Something sensational to read on the train
November 6, 2017

Mint - Blain's Very Late Morning Porridge

I never travel without my diary. One should have something sensational to read on the train.

For the avoidance of doubt – the Morning Porridge is unrestricted market commentary, it is not investment advice…

I reckon my increasingly fraught weekly commute up to London is the clearest proof yet of the possibility of shocking electoral surprise and chronic market uncertainty in the UK sooner than markets expect. It's just taken three hours to travel a one-hour route.

I'm intrigued to know what's happened to South-West rail's Southampton-Waterloo line. For many years it functioned fine, but now my Monday morning trip up to the Smoke has become a lottery - how slow can you go and trains crawling to London because of perpetual "signaling faults", or this morning which began with a "broken-down" train on the line, then dumped us at Woking to find alternative ways into London, while excusing the lack of service with a derailment and later a host of increasingly contradictory tales.  

It feels symptomatic of a wider UK economic malaise - it just doesn't seem possible to get anything done any more in this country. UK politicians crow about the success in rebuilding London stations, but what use are lots more platforms if the middle management jobsworths running the railways cannot make them work properly? (Or a now-homeward bound minister boasting our aircraft carrier is the envy of the world - when it's not going to have any aircraft for the foreseeable future...and even then we can't staff it or afford it. It's just a very expensive flat deck with a figurative bull's-eye painted on it!) 

It's not just across rail - try asking anyone to do anything these days and you can be pretty sure there will be some sort of "computer says no" excuse. Even the "sensible" parts of the economy are buried under tons of bumf - regulators desperately keen to regulate by demanding instant data they will never ever figure out. So don't ask your local bank for a loan - they are far too busy responding to the latest "must do" proclamation on MiFID (markets in financial instruments directive) to actually do any business..

It's no wonder it all feels so pointless....They say fish rot from the head down…When parliament is discredited by the activities of the entitled serial gropers among the Self-Servatives, the rest of the country takes its lead from them. A loss of faith in politics, Brexit remorse and the central heating breaking down just as the cold begins...it's enough to make you cry!

The day of reckoning may be coming - before the wi-fi on the train broke down, I was reading about Tory plans for by-elections to get rid of the worst abusers. Guess what? They will likely lose, and Theresa Might‘s majority will vanish. Jeremy Corbyn anyone? 

Back in the real world, and we're watching oil prices rise as the headlines out of Saudi Arabia play on. A luxury hotel is now a luxury prison, while a helicopter containing eight prominent figures and a minister crashes? How convenient. Is the Crown Prince Mohammed Bin Salman simply cementing his power base by removing rivals, or will he succeed in building firm foundations for a solid future economy, solve the crisis created by chronic inequality by freeing up the economy, or are we entering the Saudi endgame as the state consumes itself?

Lots of differing views - but I suspect the Aramco IPO (initial public offering) is already about ten years past its sell by date. Turning around Saudi is a massive task, and may not play out the way many in the west expect – with the emergence of a more liberal Saudi. In the fact the opposite is also possible – some Middle East watchers are predicting a more repressive and theocratic Wahabi ascendency as a possibility.  The most interesting arrest over the weekend is Prince Alwaleed bin Talal – hinting at a change in the way Saudi deals with the west. Will Salman open up the economy or close down the kingdom?

It's 100 years since the Russian revolution and I think I'll read up on Kerensky's attempts to liberalize the economy – he was years too late and we all know what happened next...

Our emerging markets desk is actively trading Saudi debt this morning – call and I'll put you directly in touch with them...

Venezuela is the other big EM axe this morning, and we're hearing all kinds of plays being suggested re financial engineering solutions, and playing debt versus debt. Again – happy to put you straight through to desk.

And the third big story this week is Greece, where the restricting bond deal looks like being a winner – and illiquid bond curve becomes an investible market. And finally, I better get on with the day job!

Bill Blain

Head of Capital Markets/Alternative Assets

Mint Partners





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Mint - Blain's Very Late Morning Porridge

I never travel without my diary. One should have something sensational to read on the train.

For the avoidance of doubt – the Morning Porridge is unrestricted market commentary, it is not investment advice…

I reckon my increasingly fraught weekly commute up to London is the clearest proof yet of the possibility of shocking electoral surprise and chronic market uncertainty in the UK sooner than markets expect. It's just taken three hours to travel a one-hour route.

I'm intrigued to know what's happened to South-West rail's Southampton-Waterloo line. For many years it functioned fine, but now my Monday morning trip up to the Smoke has become a lottery - how slow can you go and trains crawling to London because of perpetual "signaling faults", or this morning which began with a "broken-down" train on the line, then dumped us at Woking to find alternative ways into London, while excusing the lack of service with a derailment and later a host of increasingly contradictory tales.  

It feels symptomatic of a wider UK economic malaise - it just doesn't seem possible to get anything done any more in this country. UK politicians crow about the success in rebuilding London stations, but what use are lots more platforms if the middle management jobsworths running the railways cannot make them work properly? (Or a now-homeward bound minister boasting our aircraft carrier is the envy of the world - when it's not going to have any aircraft for the foreseeable future...and even then we can't staff it or afford it. It's just a very expensive flat deck with a figurative bull's-eye painted on it!) 

It's not just across rail - try asking anyone to do anything these days and you can be pretty sure there will be some sort of "computer says no" excuse. Even the "sensible" parts of the economy are buried under tons of bumf - regulators desperately keen to regulate by demanding instant data they will never ever figure out. So don't ask your local bank for a loan - they are far too busy responding to the latest "must do" proclamation on MiFID (markets in financial instruments directive) to actually do any business..

It's no wonder it all feels so pointless....They say fish rot from the head down…When parliament is discredited by the activities of the entitled serial gropers among the Self-Servatives, the rest of the country takes its lead from them. A loss of faith in politics, Brexit remorse and the central heating breaking down just as the cold begins...it's enough to make you cry!

The day of reckoning may be coming - before the wi-fi on the train broke down, I was reading about Tory plans for by-elections to get rid of the worst abusers. Guess what? They will likely lose, and Theresa Might‘s majority will vanish. Jeremy Corbyn anyone? 

Back in the real world, and we're watching oil prices rise as the headlines out of Saudi Arabia play on. A luxury hotel is now a luxury prison, while a helicopter containing eight prominent figures and a minister crashes? How convenient. Is the Crown Prince Mohammed Bin Salman simply cementing his power base by removing rivals, or will he succeed in building firm foundations for a solid future economy, solve the crisis created by chronic inequality by freeing up the economy, or are we entering the Saudi endgame as the state consumes itself?

Lots of differing views - but I suspect the Aramco IPO (initial public offering) is already about ten years past its sell by date. Turning around Saudi is a massive task, and may not play out the way many in the west expect – with the emergence of a more liberal Saudi. In the fact the opposite is also possible – some Middle East watchers are predicting a more repressive and theocratic Wahabi ascendency as a possibility.  The most interesting arrest over the weekend is Prince Alwaleed bin Talal – hinting at a change in the way Saudi deals with the west. Will Salman open up the economy or close down the kingdom?

It's 100 years since the Russian revolution and I think I'll read up on Kerensky's attempts to liberalize the economy – he was years too late and we all know what happened next...

Our emerging markets desk is actively trading Saudi debt this morning – call and I'll put you directly in touch with them...

Venezuela is the other big EM axe this morning, and we're hearing all kinds of plays being suggested re financial engineering solutions, and playing debt versus debt. Again – happy to put you straight through to desk.

And the third big story this week is Greece, where the restricting bond deal looks like being a winner – and illiquid bond curve becomes an investible market. And finally, I better get on with the day job!

Bill Blain

Head of Capital Markets/Alternative Assets

Mint Partners



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