Jeremy Corbyn's hard-line socialism and Bolivarian aspirations would destroy the electronic trading business - Op Ed - FinanceFeeds

Jeremy Corbyn’s hard-line socialism and Bolivarian aspirations would destroy the electronic trading business – Op Ed

The thought of Tier 1 FX desks being run by teams of ‘entitled’, unaccountable gray cardigan-wearing Caravan Club members with civil service pension plans should be enough to send the entire industry striking up prime brokerage relationships in Hong Kong, New York and Singapore.

Just one month remains before Britain’s electorate goes to the polls to elect the prime minister that will lead the country for the next four years after incumbent premier Theresa May called a snap General Election two weeks ago.

Never since the dark days of the late 1970s has there been such a polarization between potential candidates, Theresa May’s evident attempts to emulate the late and great Baroness Margaret Thatcher a far cry from opposition leader Jeremy Corbyn’s old-fashioned extreme left aspirations.

It is entirely possible to listen to a speech by Mr Corbyn, or read his party manifesto, whilst reminiscing over the several meter high piles of refuse adorning the streets of every town and city, the three day working week and the nationwide industrial disobedience that brought Britain’s proud industrial empire to its knees forty years ago.

There are far more considerations this time than socio-economic preferences, however, as today’s world is an electronic one, and London’s financial markets economy, which leads the world and is responsible for £176 billion in revenues and is so efficient that it employs only 0.0009% of the European Union’s workforce yet produces 16% of all tax receipts for the entire 28 member states and has a £76 billion trade surplus.

It is patently evident that London’s financial sector – especially the non-bank electronic trading sector with its prime of prime brokerages, connectivity and integration suppliers, and their relationship with the eFX divisions of Canary Wharf’s Tier 1 banks – is a pinnacle of commercial excellence and leads the world.

Not very much scratching beneath the surface of Jeremy Corbyn’s hammer-and-sickle toting shadow cabinet is required to note something quite sinister, that being the socialist Labor Party’s disdain for Britain’s largest and most revenue driving business, London’s financial markets industry.

Just three years ago, there was a substantial amount of discourse mounting in London with regard to the European Union’s predilection for the intrinsically socialist Tobin Tax on transactions that are placed in trading financial instruments.

That has now gone completely quiet, as Britain opposed it on principle and has managed to fend it off, however in 2013, eleven European Union member states, all of which were led by left-wing governments, announced their wish to move ahead with introducing a financial transactions tax.

At that time, the nations – which include France and Germany – intended to use the tax to help raise funds to tackle the debt crisis, and the tax had the backing of the European Commission which was reinforced after the 2014 election the highly unpopular Jean-Claude Juncker as President.

The other countries that wished to introduce it were Italy, Spain, Austria, Belgium, Greece, Portugal, Slovakia, Slovenia and Estonia, all nations with absolutely no place in the world’s highly advanced financial markets economy. Greece’s government accountants, when not asleep for half of the day, cannot tell the top from the bottom of their balance sheets, Italy is rife with corruption, Portugal is agrarian, Belgium has invoked outright bans of retail electronic trading instruments and Slovakia, Slovenia and Estonia have absolutely no Tier 1 bank presence.

Jeremy Corbyn’s policies echo this line of thinking.

The Tobin tax was originally proposed to target the FX market when it was orchestrated by James Tobin in the 1970s, and whilst Britain has managed to remain free from it’s burden until now, Jeremy Corbyn is a staunch advocate of implementing it.

In September 2015, Jeremy Corbyn and Shadow Chancellor and equally leftist John McDonnell made a schedule to meet four times per year with a seven-strong group comprising of economic academics (rather than business leaders) one of which was Anastasia Nesvetailova, a self-designated ‘expert’ on the international financial sector and its role in the global financial crisis of 2007-09. Ms. Nesvietailova, is an academic who spends her day in the classroom rather than the boardroom, thus is a theorist and has no practical experience. Just the type of policy advisors favored by the left.

During one particular conversation, the Labor Party’s support for the implementation of the Tobin Tax on all trading transactions was raised, as was, rather alarmingly, the potential of a Britain free of dominance of the financial sector.

Bearing this in mind, it is worth looking at John McDonnell’s credentials and viewpoint.

Mr. McDonnell is a former trade unionist who backs renationalizing banks and imposing wealth taxes. He actually lists “generally fomenting the overthrow of capitalism” as one of his interests in the Who’s Who directory of influential people. He also advocates the complete public ownership of all banks.

Mr McDonnell has served as Chair of the Socialist Campaign Group in Parliament and the Labour Representation Committee, and was the chair of the Public Services Not Private Profit Group. He is also Parliamentary Convenor of the Trade Union Co-ordinating Group of eight left-wing trade unions representing over half a million workers

The thought of Tier 1 FX desks being run by teams of ‘entitled’, unaccountable gray cardigan-wearing Caravan Club members with civil service pension plans should be enough to send the entire industry striking up prime brokerage relationships in Hong Kong, New York and Singapore.

Mr McDonnell has also said publicly that if he was able to, he would have assassinated Margaret Thatcher in the 1980s, a comment that when challenged, he retracted and said it was “a joke”.

Well, Mr McDonnell, that kind of extreme anti-business mentality combined with a will to bring the entire financial markets sector to its knees in the rebellious quest for overthrowing capitalism is not welcome.

Mr McDonnell wrote in 2012 that a financial transaction tax would halt “the frenetic, madcap speculation in the City” and raise money for infrastructure investment.

“If the City resists then let’s make it clear that capital controls would follow,” he said in a piece for Labour Briefing, a left-wing website.

He has also said he wants to take the power to set interest rates away from the Bank of England and to give it back to government. This would reverse a decision by the Blair government to let the central bank decide monetary policy.

If his choice of senior cabinet ministers is not enough to ensure that this odious relic of the dark days of socialism stays out of office, Mr. Corbyn’s affection for Venezuelan communist dictator Hugo Chavez should do the trick.

In 2013, Mr. Corbyn tweeted “Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world” just after president Chavez passed away.

The hard-left policies of Mr Corbyn’s idol Hugo Chavez have left a once-rich nation brutalized and devastated and with 2,200% inflation, strict capital control laws and an inability to do business with any free market nations.

Venezuela shows quite clearly just how catastrophic socialism is. So you might then expect those well-meaning folk who held up Chavez as a paragon to admit their mistake. Naomi Campbell, Diane Abbott, Seumas Milne and Owen Jones in the UK; Sean Penn, Oliver Stone and Michael Moore in the US. Not a peep from any of them.

Hugo Chavez’ successor Nicolas Maduro has turned out to be a first class economic incompetent. In 2016, imports collapsed by more than 50% (largely due to socialist trade sanctions) and the economy nosedived by 19%.

The budget deficit is around 20% of GDP. The minimum wage is now the equivalent of £25 a month. Conversely, London’s financial sector employs several middle managers between the ages of 25 and 35 who easily earn between £150,000 to £200,000 per annum, rising to over £500,000 for a senior executive position, and professional mobility – the chance of switching to new firms and accelerating one’s career – is among the best in the world.

After a Central Bank estimate that suggested that the Venezuelan economy had contracted by 19% last year was leaked to the press, Mr Maduro fired the bank’s president and replaced him with a Marxist loyalist demonstrating another very problematic aspect of left wing control, censorship and that anyone who speaks against the ideology, whether right or wrong, will be removed from office.

Up to £640 billion of oil money was lavished on the country’s poor during the oil boom years, creating a gargantuan dependency culture. The country quintupled its national debt and hundreds of thousands of homes (of questionable construction quality) were handed to the poor. President Chavez created a massive and unsustainable bubble which is now beginning its slow, painful collapse.

At the heart of Venezuela’s economic chaos lie market distortions. Gasoline is sold locally for less than 1 British pence per litre and it receives £12 billion of state subsidies a year. The country has a complex monetary arrangement that makes use of three different exchange rates simultaneously.

This feeds rampant corruption because those with close connections to the president can buy dollars from the state at 10 bolivars a dollar but sell them at 3,300 bolivars a dollar on the black market – a classic case of ‘do as I say, don’t do as I do.’

Price controls have made it unprofitable for small businesses to sell staple goods, leading to widespread shortages. Carjackings and kidnappings are now epidemic. Caracas’s murder rate is 80 times higher than that of London, which over the last 15 years has become very safe indeed, especially in Central London, and in particular, the Square Mile where it would be extremely rotten luck to have even so much as a wallet stolen from a pocket.

It does not bear thinking about should a government with these views and ideas which are aimed at instilling a ‘new world order’ gain office, hence London will likely be business as usual on June 9 once the sensible rather than anarchic have done the right thing at the polling booths.

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