Blain’s Morning Porridge – 15th Feb 2019

Blain’s Morning Porridge  – 15th February  2019

“Not as glamorous as Brooklyn, as cool as Staten Island, or as private as Manhattan… ”*

*see below..

In the headlines this morning:

Blain’s Morning Porridge is also carried on The Property Chronicle – “Real estate, alternative real assets and other diversions” – check it out on:

Bit of jolt to stock market’s yesterday – US Retail Sales crash, Trade War concerns, slowdown in China, stagnation in Germany, and a growing realisation all these things plus a modest earnings season point to a downturn. Coke took a spanking as it warned it expects sales to slow. It’s all happening so soon? But what’s to worry about in bonds – the Fed looks to be on hold, long-term rates will hereabouts for eternity with zero inflation, while the Bank of China is likely to ease to reflate the economy with further stimulus, and the ECB-G (The European Central Bank of Germany) is (probably) dusting off plans to relaunch QE2 as the European economy slides in Germany’s wake.

Bloomberg reports that 75% of US CFOs expect recession by 2020, even though a majority of economists it surveys expect US Growth to remain positive this year. Meanwhile, issues such as the rising number of defaults on cards, student loans and auto-loans may be factors underlying Jeff Gundlach’s comments about the widening gap between consumer sentiment and expectations as the most recessionary signal at present. It sure feels like something isn’t quite right out there..

Is the trade war going to be a second front for Donald Trump? Although many China-watchers believe Beijing is desperate to secure a face-saving deal at the earliest opportunity, I’ve been quietly told the fact Trump now seems to have trapped himself in the “Wall at any-cost” emergency powers, plus rumours he’s willing to extend the March 1 tariff deadline, is giving the Chinese hope they can win concessions and delay through the trade summit between Xi and Trump. El-Donald is said to be close to declaring a national emergency to get his hands on $8 bln of military funding and control of the US Corps of Engineers to build his Wall. Nice.

As for the UK…. Well let me come clean. I just don’t know anymore….

The BBC has allegedly put editorial guidance in place that Theresa May losing anything but a full-blown confidence vote is no longer news. Apparently, she lost yet another vote last night – rather brilliantly pissing off both hardened remainers and brexiteers – but what it was about? I have not a breeze of an idea? And should I care? My political chums tell me there are now so many competing streams of contradictory Brexit bluster doing the rounds of Westminster that there is zero chance of agreement.

So I found myself watching some self-important Tory MP on Brek-Drek this morning –  although his lips were moving all I heard was “la, la, la, la,”. I tried to focus, but it was still nonsense I simply could not understand. I picked up my iPad and opened the paper to update myself on what the latest thang is all about.. but no, even the FT reports on Brexit read like they were lifted straight from Through the Looking Glass as they blathered on about Brillig, Slithey Toves and Vorpal Swords. I’ve tried asking colleagues in the office – but they stick their thumbs in the ears and hide under their desks. I called up one of my key political contacts, but he decided to pretend he was a penguin rather than explain the current internal politics of Brexit.

Deal or No Deal? Does it actually matter? The amount of political hot air and nonsense expended by political opportunists will likely proved inversely proportional to the actual effects on Brexit Deal.  Guess we just get on with it… Note to all ambassadors: Please sign our WTO letter.

(* see headline quote…)

One story that did tickle me this morning is Amazon deciding not to build one of its two new corporate headquarters in Queens, NY. Apparently Jeff was put off by all the Liberal lefties complaining about the $3 bln of promised tax subsidies (er.. what does a company that pays no taxes do with a tax subsidy? Just aksin.) Or maybe it was their objections to Jeff’s rooftop helipad? 25k “hi-paid” jobs just went somewhere else, and the blogosphere is white-hot with Red-Necked Right-Wingers fulminating against the stupidity of lefties, while the lefties rejoice in the beginning of what they are calling the Techlash!

I’m confused. I really can’t understand why anyone would want to build a corporate HQ in Queens? Have you been there? If Amazon are interested in excellent communication and pretty working environment, there is a large shopping centre in Kirkcaldy, Scotland, just across the river from Edinburgh, recently sold cheap, which I can probably get for them. If they can resolve Alexa issues understanding the Fife Accent, there are plenty of people available to staff it. (Begging the question what do 25k “high-paid” new jobs actually do in Amazon’s second headquarters…)

Finally; quick update on some alternative deals we’re working:

Shipping – We’ve a number of deals at present. Remind me who is into shipping?

FINTECH – I’ve got a well-established Tech Led financial lender looking for capital – give me a shout if FinTech and not losing money is your bag…

UK Property – it’s a steal at present…

Aviation – number of deals in pipeline.

SME Lenders – any serious SME lenders, please get in touch, some interesting stuff to show.

Have a great weekend…

Bill Blain

Shard Capital