Meltdown

Not much to say really, except that HBOS proved to be a dog of a buy, 90% of Flash's stops have been triggered, at least 50% for losses, and he's left holding a handful of anaemic looking equities showing some anaemic profits. And what's really shocking is that one of the UK's largest banks can say one day "our funding position is adequate' and the next agree to be bought up for virtually any price because they can't raise enough cash to keep the UK's biggest mortgage and retail deposit book afloat. This really is a monster of a disaster. And the leverage maniacs that brought us to this position ought to be held to account - perhaps it is indeed all of us, but some people have more responsibilities than others.

Lybos indeed. And who is going to want to write mortgages when the property market could slump another 10 - 15%? And cash doesn't cut it either. It's a total unravelling. And if the solution is for central banks to print money for bailouts then the inflation monster will be back with a vengeance.

All the long USD currency positions have been closed down and Flash just wishes he'd left some of the many index shorts he'd established to run their course properly. One little sideline might be to short some eastern european currencies - demo-trading buying GBPvsHUF has been pretty spectacular. Shame he didn't do it in reality.

Gold going from 777 to a high of 893 in 24 hours is pretty unbelievable too. Flight to safety? Capital flight out of the market, full stop. And most of Flash's trades in the last 3 days have been in the wrong direction.

Time for a breather and some reflection on the next move.

For light relief, this morning's FT Alphaville live blog was a cracker (especially some of the comments).