Indholdsfortegnelse for Issue 998 i MoneyWeek

“How much will consumer and corporate behaviour change after lockdown eases? ” Some exciting news to distract you from epidemiologist Neil Ferguson’s love life this week. This is issue 998 of MoneyWeek. In two weeks (assuming 2020 has already done its worst and we are still here) we will publish issue 1,000. In some senses this feels right. MoneyWeek launched into a crisis of sorts (the dotcom crash) and rather came into its own during another (the GFC). So it should be no great surprise that we are marking our relative longevity in the middle of another. Our core purpose has always been to help you invest. Our plan is to make issue 1,000 one of our best investing issues ever. So, here’s my anniversary ask to you: if you…

I’m A Celebrity bosses (Jacqueline Jossa, who won the reality TV show last year, ispictured) face a huge fine for breaching traffic restrictions at the show’s jungle camp in Australia, says James Beal in The Sun. Officials from Tweed Shire Council in New South Wales have threatened ITV with a £110,000 bill after locals complained the highway was overloaded with trucks and trailers. Under cover of New Zealand’s exceptionally strict coronavirus lockdown, a group of thieves stole 97 cars from local rental company Jucy in Auckland, says Andreas Illmer for the BBC. Tom Ruddenklau, Jucy’s chief rental officer, told the BBC: “We couldn’t believe that when everyone was pitching inand looking after each other as a nation, there would be this brazen theft.”…

Are slumping oil prices a harbinger of doom for the stockmarket? Albert Edwards of Société Générale notes that weak commodities often serve as “a leading indicator” for other asset prices. Crashing oil demand suggests that the global economy is heading for a deep recession. Shares, another “cyclical risk asset” prone to recessionary plunges, could soon follow black gold south. Oil prices remain historically depressed. However, they enjoyed a strong start to the week, with US West Texas Intermediate, which turned negative last month, doubling over a week to trade above $23 a barrel and Brent rising through $29 a barrel to hit a three-week high. The easing of lockdowns in many places means that demand is slowly returning for the world’s favourite commodity, says David Hodari in The Wall Street…

Covid-19 has affected all the world’s big stockmarkets, says The Economist, “but it is shining a particularly brutal light on the weaknesses” of Germany’s blue-chip index, which has lagged its US and French counterparts over the past five years. While the S&P 500 is bolstered by tech stocks, the Dax has a greater skew towards ailing financial and basic materials groups than the more defensive CAC 40. What’s more, some of Germany’s “corporate oldies” are in deep trouble. The national airline, Lufthansa, has said it may go bust, while Deutsche Bank has just reported a 67% year-on-year slump in first-quarter profits. One of only two tech stocks in the Dax, payments processor Wirecard, is beset by allegations of accounting fraud.…

The Hong Kong market is showing signs of life. Chinese bottled water manufacturer Nongfu Spring is on track for an initial public offering (IPO) in the third quarter of 2020 that could be worth up to $1bn, says Scott Murdoch on Reuters. Nongfu is the leading bottled water producer in China and among the top three in the bottled tea and juice market. The company made sales of 24bn yuan ($3.4bn) in 2019, up by a fifth on the year before. The group’s mainland production plants are all up and running again. Hong Kong’s investment banks will be eagerly looking forward to the flotation. The biggest IPO so far this year was the $333m listing of drug developer Akeso in April.…

Tesla’s share price, having doubled after the virus-induced market slump, fell by more than 10% following the latest outburst from CEO Elon Musk (pictured). He tweeted that the electric carmaker’s stock price “is too high”, says Richard Waters in the Financial Times. This is ironic given that Musk has been engaged in a “running battle” with short-sellers who have complained “that the shares are artificially inflated”. Musk’s decision to talk down his own company’s share price is clearly a “kick in the teeth” for investors, says Liam Denning on Bloomberg. However, he is right to stress that Tesla’s stock price is “an emotional, not financial, construct”. After all, the pandemic has piled more stress onto Tesla’s “already less-than-utility-like model”. Despite analysts’ euphoria at the “peanut-sized profits” Tesla announced in its…

Over the past week Donald Trump’s odds of victory in the upcoming presidential elections have narrowed a bit, to 2.06 (48.5%) on Betfair. The odds on his likely opponent, Joe Biden, have drifted out further to 2.4 (41.7%), presumably because punters believe he will drop out (or be made to drop out) between now and November. Crazier things have happened, but I think this is less likely than the odds imply. If you have already bet on Biden, though, don’t put any more money on him. One interesting bet available isLadbrokes’ market on the Senate election in Kentucky. As you’d expect, in a state that Trump carried by 30% at the last election, they have the Republicans as favourites at 1/5 (83.3%), with the Democratic candidate at 10/3 (23.1%). The…

Quantitative investing – also known as systematic investing – is the broad term for a wide range of different investment strategies that employ sophisticated computer-based mathematical models to identify and carry out trades. Common quant strategies include factor investing, which looks at characteristics of an asset such as the profitability of a company. To take a simple example, an investing algorithm might buy stocks that appear cheap on measures such as price/book value and sell stocks that look dear. This is a classic value investing approach that a human manager might follow. But the algorithm will take into account far more metrics than a human manager might, while ignoring other considerations that might sway a human – such as whether they think the firm’s management is good. Risk parity strategies…

• Marks & Spencer’s boss Steve Rowe “will not take a pay cut, despite furloughing workers” and scrapping next year’s £210m dividend, says the Daily Mirror. Rowe is to receive total pay of £1.7m for 2019, up from £1.1m the previous year. However, his salary of £810,000 stays the same. The bulk of his pay increase comes from £621,000 in vested shares; he got a £79,000 performance-based windfall in 2018. Last month, the retailer announced it was saving £130m by cancelling the final dividend for this year. • Goldman Sachs’ decision to reward chief executive David Solomon (pictured) with a 20% pay rise for his first full year at the helm “drew a sharp rebuke from shareholders frustrated with years of subpar returns and worried about an impending recession”, says…

“Taxes. Idon’t like them. They want too much of the money back.” Rapper 50 Cent (pictured) on what he would change about the US, quoted in The Guardian “Germans will crawl bollock-naked over broken glass to get low fares.” Ryanair chief executive Michael O’Leary, quoted in The Times “Who knows what effect it all had on producers who might have hired me. You take the papers to court and you get money, but you don’t get your life back.” Actor Neil Morrissey on having his phone hacked and being hounded by the press over an affair, quoted in The Observer “It didn’t happen in the end… I did try to buy Tottenham Hotspur in the Sixties [but] the family who owned the club at the time… didn’t want to sell……

hbr.org If you’re finding you’re more exhausted after a day working from home than you used to be, you’re not alone, say Liz Fosslien and Mollie West Duffy. “Zoom fatigue” is aresult of the fact that video calls are more draining than face-to-face meetings. We tend to focus more intently and feel that we have to stare at the screen constantly to signal that we’re paying attention. Here are four tips for making Zoom calls less tiring. 1. Don’t multitask. Switching between jobs constantly can cost as much as 40% of your productive time. Turn off Slack and focus on the task in hand. 2. Build in breaks. Even just looking away from your screen for a few seconds now and then, while still paying attention to what’s being said,…

It seems unlikely that you will be able to jet off for a summer holiday this year. However, if you had a trip booked from March onwards you may be struggling to cancel and get your money back. “Many tour operators, airlines and accommodation providers... have tried to persuade customers to rearrange their trips or accept credit vouchers for future holidays instead of a cash refund,” says Nick Trend in The Telegraph. You are entitled to a full refund from your tour operator or airline within 14 days of cancellation. But a study by consumers’ association Which? found that all 20 of the biggest travel firms, including TUI and British Airways, were missing the two-week deadline. If you are struggling then the Competition and Markets Authority would like you to…

“Almost all the gold that has ever been mined still exists in some form or other” When I last covered gold for MoneyWeek in September 2019 the yellow metal was trading around $1,500 an ounce (£1,200/oz). It had had a great year, gaining 20%, and things were looking good, if a bit frothy. It slid back a little before something happened to do with a bat in a wet market in Wuhan. When Covid-19 panic hit and governments around the world announced extraordinary stimulus programmes, gold rebounded to all-time highs in sterling (£1,445/oz), euros (€1,635/oz), Japanese yen, Canadian dollars, Australian dollars, Singapore dollars, Swiss francs and pretty much any currency you care to mention bar the US dollar itself. The US dollar high was $1,788/oz – about $130 short of…

The government’s flagship grants scheme for retail, leisure and hospitality businesses was supposed to provide speedy cash payments to thousands of struggling small companies in these sectors. But more than five weeks after the scheme was announced, many have not received the money they were promised because the local authorities administering the grants are dragging their heels. In March, Chancellor Rishi Sunak said he was awarding £20bn to local authorities to provide non-repayable grants to crisis-hit retailers, leisure companies and hospitality providers. He promised a grant of £10,000 for businesses in premises with a rateable value of up to £15,000, rising to £25,000 for those in properties with a rateable value between £15,000 and £51,000. But local authorities have yet to hand over more than a third of the cash.…

YouGov (Aim: YOU) is a British opinion-polling and market research firm with a global presence. As an online data gatherer, YouGov is more defensively positioned than most to deal with disruption caused by Covid-19, says Emma Powell in Investors Chronicle. Although management has warned of potential delays to projects, it has not seen any significant damage to trading. Half-year results showed a 35% year-on-year jump in earnings per share to 8.7p, notes Graeme Evans on Interactive Investor. The group has no debt. The stock has gained 50% in a year.…

When Kate Daly and her former husband split up, matters quickly turned toxic when they both hired divorce lawyers, says Jill Martin Wrenn on the BBC. Hostilities escalated, with “huge amounts of money being spent on things that were irrelevant and not important to the process”, Daly, now in her mid-40s, says. Her experience prompted her to quit her job as a corporatcounsellor to business leaders to set up as a divorce coach to help couples separate “without rancour”. Then, brainstorming with her friend Pip Wilson, Daly (pictured) realised she could go further and help couples divorce without lawyers being involved at all. So Amicable, an app and website that connects couples with counsellors, was launched in 2015. The company helps divorcing couples to draft and agree on a settlement…

Ferdinand Ward was born in New York in 1851. He was dismissed from various clerical jobs in his early working life until finding a post as secretary to the superintendent of one of the New York commodity exchanges. A marriage to the daughter of a wealthy merchant allowed him to start speculating in commodities, and he had some initial success. By 1880 he had become established enough to set up his own brokerage, Grant & Ward, in partnership with Ulysses “Buck” Grant Jr, the son of former president Grant, and James Fish, who ran the Marine National Bank and was a friend of his late father-in-law. What was the scam? Ward quickly dominated the partnership, making all the decisions, and persuaded Grant Jr and his father to invest another $200,000…

Bezonomics How Amazon Is Changing Our Lives and What the World’s Best Companies Are Learning from It By Brian Dumaine Simon & Schuster, £20 Amazon is the “fastest-growing company in the history of modern capitalism” and has made its boss, Jeff Bezos, “the richest man in history”, says John Arlidge in The Sunday Times. However, the reasons for its rise are “complicated, contradictory and controversial”. Amazon seemingly “breaks many of the usual rules of business” – it is “not interested, and never has been, in making money”, concentrating instead on winning market share and ploughing most of its profits into research and development. Bezonomics, by Brian Dumaine, tells the story of the company and shines a light on the “tenacious” man “who has made Amazon such a success”. The book…

• Thank heavens the BBC has axed The Greatest Dancer, yet another Saturday night TV audition show, says Jan Moir in the Daily Mail. The viewing public are heartily sick of them. We can only partly blame chief judge Cheryl Cole (pictured) for the programme’s failure. “It didn’t help that the former Girls Aloud star jived around like a turkey on a hot tin roof.” Dancers competed to win £50,000 and a slot on the far more successful Strictly Come Dancing. “I don’t think the latter ever materialised, unless it was aslot sweeping up the glitter from the Strictly ballroom floor.” In its “hysteria to be politically correct and non-elitist”, it had categories such as “street dancing”, “contemporary dancing” and “the terrifying ‘free-style’ dancing”. “Give me Strictly’s Aljaz doing the…

Commercial flights out of Argentina have been banned until September, leaving us stuck on our ranch, pondering what worthwhile things we could do with our time. Learn the piano, our wife suggested. Or learn cattle ranching perhaps? Meanwhile, back in the USA, the scam goes on: The bigness of the flimflam is breathtaking. Already the feds have committed nearly a third of GDP to “fight the virus”. And still politicians of all political persuasions are proposing to spend trillions more. Says the rascal Steve Mnuchin: “We need to spend what it takes to win the war”. It is a scam on several levels. First, the “war” is fake. This is a public health crisis, not a war. Calling it a “war” is just a way to get people to salute…

61 The percentage of investors and business owners with investable assets or annual revenues of at least $1m who are waiting for stocks to fall by 5% to 20% before buying shares again, according to a poll by UBS Global Wealth Management. 31 The number of tonnes of gold belonging to Venezuela that is held in the Bank of England’s vaults, worth around £1.3bn at today’s prices. The government of President Maduro has asked for some of it to be sold, but the Bank has so far refused. Britain recognises Juan Guaidó, the opposition leader, as the legitimate president of Venezuela. £125m How much the BBC will have to find in cost savings this year. The broadcaster cited problems with collecting TV licence fees and the extension of free licences…

Warren Buffett’s Berkshire Hathaway has sold at a loss its entire portfolio of US airline stocks, which comprised American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines. “We put, whatever it was, seven or eight billion into it and we did not take out anything like seven or eight billion,” Buffett said during Berkshire’s annual meeting. “That was my mistake.” Berkshire held an 11% stake in Delta, 10% in each of American and Southwest, and 9% in United. “We have sold the entire positions... When we change our mind we don’t take half measures.” Though he didn’t have any views on the long-term outlook for the travel and aviation industries, Buffett said the immediate future looked negative as airlines are accumulating debt, diluting shareholder value by issuing equity, and…

Are we heading for “Trade War 2.0”? asks Robert Carnell of ING. US criticism of China’s role in the Covid-19 outbreak has reached a “crescendo”, with Donald Trump reportedly considering the reimposition of tariffs. Secretary of State Mike Pompeo has said there is “enormous evidence” that the coronavirus originated in a Chinese laboratory. A rising stockmarket may have persuaded the White House that it is safe to start tariff sabre-rattling once more. Meanwhile, global markets enjoyed a very profitable April. America’s S&P 500 gained 13%, its biggest one-month gain in 33 years. British blue-chips were unfazed by a wave of dividend cuts (see box below). The FTSE 100 entered a technical bull market last week (defined as a 20% rise) after rallying 22% from its March lows. A pause for…

“[When] the coronavirus hit... we were totally blindsided... first the administration downplayed the threat, and then it overreacted. It (along with... an equally unprepared Congress) decided to stop the economic world in its tracks and again print trillions of dollars of debt and sacrifice long-term economic, social and geopolitical health and stability... People argue that the government must make people whole... without addressing how government can stay afloat over the long run without experiencing either a deflationary bust or hyperinflation (I expect first the former and then the latter). That is the question that should have been asked before borrowing trillions of dollars and spending much of it indiscriminately... rolling out one bailout plan after another is no way to run a railroad unless you don’t care about running it…

Three to buy Helical The Sunday Times “Offices are lying dormant” and social distancing means that many will operate at only half capacity for the rest of this year. That is bad news for this owner of workplaces in London and Manchester. It specialises in buying shabby buildings in “vibrant” areas and refurbishing them in a “modern, quirky style”. The dividend may be axed, but “rock-bottom interest rates” and “negative bond yields” mean property remains attractive. 365p Visa The Daily Telegraph Covid-19 has turbocharged existing trends favouring electronic payments at the expense of cash. There is still significant scope for card penetration in emerging economies and the likes of Germany, where only about 15% of payments are made by card compared to over 80% in Sweden. Fat operating margins and…

• While investors are “somewhat disappointed” with Amazon’s latest quarterly figures, it is still one of the “select companies” benefiting from the Covid-19 crisis, with its shares up 34% this year, says Jon Sindreu in The Wall Street Journal. Still, its sales growth has been constrained by the fact that its rented fleet of cargo planes “pales in comparison” with that of its competitors. With airlines “now dumping older planes”, Amazon can fix this problem by using some of its “vast” cash holdings to start owning its own fleet. This is “Amazon’s moment to seize”. • The prospect of an extended lockdown and social distancing is “grim news” for London’s shops, shopping centres and restaurants, says Jim Armitage in the Evening Standard. So it’s not surprising that shares in retailer…

Germany’s highest court issued an explosive judgment on Tuesday on the legality of European Central Bank (ECB) bond buying, threatening to block fresh purchases of German bonds and giving the ECB until August to prove that it acted proportionally, say Martin Arnold and Tommy Stubbington in the Financial Times. Ruling in a long-running case launched in 2015, the Verfassungsgericht said that Germany had a “duty to take active steps”. The ECB has bought more than €2.2trn of public-sector debt since 2014, but the scheme has always been controversial in Germany, where critics argue that the ECB “exceeded its mandate by illegally financing governments and exposing taxpayers to potential losses”. “The court’s decision raises questions about the recent €750bn blast of pandemic QE” Although the court found, crucially, that the ECB…

“I don’t trust this rally,” Ben Inker of US asset manager GMO tells Finanz und Wirtschaft, speaking after the S&P 500 clawed back half its losses in just a few weeks. While “markets have a very strong tendency to overestimate the importance of acute near-term events” that don’t greatly affect the long-term value of stocks (such as the coronavirus crisis), “if ever a market should have fallen materially, it was the US”. Before the crisis, the S&P 500 was priced for perfection – “high profit margins, a stable economy and no disruption”. The fair value of the market probably hasn’t changed much – maybe 6% lower, Inker estimates – but because the market was already pricey, the drop did little to change the maths. “Before its fall, it was very…

Highly paid chief executives who have taken salary cuts during the coronavirus crisis have only done it for show, says Justin Harper on the BBC. Salaries are typically only a fraction of an executive’s overall pay package. Disney’s chairman Bob Iger’s $3m basic salary last year, for example, made up only a small part of his $47.5m pay package. Arne Sorenson, boss of one of the world’s biggest hotel chains, Marriott, was paid $13.4m, of which only $1.3m came from his salary. United Airlines CEO Oscar Munoz’s $1.3m wages were just 10% of his total pay. All three have offered to sacrifice at least part of their salaries – and that can be lucrative. “Announcing you will take a salary cut will buy you a lot of goodwill and hopefully…

conversableeconomist. blogspot.com Do profit-making firms plan to produce products that will become obsolete sooner than necessary so they can keep sales high over time? The idea that they do rose to prominence in the 1960s with the publication of Vance Packard’s The Waste Makers, says Timothy Taylor. But actual evidence that firms plan this, rather than it being a consequence of consumer preferences, is hard to come by. Modern concerns about it focus on our “electronic gizmos”. Do they really need to be updated so often? And why is it so hard to get minor problems, such as worn-out batteries, fixed? Such issues may “raise eyebrows”. But the issue is one of trade-offs. When consumers demanded smartphones that were slimmer and sleeker, and made of metal and glass rather than…

■ “Loans on 1.6 million homes are now subject to the payment break, which amounts to £755 per month of suspended payments for the average mortgage-holder,” says Mark Duell in The Daily Mail. The payment holiday applies for three months, so people are having an average of £2,265 suspended . You can also still shop around for a better deal while taking a break from repayments. Normally, homeowners on a mortgage payment holiday would not be able to transfer to a new mortgage but “lenders are waiving this rule to help borrowers affected by Covid-19”. If you haven’t yet taken a mortgage payment holiday but feel you need one contact your bank to discuss taking a break from your repayments. Remember, however, that interest on your home loan will still…

Bakkavor (LSE: BAKK) is an international food manufacturing company that supplies fresh and chilled prepared meals and salads to supermarkets. It operates in the UK, the US and China. “The problem for Bakkavor is that its ready-made meals are ideal for consumers with busy working lives,” says Miles Costello in The Times. Now very few people are commuting, while the lockdown has “renewed people’s interest in home cooking”, so the group looks set to struggle. The shares have fallen by a third in the last month and by 46% in the past year.…

“As an engineer, Elizabeth Davis helped plan the construction of Porsche’s North American headquarters in Hapeville, Georgia, and was on the team that built the MGM Casino at the National Harbor in Washington DC,” says Elaine Pofeldt in Forbes. But when she wasn’t working on these grand projects, Davis, 34, spent her time on a more humble pursuit: her hair. “In a perpetual quest for longer locks, Davis would mix up natural elixirs and other products she made with herbs, essential oils and Ayurvedic products at her home.” Ayurveda, the traditional Hindu system of medicine, is based on the idea of balance in bodily systems and applying herbal treatments for wellness. Davis (pictured) would test her recipes on herself and friends, and when she found they worked to her satisfaction,…

“Since its founding more than 20 years ago, Yves Béhar’s Fuseproject has created a range of innovative home products: arobotic crib, a TV that looks like a painting, door locks without keys,” says James Gaddy on Bloomberg. Now comes Forme, an artificial intelligence-powered “wellness machine” for the home that costs $149 per month. The touch-response mirror is nearly six-feet tall, has 4k resolution, voice control, and stowable arms for resistance training. Users have a choice of prerecorded workouts to stream that change every three or four days and live trainers will be available at launch. It features voice control, which allows users to change settings quickly by touching and speaking to the screen instead of pausing their workout, keeping you in the flow. Forme is now available for preorder at…

In the spring, hedge fund investor Mark Spitznagel celebrates the birth of hundreds of Alpine goats at the hilltop farm he runs with his wife, but this year he has something else to toast, says James Coney in The Sunday Times. The $4.3bn fund he runs delivered returns “destined to become a thing of Wall Street legend”. By banking on a one-off crash in prices, Spitznagel’s Universa fund in March rose by 3,612%. Over a year it has risen more than 4,100%. Tiny US airports are raking in big money due to the “botched” federal stimulus formula, says Sam Mintz in Politico. Airports with little debt and sufficient cash on hand were entitled to a relatively large share of the $10bn in airport funding, meaning Merrill Field, in Alaska, received…

Ahold Delhaize is having a good crisis, says Wirtschaftswoche. A food retailer with 7,000 shops worldwide, it is benefiting from the lockdowns forcing people to eat at home more. But the group, which boasts a portfolio of local brands ranging from Giant and Martin’s in the US to Albert Heijn in the Netherlands, should flourish without the aid of a virus. The emphasis on locally sourced and sustainable food is a key selling point that keeps customers happy and loyal, while the online business is growing by around 25% ayear. It now accounts for 8% of overall sales, which should rise to €68bn this year. The stock offers good value on 12.7 times trailing earnings and a 3.3% yield.…

Last week Royal Dutch Shell cut its dividend for the first time since World War II, says Anjli Raval in the Financial Times. The payout for the first quarter was slashed from 47 cents to 16. No wonder. Not only did profits for the first three months of the year fall from $5.3bn last year to $2.9bn in 2020, but the oil major thinks that the situation will be “more severe” in the second quarter, with oil prices already down to $24 a barrel. The shares sank by 11% on the news. The scale of the cut suggests that Shell believes that the crisis isn’t just a short-term event, but will cause “permanent change” in customers’ behaviour, say Anna Edwards and Laura Hurst on Bloomberg. The long-term impact on the…

The days of opposition parties around Europe “rallying to the flag” may be numbered – Spain’s prime minister, Pedro Sánchez, is under pressure to reverse his plans to extend “one of the strictest coronavirus lockdowns in Europe”, says Sam Jones in The Guardian. His socialist-led coalition has been criticised for “reacting too slowly” to the crisis and for “inconsistencies and delays” in publishing statistics. In a break from its previous support, the opposition People’s Party is refusing to support any extension; the far-right Vox party is opposed too. The leaders of the Catalan and Basque separatist parties have also expressed “deep dissatisfaction” with lockdown, says Daniel Dombey in the Financial Times. Even the moderate Ciudadanos party has expressed reservations – it only agreed to provide support to allow emergency measures…

The March meltdown was a tough time for almost all investors. Even quantitative investing strategies (see below), many of which are intended to be largely market neutral – ie, they try to exploit anomalies between the price of individual securities without taking a view on whether the overall market will rise or fall – were badly hit. By the beginning of May, the HFR Global Hedge Funds index was down by around 4.5% from the start of the year, according to Bloomberg, but a subindex of equity market neutral funds had lost twice as much. “Dividends have been slashed, yet markets are rebounding” Why these funds performed poorly is fairly simple. In a crisis, past relationships between different securities break down – which leads to runaway losses for anybody who…

We need a trade deal with the US. We need finally to make peace with Michel Barnier, and come to an agreement with the EU. We need to secure access to markets around the world so that we can still export globally. As the deadline for ending our transitional deal with the EU draws closer and closer, there are lots of different deals that Britain needs to negotiate in a hurry. But one is perhaps easier than any of the others and potentially more valuable: a UK partnership with Switzerland to create a global powerhouse in financial services. A powerful force in banking With just 8.5 million people, Switzerland is far from the largest country in the world, but its incredible prosperity makes it more important than you might imagine…

The NHS is not beyond criticism Clare Foges The Times Covid-19 may “do serious damage to the NHS”, says Clare Foges; not by overwhelming it, but by elevating it to “such heights in the public’s affections that it is beyond discussion, beyond necessary reform”. Boris Johnson’s moving tribute to the NHS after his hospital stay, in which he “veered between” individuals and the NHS itself, is part of the problem. If we conflate workers with the institution, any criticism can be cast as an attack on doctors and nurses, “pressing the button on public outrage”. Yet it is perfectly reasonable to ask “whether a system designed in the 1940s is fit for today”. Although there is much to be proud of, across eight of the 12 top causes of death…

fee.org Economists and academics who have been pushing the case for a universal basic income are “finally having their day in the limelight”, says Gavin Wax. A poll last month found that 40% of likely voters in the US favoured the idea of the federal government giving everyone a monthly cheque without condition. Even conservatives are getting onboard with the idea. Their hope is that it will make welfare more efficient. Yet “that’s its biggest problem”. Greater efficiency was the reason why Milton Friedman advised President Richard Nixon to back the policy. But as economist Murray Rothbard pointed out in 1971, more efficiency would be “disastrous”. The “only thing that makes our present welfare system even tolerable is precisely its inefficiency”, said Rothbard. The fact that one has to “push…

Royal Dutch Shell’s decision to slash its dividend last week (see page 7) has severely rattled equity-income investors. Dividends are being cut to the bone across multiple sectors and markets, sometimes at regulators’ insistence. And there’s no reason to think that it might get any better in the short to medium term. Earnings have fallen off a cliff and taken dividends with them. A fifth of both Euro Stoxx 50 (the index of eurozone blue chips) and FTSE 100 businesses have already cancelled their payouts (see page 4). Research the dividend-hero trusts So what should investors do? I think there are four options. The first is to look at equity income-orientated investment trusts. Here there is some rare good news. Many of the biggest and most popular investment trusts have…

The withdrawal penalty on lifetime individual savings accounts (Lisas) has been cut in an attempt to help savers struggling amid the crisis. Lisas are designed to help people saving for a first home or their retirement. If you are over 18 and under 40 you can open a Lisa and deposit up to £4,000 a year. As with other Isas your money can grow tax-free but there is an added benefit: every year the government will top up your savings by 25%. So you could get an extra £1,000 a year. You can only use the money to put down a deposit for your first home or to help with retirement. So, if you try to access it before your 60th birthday for anything other than to buy your first…

The government’s latest initiative for cash-strapped small businesses struggling to cope with Covid-19 pandemic went live on Monday and is likely to prove hugely popular. The Bounce Back loans scheme, announced by Chancellor Rishi Sunak, aims to help tens of thousands of small businesses struggling to secure finance from the Coronavirus Business Interruption Loan Scheme (CBILS), which has been criticised as overly bureaucratic and too exclusive. Administered by the British Business Bank and the same panel of more than 50 lenders participating in CBILS, the terms of the Bounce Back scheme really are exceptionally generous. “Firms can borrow up to £50,000, backed by the state, at 2.5%” Businesses can borrow up to £50,000 at a fixed interest rate of 2.5%, no matter which lender provides the advance (you don’t have…

A revolution is upon us. Innovation in healthcare now ranks among the global economy’s most dynamic, fast-growing sectors. Artificial intelligence (AI), robotics and improved internet services – thanks to advances in Cloud computing and 5G wireless connectivity – are dramatically lowering costs. Covid-19 should give the healthcare innovation sector further impetus as efforts to alleviate this crisis and prevent future viral outbreaks intensify. New diagnostic tools are making it easier and cheaper to identify and treat diseases. They are helping healthcare professionals to identify (or rule out) diseases such as coronavirus cases quickly. Such technological tools are also providing remote (virtual) care, stopping the virus spreading more widely. We expect the latest outbreak to lead to more investment and demand for online, or virtual, medical services (known as telemedicine or…

“The food industry is full of people trying to convince you their product tastes delicious, regardless of what your taste buds might say. Julian Hearn isn’t one of them,” says Alex Lawson in the Evening Standard. “Hueligans” extol the virtues of Hearn’s powdered food with evangelical zeal, even while mostly agreeing that it doesn’t taste that great. The product, Huel, is a “complete meal” designed on a spreadsheet to meet the body’s energy and nutritional needs to replace breakfast or lunch for the time-poor. You might think that its flagship product – apowder mixed with water that contains flaxseed, oats, sunflower, coconut, peas, rice and a vitamin blend –risks taking the joy out of eating. But Hearn thinks there’s a big difference between “functional” food and “entertainment” food. The powder…

“Tangen is one of Norway’s most gifted and intellectually curious fund managers” Until last month, the Norwegian-born hedge-fund manager, Nicolai Tangen, was best-known outside the world of finance for holding the world’s largest private collection of modern Nordic art – his AKO Foundation sponsored last year’s Munch exhibition at the British Museum. Now, Tangen’s surprise elevation to head Norway’s giant $930bn oil fund, the world’s largest sovereign-wealth fund, has plunged him into a full-blown “morality play” in his home country, says Bloomberg, with union leaders and left-leaning politicians “voicing their outrage” that a risk-loving, jet-setting financier – whose firm, AKO Capital, is registered in the tax haven of the Cayman Islands – should have been made “guardian” of their national savings pot. A breath of fresh air The situation hasn’t…

2018 Côte de Brouilly, Les Grillés, Domaine Chevalier-Métrat, Beaujolais, France £14.50, reduced to £12.95 each by the case, Lea & Sandeman, 020-7244 0522, leaandsandeman.co.uk I love this outfit and I knew exactly what to expect asthis wine approached my olfactory gear. I also knew I would approve of its flavour, too, but, of course, I never pre-judge. The surprise came when the aroma actually sought me out rather than the other way around. The next fillip was the buoyancy and purple-hued freshness, with energy and vitality flooding in from all angles, which should mirror the weather at this time of year and also lift our collective moods (and by golly we need that right now). This beauty is a benchmark Côte de Brouilly, an epic Beaujolais Cru, one of the…