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04 October 2010 |
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators on television, radio and in the press. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor.
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators on television, radio and in the press. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor.
The great thing about politics and the politicians is sometimes they don't seem to realise how much of a soap opera they provide us with. In the US we have the farce of the Tea Party sect who are doing their level best (much to the President's delight I'm sure) to ruin the Republicans' mid-term campaign. From dabbling witches, to pigs with lipstick, they make an amusing by worrying charade.
Meanwhile back in Blighty, we have another charade of the Labour Party leadership results at their conference last week. The winner didn't get the majority of the MP support or the Shadow Cabinet or the members' vote - but he did get the backing of the Unions and they of course are at the behest of the 3 Union Barons of the GMB, Unite and Unison. Democracy is a great thing - all votes are important, it's just that some are more important than others.
Oh well, we will have to wait and see what the new look Labour front bench looks like. After the brother stomping off in a huff to play with his own toys (presumably his younger brother's nationalised train set) the 'new generation' has had an amazing chance of looking remarkably like much of the older generation. Queue the Eastenders' theme.
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Last week's data only served to confuse - again. US consumer confidence down, and UK growth in Q2 was 1.2%, growing at its fastest rate since 1999. These UK figures were quite encouraging as they seemed to show that this was not just a rebuilding of inventories (stock) but rather an increase in business investment. However, one quarter is just an indicator and we need at least three to see a trend develop. It also seemed as though consumers were spending, possibly spurred on by the thought of the VAT rise at the turn of the year, but tie this with a fall in savings and this is unlikely to continue. At some stage the consumer will start to save more and in all likelihood spend less. Whilst the MPC member Charlie Bean wants us to spend more to get the economy moving, I hope he realises that this is not a bottomless well - raiding savings just for spending will only store problems for later. I regard this as a rather patronising comment to the many of the British who are worried about the future and financially concerned. Mr Bean's comments almost fall into the "let them eat cake" file - yes, let's eat into our savings - and have nothing for the future!
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So the US is threatening sanctions for currency manipulators. I assume they don't mean themselves? There is a fine edge of interpretation between currency intervention and currency manipulation. The truth is that all countries are concerned and do what they can to manage their currency levels either directly or otherwise. The threat of populist sanctions and protectionist measures has little effect other than to reduce trade and that hurts all, and usually the initiator most. I would ask the Americans to remember the passing of the Smoot Hawley Act in 1930 which served only to exacerbate the Great Depression at the worst moment, by raising the tariff on over 20,000 goods in the name of 'American jobs for American people'. For the flag waving Mrs Palin this may seem logical; for the more objective it is just objectionable.
However, countries with surpluses have to play fairer in the world economy. Amassing surpluses with no regard to their trading partners is equally selfish. This is not just a Chinese issue but for others like Germany, who must also act to stimulate domestic demand.
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The no surprise 'astonishment of the week' has to have been the FSA revealing of the banks having over a million complaints against them. Some of the comments from one bank employee on the radio that 'This has to be put into perspective with other industries', was astonishingly complacent and naive. Surely this must spur some movement in bank reform to address these issues. Of course after a recession and a banking crisis one expects a high level of consumer dissatisfaction, but banal advertising campaigns about commitment to service and 'for the journey' are frankly pathetic.
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'God save Ireland', because the bond market won't. Ireland has to do its best to get itself off the front page. It has acted bravely in the face of the seeming unending woes of property losses within the banking system. I would have thought the Eurozone support fund could have been brought to bear but apparently this has been ruled out. Frankly now I think the time has come when the limping Celtic tiger could turn around and bite back at some of its creditors. Why should the Irish take all the blame and losses for overseas lenders who were as equally incautious as the Irish banks themselves? The Irish worry about the credit ratings agencies - they shouldn't. The spread on the debt is probably much worse than their rating anyway. So why not start to reschedule the debt - at least the secondary line debt - after all, we can't call it default can we!
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And finally ... a notable anniversary - 9th October 1940 - the birth of John Lennon during an air raid in Oxford Street Maternity Hospital, Liverpool. I prefer to celebrate the births than recall the deaths.
Also ... from New York, so much for a weak economy, with its ghosts or goblins or candy and costumes, Americans are ready to spend far more on Halloween this year than last - an estimated $5.8 billion ( |
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