Month: July 2017

The President has an urgent need to change the subject, but the media is intent on not allowing him to do so for the time being. Normally, people would get tired and stop reading or listening to these old news, whether bona fide or fake…but the president’s detractors are clearly not going to let go, drip-releasing snippets on almost a daily basis. There are a few things that the president can do to force the change of subject. First, try to become a news maker, rather than a news taker. This he is trying to do with the appointment of Mr Scaramucci. Next, he and his family and advisors should also release any information remotely dealing with the Russia issues at once so that there can be no more daily leaks. Of course, he and they can only do this to the extent that there is no smoking gun out there….

Finally, a real international crisis, such as a war with N Korea, or in the middle east, would probably go a long way to replace these irritating news…are we in for a hot summer?

It is becoming increasingly clear that the Obamacare bill that most people didn’t like a couple of years ago, has become an ACA that is certainly not perfect but not even a disaster. It is probably best characterised as the lesser of the evils. Repealing it will be tough, and changing it has proven impossible for the Republicans to achieve, given their own divisions between right and left of the party.

 The problem now, witness the US dollar rapid depreciation, is that this legislative debacle has significantly eroded investor confidence in the Trump’s administration ability to push through much of his economic agenda. The main next step will be tax reform. Trump and the GOP congress better gets their ducks in line this time, as confidence is easy to lose and very tough to regain…

For a long time Italian banks have been the scare of the Eurozone. In particular, their mountain of NPLs, usually not properly covered by adequate reserves, have been a Damocles sword on top of European technocrats. However, the recent swift, bail-out of the venetian banks and MPS has suddenly taken a weight off the sector. Italian bank shares are up over 25% year to date, and problem cases are now much more manageable. Of course, there is still the problem that on top of the mountain of NPLs there is an even taller pile of UTPs (acronym for unlikely to pay…), which are essentially NPLs in gestation. If the economy picks up steam, and the banks continue to work through their NPLs, it is still possible that the UTPs will not become the next ticking bomb for the Eurozone. The markets have turned bullish, we shall see…

President Macron is increasingly looking like a modern Roi Soleil. He is now meeting foreign visitors and holding parliament meetings in Versailles. This is probably not a bad thing as long as he utilises France’s attempt at regaining ‘grandeur’ to make the necessary reforms at home. He seems to be inclined to hit the ground running with labour laws reform… Let’s see how he deals with the inevitable street demonstrations that will certainly happen.