TODAY’S FAYRE

TODAY’S FAYRE – Thursday, 17^th January 2013

“Kind o’er the kinderbank leans my Myfanwy,
White o’er the playpen the sheen of her dress,
Fresh from the bathroom and soft in the nursery
Soap scented fingers I long to caress.

Were you a prefect and head of your dormit'ry?
Were you a hockey girl, tennis or gym?
Who was your favourite? Who had a crush on you?
Which were the baths where they taught you to swim?

Smooth down the Avenue glitters the bicycle,
Black-stockinged legs under navy blue serge,
Home and Colonial, Star, International,
Balancing bicycle leant on the verge.

Trace me your wheel-tracks, you fortunate bicycle,
Out of the shopping and into the dark,
Back down the avenue, back to the pottingshed,
Back to the house on the fringe of the park.

Golden the light on the locks of Myfanwy,
Golden the light on the book on her knee,
Finger marked pages of Rackham's Hans Anderson,
Time for the children to come down to tea.

Oh! Fullers angel-cake, Robertson’s marmalade,
Liberty lampshade, come shine on us all,
My! what a spread for the friends of Myfanwy,
Some in the alcove and some in the hall.

Then what sardines in half-lighted passages!
Locking of fingers in long hide-and-seek.
You will protect me, my silken Myfanwy,
Ring leader, tom-boy, and chum to the weak.

John Betjeman – poet– 1906-1984

Every Australian will tell you how strong the Aussie $ is and consequently how expensive they find London, if they are either paid in Dollars or if they repatriate their money. I was also told recently that when people walk down a shopping mall in Sydney and Melbourne and try on a pair of shoes, trainers or a piece of clothing they are charged $5 for the privilege of of doing so,  if they don’t buy it, in the full knowledge that the consumer can buy it ‘on-line’ at half the price!

I was desperately looking forward to seeing ‘Sprinter Sacre’ run in the Victor Chandler at Ascot on Saturday.  The only other ‘prep race’ that is suitable for him before the Cheltenham Festival is the ‘Game Spirit’ at Newbury on 9^th February.  I suspect that ‘Sprinter Sacre’ may well be the finest 2 mile chaser I am ever likely to see in my lifetime – ‘Moscow Flyer’, ‘Pearlyman’, ‘Viking Flagship’, ‘Mastermind’ or any other candidate that could be thrown up! However I fear the weather will spoil my dreams!  Here’s hoping that trainer Nicky Henderson manages to keep this flying machine sound until Cheltenham. What a thrill it will be for Mrs Caroline Mould, the owner and her husband Raymond, who has not been enjoying the best of health, to see him bolt up the Cheltenham hill!  They have been brilliant supporters of NH racing! Racing loves a champion!

The response from the Street of Dreams to really excellent numbers from JP Morgan Chase and Goldman Sachs should have been more positive than it turned out.  However the threat of Presidential intransigence over the debt ceiling is taking its toll on the market’s confidence. Initially JPM opened lower and Goldman just above the Plimsoll line. At the close the DOW was down 23 points at 13510, but Goldman’s share price was up 4% and JPM by 1.1%.  Goldman’s 4^th quarter profit tripled on this time last year to $2.9 billion.  This was an excellent period for trading fixed income and equities.  Total revenues were up 50% to $9.2 billion with net profits for the investment bank up 63% to $1.4 billion. These results were considered stellar.  Sir Mervyn King and his colleagues and regulators will be delighted that Goldman chose not to introduce a tax ‘rinky-dink’ over the payment of bonuses. The net profit for the year was $7.5 billion against $4.4 billion last year,

JPM’s results are more complex.  There are issues over the ‘London Whale’ and mortgage repayments not to mention forthcoming issues over LIBOR manipulations, were not really discussed in any meaningful way by Jamie Dimon or the board. The profits for the last quarter were up by 54% to $5.7 billion.  Jamie Dimon’s compensation will be halved – salary to remain at $1.5 billion with a bonus in the share scheme valued at $10 million. Risk controls have been tightened up after the ‘Whale’ left a trail of devastation with a $6 billion loss.  Revenues rose by 10% to $24.4 billion.  There was a significant improvement in lending. Investment banking profits doubled for the quarter to $2 billion. The net profit for the year was $21.3 billion, despite the bank’s trials and tribulations. Impairment charges fell from $2.2 billion last quarter to $656 million.  It is almost certainly the imponderables that have curbed further progress on the share price and also the fact that the shares gained so much in 2012 plus prevailing concern about global growth for 2013.  The 4^th quarter earning season has started in earnest and next week we await the results from the likes of Apple, IBM, Johnson & Johnson, General Motors, Microsoft, Google and Pfizer to give the market a more balanced appraisal of economy’s performance!

As previously mentioned it was another fairly flat day on the Street of Dreams with the DOW losing 23 points, the S&P remained flat and modest gains were booked by NASDAQ.  ‘After hours’ eBay posted sales for the last quarter up by 18% and profits by 16%. This stock has rallied by 72% in the last year.  Meg Whitman before moving to the troubled Hewlett-Packard seems to have set down quite a recovery process.  The FAA has grounded the Dreamliner for the time being until the niggling problems have been sorted out. Sadly there was news that Blockbuster is headed in the direction of ‘ashes for ashes…’ - 4k jobs could be lost in the UK. In the US the following post interim numbers today - BANK OF AMERICA MERRILL LYNCH, BLACKROCK, CITIGROUP & CAPITOL ONE. BOA’s numbers are expected to be good with a measured increase in mortgage lending.

In London the FTSE eased by 0.25%, the CAC by a similar amount and the DAX closed flat. It was very much a lack-lustre session.  Today ASML and CARREFOUR post interim results. In the UK the following post trading statements - AFRICAN BARRICK GOLD, ASOS (TS), AB FOODS (TS), PREMIER OIL (TS) & ABERDEEN ASSET MANAGEMENT (TS). Though Shanghai was easier by nearly 1% today, the Hang Seng was down only 0.2% at lunchtime and the NIKKEI closed up 0/15%

The EU debate on the UK’s continued participation or not is gathering some momentum in quite a visceral manner. Many like me think the behaviour in the House of Commons is just getting more puerile as they months roll by. The lack of respect by Ed Miliband for the office of PM is dispiriting and frankly his behaviour brings out the lesser qualities of the PM. What I dislike about this debate is that the UK and the EU are behaving more like the US in terms of its business culture.  There are no FTSE 100 CEOS who are sceptic! Why?  They cannot afford to be!  These huge companies have to constantly be ‘in the sack’ with governments and regulators; or else they are in danger of losing out.  Most SMES and financial operators are very sceptical.  There is a dangerous and unhappy balance developing.

Whilst we all ponder the damage that will be inflicted by  greater integration between the UK and the EU, it is becoming apparent that Michel Barnier and regulation will be the domain of the EU and the Vickers report is headed for the scrap heap. The UK must fight tooth and nail to avoid that possibility.  At least we must wait for Mark Carney to arrive. As we understand it Carney is not keen on breaking the banks up.  He just wants adequate capital appropriated to relevant activities.  That would suit the City and the financial sector if that type of policy were to be adopted.  Mr Carney is also supposed to be very keen on ‘naming and shaming’ transgressors.  Who would have a problem with that idea?

Finally I heard gossip and very reliable it was too, that Europe’s trade demographics with China had changed enormously in the last 5 years.  5 years ago the pecking order for trade was 1) UK, 2) Germany) and 3) France.  Today it is 1) Germany and 2) France.  China regrettably does more business with the Netherlands than the UK.  Dr Cable and Lord Green – WAKE UP!

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