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Finally the s*** did hit the fan and who knows when the fall-out will stop. As I write there has been further volatility affecting all stock markets and there still seems to be many worries eddying around the banking and finance sectors. As each rumour surfaces the markets react sometimes quite savagely to punish or reward companies in related sectors with a rise or fall in SP.

Interest rates are still thought to be due a rise in Euroland and the UK but there is pressure in the US for the Fed to drop rates as a next move but one would be surprised if that was going to happen in the next two months when the US consumer is only now reacting to past squeezing of rates. Housing problems, with unsold stock and repossessions rising in the US, as most are aware, is now hitting nearly every state. Maybe the Fed has done enough only the future will tell.

Here the consumer has moderated spending but outstanding debt is still considerable. Difficult selling seems to be region specific but there seems little doubt that the market will creak a bit over the next twelve months or more.

Commodities have moderated also with associated producing companies coming off highs due to lower prices. However demand from Asia is still fairly strong and this will support companies in the medium term.

Mobius club have swiftly moved from having a larger portfolio than average to much less than average. Recent forced sales have reduced us to 5 shares. It will be interesting to see is they are proof against these turbulent times. Certainly each share has a cushion of sorts but nothing is shell proof these days. Even JKX, which in these high oil price periods would seem to have good support and a buffer between SP and purchase price, is in a zone of the world where geo-political risk is endemic and could prove the greatest risk to our holding.

There has been little positive activity by the club during August and several members have been away. With our depleted portfolio we can probably look at some more undervalued growth stocks generated by our mechanical systems. Hopefully, if we pick sound stocks and the market begins to move ahead then we will be able to repair some of the damage wrought to our assets. In a couple of days we should have the latest UV posted and we will be able to ponder what I fear will be a chastening realisation.

Martin Longman - Acknowledgements to Daily Telegraph and FT.