Monday 12 September 2011

Roller-coaster ride

Yet more massive fluctuations. Look at these numbers

  • Silver 2.5%
  • FTSE 2.1%
  • Gold 1.75%
  • S&P 1.5%
  • DJI 1.25%
Those were the variations up and down during the day for these commodities and indices. Not the move on the day but during the day. This is a terrific bear vs. bull battle. Conspiracy theorists, no doubt, would claim that the market was being manipulated. I have no doubt that there is a lot of money being made by institutions with deep pockets and no fears of losing money because they know they will be bailed out. (Moral Hazard was a term popular at the time of the bank bailout and now we know what it means. When the shit hits the fan there are going to be some banks caught holding the fuzzy end of the lolly pop.)With that amount of support they can ride these enormous waves indiscriminately. Lesser mortals like myself have to mind our pennies and make sure we are on the right side of the market in the longer term.

My big worry is silver. The movements are so dramatic and it is so easy to lose a lot of money if you temporarily get it wrong. Gold is less worrying since moves are slower and you can get out less badly burned. Likewise the indices. My hunch is that they will fall. (This was reinforced by a walk round our little local market town. I have never seen so many empty shops. Not even during the 2008 debacle.) But at least if they bounce, there is time to get out. I bought some more short FTSE today (SUK2). And held onto my silver despite the turmoil and a fit of nerves.

Theatre again tonight. Report tomorrow.

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