Indholdsfortegnelse for Issue 988 i MoneyWeek

“Politicians can’t redistribute years of life as easily as they redistribute cash” This week brought a slew of interesting statistics on inequality in the UK. It turns out that income inequality is slightly higher than we thought (albeit not rising –which is good). More interesting, however, were the numbers on longevity equality. The latest show (pleasingly) that while the rate of increase in UK life expectancy has slowed we are still living longer than ever. Female life expectancy is now 82.9 years and male 79.5 years. However, these numbers do mask some miserable divergences: there is close to a 20-year difference in the length of the lives of those who live in the poorest and the richest areas of the UK. This is a gap that is going to get…

US bank Wells Fargo has agreed to pay $3bn to settle a lawsuit over a fake account scandal, reports NBC News. For over a decade bank staff, under pressure to meet sales quotas, opened various accounts and credit cards in real customers’ names without the customers’ knowledge. Last month former CEO John Stumpf was fined $17.5m for his part in the scandal, though he left the company in 2016 with $80m in stock and a pension worth $22.7m, says the LA Times. Yorkshire Tea suffered a social-media backlash this week after left-wing Twitter users objected to chancellor Rishi Sunak, MP for Richmond in North Yorkshire, posting a snap of himself making tea with the brand. The company said it had not endorsed the photo, and pointed out that “people of…

Is this dotcom bubble 2.0? asks Robin Pagnamenta in The Daily Telegraph. Almost 20 years after the dotcom crash tech stocks have once again reached dizzying heights. Apple and Microsoft are now worth a combined $2.8trn. That is more than Great Britain’s entire annual GDP. Yet where the dotcom bubble was marked by the overvaluation of “flimsy” start-ups, today’s tech giants are “mature companies which earn real money”. Just five stocks – Facebook, Apple, Amazon, Microsoft and Google-owner Alphabet – account for nearly a fifth of the S&P 500’s total market value, notes Akane Otani in The Wall Street Journal. That is the highest level since the dotcom bubble peaked. Yet today’s valuations are far less stretched: the five leading lights of the dotcom boom traded on 47 times expected…

Many investors think of the past two decades, which followed the 1980s spike in inflation, as the era of falling interest rates. But a paper by Paul Schmelzing, a visiting scholar at the Bank of England, suggests that rates have actually been falling for centuries. Using historical data from developed economies, including personal loans made to major powers such as a Rothschild note issued to the Papal Treasury, along with the debt issued by key governments, Schmelzing calculates that global real interest rates have slipped by around 0.0196% a year in the past 800 years. In the 2000s they have averaged 1.3%, down from 2% in the 1900s and 3.4% in the 1800s. The real rate trend line suggests rates could soon enter permanently negative territory.…

The coronavirus has forced China to hold its first online initial public offering (IPO). Bestore, a high-end dry snacks chain based in Wuhan, the epicentre of the outbreak, achieved a market capitalisation of ¥6.87bn (£750m) after its shares rose by more than 40% on their first day. The online ceremony featured a video simulation of the beating of agong, a key part of the IPO ritual on a trading floor. The Shanghai Stock Exchange says that for the foreseeable future it will hold online listing ceremonies for all companies planning an IPO. Bestore is expanding rapidly. The IPO prospectus showed a 19.6% year-on-year rise in operating earnings in the first nine months of 2019.…

• Barclays CEO Jes Staley is facing an official probe into his relationship with the disgraced financier Jeffrey Epstein, while activist investor Edward Bramson has complained of “governance weakness” in a letter to the board. Staley may soon step down, but despite his “insensitivity to criticism” some of his business decisions have been quite good, says Lex in the Financial Times. In particular, Staley’s “contrarian strategy” of retaining Barclays’ full-service investment bank has helped differentiate it at a time when its competitors in Europe have been abandoning this segment of the market. • Until this week, investors had been “extraordinarily unconcerned” about the potential economic impact of the coronavirus, says Nils Pratley in The Guardian. But the drop in the value of easyJet from £6bn to £5bn in just a…

Value stocks –those that are cheap and unloved – have a long record of outperforming growth stocks – those that are expensive and popular. It’s very easy to make overly simplistic distinctions between “value” and “growth” (see page 36), and not every “value” investor has had an awful time, just as not every “growth” investor has shot the lights out. But taking a broad view, betting on value rather than growth in the last five years has cost investors in the region of 6% a year, argued Norbert Keimling in a research piece for StarCapital in October. “A more contrarian trade than value is hard to find” That’s a massive gap. So what’s going on? The problem for value stocks today is mean reversion –or the lack of it. Mean…

Most of us probably never dreamed we would end up being a Goldman Sachs or JP Morgan customer. You needed ten digits on your net worth, and possibly 11, just to get through the door. But now, they are throwing themselves into the mass market. Last week, Morgan Stanley unveiled a $13bn takeover of E-Trade, one of the leading internet-based share-trading platforms. It will now be offering a range of services to small investors. JP Morgan is planning a British retail bank offering a range of saving and loan products in a digital package. When the bank is launched it will be competing with its long-standing rival Goldman Sachs, which already has its Marcus unit up and running in the UK and elsewhere. At this rate Credit Suisse, Deutsche Bank…

The rush to the Moon has begun Homer Hickam The Washington Post Now that US space agency, Nasa, has been directed to return astronauts to the Moon by 2024, interest is quickening among a host of private firms and countries, says Homer Hickam, a member of the National Space Council. This isn’t surprising. The Moon has abundant water and oxygen, as well as rare-earth metals and other minerals that may well be worth mining. The “quiet far side of the Moon” could provide a location for interstellar observatories and hotels. Looking at the Moon as an eighth continent and potentially a new source of wealth is a “revolutionary way” of thinking, and it is why, although professional astronauts are required for the initial landings, this “exclusivity” shouldn’t continue for long.…

capx.co Older voters, including those of modest means, are more likely to reject leftwing radicalism. Some partisans say this is because they are selfish, says Tim Worstall. There is a more likely explanation. Of the nearly £15trn in national wealth measured by the Office for National Statistics, some £5trn is in housing (net of mortgage debt) and £6trn in pensions. Financial wealth of the kind billionaires use to pay for their yachts is only £2trn or so. In other words, most of the wealth in this country is of the kind that ordinary people have accumulated over many years by working for it. The young, who haven’t been alive long enough yet to benefit from such accumulation, find the idea of redistribution amenable. Those of us ancients who have worked…

“By 2050 green hydrogen could provide almost a fifth of total power consumed globally” Hydrogen is the fuel of the future – and always will be. That’s the industry joke and, as Homer Simpson would say, it’s funny because it’s true. Or at least it has rung true for a long time. General Motors built a car powered by hydrogen in 1966, as Fatih Birol of the International Energy Agency (IEA) points out. It ended up in a museum. At semi-regular intervals since then, hydrogen has been touted as the answer to humanity’s energy needs. After all, it is the most abundant element in the universe and, when burned, releases only energy and water. It can be stored and transported in liquid or gaseous form, is energy dense, and is…

Third Point, an American hedge fund led by Daniel Loeb (pictured), has taken a 5% stake in insurance giant Prudential and is now the group’s second-largest shareholder. It published a letter this week saying that running both a US and an Asian business from a London base was “sub-optimal” and that the divisions should be separated. Loeb claimed that the shares would double in three years if the units were split off and Prudential retained a stake in both. Loeb’s previous successes as an activist include ousting the boss of Yahoo.…

Many of us dream of the day we are free of our mortgage. But have you ever considered cutting the time it takes to be mortgage-free by increasing your repayments? The repayment your lender tells you about is the minimum you have to repay each month. Most of us never consider paying more, but doing so could shave thousands off the cost of your home. “Overpaying can wipe years off your mortgage and saves you paying the interest you would have accrued by having the debt for longer,” Rosita Janulion, a mortgage expert from Habito, told the Daily Express. If someone with a £200,000, 25-year mortgage paying 1.89% interest overpaid by £100 a month, they’d “save over £7,000 in interest alone and become mortgage-free three years and three months earlier”.…

The co-working phenomenon is gathering pace in the UK, with more and more businesses renting space in a shared office building. The biggest co-working firms’ portfolios increased by 22% in 2019, according to law firm Boodle Hatfield. WeWork’s portfolio alone increased by 30%, while competitors such as Regus are rising to the challenge. Its new 80,000 square-foot office complex in Victoria is its largest London site on record. But while co-working spaces are popular with start-up businesses and, increasingly, larger companies, do they suit your firm? Advantages include not having to worry about equipping the office or dealing with telecoms, utility and IT providers; moreover, you can easily take on more space as your business grows. Co-working fans also point to the soft advantages of working alongside other growing businesses,…

A recurring theme in financial markets is the division between “growth” and “value”, two key styles of investing that are always pitted against each other. In recent years the growth style has outperformed value. Value funds have shrunk in size, while growth funds have topped the performance charts. However, there is more to this story than the two styles, and the crucial point is that the type of investing deemed value has come to be defined in an overly rigid and ultimately unhelpful way. We consider ourselves value investors and we have managed to outperform while the value style has underperformed. How it all began “Comcast’s broadband subscriber growth and profit margins bode well” The explanation starts with the capital asset pricing model (CAPM), which was introduced in the 1960s…

1. Switch off: Unplug all electronics and turn down the thermostat. Suspend deliveries. 2. Choose a green destination: Are there cycle networks, public transport, local food markets? Avoid overly popular places and travel out of season. 3. Pack light: Planes and trains use more fuel the heavier they are. Take only what you need, a reusable water bottle, coffee cup and recyclable shopping bags. Reduce plastic with a bamboo toothbrush and download your boarding pass to your phone. 4. Fly direct: Taking off and landing uses more fuel than being in the air, and pay to offset your carbon footprint. Better yet, go by rail or sail. 5. Stay in an eco-hotel: Choose a hotel with sound environmental policies. Conserve water and electricity, and don’t use the laundry service. Eat…

2016 Châteauneufdu-Pape, Domaine de la Solitude, Southern Rhône, France £33.99, reduced to £26.99, strictlywine.co.uk The people at Strictly Wine assure me that the reduced prices shown here will still be live at the time of this publication, which is awesome news for us all. My featured estate Châteauneuf, its white sibling, 2018 Châteauneuf-du-Pape Blanc (£35.49, reduced to £28.99), and the red super-cuvée 2015 Châteauneuf-du-Pape, Cuvée Barberini (£54, reduced to £41.99), are quite simply the finest releases from this much overrated appellation I have tasted in aeons. The grandeur, complexity and depth and accuracy of fruit shown by each wine took my breath away – I couldn’t believe the effect they had on my senses. The white is every inch a diva, with richness and indulgence on the peach-blossom-kissed…

More The 10,000 Year Rise of the World Economy By Philip Coggan Profile Books, £25 Economic history “rarely makes for a cheering read” because historians tend to focus on the various crises and the downsides of progress, such as the “dark satanic mills” of the industrial revolution, says Diane Coyle in The Economist. More: The 10,000-Year Rise of the World Economy by Philip Coggan, on the other hand, takes time to acknowledge instead the “immense economic advances” that have taken place over the past ten millennia. The book is divided into three parts: the pre-modern economy up to the early 19th century; the epoch from the industrial revolution up to the turning point of 1979; and the modern era of globalisation and its discontents. The book is not really the…

• In the end, the 39-year age gap proved insurmountable for actor Al Pacino’s ex-girlfriend, 40-year-old Israeli actress Meital Dohan. “It’s hard to be with a man so old, even Al Pacino,” said Dohan (pictured). “I tried to deny it, but he is already an elderly man. So, even with all my love, it didn’t last.” I’ll bet, says Jan Moir in the Daily Mail. Sympathising with lumbago and searching for the spectacles takes its toll on a relationship. Dohan also accuses the actor, who has a £140m fortune, of being stingy. He didn’t buy her presents, just flowers. “What a rotter.” Then again, Pacino has never married, “which is one reason why he still has all that dosh”. “Sometimes I swear he must have been raised by wolves,” his…

£27,700 How much Commons authorities have spent on armchairs and sofas at Portcullis House, the glass-covered atrium that houses cafes, canteens and MPs’ offices. Three blue leather sofas, at £3,425 each, were obtained from Frovi, a high-end British brand. 96 The percentage year-on-year slump in car sales in China in the first week of February due to dealerships closing to prevent the spread of the coronavirus, according to the China Passenger Car Association. That works out at just 811 cars sold a day. £470,933 The average price for a house in Cambridge, making it the least-affordable place in Britain in which to buy a house, relative to the average local salary of £39,434. Oxford, where the average house costs £431,647, and the average salary is£36,194, comes in at second place.…

Clifton Collins, a drug dealer from Galway, thought he had found the ideal way to hide his ill-gotten gains back in 2011-2012: he put his money in bitcoin. The digital currency ended 2012 at a price of around $13 per coin and Collins amassed around 6,000 of them across 12 accounts. He printed out the access codes for safekeeping, which he hid among his fishing gear in his rented home. But in 2017 he was arrested and jailed for five years. Ireland’s Criminal Assets Bureau was hoping to sequester the crypto-funds – now worth around £45m, following bitcoin soaring in value – as proceeds of crime. But while Collins was in prison, his landlord cleared out the house and the fishing gear and access codes ended up in the dump.…

The coronavirus has gone global, says David Fickling on Bloomberg. News of outbreaks in Italy, Iran and South Korea suggests that Covid-19 is “skipping past our quarantine cordons”. The World Health Organisation this week stopped short of officially declaring a pandemic, but if similar clusters keep emerging then that “alarming prospect” will not be far away. Markets roll over “Equities have finally succumbed” to Covid-19, says Rupert Thompson of wealth manager Kingswood. Confidence that the outbreak would soon be contained had seen markets trading close to all-time highs. No longer. News of the global spread of the disease has spooked traders. World markets had their worst day in two years on Monday. The S&P 500 fell 3.4% to lose all its gains for this year; Italy’s MIB plunged 5.4%. The…

“What has made this cycle unique is that the correlation between [US] gross-domestic-product growth and the direction of the S&P 500 index has only been 7%. Historically, it has been 30% to 70%... Economic fundamentals have never mattered as little for the stockmarket as has been the case during this 11-year bull market. The stockmarket is behaving more like a commodity than anything else, in that it’s trading on simple supply and demand. [The reason is that we] have had $4trn of quantitative easing matched perfectly by $4trn of corporate share buybacks… You would normally believe that a powerful bull market in equities would have been reliant on a strong economic backdrop. But… the last 11 years [have been] the weakest... expansion of all time. We haven’t even had one…

Three to buy Ashtead The Times This industrial-equipment renter makes 90% of its profits in North America. There is speculation that it could eventually choose to shift its listing to the US, although there are no such plans for now. It offers construction essentials such as generators, air conditioners and cranes, and has diversified into barriers and lights for festivals and even refurbishes offices. That should make it more resilient during a poor year for US construction. On just 12.6 times forecast earnings the shares are a “solid buy”. 2,765p Biffa Investors Chronicle This waste-management specialist has a bumpy record, but is now moving into higher-margin growth areas. New taxes and regulations on landfill have opened an opportunity in the energy from waste business. More environmental awareness should also help…

The Iranian people have delivered a “rebuke” to its leaders as record numbers defied calls to take part in parliamentary elections amid popular unrest over the regime’s handling of an economy “battered” by US sanctions, says The Wall Street Journal. The boycott, prompted by the “mass disqualification of moderates and reformists”, produced a record low turnout of 43% of registered voters, falling to 25.4% in the capital Tehran, down from a national level of 62% four years ago. It also led to victory for hardliners, who now hold 221 of 290 seats. Iran’s government is already blaming “negative propaganda” about the coronavirus for the low turnout, says The Economist. That’s “hogwash”, but Iran is “scrambling” to contain an outbreak of the disease, closing schools and universities in an attempt to…

“It is a problem that blights the lives of modern metropolitans: you need to spend a penny and it ends up costing the price of a cup of coffee,” says Harry Shukman in The Times. Sophie Bowley-Aicken and Merlin Jobst have had enough. Last month they launched London Loo Codes, a Twitter account that publishes the door codes to unlock toilet doors in cafés and bookshops across the capital. Predictably, there has been some resistance. Waterstones on Tottenham Court Road, for example, has been fighting a rearguard action, changing its codes. “Not everyone who needs to use the loo can afford a coffee,” Bowley-Aicken tells Amelia Tait in The New Statesman. “As the number of people sleeping rough increases, we feel it’s conducive to basic human dignity to afford these…

An initial public offering (IPO) represents the first time that a company sells shares in itself to institutional investors (such as pension funds) and often also to individuals (retail investors). This process is also known as “floating” or “going public”. Companies go public for a wide range of reasons. They may want to raise funds for expansion and choose to do so by selling part of the company rather than borrowing the money. Alternatively, the current owners – perhaps the original founders, or a private-equity fund – may wish to “exit” (ie, cash in on their investment). An IPO is underwritten by one or more investment banks, which typically earn large fees from the process. A prospectus with details of the company and the offering is issued to potential buyers.…

• Richard and Antony Joseph, the twin brothers who founded the colourful utensils brand Joseph Joseph in 2003, have split a£10m dividend, up from £5m in 2018. The London-based brand’s stackable food containers and bathroom accessories have gone down well in Europe and the United States, helping to grow sales by 19% to a record £79.8m in the year to the end of May. Pre-tax profits were £16.6m. The brothers each own half of the company. • Lloyds Bank’s chief executive António Horta-Osório, (pictured) formerly Britain’s highest-paid banking boss, has taken a 28% cut to his £6.5m pay package, says The Guardian. His total pay for 2019 was £4.7m. Pre-tax profits at the bank fell by a quarter to £4.4bn last year, after it was made to pay an additional…

“My career was a letdown to my parents. They’d busted their arses for their kid to go to a grammar school –and to see it from their perspective, the arts were not a way for black people to survive. They came around when they saw me on the bloody telly, mind!” Film director and musician Don Letts (pictured), quoted in The Observer “You know, if baseball umpires were on the front page of the sports section every week, you’d know something was desperately wrong with the game.” Jim Grant on central bankers, quoted in a Price Value Partners note “The diet book is one of those fool-and-money separation devices that seems, like roulette or slot machines, never to lose its power.” The late Christopher Hitchens, quoted in Forbes “I think…

fee.org If we can put a man on the moon, surely we can solve such-and-such social problems? This commonly heard objection is fallacious, says Gary Galles. Economics is not rocket science – it’s much harder than that. Rocket science and engineering focus on achieving already agreed-upon goals using materials governed by physical laws and relationships, and forces that are stable and mathematically expressible. Rather than achieving agreed-upon goals, economics focuses on resolving the trade-offs between the conflicting desires of billions of people. Physics has constants and laws. Contrast that with the law of demand, which says that people want to buy more at lower prices, other things being equal. It doesn’t tell us how much more, or that those “other things” aren’t in fact equal but change, and are infinite…

UK-based Ceres Power (Aim: CWR) is a maker of fuel cells made from ordinary steel – as opposed to more expensive materials such as platinum – that burn natural gas to generate low-carbon electricity. The technology also works with hydrogen and other biofuels, and enables residential and commercial properties, and charging points for electric vehicles, to generate their own power. The company is investing in new plant and technology to meet rising demand and is probably a good four years away from making any profit, but sales are growing fast and losses narrowing. For the full year to June, revenues were up 142% to £15.3m, the fourth year running that Ceres has more than doubled turnover. Ceres licenses its technology to commercial partners including Chinese engine maker Weichai Power, America’s…

■ Fund management groups Jupiter and Merian have entered a “marriage of convenience”, says Owen Walker in the Financial Times. Last week Jupiter bought its rival for £419m. The combined group will have assets under management of £65bn, with around two-thirds accounted for by Jupiter. Merian, known as Old Mutual Global Investors until fund managers at the group led by head of UK equities Richard Buxton took it over, has suffered from outflows following a run of poor performance. The two groups are also bulking up in order to fend off competition from “passive behemoths”, notably US invaders BlackRock and Vanguard. Medium-sized active managers have been struggling with lower fee income as low-cost passive funds have become increasingly popular. They have therefore started to “[club] together to achieve scale and…

British businesses borrowed more money using asset finance than ever before in 2019. Asset financing–borrowing against physical assets ranging from plant and machinery to vehicles and commercial premises – rose by 6% to £35.7bn, according to the Finance & Leasing Association. The Bank of England says banks lent just 0.8% more to small and medium-sized enterprises (SMEs) last year. The advantages of asset finance include easier access to money, lower costs and greater flexibility. Since businesses are borrowing against the value of a physical asset the lender feels more comfortable advancing credit. And businesses acquire new assets as they grow, allowing them to secure more finance; the facility thus grows in line with the borrower. Two main options Asset finance comes in different forms. The most straightforward arrangement is a…

There is a select group of high-quality British engineering companies with leading positions in their market niches that make excellent long-term holdings for your portfolio. These include Halma, Rotork and Spirax Sarco. Here, we add another: Porvair (LSE: PRV), a member of the FTSE Small Cap index with a market value of £340m. Porvair makes filters – bespoke high-tech filtration systems that, for example, extract impurities from molten metals. Porvair’s filters are usually a modest part of the overall cost of process equipment for its clients. But they are crucial for quality and reliability so these features are more important than price. A specialist in three fields Porvair has three divisions contributing to its 2019 turnover of £145m: aerospace and industrial (45%); laboratory and environmental (28%); and molten metals (27%).…

Boohoo Group (Aim: BOO) is a UK-based online retailer selling “fast-fashion” aimed at the 16-30 age group. It owns brands including PrettyLittleThing, Karen Millen and Coast. While the traditional high street names have floundered Boohoo’s rise has been unstoppable, with revenue rising tenfold and profits up nearly sixfold in the last five years. The shares have followed suit, climbing over 400% since the company listed on Aim in 2014. At £3.8bn, its market value now eclipses Marks & Spencer’s. In the last 12 months, the stock has risen by 90%.…

Andrew Cochrane was born in Edinburgh in 1767. After a spell serving in the British Army, he became the MP for Stirling Boroughs in 1791, marrying the heiress Georgina Hope-Johnstone in 1793 (he added Johnstone to his name at that time). By 1797 he was promoted to colonel and was then made governor of Dominica, quickly acquiring a reputation for corruption and mismanagement. Although a mutiny prompted him to be recalled to face a court martial, he was acquitted and made his way into Parliament for a “rotten borough”. Although subsequently disqualified, he returned to Parliament for a third time in 1812. What was the scam? On the advice of his broker, Richard Butt, Cochrane-Johnstone began speculating in “Omnium”, aform of government debt, on margin, acquiring around £1m (£68.7m in…

As the first decade of the 21st century came to a close, it became obvious that the Information Revolution had turned out to be a failure. We had far more information than ever before… but there was no way to tell what was real and what was fake, what was gold and what was dross. We could get a lot of practical tips from the internet. We could get directions to the nearest off-licence from GPSenhanced interactive maps. But the internet could also send us in the wrong direction. Every crank with a conspiracy theory, every yahoo with an investment secret, every jackass with a plan to improve the world – all had millions of disciples. Optimists promised us ever smarter machines that would put us all out of work.…

Samira Ahmed, the BBC presenter who took the BBC to an employment tribunal for sex discrimination and won, reached a settlement with the broadcaster this week. Ahmed (pictured) had claimed £700,000 in back pay, arguing that the work she did, for which she was paid £440 per episode, was comparable with that of Jeremy Vine, who was paid £3,000 per episode. The settlement size was not disclosed, says The Times, “but experts said she was likely to have received at least £400,000”. A man who gave a lift to Richard Branson ten years ago has been rewarded with a free Caribbean cruise, says The Sun. Steve Chandler picked up the Virgin boss near the M40, after he had abandoned his car and driver in traffic. But friends didn’t believe him,…

The German government and the national railway group Deutsche Bahn will spend €86bn by 2030 upgrading the network, says Andreas Körner in Focus Money. Berlin’s IVU Traffic Technologies, which provides software systems to ensure that public transport operates efficiently, has just secured a 15-year contract with Deutsche Bahn. Its digital platforms range from planning the deployment of buses or trains to providing real-time information to passengers. The group, which operates worldwide, has grown earnings per share by an average of 49% a year since 2017. With environmental concerns and global growth set to boost investment in public transport, IVU’s future looks bright.…

Estate agents Countrywide and LSL are in merger talks to create “the UK’s biggest property group”, reports Sarah Provan in the Financial Times. If the all-share deal goes ahead it would bring together LSL brands such as Your Move and Marsh & Parsons with Countrywide’s Hamptons International and Gascoigne-Pees to create a group worth about £500m with 14,000 employees. The hope is that the tie-up will allow both firms to eliminate costs by having one head office and combining IT systems, says Julia Kollewe in The Guardian. There are also likely to be “scores of branch closures and job losses”, since both firms are struggling. Countrywide is doing particularly badly and has seen its market capitalisation fall from £750m when it floated in 2013 to around £111m today as it…

Armed with a “solid majority” and a determination to make Brexit a success, Boris Johnson and his chief aide, Dominic Cummings, are trying to “bend Whitehall to their whim”, says the Financial Times. The goal is to lead a “powerful administration” whose “writ runs across government”. That means “bringing to heel” the permanent secretaries or senior civil servants and the special advisers. However, their “heavy-handed approach” is creating a climate of fear” and could foster “not efficiency but instability”. Governments have “every right to reform the civil service”, but the aim should be improvements in management, not over-centralisation. Quite, says Ian Birrell in the Daily Mail. Cummings needs to be less abrasive if he “wants to survive, let alone thrive. Politics is a consensual process and fear of challenge shows…

It’s now been more than three weeks since Iowans went to the polls for the opening contest in the Democratic presidential nomination race and we still don’t know whether my tip to lay (bet against) Bernie Sanders winning the caucus was a winner. Indeed, appeals by both Sanders and Pete Buttigieg mean that it may be some time before the fight for first place is officially decided. Still, the good news is that you can bet on the blizzard of upcoming primaries over the next week, with the best opportunities in South Carolina and Massachusetts. In the case of South Carolina, I recommend you bet on Joe Biden (pictured). Biden’s chances seemed to have taken a knock when he performed poorly in Iowa and New Hampshire, but his second-place position…

For all the worries about the spread of coronavirus, investors should ignore scary headlines, says Warren Buffett, America’s best-known investor. “Something else will be front and centre, six months from now, a year from now,” he tells Becky Quick on CNBC. In his latest annual letter to shareholders in Berkshire Hathaway, Buffett’s investment vehicle, the 89-year-old writes that when evaluating how to respond to news events, or sharp falls in stockmarkets, “the real question is: ‘Has the ten-year or 20-year outlook for American businesses changed in the last 24 or 48 hours?’.” Given that you wouldn’t buy or sell your own business simply “on today’s headlines”, why sell shares in good firms? Buffett also favours equities over bonds. “If something close to current rates should prevail over the coming decades…

The Conservatives promised to do away with publicly funded redundancy payouts of more than £95,000 in their 2015 manifesto. Since then, there have been 1,006 payments made by government departments and public bodies above that figure, says The Times. At least 66 were worth more than £200,000, with two reaching almost £500,000. The health sector accounted for the biggest share, with 563 NHS staff and doctors receiving payoffs above the proposed cap, although it also had by far the most staff in full-time employment, at 1,243,520 as of last year. The culture and sport sector oversaw 246 exit packages breaching the cap, the second-highest number. It counted 34,958 full-time staff as of 2019. Despite repeated promises from the government, the cap still isn’t in place, says Paul Morgan-Bentley in The…

unherd.com Boris Johnson wants 20,000 new police officers and 50,000 nurses. The NHS has 100,000 vacancies. Social care has more than 110,000. Where are all these legions of workers going to come from? asks Polly Mackenzie. The reality is that recruiting for the public sector is a “ceaseless slog”. Standards are high. Pay is low. Working hours are tough. Scrutiny is endless. The UK already has record numbers in jobs (see top story) and turnover rates in the public sector are high – it’s “like trying to fill a bath with no plug”. There isan answer: bring back conscription. Expecting people to serve in the frontline for 50 years is too much. But public service is a great way to start out in the workplace; and a great way to…

With ten-year UK government bonds yielding well under 1%, the consensus view on the bond market is overwhelmingly bearish: even if inflation stays around 2%, governments’ reluctance to control fiscal deficits implies more bond issuance, lower prices and higher yields. John Pattullo, the manager of Henderson Diversified Income Trust (LSE: HDIV) is deeply sceptical about this view. He points out that forecasters have called for lower bond yields in only two of the last 26 years, yet ten-year US Treasury yields have headed remorselessly down, from 7% to below 2%. Moreover, the notion that high fiscal deficits mean high bond yields is “fake news. Everyone focuses on the supply of bonds, but in a flight to safety, demand for bonds also rises”. The experts get it wrong He accepts that…

• What does your company do? The Folio Society publishes illustrated hardback books. We select the key titles across all genres. Using artisan techniques we publish editions that are objects of beauty in their own right. • What’s been your greatest achievement? Publishing attention-grabbing books, such as A Game of Thrones, The Aztecs and The Velveteen Rabbit, and seeing a new generation of readers turning to physical books and discovering the joy of The Folio Society’s editions. Another highlight has been bringing our books to a wider audience using omnichannel marketing – digital, social, PR, email and catalogues – with fantastic customer service. This was all done while growing The Folio Society’s US customer base. • What has been your biggest challenge? Not running out of cash. Publishing artisan-produced books…

Tullow Oil (LSE: TLW) is an oil and gas exploration company with operations concentrated in Africa, although it also has interests in the North Sea. The last year has been a difficult one for Tullow. It failed to strike oil in Peru; found less than it expected in Guyana; and has had problems with wells in Ghana. It has dramatically lowered its production forecasts for 2020 and plans to axe a third of its workforce. The CEO and exploration director have both stepped down and the group is swimming in debt. The share price has declined by 80% in a year.…