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Posts from the ‘Europe’ Category

Don’t Go to Davos: Time to Be a New Rebel in the Brexit/Trump Era.

This is the message I give to Davos man or woman for the 2017 January meeting of the World Economic Forum in Switzerland, unless you want to go skiing of course. Picking a theme like inequality or climate change is all well and good.

However, with the inauguration of Donald Trump as the 45th President of the USA on the 20th January and Theresa May, UK Prime Minster, taking a harder line with Brexit from the EU once Article 50 of the EU Charter is triggered. The opportunity has arisen for a new type of rebel against the new anti-establishment establishment now that Brexiteers and Trumpites are in their ascendancy.

Global business executives, politicians, commentators and celebrity activists instead of lamenting about the ending of the Obama Presidency now need to embrace not just a new agenda of defending and improving liberal democracy, as the best political engine for raising living standards around the world, but a better way of involving its increasingly disparaged citizens in the process.

More elite group thinking in the cool mountain air is not going to resolve any loss of confidence in Western political systems that caused the political upsets of 2016. It has allowed the rise of nationalism and nativism across Europe and the successful isolationist rhetoric of the Trump presidential campaign.

Will he and his new administration be all bad? He seems to be rather thin skinned and rises to the bait or “tweet” far too quickly for trouble not to be too far away.

However, global stockmarkets have rallied, perhaps too far, in anticipation of looser fiscal policy, reflation and rising bond rates. Investment strategists have suggested the US should publicly finance infrastructure as one area of fiscal policy earmarked to get a boost under Trump.

How the new administration deals with Russia’s President Putin over claimed election interference with Rex Tillerson as the new Secretary of State, a lifelong oilman with business dealings with Russia, will be worth following. So too will the complex negotiations with Iran and Saudi Arabia over Syria, Yemen, trade sanctions and global terrorism. Furthermore, China’s territorial claims in the South China Sea with its neighbours will test and stress his administration to the limit no doubt.

Although it’s likely he’ll rely on his team to do the job for him and I suspect he’ll be as much of a part-timer as possible with Kellyanne Conway and his daughter Ivanka likely to feature a lot in managing the media (and his tweets) in the months ahead.

So what can the new establishment rebels do to make sure they don’t experience the political shocks that upset them so much in 2016 continuing in 2017?

Well to begin with, as it will take more time than a 4 year presidential term or the timeframe for the UK to exit the EU formally. By engaging with people and organisations not based in capitals or large metropolitan areas to better understand, argue and formulate changes to the political system.

Politicians and political elites should promote and introduce deliberative democracy techniques using sortition and lots for forming representative bodies. As in Finland, organise trials for universal basic income models to help alleviate anticipated long term employment or lifestyle changes due to technological advancement.

Well intentioned worries over inequality at Davos won’t produce any worthwhile solutions unless more people perceive they aren’t excluded from society or its opportunities by distant wealthy elites. This is surely the lesson from 2016 and any time now would be a good time to address it. Lest unpalatable results materialising further for those who claim to know best what’s good for society.

It might even be interesting experience transitioning to a new democratic system of governance now that could be worth talking about at some future Davos gathering.

LDC.

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2016: Goodbye to All That Nonsense and Hello to 2017

I’m looking forward to seeing the back of 2016.

However it’s not particularly as an investor that I’ll be glad to see the start of 2017 but as a voter. I have voted 5 times since 2014 in elections for EU, UK and Scottish parliaments, 1 Scottish referendum and in June 2016 the Brexit referendum. It has been the latter that has seemed to matter the most and it has caused all the political upset although markets have been benign about the result so far except with currency markets against Sterling. Unfortunately that does matter as prices are rising and inflation will creep back in to the UK RPI figures as 2017 progresses.
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Brexit and the Philippines’ President Duterte “Harry” Show the US Has Problems With Key Allies Doing the Unexpected.

Before the UK’s referendum on leaving the EU in June 2016 plenty of world politicians advised the British to remain most prominently was the current US President Barack Obama warning the UK would be, “at the back of the queue,” in any future trade negotiations with the US if it choose to leave.
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Post Brexit Bounce: It Will Need To Keep On Bouncing For Years

A Datastream chart of the month showing, “bumper UK retail sales in July as consumers shrugged off Brexit gloom,” was sent to me as a client of Cazenove Captial, a well known UK investment manager. Read more

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Sow the Seeds and Scatter: Will UK Farmers Reap What Profits They Sow in A Post-Brexit Britain?

Harvest thanksgiving services in many rural parish churches were for centuries well attended events in the church calendar which celebrated the harvest had been successfully gathered in for another year and the prospect of famine and poverty avoided.
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In the summertime when the FTSE 100 is fine, it can stretch right up and touch the sky…

The performance of the FTSE 100 share index appears to be fine so far after the UK’s Brexit vote, to paraphrase Mungo Jerry’s 1970 hit ,” In the summertime,” before the UK joined the EU, with global investors seeing US and other major indices rise too.
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Brexit – Well That Wasn’t Meant to Happen But There’s Democracy For You.

The cliches maybe old and tired but they usually contain an element of truth this time on what happens now in UK politics – it’s anyone’s game, all is possible, the cat is out of the bag and who knows what tomorrow brings or the worst possible outcome of all would be cry havoc and let slip the dogs of war as Europe has often witnessed, and recently too with Bosnia in 1990’s and Ukraine now although on the EU periphery it’s geographically part of Europe.
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Brexit: The Great Tory Tear up and Why Britain is Better Bumbling Along.

The polling cards have been delivered and the debate is at large for the referendum on the United Kingdom remaining or leaving the European Union on the 23rd June 2016.
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Out and Proud with Ruth: Has the Tory Tide Turned in Scotland?

The election result was never in doubt in the May 2016 Scottish Parliament elections it was more about who came in second place. The governing SNP won the election easily with 63 out of the 129 seats only 2 short of an outright majority although losing its parliamentary majority did take the shine off an otherwise good result again for the SNP.
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2016: What’s Coming – the Good, the Bad or Mediocrity.

Another year starting so what’s in store for investors and markets?

In 2015 the GDP of the US economy grew at 2.4%, the UK did 2.5% and the EU managed 1.5% with all its currency and migrant upheavals (GS, 2015). China slowed down yet still reported 6.9% causing investors or speculators a heap of disappointment or margin call troubles depending on what figures one believes. India performed better at 7.4% and seems to have the confidence of pundits for an improvement in 2016 to 7.8% (GS, 2015). Let’s hope so, as India the world’s largest democracy, has disappointed before and there’s still plenty of debt and cronyism in its large institutions.
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