Questions and Answers (Part 1)

A Strategist asked....

Visiting London recently I caught up with an old colleague from my days at James Capel (literally in the last century!) He is still treading the boards as an Equity Strategist and over a glass of wine he asked me the following four questions:

1. Have you heard of the C40 Group?
2. ⁠What happened in Kazan in October (2024)?
3. ⁠Have you heard of Norinchukin Bank?
4. ⁠Have you heard of/read the 1776 Report?

Fortunately I was able to answer the questions, but what he told me next was quite alarming (if this was a YouTube presentation I would probably title it something like “What I heard next will shock You!”) He said that he has asked those same four questions of literally thousands of investors in the UK, Europe and the US over the last couple of years and almost nobody knew the answers. To any of them.

When surveying hundreds and sometime thousands of professional investors, almost nobody knew any of the answers…

Of course Google can quickly get you the answers or more correctly its AI will - assuming it isn’t hallucinating. But the point of his asking in face to face meetings is that it exposes the narrow context within which many investment decisions are being made. Bear in mind he is an Equity Strategist, so he is theoretically meeting with macro people and investment committees, not company specialists.

I contacted him recently and he gave me permission to write about this and the following are his answers in italics. I have also added my own context.

Q1. C40: 0 from c2000 investors asked since start 2023…Bloomberg/Clinton foundation funded group of c100 largest cities in world with Sadiq Khan as current co chair and with 2030 targets including elimination of meat / dairy & private car ownership plus limiting flights & clothes purchases per person.

This hidden layer of supra-national government using (mainly left wing) Mayors to advance agendas not only way beyond their remit, but outside of their manifesto, is the pivot away from more obvious forums like Davos for the Green Industrial Complex. They are also behind much of the relentless ‘news’ and surveys and astroturfing about how popular these measures are. (They aren’t, obviously.)

Q2: Kazan - asked before and after event - 0 from c400 investors knew Kazan hosted BRICS 16th annual conference.

Kazan is in Russia and was where there was a lot of discussion about an alternative Reserve Currency. It’s not that people haven’t heard of BRICS, but rather they had no notion of what has been happening. The fact that in addition to Russia and China, ‘the west’ has been making life really quite difficult for the current governments of Brazil, India and South Africa is not a coincidence and probably why the curated news doesn’t mention it very much, if at all.

Q3: Norinchukin Bank reported in 1H24 forced liquidation of $63bn of US/European bonds to cover liquidity losses ~ 2 (one who’d interviewed for a job there and one Japanese based SF investor) out of 600 or so.

The Japanese Farming and Fishing Bank has got itself in trouble before, but this latest episode was a bad ‘bet’ on US and European rates and came between the Silicon Valley Bank debacle and the collapse of the Yen Carry trade that happened this time a year ago - when the Nikkei fell 12% in a single day. Watching these carry trades and unhedged bond positions ought to be a key part of an asset allocators toolkit.

Q4: 1776 report - 1 out of 500 - commissioned by Trump 1.0 and published in Jan 2021 = roadmap for “remaking and repairing” America…ideological blueprint for Trump 2.0

Understandable (perhaps) if European Investors didn’t know much about this one - although given the obsession with Trump and all things US that isn’t really an excuse, especially as it was heavily referenced by the Democrats as evidence of Trump wanting to be a dictator and being racist. Briefly, it was set up by Trump at the end of Trump 1.0 as a counter to the 1619 movement which was pitching the history of the US through the prism of slavery and racism and was an attempt to counter the growing influence of Critical Race Theory. On inauguration Biden immediately abolished it, so on his second inauguration Trump brought it back.

As my friend puts it “western based investors struggle to ‘see’ broader news flow/information outside of their curated western lens… There’s a big world out there and if you’re not look in at the whole picture then you may as well be flying blind!!!

My response was about how little people know about what is happening in China…that’s Part 2. Coming soon.