Philosophy (from the Greek, ‘filosofia’) means love of wisdom and concerns itself with the study of existence, values, reality and knowledge; all essential stuff. As we know, the likes of Aristotle, Plato and Confucius made immense contributions to human thought and civilisation. Strangely, these giants of the ancient world instantly came to mind the other day as I repeatedly pressed the television remote control, concluding that even they would struggle to reconcile the primal philosophical dilemma of today’s Sky TV subscriber, restlessly searching for existential fulfilment. Namely, despite there being 500 channels on offer, how come there’s nothing worth watching on any of them?
Or, so I thought. At that moment, salvation revealed itself in the curious guise of ITV4 where 1970’s cop drama ‘The Sweeney’ had just started. The name derives from ‘Sweeney Todd’ being the cockney rhyming slang for ‘Flying Squad’. Readers of a certain age will, no doubt, recall the adventures of Detective Inspector Jack Regan and Detective Sergeant George Carter, ably assisted by their trusty partner, Johnnie Walker, who resided in Regan’s bottom drawer but made regular guest appearances.
Regan and Carter were old school; they got the job done and if it meant bending the rules to get the bad guys, what was the problem? They would tear around the London streets in a 3 litre Ford Consul, kipper ties flapping and fag ash everywhere, their usual assailants being geezers attempting a getaway from a bank job in an old Jag. Personal pride meant nobody took liberties on their manor and most assignments ended in a serious punch up. If there had been an Independent Police Complaints Commission at the time, the boys wouldn’t have been bothered about being referred to it.
Now, at this juncture, I suspect a slight detour might be in order as I appreciate how confusing this must be for any Millennial readers. Firstly, although fictional characters, Regan and Carter never required the shelter of a ‘safe space’. Secondly, back then, it was the job of the criminal justice system to implement the law and the police to uphold it. Perversely, it was considered a priority to take violent offenders off the streets rather than trying to nick motorists doing 33 mph in a 30 mph zone or investigate what Cliff Richard was (not) up to 30 years before. Mercifully, we live in more enlightened times……
Anyway, I digress, Carter would always address Regan as “Guv”, being short for ‘Governor’, cockney parlance for ‘boss’. Which reminded me that Bank of England Governor, Mark Carney, had just chaired his last Monetary Policy Committee meeting after a 7 year stint. So, how should we remember the tenure of this Davos denizen? Has he lived up to then Chancellor George Osborne’s description as being the “outstanding central banker of his generation”?
It is imperative the governor of an independent central bank reflects that independence and does not stray into areas beyond both its and his remit. Regrettably, Mr Carney appeared happy to do just that, commenting upon ‘inclusive capitalism’, climate change and particularly, Brexit. Just before the referendum, he opined that a leave vote might lead to a recession. Well, it might have or it might not have but as we all know, it didn’t. There are two sorts of ‘might’; one has value while the other does not. Anyone suggesting that it might be prudent not to travel to China at present due to the rapidly spreading Coronavirus is offering advice that could well be worth listening to. However, anybody informing us that it might rain three weeks on Wednesday is wasting our time. All too often, his musings sounded like the latter.
Post the June 2016 referendum, he noted the economy had done better than he’d expected and appeared to take some credit for it as base rate had been cut by 0.25% to a record low of 0.25% in August. What real difference could a 0.25% cut have engendered in only a matter of weeks when borrowing money was close to free anyway? Perhaps he should just have said he’d been wrong?
This, inevitably, brings me to his flagship ‘forward guidance’ policy which eventually earned him the ‘unreliable boyfriend’ sobriquet because he was always changing his mind. While sensible in theory, such a policy risks wrong footing markets unless one’s predictive batting average is way above average. As Mr Carney’s wasn’t, his constant change of tack eroded his credibility. I’m not indulging in being wise after the event here. As Mark Twain said and all of us who manage capital already know “it is difficult making predictions, especially about the future”. The potential path of base rate is affected by so many variables that Nostradamus would flunk his central banking exams. Rather than attempt to predict the unpredictable, better to say less, thus imparting more.
All told, I reckon Mr Carney was a bit of a show pony. His next job will be at the United Nations as Special Envoy for Climate Action and Finance. I suspect he’ll fit in well there, although judging by the success of his previous crystal ball gazing, I wouldn’t be surprised to see the dawn of a new ice age.
I’ll leave the last word to our cockney coppers. “Here, Guv, isn’t that Mark Carney over there, you know, the central banker?” “You can say that again, George.”
John Newsome can be contacted on 01423 705123 or john.newsome@williams-im.com. Williams Investment Management LLP is authorised and regulated by the Financial Conduct Authority.
