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 39/2018–
That actions have consequences is a given, that they are unknown, and unseen, is perhaps less appreciated. This week’s blog is starting where it should have ended, with the showcase trial of Dr. Christine Blasey Ford alleging sexual misconduct against Brett Kavanaugh, Donald Trump’s nominee for the vacant slot on the Supreme Court, a job for life.
The Donald wants this sorted by the mid-terms, in early November, lest he loses his thin majority in the Senate. It is a fast moving situation, but in the absence of witnesses, it is all but impossible to stack up, and verify, given that in the early 1980’s, there were no mobile phones, CCTV, or internet. The hearing, (trial), therefore became a slugfest along partisan lines, which the Republicans will win, due to their majority.
Apart from the utterly compelling testimony from Dr. Ford, what struck me was what this says about the state of discourse, politically, today. I was in America not long before the 2016 election, and told anybody that would listen, (not many), that the Donald would win against the most hopeless candidate that the Democrats have ever fielded, but then I was on the eastern seaboard.
The swamp he promised to drain, (lobbyists in Washington), has never been larger; vested interests need people to make their case, when he is so hard to read. This week’s events move things on, by a leap. It is now blatantly obvious that any kind of discourse, let alone discussion, is out of the window. It is a straight, fight from which there can be only one winner.
The polls indicate that the female vote was leaking from the Republicans, prior to this week, so the question is whether that is a big enough swing to defeat the Republicans, whose voters will double down. Whatever your views on the rights and wrongs of this sad affair, it is a window on the state of politics, certainly in the western world.
Politics is all about how you garner money from the populous, and how it is then spent. In a domestic household, there needs to an equilibrium, in the medium term, but such rules can be skirted by governments. And oppositions. The Labour party held their annual conference this week, proposing large scale nationalisation, and the confiscation of 10/% of the equity of any company employing more than 250 people, providing it is publically quoted.
Polling suggests than this has widespread support, which is pretty shattering when it amounts to no more than theft. Perhaps voters might wake up if they came for 10% of the value of your house, rather than your savings, but then if you have neither, there is nothing to lose. Policies which would require real money to be spent will be financed by borrowing, and there is the rub.
The GFC in 2008 destroyed the middle ground in politics, both here, in America, and much of the western world, not that it was immediately identifiable at the time. Now, both the left, and the right, are getting more extreme, and the cult of the leader is spreading.
The leader is now more important than the party, think Merkel in Germany, Trump in America, Macron in France, and now Corbyn in the UK, although he is just the leader of the opposition. At the moment.
Thus you are either wholly onside, or you are the enemy, with those advocating some compromise facing deselection. The common enemy for both Trump and Corbyn is the media, who do not necessarily agree with the actions, and policies, of either, further thwarted by the actions of the “deep state”.
This seems somewhat bizarre when the ruling Conservative government in the UK do not seem capable of organising anything at all, but even paranoiacs have enemies. Where this ends up is anyone’s guess, but the direction of travel does not look good, with the outcomes increasingly binary.
Which leads me back to where I started. If you think that the Senate hearings set an appalling example to democracy, then #MeToo. Unintended consequences.
–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.