Should auld acquaintance be forgot

Should auld acquaintance be forgot…..

Resolutions, resolutions…

Feedback is always good, even from a follower at 2.30 a.m. on New Years Day, but I take it on board, and will try to make these things more understandable. It is not that the audience, (who do not have to follow), are stupid. Indeed, many are experts in their own field, but we are all guilty of lapsing in to jargon. So, that is probably the only resolution I will make this year, to make things easier to follow. I will also ask how the comment feature can be reopened, since debate is to be encouraged.

Turning the clock back (or forward)…

 The end of one year, and the start of another brings forth both reflections and predictions; all this based on the Christian calendar, which many do not recognise as their own. Indeed, the 186/- inhabitants of Samoa decided to change their time zone from being aligned to the USA to the one adopted in Australia, thus putting them at the front of the international clock, rather than the end of it. They did this because they can see the way that regional trade is moving.

The 1500 inhabitants of the adjoining islands of Tokelau sensibly decided to follow suit, whilst the mobile phone company reconfigured all their systems in fifteen minutes. Everyone got paid for the 30^th December, a day which did not exist, which proves that the unthinkable is possible, and that a date is but a date.

On reflection…

Anyway, back to the reflections, because this has been a most extraordinary year. You can read about these, endlessly, in the papers, but for me, a few things stood out. Politically, the “Arab Spring” was unforeseen, and is ongoing; one can only hope for an agreed solution in Syria. And this moves on, and on; the demonstrations in Moscow are very significant. Previously, as my trip to St. Petersburg confirmed, the locals were happy to be free of state control, but the pendulum has swung from communism to rapacious capitalism.

There are two main factors behind this, for me. Firstly, speculators, (for there is no other word), drove up the cost of basic commodities such as wheat by some 50%, which is significant if you have no job and live on a subsistence income. Secondly, the growth of “electronic communication” is quite extraordinary, and the ability of the state to regulate it virtually non existent. This is both good, and bad. We want, surely, others to have access to what we have, but the opposite is that our offspring are competing with a very international workforce. Indeed, that is not limited by age. This will become an increasing problem; you don’t have to be too pessimistic to see protectionism coming round the corner, pointless as it is.

Economically, markets dealt well with these events, for the first half of the year, before collapsing in early August in the face of a failed bail out for Greece, and the downgrading of American sovereign debt, which nevertheless proved to be the asset to hold this year, up by some 30%. Rating agencies have had their time, not much of it glorious.

The precipitate fall in risk assets caught many out, including us; those hoping for a normal recovery from an average recession were savagely disabused. The problem was not fixed in 2008, has not been since, and will enter a much darker phase, before it gets better. Many banks are bust, dependant on the sovereign state to prop them up, whilst those that look in a better condition will fall victim to contagion.

Of course, the politicians could have sorted this out, (note, not will), but I don’t think that, collectively, they get it. One suggestion is that markets are regulated to the point where they move slowly enough for the politicians to keep up, hence, in part, the UK veto, at the last summit. Won’t happen.

Looking forward…

So, to my predictions for 2012:

By April, the 15th to be precise, you will become very bored indeed with the Titanic. A tragic outcome, not only for those who perished, but all the others who were involved with the project.

Next up is the Diamond Jubilee; mathematically impossible, in our lifetime, that we would ever have a Sovereign that would be there for so long in future, and equally odd that a combination of Germans and Greeks have kept the UK stable for so long.

Following that, we have the London Olympics. Clue is in the title; bar Weymouth, the whole of the rest of the country is excluded from attending.

And then the big circus in November which is the American presidential election. This should be for the Republicans to take, but they are doing a fine job of missing the target.

As ever, things will come along which we have not anticipated; I hope it is a prosperous one for all of you.

CDO

January 1^st, 2012