Chart of the Day - RIP QEII.
I wanted to add my voice to the plethora of those who mourn the loss of Queen Elizabeth. Let me begin by saying I am not one of those Americans who have a starry-eyed fascination with the monarchy. My people voted with their feet & got on wooden boats a few centuries
ago to escape that. That said, QE II was special, not because she was a monarch, but because of the person she was. It put it in context when I read she served as queen for 30% of the life of my country. She did more than serve. She inspired. On my drive home yesterday, I heard a speech she gave as a teenager during the bombings of London in WWII. It was moving, it was heroic & it was inspirational (https://lnkd.in/gfSVpuAR).

In addition, in my many years of living in & traveling to the UK, I have always been treated remarkably well by all - friends, colleagues, acquaintances, people on the street. It is for those people who suffered a loss, that I send my well wishes.

It is somewhat appropriate that the Queen saw to the appointment of a new Prime Minister this week. She rose to prominence at a time when the UK was in trouble, now she leaves when the UK is also in some trouble. While I am in no position to comment on the strength of the new PM, I will say that at least she has a plan. While subsidized price caps on the cost of energy is fraught with many holes & will require further bailouts, it is arguably a better idea than buying a new kettle, which seemed to be the previous plan (https://lnkd.in/gUXf8B_6).

We can see the weakness in the UK in the prices we observe in the markets. Much has been said about the weakness of the GBP. It is now down to 1.15 vs. the USD. Man I wish it was there when I lived in London. Instead, it was 2.00. Anyway, the weakness of the Pound is indicative of the weakness of the domestic economy.

We can also see this in the white line which is ratio of the midcap UK stocks vs the FTSE 100.
The latter and oft-quoted index contains many large cap companies with multi-national exposure. Midcaps are primarily domestically facing. Thus the relative weakness of the domestic companies to the multi-nationals suggests a certain weakness in the domestic economy that we see reflected in the currency.

The UK has a lot of problems to fix. It begins the path to fixing those now with a new Prime Minister & a new King. It will not be fast nor will it be easy. But the UK has overcome much worse in its history so I am sure it will this time as well. There was an very appropriate quote when I opened my Bloomberg this morning: "It's worth remembering that it is often the small steps, not the giant leaps, that bring about the most lasting change." - QEII

Stay Vigilant

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Nathan Worden's avatar
Love that quote at the end "it is often the small steps, not the giant leaps, that bring about the most lasting change."

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