Real estate, alternative real assets and other diversions

Blain’s Morning Porridge

The Macro View

Only the guy who isn’t rowing, has time to rock the boat

In the headlines this morning…

Apologies to anyone trying yesterday to link to Shard’s March 2019 Alternative Asset Outlook – I managed to append the wrong site-address which linked to the www.morningporridge.com admin login site. The corrected link is Blain’s Alternative Asset Monthly Outlook

I’m afraid this morning we have to talk about Brexit and Europe. As I got into the lift up to Shard’s Eyrie in the City, the lady standing next to me looked at the TV screen and said: “I’ve had enough of this Brexit rubbish, can’t we change the channel?”

I’m afraid we can’t.

My expectation for Brexit – gazed through a glass darkly – is we’re in for a long drawn out political impasse, Article 50 extension and/or suspension, a Second Neferendum, No-Brexit and a sustained period of UK political infighting throughout the process. Sounds terrible, but probably not as bad as we fear. It will keep sterling uncertain and competitive, force UK companies to stay lean (no bad thing), and eventually we’ll probably all come out of this in better shape.

There are significant implications for Europe also. They may even be positive! Based on what we’re already seeing in term of National inputs into the Brussels swamp, the Brexit threat could be a positive long-term shake up: the creation of a slimmed down, depoliticized EU fit for purpose could be a long-term positive. That would just leave the problem of the Euro to be resolved – depoliticizing Europe and keeping the Euro is probably an unworkable option. I’ll leave it to the Germans to explain why.  

While it’s a shame to waste all these precious pixels taking about Brexit, to understand markets we have to understand the politics. I wish it was simpler….

How I wish we had a president like Trump to distract us. We could spend our time speculating about while he might not be guilty of collusion with Russia, what other horrible bad things has he done? Just how much has he lied about his wealth, taxes and other affairs?

Sadly, instead of a scoundrel in Number 10 we have the sad and pitiful Theresa May. I’ll leave it to readers whether we should be sorry for her, admire her, or dismiss her as an incompetent out of her depth. I suspect she will remain in power for ever for the simple reason that any alternative is likely prove even less able to unite the party or the nation.

Foreign readers will have to understand that gross political incompetency is not something the UK does well. We have occasional moments of skulduggery, foolishness, and light comic relief, but generally the stately galleon of the UK political system is faultless. This long-term political failure is new to us. We are not used to political breakdown. We leave other nations to embarrass themselves with coups, revolutions, scandal and such frivolities. 

Rather than bore everyone with a full scenario analysis, here’s my simple reasoning on the UK:

The Macro View

About Bill Blain

Bill Blain

Bill Blain is Strategist for Shard Capital, a leading investment firm. Bill is a well known broadcaster and commentator, with over 30-years experience working for leading investment banks and brokerages at senior levels. He's been closely involved in the growth and development of the global fixed income markets, and pioneered complex financial products including capital, asset-backed securities and private placements. Increasingly, he's involved in the Real and Alternative Assets sector seeking to explain their complexity, how to generate decorrelated returns, and create liquidity in non-listed assets. Bill is a passionate sailor, talentless painter, plays guitar badly, is learning the bagpipes, and built a train-set in his attic.

Articles by Bill Blain

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