Hobbs is a public face of the bank, writing popular blogs and appearing as an expert analyst on Bloomberg and CNBC. “It just kind of happened as part of the job,” he says. “To simplify my team’s job, we have to produce a narrative around economies and markets. The purpose of that narrative is twofold: it has to be profitable for clients to follow of course, but it also has to be accessible. That’s important because in financial services a lot of the jargon we hide behind obscures investments to clients and other normal human beings. One of our jobs in this sector is to make investments more accessible to a wider part of the population, because the returns available from capital markets are – over time and with the right sort of help – much more attractive than many people realise or are currently exposed to.”
In his work as a commentator, Hobbs tries to follow the example of those he admires: “The people you admire as commentators – whether in sport, finance, politics or whatever – you notice they’re always saying things that are carefully thought through, measured and defensible. The people I admire who speak on these matters have always been able to say, ‘I don’t know’. It takes a lot of guts to say it, but of course it’s impossible to know the answer to everything, even on a subject much narrower than the world of capital markets.”
The idea of “knowing what you don’t know” is also pertinent to the wider sphere of Hobbs’ work. He believes that “it’s important we advertise ourselves not as people who can see the future better than anyone else: the future’s unknowable, we’re just making carefully considered, well researched guesses. An ever-present problem in markets is how one measures and assesses risk. Many investors look at the year ahead and focus on the items they can see – this year everyone has been very focused on the various potential electoral minefields in Europe. But how can we place such risks in their proper context if we can’t see all the details of the future? In reality, like icebergs, most of the risk picture is submerged from view, and the danger is you exaggerate the risks you can see, just because you can see them.”
Rewinding twelve months, most analysts did see the risk of a Trump presidential victory or an EU referendum Leave vote, but few thought they would actually happen. Do unlikely future events begin to look more possible because such shocks have already taken place? “Possibly,” says Hobbs. “But the important thing we got right last year was that for markets it would be the economy – the prospects for growth and inflation - that would eventually be more important than the ever-evolving political backdrop, and that’s still the thing to think on.
“We’re not political strategists, we’re market strategists and our job on the political side of things is really to analyse how much politicians can actually do within the various, carefully constructed, constitutional frameworks. In the US we continue to argue that a combination of congressional treacle, economic self interest and the policing role often played by markets will end up diluting many of this new US administration’s more extreme promises. In Europe, we probably need to remember that the constitutional framework in many of the countries in question was designed in the aftermath of the Second World War, with the specific aim of muting the extreme ends of the political spectrum. We suspect these various constitutional restraints will continue to hold firm.”