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 39/2019–
It would be difficult to imagine a more chaotic week. For the purists, the verdict of the Supreme Court was unexpected, and will be argued for many years. This was an invention of Blair, and whilst it has flexed its muscle’s in this case, the limits of its brief are unknown, and capable of misinterpretation. Nevertheless, the prorogation of parliament was deemed unlawful.
It was not. When it was called, it was perfectly legal, as it has been for more than 300 years. On Tuesday, the law was changed, which the court was entitled to do, hence the climbdown by the Government. In simple terms, you parked your car on the street, perfectly legally, and returned to find that double yellow lines had been painted underneath it, and therefore it was illegal. Can’t argue.
But, and it is a very big one, if the normal conventions no longer apply, as we have seen in parliament this week, then it is going to get very ugly. The foretaste is already there. The forthcoming General Election is going to be pitched, by the Conservatives, as the people verses the state, but I don’t think this has much resonance.
The Donald tried it with his drain the swamp narrative, but there are now more lobbyists in DC than ever before, as interest groups try and match his next move. To add to the usual chaos of his circus, the Democrats are now seeking his impeachment claiming that he tried to get the Ukrainian government to dig up unfavourable facts about the activities of Jo Biden’s son.
Geopolitics are a murky business, especially in that part of the world, and there are many questions that Biden, the Democratic front runner, is not keen on answering, so all they have managed to do is severely damage his campaign. There is not the remotest chance of an impeachment happening, and it strengthens the Donald re-election effort.
The Democrats pinned all their hopes on the Russian investigation turning something up, but two and a half years later, it didn’t. Unless they can find a new way forward, (unlikely when they are devoted to this fool’s errand), they will lose in 2020, entirely their own fault.
A week has now passed since the collapse of Thomas Cook, one of Europe’s largest package tour operators, requiring the repatriation of 160,000 people, which seems to be proceeding without too much fuss, maybe because this is now a well-practised procedure. In theory, there is an industry wide scheme to fund such eventualities, but the sheer size of this failure has dwarfed it, leaving the taxpayer with a bill for £600mn.
Thomas Cook were making just £11 profit per head; no doubt it suited them to offer ridiculously low prices on the basis that somebody else would pick up the tab when it all went wrong, but I fail to see why the taxpayer should be involved.
As we drift in to October, and the end of the month deadline for leaving the EU, expect events to get much more fraught from here. There are too many similarities with the Trump playbook for it to be a coincidence, so maybe we should look across the pond for guidance.
–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.