Across the world today, TV anchors staring at falling markets, politicians facing referendums and Presidential elections, and bankers looking at credit crunches are saying daft things to try and make their leaky sieve cases seem vaguely credible. As so often happens, the more intelligent end of twitter is a lightning-rod for satire about that sort of tosh, so I was delighted to see this one first thing:
The theory of continental drift is, of course, widely accepted as the reason why we wound up with continents as opposed to one gigantic Australia. But as such, it knocks every contemporary ‘theory’ about what’s going on into a cocked hat. Everyone has a theory today, and the theory is there to stop the opposing theory from gaining ground.
Bernie Sanders points out that, woman or not, Hillary Clinton is the Establishment candidate. And of course, she is. So Hillary plays the gender card as if she was some downtrodden negress from Alabama, as opposed to the wife of a two-time (and two-timing) US President.
Business telly points out that the banks are the main institutions getting caned in the markets, because (a) they’re overleveraged and (b) a credit-crunch is obviously nigh. So Bankers go on to Bloomberg and blame their woes on “regulatory restraints that make it impossible for us to make money”. What restraints? And when exactly did they last make no money?
For the entirety of 2016 to date, the leading theories put forward in financial circles have said anything rather than “the markets don’t buy the bollocks any more, and so a classic bear market is at last beginning to reflect a global slump”. There has been uncertainty, then volatility, a small correction, stoopid markets, stock falls not reflected by the data, misconceptions about China, an oil-supply glut, not a recession, technically not bear territory, and now latterly “this will all settle down by the summer and then a lot of people are going to look dumb”.
But none of this changes the fact that the Dow is below 16K, the FTSE below 6K, and the Shanghai below 3K. Or, indeed, that without the PBOC spending 0.8 trillion Yuan on direct intervention while introducing draconian laws about selling, the Shanghai would be nearer 1,800. Or that the UK economy is 67% financial service profit dependent for its trade positives, but the banks are heading for big trouble.
On CNBC yesterday, one talking head pointed out that last August, 71 out of 73 ‘experts’ polled by Bloomberg got the US Bond yield futures wildly wrong. Yellen clearly got the rate rise wildly wrong – or was ordered to do it by the pyschos. Every oil opinion-leader has been shown to be wildly wrong.
And nobody is answering this question: what happens when Chinese New Year is over, and the poor sods in Shanghai get back to their desks? What does Goldman Sachs – ‘no chance of a recession’ – think they’re going to do, buy?
However, for me it’s the dots between economies, stock markets, commodities on the one hand – and politics on the other – that aren’t being joined up. One by one, the first three have become a line pointing down to the sewers. That’s going to put the fourth dot into an entirely different place.
That’s why Hillary (and Bill) Clinton know they have to beat Sanders in the early primaries….because as things get worse, his logic will be increasingly seen as real wisdom.
And that’s why Cameron wants the Refendum in June, not (say) September. For he and his Dark Knights know perfectly well that either or both of eurozone disaster and UK banking failure(s) could easily occur by the Autumn. One can argue that the latter would argue strongly against Brexit, but I disagree: I think both will show that the Clown Princes of Westminster and Brussels have little or nothing between their ears.
Those who think the Tusk ‘deal’ will get any better are deluding themselves. As I first revealed here three weeks ago, the deal was done and signed off ages ago. And there remain many in Merkel’s Party who think it is far too kind to Britain.
For the moment (despite the poverty of what David Cameron ‘negotiated’) the latest poll still shows the In/Out camps neck and neck. And the College votes in the US still suggest that Hillary is a shoo-in for the White House. At this point in the cultural Crash2 process, there is only one agent that can change those numbers.
“It’s the economy, stupid,” as a former President once said.
Yesterday at The Slog: does the US want the EMs to emerge, or be colonised?
The Slog 