Truss and Kwarteng – Useless or Corrupt?

Posted on September 30, 2022

Through fear of going down the road of becoming a raging conspiracy theorist, yesterday, I contacted three people I know who have more knowledge of finance than me. One being in asset management, another who works in consumer pricing (RRP) and has a BA Hons in Accountancy, and the chartered accountant for my business.

These chaps are level-headed and as exasperated with our current political situation as any other normal person. The question is, do they think the chaos engulfing the country is down to corruption, ineptitude, or both? Are our political leaders giving people who make money out of chaos, the heads up?

Probably Just Hopeless

Of course, as the lover of a good corruption story, I wanted Truss and Kwarteng to be guilty of insider trading, deliberately causing chaos in the markets for those who bet on economic meltdown. There is enough evidence to allow the brain to go into overdrive, especially with regards to Kwarteng being a former employee of the much-despised Crispin Ode, who profits from chaos.

The responses I got were disappointing in that they all believed that the likelihood of ineptitude outweighed corruption. All three of them believed that it was extraordinary levels of hopelessness that was bound to panic the market. However, they could also see how the perception of industrial scale financial corruption existed amongst people who expect our leaders to be competent.   

Snippets to Ponder

A few snippets for you to ponder. My friend in retail pricing said, “She can call it bold, but driving a car at 100mph towards a brick wall is also bold”.   My friend in asset management said, “It is highly unlikely Kwasi Kwarteng would approach Crispin Ode and say, “I’m going to crash the economy, give me X million quid”. Finally, my accountant said, “Everyone, even these lunatics, value their freedom and it is highly unlikely they would threaten that freedom by deliberately crashing the market…they are just useless, in my opinion”.

In fairness none of them said there is categorically no systematic internal corruption, they just felt, in their opinion, it was unlikely. These are all good people I know, not right-wing, raging populists. It was a little bit jarring in a way, as I was hoping for something more dramatic. However, after trying to be an epidemiologist in the pandemic, I have vowed to use my more experienced contacts when trying to make sensible conclusions.

So, it appears that this is pure ineptitude. A pair of people in the highest jobs in the country, trying to appear proactive by making impulsive statements without logical thought or independent advice. As my RRP friend said, “When you unleash secrets on the markets, they just don’t like that. If you tell no one and your plan is mental, you hit the brick wall of reality”.

Looking Stupid by Trying to Look Tough

So basically, Truss and Kwarteng, in a bid to look like politicians unafraid to make tough calls, have made utter prats of themselves and crashed the markets. To make matters worse, after the BOE stepped in to try and calm the markets, Truss came out of hiding and doubled down, causing another economic shock. Her and Kwarteng have decided to deny they have acted with ludicrous folly.

They have backed themselves into a corner where there is no way out. They can either back track to calm the markets and look like they have not got a clue, or they carry on regardless as the markets react in the same way you would if your elderly parents had just handed 20 grand to a door-to-door pyramid salesman.  Either way, their credibility has gone.

Trading on Ineptitude

As for the people who have made a fortune out of this, it now feels more likely they have done it by instinct. In our chosen professions, we get good at stuff through experience. Call it what you like, a gut feeling, a sixth sense, whatever. An experienced fireman instinctively knows whether a building might collapse, a tax accountant can see red flags in a complex statement of accounts, a professional tennis player can return a 130 mph serve in milliseconds by judging opponent’s body shape. We do things a lot and guess what, we get instinctively good at them. We become experts.

An experienced trader who profits on chaos would have sensed what was coming with Truss and Kwarteng. They would know that they were impulsive and would be trying to look tough to command populist plaudits. Basically, they betted on Truss and Kwarteng being impulsive and it came off. They might be immoral arseholes but it’s not illegal.

Of course, we will never know for sure and the links between the City of London and politics are certainly too close. However, trashing a political party and the UK economy on purpose, is on balance, unlikely. Not impossible. but if you think about, it will take someone extremely bold to do such a thing and get away with it.

Just an opinion though! I am more than happy to be proved otherwise.

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