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The Financial Ironmonger Blog No 30/2017

The Financial Ironmonger Blog No 30/2017

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.


One of the joys of working within the financial system is looking at the interface between economics and politics, and over time, meeting with some of the players. There is also a constant requirement to have an opinion on everything, which induces the politicians to spout anything that comes in to their heads, and economists to predict whatever, and the direr the outcome, the more dramatic the headline.

On top of these basics, you have people spinning the official line, and journalists, who might have a particular stance, trying to engineer opinions in an opposite direction. The best example of this, in a very long time, was an interview between Emily Maitlis, (of the BBC non-list), and Anthony Scaramucci, the incoming White House Director of Communications. In this, she asserted that the biggest issue in the UK, right now, was the potential importation of chlorine-washed chickens, following the biggest trade deal ever, according to the President.

He quite rightly responded that he knew nothing of this, but would revert with the facts, which are, that despite being banned by the EU since 1997, the European Food Safety Agency has ruled that it is perfectly safe. It is nothing more than protectionism, and there will be many more examples of this as the negotiations progress. As long as the product is correctly labelled, it should be down to consumer choice.

Quite how long Mr. Scaramucci will last is another matter, having spent the rest of the week talking down his colleagues. We are told that this type of dysfunctional creativity is how you build great teams, but it is hard to see why anyone with a steady career would risk everything to join this circus, until there is stability.

Meanwhile, a recent survey has shown that US manufacturing output has risen 40% over the last twenty years, whilst factory employment has fallen 29%, the result of the advance in technology, and the resultant increase in productivity. One would expect to see much the same trends in other advanced economies, but it illustrates the problem in trying to create jobs in the rust-belt states, so supportive of the Trump Presidency.

Back on this side of the pond, another newly elected President is finding that governing is not as easy as campaigning; more fun throwing stones in to the pond than sitting in the middle of it. For now, Emmanuel Macron is doing the easy stuff, mixing with celebrities, of sorts, and trying to sell France as the new, cool, place to be in Europe, much as Blair tried to rebrand the UK in the late 90’s. In truth, he was elected as the least bad option on offer, rather than by any desire for him to succeed, and now his ratings are in freefall, and that before he has tried any reforms. These, we are told, will come in the autumn, by which time the communists, the unions, and other fellow travellers will be well prepared for him.

Having campaigned on free market principles, and more flexible rules for labour, his first big intervention in industrial markets has been to nationalise the Korean owned shipyard, STX France, preventing a takeover by the Italian group Fincantieri to “defend the strategic interests of France”. Sharper eyed readers might spot the irony in this statement. They can just about get away with this on the basis that it defends the “strategic interests of France”, building warships, and aircraft carriers.

Some of the latest warships they built were two for sale to Russia, only very reluctantly blocked when the latter invaded Ukraine; you can work out the strategic necessity of supplying state of the art warships to an implacable opponent of Nato, and the EU. But only if you are a French politician.

What really amused me, however, was the reference to building aircraft carriers. The only one they have, Charles de Gaulle, commenced build in 1989, and not in these shipyards. Work was halted in 1990, 91, 93, and 95, due to budgetary issues, whilst during sea trials in 2000, the port propeller fell off. (Actually, it broke, but much the same thing). It underwent a major refit in 2007, another in 2010, and even now, languishes in a dry dock.

Unconfirmed reports suggest that they just get tugs to move it to where it is needed, but hardly a great example of European free trade, which turns out to be anything but.

Finally, (which will not be the last announcement as silly season gets a grip), we are all to drive electric cars by 2040, a decision made following absolutely no consultation with car makers, utility companies or the people who provide finance to purchase the existing fleet, which will be worthless at that point. All of which leaves me wondering if the present stupidity is the normality, and sensible debate the exception.


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.