You think it’s all going swimmingly? Don’t look behind you, says David Cowell of Myddleton Croft Investment Managers. You’d probably rather not know… 


Presenting the Bank’s Inflation Report yesterday, Governor Mark Carney said the Bank “has the will, means and responsibility” to take further measures, including changing the pace of rate increases, cutting the bank rate to zero and further QE if risks materialise.


What does he know that we don’t?


Hot on the heels of Towry and Ashcourt Rowan, we have Pearson Jones going bankingrestricted after being bought by Standard Life. Perhaps people will now believe what I have been saying for years that things would go full circle and insurance companies would once again make a bid to corral IFAs’ clients through owning platforms and buying firms. You may wish to spool back to last week’s missive for further comment.


Don’t be under any misapprehension, they will find ways of easing you out unless you take action to protect your client base. We have some interesting and profitable ideas on this subject. “The interesting thing is it is a real vote of confidence in the advice sector,” said Mick McAteer, director of the Financial Inclusion Centre. Rubbish! It’s a fight-back by insurance companies for distribution.


myddleton croft


Sweden shocked markets on Thursday by introducing negative interest rates, launching bond purchases and saying it could take further steps to battle falling prices. The Riksbank said it cut its key repo rate to minus 0.1% from zero where it had been since October. It also said it would buy bonds worth 10 billion Swedish crowns. The central bank joins a list of those including the ECB, the U.S. Fed and the BoE. Unlike many other European countries, Sweden’s economy is growing at a solid pace but even so, inflation is still way under their 2% target and some economists say Sweden risks a deflationary spiral. However, as economists have predicted 14 of the last 4 recessions, am I bothered?

FCA head Martin Wheatley has told the Treasury Select Committee that the FCA didn’t know about HSBC. HM Revenue & Customs (HMRC) was given documents in 2008 to 2010 about HSBC’s possible role in tax evasion. Wheatley told the Treasury Select Committee that the FCA is now in discussions with the bank on its global operations but denied it was a problem that HMRC had not informed it about the specific issues, according to the BBC. “I don’t know if they have any such obligation,” he said. He also said that the lack of communication “doesn’t stop us doing our job”. No, but it stops you doing it properly.

Is the S&P 500 about to follow earnings  lower?


MC chart S&P


US Payrolls rose a hefty 257,000 in January while benchmark revisions led to an additional 250,000 jobs added in 2014 leaving the total for the year at 3.1 million and the average monthly gain at 260,000. Notably, November and December data were revised up a combined 147,000 with a whopping 423,000 added in November! The economy has added on average 336,000 jobs per month over the past three months and just under 270,000 over the past 12 months. The services sector added 209,000 jobs with gains observed across all major industries. Healthcare and social assistance led the way with 50,000 added followed closely by retail trade employment up 46,000 and professional and business services up 39,000. Perhaps we shouldn’t worry?



Main headline on Reuters yesterday:  “Ukraine peace deal agreed. Germany, France, Russia and Ukraine agree a deal that offers a “glimmer of hope” for an end to fighting in eastern Ukraine after marathon overnight talks.” Article a little below headlined: “Fifty tanks, 40 missile systems crossed from Russia into east Ukraine overnight.”



It would appear that major shareholders in 7IM, Zurich Insurance Group and Aegon, have ordered corporate finance firm Evercore to conduct a valuation of the business without consulting the founding partners. Shareholders can be tedious at times.


Sheffield University economic students have complained that examiners asked “questions on something we have not been taught or told to research”. Surely these are the best questions; they invite students to think rather than regurgitate. Unless one is going directly into politics of course.


The Times reports that, under a trial scheme due to be launched in ten areas with high levels of migration, GPs will ask EU migrants to produce their European Health Insurance Card in order to allow the NHS to claim back the costs of their treatment from their respective governments. Other EU governments are already supposed to refund the UK, but due to the lack of a formalised NHS procedure, the Department of Health estimates that the UK only reclaims £73m out of a potential £500m total. Is this the same NHS that moans about being under-funded?

Recently, while I was working in the flower beds in the front garden,  my neighbours stopped to chat as they returned home from walking their dog. During our friendly conversation, I asked their little girl what she wanted  to  be when she grew up.  She said she wanted to be Prime Minister someday.

Both of her parents, of left-wing proclivities, were standing there as  I asked her, “If you were Prime Minister what would be the first thing you would  do?” She replied, “I’d give food and houses to all the homeless people.” Her parents beamed with pride! “Wow…what a worthy goal!” I said.  “But you don’t have to wait until  you’re Prime Minister to do that!”

“What do you mean?” she replied. So I told her, “You can come over to my house and mow the lawn, pull weeds,  and trim my hedge, and I’ll pay you £50.  Then you can go over to the  grocery  store where that homeless chap sells The Big Issue and you can give him the £50 to use toward food and a new house.”

She thought that over for a few seconds, then she looked me straight in the eye and asked, “Why doesn’t the homeless guy come over and do the work, and you can just pay him the £50?” I said, “Welcome to the real world.” Her parents aren’t speaking to me anymore.

A sage was once asked how long a minute is. He replied that it depended upon which side of the toilet door one happened to be.


Have a good weekend.



David Cowell


For and on behalf of Myddleton Croft Investment Managers

1 Woodside Mews

Clayton Wood Close


LS16 6QE

Tel:        0113 274 7700

Fax:       0113 274 7711


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