I know it sounds like a blog that should be written after Christmas and about the past 2016 year. But it isn’t, of course, because it isn’t Christmas yet, though I know you could have been fooled by that as Checkers lead the Charge of the Christmas Light brigade on 25 October 2016 – a full two months before that beautiful Holiday.
Just some context for my thoughts. I have written about Brexit in early July 2016. Lest we forget, Britains decided to exit the EU, signing their declaration of independence from Europe by invoking Article 50. To date, Theresa May has appointed a new Foreign Minister and her Chief Brexit Negotiator and then seems to have gone coy on everybody. I guess undoing a massive agreement with your country’s bedfellow does take time. In the meantime, the UK Pound has collapsed from US$1.70 to US$1.20 [Approx 30%] but, according to the Office for National Statistics, the UK’s gross domestic product expanded 2.3 percent year-on-year in the third quarter of 2016, accelerating from a 2.1 percent growth in the previous period and in line with preliminary estimates. It was the strongest reading since the second quarter of 2015, boosted by net external demand and gross fixed capital formation. Not bad it would seem, given some of the gloom and doom around Brexit.
Then came Munexit in which I essentially looked at local government and pondered the state of the vote in SA’s large metropoles. My basic encouragement was that voters turn out because what happens in our cities matters deeply. They did, and the rest is history but for Bloem, Polokwane and Ekurhuleni where the ANC held sway. To be honest, apart from some positive political statements, I haven’t felt the change yet – it takes time to turn a city. Frankly, what I feel is irrelevant but what the less advantaged feel is crucial especially if the ANC gets it act together from 2019 onwards.
What really happened in Britain and our City Councils? Corruption got “klapped” and the twin peaks of Immigration and Independence [read: a new spirit of nationalism] got challenged. It’s a stretch to link the two with respect to our metropoles, but there is some familiarity.
Enter Ameriexit. Who would have guessed!? Donald Trump, the man with the everlasting kuif, beat Hilary. Apart from some re-counts in the huge votes of Wisconsin, Pennsylvania and Michigan which we shall see, he beat her hands down. The first women, her email saga, alleged corruption, who knows? On his side, a huge white male vote, some 70%, and though I don’t have the final stats, a somewhat “secret” minorities vote. But here he is, in all his glory, the first really non-politician American President-Elect.
I watched the elections unfold. Trump seemed to hammer Hilary’s person incessantly and, honestly, to the point of boredom. But he also hammered on about Jobs and Immigration and Corruption [read: the fact that you are, or the ability to be, bought for political favours]. Beyond that, he continued to say and reveal little. Do you really know how he will run the American economy? Do you really know what he will do with NATO or NAFTA or Obama Care? I don’t. But what I do know is that he is going to “Make America Great Again” and for all of Hilary’s, “We Are Great Already”, he was heard where and in the quantity it mattered, for votes.
The parallels to Brexit are sobering. Both countries are in the throes of radical globalisation and both, utterly dependent on trade with the rest of the world. Globalisation has increasingly raised the prospect of un- or lower quality, employment. It kind of sneaked up on us and we were duped by the first world Unemployment stats coming out of America. 5% and on its way to 4% is enviable especially at our 27+%. Yet, beneath the statistics is deep unhappiness as jobs have left the USA shores equipped with a license and a patent so that some stranger in Asia could manufacture the tekkies and TV’s. Slowly but surely, the industry of America wilted and the city centres decayed.
On the other hand, immigration proceeded unabated and lower-level jobs were absorbed by Mexicans et al. If you hail a taxi in New York, you very seldom hear American spoken behind the steering wheel. I also met some Americans on a cruise who own serious real estate in Dallas and he admitted that he could not conceive building, maintaining and managing his property portfolio without Hispanics to do so. Similarly, Britain over the years has experienced a huge influx of people from former colonies; a trend which has only increased in the last decade. Resources are seriously strained and the NHS, roads and housing have all felt the difference.
Then along came the Syrian crisis and bombings in Paris. As I sit and think about it, these visuals seem to have become a turning point. David Cameron seems to have been naïve to think he could have held and won a referendum in favour of staying in Europe. And, after many requests to stand, Donald Trump seems to have read the air of discontentment in the American populous. Sweeping statements of disgrace and collapse were all it took to win. Walls, renegotiations and exiting non-Americans became the mantra for success. But, along with it, his anti-corruption rhetoric certainly struck a chord down here!
Quo vadis? All of the above means little unless we see how it affects us. I’m tempted to stick out my ostrich-like neck but let me remain cautious for one simple reason: I don’t know.
Uncertainty reigns in three main areas: the Stock Market; interest rates and politics. Because of the extent of uncertainty, business as usual seems to be the order of the day for now, at least. Commodities had an early run as the markets decided that Trump would spend on infrastructure. The UKP remains under pressure so the US$ has remained strong to it. Interest rates have remained stable and the possibility that Governor Yelland will raise them in December is real. There is much debate about some of Trump’s early appointments and much is being made of the revision [and exclusion] of many of his campaign promises. Overall I think he will be conservative and will actually be able to accomplish many of the things he has spoken about given the Republican majorities in the Senate and Congress. However, he won’t be able to achieve them in the way he simplistically campaigned. Politics is not business and “deals” have far more long-range complexities than building a high-rise or a golfing estate.
For us, America has “exited” globalisation and immigration. They would like economic growth, prosperity and security to follow. Time will tell if their votes counted for this “wonderful” outcome. It is going to be a roller-coaster ride for the next two years at least until Trump settles down and moderates some of his realities. On the upside, we could have a strong America resolving Syria with Russia and creating good links and alternative thinking with Britain and Europe and even China. My sense is that we don’t need to consider the downside because sanity will prevail.
One thing we have is change. I am reminded of the words of William Arthur Ward:-“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”
Decide where you are positioned. Reposition as required. Keep your face in the direction you intend to go.
Yours in Property.