Firstly, a slight correction: The photograph accompanying my regular piece last week http://www.ifamagazine.com/category/coffee-lounge/the-other-side/ is not, I am relieved to say, of either me or of the top of a type of drinking receptacle. For those who have not met me or seen my likeness, I am equally ugly but in a more up-market and distinguished way which is often attractive to ladies of a certain age and loveless cock pheasants.
This is arriving earlier than usual as I am in Tyneside tomorrow, talking to some really nice IFAs about the first thing that comes into my head… or possibly the second.
Commerzbank first quarter net profit came in at 369m euros ($479m; £297m), down 63% from the same period last year. It took part in the Greek debt swap and the sold almost all of the new bonds it received, losing 69m euros in the process. Germany’s second biggest lender said the eurozone debt crisis would continue to hit its earnings. So it still isn’t telling the whole truth.
Elsewhere Australia’s main index fell after Treasurer Wayne Swan outlined the nation’s budget on Tuesday. The budget aims to return to a budget surplus in 2012-13 as the government reduces defence spending and abandons a planned corporate tax cut.
The European Financial Stability Facility’s Board of Directors released a €5.2bn payment to Greece, allowing it to meet its near-term obligations. €4.2bn will be paid now while €1bn will be given at a later date “depending on the financing needs of Greece”. In Spain, the Ministry of Economy confirmed late on Wednesday night that it would kick-start the process by which the state will assume control of distressed lender Bankia. It has since confirmed that it is taking a 45% stake by converting the loan it made earlier to equity. Don’t doubt that there is an awful lot more to follow.
Headline on FT Adviser: Network IFA liable for PI excess but ‘unable to appeal’. Former Tenet AR writes to FOS to complain that he was denied access to the normal paths of appeal. This must be happening all the time with networks. A good friend and retired IFA has had the same problem with another network. Everything’s good until it isn’t, then you find that you have no status with the FSA unless they want to fine you too.
Investors in Warren Buffett’s firm Berkshire Hathaway may have been left disappointed with returns over the past three years as the company has underperformed the S&P 500 by more than 25%.
April’s job gains in the US were poor by any standards. Almost 70% of job gains came from bars and restaurants, temp firms, and retail, which do not seem the strongest foundations for long-term growth.
The platform industry has raised concerns over some advisers using model portfolios through platforms without the correct regulatory permissions or a contract between the client and the discretionary fund manager. In April, the FSA published guidance consultation on assessing suitability for replacement business and centralised investment propositions. The regulator says it found evidence that some firms that do not hold permissions to manage client investments are failing to arrange for clients to have a contractual relationship with a DFM. (Money Marketing 3 May) Why take the risk? Leave it to us.
“If China’s GDP were a security you could buy, it would have delivered strong returns. The value of China’s annual output nearly quintupled from 2000 to 2011, which would have made it one of the best investments in the world. But GDP is not a security. The Shanghai Composite Index, something you can invest in, has a much weaker record. It rose about 46 per cent over the past decade, barely keeping pace with inflation.” (FT 1 May) Perhaps investors in the SCI don’t believe them either!
I was sitting contemplating death the other evening. I said to my wife, “Darling, when I die I’m going to leave everything to you.” She said,” You already do, you idle sod.”
Have a good weekend.
For and on behalf of
Myddleton Croft Ltd
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