“What matters most for us are stability, stability and stability”
UK as an emerging market economy
In the post-Brexit and persistently high inflation era, the phrase “UK is becoming an emerging market” is one that is regularly touted about, especially by pro-remain factions in the finance community.
BoE independence in 1997
While such comments may be an exaggeration, a common characteristic of troubled emerging market economies with persistently high inflation is a lack of separation of power between the central government and the central bank, including other branches of government such as the judiciary. It was only after the arrival of the Labor Party of Tony Blair and Gordon Brown in 1997 that the Bank of England (BoE) gained full independence in setting monetary policy.
However, with UK inflation stubbornly remaining well above the BoE's official target of 2%, the blame game has begun.
Who's to blame for UK inflation woes?
Pro-remain advocates attribute the UK's persistent inflation to Brexit, which has resulted in labor supply shortages and loss of access to the EU's single market. Most sensible and reasonable-minded individuals would agree with this assessment.
On the other hand, those on the far right of the ruling Conservative Party, led this week by Prime Minister Rishi Sunak, including the European Research Group (ERG), argue that the UK's inflation woes are part of a global G7 problem exacerbated by BoE policy missteps. It is worth noting that the ERG has long advocated for the abolition of BoE independence even before the current inflation episode.
The BoE itself admits to early mistakes in setting policy rates to combat inflation, a situation shared by many G7 economies. However, subsequent mistakes mostly revolve around communications. Undoubtedly, the populists in power will seize this opportunity to blame the technocrats for the UK's economic troubles.
Elon & Zuck Cage Fight
According to reports, keyboard cage fighting heroes Elon Musk and Mark Zuckerberg have agreed to a fight. Musk challenged Zuckerberg to a fight, to which Zuckerberg replied with “send me location,” borrowing the phrase from Khabib Nurmagomedov‘s message to Conor McGregor ahead of UFC 229. We recently drew parallels between this fight and a couple of blowhard Wall Street analysts caught in a short squeeze chokehold by the market but refusing to tap out.
Zuckerberg has been practicing Brazilian Jiu-Jitsu (BJJ) and Mixed Martial Arts (MMA) for a couple of years and recently participated in a BJJ tournament under the name ‘Mark Elliot' while in disguise. Musk, being the (physically) bigger and older of the pair with a psychopathic desire to win, claims to have no martial arts experience. If the fight proceeds, witnessing Zuck maul Musk will give great pleasure for many around the world.
Betting Odds
In the spirit of synthetic CDOs, when there's nothing in the markets or sports to speculate on, we will create something to fill the void. A good addict never quits.
Let's open up the market as follows:
Zuck to win — 1.2/1.4
Elon to win — 4/5
$10 per side.
*Bets are anonymous. Dealers at Deutsche Bank and Bank of America are subject to additional collateral requirements. All bets are void if the fight is canceled.
There must be a couple of washed-up retired brokers in our audience who can show an inside market. In parallel, we could also send speculative markets on the number of days till Crispin Odey is arrested?
