9 Dec 2024

WAR WAS TRADITIONALLY DELEGATED TO MEN In the last thousand years or so, nations that considered themselves civilised generally delegated the task of fighting wars to their male populations. On average, men were stronger and probably more violent and possibly less prone to the introspection that might question whether an order to engage in a near-suicidal action was stupid and pointless.  Napoleon and Wellington live on through war gamers who deploy men in ways that might have led to a different outcome at Waterloo. The US civil war (also a gamers’ favourite) was for a while peak slaughter of loyal male soldiers. In addition there were unsurprisingly many civilian casualties but these were regarded as regrettable mistakes.  And then came World War I. The women kept the home fires burning (and much else) but the reputation of that conflict is that it was a foolish and immoral waste of young male life.  AFTER WWI WE ALL BECAME INVOLVED The result was widespread pacifism with a twist. George Orwell said that if nations insisted on going to war they should accept that the cost would and moreover should be borne by the whole population. The Spanish civil war and in particular the attack on Guernica in 1937 by German and Italian bombers brought to international attention what this meant – that civilians would be casualties of contemporary warfare.  Consequently, appeasement was an extremely popular response to the demands of the Nazis in the late 1930s. When Churchill voted against Neville Chamberlain’s Munich agreement of September 1938 he was nearly deselected by his own constituency party. A few months later Hitler broke his word and invaded Czechoslovakia. At that point war was seen as nearly inevitable and, correctly envisaging that London would be a bombing target, the government began to prepare for the mass evacuation of children, gasmasks in hand, to rural and seaside areas. WWII is notorious for the attempted genocide of Jews but also for the bombing of cities. The “Battle of Britain” aimed at London, first by the Luftwaffe and then by V1 and V2 rockets, the destruction of German cities by British and US bombers in early 1945 and the atomic bombs...

Fear of unpredictable geopolitical events seems to provoke a collective desire for experts who can reassure with their wisdom. And there is never a shortage of volunteers to satisfy these needs. They rush in like hopeful lottery ticket buyers ahead of a rollover.  COVID – DISEASE EXPERTS I suppose that this has been building for a long time but the Covid-19 panic jolted it into a higher gear. When Boris Johnson said in June 2020 that a cricket ball was “a natural vector of disease” he inspired not howls of derision but rather an implicit challenge to say something even more uninformed and ludicrous and to claim a spurious authority for having done so.  Governments all over the world engaged in competitive dictatorship to see what restrictions, including travel bans and curfews, they could place on their citizens. And they came for the children too.   In 1984 Orwell wrote: “If you want a picture of the future, imagine a boot stamping on a human face— forever.” In my mind this apocalyptic image has been replaced by that of infant school pupils wearing masks and for hours recycling their own breath back into their lungs. According to experts, this was for the greater good of their grannies and, let us not forget, their teachers. In the US, teachers demanding the closure of schools staged their own mock funeral processions. As if school children were inadvertent assassins. RUSSIA – WAR EXPERTS As this lunacy subsided, Russia invaded Ukraine. A mad man with nuclear weapons and a grudge was threatening to start World War III. Help! Fear not. Help was indeed at hand. In fact, many of the old experts were the new experts. “Ukraine will win. I’ve never been more certain” Boris Johnson It is the two year anniversary of the invasion. I have lost count of the variations in the expert narrative. Quickly out of the traps was the story that the end of Ukrainian wheat exports would cause havoc, particularly in countries like Turkey and Egypt that have diets of which bread is a large part.  The price of wheat rocketed to US$450 per ton but is now at US$187. What happened? It seems...

5 Jul 2018

In Q1 the main UK indexes fell by between 6% and 8%. In Q2, they rose by 7% to 8%. The chart of the first six months is a “V” or perhaps a two-fingered salute to all the financial commentators who claim knowledge of the future. Bond yields again did almost nothing.   I have written elsewhere about the prevailing mood that seems to try to put a pessimistic spin on everything. As a result I would imagine that most people would be amazed to know that shares were so strong in Q2. How could they be in the turmoil of the imminent collapse of international trade, courtesy of the hardball tactics of Mr Trump and M Barnier, l’homme who loves to say “non”? The sole purpose of trade rules is to prevent trade from taking place and that these two gentlemen are both happy to use that threat as what I suppose we must call a negotiating tactic, if we could only tell what it is that they are trying to negotiate. Never mind that. The stock market doesn’t seem very concerned about it. Last quarter I listed thirteen everyday UK shares with markedly high dividend yields. Unsurprisingly, in view of the market performance, you would have done quite nicely if you had bought them. Not a single one of them went bust between April and June, I am pleased to say and the shares of none of them declined. It is better to look at valuations and to ask what they are telling us than to listen to what commentators are actually telling us. How about the yields on government bonds? I have said that there was little change in Q2 (despite innumerable predictions of falling prices) but are there trends and what do the absolute levels tell us? Germany is the benchmark bond for the EU. The ECB will continue its asset buying programme until the end of this year. It is still boosting asset prices by its own version of QE, implying that the crisis that started in 2008 continues. A year ago, 10 year Bunds yielded 0.5%. Now they yield 0.3%. Not many signs of imminent recovery there. Bond yields...