The Reds are back under the beds!

The Russians are coming, The Russians are coming!

By Richard Matthews November

October is historically seen as a month for stock market upheaval driven by institutional traders finally being back from their long summer breaks to face the slew of corporate earnings and markets that have been puffed up through light volume. Indeed yet another anniversary of the first great crash of modern times passed recently when the thirtieth year since the ’87 dump rolled by. A momentous day of which I have already written and a day which has kept us scribblers happy and in work as we are guaranteed an article about it on a fairly regular basis. If October is the month for market crashes what is it about November that makes fermenting revolutions finally boil over?

A year ago this week a revolution, or what felt like it at the time and on occasions since, took place in America with the election of Donald Trump. I am leaving the reflections on his first year in power toXXXXXX and instead take a look back a bit further in time. In the United Kingdom we celebrate November 5th every year with firework shows and bonfires, on top of which effigies are sat and burnt. When I was a kid we used to make these effigies by stuffing old clothes with straw and go round the streets with them crying “A Penny for The Guy”. The Guy in question was not just slang it was referring to Guy “Guido” Fawkes a Catholic plotter who attempted to blow up Parliament in 1605 as a protest against religious discrimination. There seems something prescient about the date and the problems that the UK Parliament is facing now but there are two more revolutions in November which I think are more noteworthy at present.

In November 1917 Lenin finally let loose the revolution that had been brewing since the Kronstadt sailors rebellions earlier in the year and the Bolsheviks grabbed power in what was to eventually  become a government of unrelenting bloodletting, cruelty and famine for the next seventy two years till another revolution set the oppressed peoples of Eastern Europe free. This revolution is symbolised by the fall of the Berlin wall on 9th November 1989. A remarkable series of calendar coincidences, as a market man I always like to try and create a picture from scraps of news and all I can really think of that drove these revolutions is that in November winter is coming and the fear of cold and hunger pushed people over the edge. But is there a connection between the two Russian revolutions and the election of Donald Trump? An easy narrative indeed is to blame media manipulation by the Russians for his election and this is being followed with vigour by Clinton’s acolytes but as yet little hard evidence has emerged.

We all need someone to blame

Growing up in the early 1960’s we were schooled to fear Russia and the threatened nuclear holocaust and films such as “The Russians are coming, The Russians are coming “played on our fears whilst poking fun at how they were being hyped up. Now again 50 years later it seems that the mainstream media is blaming events that they don’t agree with or can’t fathom on the Russians. Events from Brexit through to the hacking of corporate information are blamed on those pesky Russians using little or no evidence. The ongoing sex and sleaze revelations in the UK Parliament are apparently  inspired by the Russians not the endemic sexism in Parliament where it appears that behaviour more akin to a 1970’s sitcom has been the norm. If this is all a plot to unseat the present government and replace it with the loony left it presumes a level of sophistication that many would say is beyond the KGB.

When I used to miss a trade I would look around and find someone or something to blame for my own shortcomings and normally it would be the closest and easiest thing that got my ire. Often , and I’m sorry David Thomset and Jamie Lear but  it was the runners standing nearest to me that got the sharp edge of my tongue or on rare occasions a telephone thrown at them . I didn’t really look for the real problem (my own idiocy) and it feels like that is happening now enabling the real culprits and the real driving factors to hide. Coincidences and the stories we draw from them drive the markets as they do life and now one sees China with its silk belt of communication threatening to dominate Eurasia whilst America paints Russia and North Korea as the devil to deflect away from its loss of influence in Europe. Spain and Europe blame the Russians for the Catalan Crisis when they should really be looking at themselves. The UK media ignores that the Channel Island based owners of The Daily Telegraph have lost a £1.25bln court case to HMRC and  **is this libellous? looks East for someone to take the blame for the leaks and sleaze emanating from Westminster which could eventually cause the enfeebled Conservative government to fall.

Whether movies imitate life or the other way round I am never really sure but I am sure that although “The Russians are coming” is a slightly dated movie now it still has some great performances, good laughs and makes a relevant point. The plotline is about a Russian submarine running aground off the coast of New England and this mishap being exaggerated until a full scale invasion of America is feared. After all the laughs the point that stays is that rational thinking and actions demand hard evidence and this is true now, more so than ever, in a world and in markets where a rumour becomes fact as soon as it is on Twitter.

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

This column is the opinion of the author and does not necessarily reflect the opinion of LiveSquawk

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