Well - an interesting week then - the end of the beginning of the credit crunch perhaps? My Really Scary Granny's crystal ball has said all along that things would get a whole lot worse, and of course during the week we saw a huge Californian lender (Indy Mac) go bust and get taken over by the state government. Depositors will see their first $100000 fully guaranteed, but anyone with more than that therein, will wait a long time for maybe 10c in the dollar if they're lucky.... Lots of talk around the two biggest lenders in the USA, Freddie Mac and his wife, Fannie Mae. (Try Google for more if you have never heard of them.) They are responsible for around $5 trillion of mortgage lending between them and Treasury Secretary Paulson and co have been meeting all weekend to discuss the concept that they are "too big to be allowed to fail." Guys, they HAVE failed! They are technically bankrupt and that's all there is to it - yet Moody's (credit rating agency) still has their debt rated as AAA. What does that tell us about the value of credit ratings? Anyway, the fallout will be massive - but as mentioned in today's video updates, markets will likely bounce during the week because all the hot air that's about to emanate from the US government will cause markets to rise on the back of a universal (although weakening) public belief in the efficacy of the SEF. (Sort Everything Fairy, if you're a newcomer to these ramblings - use the search engine for more thereon if you have some time on your hands.)

Then of course, once it becomes clear that USA Inc simply has not the available funds to do anything remotely constructive, markets will resume their downhill journey - and their brakes aren't in great working order either! One of the ideas being touted - by politicians seeking re - election of course - is that cash will be made available to banks at favourable rates, IF they write off a whole lot of mortgage debt. Unbelievable - you get a NINJA loan (again, try the search engine if you're a newcomer) and then you get to keep the house anyway! Plenty respect there, for people who work hard, save for a deposit, and service their mortgages in the expected fashion then. Politicians are truly loathsome creatures.

On this side of the pond, I note that the person in charge of the BBA (British Bankers' Association) has suggested that such problems won't affect the UK banks because "In America, they have lent money to people with no proof of income to buy five-bedroom houses. That has not happened in Britain." Madam, where have you been living these past ten or so years? Or is it maybe that NINJA loans in the UK were restricted to FOUR bedroom houses? The complacency - or indeed true lack of understanding - of these people is utterly mind - boggling. So Bradford & Bingley (to name perhaps the worst culprit) DIDN'T lend to anyone clearly unable to repay? Ho ho ho.

An idea currently being touted by the UK housing minister is for councils to buy houses under threat of repossession and allow the occupants to remain as tenants - not the worst idea on the planet perhaps, to be fair - but who is going to pay for them? It would be fair to suggest that Gordon's sporran has only a few hungry moths left in it these days. Maybe the banks could rent out repossessed houses? That is happening (very quietly!) the length and breadth of the Irish Republic, whose housing market is in far worse shape than anyone will admit for the moment. Certainly that process would turn Northern Wreck into a major landlord - and since you folks in Blighty own about £25bn of otherwise unserviceable debt therein, maybe if you live long enough you would see a bit of a return on the money Gordon wasted on your behalf?

Remaining with property for a moment, it seems the Chrysler Building ( a 1930s US icon) has been bought from Prudential by the government of Abu Dhabi. Well done to the Pru for having got out in time! It's a sure sign that the commercial property market has topped when foreign governments buy in, because history tells us that they always buy at or near market tops, and sell at or near bottoms. And of course the news regarding UK construction/estate agency/central heating maker/floor tiler etc etc layoffs is not good - my Scary Granny predicts a profits warning from Savills any day now.....and it seems that property auctioneers are struggling to sell anything much at all, despite the idea that you get "bargains" in that arena. People are simply not bidding, because they know that next year they'll get the same thing for a lot less - and often those who do want to bid, can't get a mortgage anyway at the moment.

Anyway, onward to stable doors and the hollow sound of them slamming against extremely empty spaces - Mr Cable (apparently some kind of UK politician) suggested during the week that "There is a real danger that many people could find themselves in negative equity and under serious threat of repossession..." And the British Chamber of Commerce: "The UK is on the brink of recession." Then the FSA is muttering once again that the whole sorry mess is the fault of short sellers and nothing really to do with the crazy credit bubble of the past ten years. A few of you have emailed me asking if maybe all forms of short selling will be banned. "For a time, probably yes" is my response - the "Bs" will blame the "Ts" for all the world's ills. ("Blamers" and "Traders" if you haven't already worked that out!) But remember the "stable door syndrome" and fear not. By the time short selling has been banned, there will be nothing much left that's worth selling anyway, and the opportunities will be mostly in the opposite direction - and we'll be right there waiting for them!

Onward, and it seems AMEC Plc has "won" the Sellafield cleanup contract. What was second prize I wonder? That "win" could well prove to be a poisoned chalice in every sense of the term. We shall see - but the share price certainly didn't jump on the news - it spiked above 880 but closed up only 6.5p on the previous day.

On then to scams - the biggest of course has to be the G8 summit, where all the bigwigs got together to announce a cut in global emissions - although they failed to agree on "when" and "by how much". They could cut a lot of hot air by agreeing never to meet again of course.....then Gordon announced his "war on waste" and told all you good people in Blighty to eat your leftovers. Then he sat down to an eight course dinner with a choice of five wines, two specially flown all the way from France. You need that kind of thing when you're important. Did he ask for a doggy bag I wonder? Did I ever mention what I think of politicians? Aaaghhh.....The other (lesser) scam that caught the Williams eye during the week was the approximately €80 it now costs a family to sit on an Italian beach. Good money for doing not a lot there - a wee bit like that Environment Agency permit not to be allowed to fish, that I mentioned here the other week.

Anyway, before a lie down in a very dark room beckons, on to a few charts, and today we'll start with that of Freddie Mac since we spoke about it above. Then we'll look at horizontal support on the chart of Schroders, in response to a specific question from one of you - thanks for that, Mike! (I try to show charts from your emails if they're likely to be of general benefit, but forgive me if I don't show 'em all!)

Finally we'll look at Punch Taverns to see if maybe it helps our understanding of what MIGHT happen on the Schroders' chart. Remember of course that I'm NOT making any kind of direct comparison between the two - but for all that, I always try to find things that just might help my overall analysis of what's going on - as of course YOU should be doing too!

That's all for this weekend then. Oh - before I forget, a password change is looming. If your sub to the videos and these ramblings is about to expire you'll be receiving an email shortly, giving you details of how to continue to suffer the Williams "take" on things - if you're enough of a masochist to want to do so. And while I remember, two of you who attended the recent workshop have not yet given me an email address - so your new password won't reach you I'm afraid. Please drop me a line to update me, if your initials are G.R.M. and M.R. Many thanks.

All the best until next weekend as usual - if I survive tomorrow night's fireworks display!

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'.