The fact that we now have comments from Nobel award winning Economists to the effect of ?we should just let banks go bust? does not actually help.



Given that so much business is intertwined, the problem with such a statement is that the bad banks would then take down the good banks. Then every company with funds in those banks (or loans from them) would presumably also collapse as cash gets frozen and loans get called in.

For all the pain of propping up the ailing banks, the decision to look after the banks seems like the best bet albeit one that will slow growth for years to come. If we just let one go, then another and another could go. The immediate destruction has the potential to be frightening.

Most people have their cash tied up in one or another of the high street banks and certainly use their debit/credit cards to pay for things. In extremis, shops would have to refuse to take plastic for fear of not being paid by the issuer. Cash machines would swiftly run out and so on. For all of Sir Stuart Rose's comments about propping up retailers with public funds he must know that this is not going to happen.

The world would survive without Marks and Spencer. However, as was shown when Lehman was allowed to go under, it would probably struggle to survive a major bank collapse.

Looking more specifically at the futures markets, trading is still continuing at quite a rate although some of the positions may be slightly smaller as traders reduce risk. Having said that, looking at the spread betting markets, the volume of trades has not yet been dented.

The FTSE 100 is normally the most popular spread bet, particularly the FTSE Rolling Daily markets that a number of spread betting companies offer. With this type of ?rolling? trade, if you don't close your spread bet it just rolls onto the next day for a small charge.

I've been trading with FinancialSpreads.com recently and the charge for selling the FTSE for ?1 per point has generally been a pretty nominal 6p per day. Watch out for the Dividends though, if Dividends are paid out by the FTSE companies whilst you're holding a sell bet then there will be another charge.

Anyway the FTSE 100 has been trading a range between 4000 and 4350 for some time now. The question for investors though is whether the markets will continue to trade nicely in the same range.

On the negative said the support in the FTSE from 4000 to 4050 should be taken very seriously. US and European indices are getting perilously close to the same major support levels, any sudden break lower in any one of the major indices might well trigger major falls globally.

Of course the markets are forward looking and traders are picking up stocks at the current depressed levels. If that continues and confidence increases the indices could spike. My personal opinion is that whilst the support may hold and there is value out there (in individual stocks) this might not translate into an overall move higher. At least, not yet.

Note that spread betting carries a high level of risk and may not be suitable for all classes of investor. Only trade with money that you can afford to lose. Make sure you fully understand the risks involved. If necessary, seek independent financial advice.