Dusk is here

Shadows are falling and I’ve been here all day
It’s too hot to sleep, time is running away
Feel like my soul has turned into steel
I’ve still got the scars that the sun didn’t heal
There’s not even room enough to be anywhere
It’s not dark yet, but it’s getting there

Its so tough to lose a parent and each one is as hard as the previous , I guess everyone knows that but what I was not prepared for was the pain of losing the parents of my wife . Odd really as the in-laws are always painted as being the enemy . Now that’s not to say that I haven’t had my issues but on reflection I was in the wrong and deserved to be pulled up.

There isn’t a word to describe the last days or moments when the family is gathered around the bed as the relative passes from this world to the next . There should be . I experienced this yesterday and the warmth and love in the warm was quite extraordinary . Those days when everyone pulls together to help ease the pain of each other and the assauge the spirit before it goes to a better place

I spent when seemed like hours with my father as the rattle increased and the breathing decreased to be rewarded by him raising a weak arm to pull my head to his chest and whisper to me one last time . This memory still brings tears to my eyes but will stay with me till its my turn .

Now my wife’s father stands at the door surrounded by the love of his children and family . He will soon pass and then the love of a country will help him on his way .

An extraordinary man who has brought extraordinary love to a country.

God Bless

A bit of advice from Canned Heat

Together we stand, divided we fall
Come on now people, let’s get on the ball and work together
Come on, come on let’s work together, now now people
Because together we will stand, every boy every girl and a man

Before when things go wrong, as they sometimes will
And the road you travel, it stays all uphill
Let’s work together, come on, come on, let’s work together
You know together we will stand, every boy, girl, woman and a man

United we stand divided we fall .

Viewing the world through the prism that living and working in London forces you to, no serious questions would be asked about your mental health if you stated that the UK is a more divided nation than at any time in the last 100 years. The North and South, Young and Old, Left and Right and any combination thereof all appear to have issues with each other which are sadly often stirred by political ambition. These divides are often most manifest when Brexit is discussed and the tangles that all the political parties get into over this subject are sadly a microcosm of British society at this present time. Britain is presented by its detractor’s as a basket case and in a perilously weak position when it comes to negotiating its exit from Europe.

As the UK recovers from a bruising election, terrorism and domestic disasters it’s seems timely to take a step back and look at whether Europe is really as united as it appears? Youth unemployment remains persistently high with levels in Italy, Greece and Spain above 40% and France almost 25%, all much higher than the UK figure of 13% .There remains areas of political risk and upheaval most notably, quelle surprise, in Italy and Greece. Poland and Hungary remain stubbornly opposed to allowing refugees into their countries and openly defy Frau Merkel’s obdurate wishes who herself appears to be starting to regret her open door policy. At the start of the year France was seen as the biggest political threat to European stability. However Macron, the markets favourite, won and with a friendly parliament the question is can he now force through the much needed changes to labour laws and practices in France

In one of his first acts as French President Emmanuel Macron called a special congress by gathering both houses of parliament in the palace of Versailles and attempted, by invoking the spirit of Charles de Gaulle and calling for a “French renaissance”, to reignite France’s glories. In his much criticised official photograph he appears to present himself as the centre of the world and has earned the nickname Jupiter a moniker that King Louis XIV used. His PR, albeit a little fanciful for this Brit, is terrific but the real question has anything really changed and can he cut the mustard with the unions whose labour laws he must reform? Within days of the formation of the new parliament four ministers were forced to resign to avoid various scandals so no real change there and with the unions flexing their muscles it will be a tough call for him to succeed in making France a country of entrepreneurs or any more attractive to international companies than it is now.

If France was the only country facing a tricky political route Europe could be viewed as a positive area but with the Netherlands unable to form a government , Catalonia calling for a referendum on independence , Greece mired in debt and Italian politics as challenging as ever are the silent majority really as content as they appear? Italy has suffered more than the rest of Europe by being the destination of choice for fleeing immigrants and refugees. The social care system is creaking and with comedian Beppe Grillo’s Five Star part deemed incompetent by a chunk of the Italian electorate and many disappointed with the PD of Matteo Renzi, Silvio Berlusconi’s centre-right could be set for an unlikely comeback with all the attendant baggage that would bring.

Immigration into Europe is a political hot potato and stirs enormously strong emotions with many attitudes being born from the horrific experiences of the Second World War. Angela Merkel’s , ill-conceived knee jerk reaction to let everyone in is having  and will continue to have a profound effect on European and German life and its impossible not to equate her actions with a sense of Germanic guilt. The cultural, social and economic impact of such a large movement of people will take years to analyse but in the short term the impact on European unity is striking. Austria is closing and fortifying its boarders, Poland and Hungary stand steadfast against allowing any immigrants at all and as a consequence Frau Merkel now wishes to take them to court.

At present there are three times as many European workers resident in the UK than British workers resident in Europe and the EU runs a E120bln trade surplus with the UK which makes one wonder at the hard line stance that Europe is taking. Europe is presented as a bastion of free trade but by demanding that the UK can only have free trade by accepting the right of migrants to settle and claim benefits regardless of their skills makes nonsense of the phrase “Free Trade “. Further evidence of how the presentation of a European unity is a sham comes with the admission, delivered as an obstacle by lead EU negotiator Barnier, that there are 30,000 regulations to be overcome. A community cannot possibly be unified with that number of special regulations and by their very tough stance the leaders of the EU are showing their real fears. Away from the bluster of the politicians Britain and Europe seem equally fragile and the currencies should continue to reflect this and they will mirror the day to day negotiations for the foreseeable future but a point to remember is the worry at the back of the European leader’s minds is not a fear of Britain succeeding but that other countries see the success and follow.




Difference Cheques

You may be an ambassador to England or France
You may like to gamble, you might like to dance
You may be the heavyweight champion of the world
You may be a socialite with a long string of pearls
But you’re gonna have to serve somebody, yes
Indeed you’re gonna have to serve somebody
Well, it may be the devil or it may be the Lord
But you’re gonna have to serve somebody
Bob Dylan

Difference cheques to “The Cartel”

With three former traders, the self-styled  ”Cartel” from JPMorgan Chase, Barclays and Citigroup appearing in a Manhattan court accused of market rigging and facing hefty fines and possible imprisonment if found guilty, it seems an opportune moment to cast a glance over historical regulation in this area, what has changed in the markets and whether new initiatives such as the BIS code of conduct for Foreign Exchange trading will change attitudes.

From the inception of the Foreign Exchange markets, and indeed the interest rate markets, until the introduction of futures, CFDs and spread betting the participants were a relatively small number of people. In the 80s and 90s there were in excess of 300 banks in the City of London trading through 26 money brokers as well as a handful of the treasury departments at the largest corporates such as BP, Shell and British Airways. The major participants were pretty much the same through every trading centre in the world with the attendant power that this situation endorsed. I was well aware as a young broker that if I upset BNP, for example, in London the repercussions would be felt throughout the world for the broker (RP Martin) who had the misfortune to employ me.

The ways that you could upset a bank dealer were numerous and often bizarre. They ranged from not showing enough respect through to supporting the wrong football team but by far the most serious was not standing by a price that you made. In the brave new world of electronic trading this may be hard to comprehend so a little explanation of how the markets used to function in the days of voice broking follows! Simply a bank would ask me a price in a specific instrument (be it a spot price, CD or deposit) and I would be obliged to make a two way dealing price with an amount specified. In laymans terms we were obliged to quote a buying and selling price to that bank in a specified amount. Not difficult really until you factor in that you had to deal on that price and if you couldn’t, for whatever reason, you were obliged to pay the bank the difference between what you had quoted and what you dealt at. I can still hear dealers shouting “cheque book” before slamming the phone down. Too many difference cheques or a really bad price and the dealer would punish you by “taking the line out” in other words they would simply refuse to answer your calls for a specified time, sometimes a week sometimes months.

If this happened too many times the Bank of England would have a quiet but firm word with the powers that be in the money brokers or as importantly at the offending Bank. We all needed each other to make the market function in an orderly manner. Be assured that to have your knuckles rapped by the Bank of England hurt and not only hurt your pride. All the participants knew their role and “place” even to the point where brokers ran A and B desks and depending on the size and frequency that the banks traded they were graded onto the appropriate desk. By operating this self-regulation, where the Bank of England held sway, the markets were kept honest and very, very few abuses occurred. What abuses there were, were quickly and quietly dealt with. Move on to the opening up of the markets to thousands of participants caused by the introduction of consumer friendly instruments, one could almost say expanding the gambling industries tools, and the world of self-regulation is as arcane as a fax machine.

It is indeed a world which is unrecognisable from 25 years ago both in terms of participants, volumes  and regulation but will the introduction of the BIS voluntary code of conduct in the FX market and regulations such as those in MiFID II really improve the markets and stop abuse? Richard Seaman, industry compliance veteran thinks that the code will go some way to restoring the public’s faith in the foreign exchange markets. He told me “The 55 principles, whilst not designed to replace local laws have been compiled with consultation and input from major participants globally. Central Banks are expecting  much higher ethical standards to become common place although as in any new initiative the ‘tone from the top’ of a firm will be vital in ensuring that the code of conduct is properly adopted and fit for purpose.” He continued “with the MiFID II best execution requirements coming into force at the beginning of 2018, firms will have to change much of their current infrastructure to fully comply.” Interestingly none of the other 6 market participants I asked for quotes could think of any worthwhile changes that these codes and rules will bring. Not finding anything comment worthy is not to say that the changes are not needed or worthwhile but that generally the markets are in pretty good shape but that is not to say that ways round rules will be found! There are however areas that the regulators should be paying much closer attention to such as the mis-selling of Binary options to a gullible public that are a scandal which I will look at more closely in my next column .