Blain's Morning Porridge, submitted by Bill Blain
“It doesn’t matter if you are a bullying billionaire or a penniless troll, such behaviour is destructive..”
Lots to look forward to this week. A “Goldilocks” economic picture in the US? Strong job creation and strong stocks – what’s to worry about? Not so rosy in Europe – the bets are mounting the dismal continent is heading into Japanification. China is all about Trade war. Who knows anymore? The latest Chinese numbers show both sides are hurting with China exports down 23% to the US, and importing less. What has Donald’s trade spat achieved? Not much apparently.
Here in the UK, on Thursday we get to vote for the least bad alternative. It’s a sad state of affairs the leadership-vacuumed Labour party has self-destructed ahead of what should have been the easiest electoral victory in decades. After 10-years of Austerity, Policy Mistakes, Weak Leadership, and Shenanigans, the best of the bad choices before us is to give the Tories yet another go.
Talk this week will all be about tactical voting to keep the Tories out. Why? The chances of any other party getting a majority to achieve strong government other than the Tories are zero. The best that remainers can hope for is a hung parliament that will plunge the UK back into a political Brexit cul-de-sac, extend economic uncertainty, and plunge sterling back into the Peso bucket.
All that to look forward to, but its nearly Christmas – and my lunch calendar is looking good.
Meanwhile… SELL TESLA
I experienced another bout of train misery this morning. Again, no functional table to work my computer from – quite funny really… I can’t get the tiny little table down against my Santa Claus belly! All I want for Christmas is the head of the RMT, Mick Cash’s head on a Spike – which is hopefully one of the many Christmas presents Boris will deliver us.. I have used that line: “head on spike” deliberately to illustrate a point.
No one really thinks I am seriously contemplating decapitation of the RMT Union Boss.. and I’m sure readers will agree it’s a stupid, unwise thing to put on the digital record. I can probably wriggle out of making such a stupid comment by expressing great regret, and explaining it was my great frustration and dissatisfaction with the current rail strike that made me write such a stupid thing. I would beg forgiveness and get away with a mild censure in the current febrile environment. My comment was hyperbole.
However, if I was to state the Head of The Rail Union was a wifebeater, a fraudster, or a child molester – none of which is true – then I would be guilty of a grievous untruth which would greatly damage his reputation and credibility. If I wrote such a thing with zero evidence to support it – then I would be guilty of the most heinous libel.
Let me assure Mick Cash of the RMT, I don’t really want his head, and I’m sure he’s not the monster all we SWR commuters believe him to be. (But, he is utterly wrong in mounting the strike – but his mistake will work against him. Whatever sympathy anyone had for the train drivers has evaporated.)
There is a great line in the Lion King – “Life is not fair”, as the evil uncle Scar toys with his lunch, a mouse. If you make any of kind of mistake in business, the cost is likely to be high. Just ask Carlos Ghosn how much he is enjoying Japanese hospitality now. This year we’ve seen a host of senior executives punished for errors of judgement, like sleeping with employees. Steve Easterbrook, head of McDonalds, was sacked for hiding a relationship with an employee. Mark Wiseman lost his senior position at Blackrock after a consensual affair with another staff member. While Ghosn may be the victim of a Japan Inc plot, the other two are example of bad decisions by business leaders – and in today’s world business judgement is everything.
The world is a very sensitive place. The merest hint of sexual impropriety is career-ending (just ask BlackRock's Mark Wiseman). It raises immediate questions about judgement and suitability. Sensitivity has become a watchword – while everyone will shake their heads in disbelief at a hospital branding a cancer patient transphobic because she requested a lady doctor who was born female (it transpired she had been was a victim of child molestation), smart businessman will do whatever they can to appear balanced and considered, and show their awareness of such sensitivity.
Every investment firm on the planet now claims to have put ESG – Environmental, Social and Governance – principals at the forefront of their investment methodology and criteria.
So how many have demanded the removal of Elon Musk, or threatened to sell their stock unless he demonstrates maturity and awareness of his manifest wrongs?
Apparently the same rules don’t apply to the likes of Musk. Don’t tell me he was found innocent in court last week and therefore has no case to answer. Yes… he does. Its not just his harassment and defamation of the British cave diver and rescuer Vernon Unsworth that is cause – there is a change in the way we need to look at Unicorns.
I don’t want to hold an investment in a firm run by someone like Elon Musk. The next 10-years are not going to be about Unicorn Hype - it will be back to fundamentals.
I can’t think of any deliberate lie more calculated to destroy a man’s reputation than to brand him a child rapist and child molester – a paedophile. (I have checked with a number of South African friends, and none of them said Paedo meant a “creepy old man”. It means what it says and is a vile insult when applied with the kind of malice Musk employed.)
I was shocked when Musk walked away from court on Friday – declared innocent. Its apparently fine for a US billionaire to call another man a paedophile, brand him a child rapist, hire investigators to dig dirt on the victim, and then declare his guilt was proven because he didn’t immediately sue. I watched the case last week, held off commenting, but after watching Must declare “faith in humanity was restored” I can’t resist. I don’t give a toss if he is a visionary, a great engineer, or whatever baloney he claims. In my opinion, such a man is not fit to run a major firm and is not deserving of our respect.
Musk is a product of our age. Entitled, arrogant, unbelievably rich and powerful, he reckons normal rules don’t apply to him. He’s a bit like that other serial sociopath Adam Neumann of WeWork – and we know how well that ended.
He sends a clear message it’s fine for marginally socialised billionaires to act above the law. It's ok for Musk to tweet untruths not just about a brave British spelunker, but also to mislead the market with tweets about taking his company private, about the number of cars being produced, and in a spectacularly unfunny April Fool’s joke, that the company was bankrupt. He and the company were fined US$40mm and he joked about it.
That is not a man you want to invest your pension in.
I just know I will get a storm of abuse for this, but the trial last week puts another nail in the American concept of justice. One of the jurors, who it turns out owns not one but two Teslas according the Sunday Times, says there was no proof Musk’s tweets about the guy being a paedophile referred to the British Caver. That is a nonsense. Musk got away with about the most malicious insult possible. Rich justice.
Mark Johnson, former head of FX at HSBC is likely to be sent across the Pond to serve jail time in the US after a series of complex transactions were done for Cairn a few years ago. It’s difficult to perceive exactly what wrong Johnson is accused of – certainly he did nothing criminal that merited investigation in the UK. It looks a very dubious case that seems to have forced through purely so the US Department of Justice can show it flexing its muscles. Or the case of the Libor fixers – a crime the Americans regard as the ultimate martet manipulation is nothing of the sort – back in the old days the Governor of the Bank of England wasn’t above suggesting a high or low rate might be helpful..
The American’s have got this badly wrong. I read this morning Musk may face a re-trial. Somehow, I doubt it.