Trying to predict the eventual outcome of the looming trade war between the US and China is about as difficult as trying to predict Donald Trump's next policy announcement. However, a reasonable prediction would be that neither side enjoys losing face, and therefore is unlikely to back down at the first hurdle.

For those that have missed it at 2 PM today America is due to slap a 25% duty on $34 billion worth of Chinese imports, ranging from machinery to electronic parts. As night follows day Tit is liable to follow Tat, meaning that China will immediately respond with equivalent tariffs focused on American farm goods.

While $34 billion seems a fair chunk to Hedge Clippings, they only represent about 0.1% of GDP for both the Titter (the US) and the Tatter (China). However the real risk lies in the Donald's approach to negotiation, and we would imagine China's approach to backing down. Assuming both parties perform as expected by most pundits, as opposed to how each hopes the other will react, it seems pretty likely that tensions, the damage to each country's economy, will increase.

However the US economy is in a very different place to China's, with a strong stock market, improving growth, and bond rates that in spite of dire predictions, and inevitable Fed tightening, seems not to have upset the apple cart (yet). Growth in the second quarter of the year is likely to exceed 3.5% annually, and unemployment is falling. Apart from the trade war, the major risk seems to be that there will in fact be an eventual outbreak of inflation, currently just above the FED's target of 2%.

Conversely, in China the equity market has fallen 20%, and the authorities are grappling to control credit. Over the past 20 years, having become the world's factory and having exported deflation as a result, a nasty trade war with the US could be the trigger to signal the end of the miracle.

Meanwhile, we assume the economy of all other countries, including Australia, caught in the crossfire will be considered collateral damage, although depending on who sides with whom, and who can negotiate what, will depend on the eventual outcome.

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We would like to highlight the following:

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Australian Fund Monitors

ATTACHED FILESAFM Fund Review - May 2018 (pdf format)

David Murray's problems with ASIC go back a long way, but more recently he's upped the ante even further as he attempts to justify Vertical Integration within the financial services industry, and AMP in particular.

It is worth remembering that Murray (who prior to his soon to be current gig as AMP's chairman) had only ever worked at CBA. He was both the architect, engineer and implementer of their vertical integration model, taking the likes of Colonial, Aussie Home Loans, and Count Financial into the bank in his quest to gain a greater share of the customer's wallet. In a classic case of "if you can't beat 'em, buy, buy, and buy more of 'em" he added financial planning, accountancy, and mortgage broking to the product suite, while Colonial's investment platform created the perfect distribution model.

Except it wasn't perfect, as clients of Storm Financial and others have experienced, and as the Hayne Royal Commission has recently exposed. Leading the charge to take market share, and make profits at any cost, often leaves the client's best interest coming a long way third - if it features at all - in the process. As a result, CBA's incoming CEO Matt Comyn has wasted little time in announcing the demerger of "wealth" from "banking" and undoing much of Murray's work at CBA in the process.

Murray's previous run in with ASIC included him comparing the regulator to Hitler's Nazis, for which he was forced to apologise. Last week, just as he prepares to take the reins at AMP, he engaged in a little more ASIC bashing claiming the regulator had lost its way under Greg Medcraft, and wasn't focussed on its main job.

Meanwhile, ASIC is going after AMP's financial planning arm through the courts, so we'd like to be a fly on the wall when the regulator's new chairman James Shipton and David Murray first sit down for a quiet chat and a cup of tea. Just try typing David Murray and ASIC into Google to get a flavour of how the conversation might run.

In many ways, Murray, whose reputation and knowledge of the financial services is undoubted, makes him a perfect choice to head up the organisation which has managed to trash its reputation and decimated the ranks of its board and senior management. 

In others he's probably the worst. The world has changed and vertical integration is on the nose, in decline. Not only has the AMP got to change, but Murray's got to learn a new game at the same time.

AMP's problem is that without vertical integration it has an uncertain future as it struggles to distribute its frequently uncompetitive products through a tied sales force. ASIC will be watching with interest.