Being patronised isn't regulation..

Politics and politicians hold the key to the success of your investments, like it or not.

The formal press is inundated with examples of political influence. One of the more frustrating is the ‘intense negotiation’ on The Hill w.r.t the possible increase of the US $14.4 trillion debt ceiling. If the ratio of US debt to GDP is tapering off why are markets subjected to all the political posturing? Incidentally, excluding the mayhem in the bond markets which could cost investors up to $100 billion, the direct cost for every notch the US gets downgraded would cost an extra $20 billion, give or take, in interest payments.  

Goldman’s O’Neill coined the grouping acronym BRIC which makes reference to the emerging economies of Brazil, Russia, India and China, in itself a collective nonsense given their disparities in socio-economic development. Surprisingly, South Africa was recently appended to this illustrious group. It is now moot whether SA is still considered the Gateway of Africa for FDI, which remains consistently low. Internalised political debate on the merits of nationalisation continues to haunt SA; a political variable difficult to account for in assessing investment risk.

Elsewhere ordinary Greek people, thoroughly confused by the antics of their 'leaders' demonstrate their displeasure in the streets. Greek banks have run out of cash and contagion in the region has become a real possibility. Yet Greek politicians hesitantly consider the consequences of their self-indulgence at the expense of the populace at large…

Australia's Prime Minister Julia Gillard now fancies a crusade against the tobacco companies. Perhaps it’s political pandering to populism? Even so, wherever you find yourself on the moral spectrum it's obvious that the consequences for companies like Philip Morris are profound.

Political negligence or omission is equally financially destructive. Seems to me that the current intention to increase capital adequacy for banks at the expense of growth is three years too late and smacks of patronisation rather than regulation. Who elects these idiots anyway?