Blain’s Morning Porridge – Nov 15th 2018

Blain’s Morning Porridge  – 15th November 2018

“This was the most unkindest cut of all…”  

In the headlines this morning:

Sorry for late comment – after excellent client breakfast this morning I was about to publish when Dominic Rabb seized his moment in history. Et tu Dom? Then it was quick coffee with another client in time to hear another rat had skipped the ship. Meanwhile, the remoaners are jubilantly moaning louder!

Sterling says it all – 1.305 to 1.275 in a heartbeat…

What do you now reckon the chances of Theresa May getting a Brexit agreement inked with the EU? 50/50? Less?

The resignation of the Brexit Minister reset the mood. All the banks confidently predicting stability look blind-sided. What is parliament likely to do? Sterling’s reaction sums it up. We can see what the market thinks – the UK is going crazy..

Actually… its not the UK that’s gone loony. Its UK politicians. Listening to friends, colleagues and clients these past few months, there is one common theme: the growing distrust and contempt for our politicians, and the lack of leadership quality. That has serious investment implications. At the moment the UK is trading like a distressed asset – it should not. Its got a strong and vibrant economy – and it should be a screaming buy. But the doubts raised by the failing and floundering political process leave it looking besmirched and cheap.

There is a fascinating ongoing poll on M&G’s Bond Vigilantes this morning. The question: if the UK parliament rejects the deal, what happens next? When last I checked;


  • 34%      say a General Election,
  • 34% say UK leaves with No Deal, and
  • 32%      say a Second Referendum.


The Brexit deal announced y’day is not ideal, but no divorce ever is. (I shall print the final result of the M&G poll on the website later this morning.)

Sterling and UK markets remain in a state of disbelief and confusion… What happens next – the EU summit, then parliamentary approval and then what happens after that, are all what-ifs…

Readers have deluged me in “scenario analysis” from the big banks and investment firms. Most of it is unreadable… but some is interesting… predicting multiple different ways the complex Brexit chain plays out.

Only one piece of bank research agreed with my gut feel yesterday’s agreement is likely to get passed.

Despite the multiple resignations, why do I still think it will get passed?

2 reasons:


  1. Because  Theresa May is demonstrating the key political gift everyone else in this  sordid cl*st*rf*ck of political ill-will lacks. Leadership and not a little courage.


More than a few Porridge Readers will be screaming that Boris and the other Brexiteers are honourable men. They are honourable men in that they are prepared to lead the UK to a no-deal as preferable to a deal. Indeed, all are honourable men and patriots too… not forgetting that patriotism is the last refuge of a scoundrel.

Am I wrong to suggest the rest of the UK political landscape lacks the courage to back the difficult call Theresa May has taken? How dare I suggest these honourable men who oppose the agreement are either crass political opportunists, or too scared to act. Lest we forget, just a few days before the referendum campaign begun, we all expected Boris to lead the Remainers… And Boris is an honourable man. Would I dare to suggest that for his own political purposes he chose the Brexit side as offering his best chance to lead the party at some future point? Of course not. For Boris is an honourable man. Simple as.


  1. The  country is heartily sick of Brexit and the Tory Opportunists.


I can’t be the only person whose admiration for Theresa May’s fortitude is growing in the face of the impossible Brexit choices and the intolerable disloyalty of certain of her colleagues. The country is heartily sick of political opportunism. We want a deal. More to the point.. the country needs a deal. With a number of exceptions, no-body rates the current crop of Tory wannabees. And if the current deal is the least-bad optimal solution that will move us forward, let’s take it and adapt in the future.

I guarantee every single UK industrialist (bar the very very rich one) will welcome the deal as providing certainty.

Meanwhile, there is lots of other stuff going on, like where global markets are going as momentum sucks out the market. On the Morning Porridge Website – a couple of stories about GE – once the Investment Grade Bond Market’s corporate AAA darling… Now its trading like Junk and much speculation it will be the first AAA fallen angel. How many other GE’s are out there? Check out the Stuff I’m Reading section of the website for story links.

Out of time…