Last Tango on the LSE – spread some butter
I was talking to ‘the trader’ this morning, about why UK bank share prices in particular just keep going up and up as if there was no recession, no toxic debt, no decimated housing market, no huge write offs – the list goes on.
As far as the virgin trader can see, the picture is very confusing indeed. Each week I think the markets will make some sort of correction and each week they go up, but for how much longer? This week the FTSE 100 is spitting distance from the 5,000 mark, potentially the biggest summer recovery in a quarter of a century according to the FT, ‘a level that would mark a 50 per cent gain since the market’s March low’. John Hughman writing for the Financial Times IC says “it’s down to investors attitudes towards risk”. He thinks “the risk in the eyes of many professional investors right now is the risk of missing out”.
‘The trader’ in his usual acerbic manner suggests that as in ‘Last Tango in Paris‘ you could ‘spread some butter‘ – why not take a spread bet on the number of days it will take for the FTSE to breach 5,000 or the DJ to breach 10,000 or how many brokers are certifiably insane.
He is resisting capitulating to the fear but is increasingly worried that once the market begins suffering from an overdue dose of vertigo, that it will bring a pack of cards down with it as we plunge into a double dip recession.
There are unfortunately good grounds to justify a prediction of a further stalling not least of which is that the banks have been building their balance sheets and he suspects it is not just to repair the (self inflicted) damage they have done over the past decade but to buttress themselves for what they think is the coming crash.
The virgin trader is feeling the pressure.
Virgin
Posted via email from a virgin trader’s posterous
