Brexit Porridge |Local Scale | Great Job!

The August Bank Holiday should be a time to switch off.  The majority of the property industry have engaged their "out of office" autoreply, the roads are seemingly log-jammed with people hoping to enjoy a late summer getaway, and even the politicians are enjoying some respite whilst Parliament is in recess.  The timing of the 'no-deal Brexit papers' this week has therefore come as a rather unwelcome distraction.  The technical briefing notes are apparently designed to 'reassure'  us that contingencies are in place should no agreement be forthcoming.  The BBC's political correspondent, Chris Mason, described the publication as a "swirling porridge of detail" - and one that The Weekly has no intention of diving into! - but if reassurance was the aim, the outcome feels very different.  The wilder claims of emergency stock-piling and 'sandwich famines' may be far-fetched, but there appears to be a striking analogy with an airline flight safety card.  These safety cards invariably show an image of your ditched plane resting peacefully somewhere mid-ocean, as the orderly queue of passengers stop to remove their high heels before exiting the aircraft.  Designed to be comforting, but not something to contemplate in too much detail!

Previous editions of The Weekly have already highlighted the increasing appetite of Local Authorities for commercial property.  This was put into figures by Savills this week who reported that Local Authorities have spent £4.1 billion over the past four years and are on track to break their spending record again this year.  And just to put the figures into some form of context, last year Local Authorities invested a total of £1.8 billion, a 1,868% increase on the £93.8m spent in 2014!  With so many authorities looking to arbitrage investment returns on the back of cheap finance from the rather misleadingly entitled "Public Works Loan Board", there are increasing concerns that they don't have the skills to get into property investment on this scale, or the ability to manage the risk.  Just look at Spelthorne, for example, who have apparently laid out more than £22,000 per household on their burgeoning portfolio!  Spelthorne's property spree has only come about to "mitigate the withdrawal of government funding" as they grapple with a broken local government funding mechanism.  But before we get too carried away with the scale of the councils' investments, we should remember that their share of the market is still only 3%.  A stone's throw from The Weekly's own HQ in the City, Korea's National Pension Service has just agreed a £1.16bn sale and leaseback deal on Goldman Sach's new London headquarters. Now that is an example of investing on a big scale!

Across the Pond, President Trump's promise to "drain the swamp" in Washington appears to be taking on ever more ironic undertones.  In a week when Trump's former campaign manager, Paul Manafort, was convicted for bank and tax fraud, and Michael Cohen, his longtime personal lawyer, pleaded guilty to campaign finance violations, you'd be forgiven for thinking that the President might be on the verge of disappearing beneath the murky waters of the swamp for good.  Manafort and Cohen’s undoing brings the number of Trump administration officials that have been convicted of, or pleaded guilty to crimes to five.  What's more, Cohen has effectively implicated the President himself in federal crimes and the spectre of impeachment is now very real.  Yet, rather than address any of the accusations, the President (as is his way) has gone on the attack claiming that the market would "crash" if his presidency was threatened.  As he told Fox News, "I don't know how you can impeach someone who is doing such a great job"!  The ongoing political drama makes the imaginary, power-crazed world of "House of Cards" look tame, but is the President's position really bullet-proof?  If you ask his core supporters, the allegations against the man they elected are no more than an FBI conspiracy and a distraction from the good job he's doing.  That, of course, means jobs.  Who cares if the President has to pay off the occasional porn star or Playboy bunny.  That's personal stuff!!