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 30/2018–
The unusually hot weather which has hit the UK, and Europe, in recent weeks has clearly started to get to people, and things, such as scrubland catching fire in Greenland. The Mayor of London has decided that from 2020, roads in Central London will have a 20mph speed limit imposed. Apparently, pedestrians hit at this speed are five times more likely to survive than those hit at 30mph, a conclusion reached, no doubt, by firing dummies at brick walls. Maybe he should volunteer; the average speed of traffic in Central London is but 6mph.
All this presupposes that you have a car to drive, since the latest scare is that, post Brexit, it will not be worth manufacturers producing right hand drive cars, ignoring the fact that the global market for such vehicles will not have changed an iota, deal or no deal.
Whilst you are pondering whether the next car is going to be right hand, left hand or no hands, between order and delivery, you are likely to have starved to death, since food supplies will stop on exit day, together with medicines to treat whatever ailments you have. Oh, and the blood supplies are going to run out as well.
You might think salvation lies in reclaiming the right to fish in our own waters, but there will be no chips since the main potato harvest has failed here, due to the drought, and in Eastern Europe, because of the very wet spring. Most of the above are scare stories that have appeared in recent days, but this bit is true. Serious food price inflation would look imminent, since all crops will have been affected, to a greater or lesser extent.
Such is the level of debate surrounding Brexit, but the one thing that everyone agrees on, whenever the subject comes up, is that they are sick of it, and just want it resolved. This might be a very clever outcome, pre-negotiated by both sides and thus an eleventh hour agreement will magically appear under an industrial cloud of obfuscation. Or, it may not.
The Q2 GDP numbers were released in America on Friday morning showing that the economy is now growing at 4.1% on an annualised basis, clearly vindicating actions taken to date by the Donald, whilst the third quarter numbers, due in October, are going to be “outstanding”. These numbers are subject to revision as much as ten years later, so really any case can be made to support whatever your argument is.
Exports have surged, but critics have pointed out that this is in anticipation of tariffs being slapped on who knows what, and is therefore a blip. The economist that I follow is predicting 4.8% annualised in the October announcement, right before the Midterm elections. “It’s the economy, stupid “was the slogan that won Bill Clinton the 1992 election, and the Donald clearly understands this. His predecessor might be able to give him some tips on how to cope with pesky camp followers, as well.
On my trip to America towards the end of October, I was looking forward to trying to see where the balance was for the elections, but I would be amazed, now, if he did not clean up, and then sweep through 2020, as well. From the other side, there seems no leadership, or policies, bar opposing anything that the Donald has got the Republicans to agree to. There are even suggestions that Hillary will have another go, some suggesting that fundraising has started.
After all, it was a combination of Russian interference, and the stupidity of the 46% of the voting population she described as “deplorables” that robbed her of her rightful place in history. What could possibly go wrong?
–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.