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The Financial Ironmonger Blog no 49/2017

The Financial Ironmonger Blog no 49/2017

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.


When I started thinking about this blog on Thursday evening, I was much tempted to repost last week’s blog, pretty much in the spirit of I told you so. The humiliation of the PM in Brussels on Monday must mark a new low, and she has nobody else to blame but herself. The little Northern Ireland party, the DUP, (on which she depends for her majority), are fearsome negotiators, and as to where they are coming from, the U in their title stands for unionist. So it was not a bright idea to lock them in to EU regulations, whilst the rest of the UK escaped.

You might think that the government would have consulted them, since they had been asking for the wording of the agreement for five weeks. Perhaps they should not feel too left out; it would appear that none of the cabinet were either, and still haven’t been. Hence the face plant on Monday, a technique she is likely to perfect if she carries on like this.

There has to be a fall guy in all of this, and the blame was quickly placed on Damien Green, her de- facto deputy, who is meant to keep the various factions on side. His friends deny that is his job, and in any case, he is distracted by a long simmering dispute with the police as to whether they found pornography on his office computer in 2008. Whilst many might find this distasteful, it was not illegal, so there is nothing to be said.

The EU has worked very hard this week to get things sorted out, with one insider suggesting that 80% of Friday’s draft was written in Brussels. They want to keep her in place, since she is so weak, having conceded every point, so far. And the tricky bit is yet to come. Had the UK team been on The Apprentice TV show, they surely would have been fired by now.

Between now and Christmas, the cabinet are to meet and decide what kind of deal they would like to persue, although the EU have already stated that only modified versions of the Canadian or Norwegian deals are on offer, neither of which cover the all important service sector. Furthermore, the EU has warned third party countries, (those not in the EU), that they cannot offer better terms to the UK than them.

The EU and the DUP have worked out how to be both pawnbroker and powerbroker at the same time, a skill distinctly lacking in the PM. The team needs a complete makeover before the next round of negotiations, and whilst the DUP are far too canny to get on board, maybe they could lend some of their titanium backbones to our jelly mould lot.

The fudge word in the latest agreement is alignment, which can mean whatever you want it to, and is therefore perfect for the purpose. The final thought on the Irish border goes to Jon Thompson, head of the UK tax authority HMRC, who described cross border trade as “within a very local economy”. Think of this as milk going south to be processed, and then sent back north as cheese, yoghurt and cream.

Questioned at the Select Committee on Exiting the EU on 28th November, he stated that “We do not believe, and this has been our consistent advice to ministers, that we require any infrastructure at the border between Northern Ireland and Ireland under any circumstances”. Had this been communicated to the DUP, perhaps Monday might have been avoided.

Meanwhile, the attempts to stitch together a government in Germany continue. The SDP, the second party in the last coalition, (and badly damaged because of it), have set out their demands for rejoining, which amount to “a constitutional treaty to create a federal Europe”, according to their leader, Martin Schulz.

“This constitutional treaty will then have to be put to the member-states and those that don’t approve it will automatically have to leave the EU”. Should this happen, it could have saved the UK a lot of bother, but maybe we can sell our experience on a consultancy basis. We would be in competition with Yanis Varoufakis, former finance minister of Greece, when they got skewered.

His, free, advice, is that the UK either rescind Article 50, (if that is legally possible), or leave with no deal. Maybe he should join the refreshed team.


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.