economonkey

Remember how excited everybody got about those flatpack Ikea homes a while ago? Well they’ve built the first ones in Gateshead, and the company marketing them in the UK claims they represent affordable housing which will be within the reach of somebody earning £15,000. OK, so assuming our low-earning friend was somehow able to muster […]

Am I the only person who finds this a bit sinister? The chancellor, Alastair Darling wants the Bank of England to secretly provide emergency funds to rescue banks which have run into trouble. This sounds wildly undemocratic to me – banks trade on their reputation and stability, and if a bank is being mismanaged so […]

If you can keep your head while all around you are losing theirs, you’d probably make a good investor.

Times of turbulence on stock markets can be times of opportunity for the savvy investor. Picture the scene last week. City traders losing X billion pounds a day and having to cancel the order for that third gold-plated Porsche. Pension fund managers taking one look at their huge losses and… shrugging because it’s not their money. Uninformed media sources proclaiming the end of the world. Meanwhile, you could have been quietly sitting at your computer, raking in the cash.

Most people are aware that to be successful at investing you should buy low and sell high. What fewer people know is that you don’t have to do it in that order.

Buying low and selling high means that you are ‘long’ a particular entity. For example, if you buy shares in Skullcrusher’s Friendly Bailiff Debt Grabbers Plc at a price of 10p, in the expectation that they’ll reach 50p on the back of increasing debt defaults, you are long that trade.

But you could also sell high and buy low. If you think Skullcrusher doesn’t have much of a future because there’s no money left to collect, you could short the trade; borrowing the shares, selling them at 10p and hoping to buy them back at 2p, for example. In this case you would be short Skullcrusher Plc.

Bloomberg reports Mervyn King at the Bank of England is warning that inflation may exceed 3% - the highest rate in a decade. Fair enough - sounds worrying, but we’re sure Mervyn and the team are on top of things. Hang on though, here’s Reuters with a report that Mervyn King at the Bank of […]

The US Federal Reserve has panicked taken rare ‘emergency action’ by dropping interest rates 75 points to 3.5% - and despite all the cynical sniping from know-it-all armchair economist bloggers, the move does seem to have fended off the widely expected stock market crash that everybody was expecting today. Monday was a national holiday in […]

While the rest of the media is reporting that house prices have fallen again for the third month in a row, according to figures from Rightmove (which aren’t exactly scientific, since they only take into account asking prices), or that mortgage lending has dropped to the lowest level in two years, the Times has a […]

This is hilarious. According to Reuters, the British government is working on a plan to repackage the £25 billion loans given to Northern Rock by the Bank of England as government backed bonds to be sold on to private investors. Now, correct me if I’m wrong, but this sounds like exactly the sort of tricksy […]