I have been amazed this week as the sheer level of stupidity shown by some commentators on the left. Bad enough that they have long flung around phrases like 'Disaster Capitalism' - which can mean anything but overall just is a slang way of saying capitlists = bad people.
But in recent days they have cottoned on to the concept that hedge funds might short positions that will be at risk in a hard Brexit. Obvious things like shorting the Pound or backing the FTSE to fall. This is not evil and it is not willing a hard brexit - it is gambling their hunch will pay off in that scenario. Plus of course, another fund or investor is on the other side of the trade betting the exact opposite. Both won't be right and one will win and one will lose - there is literally no political element to this. So the Angela Eagle level conspiracy is jus the most baseless and ignorant nonsense possible.....and the remainers say the leavers are the uneducated and stupid ones.
Additionally, after ND added in his tuppence yesterday on the Energy market, I thought I would add in a summary of anecdata taken from many of my recent meetings in the City and West End.
The property market is in a bind,
the resi market is vey weak at the top end and has been since the stamp duty rises of 2015. Many units in central London are coming to market with very few buyers, but also not yet the huge drops in price that would stimulate real demand - the issue being the cost of building was likely above the now demanded sale price - so profit warnings ahead for these developers. Luckily for the UK economy, most of those parted with their money for these developments are wealthy foreign wealth funds or high net worth families who eventually can and will take the losses. However, as with all markets, construction has dropped off in response so now with much reduced supply pipeline as compared to recent years it is likely that the market will start to move up again in the next few months and years - Brexit or not.
In the commercial market, there is a good reminder that Brexit is not everything.
A wave of money rushed our of Hong Kong as problems there meant capital fled to traditional safe haves - even French Chateau's have been selling. There are a plethora of fund launches into fine wines and art - things that Asian investors are often very keen on, despite the risks. Money flows are also helped by Sterling weakness as assets are cheap. however, commercial markets are very toppy price wise and a sharp drop is expected- perhaps the Sterling fall means in reality this has already hit, but us domestics don't see it!
With cheap assets comes deals, so lawyers and bankers are busy. Cheap interest rates mean firms can refinance and high levels of foreign investment means lawyers and investment bankers have deals to do. There are not may quiet offices in the City with people panicking over Brexit. They just want it done one way or other (revoke very popular as ever). one area of worry is that Luxembourg will eat the market share of European funds work as London and the Crown dependencies struggle with uncertatinty.
So, against the usual talking down of everything thanks to our universally useless political class, the economy seems OK. Which is why is it not surprising to see high employment and wage growth against this background. What is different I outside of services, where manufacturing has had to stockpile and hoard resources due to the uncertainty and construction is weak, as per above. Overall I think IF we can either Brexit or not and reduce the uncertainty we may even pull off avoiding a recession for another year or two yet, driven by the continued funnel of Foreign Direct Investment into the economy.
