What goes down, must come up!

With all the panic over falling stocks and shares, it should be noted that given the right indicators, the buying of certain shares at the moment is going to make somebody a small fortune.
Good buys: Ericsson US:ERIC $9.33; M.Wright Japan LSE:MWJ 40p; BP LSE:BP 439p; Meetic FP:MEET Euro 17.70; United Utilities LSE:UU 488p.
Other likely winners are: Shanks (SKS); Smiths News (NWS); Trading Emissions (TRE); Young & Co’s Brewery (YNG).
Some of the best performers as of 15th April 2009: Barclays (BARC) 197p; Vendanta(VED) 932p; Lloyds Bank (LLOY)84p; Kazakhmys (KAZ) 487p;

Collapse of Private Sector Financing

In bidding for the Olympic Games, it looks as though the government may well have scored an ‘own goal’ judging by the amount of funding that is required to keep it alive.
Olympic Sports Minister Tessa Jowell reassures the public by stating: “This is precisely the time for this investment to be made. It (The Olympics) has the potential to be economic gold at a time of economic need.”
Now don’t be lulled into a false sense of security here. The investment she talks of is a £225m loan approved by the European Investment Bank; another £400m in direct government support should private funding not prove forthcoming.
The total funding required comes to £9.3bn with a shortfall of £1bn. Should the government accept the £225m loan, the interest rate would almost certainly be higher than borrowing from the Treasury.
At the end of last year, reports surfaced that Tessa Jowell, whilst attending a dinner for leisure industry chiefs commented that the government would not have bid for the Olympics had it known that a recession was on its way.
The government is reluctant to risk its £2bn Olympic contingency fund as the European Investment Bank expects the government to underwrite the loan. £461m of the fund has already been drawn down to assist with financing problems. The bulk of which is to be used for the building of the athletes’ flats, the cost of which now looks set to cause the government a huge loss due to the collapse in the housing market and without private funding the government look hard pressed to find a way to recover their investment.

From Trillions to Zillions

It’s interesting that Messers Gordon Brown & Co., have managed to secure trillions of dollars in global financial aid at the G20 meeting in London’s Docklands. The last time I was there I ended up giving a beggar a tenner… Wait a minute, I think that was Mr Brown, (Well, it was a sorry looking down and out!). I can’t help wondering what will happen after the banks spend the cash fortuitously on Ferraris and non-existent stocks and hedge funds – I expect Mr Obama & Co., will splash out zillions next time – aha! That may well be the reason we have soldiers on foreign soil – a simple case of you scratch my back and I’ll pay your debts; or something like that… And as for the starving prisoners of Zimbabwe, they can go whistle – at least whilst they still have the breath to do so!
OK, less of the sarcasm, but you see my point – no matter how much money the world leaders put into the global economy there will always be losers – just ask Bernard Madoff!
As far as the G20 debate went, markets rallied at the news of $1.1 trillion dollars being pumped into a collapsing worldwide economy. And a somewhat smug Mr Brown beamed, “This is the day that the world came together to fight back against the global recession.”
The IMF were informed that there would be a tripling of resources available to them, amounting to $750bn; and in order to boost foreign exchange reserves around the world, the IMF are to create their own currency made up of Sterling, Yen, Euros and Dollars in the form of Special Drawing Rights. I should point out that much of what was said regarding IMF funding has only been agreed in principle.
Anyway, the FTSE closed 4.3% higher; New York’s Dow finished trading 2.8% higher; Frankfurt’s Dax leapt 6% at close of play and the Paris Cac 40 looked good after closing 5.4% higher.
Now this all looks fine and dandy but take a closer look and maybe you’ll see a different picture emerge.
In Rome, during the G7 meeting (13-14 February), IMF big wig Dominique Strauss Khan stated that he hoped to double the fund’s lendable resources to $500bn – this is money which supposedly was discussed yesterday and forms part of the G20 bailout.
In January, Japan made it known that they would be contributing $100bn to the fund.
So it came to pass that the people suddenly realised that much of what was determined to be ground breaking agreements had in fact been played out some months before. That is except for some good news from China who pledged some $40bn to the fund – didn’t they used to be a developing nation?
It does appear that the politicians are just going over old ground.
A moment of caution bekons for the wise man can act the fool, but the fool cannot act the wise man… And the rest of us will be well advised to treat the debate with just a little pinch of salt.