METALLIC HEGEMONY


Is it not high time for a redefining of the word ‘outlier’? It only requires a brief look back over the last two decades to prompt a realisation that the often overlooked ‘black swan’ scenario is not as improbable as statistically forecast. As such, the notion of an ‘outlier’ – something or someone that is situated away or detached from a main body of system – is actually more of an ‘inlier’.


The first example of an outlier is none other than the new leader of the United States of America – Mr Donald Trump. His “stunning success” in the US election offers a clear illustration that his decision to run for President was by no means abnormal. There are evident dangers in classifying perceived unconventionality as improbable but this is a consequence of society’s hegemony. So how has this precarious situation arisen if Mr Trump was in fact Mr Black Swan?


Perhaps our fascination with Donald Trump lies with his apparent difference to the norm. His mélange of radical proposals and addiction to Twitter are unique in modern American politics. Conversely, maybe Trump is the new standard in a world that is breaking away from a traditional norm or indeed breaking up with itself. However doesn’t this just produce a catch-22 scenario; namely that once (if?) Trump becomes the standard on a fractured global political stage then the people will demand change, yet again?


If we glance back at what is now history, the financial issues and difficulties that have arisen have often been from an underestimation of the outlier. This outlier, or outsider, represents change and it is no secret that when change is rendered obligatory people fear what the future holds. There is little doubt that people are apprehensive about Trump; Europe and Britain are preoccupied with the effects of Brexit (another outlier); Russia’s increasingly dominant potency that for so long had been subdued has caused some anxiety; when will North Korea launch a nuclear missile and what are we to think of China – is it growing or is it bust? All of these are just a handful of the uncertainties cultivated by the current changes in the world. It is likely at this juncture that you – the reader – have either fallen asleep with ennui or are asking yourself how this is relevant to metals?


Before assessing the LME more specifically, it is important to understand that man is defined by his audience – institutions, the people, the media, literature and the wider society. A ‘crisis’, or more specifically an ‘identity crisis’, can occur if one of these inputs (man or audience) altars significantly whilst the other remains unchanged. For example, if a close group of friends decides that racial abuse is acceptable, indeed conventional, but one of the group decides it is not, then it is he who is cast as the outsider. On the other hand, if our individual decides that racism is acceptable but the remainder of the group does not, then again there is an identity crisis. The point here is that a predicament can occur when change is proposed if there is not uniform agreement and consent. It is based on this very reasoning that expounds the grievances and frustration that is felt by the LME Members.


In order to understand the current state of the LME, it is important to look back to appreciate how it reached this state. For the last two years the Exchange has been in limbo, if not decline. Despite continued denial from the Exchange itself, there is little doubt amongst its participants that the prevailing deterioration in volume is almost entirely attributed to an exorbitant fee increase. It is ignorant to assign blame for fewer volumes exclusively to a market downturn and subdued trading activity. Nonetheless, it is admirable that the LME is trying to change and adapt its perceived archaic trading model. The existence of the open out-cry floor and the unique prompt date structure makes the LME exceptional. For some time the LME has been working tirelessly to ‘futurise’ the market, offering outright monthly contracts. So far there has been little traction nevertheless will 2017 be the year in which these contracts offer real potential?


6 | ADMISI - The Ghost In The Machine | January/February 2017


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