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 45/2018–
You would have to guess that the pollsters were more relieved than the Donald after Tuesday’s midterm elections in America, having completely failed to call the last presidential contest in 2016. Vindication for them was nothing compared to the enormous victory claimed by the president, increasing his majority in the Senate upper house, whilst losing his dominance amongst Representatives.
Some 43 of his colleagues retired this time round, so there is a double whammy of losing the power of incumbency, and the well established trend of voting against the president, at this point in the cycle. Where it goes from here is the important point. His first task was to fire Attorney General Jeff Sessions, who oversaw the Robert Mueller investigation in to Russian interference in the 2016 election.
His replacement, Mathew Whitaker, needs Senate confirmation, surely a given, whilst there are 210 days before he needs congressional approval, enough to all but close down these investigations, which have been going for ages, with no significant findings. The Democrats, emboldened by their partial win, are going to chair the major committees, and are hell-bent on revenge for the 2016 outcome, whatever their putative leader, the 78 year old Nancy Pelosi might say.
Apart from firing Sessions, the CNN representative lost his press pass, after a pretty combative conference. I worry about the attack on journalists, which is a global problem in this age of social media, but if you leave your objectivity at home, and bend your questions and reported outcome, to vested interests, it can be no surprise that others will call you out.
There will be lots of speculation on where this leaves the situation, but there can be no doubt that the Donald now controls the Republican party, even if he is not a supporter, and was quick to call out those that failed to embrace his worldview, with most of them losing their seats. In the GOP, you now have to tow the line, and with that security, and certainty, he launched his 2020 re-election bid, alongside the totally invisible vice-president, Mike Pence, which takes you to 2024.
It is thought that there is already $200mn in the war chest, a mere soupcon compared to the $5.2bn spent on Tuesday’s prelude. He now has a choice. Double down on the rhetoric, or go Trump 2.0, under which he would soften the language and seek to do deals on infrastructure, say, on which there should be agreement. It is early days, but there is no sign of this being rolled out.
Either way, he is a winner. 2.0 means he can get more done, but if the Democrats go for all out opposition, he can go back to the electorate, and say they blocked all these things that would have benefitted you. That is where I suspect it will end up, with the Democrats already hopelessly divided amongst themselves; more than thirty have indicated their intention to stand, so you have a split party with no central message other than that they hate Trump. Unlikely to be a winning approach, and having spent a year talking up the Blue Wave, which barely registered as a ripple, they need fresh direction and purpose.
I don’t want to be accused of ageism, but the 78 year old Nancy seems an unlikely place to start.
–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.