TODAY’S FAYRE – Tuesday, 27th January 2015


Because I could not stop for Death –

He kindly stopped for me –

The Carriage held but just Ourselves –

And Immortality.


We slowly drove – He knew no haste

And I had put away

My labor and my leisure too,

For His Civility –


We passed the School, where Children strove

At Recess – in the Ring –

We passed the Fields of Gazing Grain –

We passed the Setting Sun –


Or rather – He passed us –

The Dews drew quivering and chill –

For only Gossamer, my Gown –

My Tippet – only Tulle –


We paused before a House that seemed

A Swelling of the Ground –

The Roof was scarcely visible –

The Cornice – in the Ground –


Since then – ‘tis Centuries – and yet

Feels shorter than the Day

I first surmised the Horses’ Heads

Were toward Eternity –

  Emily Dickinson – poet – 1830-1886   


Last night I went to listen to a typical barnstorming speech made to supporters of ‘Business for Britain’ by Lord Digby Jones, the hugely respected former Director General of the CBI. Much of the delivery style I had heard many times before, particularly his perennial pop at the ‘French!’ What I admire most about Lord Digby is that he is apolitical. Every speech he makes is on behalf of ‘Business!’ – No political persuasion recognition! Though his locks continue to flow, he is, with age, getting thinner on top, perhaps some of his thatch has worn thin through frustration watching the EU’s feudal attitude to business. Coupled with its bloated bureaucracy, the EU is losing market share to China, the US and others willing to be more competitive.


Lord Jones was adamant that the EU constituent countries had their own agenda and that Brussels’ intransigence was bringing the economy of 500 million heading into the vortex of despair. Approach competition using every country’s best attributes. “Remember the population is getting older”, he said and “we cannot afford to pay for dotage when sustaining gargantuan debt.” That was Lord Jones’s message. He also begged all governments to remember that the public sector does not create growth; business does! That is where tax comes from; so stimulate business opportunities and stop hammering them in to the ground! If Cameron or any other PM failed to deliver radical change in areas of immigration, CAP, taxation and regulation, Lord Jones would reluctantly recommend that the UK should leave the EU, but not before a hell of a fight!


The poll of polls for the General Election posted today did not make great reading for business. My colleague, economist, Simon French shrewdly points out, and this has been his concern for some time, that if the SNP gain a forecasted 53 seats, coupled with Labour not necessarily being the largest party, would muster sufficient seats to form an anti-business administration. This would be unwelcome news, just as the UK is more together economically than it has ever been.


I find it staggering as to how ambivalent everyone is to the current plight of the Russian economy. Russia’s downgrade to junk status is far more significant than any fall-out from Greece insolvency. Russia relies on oil! At $48 a barrel that is hopeless for balancing the books. Also if Russia is incapable of borrowing at competitive rates, this will not augur well and will incur the wrath and indignation of Putin, who politically will probably thrash out with more troops and tanks being planted in Ukraine. I do wish President Obama would engage!


Just after 5.00am this morning some charming Australian wag was so chilled out about Greece’s plight commenting on CNBC, I thought he was going to keel over! We were not to worry for the following reasons. Firstly he said QE provided a brilliant cushion allowing struggling countries to relax a bit more. Secondly Spain, Italy and Portugal were in much better economic condition than a year ago – maybe true but still drowning in debt and massive unemployment. Thirdly the EU banking system was much stronger – I doubt that very much – and finally the fall in oil prices was a terrific boost for recovery. I wondered if this very erudite bloke had been brought up on the Planet ‘Zog!’ I’d love to know what ant-depressants he is on! Can I have some, please? Greece’s €260 billion worth of debt is measurable and should not be treated glibly! The story will run its race and there will be sorrow and tears at the day of reckoning.


Today everything in the garden looks rosy. Yesterday European bourses had a great day of consolidation, apart from Greece, whose ASE shed 3%. Greece’s 10-year bond yield has rallied uncomfortably to 9.41%. You could add another big figure and as an investor I would still be disinterested. Yesterday Wall Street had a rather nebulous session, as snow threatened to envelop the capitalist centre of the Universe. Trade, understandably was not brisk. Today is a huge reporting day with CATERPILLAR, PFIZER, LOCKHEED MARTIN, PROCTOR & GAMBLE, BRISTOL MYERS SQUIBBS, AMGEN, APPLE, YAHOO! and AT&T all supposed to be stepping up to the plate. Some may not be able to make it through the snow. Remember what happened last year. The inclement weather saw the US post -2.9% for the first quarter GDP!!


In Asia, Tokyo cracked on but poor industrial company profits saw losses posted by the Shanghai Composite and the Hang Seng. This morning EU bourses were in the doldrums. Despite decent numbers from Novartis and Siemens and questionable efforts from Ericsson and Phillips EU bourses lack momentum. Even though there is plenty of M&A talk and gossip about – Shire, IAG, and Three/02 etc – the FTSE is down 20 points at 6830. EasyJet, PZ Cussons, Crest Nicholson and British Land pleased their respective acolytes. It was rumoured that PostNL of the Netherlands has expressed an interest in buying the Royal Mail. Yesterday RMG’s shares popped 2% on the rumour. This morning they are down 3% thanks to an RBC Capital downgrade for under-performance. Even if the interest was real I doubt the unimaginative Dr Cable would countenance such as sale.


This morning 4th quarter GDP was slightly disappointing at +0.5% – for 2014 2.6% and for the year 2.7% – the best since 2007! Rule Britannia!



 David Buik

Market Commentator


+44 (0)20 7886 2775


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


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