Welcome to another weekend's ramblings - it's good to be back in the mountains after three weeks and around 5000 kms of driving! First of all today, I trust you have all bought tickets to the Edinburgh Fringe Festival, where a new comedy act will be appearing this season - The Wee Allie Reality Denial Show, where you'll see him race around in ever decreasing circles waving a red briefcase before vanishing into his own eyebrows. He has already been practising the script: "The economy is not heading for recession and will continue to grow...." Mr Eyebrows, you are right of course. The economy can't be heading for somewhere it has already arrived. And if you add one word to the end of your statement, that too would make it accurate - the word in question being "smaller." It's all very well trying to put a brave face on things but as chancellor, a wee bit more evidence that you have a decent grasp of reality, would help your credibility just a tad. The glaringly obvious economic fact is that the housing market is collapsing. Since there are around three million UK jobs dependent upon that sector in one way or another, a pretty major rise in unemployment is inevitable. Will that help stem an ongoing fall in house prices? And as jobs are lost and house prices continue to fall, the growing "feel bad" factor will see people cut back on their overall spending, even more than they have already begun to do. That too will hit jobs - and Gordon really has nae money left in the kitty to permit his powerless wee chancellor to give anything away that might help soften the blow. Sure, oil production taxes are well up due to the price thereof, but stamp duty revenues probably wouldn't cover MP expenses these days. And rest assured that oil prices will drop sharply in due course, taking that tax income with them. Certainly the proposed 2p a litre tax hike at the pumps won't go ahead in the autumn - but the £300m or so 'saved' by motorists is hardly going to get anyone too excited about buying a new leather suite or whatever. Now all the foregoing is just a wee "broad brush" sketch of what's going on, but nothing is more certain than the fact that it's leading to economic contraction of a substantial degree.

Coming back to housing for a moment, someone suggested during the week that the mortgage problems people face - ie they're hard to obtain and harder perhaps to service these days, as people lose their jobs - will mean "buy to let" landlords will do well. Nope. Why not? How many empty buy to let apartments are there the length and breadth of the UK? Rents are highly negotiable these days, and will become even more so as more and more tenants become dependent on "The Social" to pay them. A harsh assessment if you're a landlord, but that's how it's going to be for a few years to come, so if you think Bradford & Bingley is going to recover any time soon......I note its debt has been downgraded to the lowest of any UK bank, and the proposed capital injection by a Texan private equity fund, has been pulled. Probably the Texans couldn't raise the dosh anyway so the downgrade was a great excuse to walk away. (In case you were unaware, B&B is by far the biggest buy to let lender in the UK.)

By the way - not that IW would ever claim too much prescience (that's where my Scary Granny and her crystal ball get the credit) take a wee look back at WICS of April 1st 2007 and have a read about Taylor Wimpey.....they have now cut £660m off their land bank valuation - as have most other similar companies, to varying degrees - and if you think that's going to be the final cut you have the same grasp of economics as the chancellor. But I note that Bellway is still in the market to buy land - are they clever or what? In the view of this old grump, "Or what" would be the current answer. Another three or four years guys - that's the timescale before you'll get real bargains!

Oh yes, and Marks & Sparks management gets its well - deserved comeuppance at last. Serves them right for downgrading the quality of their liquorice allsorts. (Type "Marks & Sparks" into the search engine for loads of references to the mess they're now in.) But on a serious note (serious - moi? Whatever next?) Marks will probably soon see the back of the vastly overpaid and (until recently) overrated Stuart Rose once the effects of their latest attempt to recover, are seen to be fruitless. The idea of adding about 140 "branded" goods to their shelves (the likes of Bisto, Fairy Liquid, Strepsils etc) is frankly ludicrous. I can just imagine the phone call from Mrs Busy - Exec to Mr Busy - Exec: "Darling, if you get a few moments at lunchtime, could you pop down to Markies and pick up a packet of Bisto, some Fairy Liquid, and a couple of pairs of knickers? - what's that? No, don't bother with a massively overpriced chicken tandoori for dinner - I'll nip into Lidl on the way home and get a roast chicken there, of equally uncertain provenance.." This time, the Markies plot has been well and truly lost. Trying to compete with Tesco, Lidl et al makes no kind of sense. And the quality of their core products has been diminishing for years - just ask Paxman about underpants!

Before moving on to "scams" - a word re oil and why my Scary Granny sees it falling back in price - probably a long way back at that - just before you ask. Conventional wisdom has it that the price MUST keep rising because it's scarce and getting scarcer. In the words of Daniel S. Pena, "Conventional wisdom is almost always wrong." In this case, what people seem to miss is this whole "recession/depression" thing. Already this year in the USA, there has been the biggest monthly percentage drop in driving miles since 1942. Does that imply MORE need for oil, or LESS need for oil? And as the bad times bite, do you think India and China will sell more goods or fewer goods to the West? And what will that do to their need for oil and their ability to afford it? Sure, oil prices will spike even higher for a time in this speculative bubble - but by the end of this year it will be no surprise to see it a whole lot lower than it is today. We'll see!

OK - scams. Where to begin? Last weekend I was ranting on about an English licence 'not to be permitted to fish' and one of you good folks pointed out to me that in Oz, you need that kind of licence for saltwater too! What an absolute con. You can swim but you can't fish unless you pay....Ho Ho. Then there's Hammond and May from Top Gear, allegedly not going to continue, bringing the programme to a close. Yeah, right, guys. Somehow methinks they'll be continuing - they're not exactly mega famous otherwise, are they? And a couple of government - related scams: how about the bonus payments made to some civil servants for their "excellent work"? You know the kind of thing - lose a laptop, win £5000. And the other major one ("major" only because it annoys IW so much!) is the so - called "security" at Plymouth Ferryport. In a nutshell, the vehicles that arrive in loads of time, get heavily scrutinised by Customs - many are searched and all get the 'mirrors underneath' treatment. BUT, a moment arrives when I guess the Brittany Ferries Loadmaster gets on the radio and says "Come on guys, if this boat is going to leave today you'll need to speed things up about 1000%...." And guess what? Almost all the remaining vehicles are simply waved through. Top notch security management - bonuses payable there for sure! Oh yes, and a leaked World Bank report suggests that food prices have been pushed up somewhat by the biofuels scam (in the WICS search engine!). The White House recently suggested the price hike was in the order of "around 3%." The World Bank figures are marginally different: "up 75%" is their calculation. Hmm, which institution to trust here? Finally, car engine oil changes - in the USA, the recommended mileage between changes tends to be 3000. In Europe, it's around 7500. Same engines! Big Oil certainly knows how to deal with their American customers eh! (And the use of true synthetic oils could see changes move out to 25000 - 30000 miles perfectly safely. That will happen in due course methinks.)

Anyway, my poor wee brain is getting fried with all these figures being bandied about, so let's close the shop for today - but first of course, a chart or two. First of all (anent the USA "driving miles" mention above) might it be the case that bus operators could do well in recession? In the USA, it seems that passenger numbers are up about 14% this year compared to last. How about Stagecoach then? And continuing the theme of possible "buy" trades despite overall market conditions, we'll look at Autonomy, where perhaps a triangle is about to be broken to the upside - reinforced possibly by the fact they have just signed a licensing deal with Ebay? (And well done to "Gary" - one of the recent workshop attendees - for having done his homework on that one!) Finally - in the opposite direction - we'll look at horizontal resistance and support on the chart of Admiral and see where a sell trade might be viable.

And that's all for this weekend - by the way, if you're looking for a great business opportunity if you are unfortunate enough to lose your job, but fortunate enough to receive a decent redundancy cheque - why not try snail farming? It seems the French are faced with a huge price rise in edible snails due to wage rises in Eastern Europe, so there could be a market there.........or of course you could do as IW did upon redundancy in 1994 and start trading full time....over to you!

All the best till next weekend.

Ian.

'IMPORTANT NOTICE: These WICS charts are for EDUCATIONAL PURPOSES ONLY. They represent only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should they be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.