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Tuesday, 17 October 2017

Papandreou's rebirth of a nation

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Anthony Peters, Swiss Invest Strategist

Anthony Peters, Swiss Invest Strategist

I barely have to list the eye-watering gains which European equity markets put on yesterday – it might just be a classic reversal day again like last Tuesday – but I am still left with that nagging feeling that there is a lot of quarter-end technicity in the price action.

Let’s face it; unless all the stars align in just the right way, then the wheel spinning which took place around the World Bank and IMF meetings in Washington last weekend will remain just that. Washington is never the place for petulance and I can’t remember how often market sentiment has had a bounce in its step immediately after that particular weekend of meetings.

Back in the real world, Greek Prime Minister George Papandreou gave a truly rousing and impassioned speech in Berlin about the rebirth of a nation – not to be compared with John F Kennedy’s Berlin speech of course – and if one had just landed after a year or two’s sojourn on Mars, one would have been touched to tears.

He spoke eloquently of the sterling efforts the people of Greece were making in order to pull their country out to mire. He never mentioned or showed any contrition for the deliberate and cynical accounting fraud which he, his henchmen and his peers of the opposition persistently committed towards the “European partners” and the pain which this is about to inflict upon the collective population of the eurozone and, in all likelihood, well beyond.

Short-lived optimism

European markets were on fire, but by mid-afternoon US time the rose-tinted spectacles began to fog up and the first questions began to be asked as to whether the proud rhetoric of the weekend would lead to the perfect solution or merely to some kind of a solution or even still to no solution at all. By this morning in Europe a lot of the optimism of yesterday seems to be fading; perhaps the “risk on” trade is only on a timer switch.

Troika inspectors set to face controversy

Alas, the Troika inspectors are on their way back to Athens which they left in disgust a few months ago and they will find the new, controversial emergency property tax promulgated. The fact that it is to be collected through electricity bills should scare them rather than encourage them, but at least it might come into the state coffers. However, they will want to see these revenues spent on something other than the bloated civil service which is apparently still growing rather than shrinking. They will also find a totally demotivated population which is being encouraged to accept an economic pop-gun in order to go hunting fiscal tigers. One way or another, Athens will get its €8bn in aid, whether it deserves it or not and whether the Germans, the Dutch and the Finns like it or not; it’s a matter of “raison d’état”.

What was significant about yesterday’s rising asset prices was how narrow the base was – or at least in my world. The go-go names traded better, being dragged higher by the rallying indices, but anything which was off the run remained better offered as holders looked to sell into the rally where they met little interest. That sort of demand/supply constellation normally smacks of panic-stricken short-covering and it will be between now and the end of the week when we find out whether yesterday’s pole vault has legs or skids.

Meanwhile… Miliboy on producers and predators

Meanwhile, the Rt Hon Ed Miliboy gave his own speech to the Labour Party faithful at their annual conference. Some regarded it as bland and uninspiring, others thought it recreated a positive centre left image; one way or the other, it was peppered with mea culpas covering just about everything which Labour did in thirteen years in office other than the achievements which were put on the credit card such as higher spending on education, health and social services.

If Miss Harman is such an equality freak, where are her calls for reserved roles in the party hierarchy for transgender socialists?

I hear the sound of one hand clapping. Alas, he had a sharp exchange with his deputy leader, Harriet Harman – he was once her speechwriter – who he patently dislikes because of her erstwhile support for his brother, David, and the latter’s stance on the Iraq war. She has taken the moral high-ground as a woman but her own speech to the Labour Women’s Conference was no more than an abject piece of female sexism. If Miss Harman is such an equality freak, where are her calls for reserved roles in the party hierarchy for transgender socialists?

Alas, Miliboy yesterday created new categories for socio-economic studies, namely “producers” and “predators” – both effectively indefinable and therefore of no value other than for rabble rousing – whereby the former are to be encouraged and the latter pilloried. No doubt most of us, myself included, are in his mind predators, but I ask him what he, professional politician with a tax-payer pension ahead of him, has done to qualify as anything other than us? Well, I shall slip into my Velociraptor suit and get on with the day.

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