TODAY’S FAYRE – Monday, 19th December 2016


The Walrus and the Carpenter

Were walking close at hand;

They wept like anything to see

Such quantities of sand:

“If this were only cleared away,”

They said, “it would be grand!”


“If seven maids with seven mops

Swept it for half a year.

Do you suppose,” the Walrus said,

“That they could get it clear?”

“I doubt it,” said the Carpenter,

And shed a bitter tear.


“O Oysters, come and walk with us!”

The Walrus did beseech.

“A pleasant walk, a pleasant talk,

Along the briny beach:

We cannot do with more than four,

To give a hand to each.”


The eldest Oyster looked at him,

But never a word he said:

The eldest Oyster winked his eye,

And shook his heavy head–

Meaning to say he did not choose

To leave the oyster-bed.


But four young Oysters hurried up,

All eager for the treat:

Their coats were brushed, their faces washed,

Their shoes were clean and neat–

And this was odd, because, you know,

They hadn’t any feet.


Four other Oysters followed them,

And yet another four;

And thick and fast they came at last,

And more, and more, and more–

All hopping through the frothy waves,

And scrambling to the shore.”


    Lewis Carroll – poet & author – 1886-1967


I had absolutely no intention of writing a piece today having written one on Sunday, but there are a fair few issues to comment on.


Firstly at the age of 99, Zsa Zsa Gabor, one of the last of the decorative Hollywood icons, sadly passed away. She had been confined to a wheel chair with a part amputation in recent years. She had been married 9 times. She was known more for her whit and acerbic comments than her Thespian prowess. Her third husband was George Sanders, one of the many English matinee idols around Hollywood in those days, including David Niven, James Mason and Christopher Lee. He was a suave as silk and I suspect his liaison with Gabor was tempestuous. I shall never forget George Sanders’s voice over of ‘Shir Khan’ the tiger in the film of ‘The Jungle Book.’


Having made a splash on Saturday that Japanese banks were packing their bags to leave London for the EU out of frustration and lack of clarity on the UK’S proposed defection from the EU, I would have been surprised if the FT had not followed up with another jingoistic article to the effect that banks are looking to exit the UK heading ‘hot-foot’ for the EU for the same reason Japanese banks are, such is the intensity of it support for the EU.


These threats are starting to sound hollow such is the intensity of the threats which are being made with monotonous regularity. All sides really need to calm down. Comments are far too acerbic and they will end up being counterproductive. I realise that I am hardly even a pawn in this intriguing game of financial chess, but I meet very few people wringing their hands in anguish at the prospect of losing gargantuan amounts of business to the EU hinterland. Most people are far more concerned about how their staff is going to get to work, courtesy of this ludicrous and unjustified strike than they are about BREXIT.


Gentle folk there is more than 2 years to go. I accept that some clarity would be beneficial to all. I also accept that a few contingency plans will be made resulting in a few people relocating in Frankfurt and Paris etc. However the rhetoric on both sides has been truly frightful and very counterproductive. There needs to be grown up negotiations without intolerable arrogance. The EU thinks that it has the whip hand giving Messrs Barnier and Juncker license to trap off. I am not sure it does. I think, if I were them I might show a tiny bit of humility with France far from long odds against Le Pen winning and Chancellor Merkel is far from a ‘nailed-on’ certainty to be re-elected. I believe that a little calm and circumspection might be the order of the day. I think it might be just be sensible for many of these banks to reflect in a balanced way before “throwing the baby out with the bath water!” I must confess to being a little anxious that the BBA’s Anthony Browne enthusiasm to inform us that the banks’ hands are quivering over the relocation button. This level of hysteria seem just a little precipitous to me.


The activity in markets both in Asia and in Europe today appeared to be almost funereal in terms of pace. The Nikkei closed near enough flat and the ASX had gained about 0.5%. Trading in China was virtually moribund with the Hang Seng closing own 0.9% and the Shanghai Composite just a smidgen below the Plimsoll line – down 0.18%. At 2.00pm GMT the FTSE was unchanged at 7011. It was quiet but investors were holding their nerve, despite President-Elect Trump still goading the Chinese authorities. This time it was again through the good offices of ‘twitter’ in saying ‘China steals United States Navy research drone in international waters – rips it out of water and takes it to China in unprecedented act.’


There were a few nuggets of information to capture the imagination. Firstly time is running out for RBS efforts to sell Williams & Glyn by the end of the year. The 314 branches are valued at about £1.7 billion; many believe that price tag is too rich. Maybe £900 million is nearer the mark. Clydesdale seems reluctant to move. So maybe RBS will need to sell other assets to appease Brussels. BP paid $2.2 billion to secure 10% of an Abu Dhabi oil field for 40 years. Bank haters wmay be delighted that Deutsche Bank’s management will be holding back a large proportion of this year’s bonus to help pay for the forthcoming $5-$14 billion fine for miss-selling mortgage related securities. Finally Apple is letting be known how displeased it is that the EU is insisting that Ireland claims $13 billion in back taxation. Apple has only paid 1%. Ireland’s standard rate of corporation tax is 12.5%. One suspects that when the dust settles this taxation may well be repatriated to the US if Trump gets his way with cutting corporation tax from 35% to 15% within 2 years.

Economic data this week – Monday – US Markit PMI services, Tuesday – BOJ Rate Meeting, Wednesday – US MBA Mortgage applications, US Existing Home Sales, Thursday – Gfk Consumer Confidence, US Initial Jobless Claims, Friday – US NEW Home Sales and Univ of Michigan Consumer Confidence.

David Buik

Market Commentator – Panmure Gordon & co D +44 (0)20 7886 2775 Mobile – 0044 7788 144 877 Panmure Gordon & Co One New Change | London | EC4M 9AF

David Buik]]6 Market Commentator

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


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