I can’t help wondering is one of the reasons the markets are feeling a little more confident recently is because they are finally getting their people in to the right jobs. I think there has been a worry in financial cricels that too many ‘off-message’ free thinkers might have crept into positions of financial influence. For the markets to have confidence there needs to be a uniformity of mind. A single global response focused on thw one true path to salvation.
To that end some recent changes are notable.
In Japan the Finance Minister, Naoto Kan is going to become the new Prime Minister. And Tokoyo has a monster rally without any aparent other cause. Coincidence? Financial cirlces should be able to count on Mr Kan to boost fiscal and social ‘reform’. That is, a promise to curb debt but NOT by stoping simulus directed at the banks. Expect more social cuts, possibly noises about the deeply unfortunate necessity for retirement and pensions to be ‘reformned’, and more stimulus for the banks, plus more attemtpts to hold down the value of the Yen
In Poland, Marek Belka, has been nominated to head Poland’s central bank. He was a top IMF man. So he can be counted on to be on board with the stimulus and austerity package.
And in Greece let’s not foget the head of the Debt Management Agency Petros Christodoulou. Former Goldman Sachs and JP Morgan man. We can rely on him.
And then in the UK we have Tory Boy and Bobbin his young protege. Now with a Danny Alexander as new Treasury Chief Secretary in charge of budget cuts. Mr Alexander is, of course, the perfect choice having no experience whatsoever and being mostly pre-occupied with getting used to wearing long trousers for the first time. So I think the City can be confident he will do what he is told.
Less choice, zero discussion, democracy at its finest.