Non-Farm Payrolls Vs China Trade War

Oh dear. It seems that the US economy hasn’t read the scripts about trade-wars destroying jobs.  On Friday, the January US employment numbers were revealed to be much stronger than expected.

In America, employment numbers are released as Non-Farm Payrolls (NFP). I’m not sure why agricultural workers are excluded from the results. Maybe the statisticians figure that farmers are too busy to bother filling in yet another form every month?

In an average month, the NFP comes in at around +200,000. For January 2019, it was expected that the number would be slightly down, at 160,000. Given the government shutdown and the trade-war induced tariffs, this is how the economics profession expected things to turn out.

The actual result of 304,000 was a very pleasant surprise.

Clearly, managers, business owners and regular people of “Main Street” didn’t behave in the manner desired by the economic theorists. Maybe the “experts” need to instruct the general population with more clarity!

Tariffs and a trade war with China are meant to be negative on the economy. All those government workers waiting for their paychecks are meant to be negative for the economy. Even the “sugar-rush” of Mr Trump’s corporate tax cuts last spring were supposed to have been a negative for the economy as their one-off stimulation wore off.

So this stronger than expected economy means; –

1) US interest rates are more likely to rise by more,

2) the US dollar will be slightly higher, and

3) US shares perhaps a little weaker.

A Tribute to Katy Cunningham

This is an essay on the fragility of life, and how a brightly-burning candle can flicker and fade away in an instant.

A road traffic accident claimed Katy Cunningham’s life last week. She was travelling with her two children during the rush hour. A regular day in a happy life, the same, usual activities that we all undertake without considering the risk of something going seriously wrong.

Then a head-on collision, thought locally to be the result of a major error by another driver, brought a life to an end.

This terrible tragedy has hurt a whole pyramid of people. Katy’s two children were very seriously hurt and remain in hospital. Everyone hopes they will be able to make a full physical recovery, but the effects of that split second will stay with them forever. Also at the top of the pyramid are the close family and friends, still traumatised and trying to cope each day. Within the wider community, schoolfriends, teachers, shopkeepers and neighbours are horrified and shocked by the total, unnecessary horror of it.

Nothing that anyone can say or do will bring back Katy. We wish her family well and some kind of eventual calmness and acceptance. Friends are trying to assemble a fund to offer support to Katy’s children. Take a look at

Katy, you will be remembered and loved forever.

UK Commercial Property Sales and Values at Record High Despite Brexit!

Hard to believe but true!

UK Commercial Property Sales in 2018 were £61.8bln, which is the second highest this decade. Even Q4 was strong, with a total transaction value of £16.6bln.

Haven’t all of these buyers heard of Brexit?????

Most exciting of all, the yield of all of these properties came down from 5.66% to 5.34% in Q4. This means that buyers were prepared to pay more than ever to receive the rental income. In fact, this yield is the lowest since those long-gone optimistic days of Q4 2017.

Within the numbers, more interesting facts emerge. Of the £16.6bln spent on commercial property in Q4 2018, almost exactly half was investment by overseas buyers.

It is not surprising that industrial sites and warehouses were up in volume, whilst retail assets were down. It cannot be news to anyone that the High Street is struggling whilst ever-growing internet sales demand logistics assets to support delivery.

My source of information is Lambert Smith Hamptons report “UK Investment Transactions”, available on

Isn’t it funny how this great news, revealing domestic and international positive views of the UK economy, never found its way on to the front pages? Or even the business pages? Still, as an old sage should have said, if they didn’t, “take note of people’s actions rather than their words.”


And the actions demonstrate that investors can see through Brexit and believe in UK!

Brexit – Now It Will Be a Fig-Leaf Deal on 29 March

Nein, No, Nee, Ne, Nie, He, Nu, Nao, Nem, ziadny, No, Uimh, Nej Le, Nullum et NON. There is no way that the EU will agree to a No-Backstop Withdrawal Agreement this week.

We have to remember that Hell Hath No Fury Like An Ever-Closer-Political-Union Scorned. Mrs May’s trip to Brussels is nothing more than political theatre, with no prospect of any substantive negotiations taking place.

These are the stages we see for the “negotiations” (Ha, we placed them in quotes because a negotiation needs two willing parties, and here there is only one.)

  1. This week, Mrs May goes to Brussels. She will be insulted, and come home empty-handed. If she was any normal person, she’d have her tail between her legs, but Theresa-The-Resilient will still think she is in the game and hold her head high

  2. In a couple of weeks, she’ll return, and the EU will make some concessions on the backstop – but also want a quid pro quo of something that is totally unacceptable, perhaps fishing rights or sovereignty over Gibraltar.

  3. Parliament will quite correctly reject these demands – but this will take until the end of February.

  4. Parliament will try to extend Article 50 but be rebuffed by Mrs May AND Brussels, in a rare moment of harmony.

  5. In the second half of March, a very thin “Deal” will be agreed where the UK pays a substantial amount of money for relatively restricted short-term smoothing benefits and the right to negotiate a trade deal in the future. It will in effect be No Deal, but presented as A DEAL.

  6. Thus we still leave on 29 March. Everyone will know it is No Deal in all but name. What we will actually have is a FIG-LEAF DEAL!

Council Splurge on Commercial Property Will End in Tears

  1. So Local Authorities Have Been Spending Big Time on Commercial Property?

    Yes, and often not in their own area to promote local growth. Check out the Estates Gazette report at

  2. How Much Have They Spent?

    It varies, but in the case of Spelthorne, it is nearly £1bln in the last 5 years

  3. HOW MUCH??

    £1,000,000,000, for one small local council in Surrey

  4. How is it funded?

    The Government lends them money at very cheap rates

  5. Why are They Doing It?

    Central funding has been drastically cut since 2011 and they are hoping to generate extra income to cover their obligations

  6. Is it part of a wider investment drive using modern portfolio theory to spread their money across many different types of assets such as stocks, bonds and so on, to minimise risk and maximise returns on some kind of efficient frontier?

    No, they seem to be focussing on just commercial property with no diversification into other investment categories.

  7. Have they appointed experienced investment managers?

    Not as far as we are aware.

  8. It’s been quite a bull-run in property prices. Have they bought near to the top of the market?


  9. Shouldn’t they have focussed on buying residential property to rent to homeless people in their parish?

    This would have directly benefited the inhabitants of Spelthorne, whilst still providing an income.

  10. To Buy Properties, the Council Has to Pay More Than Anyone Else Thinks it is Worth


  11. Do you think that all this is awfully wise?


  12. Will it all end in tears if there is a setback in the commercial property market?

    Yes it will. The commercial property market can bite back extremely viciously and a newbie council could easily have half of their (borrowed) money wiped out.

  13. Will this writer Be Able To resist Writing “Told You So” When it Happens?

    Not a chance!!!

Best Brexit Option is Disney+

We’ve all heard of Norway+, Canada+++, and even that Mrs May’s Plan B is really Plan A+.

So imagine how exciting it was to discover the concept of Disney+. Think of it, the UK could become a theme park.

For years, people have complained that the country was focussing too much on tourists, but now we could live off it. Nobody would be surprised that we erected a metaphorical fence around the country – except Northern Ireland, obvs, where a hard border cannot be tolerated. People would be happy to pay a high entry fee at Border Control, and food becoming really expensive would just be par for the course.

As an aside, I reckon that the whole Canada+++ was a mistake, and really the +++’s were xxx’s at the bottom of a letter sent by Justin Trudeau:

Love Canada xxx”.

There are so many other positive benefits of rebranding United Kingdom as United KingDisney. Our Government is already completely Mickey Mouse – and which MP would gain the title MOST PINOCCHIO for being ever so slightly economical with the truth?

Sadly, a little research has revealed that Disney+ is not actually anything to do with Brexit, but is merely a soon-to-be released online streaming service. See

Still the idea was good. You heard it here first, UNITED KINGDISNEY!

Let’s go for it!

Italian vs English Design; Maserati vs Daimler

I’m indebted to my pal – who we should call Mel, on account of that being his name – for forwarding this picture during a spot of lunchtime car porning. It is a 1953 Maserati A6GCS by Fiandri – and isn’t it gorgeous?

It’s coming up for auction next month, and if you are nipping over to Paris for the Retromobile show, with a spare EUR 4.5mio, then you could make it yours.  See

Let’s look at another picture for a few tender moments………

It strikes me that English car design wasn’t quite as – what’s the word – resolved, in those days. As evidence, I give you Exhibit A, the Daimler Dart. Ooops, they couldn’t even select a name that wasn’t already taken, so in fact I give you the Daimler SP250.

Do you think it hit every branch on the way down?

Luckily, I feel that modern UK car-drawers are much more up to scratch, with the Jaguar XE easily as pretty as the Alfa Romeo Giula.



OK, that’s enough staring at car pictures for one day – now get back to work! (And have a good weekend)

China Crisis

Let’s have a quick look at the behemoth that is the Chinese economy. Sorry to all those eager readers hoping to catch up on the 1980’s syth-rock band of this article’s title. Their greatest hit was “Wishful Thinking” – which is how we view the prospects for the Chinese economy!


We know that growth in the huge Chinese economy is slowing: we don’t believe the official figures which claim 2018 expansion was as much as 6.6%. However, the direction of travel is clear. Growth is slowing noticeably, and ever-increasing debt may not be enough to stimulate it again.

Ahhhhh, the debt. Didn’t take me long to get there did it? This expansion has been built on massive loans. It is suspected that many of these advances tended to be arranged for political reasons rather than as a result of careful analysis by credit committees. As many as 30% are thought to be non-performing.

For such a tightly controlled economy, a banking crisis may not be as serious as Lehmans was. To some extent, a bank loan in China is a paper transaction from one pocket to another. And don’t forget their huge foreign holdings of securities such as US Treasuries.

However, the model is crumbling. The Chinese have flooded their economy with cheap money and endless cheap labour. The west has been a major beneficiary with ever-cheaper products holding inflation down for 20 years.

Meanwhile, the Chinese government is riding a bit of a tiger in that the population is rapidly urbanising – and so more and more jobs are required to avoid civil unrest.

Over the long term, we do not believe that a centrally planned economy, with state blowing hot and cold on private enterprise, can efficiently allocate capital. Sooner or later, the distortions created in the 2-decade long rush for grown will come home to roost.

The Chinese authorities seem to be turning their back on capitalism, and the west has finally grown tired of Chinese intellectual theft and gaming the free-market trade rules. It could be that the tariff wars with the USA are the precursor of a longer battle for global influence which China cannot win. So the Chinese are in a bit of a bind. Their growth is slowing. They have huge non-performing loans that would already have killed a western banking system. Their western customers are no longer playing ball. There is not enough internal demand to keep all of the plates spinning. Companies listed on the stock market remain vulnerable to the whims of the central government.

For these reasons we see the Shanghai stock exchange uninvestible, and worry that when the Chinese economy does eventually blow, the storm winds will be felt all around the world.


PS. Feedback on yesterday’s post.

Oddly enough, including the words “Economy”, “Trump” and “Brexit” in the article title didn’t seem to attract any more readers at all. Clearly there is more to Search Engine Optimisation than meets the eye!

UK Economy to Trump Brexit

Did you miss it hidden in all the Brexit doom and gloom? The economy is doing just great!

The media and Westminster are hysterically screaming and shrieking every day about the Brexit car-crash cum train-wreck cum disaster-movie where we might crash-out-of-Europe over a cliff-edge in some kind of national Thelma and Louise climax. (I wonder if they actually see a map of UK in a 1966 T’bird driving over Beachy Head?)

And of course you wouldn’t catch us at London Market Comment devoting days of our busy exciting lives commenting on such distractions would you???

Meanwhile, the UK economy is ticking along pretty nicely. Office of National Statistics figures released yesterday at confirm unemployment at its lowest for more than 40 years, with the employment percentage at its highest ever since data was first collected in 1971. That is, the best for nearly 50 years.

Earnings are up by 3.4% since last year – and all the time inflation is down to 2.1%. Folks are getting increased spending power – a better standard of living!  This is what is happening out there in the real world, not to the self-absorbed London Commentators! (Ooops, that’s us too).


What does it mean? In the real world, people are going about their business, buying, selling and investing – and completely ignoring all the Casandras alarmistly (like my new word?) predicting that something terrible is about to happen.

Maybe, just maybe, the wisdom of the crowd is that the Brexit story is being ever so slightly overplayed???  So ignore all the prophets of doom out there.  I checked to see if this amazing good economic news made the front pages of the national newspapers – and it didn’t get a mention. Don’t worry, I looked on the newstands rather than buying all the national newspapers.  But regardless of the lack of coverage, it is true!




PS. See what I did with the title to attract Google hits?? Using words such as Economy, Trump and Brexit must attract all the search-bot, surely? I’ll let you know if it works, or if Google is too clever to fall for my cunning little plan.

SUPERPROFIT – Investment in Business

Business investment broken down into four simple definitions;-

SUPERPROFIT = noun, meaning profits above and beyond a normal return on the money invested and unpaid labour input. Without a superprofit, a business is unlikely to thrive, grow or gain significant capital value.

MOAT = A defensive property of a business meaning that competitors cannot easily come and take away your ability to make SUPERPROFIT.




To anyone thinking of creating or buying into a small business, we would ask,

a) How does this business fare in the quest for SUPERPROFITS?

b) Is it truly INVESTIBLE?,

c) Hence, is it actually worth doing?

Or is it in fact a Lifestyle Business, being an enjoyable, but riskier, more stressful alternative to having a job and putting your money in the bank?  We’re not saying nobody should ever get into a Lifestyle Business, but would caution to go in with your eyes open.


To anyone thinking of buying into a large business, we would say; the same questions apply!  Where are the SUPERPROFITS and the MOAT?