Reasons to be cheerful, one, two, three,Yes, yes, dear, dear ,Perhaps next year – Ian Dury


A year ago the world waited nervously for the inauguration of Donald Trump to see what sort of presidency he would bring and as I wrote at the time his unpredictability may well prove to be his greatest asset. It’s interesting to see that indeed this trait, especially on Twitter, has infuriated the mainstream press and indeed the political establishment. Whether it’s tough talking to the fat kid in North Korea or criticism of the UK it is very hard to read his motives. Or is it? What you see on the label is what you get in the jar and it’s the contents which are so often unpalatable to the career politicians and journalists.

What is beyond doubt is that Wall Street, or more accurately the stock markets, have loved him. Many a time this year I have said “this is the top” of the market, thankfully normally privately, and yet the market has ignored all sages and carried on up regardless. In fact it has not only consistently made new highs it has cracked its own records of records. As I write this the Dow has broken new 1000 point milestone highs four times this year and if it finishes the year at 25,000 plus that would be five, yes five, thousand point gains in a year. As of today it has had 67 new highs in the year and finished ahead eight months in a row, the first time since 1995 that it has managed to do this. The Dow closed on 3rd January 2017 at 19,881.76 and despite the fact that it’s been driven by relatively few stocks it’s an awesome move. I wonder though if Trump’s tax changes will be the final piece of good news, just remember buy the rumour sell the fact. I wrote a year ago” buckle up for a bumpy ride” and if I was you I wouldn’t reach for the buckle just yet as I feel that the flattening of the 10yr -2yr yield curve is telling us something unpleasant.

Looking back over the year I also alluded to the rise of populism. At the time I thought that there was a real chance of some political upsets in Europe most likely in France and Italy. In France the outsider Macron was elected easily beating my tip Le Pen on many a promise of reform but already he seems to be struggling with this as well as with his own party where 100 party ,members are threatening to resign. I didn’t see though that Merkel would be unable to form a government or just how badly Theresa May could run an election campaign. Italy, of course, is Italy and whether its Beppe Grillo or Silvio Berlusconi it appears that their politics will continue to entertain. Populism is often used as a label by the “elite” to sneer at popular opinion as it turns against their arrogance. Sadly the feelings of frustration are being expressed in the rise of extreme politics, and politicians, and sadly the reality is now that Austria has a powerful far right element in its government. The powers that be in Europe continue on their course of federalism and ignore the voice of the people, whether they be in the U.K., Catalonia or Poland. Dangerous times indeed and increasingly it feels like the lights are starting to dim in Europe and the lessons of the thirties are being ignored.

Looking forward I have been trying to get an old Ian Dury song “ Reasons to Cheerful , Number Three” out of my head. It’s really an early rap song, not typical of Ian Dury at all, and consists of a list of his favourite things in life from Jon Coltrane’s soprano to British Motorcycles. An eclectic amusing song that has had me trying to think of reasons to be cheerful, sadly what I keep going back to are reasons to be fearful. So in keeping, vaguely with the song, here are firstly my Reasons to be Fearful , one , two , three.

Reason one to be fearful is the bursting of assets bubbles. With every day that the price of Bitcoin gyrates upwards we come closer to a major pullback. This is a fact, end of story. Nothing has such a steep rise, as Bitcoin has had, without a setback. If you look across assets everything from Fine Art, Equities to Bonds look overinflated. I am too long in the tooth , those that are left anyway, to want to predict when this will happen but happen it will and just hope that one pop doesn’t lead to the next pop because if it does we will see the opposite of good money chasing bad and the mother of all recessions. Is this what the US yield curve is telling us? Be afraid, very afraid if it inverts as we all know that the last seven times it has done this a deep recession has followed,

Reason two is the developing situation, which I wrote about recently, in Poland and other parts Eastern Europe. How much of the rise of the right in Poland and the political problems in The Ukraine are inspired by Putin is impossible to know but in my humble opinion it is much more likely than Russia interfering in the US or UK elections or indeed cutting underwater communication cables. Not only more likely but much easier. Europe moves inexorably towards the creation of a federalist state with aspirations towards a European Army whilst Eastern European countries move increasingly out of line with Western European policies. That sounds a bit familiar; I mean what could possibly go wrong?

Reason three is one name. Corbyn. I am going to assume that the majority of my readers understand the real threat that Corbyn, or more accurately his puppeteers represent to not only to the economy of the UK but also to its democracy. I for one, feel very uncomfortable when my grandchildren tell me what a lovely man he is and that their teachers all love him. Be under no illusion there is a sinister undertone to far left and there is a very real danger he could get into power.

So three reasons to be fearful but as New Year approaches but I can’t possibly end on such a down note! I have scratched my head to find some cheer and in doing so I have returned to Ian Dury’s song. In it there are many, many reasons given to be cheerful some very personal and some too rude to transcribe but my favourites and I am sure no one will disagree with these three are Harpo, Groucho and Chico. That’s three reasons to smile. The strongest reason for optimism , though, is that all though I’ve been close on my predictions in the last year I have very rarely spot on and I hope my pessimism in this column is misplaced and my reasons to be fearful are overdone.

I can now hear the closing bell for the year so firstly thanks for reading, I hope I have amused you and made you think on occasions. More importantly I wish you all a happy, prosperous and safe New Year.

Reflections on Christmas Past


By Richard Matthews 22nd December

The year-end approaches and I feel it’s only right to borrow a couple of traditions from Europe as they have given me so much to write about this year. In the Spanish world Christmas is celebrated by Noche Buena  and New Year’s eve is called Noche Vieja. In honour of this and my European friends, my final two columns of the year will reflect these two nights. Noche Buena, or Christmas eve, celebrates the good that is about to come to this earth and is traditionally a night for stories so I am going to dip back into my memory and remember what Christmas was like in the City in days gone by .

My first Christmas at work came in 1973 and I was a fresh faced innocent, yes I was, young broker at Phillips and Drew. P and D as it was known by all and sundry was a blue blooded stockbroker and one of the top names in the City. It was a very traditional broker and we wore starched collars, short hair and polished shoes. Anyone that strayed from this path didn’t last long. My first Christmas I had only been at the company for three months and was earning the grand sum of £1250 per annum – that’s inflation for you! I didn’t dream about a bonus, those came years later, all I remember was being petrified off getting too drunk at the Christmas party and making a fool of myself. I can’t remember the Christmas party, I kept my job so I can’t have been that drunk but I do remember staggering home with a Turkey. Now I didn’t find the Turkey on the tube it was the Christmas gift, a Turkey or a bottle of Port, from the partners. Very generous I hear but I do remember being told, after sharing a lift with the senior partner, that he had just earnt £5 in the minute that the lift had taken to go down the six floors. Do the math.

Flash forward 20 years, well if Charles Dickens can I can, and I remember the heady days of the floor and the excess that came with the success. The barmy parties that we held when we hired out The Grand in Brighton or the Belfry in Birmingham. I will not go into the detail of beds flying from windows, doors being taken off hinges  or cars being carried into lobbies because despite them all being true it’s not fair to name names – is it Wilko? Oops- hey ho, he won’t mind. Funnily enough the story and image that sticks in my mind is Harry The Horse dressing up as Santa Claus and taking a collection bucket around the floor where we had to empty our pockets to fill it. Ouch, but it was all in a good cause and hats off to the great Steve Harrigan for doing this.

The stories of these parties are legion and I am sure all of us can tell some but the funniest story that I can remember occurred in the run up to one of the Christmas dinners. Certainly some of my readers will remember this, possibly even the editor, but to protect the innocent I’m going to change names slightly. As always when organising these dinners a runner would be assigned with the job of ringing around a few restaurants and getting availability and menu prices. The runner I am thinking of had the nickname of Deutsche Mark and lovely man that he is he could never be accused of concentrating too hard. On this particular occasion he had found a restaurant and was going through the menu when he got onto the subject of the main course. The restaurateur said something along the lines of “ We have Salmon , Turkey or Venison “ to which Deutsche Mark asked “ What’s Venison “ the restaurateur answered  “It’s Deer “ to which the reply came “ Don’t worry about the cost as Steve, the boss,  is paying “. True.

I am going to close with a little plea, I am not dressing up as Harry The Horse did all those years ago but I am going to ask you to think of those less fortunate than ourselves. However good or bad your year has been there are those who are worse off. Please think for a minute of the homeless that live on the streets that have next to nothing to give them comfort . When you see these people don’t just give them money please ask them what they need. I support one organisation that helps, it’s called  Dogs on The Street. Just pause and think who looks after the dogs that the homeless have with them? These dogs are often their last friend and only source of companionship and warmth. Dogs on the Street is a not for profit organisation that supply food, clothes and Vet care to these dogs. Now if my story about Deutsche Mark and Venison has made you smile please,please give a little help to DOTS (their details are at the bottom of this page) and by helping others you will really join in the spirit of Christmas.

Where ever you are, whatever your religion have a good Christmas!

From Hampstead Lane to Downing Street


When I was young anything at school that was unpleasant was sold to pupil and patent as character building. A different world from now, a world where the phrases “I don’t like or I can’t “didn’t exist. Don’t like the food? Tough; eat it or go hungry. Don’t like cold showers? Tough, stay muddy. What all this discipline did apart from prepare you for life did was teach you to find solutions. Solutions to problems. One of these problems was my vehement dislike of cross country running – I loved all other sport but for some reason running for running’s sake on a cold day held little appeal. To avoid this I used to sprint off at breakneck speed, get ahead of the pack and hide out in a friend’s house till I could see the bedraggled troop returning at which point would liberally smear myself with mud and nip out into the tail. True story, actually one of the readers of this column can verify as he was at school with me. True or false Richard? Richard was a great runner and layer became a compliance officer whilst I became a broker, I wonder if there is a link there?

I thought of this whilst I watched Theresa May’s trials and tribulations recently. She was so weakened, partly by her own party and partly by the meddling of Euro Politicians it looked like she could not recover. Yet recover she did. From such a weak position she garnered strength and put together what seems to be a clever deal with Europe. By agreeing to move on to stage two of the negotiations with a capped payment of about €50m she has suddenly got to hold a decent hand of cards.

The pro remain press may not agree but by agreeing the top of the price the UK is going to pay its very hard , if not impossible, for Europe to up this price and with the UK a net importer from the UK all of a sudden the negotiations look more balanced in the UK’s favour. The defeat of the government last week again heralded as a major setback by the reamainers is no such thing. What is not reported is that if the final deal goes to a vote and it’s rejected by Parliament the UK will walk away with no deal and no payment to Europe. Europe has already stated it won’t renegotiate so there we have it. Every reason for Europe to negotiate a good deal as they are desperate for the €50m cash, indeed some reports suggest that they will go bankrupt without the cash . Remember they can’t borrow.

Why this scenario is not reported by the mainstream press and media remains a puzzle but trust me her position is stronger than it has been for months, certainly since the election. The backstabbers in her party have had their day in the sun by defeating her in Parliament but will now back away as they fear an election , the Labour party changes its position on Europe every day and has no, let alone consistent, policy. When questioned a leading Labour spokesperson (I am being deliberately politically correct here) Angela Rayner said “more employment and economic growth “. As shadow education secretary you would think she would know the difference between an ambition and a policy.

Many a bad day will come again for Theresa May that’s for certain but her very weakness has been turned to strength. I wonder if she was made to go cross country running as a youngster and found a way round it and remembered this in the dark hours that she faced last week. If overcoming adversity is character building one thing for certain is that being Prime Minister’s character must be enormous.

We live in extraordinary times with strange days. Strange days indeed where weakness is strength. A parliament where Remainers strike a victory for a soft Brexit by revolting against their own party which in turns gives hard Brexiteers the opportunity to ensure a no deal exit…if they in turn vote against the government. Heroes to villains and back again. Pass the looking glass, Alice I think I need it.

Poland – the latest naughty Child


Anyone who regularly reads my columns knows I’m a great proponent of democracy, freedom of speech and the self-determination of people. I worry when a “ruling body” becomes overly oppressive and dictatorial, and I am worried now. I’m worried at the hard line stance Europe increasingly seems to be taking.

The problems in Catalonia rumble on whilst political prisoners are held in Madrid. With Article 155 invoked, the autocratic rule of Europe’s puppet Spanish Prime Minister Mariano Rajoy is being strengthened. Be under no illusions: he is a puppet – without the support of Europe Spain’s economy would collapse. So he dances to the tune that they play. The crisis in Spain is well off the front pages, somewhere between celebrity gossip and sport.


That’s where you might also find what is happening in Poland. Poland, that beacon of anti-communist hope where free elections 30 years ago preceded and emboldened the fight for the fall of the Berlin Wall. Poland has taken a fierce turn to the right, and along with Hungary, not scared of courting controversy.

Poland has become increasingly dictatorial since the election of the far-right government led by Prime Minister Beata Szydlo and President Duda. The government has been interfering in the judiciary, never a good sign, and is also fiercely anti-immigration. So how does the ruling body of Europe react? It starts the legal process of Article 7(1).

Article 7(1) is the legal structure to impose sanctions that in the first instance precludes a member from voting in the European Council, which decides the law. A sort of “you are a member but you can’t be involved in the law-making process if we disagree with your politics.” I have had to reread what I’ve written as it seems so unbelievable, but it’s true.

“When you have a centralising force such as Brussels, there will always be tension between independent nation states and integrationist bureaucrats,” said Andrew Rosindell, UK member of parliament (MP) to LiveSquawk News.

Still, Rosindell, a leading Brexit proponent, finds it “astonishing” that the EU reacts by saying Poland is undermining democracy.

“Brussels kept silent on the Catalonia issue, forced countries to vote again for the Lisbon Treaty, and bankrupted southern Europe with the Euro,” he said. “Clearly, the Eurocrats have been furious with the Polish government ever since it refused to take in refugees.”

Various Remainers were approached for their views for this column, but none were willing to be interviewed.


Margaritis Schinas, chief spokesman at the European Commission, told LiveSquawk Brussels was indeed unhappy with Poland’s current political stance.

“The commission is ready to use all tools at its disposal, including Article 7(1) if and when it decides that there is a clear risk of a serious breach of the Rule of Law,” he wrote in a detailed email response to my questions. “The Rule of Law is not optional,” he wrote.

Translated to, I suspect, the Rule of OUR Law is not optional.

While I am in no way condoning the behaviour of Poland or indeed the Catalans, I feel strongly that freedom of speech is a fundamental right and by their actions Europe is suppressing these freedoms.

Apart from my own political feelings why do I feel this is so important? Because I remain more convinced than ever that beneath the smarmy exterior of EC apparatchiks, there are problems as big, if not bigger, than Brexit for them to worry about. Apart from Poland there are the domestic political problems of Germany’s lame-duck Chancellor Angela Merkel, France Emmanuel Macron’s internal problems, and for Spain, not only Catalonia but its simmering pension crises. Europe looks like a big bowl of Matzah ball soup to me.

With Theresa May exploiting her position of weakness, a position where no Tory MP can truly attack as they fear an election, to pull a deal from the fire with Europe the UK is now in the driving seat – a fact you won’t see reported in the Press. I, for one, doff my cap. The UK has capped the payment due at a figure of circa£35bln whilst it negotiates a trade deal. Nota Bene- Europe sells at least £80bln more goods to the UK than we do to them. Do they want to lose this? I’m not suggesting that we want to be as crude as “Do you still want to sell us your BMWs because if so we want the £35bln dropped down a bit” but I am now turning increasingly bullish of Sterling and I would tickle at few longs on board the one thing that I am sure of is to steer well clear of the Bitcoin casino!

Andrew Rosinedell has been The Conservative M.P. for Romford since 2001 as its Member of Parliament.





Bitcoin – a bridge too far?

Bitcoin – a bridge too far?

By Richard Matthews , December 8th 2017

Last night I watched a fascinating programme about one of my great heroes, Isambard Kingdom Brunel, a man who through his mastery of maths and extraordinary imagination revolutionised Great Britain at a time of innovation the like of which we had never seen before, The Industrial Revolution. At present we are in a similar era and since the invention and subsequent widespread adoption of the internet everything in our daily lives has changed from the way we shop, listen to music or bank and trade. Not everything Brunel tried succeeded but he left a legacy including the first tunnel under the Thames built the longest tunnel and widest suspension bridges (all still in use) the biggest steam ship for his time and a bridge that still stands in Maidenhead with the widest arches. All these changes were driven by the invention of steam power and the drive of the railways,

Similar to the widespread acceptance of steam power which changed industry between 1760 and 1840 the internet has changed how we do business indeed, I am now able to write this column surrounded by fields on a beautiful snowy morning in the country. Instead of drawing people into cities as the industrial revolution did the internet revolution has given people the option to work from where they wish to work from. Now I can sit and trade away at home and at least lose money in a comfortable environment and not even have to worry about my train fare home, and boy what a week for trading . Trading Bitcoin that is.

Last week we saw extraordinary changes in the price of Bitcoin as it surged from $11,000 to $16,000 and back down to $13,000. That’s in a week. I suspect that quite a few of my readers are ex LIFFE traders or indeed members of other exchanges workplace social groups. I mention this because there has been a stream of comment on Facebook and the rights and wrongs of Bitcoin for a few weeks now which has increased in tempo  as the price climbs. There are a lot of salient points made regarding Bitcoin but I thought the most telling comment was that “A taxi driver told me that he was borrowing to invest in Bitcoin”. Whether that story was an urban myth or not it reflected the worrying trend that the casino that is Bitcoin is sucking people in. People who are driven by the greed and fear of someone else making easy gains. Every single aspect of a bubble is there now and it doesn’t matter whether it goes to $ 30,000 no commodity, and it is a commodity, with such volatility can be traded and there will be a serious shake out. If you doubt this just look at Silver in the 1980s when Nelson Bunker Hunt tried to corner the market, the real question is what happens then.


I wrote in my last column about bitcoin in August 2017 a month when the price moved from roughly $2700 to $4700 which now seems a long time ago and a relatively small movement compared to a week like last week ( 2nd December to 9th December ) when the price moved from $11,000 to $17,000 and back to $15,000. Extraordinary and despite appearances I have never seen anything like it as not even  I am not old enough to remember Tulipmania. Lest anyone thing that Tulipmania and other bubbles were just for “ mug punters “ remember that Isaac Newton borrowed to invest in the South Sea Bubble and lost everything. Without a doubt a bubble and I am not going to be foolhardy to predict when it bursts.

What the bubble is doing though is drawing attention to these new” currencies” and educating us all on a new way of paying for goods and financing businesses as well as new forms of business . In August when I previously wrote about Bitcoin I was only just about aware what an I.C.O, (Initial coin offering) was and had never herd (I can’t resist a pun) of a server farm. Now they are increasingly talked off and the CBOE and CME are introducing/ has introduced  Bitcoin Futures – which should be an interesting market to watch especially to see how large the open interest grows to as remember there is a finite number of Bitcoins in existence – unlike any other commodity or currency. Foreign Exchange houses are increasingly being drawn into the market and Central Banks are rumoured to be considering issuing e-currencies with Sweden the leading contender to do so. The introduction of a Central Bank backed currency will be the coming of age for this new transactional payment method and will have as big an impact on the world has the internet has had on the High Street. A truly international currency fungible with an underlying FIAT will facilitate huge growth in World trade as transactional costs are dramatically lowered and exchange spreads all but disappear thanks to the blockchain. Transactions will be instantaneous at tiny spreads and all of a sudden Visa and Mastercard charges will disappear as their technology becomes redundant.

Isambard Kingdom Brunel had his failures as well as his successes such as when he tried to introduce atmospherically propelled trains – a great idea but unfortunately not scalable. Like Brunel not all innovations have succeeded in the Internet age from phone operating systems to the early days of streaming and it’s not always the strongest that survive. As I wrote in August it may or may not be Bitcoin that survives but other Cryptos will. As Brunel completed the Box Tunnel in 1841 and first saw light at the other end he must have worried whether it was really daylight or the mythical gorilla with a flashlight. Much the same is happening with Cryptos there is starting to be light with the increasingly widespread understanding of them and trading volumes but is the volatility telling us something we would rather not hear? Are people investing in Bitcoin as a safe haven where money can be secreted away from the authorities prying eyes and in some cases using it to bust sanctions? Its noticeable that Gold isn’t reacting to World events in the way that it has done in the past and Bitcoin investment may be the reason or equally it may be that punters taking a chance on its volatility because Central Banks through QE have destroyed yield and value and there again they may not. Similar to the yield curve movements in China and The U.S. the markets are telling us something and that something is be careful there is a shock coming and the bursting of the Bitcoin bubble will add to our woes.