TODAY’S FAYRE – Wednesday 19th March 2014

TODAY’S FAYRE – Wednesday 19th March 2014

“A stranger came to the door at eve,
And he spoke the bridegroom fair.
He bore a green-white stick in his hand,
And, for all burden, care.
He asked with the eyes more than the lips
For a shelter for the night,
And he turned and looked at the road afar
Without a window light.

The bridegroom came forth into the porch
With, “Let us look at the sky,
And question what of the night to be,
Stranger, you and I.”
The woodbine leaves littered the yard,
The woodbine berries were blue,
Autumn, yes, winter was in the wind;
“Stranger, I wish I knew.”

Within, the bride in the dusk alone
Bent over the open fire,
Her face rose-red with the glowing coal
And the thought of the heart’s desire.
The bridegroom looked at the weary road,
Yet saw but her within,
And wished her heart in a case of gold
And pinned with a silver pin.

The bridegroom thought it little to give
A dole of bread, a purse,
A heartfelt prayer for the poor of God,
Or for the rich a curse;
But whether or not a man was asked
To mar the love of two
by harboring woe in the bridal house,
The bridegroom wished he knew.”

Robert Frost – poet – 1874-1963

Unlike his predecessors Ken Clarke and Gordon Brown, Chancellor Osborne has got his priorities right – not having the Budget during the Cheltenham Festival, where the entire city would have been happier down for the week, but was never given the opportunity. However the Chancellor has picked up other bad habits introduced by previous incumbents – allowing the Treasury to leak the entire content of the Budget in the preceding month. Of course, Mr Osborne can put a little colour on the content at noon, but I doubt there will be much in the way of surprises. We still have such a gargantuan debt and borrowing requirement – circa £111 billion – that I fear a degree of necessary austerity for another 5 years despite growth target being raised in coordination with the OBR – Coalition, Tory or Labour will all be obliged to adhere to cutting expenditure! However it is voiced abroad that Mr Osborne is keeping a little powder dry. Apparently he allowed DPM Clegg to crow about the £2k child allowance and as a ‘quid-pro-quo’, the Chancellor may open a ‘goodie-bag’ at the end of his speech, which normally lasts about 48 minutes, for us all to drool over!

I was wittering on yesterday about the necessity of appointing a market person as deputy governor, whose finger-nails were actually dirty from working at the coalface of banking; someone who actually knows the ‘movers & shakers’ in the City and Canary Wharf – in fact the Bank needs to know people in ‘low places’. Well my assessment of the situation of what was required bore zero resemblance to Governor Carney radical changes. I must apologise for being way off the pace. Not for one minute did I think that Paul Fisher would be held to account as the scapegoat for forthcoming foreign exchange misdemeanours, despite his unfortunate comments last week – “It’s not our job to go hunting for market wrongdoing!” Knowing Mr Fisher a little, I suspect this remark was made out of context. In his defence Andrew Tyrie and his visceral colleagues on the Treasury Select Committee are a daunting prospect. I have nothing against Mr Tyrie – he does a very necessary job with the utmost diligence.

The Governor expressed concerns about the unwieldy size of the BOE with fresh responsibilities for regulation taking increasing toll on executive management. Well Mr Carney, if nothing else, has been brave and radical. He really has had the drains up. So Paul Fisher leaves the MPC and his responsibility for markets and heads for Prudential Authority as Andrew Bailey’s deputy. Spencer Dale more or less swaps with Andy Haldane – Financial Stability and Economist – Haldane to the MPC in place of Dale.

There is no doubt that Ben Broadbent has an exemplary CV – economist to Bank of England to Goldman Sachs as economist and back to BOE as deputy governor. However forgive me for whingeing but he’s ANOTHER ECONOMIST! – Not what is required at this juncture! Yes he replaces Charlie Bean, who is an economist, but the Bank has economists crawling out of every ‘nook and cranny.’ We need practioners!

Now to Nemat (Minouche) Shafik; She was crow-barred out of the IMF by Mark Carney to take control of markets and banking. She will oversee the UK’s eventual withdrawal from QE, improve the Bank’s access to market intelligence and represent the UK on international financial bodies and committees. Internationally educated M/S Shafik has unprecedented intellectual capacity, having held down a number of very high profile jobs at the World Bank, the IMF and more recently as Permanent Secretary to the Department of International Development. She clearly has impressed the PM, the Chancellor and Governor Carney with her credentials. My problem with her appointment and I will have to get over it, is that she has never been a market practitioner. Knowing the CEO at Barclays and HSBC is all very well, but her appointment or someone else of similar ilk is never going to put an end to banking transgressions or more to the point heading the threat of them off!

We have had a sepulchral start to the session this morning. At 9.00am the FTSE 100 was down 17 at 6587. Partnership and Smith Industries lost some value on perceived shortcomings in their results. Conversely Inditex added 3.8%, as its fall in sales was already priced in. Since January 2014 Inditex’s share price has fallen from E320 to E107.

Eyes down for a full house from Chancellor Osborne’s Budget at 12.00noon today – all the fun of the fair!

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
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