It was the best of polls ... it was the worst of polls ...

The long awaited YouGuv MRP data was released this week. A weekend poll suggested the Tories had an eleven point lead over Labour with 42% of the vote.

The MRP model released on Wednesday, predicted 359 seats for Conservatives and just over 211 for the Corbynistas. If the model predictions are correct, Boris Johnson will have a clear working majority of 68. A great opportunity to get "Brexit Done", put the "Bun in the Oven", release the "Tiger From The Cage" and get the Mogg out of solitary confinement.

For Conservatives it was the best of polls, for Labour, it was the worst of polls. Sentiment was mixed in Conservative headquarters. With mood swings from complacency to crisis, Dominic Cummings, the "eminence grise" in the Tory Shadows, lit up a bat signal from his cave. Brexit could yet be in danger. There is still a possibility of a hung parliament. No time for complacency. "Powerful forces are plotting to block the democratic outcome of the 2016 referendum."  

For manifestos, it was the age of wisdom, it was the age of foolishness. The socialist doctrine of yore, returned to the Labour ranks. The Tories avoided any major commitments that might offend. The triple lock on increases in tax, national and insurance cheered the rank and file. The commitment to 50,000 new nurses melted under scrutiny, like an ice carving of a party leader subjected to studio lighting.

For the party faithful, it was the epoch of belief, for the Institute for Fiscal Studies, it was the epoch of incredulity. Taxes are set to rise to historically high levels and beyond. Labour spending plans would push levels beyond anything ever sustained in previous history in the U.K. Tax plans are unrealistic for all parties with higher levels expected than revealed in the Tory manifesto.

It was the season of Light, it was the season of Darkness. Opponents sought to shed light on the Prime Minister's statements made about single mothers over twenty five years ago. Jeremy Corbyn tossed the cloak of darkness on anti semitism in the Labour Party.

It was the Spring of Hope, it was the Winter of Despair. Hope the political uncertainty might soon be over, despair as reality dawns, the uncertainty of a deal with Europe may well run on for years to come. Boris Johnson didn't help matters, suggested a "No deal Brexit" was yet a possibility.

We had everything before us, we had nothing before us. How easily we learn, promises written on the side of a bus, are easily thrown under, once the primary objective has been achieved. It remains to be seen, how promises outlined may yet be delivered.

We were all going direct to heaven, we were all going the other way. Donald Trump arrives next week to stress NATO and have dinner with the Queen. The Prime Minister will avoid a photo shoot with the President and an endorsement from the White House. That may be difficult. If Johnson looks like a winner, the President will be keen to take the credit.

If polling narrows, the future period may look much like the present period, heaven forbid that nothing changes but "What the Dickens" not long to wait now ...

World trade growth is slowing ...
World trade is slowing, the latest data suggests growth slowed to just 0.5% in the third quarter. We now expect growth of just 1% for the year as a whole, compared to over 3% last year.

World growth is slowing. We now expect growth of just 2.6% in the current year, compared to 3.2% last year. World expansion is deflating. No risk of recession as yet. The twin concerns of Boris and Brexit, Trump and Tariffs continue. The damage to output in the world is significant. Uncertainty over impeachment will not help.

In October, profits within China's industrial enterprises, fell by 10% as businesses struggle to cope with the challenge of the trade war with the U.S.A. Hopes of a trade deal continue to ebb and flow. The economy grew by 6% in the third quarter according to official data. Growth for the year as a whole will be maintained at a similar level, in contrast with a U.S.economy expanding by just over 2%.

It is clear, the White House struggles to achieve an adequate attention span to secure a deal with Beijing. There was confusion in the Oval Office about the sex of the dog, awarded the canine medal of honor by Trump this week. So much for the role of transgender in the U.S. military.

The President made a surprise visit to the troops in Afghanistan this week. A quick visit between a pardon for a Turkey and the inevitable pardon for Rudy Giuliani in due course. Trump announced talks with the Taliban were "back on". This came as a surprise to many, including the Taliban.
Trump calls for a cease fire in Kabul and in Washington as  impeachment rumbles on in Congress. The President appears to be stronger with his base but ever in need of a good headline, London will provide the next opportunity to shock. The Prime Minister will be anxious to ensure he does not become collateral damage in the process ...

Negative Rates  ...
Negative rates can do more damage yet ... the message from the North this week. After half a decade of negative rates, one of the biggest Nordic Pension Funds is beginning to wonder if this is just the beginning.

Euro-zone rates first went negative in 2014, two years after Denmark, which has had negative rates longer than any other country in Europe. The ECB continues to think easy money is the correct response to slowing growth in the single currency trading zone.

World stock of negative sovereign debt is now $12 trillion dollars, down from a peak of $17 trillion earlier in the year. The search for yield is taking institutional money out of government and investment grade bonds and into alternative assets, including real estate, infrastructure and private equity.

Equity markets continue to attract funds. The US indices moved to new highs this week with the S&P up  25% in the year. In France and Germany markets moved to new highs. We expect the FTSE to move once the election uncertainty clears.

Modern Monetary Theory is returning to accommodate the push into infrastructure spending. Talk is back of helicopter money. A cash drop to everyone in the Euro-zone would provide a boost to consumption and growth. Talks of a tariff war with the US will not help.

Trump and Tariffs, Boris and Brexit, the major overhangs for the world economy, now compounded by impeachment in the US and an election in the UK ... negative rates can do more damage yet and probably will ... easy money is not the solution as the search for yield intensifies ...

That's all for this week, have a great weekend. We will be back with more news and updates next week ...
John