What caught my eye this week.
Another quiet week in British politics. And thank goodness for that. Maybe it’s time to recant?
After all, for the past six years I’ve been lamenting how the full-spectrum delusions of Brexit – the toxic campaigning, economic self-harm, and Alice in Wonderland contradictions – were causing real distress to both our economic prospects and our civil society.
How far from seeing a ‘Brexit dividend’ that politicians still had the gall to lie about with a straight face, our economy was weakened to the tune of £100bn in lost GDP a year.
How worst-case scenarios were inching towards the table that you wouldn’t want to wake up to in the morning.
But what a fuss about nothing!
Turns out there was – as my critics so often retorted – nothing to see here. Just a harmless bit of political roister-doistering, MPs implementing the will of the people, and Westminster ticking along as usual.
And how great is it to see our MPs hard at work with their heads down? Tackling the actually important issues like climate change and energy security, safe in the knowledge that we have crown stamps securely back on our pint glasses (thank heavens!)
The strong and steady hand of the Conservative party on the tiller, cleansed of its factionalism.
Our international credibility definitely just where it was in 2015.
So bad it’s good
Given the absolute 100% normality of British politics that vision-less, tofu-guzzling Remoaners like me have been squawking about for no good reason, let’s turn instead to the markets.
Because something interesting might be going on, unless my spidey senses deceive me.
Which, to be clear, they often do. No-one tingles – or times the market – perfectly.
But for those that do like a bit of speculation, it feels like we might be approaching the turning point in this fairly lengthy global bear market.
I began to think this a couple of weeks ago, when markets initially plunged on higher-than-expected US inflation but then turned around and ended higher.
True, things were choppy after that. But again this week there’s been a bounciness that’s hard to credit to the news flow – or even slightly less hawkish words from any given Fed official.
Don’t get me wrong. Equities are still going two steps forward and more or less two steps back.
But I’m seeing signs that investors are getting almost bored of bad news. That’s potentially a signal of a bear market bottoming, as is the fact that the kinds of shares that led the market lower have been more or less flat since summer.
Has everyone who is going to throw in the towel already let it go?
Rate expectations
It’s very hard to tell, always. Capitulation is one of those things you tend to see if you look for it – only for even more sellers to emerge from the sidelines when things get worse still.
For example – and to my embarrassment – I correctly noted growth stocks selling off late last year might presage a wider market decline.
But I also thought the apparently discarded disruptive stocks might now be an opportunity.
Oops!
Reader, I bought some. And some of that money halved or more.
I’ve also stubbornly stuck to the belief all year that most of the inflation around the world was caused by lockdowns rather than government handouts. Maybe in ten years we’ll have a perspective that shows that was right too. But the fact is we’ve laboured on with high inflation – and ever-higher rates – much longer than I for one thought likely.
That is the main reason why stocks have fallen so far.
But now – partly thanks to all those rate hikes – Wall Street sees inflation coming down steeply.
And while I’ve assumed since the summer that a big recession in the crucial US economy was the inevitable cost of raising rates so far and fast, the excellent macro-blogger at Calafia Beach Pundit offers plenty of evidence that things aren’t so bleak there either.
In other words, the rate hikes that drove the 2022 regime change might almost be done.
Perhaps by Christmas the Federal Reserve will be ready to pause?
Better yet, while rate rises definitely work with a lag so it’s too soon to be sure, the US economy might see a slowdown more than a slump. Which would be bullish for assets more generally.
Even the Bank of England took a moment out from supervising the kids to say it might not need to hike Bank Rate beyond 5%.
Darkest before the dawn
As ever, most people’s best response to all this will be to smile and say “that’s nice” and to keep on automatically investing into their balanced portfolios.
Maybe smiling extra hard on remembering that besides cheaper equities, you can also look forward to better returns from bonds to come, too.
Just don’t put all your eggs in a basket made in Britain. Just in case, you know, it gets a bit wobbly again.
Have a great weekend all.
From Monevator – Monevator
Transaction costs: how they bloat fund charges – Monevator
From the archive-ator: A political day is a long time in the markets – Monevator
News
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Average London rent hits record £553 a week amid property shortage… – Guardian
…with some areas of the country seeing advertised rents up 20% year-over-year – Guardian
State pension could rise by 10.1% next year if triple-lock remains – Which
Many remote workers could qualify for Portugal’s new ‘digital-nomad visa’ – Insider
The Covid situation is looking complicated this winter – Guardian
What would a UK housing crash look like today? [Search result] – FT
Products and services
Time is running out to claim up to £200 from the best current account switches – Guardian
HSBC’s best buy easy-access savings account pays 3%, but only up to £10,000 – This Is Money
Changes to SEIS and EIS are a win for UK investors and startups – Crowdcube
11 tips to save on the cost of your subscriptions – Which
Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor
Amazon set to launch online insurance portal for customers – Amazon
Townhouses for sale, in pictures – Guardian
Comment and opinion
Why 2022 is a uniquely bad investing year – The Best Interest
Money games people play – Banker on FIRE
There are no no-brainers in investing – The Motley Fool
The perfect time to start investing – Darius Foroux
Back where I started – Humble Dollar
Bear market opportunities for every generation of investors – A Wealth of Common Sense
Walking in forest green is better than staring at blood red screens – A Teachable Moment
Saving versus spending: striking a balance – Humble Dollar
15 years on [gulp!] from the fall of Northern Rock [Podcast] – A Long Time in Finance
Retirement can mean a loss of identity – MarketWatch
Puppy love – Humble Dollar
Brexit reality bites mini-special
The Brexit effect: how leaving the EU hit the UK [Excellent video] – FT via YouTube
Trade from UK to EU 16% lower than if Brexit had not happened, study funds – Guardian
Uncertainty delays investment. If only the UK government grasped this [Search result] – FT
When populism fails – Coppola Comment
Naughty corner: Active antics
Strategies that beat the market – Compounding Quality
We will see the return of capital investment on a massive scale – The Market
1987 Q&A with Phil Fisher shows even geniuses should be wary of big macro – Investment Talk
No grand strategy: the financial history of Berkshire Hathaway – Neckar’s Minds and Markets
Misadventures in Bondland [Search result] – FT
Value investors should try harder to hold on to their winners – Klement on Investing
[As discussed in August] dry powder is drying up in VC-land – Harvard Business Review
Kindle book bargains
Mastering The Market Cycle by Howard Marks – £0.99 on Kindle
Go Big: How To Fix Our World by Ed Miliband – £0.99 on Kindle
Talking To My Daughter: A Brief History Of Capitalism by Yanis Varoufakis – £0.99 on Kindle
My Life, Our Times by Gordon Brown – £0.99 on Kindle
Environmental factors
A rare victory in the war on corporate eco-guff [Search result] – FT
Blackrock and Vanguard tell UK they won’t phase out fossil fuels – Advisor Perspectives
Marina Hyde mini-special
Britannia rechained – Guardian
Tories on their knees… and here comes Boris Johnson. Look away now – Guardian
Off our beat
Russia’s population is in a historic decline – Fortune
The one true benchmark – Prime Cuts
Boris Johnson’s Covid laws took away our rights with flick of a pen. Don’t let that happen again – Guardian
Just how safe is great art? – MSN
No more Boris Johnson: how to write to your MP – Simple Living in Somerset
And finally…
“Democracy is like a tamborine – not everyone can be trusted with it.”
– John Oliver, comedian
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Especially enjoyed the John Oliver quote – thanks as ever for all the links.
Puppy lover – Over crowded dog rescue centres demonstrating what happens when anyone can buy a dog….
A few months back, collecting one of my labs from the vet, a burly bloke was ranting loudly at the poor vet nurse ‘how much? I could have a holiday for that!’.
Shame the govt doesn’t feel the need to either legislate (licensing?) or inform about the costs of pet ownership.
Whilst a lot of macro economics doesn’t directly affect you (and you might be better ignoring it tbh) the Brexit experience and falling apart of the Tory party has painful to sit through and costly to everyone.
Now we have a government in charge for over a decade with no idea of what it believes in or what it even wants.
Brexit was so obviously a mistake that I’ve not really written much about how stupid it is and for Truss to campaign for Remain and then flip to be a tru blu Leaver should make anyone realise that the UK is lost and the way way back is a long one.
And my mortgage is agreed at 4.45% fixed for 5 years – that rate alone will sink the UK housing market. Maybe doing more economic damage than all of COVID put together.
That 41 Tory MPs have already come forward and said that the man for the job is a political arsonist that their own party ousted from the top job barely two months ago – who is about to be investigated by the Parliamentary watchdog – says all you need to know about British politics right now.
Such is the depth-less gullibility of a core of the British electorate that no doubt he would retain some seats by being recognisable on the telly and spouting off about the Blitz spirit. But that is hardly the point right now, and those 41 MPs should be ashamed.
As for the likes of Badenoch and Braverman, somebody please stow them away in a soft play center until the next leader has been chosen.
So that leaves Mordaunt and Sunak.
I thought Mordaunt made a good fist of a hospital pass a 1,000 years ago (i.e. on Monday) when she had to defend the indefensible in Truss’ absence. However an ability to handle herself at the dispatch box isn’t really the top priority at the moment (which is not to say it’s irrelevant).
Still, I kind of like what I’ve seen of her. In normal times she’d be promoted by the next PM to Home Office, say, and have her shot in 5-10 years. I suppose she is the closest thing the Tories have to a unity candidate, and she isn’t loathed by any large segment of the wider public, which should be worth something but probably isn’t.
Sunak is loathed by some, of course, albeit mostly by Johnson supporters which is a badge of honour in my book. He made a decent fist of things during Covid, given that nobody could really do well, and I found him reassuring in delivering his budgets. He seems competent and capable. He’s gone up in my estimation — and hopefully others — by predicting to the decimal point what would happen if Truss got in and enacted her plans.
We should probably have a General Election but given we won’t I suppose I’d go Sunak for PM with Mordaunt for Home Office and Hunt staying on as Chancellor.
I’d far rather Johnson had never come back from America, but if he must be thrown a bone he could have Foreign Secretary, which suits his talents for going on holiday and entertaining people who don’t know any better yet.
However it’s entirely possible that, in the national humiliation of our lifetimes, he could be PM again.
Also, a glaring issue from everyone’s perspective (anyone smart can surely see it’s not just about Remainers now?) is that all three supported Brexit.
I suppose this does open the door to a Nixon goes to China moment — maybe Leavers would accept a Brexiteer saying it’s not fully working, and needs some kind of softer trade settlement such as a partial re-entry.
But it’s more likely they will keep saying Brexit is a great opportunity, which will leave the national discourse to continue to be confounded by the underlying reality that it’s just a huge economic drain, for no apparent benefit.
This ongoing deceit is to me perhaps the most damaging thing of all.
The situation is really very bad. Economically it’s quite bad, but politically and institutionally it’s a car crash IMHO as all kinds of fantasies have collided into reality.
I suggested on my personal account on Twitter that we should have a unity government including the best talents of all parties (including Labour, the SNP, Lib Dems, and Caroline Lucas) led ideally by Hunt but as he seems to be ruling himself out maybe Gove.
I suggested a one-off and progressive wealth tax on households worth more than say £4m to help plug the public finances as the price of getting Labour on-board.
We’d then have a general election in two years.
It really is that sort of moment, but of course the nature of the crisis — factions hating factions, and a death cult still dancing around the carcass of Brexit, the dead elephant in the room — is what makes a unity government impossible.
So unsurprisingly I got few takers, whatever their politics.
Barclay’s have a rainy day saver account paying 5% but only up to £5k and you have to be in their blue rewards scheme. I was perhaps in too much of a rush to put money in to it but I think it’s instant access variable.
I did the same @mr optimistic. Now sitting on money in premium bonds and wondering whether to wait or start putting In some year fixed rates
Bozza will Be Back. Particularly if the vote goes back to the crusty scrotes that brought us Liability Liz. Some things have to get worse before they get better. Some things just have to get worse, and the dice are still rolling in this case.
Still, I note the bat-signal going up. I have also been buying this month. Here’s hoping it’s 2009 all over again. Shame that our Great British Shitcoins were worth ~$1.40 back in the day, whereas they are worth 20% less now due to Bozza’s Brexit bullshit and baloney, making the job harder.
As far as I can see, the Conservative party is much the same as the Communist party of China. The only reason for their existence is to keep themselves in power.
Personally I’m totally sanguine about Johnson being recrowned by comservative party members. To me it’s inconceivable he won’t be found guilty of misleading the House of Commons about parties in 10 Downing Street. It’s also inconceivable he won’t be suspended for long enough to trigger a recall election at his constituency. A marginal in outer London. Which he’ll lose. Then the conservatives will have to choose another prime minister for us all
Chill out. We have nothing to lose but self esteem … plus maybe 5 cents on the dollar … and another per cent on mortgage rates ….
How do you reconcile augeries of a recovery with everyone* predicting a deep recession imminently? Sentiment that it can’t get any worse is quite different to sentiment that you ain’t seen nothing yet, buckle up.
CEO/Owner (with finance industry background) of my employer delivered a quarterly all-staff missive this week that didn’t pull any punches, predicting severe conditions ahead and planning accordingly. It would be optimistic to think it’ll be all over in 12 months if it is a decade+ of ZIRP unwinding and not just covid.
* to casual news observation, interested in reading counter arguments. Obviously YoY inflation will catch up with its tail within the next 6 months, so that’s something. Will it be everything?
@Learner — The crash we have had is partly due to re-ratings on interest rates rising (especially growth/tech) and latterly more about fears of recession. That is to say, markets have already discounted US (/UK for what it matters) rates rising to around 4-5% and of some kind of economic slowdown to come.
Currently however earnings are still coming in very strong, and any slowdown (in the US, which is primarily what I’m talking about and care about in this context) is so far mild. The US housing market does seem to be rolling over, but most US mortgage holders are on long-term very low rates so I don’t expect much more than a price correction and some local difficulty there.
So if we get rates topping out at c.5% and a run-of-a-mill recession then equities could have bottomed here.
Caveats: (1) I’m probably slightly biased by my focus on growth/tech (albeit it’s currently only about 30% of my equity holdings, not counting unlisted) and that bust-up has been strong and (2) if inflation persists all bets are still off and (3) none of this is particularly about the UK, which is a basketcase albeit looking cheap or Europe.
@Neverland — I understand where you’re coming from but to me it’s hard to use the word ‘inconceivable’ these days. But you could be right, perhaps if he is made PM then enough of his disgruntled MPs (assuming he can’t buy them off) will say screw it and either resign or go to the authorities with the evidence we know exists.
With that said it seems I probably differ about how much damage would be done from having yet another new PM in three months time. I suppose you could argue that the damage is already done and it would only confirm what the world / markets thing of us now. And perhaps to @ermine’s point, we have to hit an even lower low before people finally wake up. But I can’t help thinking it’d make matters even worse.
@ermine — I wouldn’t say this is a solid see-from-50-miles bat signal. We have seen a sort of rolling capitulation, but not outright total despair, at least not in fund flows. But there’s lots of indicators of dire sentiment. Time will tell, but it’s certainly a better time (/valuation) to buy now then this time last year!
Interesting that you’re feeling bullish, TI. I’ve fairly recently started following a few Macro traders (not total doom mongers) on twitter, and pretty much all of them seem to be convinced there’s months and months left of misery on the stocks front, basically as they feel a recession hasn’t even started yet and the fed is going to keep hiking relentlessly.
I find their analysis persuasive, but I also suspect I should probably unfollow them all and just rebalance into it already for the same standard reasons as usual – they may well not be right, or even if they are their timing may be way off. A little knowledge is a dangerous thing!
@investor
Why do I think its inconceivable Johnson won’t be found guilty of misleading parliament about covid rule breaking?
Because character is destiny.
I’ve come to the conclusion it doesn’t matter who becomes PM next week. We’re too deep down the shit shaft.
Charles Walker was so spot on – and very refreshing. Far too many people are in the cabinet for self-interest rather than national interest. Whilst speaking the truth was always subject to ‘bending’ before, it now seems the norm to lie.
I have a mate who works in the Cabinet Office. Midweek he said how refreshing it was to work with a grown up again (Hunt). Ouch.
Whether Brexit was right or wrong (the debate will last forever), it hasn’t been delivered in the way it was promised or how the country needed it to be. Whether it was even possible to do so doesn’t matter – the vote was cast, the result can in and the cards were dealt. We’re deep down the shit shaft…
I do wonder if COVID-19 was man-made and had a neurological trait in its core that turns politicians into complete muppets.
@far wide – I’ve seen the macro traders on twitter. I think some are better than others, but a) I suspect most are a bit one note, and b) now they’ve become popular, they’ve got a bit pleased with themselves & formed into a ‘mates club’ (there’s a less polite way of putting it, starting with ‘circle’). I am a bit wary of paying too much attention to them – not to say they’re always wrong, but perhaps they are one more colour to use to form the bigger picture.
@far_wide – so sorry, I didn’t finish reading your comment – you basically said what I just did!
@TI – “he could have Foreign Secretary, which suits his talents for going on holiday and entertaining people who don’t know any better yet” – you have got to be joking. We’ve been here before too, and he was an absolute disaster in that job. In his short and cringe-inducing incumbency at the FO it became abundantly clear that Boris’s brand of charisma doesn’t travel and far from finding him an affably roguish character – as so many in the UK appear to – foreigners just see him as a crass idiot. Britain’s version of Berlusconi perhaps (to go back to your ‘Italy’ comparison …..).
@Tyro — Don’t get me wrong, he was the worst prime minister in British history and he shouldn’t be near Parliament on a walking tour as far as I’m concerned. But we’re in febrile times. If he goes to the members the muppets will elect him and he’ll be PM again. At least for a while, per @Neverland.
The Foreign Secretary seems a very important job but it’s not as important as the other big ones, your power is limited and you have a lot of briefings and aides with you. It isn’t particularly demanding. Truss just rode around on a tank for photos as far as I can tell.
Sure he will do some damage, he will anywhere. But unlike yourself I do think his buffoonery travels; see his (reportedly) £150K a night speeches in the US etc.
@tom @far wide — They may well be right who knows. Anything can always happen, and I reserve the right to turn on a dime. 🙂 If you don’t, then you shouldn’t be active *trading* at all as far as I’m concerned. (Of course you can be investing actively and stay in the same companies for 5-10 years and say you’ll never take a view on these things, that you think it’s completely impossible and so on, and that’s perfectly respectable too). But this is my sense right now, contingent on inflation waning soon and the upcoming recession not being super deep, which I think is a plausible scenario.
@Tom – no problem at all.
It’s such a double-edged sword. Just as with politics, finance Twitter can be fascinating and insightful but also can really drag you down a rabbit hole.
I used to consider myself pretty immune to being brainwashed with my sort of personality, but I was taught a lesson by what I’ll loosely call ‘Brexit Twitter’. You follow a couple of people for the latest breaking developments, and then get slowly sucked into a point where your feed is overwhelmingly one-topic based and increasingly skewed to the most frequent/extreme commentators who have taken your nub of opinion and basically reinforce and enflame it all day long.
With Brexit twitter I realised eventually that, whatever my strong views, I needed to unplug from it as it wasn’t healthy. Reading about the latest micro-chapter in why Brexit will cost £bns wasn’t doing my sanity any good whatsoever.
So now I’m pretty mindful about this too. Macro trend analysis is really interesting, but already my feed is filling up with people reinforcing each other about how further equity falls are absolutely inevitable.
It’s notable though that many of these same people were suggesting accumulating LT US treasuries as far ago as Spring. It’s already cost me money as I actually had a nibble of those just last month : 9% down now!
Well if this sh*t-show doesn’t emphasise the many things beyond our immediate control or ability to foresee, I can’t think of a better example.
No reaction, no change in the plan – just KeepOnKeepinOn!
@The Investor “Truss just rode around on a tank for photos as far as I can tell.” Also, didn’t she sign a number of dubious trade deals ?
“the worst prime minister in British history” sounds a debatable category. Cameron – for starting the collapse ? Thatcher – for changing the post-war consensus, creating the conditions for the referendum. Johnson for getting that Yes vote merely for his own gratification – the worst English traitor since Tostig Godwinsson ? YMMV.
> Thatcher – for changing the post-war consensus, creating the conditions for the referendum.
I find it a little bit hard to believe I am saying this, but I am just old enough to remember them and something did have to change in the late 1970s. And remember that Thatcher was a significant part of architecting the Single Market that her vainglorious successors spurned, despite it not being a necessary condition of Brexit. And indeed much as Brexity opinion likes to sweep it under the table, Thatcher campaigned for staying in the EEC in 1975, it was the Labout government that has called that referendum to try and roll back Hath’s 1973 accession.
There is cogent argument to make that the EU EEC, indeed the most obvious charge against Brexiters was that they should have supported the rich bastard James Goldsmith’s Referendum party, which called for a referendum on Maastricht, which was the big change in the nature of the EU on the sovereignty front – moving it from an economic community to more of a political federation. Goldsmith had a far more coherent and better argued case for what was going wrong with the EU. Sadly the archive of his work is now gone from the Web, theouth the WP article is is reasonably good. He made a much better case than the liars and rabble-rousers of Farage’s crew, but in the end Farage had the advantage of decline and the GFC.
I wouldn’t have been averse to spiking the guns of Maastricht, but it was not to be. Thatcher was a product of her time, and perpetrated much damage in some UK areas such as leaving the destroyed industrial heartlands to rot and bringing us the devilment that was Right to Buy and 40 years of housing policy to mollycoddly house owners over those wanting to buy. She also squandered North Sea Oil revenues, partly on RTB. But she did much good in the fractious dealings with the EEC 😉
I don’t agree Thatcher caused the conditions for the Brexit referendum. She was defenestrated 30 years ago. The GFC, Osborne austerity maybe, and Cameron’s political incompetence. Not everything that is borked in Britain can be ascribed the Thatcher. You will find out soon enough what it’s like when union barons run the UK. It’s ugly in a different manner.
It’s surprising that Britian has managed to become the sick man of Europe quite so rapidly since 2016, but as our Esteemed Leader said, “Them’s the breaks”
TI your caveats are key. There doesn’t seem to be compelling evidence, so far, that inflation is coming down. Like ketchup in a glass bottle – nothing comes out for ages, then after a good whack it goes all over the place.
If the past 30 years of falling inflation have been caused primarily by the addition of cheap Chinese and eastern European labour into the global economy and low cost commodities from the former Soviet space, that hasn’t just stopped, it’s going into reverse. See China lockdowns, belligerence over Taiwan and Putin’s attempt to rebuild a Russian empire.
Large amounts of capital and labour will be required for the Western world to rebuild its industrial base, as de-globalisation requires efficient supply chains to be replaced with reliable ones. This will fuel inflation and higher costs of capital, possibly for a decade or two.
Have to be careful not to be the generals fighting the last war. Barring Elon Musk actually producing robots that can build factories or work in factories, deflation / disinflation seems unlikely to reappear for a while.
If you believe that the Fed is serious about its inflation mandate, it’s hard to expect any long term relief from rising/higher interest rates. The markets keep seeing pivots. The latest being when the SF Fed president mentioned the idea of reducing the pace of increases from 0.75% to 0.5% increments on Friday. However, this pivot idea look more like wishful thinking at the moment.
While quality growth companies have come down significantly, they are still not that attractively priced, with free cash flow yields of c. 3.5% – 4.5%. In a world where you can get almost 4% on risk free 3 month T-bills, there doesn’t seem to be much of a risk premium built in. Which suggests that the markets think that rates will fall quickly and that earnings won’t be impaired by a recession. Doesn’t look like a great bet to me. (Appreciate that the orthodox comparison might be to the 10 year, which is also at c. 4%, but in constructing a portfolio that dampens equity volatility, I prefer to avoid duration).
Then again, there’s the joke that economic forecasting was invented to make astrology look good. So as you say, being ready to quickly change your mind is a requirement of active investing.
There’s a deeper Brexit consequence than its direct effect on GBP decline, reduced trade and fracturing of the British Union. The political split and instability in the Tory party over Europe has led to where we are now. The Eurosceptics were once a minority, They took over the Tory party. Cameron misjudged how to tackle them and UKIP with a simplistic referendum that gave no mandate for any particular future Treaty. Working out what form of Brexit was and remains the conundrum. So even if you’re pro Brexit, it cannot be disputed that the irresponsible binary referendum was no way to approach the most complex change to the UK in modern history.
Addition: and as Truss and her predecessors have shown: 1) there’s no consensus or obvious way forward as to what to do with the UK’s Brexit “freedoms” and 2), we continue to see how the EU and leaving it was neither the cause nor solution to the UK’s problems.
On asset prices generally, I don’t feel a loud bat signal so to speak but clearly it’s better deploying funds now than it was 12 months ago. On the basis that nothing is predictable.
FTSE 250 is heading for cheapish territory, US is a bit less expensive than it was but not cheap, bonds better but not cheap, gold haven’t a clue and never had. UK property still bonkers but presumably coming down. Just keep buying….
The link on population falls in Russia is interesting. It’s been mimicked across the world apart from in Sub-Saharan Africa and India. I’ve thought in the UK and I guess generally the cost of living crisis will accelerate the reduction in births. An increasing number of people will consider them to be an unaffordable luxury. Should accelerate falling populations. Personally given David Attenborough strongly believes the main issue is there are too many humans I think that’s a good thing. Culturally though that’s a big hurdle for many countries to cross.
Feels like Borat has a good chance of becoming PM again. You couldn’t make it up. I have detected generally this week a very slight acknowledgement that it doesn’t really matter who is captain of the ship, it’s taking on water so to speak and unless something radical happens things will continue to get worse.
Choice is Kier Starmer, Rishi Sunak et al who broadly speaking aren’t that much different from each other in which case it’s just a case of raising taxes and cutting spending – slightly different amounts but so what – look at what Kier Starmer is proposing, it’s tinkering around the edges. Or Boris and a continued fantasy. The only thing I liked about Truss et al was the acknowledgement the ship was taking on water and sinking a bit.
Given the outlook appears to be rising taxes, If I was young and was part of the educated elite, I’d certainly look elsewhere – perhaps get a couple of years work experience in a professional services firm (investment bank, accountancy) etc and then look to work in the US, middle east, Monaco or some other tax haven. Hence the Portuguese option is v interesting. You can do something similar now in Italy (15% for expats all in) and Greece.
Personally been a bit older, I’m having the discussion with the family about engineering a move overseas which could happen. Won’t be easy, upheaval and all that but what’s the point of paying more and more tax for less and less. Far rather let someone else foot the bill.
I think human capital is a heck of a lot more mobile than it used to be twenty years ago (backed up anecdotally from what I’m seeing) – probably the most sticky is the basic rate tax payers. Just keep the bands where they are for the next decade and with any luck most people will be higher rate tax payers at the end of it – won’t they feel wealthy to be one of the luck ones 🙂
It’s hard to understate the contempt in which I hold Boris J and Truss. And, I can’t really see anyone in the conservative party that is actually that much better. That is, who can look beyond getting into power to fill their own boots in some way or to govern based on some 3rd year university level ideology versus actually trying to work out what will achieve an outcome that is vaguely “just” and tilted to delivering the best realistic outcome for the greatest number while not completely deserting whole groups of the population.
But, for me the real problem is that there is no clear “good choice” here.
I’d love to be able back Starmer and Labour but it’s not clear that he (and they) have managed to see off of their own loonies. Latest reports have him facing growing pressure from the left for a more radically redistributive economic programme and Rebecca Long-Bailey (she who scores Corbyn 10 out of 10 for his leadership of Labour) suggesting they are in a position to win a large parliamentary majority and so they should take advantage and offer a “transformative socialist programme for government”. So we risk swapping the venal and incoherent conservatives for ideologues from the left (support for industrial and union strike action “no questions asked”, state ownership of all key industries, ringfencing company profits for employees etc.) who seem to believe that now is the time to offer the electorate a choice of conservative muppets or Labour muppets. What the hell is wrong with offering a choice which includes a credible left leaning (note leaning!) centerist government?
And the Lib Dems are polling in the 5-10% range. Even now, with the conservatives actively trying to appear as unsuitable to govern as possible (the fact that any of them can countenance re-introducing the buffoon that Boris beggars belief) they can’t get enough support to look like a potential force. And, I think the only hope for deal old Blighty is the next general election delivering a result that requires Labour to form a coalition (formal or otherwise) with the Lib Dems to govern and the Lib Dems knocking the loony left edges off Labour and making a move to proportional representation a condition of any support (which change hopefully leads to governments and MPs that realise they need to learn to compromise to get anywhere rather than simply market themselves to their most extreme wings).
And, the fact that no senior politician from the left or the right can bring themselves to publicly acknowledge that Brexit has been a complete (and I do mean complete) sh!tshow in practice, regardless of what certain idealogues may have hoped for it, and suggest that maybe we should perhaps think about a moving to a less ideologically driven version of Brexit that just maybe involves exercising some of that lovely sovereignty now available to us to recognise our inter-dependence on our neighbours to the east (inter-dependence on rather than with – we depend much more on them than vice versa) and perhaps do something rational in response like negotiating in good faith to achieve an agreement which delivers a sensible set of benefits to both sides recognising that we and they can’t get everything that we want (otherwise no negotiation would be needed).
/rant
I’m almost pissing myself laughing reading all the doom and gloom here about gb plc
In 1976 the uk went cap in hand to the imf for the biggest loan it had ever given out
In 1985 we had one of the fastest growing economies in europe
All it took was a decade of serious government by grown-ups
But what had we done in the early 70s that made all this possible?
Joined the eu …
Post hoc ergo propter hoc ?
@MrOptimistic
Sine qua non, actually.
A little sovereignty for a lot of prosperity.
Quid pro quo.
Penny Mordaunt, bless her. Over the weekend, comparing herself to Rishi Sunak stated that unlike her, he “Doesn’t Have Military Experience”
At the previous leader race which BJ won, two ex senior cabinet ministers who she worked for, felt compelled to warn about her lack of understanding her job role and basically sloping off when it suited her.
In 2022, George Freeman MP incorrectly claimed that Mordaunt had fought in the navy, with a navy source responding by saying that Mordaunt is not currently “a trained or paid reservist, she’s never qualified or commissioned. She’s been banging the naval drum for days and enough is enough. How she has presented herself – and how she has allowed herself to be presented – have been deeply misleading.”
So perhaps, yes, she is well suited to the roll of PM.
> her lack of understanding her job role and basically sloping off when it suited her
BoJo lite then. Three holidays since he got the order of the boot last time.
Penny’s going to be a cakewalk with the geriatric scrotes of the Tory Party if it comes down to them. There are other aspects of Penny’s lineage they may be more comfortable with than Rish!
@Ermine
As opposed to a chancellor who couldn’t see the obvious political issue with holding a US green card while in office and his wife paying a fee to be non-domiciled so she wouldn’t have to pay tax like the rest of us?
Rishi Rich’s honeymoon won’t last long beyond halloween when our taxes go up and his don’t
@Neverland
Hey, this is not about selecting the good options here. This sucker’s going down whatever. It’s the relative cleanskins with the barmy ideas that have been shown the most dangerous.
@Ermine — Agreed. It’s easy to be cynical / nihilistic, and indeed perhaps I succumbed to a bit of that in my main article this week. But anything that prevented Johnson coming back is already a better option as far as I’m concerned, so it most definitely could have been worse.
Obviously as all but Leave fans can see it will probably be how the hardcore Brexiteers respond over the next few months (weeks?) that will probably set the tone of Sunak’s first term.
You’d hope he’d decide to soften Brexit in his own self-interest (the economic challenge is hard enough already, and a trade/investment boost would help, not to mention it’d probably boost the pound and thus help reduce inflation without as many rate rises) but perhaps that cannot be done if the likes of @BBlimp are right that most Leave voters remain believers.
At least he didn’t mention Brexit in his first speech. Small crumbs.
May and Johnson both called snap elections. Truss didn’t last long enough.
Reckon we’ll get one more from Sunak?
@Learner — I don’t think so. He’d certainly lose it and many Tory MPs know it. Sunak’s best hope now is the full two years, with a rough 6-12 months starting a month or so ago that seems to be green shooting six months or so ahead of the next election, perhaps with the BoE beginning to cut rates even, or at least the expectation of that. Mortgages a bit more stable. Inflation down, but without too much unemployment or house price crashing along the way.
That’s not a prediction, it’s a best case scenario. My point is I think it’s rational to hold out for as long as possible. I don’t see anything much changing in the next six months to suddenly turn things around; except perhaps RUS-UKR suddenly resolving and a much faster than expected collapse in inflation (/interest rates). That doesn’t seem likely and escalation seems as probably but wars are weird. Things often look worst just before a settlement.
I’m reading Guy Hands’ biography and was pleased to hear him telling the truth about R4 on Brexit this morning.
A lifelong Tory backer, he also thinks they need to come clean and renegotiate:
https://twitter.com/implausibleblog/status/1584460535621648385
Defenestrating a PM who won a 80 seat majority is a problematic issue at any time
Voters seem to take a dim view of unelected PM,s understandably
Tony Blair won 3 elections on the trot for the Labour Party and was replaced by an unelected Brown who duly gave the Tories a clear run for many years
Politics of course often run in tandem and but sometimes separately from economic affairs-possibly the current scenario
The state of the economy is the elephant in the room at the moment and rearranging the political deckchairs on the Titanic might not a happy or successful policy for dealing with this situation
A proven politician with apparently little economic credibility versus a technocrat with no public credence is an interesting dynamic
Voters will express their thoughts again in due course
Exciting times
xxd09
> the truth about R4 on Brexit this morning
haha, yeah, it’s all a Deep State conspiracy, that Radio 4. Brexit is The One. True. Love. She will never fail you, a beacon of constancy telling you whatever you want to hear in the stormy tempest of Remoaner whack-jobs otherwise known as the Markets*. Tune in to Brexit in the morning to hear what you want to hear.
Sorry. Been a long day and I have the flu, and I still feel we are lashed to the thrashing tail of the tiger that is Bozza’s naked ambition to be King, lit by whatever childhood trauma he suffered. BoJo despatched his men to undermine his nemesis, less than half an hour after Rish! was crowned. This one ain’t gonna slip away quietly into the night. Never forgive, never forget. Bozza and Trump are merging into the single rough Beast, slouching towards Bethlehem in the pitiless night.
* They’re not Remoaners. They don’t give a damn. But they’re kind of hung up on that reality thing, because they are greedy suckers and would quite like their money back at some time.
It frustrates me that Mordant has been seen as credible to lead.
She has lied to Parliament, more than once and treated it with disdain with her ‘saying Cock in speeches to Parliament’ bet with her idiot mates.
Just google search the above and see how much she has got away with, but then she is a Tory who thinks she can be PM.
What a mess we are in, supposed to be a G7 Nation?!?
Ousting Boris for ultimately his chancellor has come at a cost to all in the UK with a mortgage on variable rate, deal up for renewal and through to rental. Nose, spite and face comes to mind.
Good luck to Sunak, with rule by sanctimonious Twittocracy the knives will be out soon enough.