2012: We didn’t start the fire. It was always burning while the world was turning…*

So much for Billy Joel’s song reciting world events up to a few years ago.

This year so far, similar to last, investors need to consider, react or cope with the ongoing European financial crisis with yet more political change now in France and even more elections and chaos in Greece. Spain is providing further assistance to its banks and the economy has depression levels of unemployment. Putin is Russian president again while becoming more unpopular. Ukraine is looking more like Belarus. The Arab spring is still waiting a summer of democracy in Egypt. Civil war rages in Syria with riots in Bahrain. Iran is still continuing with its mischief or atomic development depending on your persuasion. Israel is still warning over a strike against them. Oil prices remain relatively high especially at the pumps. The Chinese economy is slowing with a property bubble to deflate. The Aussie dollar is falling while the US dollar and sterling too have risen for reasons best left to optimists and speculators. Argentina has renationalised YPF. JP Morgan has become the next large financial institution to have a trading debacle. The UK has fallen back in to recession although milder with public sector union demonstrations against government pension deals. Construction orders are weak and retailers continue to struggle. Even Glasgow Rangers, rescued from liquidation but still plagued with problems.

This all makes choosing your investments all the more wisely as even gold price is proving hard to predict in direction. Are we going to have deflation or inflation, more quantitative easing in the US, UK or the EU or not? Will Fiscal austerity continue or be curtailed in light of Greek and French elections? What debt repayment promises to the Germans and other bond investors will be honoured or altered? Again.

However one development that has come to pass, at last, shareholders have began to stand up against directors and their pay deals. It appears not just with bankers but the whole culture of remunerate for senior executives across industries. Why it has taken until the fall of the western civilised world before company owners finally start to demand some accountability is debatable and I’ll comment more in future blogs. For now I just hope this shareholder spring has some legs and proper associations will form and be able to permanently change the culture and discipline. There have been a few resignations so far and ton of talk about banking reform (and yet still a lot of crisis talks too). A Shareholder spring is the term. More like waking up from a comfortable coma and needing to learn to speak again. It’s a start.

LDC