Put the date in the Diary-13/10/08

Lenin must be laughing from his tomb. "When Capitalism fails, Socialism will come to the rescue"

Well, not quite. Remember what's at the root cause of the current crisis - subprime mortgage loans in the US.

And why were so many loans given to people who couldn't afford them? Much was down to political correctness and almost socialist-like interference in the market, in an attempt to increase home ownership amongst low income groups.

These articles sum it up pretty well:

It was the day that Keynsian economic polices failed, and were bailed out by yet more Keynisan economic policies.

Raw unfettered capitalism always pushes things beyond sensible and acceptable limits, as, to find the limit, first you need to exceed it. It's the job of government to control the worst excesses. They failed.

People in a bubble, once they get Dollar signs in their eyes, won't let regulators, government, or even common sense get in their way. The only thing that will stop them is the fear engendered by the bursting of a bubble.

If politicians try to get in the way, the public will simply replace them with politicians who are more amenable.

FoFP

Fair enough. How depressing....

I hope you're well and enjoying watching the fallout.

I 've started reinvesting in equities to a limited degree. A couple of months ago I bought into small oilies -

SIA Soco International AEX Aminex GKP Gulf Keystone Petrolium EO. Encore Oil FRR Frontera Resources MOG Meditereanian Oil & Gas

security cameras IND Indigo Vision and NG. National Grid. The oilies have fallen by ~40% and the original plan was to double up, but instead, during the carnage on Monday I picked up -

ALL Anglo American AV. Aviva BP. BP MKS Marks & Spencer RBS Royal Bank of Scotland ULVR Unilever UU. United Utilities VOD Vodaphone

I'm 58% cash now. Perhaps I overdid it a bit, time will tell. The point when US & UK house prices stabalise for 6-12 months seems like a sensible point to review deployment of the rest.

I notice that Japan looks good value. Neptune Japan Opportunities is easily the best performing open/closed fund. I forced myself not to buy it, or GSK Glaxo and TEM Templeton Emerging Markets as I was concerned that I was too exposed to equities.

Have you writtent any articles/posts on how things progress from here ? I haven't been keeping up to date - istr you posting on prudentbear.com as well.

btw - did you hear that Ian Rushbrook (Personal Assets Trust PNL) had died ? A sample of his thoughts -

Certainly am. I promised you all a front seat at the denouement of the largest credit bubble in history. Settle down and eat your popcorn.

Brave!

We're likely at least 3 or 4 years from that, though it has all been happening faster than I anticipated...

My target bottom for the Nikkei (in 1989) was 8000. Looks like we'll soon finally get there. Could be worth buying in lower than that.

I'm afraid not. I'm reading 150 news articles per day just to keep up with this. Time for writing just isn't there. I keep promising I'll take a day off and knock out a long screed though...

FoFP