"Why don't you take all the IRS boys, an' watch 'em try to make a livin' from the family store..." Another few words from the Tractors album to which the Williams family has once again been subjected after its rediscovery at the bottom of a suitcase the other week. Did Madame W hide it away, all these years ago? Surely not.......anyway, the words are appropriate enough following the election of Mr O. in the USA. This fella must be one of the few who didn't fall for all his spin - he must have employed St Tony methinks during the campaign. Why the cynicism? Well, he's a politician, for goodness' sake. Isn't that enough? But on top of that, he's a "tax and spend" politician. He is also a bit of a protectionist - ie he has no problem with the concept of tariff barriers to "protect" American jobs. Hmm - this is going to be pretty interesting over the next few years. Protectionism has never worked and it certainly won't work "this time" either. Oh yes - and from which business sector did Mr O receive the bulk of his campaign donations? Not the investment banks, surely? "Hey Barack old buddy - we need another zillion dollar bailout - arrange it, would you, there's a good fellow?" An American financial analyst commented before the election, that it might be a good idea to vote for the one you really detest, because whoever "wins" will become the most reviled president in history as the US economy collapses. Mr O will certainly assist in the ongoing development of that process! (Although it has to be said in fairness, that he's starting off with a dreadful economic legacy and he can hardly be blamed for that - and in "non economic" terms maybe he's somewhat preferable to the other candidate?) Anyway, time will tell - but my Really Scary Granny's crystal ball sees a whole lot more very serious trouble ahead for the USA - and the reason for mentioning anything vaguely "political" here today, is that trouble in the USA = trouble everywhere. Not a good time to be splurging on the luxuries, methinks.

In the UK of course, politicians just act in the same way as bankers, and carry on stealing and spending as if nothing economically unpleasant was going on at all - a Commons committee suggested the other day that the Broon one's idea of building 3 million new houses, including 10 "ecotowns" (try the WICS search engine with that term) might now be a tad on the overambitious side. Mrs Beckett, a politician seemingly "in charge" of that particular piece of lunacy, riposted with "Now is not the time to scale back on long term ambitions because of economic difficulties." Now THERE's a message to UK taxpayers, eh?

The Broon one has been rather unsubtly hinting at the prospect of coming tax cuts, and the glove puppet one has been saying that the recent interest rate reduction (ie theft from savers) will "feed through into the High Street" - a somewhat clumsy attempt to get the public to rush out and spend, spend, spend all the massive savings they're about to make - after all, leaving your dosh in the bank earns you nothing anyway. The ploy won't work of course - as so often mentioned in these ramblings, it's "mass psychology" that causes both boom and bust. When people in the mass begin to feel a bit twitchy about job security and whether they'll manage to keep a roof over the family, they will tighten the purse strings no matter how big the potential reduction in their essential outgoings. People are not as dumb as politicians seem to think (mind you, voting for that lot in the first place does rather make me wonder....) and they understand well enough that more and more, there is just too much month left at the end of the salary cheque to get overexcited about that fancy "half price" Italian leather suite in John Lewis' window.

Interest rate reductions are hardly likely to be passed on to the punter anyway - at least not to any great degree. Only "tracker" mortgages benefit, and given that most of them were "pulled" by your caring, sharing bank a day or so before the rate cut, you'll excuse the cynicism emanating from today's ramblings. A headline on Friday said "Credit Card Rates Unchanged" and the article's writer expressed some bemusement about that. Gosh. And sticking with the banks for a moment, I note that a couple of ex chief execs of RBS and the old Bank of Scotland have written to HBoS telling the board that they are fools to accept a merger with Lloyds and that "alternative proposals" could work better and "save" 20000 jobs in Scotland. Ho Ho. I wonder just a wee bit, as to who might own how many shares in what, and might be anxious to see dividend payments continue.......?

The IW "take" on the whole thing might be to dump ALL bank directors and politicians and replace them with a different "Mr O" - Michael O'Leary. (of Ryanair, in case you live on the planet Zarg.) He's a bit of a motormouth as we know, but he certainly hit the nail on the head with a couple of remarks he made last week: "Leave interest rates alone" and "You can't tax your way out of recession." Absolutely. Anyway, interest rates will continue to fall, and overall taxation will continue to rise, and do you know what difference that will make to the deflationary recession that is now gathering steam? Answers not required.....

Moving along, just another wee addendum to previous WICS comments that "cash is king" (try that phrase in the search engine if you can be bothered.) Some of you seem to have misinterpreted the comment - my fault! - and think that it suggests TRADING too is a bad idea at the moment. That is most emphatically NOT the case. What was meant, was that OWNING "stuff" might be a bad idea - "stuff" in the sense of things you want to see either appreciating in value, or earning some kind of return for you. Stuff like BT shares for example. Or ANY kind of shares. Stuff like that may prove a pretty poor investment overall. "Liquidity is king" might have been a better way to put it. In this fella's view, even if interest rates are zero (and they'll get pretty close to that particular round number in due course!) cash - even in a bank - is still preferable to what are laughingly called "assets". But make no mistake here - TRADING is a perfectly sensible use of such cash, because at no time do you actually OWN the underlying "asset" and of course you can profit whether it goes UP or DOWN in so - called "value". If you have lost sight of what I'm getting at, maybe it's time for a serious revisit of the TTEW manual? If your trading funds (ie cash) are with a properly regulated, well established broker or spread bet provider, and as long as you don't keep more than you're comfortable with as deposits there, then trading (if successful of course!) allows you to "turn the money over" and let's face it, supposing you ended up with a meagre 10% return over a full year, wouldn't even that paltry sum be better than current interest rates? And if you think "assets" are bottoming in price, well, that's up to you but the "Frail Grasp on the Big Picture" song title (somewhere in an earlier WICS) would accurately describe your thinking in that case.

OK - sermon over - on to some of the sillier stuff noted during the week and we see that Porsche is still massively profitable, unlike all other motor manufacturers. How come, given that their sales are falling off a cliff? Surely it could be nothing to do with running their own hedge fund and playing fast and loose with German stockmarket rules? Heads will roll there methinks.

Speaking of cars, it seems that the Spanish market isn't in nearly as bad shape as expected. Sales have only dropped 40% year on year. In the USA, General Motors shares were suspended for a time - as predicted, it's more or less bankrupt now. That's "more" rather than "less" of course. And Ford is close behind for sure. Not terribly amusing really - especially not for those working in the motor industry. It WAS amusing though, to see the response to the "buy one, get one free" advert in the UK. Seemingly a motor brokerage had a heap of new Dodge Avengers it needed to shift quickly. It offered them at half price ("heap" being an accurate description) and sold a few - not enough - at £10000. Then the guy in charge had an idea and ran a "two for the price of one" advert. His website crashed with 22000 enquiries and he sold the lot right away, at £20000 the pair. Maybe people felt they needed one for spares? Seriously, if you want an example of irrational behaviour, surely that one is a doozie, to use the quaint phraseology of my Yank brother in law?

Then there was the report that French red wine contains a whole load of really nasty metal residues. So that's why they taste so nice and why the French are among the healthiest people in the world.

Speaking above re the TTEW manual - you may recall the "trading chickens for cartwheels" reference therein. The Mexican cops must have been reading it too - but they traded the chickens for three escaped tigers. Nice one!

And finally before a chart or two, the prize for the silliest idea of the week (of the year?) goes to the UK government department that has just decreed that universities are going to be compelled to "prove" to students what "value" a particular course might be......anyone for media studies?

Anyway, on that note, on to a couple of charts and today we'll look at support on that of Carnival. You may recall recent mentions here of "why bother selling low priced stocks when there are others that are still priced a lot higher?"

Mind you - I sometimes wonder if many of you actually look at these charts - re tonight's video updates and the mention therein of Axon, it's a little disappointing to note that it was a WICS example only three weeks ago.......

The next chart today is that of Wolseley and it's here to show how a trendline that may have been initially hard to draw (as regards the choice of the "best" beginning and end points) can be reinforced by subsequent price action. To get the whole story you'll need to revisit video clip 1796. Finally we'll examine Clipper Windpower, on the basis that "something seems to be brewing" and the chart is taking on a slightly more interesting look than hitherto. It's looking for that kind of thing, that can help us create a "watch list".

And that's yer lot for this weekend - it's time to pour a glass of nasty metal residues and go to visit my wee friends under the walnut tree, so 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'.