Marmite Cocktail

 

 

We have seen quite some volatility over the last few days, which have been terrible for commodities firms on global stockmarkets.

 

Which always begs the question……what on earth is going on?

 

Dead simple……simply look at the 2 big players in the world economy for your answer. China and USA have much to answer for.

 

Firstly, China. The slowdown in the Chinese economy has been weighing on commodity prices. Investor decisions that were taken three or four years ago when China’s economy was growing at around 10% have led to a problem of oversupply in commodities.

 

Secondly, the US. In the background there is a distinct prospect of an interest rate hike in the US. This will lead to a stronger dollar and will make commodities more expensive because they are priced in dollars.

 

This reducing supply / demand at the same time of the prospect of a strong dollar creates a ‘marmite cocktail’……the cherry and sparkler on the top being prices further exacerbated by investor sentiment. Quite a cocktail that not all came stomach.

 

Until the stimulus pushed through in China last month begins to show results, we can expect to see some continue turbulence.

 

Interesting times

Oh Lordy

 

 

 

We have a long political history in the UK. Some of it is tradition and quintessentially what makes the drama of Westminster’s pomp and ceremony very ‘British’. Whereas, some aspects from the days of Robert Walpole, William Pitt, et al, lack all logic in today’s society.

 

Let’s take the House of Lords, the upper house to the House of Commons. It is made up of 776 sitting Lords who have been ‘selected not elected’ to scrutinise bills that have been approved by the House of Commons.

 

Whilst it can review / amend Bills from the Commons, the House of Lords is unable to prevent Bills passing into law (except in exceptional circumstances) but can delay Bills and force the House of Commons to reconsider their decisions. In this capacity, the Lords act as a check on the House of Commons that is independent from the electoral process.

 

But here’s the thing……do we really need 776 Lords to act as chief checker to 650 MP’s in the House of Commons?

 

More importantly……do we really need the cost to the public purse strings of this simply to maintain tradition?

 

The Electoral Reform Society recently reported that in the 12 months leading up to the 2015 General Election, 64 Lords / Ladies claimed combined expenses of £1.2 million yet did not speak, debate or act during that time (at a cost of £18,750 per person). Or to put that another way……£1.2 million to not really do that much checking. The total cost of the House of Commons is over £90 million a year. Times of austerity you say?

 

Which all begs the question……what is the point? History is simply that……history.

 

But don’t expect too many MP’s campaigning to abolish or amend the House Of Lords……it contains too many of their friends!

 

Is it too much to ask for a political system that is fit and fair for 2015?

Who's Buying

Sometimes cutting through the political madness in the UK is impossible and seems to lack all logic. Which is why the Office for Nation Statistics (ONS) is frequently the rarest of gems in that it can be trusted to cut through the spin and simply give hard, credible and factual information. Perfect! Essentially, they are the ‘go to’ guys for evidence to support or challenge the Government and political spin.

 

ONS’s recent publication focussed on UK’s goods exports. Or to put that another way……who is buying the stuff we make. Politics is so often linked to money and who is buying can explain plenty of policies and behaviour.

 

The graph below shows our 10 biggest buyers of UK exports over the last 10 years.

 

 

 

Interestingly……

 

1.     Only China is purchasing more from the UK then they did 10 years ago (up 400%).

 

2.     US buys 20% less than 2004.

 

3.     Europe continue to be a huge buyer and collectively our biggest ‘customer’.

 

4.     India doesn’t make the top 10 yet and is predicted to be the third largest economy in the world in a decade.

 

Based on the graph, you would expect plenty of schmoozing with US / China / India going forwards and a reluctance to leave the Euro. Now sit back and watch W1 at work.

 

Money talks after all.