Friday at last. What a busy week it has been here at the office. We’ve plenty in the works at the moment that you’ll be hearing more about in the coming weeks. I’m only now getting caught up on the news, and of course, there’s only too much of it. Sifting through all the junk content out there is only getting harder…
The City of London will be getting another skyscraper. Planning permission for “The Tulip” has been granted, and if the mayor approves, the structure will be the second tallest in London. It won’t house offices, and is instead intended to be used as a viewing platform with rotating viewing pods, bars and restaurants.
My colleague Akhil Patel over at Cycles, Trends and Forecasts sees the construction of skyscrapers as indicators of where the global economy is in its grand expansion. But if you think The Tulip is as wild, he says think again. He reckons the “really crazy” one that will mark the peak of the boom, and the end of the cycle is a few years from being announced. Let’s watch.
Meanwhile, there’s been a plot twist in the Deutsche Bank Affair. Deutsche, the bloated behemoth which recently awarded a figure equivalent to 10% of its market cap away in bonuses despite terrible profitability, had been nudged into a merger with Commerzbank, another German lender, by the German government. The planned merger was akin to two drunks propping each other up, for Commerzbank, while in better shape than Deutsche, has problems of its own.
But now an Italian bank, Unicredit, has entered the picture. It wants to merge with Commerzbank too, and steal the deal from Deutsche. Just how this love triangle will play out remains to be seen, but it’ll be interesting to see how hard the German government pushes for the original merger as a “UniCommerz” blend would not solve Deutsche’s problems. And Deutsche is about as too-big-to-fail as it gets, ranked as one of the most systemically important banks in the world.
However, the UniCommerz deal would spread some German banking risk to the Italian banking system and thus the Italian government, possibly tying a rope around the Italian populist government who wants to focus on Italy’s problems alone. But some problems are too big to ignore – something we’ll be exploring next week.
Speaking of drunks propping each other up, I’ll be heading back to Aberdeen for the BrewDog AGM this weekend. I was given shares in the business as a gift, and though I’m not a huge fan of its beer, BrewDog invites loads of smaller breweries to serve their wares and the atmosphere is terrific. I’ll be away until Wednesday next week (recovery time), and leaving you in the capable hands of Nickolai Hubble and Connor Whitlock in the meantime.
One last thing before I sign off today. I have a question for you.
I spoke to Dominic Frisby yesterday, the financial writer, comedian and composer of a certain song about Brexit. He’s also a big gold guy, and I was keen to get his take on the precious metals market. But our conversation strayed to demographics, and I found he was incredibly optimistic about the younger generation, particularly millennials.
I found this interesting as I am a millennial and hold a very grim view of what the future will look like once my generation has inherited the tools of power currently held by baby boomers (and to a smaller extent, Generation X).
So I’ve a question for you, and would love to know your thoughts on this, as while our readership comes from all sorts of backgrounds, they generally hail from an older generation: are you encouraged by what you see in the millennial generation? How optimistic do you feel about a future with them in charge?
Let me know: [email protected].
All the best,
Boaz Shoshan
Editor, Capital & Conflict
Category: Market updates