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Blackmore Borley Limited

 

 

                                 The Bespoke Lloyd’s Insurance Broker

 

The Vintage Magazine is delighted to welcome Blackmore Borley Limited as a Platinum New Business Member and its favoured insurance broker.

Their Private Client team specialises in personal insurance solutions for those individuals who require a more bespoke product when protecting their valuable assets. They work closely and discreetly with their clients to understand their needs in order to provide independent and expert advice across a wide range of personal products. These include UK and overseas homes, motor, classics cars, fine art, jewellery, wine, travel, private aviation and yachts. To ensure that they provide the best coverage, they only work with the UK’s leading specialist insurers.

Their skilled specialists take the time to understand their clients’ needs and simplify the complexity of insurance so that they can deliver innovative and high quality solutions.

 

They are the broker of choice for many businesses and individuals, across a range of disciplines and industry sectors and are committed to building long-term relationships between their clients and their insurers.

 

For further details please contact Ricky Downs at rdowns@blackmoreborley.com or 0207 929 4616 or visit www.blackmoreborley.com.

 

Blackmore Borley Ltd is authorised and regulated by the Financial Conduct Authority FSR 311926

 

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                                                         Blackmore Borley Ltd is authorised and regulated by the Financial Conduct Authority FSR 311926

 

 

 

 

London Skyline for Christopher Jackson's Blog, The View From Lawrence Street

 

From the 14th June, the world will witness its 21st World Cup tournament, this time hosted in Russia. Football is an odd game to have conquered the worlds hearts. A sport popularised by the sons of aristocrats running around the wet and cold fields of England’s leading 19th century public schools, is now actively played by over 270 million FIFA registered players globally while the World Cup is the World’s most watched event, with 3.5 billion people reached in the 2014 tournament.

But while the talents of the worlds leading male football players will fill the papers for the next few weeks, it is also worth taking some time to consider the impact that the World Cup has on national politics.

The World Cup can exert a powerful affect on national moods, not only on the host nations but also on those who participate. In 2006 as Germany hosted the World Cup, the nation witnessed the first large scale public displays of German flags and German nationalism, or as one German friend remarked to me, “It was the first time in my life I felt it was ok to be proud of being German”. By contrast spare a thought for Brazil, who after financing the World Cup and the Olympics, crashed out of the World Cup against Germany in a 7-1 in what the BBC called one of the “Great World Cup moments”. Not only did the tournament torpedo the reputation of Brazil, it also destroyed the popularity of the national government, and when the full details of the lavo jato or “Operation car wash” scandal first started to appear in 2014, it was a matter of time before the acting President Dilma Rouseff was impeached and the Workers Party (PD) removed from party. Incidentally, Argentina’s subsequent loss to Germany in the final also helped sour Argentine national mood and along with Brazil the country removed President Cristina Fernández de Kirchner in 2015.

So, what is there to consider at this World Cup?  Well firstly its hosts are not exactly in the international good books.  Following large-scale arrests and investigations, it is widely believed that the Russian hosts bribed their way into securing the World Cup tournament this year.  If that wasn’t bad enough, the country remains under heavy international sanctions for its illegal annexation of Crimea, alongside its involvement in the deaths of Dutch nationals in Ukraine and its complicity in Assad’s war crimes in Syria. Given this backdrop, President Putin sees an opportunity to distract the world (and his citizens) with well-executed games. If Russia performs well, the visitors are happy and the matches are exciting, the country will be given a strong platform to re-engage with Europe on sanctions whilst also undermining domestic political opposition. However, a loss in the group stage, followed by further corruption details and stories about Russian football hooligans would further undermine both domestic and international support for Russia.

But Russia is not the only country looking to the World Cup for a reputation boost. Both Iran and Saudi Arabia would benefit from stronger than expected performances, and while the chances of any Middle Eastern Team winning the cup are reasonably low, an advance to the semi or quarter finals would still provide a large positive PR boost to these middle eastern nations.

Read more…

 

London Skyline for Christopher Jackson's Blog, The View From Lawrence Street

It was probably inevitable, but the crisis engulfing Facebook is one of the most embarrassing examples of Silicon valleys hubris in the last two decades.

A company that specialises in connecting people, an exercise that requires people to trust the platform as a place to share content, has managed to simultaneously violate that trust and act totally surprised in doing so. When Facebook was first created it was a place for university students to share stories, an occasional photo and talk to friends when they couldn’t afford to call abroad. Today it is a business platform for multinational corporates, a virtual monopoly in the global social media world (excluding the great digital firewalls of China and Russia), as well as the largest surveillance mechanism ever created by man. If the apocryphal tales that Facebook was created by the CIA ever become more than conspiracy theories, I would take the agents out for a beer. It’s hard to imagine them being more successful in manipulating billions of people to hand over the most intimate details of their life than Facebook.

But what do we do about it? Facebook IS the only platform where everyone can find a friend, family member or old classmate from their school days. It also owns Whatsapp, Instagram and nearly brought out Snapchat (before deciding it was cheaper just to copy all of their ideas into Instagram instead). Indeed, the monopoly is alive and very well in the social media space. So much for a dynamic and free market that internet radicals long predicted.

The issue with Facebook is that it has transcended its role as a tech company and become a global public good, much in the way that GPS, SWIFT and Wikipedia have done. This conflict between its corporate needs and Facebooks public nature is at the heart of the conundrum that is threatening Facebooks future role as the global sharing platform.

There may come a time where individuals lose their inhibitions and learn to accept the flawed nature of humanity, such that the embarrassing university photos and awkward Facebook status of one young activist days become nothing more than a source of amusement. But we are not there yet.

In the interim the most radical solution may yet be the one true way to ensure the eternal legacy of Zuckerberg’s creation: turn the company into a global charity with an international non-partisan board. Such a solution has long been muted for Twitter, another social media company that serves a clear public good, but unlike Facebook has lacked the will (some would say ability) to extract the financial gains necessary to ever become commercially viable.

A world where Facebook becomes a utility like Verizon or a charity like Wikipedia is hardly likely to thrill investors and tech entrepreneurs. Then again, few people who change the world ever live to see the real fruits of their efforts.

If Zuckerberg is serious about fixing Facebook he needs to find a way to square the circle between regaining user trust and generating the returns expected by Wall Street.

For a man more concerned about his public appearance than his bank account, Mr Zuckerberg could do worse than consider what Facebook would look like if it became a true global public good rather than a Wall Street darling. The clock is ticking and the users are leaving.

Your move Mr Zuckerberg.

 

 

Christopher Jackson The View from Lawrence Street

 

Christopher Jackson graduated from York University with a 1st Class Honours Degree in Politics with International Relations, BA and is a graduate of Johns Hopkins School of Advanced International Studies and currently works on financing and developing renewable energy projects.

Click HERE to read Christopher’s impressive curriculum vitae on Linkedin.com

 

London Skyline for Christopher Jackson's Blog, The View From Lawrence StreetOn the 5th of February 2018, the Dow Jones witnessed its largest one-day point decline in its 120-year history. In total, the 30 largest US listed companies from across the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (NASDAQ) dropped 4.6%, a percentage decline not seen since the eurozone crisis in August 2011. Nor was the Dow alone.

As investors across the world saw the roaring US stock market come to a violent halt, stock markets in Asia and Europe started to collapse as well.

Why? What went so badly wrong that the world suddenly lost its cool and within a week almost all global indices had fallen by 6%-12%?

Most of the news for 2018 actually looked pretty great.

The IMF had upgraded global growth forecasts for 2017, 2018 and 2019, while claiming that the world was about to witness the “‘broadest’ upsurge in global growth since 2010”. Global Mergers & Acquisition activity was at its highest since the dot.com boom over 17 years ago, the eurozone grew at its fastest rate in a decade and manufacturing growth has exploded across the US, Europe and the UK.

Given these factors, many retail investors and ordinary people reasonably asked the question: “Why did everything collapse and what should I do with my money now”? In an attempt to answer the first part, we have to begin with separating the event itself (the stock market collapse), and the reasons behind the crash (the fundamentals).

There are many different and authoritative views on this issue, including a very easy and concise piece by Bloomberg available here. My take is below:

With interest rates at record lows, the stock-market continuing to grow at breakneck speed and the global economy expanding, people have thrown caution to the wind and invested in the stock markets. In fact, January 2018 witnessed record levels of investment in the stock-market, as confidence took over and people from all walks of life began to invest. This is where the problem started.

Everyone in the stock market had been waiting for a fall. But knowing when it would come had been a significant challenge. If investors left too early, they would be potentially giving up the chance to make more money. If they left too late, they may lose everything. On January 29th and 30th, the first investors lost their calm and pocketed their gains and as January came to a close, the US stock market saw two days of consecutive decline and its largest fall since May 2017 (a small blip in comparison to what would happen later).

But why were the professional investors sceptical of the market? Here again we must return to expectations.

The aim of a professional investor is to generate returns that exceed what could be earned by investing in a risk-free asset. In simple terms “risk free” usually means bank deposits and the bonds of the worlds most financial secure markets (US, UK, Switzerland, German). The reason they are “risk free” is because most bank deposits are covered by insurance and because these governments are considered financially prudent enough to guarantee that any money owed to investors will always be repaid. Naturally this sounds like a great deal for investors. Put your money into a bond and earn a guaranteed amount of interest. What is not to like? Well the problem is that after the financial crisis too many investors thought that this was a good idea and so as the demand for bonds increased, their price increased. To cut a long story short, when the price of a bond increases the interest (read return) gets smaller. This is where the problem started.

Risk free bonds are the benchmark for professional investors. The expectation is to beat the risk free rate and the more risk the investor is asked to take, the bigger the return they expect (over the risk free rate). But if the risk free rate is extremely low, then risky investments can look increasingly attractive if investors cannot reach their target return through traditional investments. Pension funds are an excellent example of this. Prior to 2008 a pension fund would expect to pay 3% of all its funds under management out to its retirees every year. Therefore, as long as the pension fund could earn over 3% the fund would meet its obligations. Conveniently several types of government bond from the UK, USA and across leading economies were paying around 5% prior to 2008, allowing pension funds to make a 2% profit and meet all of their commitments, with minimal risk. But the financial crisis and ultra-low interest rates changed everything.

 As interest rates dropped to nearly 0% (in some cases negative), investors like pension funds, were forced to find other ways to generate their returns and so they piled into property, real assets (gold, oil, etc) and stocks. Accordingly, the stock market exploded. It didn’t matter that a company was now generating 3% return a year (compared to 5%) because its share price had risen. The alternative was a 1% government bond.

So back to 2018, the key question for investors was this: when would interest rates rise sufficiently that large money managers would sell their stocks? After all, if the interest rate rises then the return from the stock must price in tandem at every step. But that cannot happen forever.

So the magic number was 3%. Specifically, investors began to believe that rising wage inflation in the US at the end of January would increase the interest rate on US ten-year debt to 3%. If inflation was high, the US Federal Reserve would increase rates and money managers would sell their stocks. In Germany the same thing happened when the largest German workers union negotiated an inflation busting pay rise in February, leading to significant stock market declines in the US stock market (the 2nd worst performer after the Dow Jones).

What next?

The financial markets have broadly calmed following their collapse at the start of the month, but the truce remains uneasy. It is clear that investors remain extremely uncertain whether the sharp decline in share prices remains the only price “correction” that we shall see for the year, or if it is merely an early warnings tremor before a larger financial earthquake later in the year. On this question, expert opinion is fiercely divided.

However, for people interested in following the stock market closely its worth looking at whether any of the large companies, famously called “Unicorns” choose to finally go public this year. Traditionally private companies go public when they believe that valuations are at record highs, not when they believe that there is space to grow. So if you see AirBnB, Uber or even Spotify go public, then maybe consider putting some more cash in the bank and out of the stock market.

Important disclaimer here: This piece merely reflects the views of the author and should not be considered as financial guidance or advice.

London Skyline for Christopher Jackson's Blog, The View From Lawrence StreetGiven the volume of news in 2017, finding a common theme to make sense of the noise has proven challenging. However, as we start 2018, there is an argument to say that 2017 was defined by the actions of the world’s Central Banks.

After years of unconventional monetary policy, the actions of the Federal Reserve, the Bank of Japan, the Bank of England, and the EBC have begun to deliver results. The spectre of deflation has been defeated and inflation appears to be increasing across the world’s major developed economies. Economic growth has picked up in the Eurozone and Japan, while emerging markets have survived the first few US interest rate hikes without causing a collapse. But just as the achievements of these policies have been recognised, so have the costs.

As central bankers discouraged saving by reducing interest rates close to zero, investors were forced into equities and real assets. This led to a surge in global property prices and record levels of investment in global start-ups, crypto-currencies, and passive indexes. Rising property prices have led to bans on second homes across developed economies from New Zealand to Western Canada, and clamouring calls for a ban in London. In many developed economies, the average property price is now well beyond the 4x annual salary against which banks will provide loans, forcing a greater proportion of people to rent than ever before.

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London Skyline for Christopher Jackson's Blog, The View From Lawrence Street

 

The world’s largest free trade deal fundamentally re-shaped the future of Transportation – and no one noticed.

In December of 2017, the EU and Japan announced that they had agreed the terms of a vast international free trade deal. The deal, still subject to final approvals in the EU and from the Japanese diet, will create a combined economic free trade area of 600mn people worth 30% of GDP. But while the focus has been on the changes to agriculture, sustainability and regulatory alignment, a key provision has slipped almost unnoticed from the public eye. A regulatory drawbridge for hydrogen vehicles has been created.

In one of the most startling changes, barely noticed by the press, the EU have been allowed to sell hydrogen cars straight into the Japanese market, bypassing stringent legislation for Japanese specialist steel and labelling standards. In addition, the EU has agreed that “Furthermore, EU manufacturers that are not yet as far advanced in the development of this technology of the future can, thanks to the specific and much lighter conditions, import hydrogen fueled cars for testing and validation purposes and use the Japanese infrastructure of hydrogen filling stations to fine-tune their cars.”

Why does this matter? It matters because (arguably) the world’s most technologically advanced nation has bet big that the future of transportation will be Hydrogen and it is now luring all the world’s largest automakers to build out their R&D and manufacturing within Japan.

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….absolutely nothing.  Unless you are invested in defensive companies, government bonds and other “risk-off” assets.  That is until conflict starts, at which point history teaches us that (strangely) markets rally dramatically as a result.

The war of words between Kim Jong Un & Donald Trump has been a major focus for markets over the past few months, with investors hoping that it doesn’t escalate into a fully-fledged war of nuclear proportions.  This month we consider the possible implications for the markets if this tension continues to escalate.  We use data from previous wars spanning back to WWI to examine the possible consequences if this verbal war becomes a real conflict.  Thankfully we have no benchmark for an exchange of nuclear missiles.  We sincerely hope it stays that way.

 

Mountstone Partners Ltd

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London Skyline for Christopher Jackson's Blog, The View From Lawrence Street

Despite 7 years of stagnant economic growth in Europe, austerity in Britain and growing inequality in the US, the political left has never looked weaker. That is a problem. All good political systems require competition of ideas to help both sides refine and improve the policies which they offer their electorates. In the founding of any democracy it is widely acknowledged that a failure to create two equal political parties, who can act as counterweights to one another, is essential. Some even believe that if the Russian Communist party had split into two parties in 1990, one moderate and the other traditionalist, it would have fundamentally changed the trajectory of Russian democracy.

But why are the political left so weak? The answer is that they are focusing on all the wrong issues. LGTBQQ rights, climate change, religious tolerance and gender equality are important issues in making our world a better place. But they are not the reason why people decide to vote for one party or another at the ballot box. Hillary Clinton did not lose because every Trump voter is a climate-denier, racist, misogynistic homophobe who wishes to punishes poor people. Though there were likely many of those too. But the reality is that people vote for bread and butter issues and as Bill Clinton once famously quipped, it’s often about “the economy stupid”.

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London Skyline for Christopher Jackson's Blog, The View From Lawrence Street

The Conservative party today lies in tatters. A leader that has lost the support of the public and her party. A party that is seen as out of touch, ruthless and clueless by the British public and nations afar. A government that has no vision and an opponent that offers hope, change and momentum. A momentum towards a past that the Conservative party and its leaders have spent nearly 40 years fighting. Perhaps the only saving grace is that the Conservative party is not alone in its struggles.

Today we see in America, in France, in Italy and across the Western World, that the old political systems and their parties are collapsing. Some are being replaced by new liberal structures. Many are not. During the Cold War the terms of debate were clear and the enemy was clearer. With the end of the Cold War, liberal parties rejoiced in their hard one victory. But they got complacent. They ignored the people and they forgot that Liberalism is not a finite end in and of itself. Rather, it is a mechanism for helping those who govern to make choices for the future. But there was no plan for the future. No dream end game or envisaged utopia. In short, they forgot the most human of all things. They forgot that people need hope of a brighter and better tomorrow.

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London Skyline for Christopher Jackson's Blog, The View From Lawrence StreetThe election today represents a reversion to the mean for British politics. For the first time since 1992, the voters of the UK face a clear choice between Labour and Conservatives. For many this is unsettling. My generation grew up with the Centre Ground. A place where limited ideologies existed and variations between the parties were driven more by local issues and individual biases than existential differences in party governing ideologies. This is how the awfully phrased “millennials” think of politics. A choice between technocratic governments with different faces. Until today.

Today ideology is back, and as I have written before, this has been a shot in the arm for the health of UK democracy. The Brexit referendum marked the first nationwide turnout above 70% in 30 years and repeated polling suggests that the 18-24yr old turnout will be a record 60% or better. But with ideology and passion comes clear winners and clear losers. In part that is why this election is so much harder than those before. There is a trade-off and whoever wins the election will change the face of Britain.

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