Nose to the grindstone again then - life is indeed hard. Not as hard as it's going to be for Mr Darling though - Gordon certainly managed to pass that parcel at exactly the right moment - an extremely poisoned chalice, to mix metaphors. Lots going on, I note with interest - and 'interest' will certainly be a hot topic as the year progresses, with so many UK mortgage payers about to see the end of their relatively low fixed rates. The move to the 'Standard Variable Rate' as it's called, will certainly reduce household budgets for other spending - and a fresh two year fixed rate won't be available at anywhere near the price of last time round. It's 'interesting' too to note that Abbey is offering depositors 8%, albeit with many strings attached, in an overt attempt to poach the clients of other institutions. However, given the fact that according to the Office for National Statistics (ONS) the savings rate in the UK is the 'lowest in 47 years', I guess Abbey won't need to shell out that much overall - but it certainly sounds good. (And methinks it's a harbinger of more base rate rises to come for a while yet.)

Headlines included the flurry at Tesco's AGM where much hot air emanated from disaffected shareholders - but it's 'business as usual' of course when you look at the reality of the situation, with only about 17% unhappy with soon to be quasi Cabinet Minister Leahy's pay packet - Big Business rules OK - certainly in the case of the UK.

Certainly Commissar Gordon's proposed 'Business Council for Britain' would be high on my list for a 'next big scam' award. What a load of tosh. The head honcho of Permira (huge private equity company) is also sitting on it - another example of Gordon's caring, sharing, good presbyterian socialist approach to government then. Gordon Gecko might be an appropriate nickname for him methinks.

Anyway, onward - and the other 'next big scam' will be biofuels - of that there is no doubt. Governments everywhere are falling over themselves to shove their green credentials down the voters' throats, and of course Big Oil, not being green in any sense of the word, is cashing in on all the grants and incentives in a payout that will almost put Halliburton's Iraq contracts in the shade. Given that it takes (with a few - small - exceptions) more than the energy equivalent of a gallon of oil to produce a gallon of biofuel......hmm. Bring back the age of steam, I say. Or perhaps not.

Moving along - a while back, I recall mentioning the probably ill - starred marriage of Taylor Woodrow and Wimpey, and now the happy couple are saying that 'Rising interest rates are soon going to bite' - a hint perhaps that their USA developments are facing the same kind of imminent meltdown as the rest of the American housing market. It was interesting to note (anent my description the other week of CDOs - sub prime mortgage debt obligations, known by the financial industry as Toxic Waste) that Bear Stearns - one of the major Hedge Fund protagonists of CDOs - had $800m worth ('worth' as in 'paper worth') of their CDO 'assets' seized by one of their bankers the other day due to inability to repay certain obligations. Merrill Lynch was pretty unhappy about the way things were going, and not only did its officers seize the 'assets' in question, but - horror of horrors - they even threatened to auction them off! That of course was a transparently empty threat because the entire house of cards that is the hedge fund industry, and the banks that still support it, are painfully aware that all the paper they shuffle around would then be exposed as close to worthless if it were actually to go to public auction. Once it became evident that the so - called $800m might only fetch say $80m, then the first domino would have completely toppled instead of just teetering, and we all know where that process ends.......not long now folks!! It's exactly the same process as I mentioned in the manual - 'perception of value' - and once reality sets in, the perception will be that all that paper is worth pretty much what used paper is generally worth - we shred most of ours before giving it to an elderly neighbour who has a cat.

And speaking of 'worthless', I note that the Financial Services Authority (FSA) has come to the stunning conclusion that commission payments to intermediaries can cause mis - selling of insurance policies, pensions, and mortgages. Wow - how I wish I had that kind of insight. Not to worry though - highly trained, hard working independent advisers with years of training behind them, are going to be stopped from earning commission and will have to charge fees, but less well trained and qualified bank/building society staff will be able to continue as before.......so that's all right then.

And nothing to do with WICS, but just a wee aside which is probably more sad than amusing in fact - when I was trawling for the above snippets I spotted this report, reference the belated English smoking ban. It seems a pub 'regular' from Hull was interviewed and his comment was "I smoke between 100 and 120 cigs a day. This ban will kill me."

Next, I note that the Blackstone IPO (Initial Public Offering) was suddenly brought forward by a week. The cynic in me has to wonder if that had anything at all to do with the nasty vibes from the Bear Stearns/Merrill Lynch spat and a resultant anxiety to get as many of the patsies - sorry - investors - on board as possible before things turn really nasty. Certainly the thing was six times oversubscribed, but it still managed to go from $38 to $31 over the course of the week......did I ever mention 'smart money getting out'?......Next to come - moneysupermarket.com. Ho hum.

Oh yes - and the expected 'private equity' thing marrying the AA and Saga. No cheap jokes about zimmer patrols here - Saga's motor insurance, for example, is pretty much unbeatable for anyone over 50 and overall I reckon they do a brilliant job in filling the needs of a growing market. Not too sure about the AA though....Anyway, the real point of mentioning this one is to highlight what is now becoming more and more evident - the fact that much of 'private equity' activity does nothing for the firms unfortunate enough to fall into its black hole, and everything for the owners of said PE firms. Witness the fact that between them, Saga and the AA have £3bn of debt - not small beer by any means and a serious burden as interest rates rise. Along comes the PE white knight and voila! The merger is engineered and the £3bn debt is paid off as if by magic! Fantastic - but the only wee fly in the ointment is that the PE company has borrowed a little, secured against the assets of the new AA/Saga company (ie the PE company itself takes none of the risk).....a mere £4.8bn in fact. So from $3bn debt, AA and Saga go to owing £4.8bn. And to balance the arithmetic, who gets the spare £1.8bn? Does it go to finance expansion/new equipment/whatever at AA/Saga? Nope - it represents the fees of the PE company for having been so clever - and I have no argument with the 'clever' bit, especially since eventually the AA/Saga entity will become yet another stock market relaunch so that the patsies can get the opportunity to pay off the £4.8bn on behalf of the current owners, by buying the shares. Clever stuff indeed.

And finally before we look at some charts, Sainsbury's bleating about the need for central warehousing and the attendant difficulties in having truly fresh vegetables on their shelves, cuts no ice with Williams. How come all the big French chains have no problem at all? And I love the name of the firm behind the Channel Five 'Brainteaser' programme (subject to a recent £300k fine by the regulators for having invented some of the winners) - Cheetah Productions!

Okay - on to a few charts and today we'll look at another 'deceptive' one - Kenmare - after your favourable response to the last one. There was a triangle, followed by a channel, both giving valid entries, but..... Then we'll examine support for Admiral, and finally we'll see where the German DAX index might be heading next, in a possible 'rising wedge' formation.

And that's that for today - the next issue of WICS will be produced fairly late next Sunday 8th July, so happy trading till then. (Oh, and I'll have to be offline from late Tuesday pm 3rd July, till midday Sunday 8th July, so please hold your mentoring questions between those dates - thanks. I don't tend to put up autoresponders nowadays because of the massive junk they attract.)

Best wishes,
Ian.

PLEASE NOTE - the passwords for both WICS and video update access will be changing at the end of this week - around 5pm UK time on 7th July. If you're still entitled to your 3 months' foc access, or if you have recently sent in a standing order mandate, you can expect to receive the new passwords before the next issue is published. If not, then enjoy this last issue! Seriously, I hope you might wish to continue to be able to access my ramblings - if so, then please visit www.trading-the-easy-way.com/stoform.htm and let me know that you're sending me the standing order mandate - I'll trust your word because I'm just such a nice guy.
Thanks.
IW

PS - while emailing the new passwords to those entitled, I'm getting a bounceback from Hotmail and AOL accounts, yet again. Please visit my webmaster's comments on the 'info' section of the website, if YOU have a Hotmail account, and see if you can set up an alternate address because this has been, and will continue to be, an ongoing problem. Thanks.