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 FINANCIAL IRONMONGER BLOG NO 23/2017–
Just thirty days ago, the Conservatives had a twenty point lead in the polls, and even earlier this week, one reader told me that he had staked money on the majority being more than one hundred. I will spare his blushes, since he is not alone. Whilst they are still in office, (if not power), I can claim that my prediction was right, albeit that this is a shabby outcome for the party, and the country.
Those of you who study these blogs carefully know to read not only what is on the page, but think about what is between the lines. And for me, there seemed to be too many moving parts in the jigsaw to make any sort of prediction that I had any conviction in. Two weeks ago, I ended the blog by noting the number of new voters, the implication being that these were unlikely to be supporters of Theresa.
Which they turned out not to be, the difference between this, and previous elections, is that they did turn out to vote. To some extent, this is the “revenge of the remainers”, but it is much more complex than that. It was obvious from the start that there was no need for this election, and to then run it on a presidential basis has not worked in the past, as Ted Heath proved in 1974.
All that knowledge, and experience, has been lost, as it is once a generation, except with the bankers. Every time there is a crisis, the people involved get binned, to be replaced by thrusting mid-thirties, who then make the same mistakes, albeit dressed up in new terminology. Thus has the cycle been reduced from once a generation to once a decade, pure genius.
It will be different this time round, of course, as they tell us old cynics, notwithstanding that we are actually sceptics, which is how we have survived this long. So, whilst infuriating the youth vote, the second mistake was the assault on their own voters in the form of the dementia tax, an invention of Theresa’s special advisor, Nick Timothy, who’s career is now an entry in the history books.
As the poll lead collapsed, she performed a massive U-turn, which was probably sensible, but then to deny it, in increasingly strident terms was, as it has turned out, suicidal. This is the equivalent of being caught by a policeman driving the wrong way up a one-way street, and then explaining that you only wanted to go one way, anyway. People can see it for exactly what it was; no shame in the procedure, (although it was completely avoidable), but denial in the face of overwhelming evidence otherwise requires Trump like powers that she clearly does not possess.
Whilst both the manifesto and the campaign to promote it were disastrous, there is a third element to this crushing defeat that needs looking at. The terrorist attack in Manchester was the first time that children had been deliberately targeted, but it took the subsequent events in London before Theresa announced that “enough is enough”, much as you might admonish a teenage child who has had a party whilst you are on holiday, trashing the house.
It is for others to decide if these events were predictable, and therefore preventable, but it would appear that the perpetrators were”known”, and thus it was avoidable. According to the Telegraph last Monday, several hundred British Isil fighters have reportedly returned to these shores, and you have to ask why this is allowed. Theresa has been in charge of this whole process for the last seven years, six as Home Secretary, and a year as Prime Minister.
People will have voted in the way that they did for multiple reasons, but there is raw anger out there with many people who feel that the “system” is not working for them, be they young or old, and I am not sure that the politicians really get this.
We do not know, and probably will not be told, the price demanded for the support of the DUP, a northern Irish take on UKIP, to keep the Conservatives in office. Inevitably, it will be more cash, for what is already the most subsidized part of the UK.
There will be enough material over the next few days to issue a daily edition, (it is not going to happen), but it is surely time for Theresa’s husband Philip to take her aside, and tell her that “she has done enough, time to go”. For which there is precedent; the reign of the first Conservative female Prime Minister ended in similar fashion.
Anyone fancy a September election?
–MORE ABOUT OUR GUEST BLOGGER, DAVID OAKES–
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.