This is a brief update on the crisis that has engulfed the markets and the contagion that has developed in the last three weeks.
 
        As you all know the emergency "bailout" plan was passed on Friday and signed into law. At this point it is unclear how much effect this will have in halting the panic that is engulfing the world's financial markets. I now believe that we will be lucky to escape this mess with a severe recession and that parts of the world will be lucky to avoid a depression. This IS a very fluid situation and it is possible that in a week I might be able to post a cheerier picture.

      The world's financial markets are being reshaped on a daily basis in the most extraordinary ways. I suspect, although I cannot be sure, that much of the financial sector upheavals have occurred, but I also believe that the carnage in the real economy is at a very early stage.
 
       I want you to know that I retain a calm and steady hand at the wheel. I am constantly adjusting the exposure of the portfolio as I am finding many bargains, BUT this could be one of those rare occasions when buying into panic may not be the wisest approach. So I am compromising by staying as safe as is possible and still exposing us to as much of the potential upside as seems prudent.  When things are calmer I will expand on all of the VERY disquieting events that are occurring round the world. Our current portfolio has the following allocation:
 

      Last week was the worst week in the markets since the fall of the Twin Towers despite the passage of the bailout bill. So many statistics are ominous in that they are either at their lowest point since data was gathered or at their lowest point since the great depression
 
 

        As this day begins most markets around the world have declined a further 5%. The credit system is frozen. California is scrambling for money and panic is everywhere.
 
        As I said I am, and will remain, calm. Please contact us with any questions.