TODAY’S FAYRE – Sunday 10th February
2013
“Once upon a midnight dreary, while I pondered weak and weary,
Over many a quaint and curious volume of forgotten lore,
While I nodded, nearly napping, suddenly there came a tapping,
As of some one gently rapping, rapping at my chamber door.
`'Tis some visitor,' I muttered, `tapping at my chamber door -
Only this, and nothing more.'
Ah, distinctly I remember it was in the bleak December,
And each separate dying ember wrought its ghost upon the floor.
Eagerly I wished the morrow; - vainly I had sought to borrow
From my books surcease of sorrow - sorrow for the lost Lenore -
For the rare and radiant maiden whom the angels named Lenore -
Nameless here for evermore.
And the silken sad uncertain rustling of each purple curtain
Thrilled me - filled me with fantastic terrors never felt before;
So that now, to still the beating of my heart, I stood repeating
`'Tis some visitor entreating entrance at my chamber door -
Some late visitor entreating entrance at my chamber door; -
This it is, and nothing more,'
Presently my soul grew stronger; hesitating then no longer,
`Sir,' said I, `or Madam, truly your forgiveness I implore;
But the fact is I was napping, and so gently you came rapping,
And so faintly you came tapping, tapping at my chamber door,
That I scarce was sure I heard you' - here I opened wide the door; -
Darkness there, and nothing more.”
Edgar Allen Poe – poet – 1809-1849
Saturday’s NH meeting at Newbury, sponsored by Betfair
was the last serious trials meeting ahead of the Cheltenham Festival, which
starts on 11th March 2013. The racing on offer was quality fayre, as
it always is, despite the cold dank and miserable weather. Perhaps we
missed a ‘Bob’s Worth’, a ‘Long Run’ or a ‘Sprinter Sacre’ to stretch their
limbs in a major dress rehearsal. Nonetheless I think we saw one and
probably 2 festival winners. It is hard to flag up anything to beat ‘Your
Tent or Mine’ in the ‘Supreme Novices Hurdle.’ He never came off the
bridle in the hands of the champion, AP McCoy to win a competitive ‘Betfair
Hurdle (Schweppes) with his head in his chest pulling the proverbial train!
As for ‘Silvianaco Conti’, he won’t be far away in the
Gold Cup up against the two Henderson ‘hot-pots’ and ‘Sir Deschamps’ and
‘Fleminstar’, who both looked pedestrian at Leopardstown in the
Hennessey. In fairness it was not a truly run race, so maybe when they go
‘lickety-split’ around Prestbury Park on 15th March we may see them
as worthy contenders, but they won’t be carrying my love, understanding and
more to the point my money!
So PM David Cameron was triumphant at last week’s EU
marathon 26 hour meeting with an unlikely ally in Chancellor Merkel, in beating
other profligate member countries, particularly France and its Mediterranean
neighbours, in to submission, by having the EU budget cut by 3.3% over the next
7 years (2014-2020) – down from €1.033 trillion to €960 billion. However
will this victory be of a ‘Pyrrhic’ nature? The UK’s contribution, thanks
to over-zealous and reckless negotiations by T Blair eight years ago, will go
up! – Something the UK electorate may not thank him for. Also France managed to
gain acquiescence for an extra billion for France’s CAP budget, which was
absolutely ‘integral’ in smoothing over President Hollande’s seriously damaged
reputation. In final analysis, the agreement is not ‘done & dusted!’
Getting the cuts agreed by the EU Parliament will be no ‘Sunday Afternoon
picnic!’
A combination of uncertainty over Italy’s election,
allegations of corruption by Spain’s PM Rajoy, concern over the EU budget, very
flaky economic EU data, despite the usual reassuring rhetoric from the ECB’s
Mario Draghi and mixed 4th quarter US earnings contributed to global
equity markets bobbing around uncomfortably like corks in a bath. Last
week the DOW eased by a modest 0.1%, the S&P 500 gained +0.3% and the
NASDAQ +0.5%. However decent export data from China (exports +25% in
December) and an improving US trade deficit helped to restore some equilibrium
and poise to US and Asian markets. The FTSE surrendered 1.3%, thanks to mining
stocks, oil and energy and banks surrendering recent gains due to adverse
publicity. European stocks surrendering 0.5% in the same period.
The NIKKEI, after a fabulous run since Christmas, gave back -0.3% last week.
Gold was friendless in the ring at $1668 an ounce. The Euro fell sharply
against the Dollar from $1.3585 to $1.3350. The Yen continued to be week
at Y92 to the Greenback, which helped exporters. Brent crude was
resilient at $119 a barrel.
Last week the financial headlines were dominated by
banking, much of them surrounded by testimony given by Antonio Horta Osorio of
Lloyds Banking Group last Monday, the obsequious Sir David Walker and the ‘mea
culpa’ of Antony Jenkins of Barclays on Tuesday, Douglas Flint and the
extremely robust Stuart Gulliver of HSBC on Wednesday. Since these high profile
meetings it has become clear that Antony Jenkins intends to shrink Barclays
Capital head count by 2000 to bury the Diamond legacy without trace. We need to
remember that Barclays Capital contributed between 40% and 60% of profits in
the last 10 years. I hope there are some contingency plans. Barclays is
also likely to close its ‘Structured Capital Markets division’ – a tax
avoidance unit. Tuesday’s results should make interesting reading!
On Thursday, few could control their excitement at the
prospect of Mark Carney setting down his visionary stall in terms of his plans
as his role as Governor of the Bank of England in terms of monetary and fiscal
policy. So much is expected of Mr Carney, the debonair, matinee idol
looking ex-Goldman and Governor of the Bank of Canada. May I remind everyone
that he is human! I am told he has blood in his veins and that he
breathes air. Contrary to public opinion he is incapable of turning the
earth on its axis. It should also not be forgotten that he adopted the
policies, which had been implemented by his predecessor, David Dodge. It is
also fair to say that Canada is a country next to the US, which is rich in
natural resources, unlike the UK. So to expect the same results in the UK
that were achieved in Canada is unrealistic. We must get behind Mr Carney,
of course. He is well liked; otherwise he would not be chairing the
Financial Stability Committee of global Central banks. However in closing on
this subject how sad it is that the Chancellor could not find ONE British
person out of 60 million to take over from Sir Mervyn King! What an
indictment!
The Treasury Select Committee did not give UK bank
executives a comfortable ride; nor perhaps should they in the circumstances in
the wake of miss-selling, money laundering, LIBOR manipulations, particularly
as we enter the bonus season. However before commenting, let wait to hear what
Sir Philip Hampton and Stephen Hester have to say on Monday. It should be a
high octane occasion with rumours abounding that Stephen Hester may accept a
£780k bonus. I must confess that if David Ruffley, Andrea Leadson, Pat McFadden
and John Mann were not so unbelievably unpleasant and rude they would glean far
more information that would benefit the TSC and the public at large. The scoop
of the last two weeks on banking must surely go to Jim Moore of the Independent
– He told us that “The
Financial Services Authority ordered banks to review all sales, after a survey
found that more than 90 per cent included in the review breached at least one
of its rules. But it has emerged that swaps of £10m and above will be
excluded, exempting the banks from compensating companies that took them
out.
There were some splendid nuggets of news last week.
Burberry saw the departure of the hugely respected Stacey Cartwright as finance
director of Burberry. I wonder if it was handbags at 10 paces with Angela
Ahrendts? John Smith of BBC Worldwide has been appointed as COO. Peugeot posted
a €4 billion one-off write-down – twice the value of its current capital – such
is the poor state of the French car market. Sales have fallen 13% last quarter
and 5% last year. Despite a 0.3% dip in GDP and 2.7% inflation the UK may
avoid a triple dip thanks to exports increasing by 2% last month. Warner Music
looks to have picked up a snip – Parlaphone for $487million (Cold Play &
David Guetta) thanks to Universal Music being forced to allow the deal when
buying EMI for £1.2 billion.
This coming week the number of companies reporting
results will be easing - US EARNINGS – Monday – LOEW’S, Wednesday – DEAN FOODS,
DEERE & CO, METLIFE, Thursday – MOLSON COORS, Friday – KRAFT. In the
UK the following step up to the plate – Monday – ESSAR ENERGY (TS), Tuesday –
BARCLAYS, Wednesday – TULLOW OIL, RECKITT BENCKISER, AFRICAN BARRICK GOLD,
Thursday – ROLLS ROYVE, AMEC, RIO TINTO, MANCHESTER UNITED, Friday – ANGLO
AMERICAN.
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