bigglesworth

You might like this IVV

Latest China stock crash spotlights urgent need for financial reform: Sisci – Asia Times

InVinoVeritas

And you might (not) like this, Biggles:-

Trader Who Made 6,400% Since 1995 Throws In The Towel | David Stockman's Contra Corner

bigglesworth

I may be naive IVV, but I am one of those who believe that generally, things work out okay. Of course there are Black Swans, but they are rare. So China I think will be a storm in a teacup – pardon the quip! Just at present I think the Uber Bears are looking for something to kick, and the UK is an easy target. So my own preference is to look through this. I am actually trying to free up some cash to buy the UK stockmarket. I had lengthy arguments a few years ago with the numpties who wittered on about Peak Oil. I feel much the same about the mantra of “debt fuelled growth”. But time will tell.

bigglesworth

IVV Just turning things over in my head, but the greatest anomaly it seems to me is the FTSE.
Since 1997/98, it is broadly unchanged. The DOW is up several hundred percent, as is the DAX and I believe the CAC.
So why despite the massive growth in the economy, inflation over that period of at least 100 percent, is the FTSE unchanged?
I know obviously it is representative of only a small number of companies many of whom are large multinationals and foreign owned, but the same is at least partly true of the DOW etc too. Higher proportion of large financial companies? Miners? Commodity based?

Any thoughts|?

InVinoVeritas

I think we're gonna need a bigger teacup!

bigglesworth

Sorry IVV only just logged on.
Several points.
Firstly, China just is not that important for the UK. (yet) For Germany yes, but not the UK, and the UK's trade with Europe has been in decline for twenty plus years so no change there.
Secondly as an ex trader, of course I know only a fool bucks thre market. But sometimes only a fool gets on its back too. Personally I think thius is one to look through. I hear all the blood and guts about the im pact on ME economies and think if they could not survive on oil at less than 100 a barrewl what have they been doing for th last quarter century
Thirdly at bottom I think a lot of it is the banks. With interest rates at rock bottom, the ONLY way they can make any money is by trading. Commodities were already in decline - there was only so much oil, copper, they could buy before the music stopped and somebody was left holding the parcel. The way they make money out of those trades is not by paying 1500 for gold and selling at 1600, but by buying gold on margin, (so only paying 150 bucks) then selling to some mug who pays the full price at 1600. Domestic property - the last bunch who screwed up on that one havent yet retired so another couple of years before they jump basck into that. Which leaves the stockmarket and currencies

The stockmarket was about as pumped as it could be, so looked open to a good kicking, and sterling - they LIKE playing sterling because it is small enough to kick but big enough to make some serious money. And with the referendum coming up they have plenty of amunition to selectively feed to idiots like Peston (as was) and others.


I will be very surprised if, at the end of the year, stockmarkets are not higher, perhapos quite a bit, and sterling back to its 90/95 trade weighted average of the lassdt 40 odd years.

Unless of course the EU does completely collapse and we can all sail off into a rosy future or Armageddon, depending on your point of view. I am very much in the former camp.