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The Financial Ironmonger Blog No 19/2017

The Financial Ironmonger Blog No 19/2017

Every week our guest blogger, David Oakes of Mosaic Money Management (aka The Financial Ironmonger), shares with us his take on some of the major UK and overseas macro and political events that shaped the previous week.

Please be reminded the value of investments, and the income from them, may fall or rise. The views expressed in this article are those of the author at the date of publication and not necessarily those of Chelverton Asset Management Limited or Mosaic Money Management. The contents of this article are not intended as investment or tax advice and will not be updated after publication unless otherwise stated.


The French Presidential vote last Sunday was much as predicted with Emmanuel Macron securing 66.1% to become the youngest head of state since Napoleon. The outcome is good news for the EU, as a construct, and for France, which needs a change of tack. Next month they hold elections for members of parliament, and the result of that will determine how much of his plans he gets to implement.

My trip to Pennsylvania confirmed what I thought I would find; supporters of the Donald continue to give him the benefit of the doubt, whilst opponents never miss an opportunity to call him out. All this is set against a background of relentless negativity by the media. The economy, meanwhile, continues to grow with earnings, in the first quarter, exceeding analyst expectations. Indeed, in the towns and villages that I visited, many stores had vacancies for new staff, surely a leading indicator.

Just as I was concluding that things were in a reasonable state, the Donald fired James Comey, the FBI Director who led the hapless investigation in to Hillary Clinton’s use of her private e mail account whilst she was Secretary of State. Last week, she blamed this for losing her the election; together no doubt with Russian collusion, without which nothing stands up these days. It seems to have escaped her notice that it was her choice to use that system, against advice, and that her campaign was a disaster from the start.

At the time that the investigation was reopened, just before the election, the Democrats were horrified, calling for Comey to be fired, and yet this week, they were all over the media arguing the polar opposite. Hypocrisy knows no bounds. Apparently, this is worse than Watergate, Nixonian in its intent.

Actually, it is a presidential prerogative to decide who leads the FBI, and this is only the second time in its 109 year history that the head has been fired. What the Democrats don’t want to tell you, amidst all their faux outrage, is that the last one dismissed in 1993 was William Sessions, sacked by Bill Clinton, on the grounds of unethical conduct. And there was I thinking that Americans don’t do irony.

The New York Times, hardly a supporter of the Donald, had pages of this stuff on Wednesday, but I was encouraged to read an article by two senators, Bob Corker, a Republican from Tennessee, and Chris Coons, a Democrat from Delaware. Together, they sponsored a bill, the Global Food Security Act, which passed in to law last summer. It permanently authorized the United States Agency for International Development’s emergency food aid program, which delivers half of all American food aid.

It used to be processed by the Department of Agriculture, hampered by decades-old regulations requiring the food to be grown in the US, and shipped on American flagged vessels. Now the pair are sponsoring the Food for Peace Reform Act, which removes these inefficiencies, and will save $500mn on a budget of $2bn. It is hardly going to be positive for the farmers, but it should get more aid to the most deserving, albeit that the corruption and chaos in the supply chain is unlikely to change any time soon.

In the most unstable parts of the world that they seek to help, food is often dropped on a pallet from a transport plane, and despite their best efforts, these often burst on impact. If nothing else, it provides training for airport baggage handlers, who have wholeheartedly adopted the techniques.

My daylight flight out was half empty, bliss for economy travellers who crave space, and so was the night time return, where it is even more appreciated. Half an hour before takeoff, the crew announced that everyone had boarded, cue for the tea dance where many move seats to gain maximum advantage. And then, half an hour after we should have left, the Captain came on the intercom to announce that we were to be joined by passengers from the cancelled flight to Amsterdam, hence the delay, before pointing out, in no uncertain terms, that he had not been informed of this.

Eventually, some twenty extra people joined, and whilst their flight was obviously cancelled for “operational issues”, one cannot help thinking that commercial ones might have prevailed. And, of course, the system cannot cope with the original people moving seats, but American Airlines were wise enough not to make an issue of it.

It is but a straw in the wind; the internal commuter flights the previous Friday were overbooked, to some locations, the operator offering $800 to anyone stepping down. Eventually, they accepted a bid of $1,000 a head from three people, in a group. Pays for the weekend. But if international flights are less popular, that has implications; one chap on my return flight, who takes it every month, said it had been so for quite some time.

So my conclusion is that whilst America seems to be doing fine, in the parts that I visited, the media storm, mentioned above, is harming the way that others perceive them.


David joined Manchester stockbroker Henry Cooke, Lumsden in 1977 and after becoming a member of the London Stock Exchange in 1984 held a number of senior positions within the firm including Managing Director of the in-house fund management company and member of the Executive Committee.

After senior appointments at Cazenove Fund Management and latterly Mercater Capital Management, David joined Mosaic Money Management in 2013. He has successfully managed private client and fund portfolios for over thirty years and has particular expertise in providing a multi manager service to his loyal client base.

The Financial Ironmonger is a hat-tip to Ironmonger Lane, the location of Chelverton’s London office.