Today, James Mackintosh of the FT, published his third successive ‘Short View’, analysing in great detail the current stock market turmoil. As one would expect from the author: Extremely well-researched and convincingly argued. All this on the basis of fundamentals and charts. But then these have been ignored for a hell of a long time: The ‘herd instinct’ prevailed or, to use the new more ‘academic’ and benign sounding term: “Pro-cyclical behaviour”. In fact, what seems to matter more than anything in today’s post-Lehmans markets is sentiment. It’s all about sentiment! Is this finally turning or just another false alarm? Well, perhaps the party really is over? It would have taken a very long time, indeed!
Not a day goes by with yet another report on house prices and every day we are confronted with a different statistic. Boom or bust in equal measure!
The UK and the London property market in particular, has become increasingly fragmented and hitherto ‘standard’ indices such as Halifax, Nationwide et al are not only pointless but intrinsically flawed; just like the banks themselves. Halifax? Surely a relic of a bygone era? Even Rightmove and Zoopla are now well behind the curve: People seem to think that because they are operating online, their yardsticks are somehow more ‘up-to-speed’ … wishful thinking!
In today’s post-crash age, it’s all about a case from region to region, city to city, quarter to quarter, street to street… and yes, even which side of the street! Buyers have become by far more sophisticated and this ‘so-called ‘boom’ bears none of the characteristics we have witnessed in previous speculative cycles. Interest rates are low and as long as they remain so, buying a property will remain cheaper than renting one. Furthermore, the UK and, again, London in particular, have become ‘safe-haven’ destinations for foreign buyers for all the obvious reasons – not just for oligarchs but, indeed, across the whole wealth spectrum. Only yesterday, it was reported that London has become the world’s most expensive city for companies to locate employees, overtaking Hong-Kong. The reason for that is simple: Demand is outstripping supply. The so-called London ‘property bubble’ is a myth.
HRM Queen Elizabeth II has spoken. And we should heed her advice: It is time to temper the “strong feelings and contrasting emotions”.
Pinkers Post in collaboration with The Verve has decided to lend a helping hand.
Further reading: All entries, below.
“More than 20 years ago, I opposed devolution. I did so not because I thought Scotland could not govern itself. Plainly it can. I did so because I believed devolution would be a high road to separation. So it has proved.”
John Major, our greyest squirrels of all prime ministers, has been proven right. No surprise, here: Consistently underrated, he has always come up trumps. Ignore him at your peril.
And now it’s devo-max: The worst case scenario. As the brilliant Matthew Parris pointed out in his column for The Times on 13 Sept 14: “Devo-max and independence-min are converging. Either must lead to home rule for England.”
Politicians have been panicked into devo-max to save their own skin and, whatever the outcome of the referendum, this has further destabilised the situation and, indeed, increased uncertainty.
“The risk that Scotland will vote for independence is real” says Rob Wood, chief UK economist at Berenberg. Surely, this statement must be one of the most hilarious pronounced by any political or economic pundit! Investors are belatedly beginning to panic, taking out insurance against a possible Scottish exit and the no-doubt catastrophic consequences. Tail risk equals terrorism!
In Scotland all the good arguments against independence are practical. “It’s all bad” is the only real argument left. The currency thing won’t work, business will go down the pan… bla-bla-bla… It’s all terribly frightening! A Yes vote equals armageddon!
Again Mr Parris hits the nail on the head: “To survive, Union had to be an affair of the heart, and the heartbeat started faltering decades ago, at devolution.”
He is right: “Whoever wins this vote, the Union is dead.”
A week to go but the outcome looks certain. It will be a No. And neither will it be a Quebec-like razor-thin margin but a surprisingly decisive No. Scotland will remain an integral part of the United Kingdom and armageddon has been averted. Phew!
The Yes campaign played it beautifully from the start, portraying itself as the perpetual underdog and duly trailing in the polls since Royal Assent to hold a referendum on whether Scotland should be an independent country was granted on 17 December 2013.
Then the shocker: Three days ago, the international internet-based market research firm YouGov released the results of a poll commissioned by The Times newspaper showing that in the past four weeks the support for the union had drained away at an astonishing rate, revealing that the Yes campaign had for the first time taken the lead. The response? Naked panic. Or so, at least, it was presented in the media.
The Murdoch empire had been campaigning for the status quo since the idea of a referendum was first put forward and in recent weeks hardly a day passed without yet another scaremongering pro-UK leader editorial in one of its newspapers and online media platforms.
The Times, especially, appeared to be running a well-orchestrated campaign, keeping ear to the ground and nose to the grindstone like a bloodhound. Perhaps unsurprisingly, the Murdoch crew was well ahead of the curve. Whilst our Prime Minister was sunbathing in Portugal, apparently completely unaware of the tsunami wave about to hit the British shores, the media pundits at News Corp International were sniffing trouble. And they decided to act. After all, victory for the Yes campaign would have meant defeat for Murdoch. Shrewdly, it commissioned the poll ascertaining their canny instinct and, on the back of it, launched a highly effective operation to reverse the last minute swing in public opinion north of the border. The climax came on 9 September when the “poll shock” received unprecedented coverage throughout all section of the The Times, culminating with a leader entitled Scotch Egg, commenting on the “lovely news of a royal baby [that] could help to save the Union”: Divine intervention, divine timing!
Perhaps the shrewdest move, however, was to highlight the “risk of a [Scottish property] price crash as the markets panic” and quoting Paul Krugman, the Nobel price winning economist, warning Scots of “financial meltdown” in the event of a Yes victory. House owners losing their nest egg? Surely the final straw and hitting a very sore point, indeed.
With a high percentage of voters still undecided, the YouGov poll spread like wildfire at just the right time, sending Twitter into overdrive. And the rest will be history: Scottish independence is a goner; dead and buried. Congratulations, Mr Murdoch, on a job well done!