All my favourite words start with F !

Abide with me, fast falls the eventide

The darkness deepens Lord, with me abide

When other helpers fail and comforts flee

Help of the helpless, oh, abide with me

Henry Francis Lyte / Will Henry Monk

By Richard Matthews May 20th 2018

I have been thinking a lot about my late father this week. I often think about him when I’m in The City as he spent most of his working life in and around Ludgate Hill but this week it was the approach of the Cup Final that got me remembering. Not because he was a Chelsea supporter, although like me when it comes down to it and a London team is playing he would support them, but because he just loved football and adored the whole day of the Final. From breakfast onward the television would be on and filled with the build up to the kick off and 3.00. From David Coleman presenting live shots of the façade of the hotel whilst telling the viewers what the players were having for breakfast through ”Jeux sans frontiers” Cup Final special to the team coach we both loved it. The real highlight was to spend the day with him and go.

Luckily we went to several finals together and suffered together the indignity of losing 3-1 to Swindon in 1969 (I know it was only the league cup but it still hurt) and the high of beating Liverpool in 1971 a day that we would never forget. He loved the game but also the ,marching band of Marines at half time, when he would stand stock still and although he never said anything he was clearly remembering lost friends but more than anything he loved the singing of the National Anthem and “Abide With Me”. We sung “Abide With Me” at his funeral and it never fails to move me, I confess I had a tear in my eye yesterday when I listened to it being sung and remembered him and indeed my late father in law whom I watched the last Cup Final with. I was surrounded by rowdy family who didn’t know the significance to me but they reminded me that life goes on. My father was a quiet man not adverse to dishing out the occasional clip round the ear, as he would say, but he was a man who worked his way from the depths of Docklands, in the Isle of Dogs, to a successful career and I’m sure he gave up much of his life to educate his family and give us a better start in life than he had.

Every year he would take two weeks holiday and we would fly to Pisa, in Italy, normally arriving in the middle of the night on a cheap flight and of course the hotel would be shut so we would sleep in the garden. This was in the days of exchange control and if my memory serves me well the airport in Pisa was still under US military control when we first went in 1960. We would take a packet of porridge for the hotel owner, Signor Bandinelli. Odd you may think but he had been a prisoner of war in Scotland and developed a taste for it. The holiday consisted of lovely long days on a beach with warm water and treats of an Ice Cream and occasionally a hot slice of Pizza. I can still see the old man with a pith helmet who lugged a huge heated box along the beach or maybe Bomboloni or fresh Coconut as a snack. I developed a deep love for Italy and indeed in my early teens for a beautiful girl that played football on the beach which led me to buy the Dino I wrote about last week and its subsequent theft.

What a sense of achievement my father must have felt from learning to swim in The Thames in the time of the First World War to taking his family to swim in the beautiful warm Ligurian Sea.

That’s four words starting with F then. Father, football, Ferrari and Forte dei Marmi. My favourite word starting with F is of course the word the rhymes with duck. A word I hardly used before working as a broker but quickly learnt that it has extraordinary wide use and is indeed one of only two words that can be used as a noun , adjective and verb. The other of course rhymes with the pre Euro currency of Ireland. Let us be clear here it’s a word that I never heard my father utter although he must have thought it on many occasions at Highbury, particularly when Willie Young was playing, but using its past participle ( F***ed for those not educated !) is how Italian politics now appears to me .

I’ve written several times how the Italian elections may prove a watershed point in both their own future but also Europe’s. A country that has had 65 leaders since the war is not sending out the right signs of stability and sooner or later this had to come to a head and implode. The impending unholy coalition of extreme left and right populist parties which I keep seeing as a horse-shoe is all of a sudden almost, and may indeed be by the time this is published, a reality. Never mind has been the attitude towards this, Italy will muddle through it always does. Emboldened by the failure of Le Pen and other populist leaders the markets have ignored for too long the real chance that this time Italy was going to be different.

The BTP/Bund spread widened as I have predicted but actually why would you buy Bunds any more than BTPs? Be under no illusion the policies which are coming out from the two parties threaten all of Europe. With Merkel weakened in Germany and now the target, rightly in my opinion, of Trump’s disdain due to their unwillingness to make the 2% NATO contribution that they should and Macron fighting battles at home the Euro looks very vulnerable and with noises off from Italy I would be wary of holding any Euro paper, Bonds or Stocks. As Bond yields increase in the US the trade must surely be to buy Dollars and watch yields increase. We have almost a virtuous circle as I have described recently. The Dollar rises in value as there is a flight to quality, money floods in and companies create new jobs which can’t be filled which causes wage inflation and interest rate rises and guess what? The Dollar rises some more as the 10yr yield rises. Easy when you know how, they say ……..

Richard Matthews, who began in career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5

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