 | Paul Gambles | Recognized as a regional financial expert, Paul is a regular speaker at industry events on market forecasting, financial planning, investing and legal issues for foreigners living or doing business in Asia. Besides Paul’s blog, Paul previously distributed his ‘almost-daily’ email – “Daily Updates”, where he gave his views on timely issues affecting financial markets, macro economics, micro economics and everything in-between. Born in South Yorkshire, England, Paul graduated from the University of Warwick with an Honours degree in English and European Studies. He began his financial career in the early 1980s as a technical inspector at HMIT with Inland Revenue. Following a successful career change to the Bank of Scotland in 1987, Paul moved to Bangkok in 1994 to help set-up an investment counseling practice, which today is known as MBMG International. www.mbmg-international.com |
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1 September 2010 Lord of Finance One recurrent theme of Lords of Finance is how despite their best intentions, the 4 key central bankers were unable to prevent narrow national self-interests from de-railing the global economy and its needs. The French were accused of being debt to an impassioned plea for help from the German ambassador, Dr. Leopld von Hoesch who asked “Did they really want to provoke a revolution in Germany?” Paul Einzig captured the view of many in Europe at that point when he later wrote, “On the ruins of the wealth, prosperity, and stability of other nations, France has succeeded in establishing her much desired politico-financial hegemony over Europe.” Ahmad writes that ‘The American ambassador in Berlin, Frederick Sackett, cabled to Washington that unless Germany received $300 million immediately, it would declare national bankruptcy and default on the $3 billion it owed American banks and investors. George Harrison convened an emergency meeting at the New York Fed with Under Secretary Mills and the two most knowledgeable men on Germany, Owen Young and Parker Gilbert. They concluded it would be throwing good money after bad, when the United States had already contributed $300 million by its moratorium on war debts.’ In an anti-reparations treatise of the time, German Central banker Schacht wrote of “bleeding Germany white” and “destroying Germany’s credit”Ahmed notes that ‘One excerpt in particular was heavily quoted in British and American newspapers: “Never has the incapacity of the economic leaders of the capitalist world so glaringly demonstrated as today….A capitalism which cannot feed the workers of the world has no right to exist.” ’ In 2010, we’re not quite at that point yet – although we weren’t too far from if recently on the streets of Alters!
30 August 2010 Banks, Baht and Beer Money! Living and working abroad has its advantages, none more so than here in Thailand, Sun (outside of the rainy season) Sea and sand plus, the friendly people and the fantastic life that you can have here in Thailand. My family and I have recently moved to Bangkok from the UK. Having worked at HSBC for the past 8yrs and the 12yrs prior to that the Royal Air Force, I feel that my eyes are suddenly wide open to the many wonderful opportunities that living and working abroad can give you.
Offshore banking is a massive perk to living and working abroad, getting your money paid into an offshore bank account free from UK tax is like receiving a bonus every month, but it’s what you do with that bonus that is going to be the main thing.
Working within the HSBC wealth management team, I always felt that I was doing the correct thing for my customer, especially during the turbulent times of the past few years, and of course I was, in my eyes, and the eyes of the UK banking sector. Being offshore has broadened my horizons and showed me that truthfully, ‘there is another way’. I was always told as a young apprentice Financial Planning Manager, the best thing for a customer’s money was on deposit with the bank in some form or another, max out the ISA’s and go from there! It was safe and secure, but did the customers’ money really work for them? The interest rates in the UK for savers are pitiful and not much better for the offshore market either. Central Bank base rates are at all time lows and the GBP has had better and stronger days too. If you had your money, let’s say £100,000, deposited into a 12 month Barclays Wealth offshore bank deposit account 4yrs ago, you may have been getting a rate of interest of 5%, giving you an annual return on your investment of £5000. Today for the same money, in the same account, you would be getting a return of £1420, that’s £118pm. If you’re retired, sooner or later with those kinds of figures, you are going to start eating into your capital Thailand then, suddenly seems more expensive. Ask any retiree who has been here a while, what going from 70-50THB to a Pound has meant to their standard of living, add that with the sudden drop in savings rates and the couple of bottles of Singha beer on a Sunday lunch time may now be just the one! We all know, as its being widely reported over the past couple of years, that the big banks are currently not lending, they are like squirrels storing up for harder times to come, so they are hardly going to try and entice you in with high rates. To get a better rate you would need to go to a smaller bank, maybe in the Euro zone such as one of the Irish banks where you could get a maximum of 3.5%. When the credit crunch hit, the Irish government said that they would guarantee all deposits held within their banking system. Since then we have had the fall of Greece and a lot of the Euro Zone states wobbling, including the Irish, is that guarantee still reliable? If you have your money in an onshore bank account and receive interest income and you are non-resident, then you must look to fill in the relevant R85 (getting your interest without tax taken off) form from the bank or building society or the Inland Revenue. However, if this and any other income that may be derived from the UK, such as rental income, takes you over and above the UK income tax threshold, then one or two things may need to happen. First, sell your UK property, if you haven’t lived as a non-resident for five full tax years, then you may be liable to UK capital gains tax. So the best thing to do is that you should really look to move your money offshore. As I have already said getting a decent return on your savings at a bank is pretty much non-existent, so an alternative must be found. Such an alternative could be a Personal Portfolio Investment Bond, which will allow you to invest in a wide array of assets that will reflect your risk exposure. With Today’s economic climate as it is, emphasis should be placed upon capital protection. You can place your cash in the bank on a fixed 12 month deposit (or longer to get a better rate), but if for some reason you want your cash out now, any interest you may have built up would then be lost due to early withdrawal. With an investment bond you can have up to 90% of your investment from day one, you can make regular withdrawals or one offs. Going back to the UK, you can take 5% of the capital per year for 20yrs or roll up the 5% year on year for 20yrs until you have taken the full capital amount, without paying income tax. More good news is that the interest will carry on being paid gross until a chargeable event happens, such as you withdraw more than the allotted 5% for that year. This means that if you decide to retire back abroad, the bond will become free of UK tax once again. As previously stated, capital preservation is recommended at this time, especially if you’re saving for education fees or it’s your retirement nest egg. The 21st Century fund is a secure, high yielding regular income fund which is hedged into a currency of your choice, using a range of currencies. The fund is Mauritius regulated, mainly comprised of asset backed lending instruments that produce a targeted return of 7%. All of these instruments are very low-risk with assets cover that currently exceed 160% of liabilities. If you’re looking for consistent, above average returns even in volatile markets, If your living and working in Thailand and therefore spending Thai Baht, this is the fund for you, as it helps protect you against currency risk, as it’s available not just in Sterling, but also USD, EUR and THB. 12 Month Deposit Bank/Fund | Deposit Amount | USD | GBP | EUR THB | | Anglo Irish Bank Corp | GBP100,000 | 2.85% | 3.55% | 1.33% N/A | | 21st Century Fund | GBP100,000 | 6.5% | 6.6% | 6.4% 6.8% |
For a full list of all offshore deposit rates in all major currencies please contact us at MBMG In a recent interview with the Telegraph, Michelle Slade of Moneyfacts said: ‘Monthly interest is only available on a third of offshore accounts, leaving savers after a regular income from their money in a difficult position.
‘With rates so low savers are seeing their income depleted and many now have to eat into their capital which only exacerbates the problem’. This is starting to be borne out in a lot of the banks who are removing the offshore arm of their business. Banks such as Northern Rock, Irish Permanent and Yorkshire Building Society, who took over Chelsea Building Society this year, are all making a run for the hills. Northern Rock Guernsey will close its doors on September 2nd this year and as an incentive, it will make a “goodwill” payment equivalent to 10 days’ interest – with a minimum payment of £20 – for those savers who move their money by the deadline. Of course if you are already retired, then it’s the monthly income that you are looking for, an investment bond and 21st Century fund will provide you with this, unlike the majority of the offshore or onshore banking world at the moment. This will give you a regular income on your investment, hedged in to Thai Baht, giving you extra spending power whilst here in Thailand. Even if you want to keep your money in a UK onshore account and need some help with the Inland Revenue forms, or if you want to shop around for the best offshore bank deposit rate bond, then come and speak with me, Antony Bell at MBMG-International, after all ‘there is another way’!
27 August 2010 Today we have a special report from Tim Price – Director PFP Wealth Management and Scott Campbell – Fund Manager MitonOptimal Scott Campbell, Managing Director and Fund Manager THE REALLY REALLY LONG TERM? Some weeks ago we wrote about the high frequency traders needing to rent office space in the stock exchange buildings, as 4 miles down the road was non competitive from a time perspective! Last week we looked at the tactical asset allocation call around the probabilities of a double dip recession. This week it is opportune to review strategic asset allocation and our philosophy based around the Kondratieff inflation / deflation long cycles. In the really long term, equities have and will produce the best real returns, however over the past century there has been two, and we are in the middle of the third, time where developed world equities can produce nothing for 10-15 years. No investor I know has a 100 year time horizon, but then being patient for 15 years is equally rare.  As our Investment Philosophy Seasons chart above highlights, in the winter period of deflation which commenced in the western world during 2000, strategic asset allocation would require a significant overweight to cash, government bonds and gold bullion. Diversification theory requires significant underweight exposure to equities and property in this period. Whilst it is important to note that many emerging markets are in different season and opportunities still abound, the western world is still 70%+ of global stock market capitalisation and economic activity.  However, the above chart for this week’s FT clearly shows that being an eternal gold bug, or only owning bonds and cash forever is also folly. The problem with most funds is that strategic asset allocation is based on 10-20 years worth of data and takes no account of these really really big picture issues. The best example being at the turn of the century after an extremely bullish disinflationary time period and almost all balanced strategic asset allocation was 75% equity / 25% bonds. Patience during the winter deflationary long cycle is very important but equally important is that spring reflation is around the corner which requires a whole new strategic asset allocation. How will we know when we are at that point? Well most balanced strategic asset allocation will be gold, bonds and cash I guess! Tim Price , Director of Investment PFP Wealth Management The going gets tougher “There are times when the burden of taking other people’s money forces you to be active when you dont really have conviction. It gives you a sense of pressure and expectation. When it‟s your own money you don‟t have to do anything.” - Tony James, President of Blackstone, commenting on Stanley Druckenmiller‟s decision to wind up his hedge fund. As reported in The Financial Times. The Investment Commentary will shortly be taking its summer holiday. It will return, on Monday 20th September. As capsule summaries of ‘agency risk’go, the one above takes some beating. As any honest trader will confirm, being forced to be active without conviction is a licence to lose money. Doubly so in such a convictionless market as the one in which investors are now becalmed. Henny Sender‟s article (“The letter that shook hedge funds”) for last Thursday‟s FT cites a hedge fund executive similarly bemoaning the apparent lack of alpha male assuredness in alternative asset management: “Nobody is sending out definitive „this is my view‟ letters these days. Nobody has any conviction. We go through rallies and we go through sell-offs and nothing is well sustained.” Well, tough. Above the noise of the world‟s smallest violin playing on behalf of the hedge fund community, nobody ever promised them, or anyone else, a rose garden. If the author of the anonymous quote above had been a traditional banker, we could at least have gone onto an extended rant about moral hazard, moral bankruptcy, and the sad triumph of a parasitic underclass that has gone on to devour its host and much of the rest of the economy. As it is, all we can suggest is that in such an apparently challenging market, those who can manage risk should now thrive at the expense of the hordes of overpaid chancers who pollute the ranks of the supposedly homogeneous hedge fund sector. The problem is most acute in the world of so-called global macro funds. In more tightly defined strategies, say credit arbitrage, you make the best – and the worst – from the asset universe available. But in global macro the investible universe is pretty much infinite; there is arguably too much choice, if there can be said to be such a thing. And if a lack of conviction were really warranted, each of those choices today essentially represents an opportunity for the active manager to hang
himself. Individual investors may lack conviction, but as we pointed out last week, the markets themselves have no such reservations. Stock markets admittedly seem caught in a state of funk. But bond markets are screaming it from the rooftops: deflation is coming. How else to explain 30 year German government bonds at all-time record yields below 3% ? Or 2 year Treasury notes hovering at 0.5% ? The investment media, of course, have an answer: it’s a bond bubble. But it’s difficult to feel the same way about lending money to „AAA‟-rated governments as most people did about piling into profitless internet businesses 10 years ago selling online petfood. (Interesting, in passing, to recall that Mr. Druckenmiller by all accounts lost a huge amount punting internet stocks. It’s not enough to say it was just a matter of market timing, and mistaking the ninth inning for the eighth. Being late and being wrong can be the same thing.) Yes, it could be a bubble, but “bubble” seems an odd way to describe an asset that most people pursue to preserve rather than expand their wealth. A bit like talking about a “bubble” in saving. Which doesn’t stop the likes of Jeremy Siegel, author of one of the most notorious examples of equity cult fetishism (“Stocks for the long run”), whining about “The Great American Bond Bubble” in the Wall Street
Journal. To take one admittedly extreme example, from the one economy that has endured outright deflation recently, one of the surest ways of losing money throughout the 1990s was by shorting, as opposed to buying, Japanese government bonds as their yields sank, and sank, and sank further. 10 year Japanese government bond yields, 1990-1998 
(Source: Bloomberg LLP) It seems plausible to conclude that there are at least two types of institutional investor – aside from central banks – buying government bonds and who are largely price insensitive. One is pension funds, who have actuarial and liability-driven reasons for doing so. The second is, ironically enough, the banks who were, alongside governments, most complicit in causing the crisis in the first place: as recipients of essentially free, government-sponsored money, parking those proceeds in the government bond market allows them to earn what they would call “riskless” profits – though we know enough about banks by now, and ratings agencies, to treat their definition of “riskless” with a pinch of salt. Japan gets something of a bad press when it comes to its deflationary lost decade. As Richard Koo points out in “The Holy Grail of MacroEconomics: lessons from Japan‟s Great Recession” (John Wiley, 2008), the damage incurred after its property and equity bubble burst in 1989 was worse than that suffered by the US during the Great Depression. Japanese commercial real estate prices fell by 87% from their peak. (As Koo suggests, imagine the effect on the US economy if urban real estate values fell that far.) The loss of wealth from the value of land and shares in Japan came to 1500 trillion Yen. That is three years‟ worth of Japan‟s GDP: “about the largest loss of wealth in human history during peacetime.” By comparison, the loss of wealth in the US during the Depression summed to “just” one year‟s worth of US GDP. Japan really had it bad. And yet, while the US unemployment rate soared to 25% during the Depression, during Japan‟s contraction its own unemployment rate never rose above 5.5%. Cultural hostility to lay-offs no doubt played some role, but a larger role was played by the Japanese government, which stepped in to replace private sector spending, albeit by issuing enormous amounts of government bonds. And yet despite this issuance, Japanese government bond prices never fell. Individuals and banks, rebuilding their shattered balance sheets, bought them. Despite suffering the financial equivalent of an atomic blast, Japanese GDP didn‟t fall during the 1990s. But more to the point, after a colossal collapse in both property and the banking sector, government bond prices can act in somewhat counter-intuitive fashion. The problem facing Western governments is that the policy cupboard is almost bare. Conventional monetary policy is spent: interest rates, particularly policy rates, simply can‟t go any lower. Nor is there ammunition in the fiscal armoury: most governments have now belatedly rediscovered austerity, so there is no realistic prospect of tax cuts, quite the opposite. The only tool left is the unorthodox and last ditch one known as quantitative easing. As Koo points out, this was staggeringly ineffectual in Japan: he calls it “the twenty-first century‟s greatest monetary non-event”. The BoJ implementation of QE at a time of ZIRP (Zero Interest Rate Policy) was “similar to a shopkeeper who, unable to sell more than 100 apples a day at Y100 each, tries stocking his shelves with 1,000 apples and, when that has no effect, adds another 1,000. As long as the price remains the same, there is no reason consumer behaviour should change – sales will remain stuck at about 100 even if the shopkeeper puts 3,000 apples on display. This is essentially the story of quantitative easing, which not only failed to bring about economic recovery [in Japan], but also failed to stop asset prices from falling well into 2003.” In an unnecessary but valiant attempt to placate our earlier anonymous hedge fund executive, here are our views. QE2 looks like a done deal across Western administrations,and we expect it to be comparably as futile as the Japanese found it to be. But it may well sow a sufficiently critical mass of inflationary and currency-destructive seeds to justify, ultimately, inflation protection. In the meantime, government bond markets will remain well bid since deflationary pressures trump any other. We prefer, however, to invest in true quality rather than perceived high quality, and are therefore focused on the most creditworthy sovereign borrowers in the world which happen also to provide excellent yields by comparison to the overcrowded conventional yields available in usual suspect markets like the US, the UK, Germany.. Investment vehicles such as the New Capital Wealthy Nations Bond Fund (investment grade sovereign debt, which yields c. 7%) and Stratton Street’s Renminbi Bond Fund (Asian investment grade sovereign debt with a structural exposure that is long Renminbi and short US Dollar; current yield c. 6%) strike us as significantly more attractive on a risk-adjusted basis than the conventionally “riskless” government markets of heavily indebted countries like the US and the UK. In equity terms we have favoured for some time the most defensive blue chips. In other respects we see little by way of compelling wealth insurance except for absolute return funds with a demonstrable track record of capital preservation and growth, and gold. Happily for us, we are not managing a global macro hedge fund: in those areas outside our zones of highest conviction, we will be doing precisely nothing.
25 August 2010 Lord of Finance One lesson from reading ‘Lord of Finance is that danger can lurk in the unlikeliest places-very much in line with our current themes of ‘expect the unexpected’ and the era of ‘Bob and Jack’. ARNOLD TOYNBEE, IN his magisterial review of the year's events on behalf of the Royal Institute of International Affairs would later compare the events of the summer of 1931 to the summer of 1914. Both began with relatively minor events far from the hub of the world that nevertheless set in train a cascade that plunged out of all control and brought down an entire world order. In 1914, it was the assassination of the Austrian heir presumptive, the archduke Franz Ferdinand, at Sarajevo. In 1931, it was the failure of the Credit Anstalt, the oldest and largest bank in Austria.
On Friday, May 8, the Credit Anstalt, based in Vienna and founded in 1855 by the Rothschilds, with total assets of $250 million and 50 percent of the Austrian bank deposits, informed the government that it had been forced to book a loss of $20 million in its 1930 accounts, wiping out most of its equity. Not only was it Austria's biggest bank, it was the most reputable-its board, presided over by Baron Louis de Rothschild of the Vienna branch of the family, included representatives of the Bank of England, the Guaranty Trust Company of New York, and M. M. Warburg and Co. of Hamburg. After a frantic weekend of secret meetings, the government made the problem public on Monday, May Il, at the same time announcing a rescue package of $15 million, which it would borrow through the BIS.
Austria was a small country, about a tenth the size of Germany, with a population of fewer than seven million and a GDP of $1.5 billion. Nevertheless, the news burst like a bombshell upon the City of London and the Bank of England
It’s reported that Harry Siepmann, one of the Bank of England governor's principal senior advisers, knowing something of the scope of the tangled mess that lay behind the headlines, announced, "This, I think, is it, and it may well bring down the whole house of cards in which we have been living."
This time the devastating blow from the periphery is as likely to be Greek, Spanish, Portuguese or Irish as it is Austrian but actually Italy could be the most likely source.
23 August 2010 Experience and Expertise will separate the men from the boys
James Phillipps pointed out on Citywire recently that we should have all been ready for the current correction following the sharp market rally in 2009 as history suggests a 30-40% correction this year is the inevitable consequence – citing David Rosenberg, former chief North American economist at Merrill Lynch who warns this fall could be the start of bear run. ‘There have only been two other times when the stock market ran parabolically up from a low in barely over a year, as was the case this time around- the 112% surge from June 1, 1932 to September 7, 1932, and the 116% run-up from March 2, 1933 to July 18, 1933,’ he says. ‘In the first case, we had a 40% correction and in the second, the correction was 34%. So, we are talking here about the prospect of a pretty hefty reversal in the S&P 500 that could very easily take the index down to as low as 850, if the history of these types of givebacks is any indication.’ That’s still some way above our fears of a S&P botton of 300-580 but Rosenberg, who is now chief economist and strategist at Gluskin Sheff, insists that there is little to be positive about, accepts that this is reflected in a lot of the key indicators and therefore believes that the market has started to price in the macro outlook. However we believe that he fails to take account if how far markets might dip-The Shiller Price to Earnings ratio (which calculates the P/E ratio of the market using ten years worth of earnings) implies that the market is overvalued by about 20% - however a crash rarely sees a neat and today mean reversion – a S&P base at around 800may eventuate and from there, ‘If history is a guide, when the Shiller P/E is at these levels, the 10 year annualised return of equities is just over 5%,’ Rosenberg says. But before that base is built don’t be surprised to see the equity markets keep falling and property and maybe commodities too. Phillipps sees Rosenberg’s view as being consistent with the fact that since March, the Fed’s balance sheet has expanded by a further $50 billion from taking on more mortgage-backed securities. So much for the Fed moving into tightening mode and a poke in the eye for the advocates of a V shaped recovery. The key to such markets is connecting the dots (what George Soros calls reflexivity), waiting for the buying opportunities (the patient asset allocation of Martin Gray’s Osmium Portfolios) understanding the intrinsic value of assets (Warren Buffett’s Berkshire Hathaway approach) and understanding the macro environment well enough to interpret the data in away that corresponds with deciding the right time to enter or exit markets (which no-one does better than Iridium’s Scott Campbell). There are times when the value of expertise will be well and truly highlighted – or as MitonOptimal’s Joanne Baynham says “when the markets separate the men from the boys”.
20 August 2010 Gambles - A Lunch with the Godfather ...An offer I couldn't refuse
Yesterday the guru of emerging market investments , Dr. Mark Mobius of Templeton , chatted to a packed audience at Bangkok’s FCCT. Dr. Mobius had the audience hanging on his every word as he took us with him on his odyssey though emerging markets for the last 4 decades. While his most valuable insights were his unique understanding of the relative opportunities of developed , emerging and frontier markets and of his time working alongside the great disciplined value investor , Sir John Templeton. I particularly enjoyed the following exchange which arose in response to a question from the floor about the definition of developed, emerging and frontier markets.
ST PHOTO: NirmalGhosh Mark Mobius – “Back in the 1980s we tended to rely on income per capita as a guideline to how developed a market was. That’s still a good benchmark today. It’s interesting that as some markets have developed, they are moved along the chain and moved away from us. The recent crises have even seen some like Greece come back to us; their Euro membership seemed to make them . More like developed markets but now they seem to be emerging markets again”
Paul Gambles – “That’s a really interesting point; looking at the relative outlook for both China the USA , is it possible that we could see an emerging market as the world’s largest economy ?
Mark Mobius – Well, Paul, I don’t think that America is in quite such bad shape yet, that its per capita income will fall to emerging economy levels not yet anyway…”
Paul Gambles – Sorry, what I meant was could China overtake the US as the largest economy, while China still has emerging market income per capita ?”
Mark Mobius – Oh yes ,that’s definitely possible . I see what you mean. Yes that could happen.
Paul Gambles – But now you’ve really started me thinking about how far the US spiral can go. I like your answer on that.
For more information about Dr. Mobius’s talk, please don’t hesitate to contact us.
18 August 2010 Lord of Finance One lesson from reading ‘Lords of Finance is that danger can lurk in the unlikeliest places-very much in line with our current themes of ‘expect the unexpected’ and the era of ‘Bob and Jack’. ARNOLD TOYNBEE, IN his magisterial review of the year's events on behalf of the Royal Institute of International Affairs would later compare the events of the summer of 1931 to the summer of 1914. Both began with relatively minor events far from the hub of the world that nevertheless set in train a cascade that plunged out of all control and brought down an entire world order. In 1914, it was the assassination of the Austrian heir presumptive, the archduke Franz Ferdinand, at Sarajevo. In 1931, it was the failure of the Credit Anstalt, the oldest and largest bank in Austria. On Friday, May 8, the Credit Anstalt, based in Vienna and founded in 1855 by the Rothschilds, with total assets of $250 million and 50 percent of the Austrian bank deposits, informed the government that it had been forced to book a loss of $20 million in its 1930 accounts, wiping out most of its equity. Not only was it Austria's biggest bank, it was the most reputable-its board, presided over by Baron Louis de Rothschild of the Vienna branch of the family, included representatives of the Bank of England, the Guaranty Trust Company of New York, and M. M. Warburg and Co. of Hamburg. After a frantic weekend of secret meetings, the government made the problem public on Monday, May Il, at the same time announcing a rescue package of $15 million, which it would borrow through the BIS. Austria was a small country, about a tenth the size of Germany, with a population of fewer than seven million and a GDP of $1.5 billion. Nevertheless, the news burst like a bombshell upon the City of London and the Bank of England It’s reported that Harry Siepmann, one of the Bank of England governor's principal senior advisers, knowing something of the scope of the tangled mess that lay behind the headlines, announced, "This, I think, is it, and it may well bring down the whole house of cards in which we have been living." This time the devastating blow from the periphery is as likely to be Greek, Spanish, Portuguese or Irish as it is Austrian but actually Italy could be the most likely source.
16/08/2010 Football & Short term trading A friend of MBMG Group dominated much of the press at the weekend - but for once not the financial or business pages but the sports pages. The story broke on SkySports who reported that Steve Coppell "shocked Bristol City by resigning as manager at Ashton Gate with immediate effect after just one match of the new league season".
Steve said in a statement released through the League Managers' Association: "It is with the deepest regret that I confirm my departure from Bristol City. I have made my decision after very careful consideration and I believe that it is in the best interests of both the club and me personally that we go our separate ways. Bristol City is an excellent club, with brilliant support and a chairman with great ambition for the club's future. Whilst I was looking forward to the challenge of leading the players in this season's campaign, unfortunately, it has become clear over recent weeks, that I found I could not, for whatever reason, become passionate about the role and give the commitment the position demands. I appreciate that the timing of my departure is not ideal, but I believe it is best for the club to appoint a new manager or indeed appoint Keith Millen, who has a deep knowledge of the club and the squad, at this stage of the season. That individual can then make decisions on signing players before the window closes and work with the squad for the full campaign. I am retiring from football management but still feel I have a contribution to make to the game sometime in the future. I would like to sincerely thank the chairman and the board for their understanding and I wish the club and its supporters every success."
City Chairman Lansdown said: "Steve's prestigious career as a player, coupled with his experiences and successes as a manager are in no doubt. His footballing pedigree made him our prime target to manage the club early this year. It is disappointing for any club to part company with its manager at this stage of the season. However, we respect Steve's decision, one that allows us the opportunity to appoint his successor and give that individual the full season to work with the squad." 
The Sun's version was subsequently rebutted in The Daily Mail with a denial by Bristol City chairman, Lansdown, that he forced Steve Coppell to sign David James from Portsmouth: "It's nonsense. I may have come up with the idea and put it to Steve. I asked him if he would be interested. From that point on it was in Steve's hands. He phoned David to see whether he was interested. My only involvement was to speak to David because he wanted to know what my ambitions for the club were. 'I know why people are saying all this. It's because they are looking for an answer but that's not it.Once Steve has made up his mind that's it. I obviously questioned it but the reality is Steve didn't have the feeling for the job, he realised it was time to call it a day and best to do it early rather than later."
The fans' reaction has been extremely supportive of Steve as typified by the following posting on SkySports from a Reading fan - "Steve, you are a true legend and I wish you all the best in whatever you choose to do (hopefully something to do with Reading FC)"
The latest edition of Platform magazine www. mbmg-international.com contains a full interview with Steve about football, the world cup and his relationship with MBMG. For our part we're simply delighted that yet another client has been able to cease working at the time of their choosing and we wish Steve a long, happy and fulfilling retirement.
11 August 2010 Opportunism-a bold move which by definition ,can not be planned Whilst our portfolio advisors at MitonOptimal pride themselves on being contrarians, what that really means is spotting the opportunities (and the risks) before the rest of the market catches up. When that finally happens is when the opportunism pays off. A good example right now is the way that our favoured satellite fund managers are now starting to attract investment flows from the rest of the market despite overall market outflows. Data released last month shows, according to Atholl Simpson of Citywire, that even as money flooded out of Europe's fund industry, Blackrock who manage our gold equity exposure bucked the trend with net inflows of €5.5 billion, according to the latest Lipper report, leading the way in the equity sector. In the bond sector Franklin Templeton whose total return fund has been our preferred fixed interest holding for some time came out on top, while French group Carmignac Gestion whose Patrimoin fund is our preferred managed fund reigned supreme in mixed assets. The Carmignac Patrimoine fund, run by the firm's founder and AAA-rated manager Edouard Carmignac,is rapidly gaining wide spread inflows proving yet again that where our client portfolios unearth opportunities today, other will eventually cotton on (at a higher entry point) leaving our portfolios to count their gains.
9 August 2010 Lord of Finace In Liaquat Ahmad’s “Lord of Finance” we learn how economic problems in Europe rapidly became destabilising political problems which only caused greater economic problems. Defeated in the Reichstag, he had Von Hindenburg dissolve it and hold new elections in September 1930, two years early. The results came as an ugly shock. In a campaign dominated by the deteriorating economy, Hit¬ler appealed across class lines, promising to reunite the nation, rebuild its prosperity, restore its position in the world, and purge the country of prof¬iteers. He put a lid on some of his more extreme anti-Jewish rhetoric. Speaking at giant open-air rallies, many in sports stadiums lit by arrays of blazing torches, he mesmerized the tens of thousands who attended these events with his oratory. Meanwhile in the streets, his jack-booted para¬military thugs, armed with truncheons and knuckledusters, clashed vio¬lently with Communists and Socialists. The Nazis won 6.4 million votes, and vaulted into second place in the Reichstag with I07 seats.
The election panicked the financial markets; an estimated $380 million, about half of Germany's reserves, bolted. To halt the flight, the Reichsbank was forced to raise its rates, so that while in New York and Paris these stood at 2 percent, and in London at 3 percent, in Germany they went up to 5 percent. With prices falling at a rate of 7 percent per year, it meant that the effective cost of money had risen to 12 percent, gravely exacerbat¬ing the economic weakness. As the economy lost ground, unemployment climbed, and the budget deficit widened, Bruning focused on balancing the budget. Unemployment benefits were restricted; salaries of all high federal and state officials, in¬cluding the president's, were slashed by 20 percent. Wages of lower-level officials were cut 6 percent; income taxes were raised, taxes on beer and tobacco increased, and new levies imposed on warehouses and mineral water. All of these measures made the Depression worse. Those who fail to learn the lessons of history are doomed to repeat them. |
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