Easy money
Sep. 30th, 2008 07:27 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksSo there I was, tuning through the channels while I ate my evening meal, and I alighted upon BBC News 24. "Voting in progress" it said, as I watched a somewhat static picture of the floor of the House of Representatives. This was the vote on the bail-out. Almost a non-story. But, well, BBC News 24 needs to fill up the screen time, doesn't it?
Unlike the rather tedious Commons Votes, the House screen actually shows the votes as they go through. It's like the Eurovision Song Contest, but without the pictures of the protagonists sitting in the Green Room cheering or looking sad as the votes go through. That latter would certainly add to the spice of the occasion. I would have given a lot for a picture of Paulson and Bernanke over those 10 minutes.
Anyhoo, the BBC twats were muttering that the current 20 majority against the bill didn't mean much because the voting can "change in an instant". But, as I watched it, it seemed to me that the number of votes cast was going up, but the Nay majority wasn't shrinking.
Hang on, I said to myself, there's an opportunity here.
I zipped into CantorIndex and bashed as much as I could onto Sterling rising against the dollar (in retrospect, I should have just shorted the S&P 500, but I suspect that, since this was the most obvious target, I might have been a few seconds too late). Unfortunately, with current volatility rules "as much as I could" wasn't nearly enough, given that I've only got a grand in that account. But I still closed out for a £50 profit 45 seconds later.
If only life were always so easy....
++++++++++
The voting was a clear indication of two, slightly contradictory things. One is that the members of the House still don't quite get it. The other is that, in their hearts of hearts, they do get it, but they are more scared of not being re-elected than they are of financial armageddon. What nearly all the Republicans who voted against probably wanted for was the bill to pass, but for them to be able to go back to thei constituents and to say that they voted against it.
In a sense I have some sympathy for these right-wing free-market Republicans who voted against more on principle than on fear of not being re-elected. These are the guys who do get it, but, like Jehovah's Witnesses, still refuse a blood transfusion despite the threat of death through loss of blood. They are, in a sense, saying "yes, there will be a hell of a lot of pain -- that's how capitalism works ... it isn't all upside".
I kind of prefer that line to the more standard Wall Street Line that "we'd like all the bonuses, but can we have government help when things go wrong?"
However, there's not much Jehovah's Witness in me, I fear. And, in this particular state, I'd quite like the blood transfusion. The major worry yesterday was that the funds that would be made available would not be enough (or, to be slightly more technical, would not be spent in a sufficiently accurate and efficient fashion). Now, if anyone is now arguing that US mortgage defaults are going to exceed $700bn (i.e., that that is the amount of money that has disappeared), then I would disagree most vigorously with them.
In other words, I suspect that irrational fear is, at last, beginning to overtake rational worries (this time last year it was irrational complacency). I assume the FTSE will open in about 15 minutes at around 4650 to 4680. There's some downside still to go, but I'm beginning to like the yields on some of these battered companies (non-financials, low levels of debt, good cashflow, but not necessarily 'defensive' stocks).
________
Unlike the rather tedious Commons Votes, the House screen actually shows the votes as they go through. It's like the Eurovision Song Contest, but without the pictures of the protagonists sitting in the Green Room cheering or looking sad as the votes go through. That latter would certainly add to the spice of the occasion. I would have given a lot for a picture of Paulson and Bernanke over those 10 minutes.
Anyhoo, the BBC twats were muttering that the current 20 majority against the bill didn't mean much because the voting can "change in an instant". But, as I watched it, it seemed to me that the number of votes cast was going up, but the Nay majority wasn't shrinking.
Hang on, I said to myself, there's an opportunity here.
I zipped into CantorIndex and bashed as much as I could onto Sterling rising against the dollar (in retrospect, I should have just shorted the S&P 500, but I suspect that, since this was the most obvious target, I might have been a few seconds too late). Unfortunately, with current volatility rules "as much as I could" wasn't nearly enough, given that I've only got a grand in that account. But I still closed out for a £50 profit 45 seconds later.
If only life were always so easy....
++++++++++
The voting was a clear indication of two, slightly contradictory things. One is that the members of the House still don't quite get it. The other is that, in their hearts of hearts, they do get it, but they are more scared of not being re-elected than they are of financial armageddon. What nearly all the Republicans who voted against probably wanted for was the bill to pass, but for them to be able to go back to thei constituents and to say that they voted against it.
In a sense I have some sympathy for these right-wing free-market Republicans who voted against more on principle than on fear of not being re-elected. These are the guys who do get it, but, like Jehovah's Witnesses, still refuse a blood transfusion despite the threat of death through loss of blood. They are, in a sense, saying "yes, there will be a hell of a lot of pain -- that's how capitalism works ... it isn't all upside".
I kind of prefer that line to the more standard Wall Street Line that "we'd like all the bonuses, but can we have government help when things go wrong?"
However, there's not much Jehovah's Witness in me, I fear. And, in this particular state, I'd quite like the blood transfusion. The major worry yesterday was that the funds that would be made available would not be enough (or, to be slightly more technical, would not be spent in a sufficiently accurate and efficient fashion). Now, if anyone is now arguing that US mortgage defaults are going to exceed $700bn (i.e., that that is the amount of money that has disappeared), then I would disagree most vigorously with them.
In other words, I suspect that irrational fear is, at last, beginning to overtake rational worries (this time last year it was irrational complacency). I assume the FTSE will open in about 15 minutes at around 4650 to 4680. There's some downside still to go, but I'm beginning to like the yields on some of these battered companies (non-financials, low levels of debt, good cashflow, but not necessarily 'defensive' stocks).
________
