Friday, 4 October 2013

Weekly Wrap Up: “SHUT DOWN, SHUT DOWN; [do not] READ ALL ABOUT IT”

With the World’s largest economy close to complete its first of week of national shutdown and their failure to address the debt ceiling, it's absolutely inexplicable that the British press has not reported this in greater detail or with a greater sense of urgency. Yes domestic news this past week has indeed been grabbing – such as the Milibands and the Mail, and David Cameron and Boris presenting a relaxed, united if not slightly awkward alliance/ double act. However, the potentially catastrophic consequences that will ensue for the entire global economy should the US Government fail to ratify the Federal Budget means it simply must get more column inches globally, putting pressure on a small bunch of lunatic Republicans, the infamous “Tea Party”.

Government shut down in the US is bad enough but the failure to raise the debt ceiling is going to have catastrophic effects globally. As IMF headmistress Christine Lagarde warned yesterday ahead of the IMF’s annual meeting in Washington next week, virtually every single investment bank and fund is holding US bonds.

Obama wants the debt ceiling raised before 17 October but the right wing Republicans want to roll back the size and scope of the debt ceiling, and the roll the central government takes in politics, a traditional liberal conservative stance. Reality is though that the Tea Party Republicans are only really concerned with not offering a single cent of the Federal purse to go on healthcare, or 'Obamacare' as is it more popularly referred to. The US Government has seen this kind of stand off before, but unlike the Clinton days, there is a greater feeling of mistrust and genuine dislike between with the Grand Old Party and the Democrats, and probably why Christine Lagarde is voicing her concern.

This morning, the Financial Times was the only paper in the UK to place any great importance on the chest puffing going on at Capitol Hill by referencing the goings on on their front page. President Obama has today cancelled a visit to Asia which hopefully might persuade editors to place greater importance on the stalemate in Washington in the coming days.

A deal simply must be made between Democrats and Republicans in Congress otherwise the stories that will be dominating the news will not be of the positive economic outlook and recovery or the latest Daily Mail faux pas but that the World will be in a full blown depression a la 1929.

This week Abchaps were delighted to welcome Numis Securities into their city view offices. It was great to meet the team and share ideas about the financial markets and the life sciences industry. As keen as ever to keep up to date with the latest Cleantech innovations, we were fascinated to hear about the latest developments in energy saving and storage at the Cleantech Investor Breakfast. Kiwi Power, Quarry Battery, S&C Electric and Itron, thank you for speaking. Tech was not to be forgotten, however, with the Wine Meets Tech event in Canary Wharf. With wine and cheese in hand, Abchaps were briefed on some very promising tech start-ups. In the latter half of the week we sampled the hospitality of GVC Holdings (at The Gallery) and finnCap (at Coq d’Argent). Both companies were excellent hosts and we hope to be able to return the favour.

FinnCap has announced four new hires: Julian Blunt and Grant Bergman have joined its corporate finance team, whilst Guy Hewett and mining specialist Mark Heyhoe have joined the research team. Investment bank SP Angel has appointed Zac Phillips and Richard Hail to run its oil and gas investment banking team, whilst Investec Specialist Bank appointed Joanna Turney to its growth and acquisition finance division.

'Debt Ceiling'- The debt ceiling is a cap on the total amount the US government can borrow..

Experience a taste of Malaysia at Trafalgar Square tonight. The heart of London will be showcasing the best of Malaysian cuisine, culture and music.

Back by popular demand, the second annual Big Lebowski Party at Bloomsbury Lanes is taking place tomorrow. In addition to the film screening, there will be an all American hot dog eating competition, cocktails and of course the Jesus big strike bowling competition.

To celebrate London’s iconic National Theatre’s 50th anniversary and 800 productions, it is putting on a whole host of talks, tours, exhibitions and much more. Head down tonight to hear Jim Carter and Imelda Staunton discuss their experiences in the National Theatre.

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