrowing to meet hedging costs. In the past two months, sterling has fallen from $1.85 to $1.50. That sharp decline has forced the funds to cash in hedge fund holdings in order to pay hefty hedging costs, adding to the pain of the troubled sector. Listed funds have been hit particularly hard as the euro and sterling share classes tend to make up more of the fund than in offshore funds.
Fintag says Its not as we are not trying. The banks want collateral. The currencies are too volatile. Who cares. Its a new world. Much better betting on currencies.
bloomberg says " H3 Japan Fund Returned 2.1% in October Betting on Currencies "
TREASURY TRADERS PAID TO BORROW AS FED EXAMINES REPOS
Owners of Treasuries may soon get paid to borrow as the U.S. tries to break a logjam in the $7 trillion-a-day repurchase market.
Treasuries are in such high demand that investors are lending cash for next to nothing to obtain the securities as collateral through so-called repos, which dealers use to finance their holdings. The problem is many parties involved in repos aren't delivering the bonds because there is no penalty for not doing so, causing “fails” to exceed $5 trillion, according to the Federal Reserve Bank of New York.
Citigroup Inc's repeated assurances that it did not need additional capital, followed by its quick about-face in accepting billions of dollars in aid from the U.S. Treasury, has many investors wondering what other banks are hiding.
"The biggest question is what, as the owner of bank stocks, do you really own?" said Timothy Ghriskey, chief investment officer at Solaris Group. "It's tough to say this won't happen again."
Fintag says The low flying lying Pandit. And he is not alone.
25 comments
I Have No Hedge For Polyannas said ...
US markets will fall today...
the rally is over...
sayonara
25 Nov 08 - 08:08 gmt
castaway said ...
Fin, I'm looking to move out of this country, which cities do you have in mind?
25 Nov 08 - 08:58 gmt
Alpha60 said ...
Fintag you can't be too keen to move to the US after watching last nights BBC2 prog: The american time bomb ( where you seem to have got your 2040 debt to GDP graphic). There in deep sh*t.
25 Nov 08 - 09:48 gmt
anonymous said ...
Fin I think I left my apartment door open on 10th Street when I left NY four years ago. Please could you check it for me? (And the gas!) Thanks. Golly I wish I could return to NY. British girls hate performing oral sex.
25 Nov 08 - 10:22 gmt
Davros said ...
Iceland. Cheap. Lovely people. Unlimted energy. Lots of fish. Well read.
25 Nov 08 - 10:22 gmt
fitzcaraldo said ...
@castaway, Fin already listed his cities of choice, i.e. Hongkong, Singapore, Dubai et al - Switzerland was branded a bit dull, however, is my favourite, perfect infrastructure, low taxes, nice country, nice people, if you want more thrill, spend the winter in St. Moritz and the summer on the French riviera (both places close to to prospective Russian investors...)
25 Nov 08 - 10:34 gmt
anonymous said ...
Do British girls really hate doing oral sex? Goodness, that's another thing we have on them.
25 Nov 08 - 10:45 gmt
Moron said ...
ANON 10:22....british girls hate performing oral sex......since when:)))))
25 Nov 08 - 10:46 gmt
anonymous said ...
If you like sex, you like oral sex..which also means you have to at least like the guy. Problem is if he just wants to push your head down and say "down there" then aint gonna get it.
25 Nov 08 - 10:57 gmt
anonymous said ...
I thought british girls hated performing sex period.
25 Nov 08 - 11:09 gmt
Sweet & Sour said ...
Fintag confused? CIA Ranking Country Public debt (% of GDP) 1 Zimbabwe 218.20 2007 est. 2 Lebanon 186.60 2007 est. 3 Japan 170.00 7 Italy 104.00 8 Singapore 96.30 15 Israel 80.60 20 Germany 64.90 22 Canada 64.20 23 France 63.90 27 United States 60.80 31 India 58.20 32 Argentina 56.10 46 Netherlands 45.50 47 Brazil 45.10 49 Switzerland 44.20 50 United Kingdom 43.60
25 Nov 08 - 11:41 gmt
Super Mario said ...
Assicurazione Generali SpA up by 5.33% already today...thats 2 out of 2
Fintag are you interested in diversifying into Super Mario Capital partners and our offbeat investments? : ))
25 Nov 08 - 12:29 gmt
Tradebot said ...
Sweet & Sour, you sure are clueless. First yours stats are wrong as they are not comprehensive of PFI, public sector liabilities, etc.
25 Nov 08 - 12:44 gmt
Tradebot said ...
Second, what matters is how the debt is structured and how you will finance the borrowing GAP, which in UK's case is gigantic. Circa £500bn to £1trn. Where do you think that will be financed? Domestic savings...ha ha ha.
25 Nov 08 - 12:48 gmt
Tradebot said ...
trade for 2009 : weaker GBPeso and steepening Gilt curve. Yours the currency, yours the bonds!
25 Nov 08 - 12:51 gmt
Moron said ...
incredibly amusing markets....today i add to my shorts....technicals are pretty screwed up.....hard to see this rally going any further:)))
25 Nov 08 - 13:57 gmt
Sweet & Sour said ...
Thanks Tradebot, I've shown you mine (the CIA's), you show me yours, we might all learn something, of course if you're too busy....
Sweet & Sour, do you also come with pork and egg fried rice?
25 Nov 08 - 17:02 gmt
anonymous said ...
I like oral sex.
25 Nov 08 - 18:02 gmt
anonymous said ...
Markets go higher from here to rally back above 10k. Short term though. Why be an investor or a trader when the profits you make will be taxed at 50%. To be a billionaire these days you have to have 2 billion first.
26 Nov 08 - 05:15 gmt
AthenaDelphi said ...
At this point I'd have to ask why anyone would be a buyer of common stock shares. We've seen how they get wiped out to zero with a mere meeting on Sunday nights around a table that has chocolate fountains, juicy strawberries, and silent women.
Investing is a scam. Trading is the 21st century word for what markets do these days. Buy and hold is a dead philosophy, as should Keynes but, as you can see, one is rising from the grave.
26 Nov 08 - 05:20 gmt
AthenaDelphi said ...
Fintag: The latest out of Paulson is now TARF (barf as in vomit). Its now estimated that all the bailouts combined are worth $24,000 dollars for every man, woman and child in the USA.
Just send me my check so I can turn around and pay cap gains of 39% on it and the rest I'll put to good use.
I'd like to know the reason why anyone would buy US Treasuries at yields near zero and a 10 year below 4%. Don't buy US Treasuries! boycott!
26 Nov 08 - 05:26 gmt
AthenaDelphi said ...
Fintag - here's a good read on the strange Goldman Sachs offering of FDIC !bonds! with a 200bps spread. Selective default. Can you give us your thoughts on what would happen if the US defaulted? In realistic terms not just we become Zimbabwe,
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