Comparing my more optimistic notes of just four years ago, I appear to have been either too optimistic or just naïve over the rebirth of this Empire. The attitude towards ex-fellow members of the USSR seems most surprising. One would have thought that these should have been the countries that the Bear would have been most keen to cuddle up to.

However, nothing could be further from reality when you see the recent gas supply disputes with Georgia, Ukraine, and most surprisingly of all, one of its former closet allies, Belarus. The recent forcing of a new somewhat one sided pipeline deal with that weakened nation was an interesting example of this power pressure. This has been further underlined by the Russians now deciding to build a new pipeline bypassing Belarus all together!  

Also, we should look through these disputes and recall the reduction in gas pressure to Western Europe last winter as a result of such arguments, and we can see how the EU finds itself in a somewhat risky and fragile position when it comes to having a reliable and dependable power supplies.

Secondly, look at the disputes with certain EU members. These include the ban on meat and especially beef exports from Poland (for no provable reason), the effective trade blockade of Estonia over the moving of a Soviet war memorial, and a 10 month long stoppage of Russian oil supplies to a Lithuanian refinery – Why? Because seemingly it was sold to a Polish rather than a Russian company.  

As for inward investment, despite pleas to encourage foreign investment just a few years ago, the programme of renationalistion appears to be continuing at some speed. Now I can quite understand that President Putin would wish to rectify the “fire sale” of assets that appeared to take place under the drunken lurches of the Yeltsin era, but the effective appropriation of assets from both Shell (with its Sakhalin 2 project) and BP (with its much feted TNK/BP joint venture) would hardly be a positive sign for would be overseas investors. Although it goes against my tenets of free trade and anti protectionism, we ought to consider very carefully the further expansion intentions of Gazprom in the UK unless we can be assured of fairness in markets and some reasonable reciprocity.

The recent EU/Russian summit hardly provided us with any further confidence and seemed to just highlight some of the potential fault lines that could well be painfully exacerbated in years to come. More domestically, the Litvinenko case will only serve to further cool relations which are already at their worst since the end of the cold war. The UK needs to consider how it wishes to address its relationship with the new Russian empire, and some robust diplomacy is needed to persuade the Russians that it is in their own longer term interests to go along with the accepted normal rules of  commercial (and come to civil) behaviour.    

So when looking at the larger picture of what has been happening, I have to ask the question – are these all legitimate trade issues or just a sign of petulance of a country suffering from a crisis of confidence and making up for it with what appears to be a programme of a bullying bear trying to gets its way.

***

 Ah the worries of money – how many times have you worried about losing your credit and debit cards? Now you need never worry again. Also, have you ever thought that your money costs you an arm and a leg? Well now it quite literally could do.

Yes we have finally reached the era of Borg technology (a Treky term for “technologically enhanced” humans). About a hundred clients of a beach club in Barcelona have opted to have tiny data chips surgically implanted into their arms. This will thus provide the party animals with the ability to pay for their drinks by a mere swipe of the arm.  

Of course there are some side effects to this proximity payment technology. For many Londoners this has already proved its value with the widespread and growing uses for their Oyster cards, but there have been occasions with other tests when users wander too close to a pay unit and inadvertently have money debited from their accounts.

Clubbers should also beware that any unnecessary waving of arms during a particularly heated remix could result in an exceptionally large round of drinks. Equally muggings could take on a nasty turn if instead of taking your cards, attackers are just interested in swiping your body, or various parts of it, past a cash machine.

***

 And finally….a sign of how competitive and market oriented zoos are becoming. A Chinese park has shown the way and cashed in on providing a photographic opportunity for children to be filmed riding a zebra. The fact that the zebra is neither indigenous nor commonly available in China was no impediment to this entrepreneurial animal emporium. Deft use of white paint applied in stripes on a co-operative equine achieved a near perfect result – presumably until it rained?

 Have a good week,

Justin A. Urquhart Stewart
Director
Seven Investment Management