Market View

Economy

Interest Rates Down to 2%

Bank of England cutting interest rates to 2% inorder to stimulate the economy is a positive move however the underlying problems of lending is unlikely to be passed onto the borrower or SME's in the immdiate future mainly due to fallout from the irresponsible borrowing that the banks themselves approved.

Even though the banks are part nationalised there main objective will be to become profitable at the expense of the consumer and SME's and sadly the most effective way is to keep the difference between what the BoE have set and what they are willing to pass on.

What's next?

As Mervin King has already hinted, there needs to be legilation and policies that needs to be broght in by the goverment to forse banks to lend or the goverment in the short term have to act as the bank to small businesses and borrowers.

Unfortunately I dont have the answers but the only way for the lending to become more fluid is to let the banks allow the interest rates differential but forse the banks to lend and accept that the true victim as always will be joe public.

UK Stocks

Using the Fundamental Formula from the Trading Made Simple course the following stocks have been shortlisted. The stocks have strong fundamentals however the technicals are still weak due to the weakness and lack of liquidity of the markets.

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Other stocks that have a potential for growth and are good value are:


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As a Private Investor its always reccommened that you research the stock picks that we post and you make the investment decision.

To perform technical analysis without doubt the best free charting software is ProRealTime (www.prorealtime.com)



Next Posting 22nd December 2008