Hedge Clippings | Friday 20 December, 2019

This is the final edition of Hedge Clippings before we take a break to consider our New Year resolutions for 2020. Before doing that maybe there's time to take a look back on a year that was, by any accounts, eventful - dominated domestically by the Hayne Royal Commission and bankers behaving badly, along with the unexpected victory (except by ScoMo himself) by the Liberals in May's election.

Taking bankers behaving badly, one has to wonder what they were thinking. Did the various boards know what was going on at the branch, online and ATM level - and if so, one assumes they're open to prosecution. And if they did know, and assuming it wasn't deliberate, why didn't they address the issue(s)? Or were they just blissfully unaware and out of touch, in which case the reporting lines to and from management (assuming they knew) were so inadequate that they're simply guilty of incompetence?

As far as the big 4 banks are or were concerned, maybe it was a mixture of the two. Certainly in AMP's case (doesn't that seem a long time ago), it seems the board were well in the know about misleading ASIC, although we're not aware of any prosecutions to date.

Commissioner Hayne certainly consigned a large number of bankers' reputations to the scrap heap. The repercussions will be felt for years to come - probably until the next round of excess or poor behaviour comes to light.

Globally the news was dominated by continued low/slow economic growth, and ongoing rock bottom interest rates, which in turn buoyed equity markets - when politicians weren't getting in the way that is. The US/China tariff war threatened global growth and dominated economic issues, although it seems that political reality (or Donald's re-election) is necessitating a truce early in the New Year.

In the US, and on the global stage, Trump continued to dominate the headlines, and not always for the right reasons, albeit that someone standing up to China and its influence was, we think, long overdue. The Democrats are desperate to keep the pressure on via impeachment, in spite of the fact that (as we understand it) they won't succeed in the Republican-controlled Senate, where a two-thirds majority vote is required to remove him.

Expect the rhetoric to continue from both sides as the next US election draws closer.

And talking of elections, what about BoJo's stunning victory last week? Much of the credit for the Tories' win can be attributed to the blind determination of opposition leader Jeremy Corbyn to stick to an ideology that was clearly going to alienate the Labour party's traditional support base. Thrice married Corbyn looked like (and at 70 years old, probably is) a hangover from a 70's left-wing student movement. He had obviously learned nothing from his predecessor Michael Foot's loss to Maggie Thatcher in 1983, the year Corbyn himself was first elected to Westminster.

Much like our own election in May, where between them Shorten and Bowen shot themselves in both feet over changes to franking credits.

So, there it is for another year. We'll be back in January, raring to go and hopefully slimmer and sharper than before. Many thanks to all readers and recipients of Hedge Clippings over the past 12 months, and wishing you a Happy Holiday in whichever way you wish to celebrate it. May your New Year be full of promise and opportunity, but above all, health and happiness.