The Cowell Rhetoric:
Posted on: 01 Jun 2012 by James Farmer

This is coming out early as doubtless you will be sloping off to enjoy the extended bank holiday.

 

IFA network Paradigm Financial Advisers has increased fees for some members by 30%. They have been swiftly followed by at least one other network. This appears to be prompting the old Monty Python question, “What have the networks done for us?”

 

Despite what’s happening elsewhere in the world, Japan is heading for significant recovery, according to a Japanese fund manager. He would say that wouldn’t he? The economy looks strong, first quarter GDP figures released last Thursday, showed the economy has grown by an annualized 4.1%, driven by personal consumption and public spending. Actually we wouldn’t necessarily disagree with him in principle but it’s only going to show in share performance if the yen falls.

 

Data published by Spain’s central bank showed €97bn had been pulled out in the first quarter – around a 10th of the country’s GDP. ECB President Mario Draghi described the current set-up of the eurozone as “unsustainable” and urged leaders to quickly come up with a “banking union” to protect depositors and prevent failed banks from threatening the financial system. Draghi criticised the current handling of the banking crisis saying that when regulators are faced with banks needing more capital, they “underestimate the problem and then come out with a second or third or fourth assessment,” citing Franco-Belgian bank Dexia and Spain’s Bankia. Santo cielo! Surely not a Damascene conversion?

 

China’s official manufacturing purchasing managers’ index (PMI) fell from 53.3 to 50.4 in May, below expectations of around 51-52. I will let you judge as to the accuracy. Meanwhile, HSBC’s own Chinese PMI fell from 49.3 to 48.4, down from an initial estimate of 48.7.

 

How d’you fancy holding an index-linked gilt for 50 years at 0.04% – yes, 4bps – above CPI? On Wednesday the DMO sold £4bn in 45 minutes!! Not only that but it was nearly 3 times oversubscribed. Mama Mia.

 

Boutique managers beat mass-market rivals in their ‘Alpha test’ according to Trustnet. If you don’t believe it without evidence, have a look at the attached charts. We produce the returns without the volatility. Our models are available on Novia and True Potential if you prefer that route. We’re cheaper direct……

Hooray!! 31 May was Tax Freedom Day! However, don’t celebrate too early; you will have to pay until late July before the cost of government is covered. The Adam Smith Institute totals up all the direct and indirect taxes along with National Insurance contributions that we pay to HMRC. Then it looks at our national income and works out what proportion is needed to fund government spending which allows it to calculate the total number of days, including weekends, that the average UK earner must work to pay all fiscal outgoings. Almost 41% of your overall income will be ending up in the taxman’s coffers. However, taxpayers will have to work until their summer holidays just to pay off their share of the total costs incurred by the government, including both spending and borrowing costs.

 

Les Echos reports that credit rating agency Moody’s expects one quarter of loans linked to corporate leveraged buy outs to default in Europe. Anyone in European High-Yield Bond funds?

 

Changes To Investment Instructions

“Due to new European Union regulations, from 1 August 2012 we’ll require confirmation that your clients have received the relevant Key Investor Information Document (KIID) before we can accept their investment instruction. Should your client wish to buy, switch or make changes to their fund choices on Cofunds, they’ll have to use our online application process (if applicable) or a standard application or transaction form. We’ll no longer be able to accept any requests by letter. As this is a material change to our established process, we must notify all investors directly. We’re therefore including an insert in their annual statements.” Cofunds announcement.

 

Using our discretionary service there is no requirement for KIIDs which will cost a fortune to print and send.

 

‘My daddy told a story about my Aunt Karen. She was a pilot in Desert Storm and her plane got hit. She had to bail out over enemy territory, and all she had was a flask of whiskey, a pistol, and a survival knife.
She drank the whiskey on the way down so the bottle wouldn’t break, then her parachute landed her right in the middle of 20 Iraqi troops. She shot 15 of them with the pistol until she ran out of bullets; killed four more with the knife; the blade broke then she killed the last Iraqi with her bare hands.’
‘Good Heavens,’ said the horrified teacher. ‘What did your daddy tell you was the moral to this horrible story?’

‘Stay away from Aunt Karen when she’s been drinking.’

 

 

Have a good weekend and God Save the Queen.

 

DAVID COWELL

Director

 

For and on behalf of

Myddleton Croft Ltd

Tags: mario draghi | purchasing