Blain’s Morning Porridge – Nov 28th 2019

Blain’s Morning Porridge  – November 28th 2019

“He is extremely focused and hardworking. On our recent trip to Davos for the World Economic Forum, for instance, he didn’t look at a pair of skis once.”

Let’s get it done…. 

Its time to put your buying boots on and load up on the UK – splurge your cash buying shares in British Supermarkets, Delivery companies, Homebuilders, Utilities, Phone companies and the Drink makers. Not so sure about Banks, but what the heck, why not. Buy Buy and Buy some more!

With two weeks to go, the polls say the Conservatives are going to get a substantial 50-60 seat working majority. Peace will break out over the land, the Remainer Sheep will lie down with the Brexiteer Lions and harmony will prevail over all citizens of the land.  Unto us will be given peace and wisdom. Sterling will head heaven-wards and UK stocks will stage a monster rally. Repressed UK Growth will explode, and we’ll see GDP ratchet higher and higher. 2% plus say the analysts.

All of which depends on Boris winning in 2 week’s time.

It is the Clown Prince of Buffoonery’s game to lose. Don’t underestimate his ability to still feck it up – his path ahead is littered with pitfalls, including his appointment with Andrew Neil. We should give Neil and hood and a pointy hat. The Grand Inquisitor’s live and public vivisections of our politicians’ inner-most selves has become morbid yet unmissable viewing.  Boris is apparently trying to wriggle out… who can blame him..?

If only for the sheer madness of it all, it’s worth checking out Boris’ chief of staff, Dominic Cumming’s “BatSignal”Blog from yesterday. He mumbleswerves about how his teams’ arcane poll magic is warning them the vote looks much closer than the other polls predict, and stirs up his followers with his vision of a Corbyn-Sturgeon government selling out the UK to Brussels.


Regular readers will know I am in a political quandry. My lifelong support for Labour will be difficult to deliver at the coming election – because the party I support simply doesn’t exist at present. I am sure it will be resurrected soon after the election. The Maoist Momentum Left-wingers that kidnapped the Party should be consigned to the dustbin of Labour Party history. Some moderniser will step up, and in 5years time she/he will be greeted as enthusiastically to Number 10 as Tony Blair was in 1997. Literally, “Things can only better..”  And all political lives end in failure…

I suppose I ought to accept 5 years in the political cold for Labour, and do my duty by voting Tory on December 12th.

Not because I want to..

I think the Conservatives under Cameron and May presided over one of the worst phases of UK economic history. Monetary Experimentation, QE and Near Zero Interest Rates put billions into the hands of the very rich and created the sharpest rise in income inequality ever. The rich got richer, while the poor have been punished with Austerity, zero-hours Gig jobs and declining hope and services.  The absurdity of bailing out banks while punishing the population is an abomination.

The Tories have nothing to be proud about.

But I will vote for them.

I won’t forget Tory performance over the past 10-years. It has been abysmal.  Policy has been wayward and ill-considered.  At a time when the country is crying out for well-educated engineers, computer expertise and medical staff, budgets have been slashed and they decided to charge Students for their courses and burden them with lifetime debt.  No wonder the Millennials are voting their wallets for Corbyn.

The Tories proudly boast about more policemen, firemen and nurses, and the numbers drop. They brag about putting money into the NHS but have lacked the political bravery to announce reform and review it from the bottom up, taking advantage of AI and digitisation to make it better for everyone. Our taxes no longer pay for services, they pay the pensions of civil servants on gold-plated schemes.  It’s no wonder the country is short of nurses – they now have spend years paying for their own training and then get paid peanuts?

Even supposed Tory strengths have been neglected. The Armed services have never been so weak. Last month the Russians surged 10 submarines into the North Atlantic and the UK was able to muster a single delapidated frigate to put towards a wholly inadequate NATO response. The Army, Air Force and Navy are duking it out to see who takes the pain in the next round of cuts.

That we don’t have a credible oposition to the Tories is shocking. It leaves us little choice but to vote for them, because if we don’t the UK will be mired in yet more political uncertainty and balderdash, trapped in a Brexit on-off again time-loop, and tumbling deeper into irrelevance.

As I say, time to bite the bullet and get on with it…

Europe, Climate and Mdm. Legarde

US Federal Reserve Chairman Jerome Powell was recently asked what he thought about tax cuts, and replied it was not the Fed’s job to comment on political initiatives – he made clear the US Central Bank will stick to the data to deliver on its mandate of price control and employment. Simple Stuff and Very Focused.

Compare and contrast to the situation in Europe.  New ECB head Christine Legarde is demanding a key role for the ECB in Climate Change. I thought the ECB was a central bank?  Silly me. Bravo for her strident virtue signalling of her impeccable climate change credentials. I would propose a round of applause – but let’s give her Jazz Hands in case it offends anyone.

The gods of unintended consequences are going to have a fantastic time!

I was also under the impression The ECB was an element within some form of democracy at the centre of Europe where elected governments would determine policy. Apologies if I misunderstood.

Just how will the ECB address climate change? Will it impose punitive capital costs on banks lending to borrowers they deem non-climate worthy? Will it jail bankers and financiers that have the temerity to offer terms to Oil, Gas and Coal companies?  Will the Bank only buy bonds issued by green borrowers who pass their tests? How will the bank police its green lending – for instance creating a Ministry of Financial Climate Control and basing it in Luxembourg…?  How will it address Greenwashing? (By selling its own Green label perhaps?) What incentives and punishments will it have at its command?

The potential for market distortion is multiple and serious.

I would suggest the remit of the ECB might stick with the knitting – like how to get European agreement on the obvious stuff like Banking Union, how to address the need for Fiscal policy, rather than trampling all over National State’s rights to address climate change themselves.

No Matter. Lagarde is French and Europe belongs to Macron.

Any company that is well run, efficient and has positive cash flow, but is tarred by some Not Green badge, is going to be a screaming buy if you legislate against it – because it will be a good and cheap company.  Giving a company a green badge does not make it a good company. It means it got a gold star – nothing more.
And why stop at protecting the environment. Go the whole hog and give the ECB oversight of ESG in its entirety. Give the ECB responsibility for determining which companies have done enough in terms of gender and transgender diversity, social inclusiveness, and which support the European dream most enthusiastically…

Out of time and back to the day job…

Bill Blain

Shard Capital