"It's So Stupid It's Positively Brilliant"

Blitz Out

Remember the scene in the Great Escape when Virgil Hilts, "The Cooler King" (Steve McQueen), and Archibald Ives, "The Mole," (Angus Lennie) dreamt up an escape plan to simply dig and burrow in one hit? It didn't work and they again found themselves back in the cooler.

Teddy...... the Blitz Out is off old boy..

Now, meet Teddy. A friends dog, he likes to dig and burrow too, under their fence to make a bid for freedom and has enjoyed rather more success in his "Blitz Out's," than did Hilts and Ives. My friends solution? Teddy now goes out to play with a bloody great bucket tied to his collar.  It hasn't stopped him digging but he no longer gets further than nine inches under the fence.

Perhaps this is where the Germans went wrong with escape obsessed POW's during the war.

What Now?

My God, he really is a robot.

The interviewer in that clip, Damon Green, was none to pleased with the result either. His post interview thoughts are worth a read.

To the debate last night and anyone landing from another Galaxy this morning will quickly realise that the UK is heading down a perilous path to a kind of unreconstructed socialism that we haven’t seen since the seventies. Whilst many hope for a Tory surge, and are no doubt tiring of the Spin Meisters drive for “discredit Milliband and steady as she goes,” approach, any outcome other than a Labour + loony fringe support looks at this point, tenuous. The remarkable thing is that the pound, gilts and equities appear relatively unruffled. Although weaker, sterling will take a good old fashioned hammering on May 8th and likely, long before. 

I’m not quite sure what tofu munching unreconstructed Trotskyists like the Greens, who have one MP, are doing on the national stage when the DUP are barred. Its also shocking that none of the other parties have the stones to call them out for what they are. Personally, I’d rather vote for a pigeon shouting alcoholic tramp than that lunatic Australian women. The Welsh woman is stuck in a 1973 entitlement frenzy and the SNP are just scary. If the electorate in Scotland, who seem to be permanently out to lunch,  deliver as the polls are indicating the breakup of the UK is simply inevitable. UKIP meanwhile strike the occasional chord with most voters but lack the maturity, breadth, quality of candidates  and organisation to reach a position of significant influence. That leaves the robotic Milliband who seems to be edging forward which ought to worry every sensible and reasonable thinking individual.

UK National Debt = £1.29 trillion, (chart is in €) That's tough to visualise; try this to help.

All of the parties, except perhaps UKIP, are either too stupid to understand the position of the national finances or are too fearful to be honest. They talk about the “deficit,” while conveniently forgetting the £1.29 trillion debt mountain lurking in the background. Interest payments on that debt are due to surge to over £40bn in 2016 and that’s with interest rates at a 230 year low. The truth is all they are claiming they will achieve is a reduction in the trajectory of the growth of the deficit. 

If these jokers think they have experienced austerity then they’re in for a shock. Regardless of who is elected, cuts will have to be enforced and taxes are going up, that’s just a starter for 10. One thing is for sure and for certain, if Milliband walks into No 10 on May 8th our economy, and the markets, will collapse like one of Fred Dibnah’s chimneys.

Well I Never

Seriously?

I learned a few things over the weekend, none of which I really wanted to hear but by way of introduction I'll mention them anyway. First, it was good news following bad when I learned that my dear loyal friend Gurkha, (Black Lab), had suffered a mini stroke but nothing worse. Although a bit lopsided on his pins, (bit like his owner), he ought to be with us for another couple of months at least.

Second and obviously unconnected, a friend told me over dinner that he popped into the  lavatory in the Shangri-La Hotel in the Shard and chanced upon the shocking scene of two men engaged in what the broadsheet court reporters euphemistically term, "a sexual act." Apparently, that sort of thing is not uncommon in what is apparently an architectural gay icon. Mostly won't be going there then.

Third, in a "well I never," moment of disbelief I learned that all manner of drugs are now more freely available than ever and one of the common conduits for transactions are apparently car washes. The patron drives in with fifty quid under the seat and drives out with his cash replaced by the Eastern European car washers with a sachet of Columbian Marching Powder or whatever the required high of the day is. I'll be using the pressure washer at home then.

The Thug Life vid's make the news. Hilarious if Pretty lightweight compared to Spitting Image or Alison Jackson stuff.

You live and learn. Light relief cascaded down then when one of the kids introduced me to a Facebook page called Political Bible. Politicians as a breed have had rather an easy time of it from satirists in recent years, especially since the death of John Fortune in 2013 bringing an end to the Bremner, Bird & Fortune sketches and we haven't seen anything to match Spitting Image in years. Until now.

Pub scene from Bremner, Bird and Fortune's "Last Show before the Recovery". Two old blokes chatting about media trends.

The BBC report that the "Thug Life," videos of political put downs started life in the United States and were first published here on a Facebook page called Lad Bible. All I can tell you is that the thought of carefully orchestrated election spin campaigns careering off their axis and party media advisor's being driven to apoplexy because of some smart kids with a galloping sense of humour and total lack of deference cheers me up no end. Where there is despair, let there be hope.

 

The Empire Strikes Back

It's with some hilarity that we learn this morning, courtesy of analysis from the Insight Consulting Group via Guido, that should Labour be elected some 25.51% of MPs are likely to be Oxbridge graduates. Interestingly, the number drops to 20.86% in a Conservative-led Parliament perhaps suggesting that slightly more Tories have held real jobs than have the policy wonk stuffed Labour party who are mostly cradle-to-grave political Moonies. 

Well, they don't make any bones about what they're about on their website. The time is coming to reclaim the management and leadership of the Kingdom from this cosy union.

I've written previously about the bizarre grip that the Oxford PPE course has on British politics and political reporting, (it's a very long list, read and be amazed). Perhaps its why they are all so grey and mostly follow the same dreary agenda's with just a different lick of paint on their buses. No long term strategic thinking and no imagination with precious little grip on what passes for Planet Reality for the rest of us. They've buggered up just about everything they've touched and done a mind trick on the Public which mostly believes in the sequential Great Con's perpetrated in their name but not for their wider good. We're in a place where a more or less malleable and supine population is governed by the intentions of a few thousand people in marginal seats.  Nothing could suit the PPE lot better; their grip is tightening but it won't last. Bad things never do.

Selective Memory

Ed Balls says abolishing the nom-dom statuses would be costly for Britain In an interview on BBC Radio Leeds in January,

I’m not yet sure if I should feel uplifted by the bountiful entertainment we receive daily through election campaign mishaps or if we should feel dispirited and dismayed that some of these utter buffoons might actually get elected on the day and god forbid, some of them might end up with the keys to something important.

Labour are of course leading the way with a daily car crash and this morning’s furore over non domicile residents is especially notable. In the spirit of “knock out a quick policy announcement, grab the headlines and don’t worry about the detail,” Labour did just that this morning and it was all going swimmingly until someone had the temerity to look at the detail. The whole nonsense has been unravelling ever since. First we discover that Ed Balls in an interview with Radio Leeds in January said, “If you abolish the whole status it will probably end up costing Britain money because some people will leave the country.” Quite.

Shabana Mahmood chucks some keroscene on the flames

Then we discover that Labour has befitted from some £12m in donations from non-doms various. Ed Balls appears to have gone missing from the airwaves and his aides have been stumbling through interviews making up more stuff as they try to make sense of the mess they've been abandoned to.

Quite frankly, I care as much about non doms as they do about me which is very little indeed. The problem here is that Labour are running an election campaign based on envy. If it doesn't fail, as it deserves to, then the economy will certainly do so in quick time shortly afterwards.

Here’s a take from my chum Marcus Ashworth at BESI,

It's the Equality stoopid... this election is coming down to two words Economy vs Equality. And I defy anyone who says this is all dull, it's a right humdinger and to misquote Samuel Johnson if you are tired of this election then you are tired of life. Golly even the sainted Nicola Sturgeon was booed as she made clear that the 2016 Holyrood election SNP manifesto would likely include a call for another independence referendum.

All the rules are being broken as Bliar is wheeled out from his political banishment despite the Labour manifesto writer John Cruddas being really rather rude about him only recently. UKIP rather enjoyed Europe having its five minutes but surely the man who tried to give us the Euro and doesn't trust the hallowed British public to make up their own minds is an odd ploy for Miliband who has fought and expects to win an election on a very clear rejection of everything New Labour? Maggie died 2 years ago so what next? My how things have changed since her time as the Marxist Kraken awakes from its slumbers.

Europe and Bliar were sharply shoved back in the closet though as Red Ed lives up to his moniker by promising to revoke something that goes back to Pitt the Younger. The Tories have already pointed out that Labour is not really going to revoke non-dom status as 1. They have no clue how much it would raise (or much more likely in the law of unintended consequences how much it would end up costing us all) 2. Would only apply to those who stay for more than 4 to 5yrs (cue a little spell abroad and hey presto I’m back under a new guise).



Soak the rich class war is the only platform Miliband has left under his Equality drive - Labour is utterly moribund under anything to do with the economy but no amount of further CEOs of FTSE100 companies signing letters is going to influence what is fast becoming the most divisive election since the war (Attlee was a silent assassin). The politics of envy are to the fore and logic is the car crash victim but Miliband has never shirked from believing that the lessons of the GFC are that the moral reprehension so ably stoked by the BBC/Guardianista bien pensant is a major vote winner and hang the inevitable consequences.
 

Ed sincerely believes it is his mission to change the UK permanently and finish the job Gordy Bruin so nearly achieved. So much for the canard that all the major politicos are alike as Farage trumpets - we have a red in tooth and claw old-fashioned socialist and he wants to alter a country near you. As does his new chum north of the border with her "have it all" message to Scotland that by voting SNP you get rid of Cameron and subsequently the Sassenachs entirely. By definition the 55% who voted for the Union in Sep should logically thereby vote Tory? Unfortunately that is a leap too far sadly methinks.

By rights Cameron should be walking away with this election but Crosby has kept him on a tight leash as he stood by and let Sturgeon and all the other left-wing rabble get away with unmitigated economic illiteracy that makes a mockery of all this coalition has achieved in averting the head on car crash that Gordy drove us towards. Clegg had his chance to be remembered favourably for his unheralded sterling work that kept his unhinged party from ruining the really quite radical work of the past 5yrs.

Unfortunately he has chosen to pick and mix selective memory - if he loses Sheffield Hallam it will be the ultimate irony for the man who petulantly reneged on the Boundary Commission changes - the egregious bias that might really usher in a Miliband Govt. We can't expect Labour to have any shame but any such Admin will be founded on a lie and as with the inevitable consequence of an ending of the Union as the prize that Sturgeon/Salmond will wreak as their prize for supporting a Tories out at any cost mandate then I guess we will really get what we voted for. It's life Jim but not as we know it...

 

Trouble in Aden?

Trouble in Aden? Send for Mad Mitch and the Argyll’s………………… wait a sec, oh, unfortunately Mitch is dead and we've reduced the Argyll’s to company strength on ceremonial duties in Edinburgh.  

Just as the GCC coalition are pondering on inserting ground forces in Yemen in support of Saudi led coalition forces there, it is perhaps worth remembering that the Egyptians didn’t have much luck there in the sixties; 26,000 dead after their little expedition into Yemen

Uber; Actually, Pretty Good

Actually, that's not me and that DEFINITELY isn't Mrs flashbang

I’m a bit of a stick-in-the-mud die hard traditionalist and deeply resistant to change. I’ve been following the development of Uber over the past 12 months but hadn’t used it until last evening. I had been at a book launch just south of Kings Cross, it was raining and I couldn’t find a cab. It took a few minutes to download the Uber app and electronically hail one having first done a fare check.

The email told me Hocine was three minutes away in his E Class. I could see that on the map and tracked him as he zeroed in on me. 13 mins later I jumped out at Waterloo, no money changed hands, just the email receipt above which is roughly the same as a Black Cab charge for the journey. I rated the driver with his 5 stars and he rated me. Job done. Friends tell me one irritating flaw is the “price surge,” when prices increase with demand but given fares can be checked before ordering I can live with that.

Now, much as I love Cabbies, and I’ve used them all my adult life, they are going to have to seriously up their game or they will be extinct. They can start by turning off their radio’s which constantly blare out inane LBC football talk shows; I don’t care if Arsenals centre forward is Polish or Peruvian, “know what I mean cause I told him, told him John…” Incidentally, should you register using this promotional code, 44zvl Uber tell me you will receive £10 off your first ride.

A Potent and Combustible Combination

First 10 minutes of Wall Street Week episode from Friday October 16, 1987 just prior to the market crash on black Monday. 

I’m not the only bear in town of course. Most market professionals quietly agree that the market has been pumped up to unsustainable levels and most expect it to self-correct in the traditional way. The only disagreement is over the timing and amplitude of correction. I’m using the cluster of unusual turn dates during this current period to identify it as a period of vulnerability for equities but with valuations and sentiment stretched to historic extremes, a catalyst could come at any time and in any form from Q1 earnings, a Grexit scenario, conflagration in the Middle East with the Saudi’s being drawn into Yemen, a cyber event and so on. 

US investors are especially low on ammunition. The NYSE available cash figure has dropped to one of its lowest levels. The last time it was near this level shares struggled for the following two months. Also, the ratio of assets in equity mutual funds to assets in safe money market funds has reached a new high. Shares have struggled to make fresh headway when the ratio has previously been close to the current extreme. 

These cash levels have been abnormally low by historic standards for a while now, perhaps reflecting what the crowd has come to believe is a “new normal.” It’s clear that managers are not looked upon favourable either by investors or their own management when not fully invested. Nobody wants to be Tony Dye. The result is a heightened state of collective market complacency.

The comfort there is the belief that “if we fall we all fall together.” We can cut and slice this with a number of other measures such as money market holdings of mutual fund investors as a % of the S&P or the percentage of cash in mutual fund investors portfolios, (2.45%) but we come to the same conclusion.  

Sentiment surveys for investors, advisors and managers are all at extreme levels. The 52 week average of the Investors Intelligence bull/bear ratio hit 3.35 last week which exceeds every reading for 35 years. These readings can of course continue to reach even greater extremes but they are telling us that markets are on borrowed time.

Concurrent with that margin debt has been contracting since Feb 2014, (a traditional warning signal), when it reached an all time high of $466bn. Margin debt peaked in front of the four greatest corrections of the past 50 years, 1973, 1987, 2000 and 2007. Note too that the level of debt in February last year expressed as a percentage of US GDP is bang in line with ratio levels at those previous peaks.

The madness abounds in bond land too. You are now guaranteed to lose money on nearly €2tr of Europe’s sovereign bonds if you buy now and hold to maturity. Bloomberg noted that the German 30 year yielded just 0.66% and if that yield rose to 1% in the next year the price of the bond would drop by 10%. Time for investors to acquaint themselves with duration and convexity perhaps. The environment is so too-good-to-be-true that a growing number of US corporations are traversing the Atlantic to issue Euro denominated corporate bonds. In fact, its been the busiest start to the year for Euro bond issuance since the currency’s introduction.

Collectively, it all creates a potent and combustible combination to trigger a bear market. In fact, it’s difficult to think of how to improve it as a bear set up.

Technically, most equity indices are in the final stages of their respective rallies. Pullbacks to date have been quick and shallow. The “buying the dip,” mantra has become so rewarding its become an automatic reflex. Overall momentum however is declining while volatility spikes are becoming more frequent. Investors at this stage of bull market maturity should be treating each decline as if it is the start of a major correction. You may be wrong once, twice, five, ten times but you only have to be right once. That’s an oft quoted mantra of would be tech millionaires but actually, I think the tables have turned.

Whisky from Where?

 

To a friends for lunch yesterday and with coffee he challenged me to a blind tasting. I hate these. It's very easy to embarrass oneself in a tasting and I did.

I tried this whisky, Slyers, and thought I'd nailed it as a mild Speyside. Actually, it's German, from Bavaria and its not at all bad given its youth.

Another ten years and it'll be getting there and another hundred and the Germans will probably be getting the hang of it.  I used to be a bit sniffy about foreign whiskies but actually, the more the merrier. They all add something to the richness of experience.