TODAY’S FAYRE – Wednesday, 13th July 2016
“I had a duck-billed platypus when I was up at Trinity,With whom I soon discovered a remarkable affinity.
He used to live in lodgings with myself and Arthur Purvis,
And we all went up together for the Diplomatic Service.
I had a certain confidence, I own, in his ability;
He mastered all the subjects with remarkable facility;
And Purvis, though more dubious, agreed that he was clever,
But no one imagined he had any chance whatever.
I failed to pass the interview, The Board with wry grimaces
Objected to my boots and took exception to my braces;
And Purvis too was failed by an intolerant examiner,
Who said he had his doubts as to his sock-suspenders’ stamina.
Our summary rejection, though we took it with urbanity,
Was naturally wounding in some measure to our vanity.
The bitterness of failure was considerably mollified,
However, by the ease with which our platypus had qualified.
The wisdom of the choice, it soon appeared, was undeniable
There never was a diplomat more thoroughly reliable.
The creature never acted with undue precipitation
But gave to every question his mature consideration
He never made rash statements that his enemies might hold hi to;
He never stated anything, for no one ever told him to;
And soon he was appointed, so correct was his behaviour,
Our Minister (without portfolio) in Trans Moravia.
My friend was loved and honoured from the Andes to Estonia;
He soon achieved a pact between Peru and Patagonia;
He never vexed the Russians nor offended the Romanians;
He pacified the Letts and he appeased the Lithuanians.
No Minister has ever worked more cautiously or slowly,
In fact they had decided to award him a portfolio
When, on the anniversary of Greek Emancipation,
Alas! He laid an egg in the Bulgarian Legation.
This unexpected action caused unheard-of inconvenience,
A breach at once occurred between the Turks and the Armenians;
The Greeks poured ultimata, quite unhinged by the mishap, a him;
The Poles began to threaten and the Finns began to flap at him;
The Swedes withdrew entirely from the Anglo-Saxon dailies
The right of photographing the Aurora Borealis;
And, all attempts to come to a rapprochement proving barren
The Japanese in self-defence annexed the Isle of Arran.
My platypus, once thought to be more cautious and more
Than any other living diplomatic representative,
Was now a sort of warning to all diplomatic students-
The perfect incarnation of the perils of imprudence.
Beset and persecuted by the forces of reaction
He reaped the consequences of his ill-considered action.
And, branded in the Honours List as Platypus, Dame Vera,
Retired a lonely figure, to lay eggs at Bordighera.”
Patrick, Viscount Barrington – poet– 1908-1990
We have had no summer to speak of this year, yet we have experienced a sensational Wimbledon championship, a deplorable Euro2016, where I personally wasted hours of my time watching uninspiring negative football – particularly irritating as I am deep into the twilight zone! Anyway I am taking comfort that the Lord’s Test Match against Pakistan starts tomorrow with the weather looking marginally encouraging and the Open Golf Championship also starting at Troon. So the sports show carries on with two fabulous events, not to forget that Chris Froome and Mark Cavendish are virtually performing miracles in the Tour de France!
In all my years I have never seen a political party tears itself to pieces so adroitly as the Labour party is currently doing. A miracle of Herculean proportions will be required to give it even half a chance of competing seriously in the 2025 General Election, barring catastrophic news. I see that Owen Smith has thrown his hat in to the ring along with Corby and Eagle – all in my opinion lightweight.
Markets will needlessly be focused for the next few days on the formation of Theresa May’s Cabinet and how it will affect the behaviour of markets. The number of BREXIT enforcers appointed to the Cabinet will provide sufficient evidence of the strength of the Government’s resolve to execute the wishes of the people. The Chancellor, Foreign Secretary and a Minister for Europe will be fundamental appointments. I expect Messrs, Hammond, Osborne, Grayling, Maude, Hancock, Rudd and perhaps Leadsom to figure prominently.
Meanwhile back in the garden of reality, Mrs May’s appointment as PM has steadied a ship that looked 2 weeks ago, to be heading for the rocks, as the Admiral and his captain were nowhere to be seen. As a result of quick remedial action, overseas punters and traders have called a halt to the hatchet job they were doing on the Pound. This morning it rallied to $1.33 – still some way from the heady heights of $1.50 on 22nd June. However the MPC’S decision and action tomorrow will be absolutely fundamental to the immediate performance of Sterling.
Mark Carney, who had a rough ride in the hands of Andrew Tyrie and Jacob Rees-Mogg at yesterday’s Treasury Select Committee interrogation of the BOE stuck to his guns that he had a duty of care to warn the public as to the damage BREXIT could inflict on the UK economy and vehemently denied that he was an advocate of the ‘REMAIN’ campaign. I suspect this may not be the last time the Governor will clash with the waspish Rees-Mogg. However as a member of the public I find it hard to understand why he might advocate higher interest rates – a remedy the BOE would use to protect the Pound. Higher rates could destroy the economy in a heartbeat. Profit margins for business are so thin and mortgagees could become insolvent very quickly.
Tomorrow’s MPC meeting’s findings could well be temporarily as significant as Mrs May’s appointment as PM. It is widely believed that the BOE could lower rates by 25 basis points to 0.25% – the first movement since March 2009. This could see some value removed from the Pound. I do not see the necessity to do so but I am not privy to the data. The value of the FTSE is likely to be decided by the value of the Pound. That will be its barometer for the time being. Since 22nd June the FTSE has rallied by 6% excluding the foreign exchange element. If that is part of the calculations then its value is down by 6%. The FTSE 250 lost 13% between 22nd June and 27th June, but today it is only down by 3%.
Activity in the FTSE 100 yesterday was minimal as it fell by just 2 points. The Street of Dreams continued to purr as the DOW reached its all-time high – +0.66%, with the S&P adding 0.70% and the NASDAQ 0.69%. Asian stocks have enjoyed a reasonable session with the NIKKEI adding 0.7%. This morning at 8.45am with the Pound looking quite perky from a few days ago has caused the FTSE 100 to ease by 14 points to 6666. There were decent numbers from Burberry, ICAP, and JD Wetherspoon with acceptable updates from Barratt and Fenner. Speaking at Farnborough Air Show, Rolls Royce’s Warren East is looking to cut costs and create an extra £1billion profit, but Panmure’s Sanjay Jha thinks it unlikely that those savings and increase in activity can be immediately delivered in that time sale and maintains a ‘SELL’ recommendation.
UK companies posting numbers – Wednesday – Burberry, JD Wetherspoon, Fenner PLC, Barratt Development, Thursday – SuperGroup, Micro-Focus, Ashmore Group, Moneysupermarket, Hays, Halfords, Workspace, Friday – DCC
US companies posting interim results this week – Wednesday CSX, Yum Brands, Thursday – JP Morgan Chase, Blackrock, Delta Airlines, Friday – Citibank, Wells Fargo
Economic data – Wednesday – US Beige Book, UK BOE credit conditions, Thursday – MPC, Friday – EU trade balances
Market Commentator – Panmure Gordon & Co
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