TODAY’S FAYRE – Friday, 23rd  January 2015



Turning and turning in the widening gyre    

The falcon cannot hear the falconer;    

Things fall apart; the centre cannot hold;    

Mere anarchy is loosed upon the world,    

The blood-dimmed tide is loosed, and everywhere    

The ceremony of innocence is drowned;    

The best lack all conviction, while the worst    

Are full of passionate intensity.


Surely some revelation is at hand;    

Surely the Second Coming is at hand.    

The Second Coming! Hardly are those words out    

When a vast image out of Spiritus Mundi    

Troubles my sight: a waste of desert sand;    

A shape with lion body and the head of a man,    

A gaze blank and pitiless as the sun,    

Is moving its slow thighs, while all about it    

Wind shadows of the indignant desert birds.


The darkness drops again but now I know    

That twenty centuries of stony sleep    

Were vexed to nightmare by a rocking cradle,    

And what rough beast, its hour come round at last,    

Slouches towards Bethlehem to be born?  


William Butler Yates – poet – 1865-1939   


Like many others, I am deeply saddened by the death of Lord Leon Brittan and the fact that he did not have his day in court to defend himself against vicious rumours concerning his private life. Also so sad for those poor children who suffered from paedophilia will not benefit from Lord Brittan’s evidence as a key witness.   


Post the ECB QE announcement yesterday, you would be forgiven for thinking everything in the garden was rosy! European bourses rallied by over 1% and look as if they will crack on today, perhaps with a degree of caution. New York and Asia also enjoyed all the fun of the fair last night and this morning – DOW +1.48%, S&P 500 +1.53%, NASDAQ +1.78%. To date the ASX is +1.51% and NIKKEI +1.05%. Shanghai Composite has tumbled from a bright start to be down 0.10% at lunch, after weaker than expected data (stalling factory growth), though the Hang Seng is still up 1.14%. 


How long can this equity euphoria last is anyone’s guess. The Euro is at its lowest level against the Greenback in 11 years and 7 years against Sterling. Exports should be very cheap and the tourist industry should boom this summer. However is this QE too little too late. Some economist felt that Euros 2-3 trillion was nearer the mark. Draghi has implied – “I have done my bit! Now you politicians, make it work!” There seems to be some major disagreement with what the ECB wants and what Chancellor Merkel wants. She seems very insistent that a serious degree of austerity must be maintained and government debt must be cut. Draghi has implied that the liquidity provided to stave off deflation and create growth must not end in banks’ coffers to buy equities. It must be used to lend to SMES and infrastructure projects within the EU, which might help alleviate the desperate levels of unemployment in Greece, Spain, Portugal and Italy in particular and France is far from out of the woods. We need to remind ourselves that unemployment in Greece is 26%, Spain 24% and in Italy 12% – horrendous. This QE will only work if unemployment is dealt with – by building roads airports schools and hospitals etc.  


Sunday’s Greek election will sort the men out from the boys. Syriza seems to have stretched its lead in the polls to 6%. So a left-wing coalition seems likely. Austerity? Not sure Syriza can spell it! Debt? Not sure that Syriza cares! Greece will want some of this debt written off. Spain and Italy will be watching carefully to see how the Troikas deals with Greece’s demands. If there is any softening in attitude on austerity and debt repayment by the authorities, other Mediterranean countries will want a piece of that action.   


Sadly King Abdullah of Saudi Arabia died last night aged 90, to be succeeded by his half-brother Prince Salman aged 79, with Prince Muqrin now becoming crown Prince. Oil spiked by 2% – probably only a knee-jerk reaction. However policy is unlikely to change. Saudi has an ageing population and 80% of people are employed in the public sector. Oil at $48 a barrel will become painful for Saudi before too long!  It was confirmed that Li Ka-Shing and Hutcheson Lampoa are in exclusive talks to buy 02 from Telefonica for about $13.9 billion.    


UK companies posting results today – PREMIER FOODS, CLOSE BROTHERS US companies posting interim results – Friday – BANK OF NEW YORK MELLON, HONEYWELL, MCDONALD’S, STATE STREET. Next week, APPLE, GOOGLE & MICROSOFT post their interim results  



David Buik

Market Commentator


+44 (0)20 7886 2775

Panmure Gordon & Co  One New Change | London | EC4M 9AF | United Kingdom


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