TODAY’S FAYRE

“The darkness crumbles away
It is the same old druid Time as ever,
Only a live thing leaps my hand,
A queer sardonic rat,
As I pull the parapet’s poppy
To stick behind my ear.
Droll rat, they would shoot you if they knew
Your cosmopolitan sympathies,
Now you have touched this English hand
You will do the same to a German
Soon, no doubt, if it be your pleasure
To cross the sleeping green between.
It seems you inwardly grin as you pass
Strong eyes, fine limbs, haughty athletes,
Less chanced than you for life,
Bonds to the whims of murder,
Sprawled in the bowels of the earth,
The torn fields of France.
What do you see in our eyes
At the shrieking iron and flame
Hurled through still heavens?
What quaver -what heart aghast?
Poppies whose roots are in men’s veins
Drop, and are ever dropping;
But mine in my ear is safe,
Just a little white with the dust.”

Isaac Rosenberg – poet & soldier – 1890-1918

Yesterday at Mandela’s Memorial gathering in Johannesburg President Obama was provided with another fabulous chance to extol the virtues of amazing powers of rhetoric and he grabbed it eagerly with both hands. He gave another masterful speech – very eloquently delivered. However what I don’t understand is why, despite the audience being a mixed South African one, he had to deliver it in ‘hillbilly accent’ from the Ozark and Ouachita mountains. The President of the USA is a cultured man from Illinois. He should speak as he is and not get sucked in to bad habits used by the likes of Tony Blair, who slipped ineloquently in to an Estuary accent if the occasion suited! There is no need to patronise the audience! It just dilutes the office of President!

Many like me will have been massively disappointed to see the EU lift sanctions in Zimbabwe, thus allowing huge amounts of diamonds to be sold in Belgium! – Absolutely sickening! Mugabe is a despot and Zimbabwe is not, by any stretch of the imagination, a democratic country!

There was potentially some good news emanating from Washington over night. The headlines read “US Congress cross-party agreement reached!” Oh really? Well why haven’t the US futures and European markets selected another gear this morning? Well Speaker John Boehner’s luke-warm comment that ‘modest’ agreement has been reached in principal tells all we need to know. If a $24 billion reduction in the Federal deficit has been reached; then all well and good. This deal could also include the $63 billion military and domestic cuts, which were in gridlock a few months ago. The whole issue is still very much up in the air with little comment about Obamacare being thrown in to the melting pot! In fairness Paul Ryan is a formidable negotiator for the Republicans but there are more draconian members of his party! I venture to suggest that Congress has some way to go to sign off on the US budget.

The Street of Dreams failed dismally to capitalise on Friday’s employment data. The cumuli nimbus clouds surrounding the deficit and tapering forced investors to keep their hand in their pockets – fully zipped up! The DOW and the S&P 500 closed down 0.3%, the NASDAQ by 0.2%. There was encouraging news on the jobless claim front, but investors were ambivalent. The only good news came on the back of confirmation that GM would go it alone with the government selling off its final tranche of shares – That was the appointment of Marry Barra to succeed Dan Akerson as CEO. M/S Barra has been a GM ‘lady and girl’ since she was 18 years of age – her father was also with e company for 39 years. She has been involved at the heart of all GM’s operations and comes highly recommended. It looks like a great appointment. There are also other wholesale changes. Mr Akerson will also relinquish his position as chairman due to suffering from advanced cancer! – Very sad, after GM’s miraculous recovery from its $50 billion US Government bail-out!

So the Volcker rule was finally endorsed by regulators and the FED. In 2015 proprietary trading in the US becomes a distant memory; but does it? This decision will mean that a mass of liquidity will be taken out of the market and the emphasis of trading will just be passed on to hedge funds and money funds, which will become omnipotent and hugely influential and potentially dangerous. I think the Bank of England understands this, but I am less than convinced about the FED. Such is the power of fund managers that the US Treasury market moves with a $250 million position. 5 years ago that was unthinkable. The wholesale money markets have improved a touch but there are still more or less moribund! So as we enter uncharted waters over the tapering of QE, we still have to consider an inefficient money market and the Volcker Rule! This could be a very toxic cocktail to cope with. Also it may be a naïve comment; will the authorities have the ability to police the difference between genuine hedging and trading? There are some smart people out there. I suggest it is impossible.

Nathan Bostock clearly was not looking for a career move for financial gain in packing his bags, leaving RBS as FD after 10 weeks to go to Santander to help with 2015 IPO of its UK business. I venture to suggest that Mr Bostock was a ‘Hester clan man’ and he may well have found difficulty in coping with the gospel according to George Osborne and the UKFI. So it is the return of the prodigal son – back to his routes in mortgage lending and retail banking. The Santander IPO is far from ‘nailed-on’ in the wake of potential competition from Lloyds, TSB, Williams & Glyns and maybe even the Co-op! RBS is years behind, I fear!

The FTSE is still flat lining today – absolutely without inspiration – up 2 points as I speak. Good results from Stagecoach were forthcoming this morning! Concern from leading shareholder about First Group – That it should sell its stake in Greyhound to help ease the financial burden. The board declined. Royal Mail and Ashtead are set to replace Vedanta and Croda in the FTSE 100.

These are David Buik’s personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
One New Change | London | EC4M 9AF | United Kingdom

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One thought on “TODAY’S FAYRE

  1. […] While everyone was caught analyzing the interpreter gone horribly wrong, I found David Buik’s review of orators identity crisis:   “Yesterday at Mandela’s Memorial gathering in Johannesburg […]

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