Politics with everything please…..

Expect the unexpected…

We spend our time trying to work out the way that short term trends are going to play out, and given that the long term is made up of lots of bits of short term that have been bolted together, it is important that we get these moves right. Often, outcomes are not predicted and in more recent years, increasingly so. Expect the unexpected has become the new mantra.

Short-termism rules… OK?

The recession, and global austerity sweeps most landscapes, and those not yet touched should mind their eye. (Australia?). And, we don’t think that it has really started yet. But the blame game has. Bonuses are the new Daily Mail hate campaign, not that I can remember what the last one was, but this is so self defeating that you begin to wonder who is setting the editorial tone. The answer has to be the politicians, forever pandering to the short term.

Those, for instance, that let Lehman’s go bust; “well, lets see what happens”, or those that refused the increase in the American deficit ceiling last August, an entirely futile gesture that caused utter chaos. You might think that they would learn, since that is human nature; smarter humans learn from the mistakes of others. Well, I have to tell you that one fund manager I met with this week thought otherwise; the better data, including jobless numbers, is only likely to intensify Republican opposition to pretty much anything in their determination to defeat Obama.

You might conclude that they deserve each other, but not that we deserve them, or the consequences.

A spent force…?

Freed of the onerous task of collecting a £1m bonus, Stephen Hester, boss man of RBS, revealed that £38bn of the taxpayer bailout had already been spent on “loan losses, disposal costs and restructuring charges”, which covers a variety of sins. If I heard him correctly, on the wireless, (since we still have these things in the country), he said that the whole £45bn injected by the taxpayer had been “lost”, and some time ago, at that.

Now, if you run an operation which depends on confidence, as any bank does, this is not the smartest comment. The whole structure only survives because people believe it will, and when they don’t, you have the sort of queues seen outside Northern Rock.

So, before too long, up pops Robert Peston of the BBC to explain that the money was not “lost”, and the taxpayer may yet recover the sum invested. Hmm. Anyway, this chap Hester, (never to be Sir Stephen), is clearly not a proper banker if he fails to collect his bonus.

For the record, we delight in sharing the good times with our colleagues who do not sit on the Board, but no bonus has ever been paid to a Director of Mercater.

Swings and roundabouts in Europe…

The denial of banking reality continues at a national level, with Greece either on or off. It has been the story for so long now; but still has the power to shift markets, just when you thought it was all priced in. For the record, we do not believe that the default, either orderly, or disorderly, has been allowed for. Not that it stops the game. The European Central Bank, (ECB), may offload the Greek debt that it owns to the European Financial Stability Fund, (EFSF), just before the inevitable write-down, rumoured at 70%. Apparently, this is just fine, and avoids votes, and other awkward stuff, that people really don’t want to talk about, or recognise.

Vive la Résistance….

Out in the wings, the French Presidential election looms; the challenger, Francois Hollande is 8% ahead of the incumbent Nicolas Sarkozy, who has yet to declare that he is running. The attraction is, apparently, a pledge to scrap all the announced austerity measures, including the increase in the retirement age, and go back to what France does best. Hollande clearly believes in this, albeit that a scorned partner may derail him, which sounds familiar.  I suppose the popularity of this chap tells you all, and is probably an accurate guide for what is, surely, to come. Those who have been accustomed to the good times will not retreat, so it is two fingers to the Germans.

We have been here before, to the benefit of none, but this time, hopefully, without loss of life.

The Wembley way…

Meanwhile, there is always hope. Thus twelve men and true, or should that be 8 men and 4 women, found “Our Harry” not guilty of parking some pocket money in Monaco, and fair call. Why would you not?

There is not the remotest correlation, I am assured, between the resignation of the present England manager, one Fabio Capello, and the outcome. I am really not into football, or soccer, but my colleagues are, but I don’t understand how you can have someone in charge who cannot speak the same language as his squad.

But, I do have some sympathy with his predicament.

And finally…

Next week, I shall be in the far north west of the UK, weather permitting.

My expectations are that the agricultural sector will be doing well, (and they deserve it), and that tourism and retail will be rubbish.

Will report back.

CDO

10^th February, 2012