Indholdsfortegnelse for 1108 i MoneyWeek

“Inflation is the result of politicians trying to do too much too quickly” Is there a glut of oil on the way? It doesn’t feel like it at the moment. Years of well meaning lack of investment into fossil fuels have tightened the market (the effect being similar to that of the Opec crisis in the early 1970s) and most analysts are now assuming the supply and demand mismatch will last for some years to come. But is this just to make yet another extrapolation mistake? In most commodity markets, the cure for high prices is high prices – and there is no reason to think this will be any different, says Max on page 25. Already governments and investors are busily backtracking on their opposition to fossil-fuel investment and…

Australian lettuce lovers are facing a supply shortage so severe that it has forced fast-food giant KFC to swap the vegetable for cabbage in its burgers, says Bloomberg. Heavy floods wiped out many crops on the east coast, sending prices soaring. Some grocery shops are charging A$12 (£6.90) for a head of iceberg lettuce, while watermelons have sold for more than A$25. The cost to British drivers of filling a typical 55-litre car has passed £100 for the first time, says The Times. A litre of petrol cost an average of 182.3p by Wednesday last week. Prime minister Boris Johnson said that rogue retailers who jacked up prices should be “named and shamed”, but motoring lobby groups pointed out that fuel duty and VAT account for 82p per litre of…

US regulators have unveiled plans to curb the practice of payment for order flow (PFOF), used by brokerages such as the popular trading app Robinhood. These firms do not charge commission, but send the order to a market maker (such as Citadel Securities) and receive a small payment from the market maker in return. Critics argue that the practice creates a conflict of interest: a broker has a duty to seek the best price for clients, but that conflicts with its desire to maximise profits by directing business toward market makers that pay it the best price for order flow. PFOF is effectively banned in the UK for this reason. Gary Gensler, the chair of the US Securities and Exchange Commission, hasn’t gone that far, but he has unveiled plans…

Refining is normally “a low-margin, low-drama adjunct to the geopolitically charged upstream business of oil production”, says The Economist. Yet a triple whammy of shrinking capacity in the West, Chinese pollution controls on refiners and sanctions on Russian petroleum exports has sent margins in the industry spiking. Refiners that usually turn a profit of $5-$10 a barrel in a good year are now making as much as $60 a barrel. Oil prices are usually quoted as the price for crude, but that is the only price paid by refiners, says Javier Blas on Bloomberg. Add on the refining margins for different grades – jet fuel is the priciest – and for end users “it’s as if oil is trading somewhere between $150 and $275 a barrel”.…

• IAG’s chief executive Luis Gallego (pictured below) “blames Brexit and Covid-19 for everything that has gone wrong at British Airways”, but he needs to look in the mirror, says Alex Brummer in the Daily Mail. BA’s former CEO Willie Walsh had outlined bold plans “for turning BA into a global champion”. Gallego ensured that as a subsidiary of IAG, it was “starved of investment and the workforce shrunk, making for deteriorating standards of service”, as shown by the anger over delays and cancellations. It’s not surprising that investor advisory services ISS, Glass Lewis and Minerva “are up in arms” about Gallego’s “astronomical” pay package. With IAG’s ownership proving a “catastrophe”, BA “would be better off cut loose from its Iberian masters, focusing on customer service and rebuilding its reputation”.…

Australian oil and gas producer Woodside Energy has joined the London stock exchange through a dual listing, says Sky News. Woodside, which was already listed in Australia and has a market capitalisation of around £36bn, decided to add a London listing after striking a deal to buy mining giant BHP’s oil and gas assets last year. The merger has left BHP’s shareholders with a 48% holding in Woodside, meaning that many UK investors will already have shares in the firm. Woodside’s assets are skewed towards Australia, including interests in two major liquefied natural gas facilities, but it also has stakes in both fossil fuel and renewables projects around the world.…

There is no question that households are feeling the worst squeeze on their budgets for the last 30 years. Inflation has already hit 9%, and may well climb to 10% by next month. An average car costs £100 to fill up with petrol and groceries are more expensive than ever. With wages only rising by 3%-4% at most, people are getting poorer and many are already cutting back on what they spend simply to stay afloat. The plastic takes the strain Plenty of us are borrowing money to make up the difference. According to Bank of England statistics, consumer credit is now rising at the fastest pace for 17 years. The growth rate for credit-card borrowing hit 11% last month, while overall consumer credit is now growing at 6% annually.…

It can no longer be denied. US stocks are firmly in bear market territory. The Nasdaq, weighted towards technology stocks, got there a while ago (it’s down more than 30%), but it took until this week for the S&P 500 to finally shed the requisite 20% from its most recent high at the start of 2022 (see page 4). The main question on investors’ minds right now is probably: when will it end? History is no guide to the future, as the fund literature always tells us, but it’s also the only one we’ve got. According to Bank of America’s Michael Hartnett, stocks lose around 37% in the average US bear market, with an average duration of nine months. Assuming this one follows that pattern, the S&P 500 would bottom…

Exodus will return to the taskmasters Ian King The Times The labour market is tighter than it has been for 50 years, largely because of an exodus of workers, says Ian King. According to the Office for National Statistics, of the additional 522,000 who left the workforce in the last quarter of 2021 compared with the same months in 2019, around 493,000 were 50 or over. Nearly half cited retirement as the reason, a reversal of the pre-pandemic trend to choose to work for longer. Those in the 50-70 age bracket were also more likely to be male and have a university degree, and the biggest groupings were those engaged in “professional, scientific and technical activities” (ie, more likely to have decent savings and generous final-salary pensions). This has…

theconversation.com “The world’s biggest nation is about to shrink,” says Xiujian Peng. China accounts for more than a sixth of the world’s population – its numbers “swelled” from 660 million to 1.4 billion over the past four decades – yet it’s on track to turn down this year for the first time since the country’s great famine of 1959-1961. According to official figures, the population grew by just 480,000 in 2021, a record low and a fraction of the annual growth of eight million or so common a decade ago. Projections suggest it will fall this year. Explanations for why this is happening in the face of state incentives to turn the tide vary. Perhaps Chinese women are used to small families after years of the one-child policy, or are…

Tech stocks have had a rough start to the year. The tech-heavy S&P 500 is down 13.5% since January and the Nasdaq Composite is down 23%. In the UK there have been some notable outliers, chief among them two London-listed digital infrastructure funds: Cordiant (LSE: CORD) and Digital 9 (LSE: DGI9). Year-to-date Cordiant’s share price on the London market is down just 5.3% (up 4.8% over the last year), while Digital 9’s share price is actually up around 1%. These two funds’ closest peers, established US players American Tower and Crown Castle, have both suffered much bigger losses year-to-date, down 12% and 9% respectively. Both UK funds have delivered positive results. Cordiant announced a net asset value (NAV) of 106.34p per share (compared to 101.6p per share on 30 September…

Picture the scene: inflation (measured by the retail prices index – RPI) is running at 11%; there’s an oil embargo and an energy security crisis, but the government has just discouraged new investment in indigenous, reliable energy through a populist windfall tax; and while the Bank of England has begun to raise interest rates, “real” (after-inflation) rates are still negative to a degree never seen before, locking in huge post-inflation losses for cash deposit savers. We’ve also witnessed an unprecedented expansion in the money supply, whereby all recent new government borrowing for profligate handouts has been financed by the printing press. After a period of globalisation and financial stability which witnessed a record bull market in “long duration” assets (such as “growth” stocks and bonds with long maturities), the stockmarket…

Switching to a better deal hasn’t really been an option ever since energy prices began to soar last autumn. The advice has been to remain on your provider’s standard tariff, since it is protected by the price cap set by regulator Ofgem. However, there are some new fixed-rate deals on the market, while the current level of the cap will go up in October (it’s reset every six months). Earlier this month, Ofgem warned that the new cap could be 42% higher, which would take the average annual energy bill to £2,800. As a result, “fixed deals are starting to look more tempting,” says George Nixon in The Times. There are 13 fixed tariffs on the market that work out at less than £2,800 for the average household. The cheapest,…

Small businesses face a squeeze. Not only are more customers paying their invoices late as the economy slows and cash-flow pressures mount, but securing financing support from the banks is also becoming increasingly difficult. The Federation of Small Businesses (FSB) says 61% of smaller firms were hit by late payments during the first quarter of the year and that just 19% viewed the availability of credit as good – an all-time low. Still, there may be a way to square the circle. Invoice finance products provide a means to borrow against the value of your outstanding invoices, unlocking funding for cash flow and growth. Invoice finance, which is available from a growing number of finance businesses and specialist intermediaries, is increasing in popularity; around a quarter of those businesses that…

The world of work has been turned upside down over the past few years. From millions of people being put on furlough, through the shift to homeworking and to the “great resignation”, the job market has been in constant turmoil. So it’s not surprising that the share price of recruitment firm Hays (LSE: HAYS) has been see-sawing over the past two-and-a-half year. At the start of 2020, its shares were trading at 165p. They then plunged below 100p by late spring, before bouncing back to 120p. They then fell again to 102p in November 2020, before news of a vaccine pushed them back up to pre-pandemic levels by summer 2021. However, in the past year they have fallen to 115p. “A shortage of labour should mean that recruiters are in…

At Troy Income & Growth Trust, we seek to invest in high-quality, resilient companies that can grow their dividends. This should allow the trust to produce a balanced total return made up of a growing income stream along with capital growth. The core focus is on UK companies. At least 80% of the portfolio is invested in companies listed in the UK, with select investments in high-quality international businesses. We seek to be the high-quality, conservatively-managed, dividend growth trust in the AIC UK Equity Income sector. “We look for companies that can sustain high returns on capital” As part of our endeavour to shield equity investors from excess market volatility, the trust employs a discount control mechanism (DCM), actively issuing and buying shares to ensure that it trades within a…

Summer is finally here. And as we turn our thoughts to holiday reading, a group of acclaimed authors have been rereading their most celebrated novels in support of English PEN, an organisation that champions the right to read and write freely around the world. Double Booker Prizewinning writers JM Coetzee, Peter Carey, Margaret Atwood and Hilary Mantel are among those who have returned to their first editions with a pen to note down their thoughts, as they come to them now, in the margins. The books will be auctioned as part of Christie’s “First Editions, Second Thoughts” sale, which runs online from 28 June to 12 July. Rescued from product The authors welcomed the chance to get reacquainted with their works. “The process of publication (however welcome and necessary) is…

Residents of Lake Como, Italy, are used to displays of “excessive wealth “ from billionaires and celebrities, but the upcoming wedding celebration of hedge-fund tycoon Alan Howard “has proved one party too far”, says The Times. Howard has paid €1.3m to the town council to close Villa Olmo (pictured), a publicly owned 18th-century lakeside mansion, for almost a month until 25 June. The mansion has been hired out for events before, but locals are enraged by the length of the time it has been shut and the fact that the closure includes parklands behind it. “Our town is not in default or in difficulty and does not need to make sacrifices or accept extreme measures to pay off debts,” said one councillor who opposed the closure.…

“The bigger the party, the worse the hangover,” says Russ Mould of AJ Bell. America’s S&P 500 plunged on Monday to close down more than 20% since its 3 January high, meaning that the benchmark index is officially in a bear market. That marks the end to the bull market that began in March 2020. While it was “the shortest bull run on record since 1950… what it lacked in duration it made up in intensity”. The sell-off followed data last week showing that US consumer price inflation hit an annual rate of 8.6% in May, the highest level since 1981, dashing hopes that it had peaked. The unexpectedly high figure increases the odds of sharp interest rate rises. Traders are now betting that the US rates will be at…

“Since the Bank of England [BoE] was founded in 1694, its Bank Rate… has been 2.5% or below for only about a sixth of the time… Most of that was due to the emergency rate of 2% that began with World War II and ended more than a decade later. Almost all the rest occurred in the past 13 post-banking crisis years, when it was under 1%… the BoE’s official rate has a daily average of 4.66%… in 1694 the new Bank of England set its first rate at 6%… That rate was cut to 5% in 1714…Throughout the reign of Queen Victoria (1837-1901), money was lent at 5% and borrowed by the government at 3%… the market’s predicted 2.5% Bank Rate for 2023 would barely be half the typical…

Three to buy Auction Technology Group The Mail on Sunday Online auctions still make up less than a third of global auction sales, but they are much more cost-effective and generate higher sales. Auction Technology Group is “an undisputed leader in the field”. The company handles between 60 and 100 auctions every week and sells 30 million items each year valued at over £2bn. Its auction hubs are used by thousands of auction houses worldwide. Brokers expect profits to grow 80% to £40m this year and anticipate further growth in 2023. 943p Shoe Zone Shares This value-footwear seller is among the few retailers whose shares are up despite the impact on the sector of high inflation and the cost of living crisis. Profits look set to increase as “cash-strapped consumers…

In what they hope will be a “summer blockbuster” that will “blow the roof off the House”, the US House of Representatives began televised hearings on the US Capitol Riots of January 2020 at the end of last week, says Hugh Tomlinson in The Times. The nine committee members, including two Republicans, claim to have uncovered evidence that former president Donald Trump not only incited the riots, but also “conspired to subvert” US democracy in the wake of the presidential election. Trump and most Republicans have denounced the inquiry as a “partisan witch hunt” and an attempt to distract attention from the troubles plaguing the Biden administration. The Republicans have a point, says Marc Thiessen in The Washington Post. Biden won in 2020 on a pledge “to restore normalcy, reach…

• National Grid’s CEO, John Pettigrew (pictured), has been criticised by pay campaigners for receiving a £1.1m increase in total pay for last year, while families “battle rising energy bills”, says The Guardian. His package rose to £6.5m for the year to the end of March 2022, boosted by almost £4m from a three-year incentive plan. Pettigrew will also see his £1m salary rise by 3.8% from July. His total pay for 2021 is well above the £3.6m average for FTSE 100 CEOs last year. • Silchester investment group’s chief stockpicker Stephen Butt has been handed at least £69m by the business he co-founded in 1994, says The Times. His is the majority share of the £130m in dividends the firm paid for 2022, its largest dividend payout to date,…

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.…

“I’ve been hard up so many times. My dad lost all his money when I was 18, so I couldn’t go to university. When I went into recovery [for cocaine and alcohol addiction] at 28, I started with no money again. After What Not to Wear, I was suddenly in a house with a mortgage I couldn’t afford. I had to sell it to clear my debt.” TV presenter Trinny Woodall in The Times “The UK advance was £100,000 and in the US it was $460,000 – an unbelievable amount of money. I was nursing my youngest child at the time, so wasn’t drinking, otherwise I’d have downed a bottle of champagne to celebrate”. Monica Ali on being paid for her first novel Brick Lane, quoted in The Sunday Times…

qz.com When psychologist Mary-Clare Race studied personality disorders in the workplace, she came to a “surprising conclusion”, says Cassie Werber: often “toxic leaders” do not get ahead despite their problematic behaviour, but succeed because of it. This is because they are willing to take risks and happy to make decisions with negative consequences for others. Both might pay off in terms of good outcomes for the business, at least in the short term. Traditional career structures exacerbate the problem. Star employees tend to be promoted into positions where they manage other people. But management may not suit their skills. “Brilliant individuals” should rather be allowed to keep doing what they do well, and get properly paid for it, without having to take on the very different task of management. The…

Toy manufacturing giant Hasbro has fended off activist investor Alta Fox Capital Management and seen all 13 of its board members re-elected during its annual shareholders’ meeting last week, says Reuters. Alta Fox, which had accrued a 2.5% stake in Hasbro worth $325m, had been campaigning to reshuffle the board and spin off Hasbro’s profitable Wizards of the Coast division, which owns popular games such as Magic: The Gathering and Dungeons & Dragons. The activist’s campaign follows an 18% drop in Hasbro’s share price over the last five years. It initially proposed replacing five directors, but later scaled this back to a single nominee. However, Hasbro’s shareholders voted to keep the current board by a “substantial margin”.…

In recent times, whenever the West and its financial markets have been in trouble its central banks have come to the rescue with more cheap money. This is no longer an option. As a result, we are in a structural bear market for most asset prices. The end of the era of free money means the end of the “almost everything” bull market. It also means structurally higher volatility, since central banks will no longer cushion downside in asset prices to the same extent. Investors should diversify away from passive and traditional long-only funds that are solely dependent on market direction and consider those that can also “short” stocks to hedge market risk, such as the Argonaut Absolute Return Fund, which I both manage and invest in. As in our…

The rules of the child benefit scheme have been declared “unclear” by a study commissioned by HM Revenue & Customs (HMRC), says The Sunday Times. Until 2013, there was no means testing for child benefit: the same amount was paid to anyone with children regardless of income levels. Then the system was changed so your entitlement tapers off as you earn more. However, the amount families actually receive has not changed. Those who sign up get £21.80 a week for their first child and £14.45 for any other children regardless of whether they qualify. It falls on high-earning families either to declare they no longer want the benefit, or to pay back any overpayments through a self-assessment tax return. This has led to surprise bills from HMRC, demanding families repay…

How will your staff get to work if next week’s nationwide rail strikes go ahead? If your business has a policy detailing your expectations of the efforts staff should make to get to the office amid travel disruption, now is the time to make sure everyone understands it. If you don’t have a formal policy, it is important to set out your approach to the strikes so that staff know what to do. Most employers want to be reasonable. Staff affected by industrial action may still be able to get in. Some rail services will still run, and they may have access to other forms of transport. But it makes sense to be flexible. Staff may need to come in later or leave earlier, for example. Home working may be…

The Big Mac Index is an idea developed by The Economist to judge whether currencies are overvalued or undervalued by comparing the price of a Big Mac in two countries with the official exchange rate. So if a Big Mac costs $6 in the US and £4 in the UK, then that suggests that the exchange rate should be £1 to $1.50. But if the official exchange rate is £1 to $1.40 then the pound may be undervalued. The Big Mac Index is based around the economic theory known as the Law of One Price (LOOP), which argues that in an ideal world with no barriers something should cost the same wherever you buy it (otherwise people would just buy it from the cheaper place). However, while burgers sold by…

Bus and train operator FirstGroup (LSE: FGP) has seen its share price climb after a £1.2bn takeover bid by a US buyout business, says Bloomberg (see also page 6). FirstGroup has received and rejected several offers in the past, but investors seem to put a higher chance of success on this latest attempt and the shares rose more than 15% in a week after the bid was announced in May. The firm is now focused solely on the UK after selling its US city and school bus businesses for £3.3bn last year, allowing it to pay off most debt and invest in improving its UK operations. The share price has risen by 61% in the last year.…

Irving Fisher (born 1867) was an economist who made a number of important contributions, especially in the field of monetary policy. He was also an inventor and profited handsomely when he sold the patent to a rotary filing system. What was the trade? Fisher invested the money from his patent in the stockmarket, using leverage to boost returns. This made him a fortune during the 1920s boom and brought him a reputation as a market pundit. In September 1929, stock prices started to fall after commentator Roger Babson predicted that “sooner or later a crash is coming, and it may be terrific”. A few weeks later, on 16 October, when prices had started to rebound, Fisher predicted that stock prices had reached “what looks like a permanently high plateau”. What…

Going… A one-off LeBron James Triple Logoman trading card, featuring three NBA patches worn by the basketball great while playing, could break the record for the most expensive sports card on 26 June, says CNN. The current record was set last August, when a Honus Wagner T206 baseball card sold for $6.6m. There are, however, 50 Wagner cards in existence, while the James card is unique. Each of the three patches on the James card was taken from a jersey worn by James while playing for the Cleveland Cavaliers, Miami Heat and Los Angeles Lakers. As of last Sunday, the highest bid before fees was $1.5m on the Goldin Auctions site. Gone… A game-worn Los Angeles Lakers jersey worn by LeBron James’ one-time teammate, basketball legend Kobe Bryant, fetched $2.7m…

• Not everyone was happy in Falkirk last week when US rock band The Killers, fronted by “my favourite rock god” Brandon Flowers (pictured), came to play, says Jan Moir in the Daily Mail. Several residents of the Scottish town moaned about the noise. The local council was even forced to ask the band to turn it down. “How embarrassing! Dare I point out that this did not happen at any of their English concerts? Better not.” One whinger complained how the noise rattled his “expensive, relatively new double glazing”. Another, a dog-walker, complained she could hear the words to Mr. Brightside. She was “sick of it”. A man railed against the “£18 for two hamburgers” he was charged at the venue. “My God! Has having a good time ever…

£20,000 The cost of fuelling a lorry for a year, Lesley O’Brien, director of Freightlink Europe, tells BBC News. Last week, the cost of filling up a typical family car exceeded £100 for the first time due to the rising price of oil. £2.4bn The cost of holding the Platinum Jubilee, according to The Times. That is almost entirely made up of the lost economic output stemming from the extra bank holiday. The Treasury had set aside £28m to cover the celebrations. 10,000 How much in Chinese yuan (£1,200) the Chinese government has said it will offer anyone who informs on people they suspect of being enemies of the state. Informants can also be rewarded “spiritually” with a certificate acknowledging their loyalty. £25.4m The record-high value of English wine sales…

Mick Jagger (pictured) and Keith Richards of the Rolling Stones are set to get around £50m for the use of their songs in an upcoming TV series, says the Daily Mail. The 16-part series, which will be made by the team behind The Crown, will cover the story of the band between 1962 and 1974. Production is scheduled to start in 2024. Trail runner Ricky Lightfoot has become only the third human to win the annual “Man vs Horse” race in Powys, Wales, since the event began in 1980, says the BBC. Lightfoot beat more than 1,000 human competitors and over 50 horses and riders round a 36km cross-country course to claim the £3,500 prize money. His winning time of 2:22:23 beat the fastest horse by two minutes.…

Shares in digital currency exchange Coinbase fell 25% in five days and the firm said that it will sack 18% of its staff amid growing fears of a “crypto winter”, says Andrew Griffin in The Independent. Coinbase’s CEO and co-founder Brian Armstrong (pictured) admitted that the “company had grown too quickly”, with the number of people working for Coinbase quadrupling over the past 18 months. The price of bitcoin is now less than half what it was at the beginning of the year, so Coinbase needs to cut staff numbers “in order to keep the company secure through any future economic downturn”. Coinbase isn’t the only firm in the digital currency sector that is being forced to take a long hard look at itself, says Olga Kharif on Bloomberg. Other…

Cavotec is a manufacturer of specialist electrical products, such as self-coiling cables for cranes, especially in the maritime sector. It’s headquartered in Switzerland, manufactures in Italy, does research and development in the Netherlands and is listed in Sweden. Profitability has been “uneven and often low”, says Affärsvärlden. However, last year it began restructuring to focus on green products – such as supplying power to moored ships, allowing them to turn off diesel engines – which could improve growth and profitability. This is not showing in results yet, but the order book is up 92% year on year, suggesting that “the company is moving towards better times”. It’s a risky turnaround play.…

On Wednesday, Nato allies and partners met in Brussels to discuss ways to help Ukrainian forces “survive a brutal Russian pummelling in the eastern Donbas region”, says Amy Cheng in The Washington Post. Russian forces destroyed the last main bridge out of Severodonetsk on Tuesday, hampering supply lines to the last major city in the eastern Luhansk region that isn’t under Russian control. Victory here would pave the way for Russia to target Sloviansk, further west in Donbas, says France 24. Ukraine’s president Volodymyr Zelensky says that the outcome in the Donbas will “indicate the course of the war”. For now, what Zelensky wants is more weapons, says Isabel van Brugen in Newsweek. “To end the war we need heavy weapons parity,” Mykhailo Podolyak, a Ukrainian presidential adviser, tweeted on…

The televised hearings of the 6 January committee (see bottom left) don’t seem to have scared punters away from betting on Donald Trump (pictured) to be elected president in 2024. With £1.6m matched on Betfair, Trump is still the favourite at four (25%). Florida governor Ron DeSantis is now in joint second place with Joe Biden, both at six (16.7%). There is also a tie for fourth place with current vice-president Kamala Harris and Trump’s former deputy Mike Pence both at 16 (6.1%). However, I think the best value lies back here in the UK, with the upcoming Tiverton and Honiton by-election, which was prompted by the resignation of Neil Parish. As I have written here previously, I think the markets are underestimating the chances of the Conservatives winning this…

The top three executives at high-street retailer Marks & Spencer could earn just over £15m between them for the current financial year, says Jonathan Eley in the Financial Times. For that to happen, a variety of personal and corporate performance targets will have to be met, resulting in the maximum payouts from annual and long-term incentive schemes. M&S’s share price will also have to rise by half over the three years the incentive scheme is set to run. Stuart Machin and Katie Bickerstaffe will take over as joint chief executives from Steve Rowe, who is retiring. They could receive payouts of £5.5m and £5.1m respectively, despite Bickerstaffe working a four-day week to Machin’s five days, while chief financial officer Eoin Tonge could earn a maximum £4.4m. Rowe will be paid…

“I’ve called this the golden age of fraud,” Jim Chanos tells the Crypto Critics’ Corner podcast. The short seller, who is probably best known for predicting the collapse of fraudulent US utility Enron, also teaches a course on the history of financial fraud. He notes that fraud is correlated with the wider investment cycle. “The longer the business and financial cycle goes on, the more people’s sense of disbelief erodes and they begin to believe things that are too good to be true.” Today, “crypto is a wonderful example of that”. As we’re seeing, it’s only when people ask for their money back that fraudulent or flawed “business models come to light”. Similar things happened during the dotcom bust, notes Chanos, “but I suspect that if and when this bubble…

ft.com/alphaville Central bankers like to think they are in control of inflation, and their opponents generally agree, berating them for not acting swiftly enough to put a lid on it, says Nick Peterson. A new paper – “Who killed the Phillips Curve” by David Ratner and Jae Sim – suggests this is “overplayed”. The paper argues that the inflation of the 1970s was not solved by aggressive interest-rate rises, as now generally assumed, but through “de facto class war and the degradation of the union movement”. The sustained inflation of the 1970s was down to the power of the unions to push wages up to keep up with price rises. That makes the chances of our current bout of inflation becoming “entrenched” low . The “working class as a cohesive…

■ “Little has changed in the fund universe over the past month,” says Morningstar. Growth strategies and US equities have continued to struggle, while energy and natural resource funds continue to top the table of the best-performing UK funds. BlackRock World Energy, which has been in the top ten funds every month this year, returned 13% in May and is now up by 61% so far in 2022. Its holdings have been buoyed by high oil prices, as supplies from Russia shrink and the prospect of a new nuclear deal with Iran – which would bring more Iranian production back into the market – diminish. The mining sector is also performing well: JPMorgan Natural Resources returned 7.5% in May and 36% year-to-date, while JPMorgan Global Natural Resources gained 6.5% and…

After the oil price soared in the 1970s, it was almost universally assumed that it would continue to rise relentlessly. BP’s annual review of the market in 1970 had stated that the world had just 25 years of reserves left so rising demand and limited supply meant that prices could only go one way. In reality, higher prices curbed consumption by encouraging a drive to energy efficiency, while new discoveries were made and extraction rates improved. Supply exceeded demand and the oil price crashed. By 1995, when the oil was supposed to run out, BP was estimating that there were 50 years of reserves left. The oil price surged again in 2008, reaching $147 a barrel, fell to $40 in the financial crisis and then recovered to $100. In 2014,…

• If you are feeling the pinch of rising energy bills “it may be time to cover up the hot tub, drain that heated swimming pool and unplug your wine fridge”, says The Sunday Times. Turning off energy-guzzling luxuries can make a big difference. Agas are one of the costliest items: estimated usage figures suggest a traditional four-oven gas Aga would consume 27,404kWh of energy a year, costing £2,020. Many people indulged in a hot tub during lockdown, but they could be regretting it now electricity bills are up. Heating a Lay-Z-Spa to 40 degrees Celsius for two hours a week would cost £240 a year. Some hot tubs could be costing you even more, since many are designed to be on all the time. If you are lucky enough…

• Small businesses looking for equity finance should not overlook the potential of the Enterprise Investment Scheme (EIS), which offers generous tax benefits to investors prepared to fund growing companies. Data from HMRC shows 3,755 companies raised £1.66bn through the EIS in the 2020-2021 tax year, down from 2019-2020, when 4,165 firms raised £1.89bn. Demand for the EIS from investors is growing, so it would be unfortunate if fewer businesses are considering this route to funding. • Two-thirds of small businesses employ at least one woman over the age of 50, according to research from the Federation of Small Businesses, which is signing up to the Menopause Workplace Pledge. The scheme, run by charity Wellbeing of Women, aims to increase awareness of how employers can support women going through menopause.…

Given the ongoing market turbulence, it’s no surprise that all three of my open long tips fell. Supermarket group J Sainsbury fell from 234p to 204p. Coach operator National Express also declined from 270p to 224p. Airtel Africa also fell from 150p to 142p. Meanwhile the pending long tips – ASOS, JD Sports and Pets at Home – are all far away from the price at which you should start going long. However, Dominos Pizza has now risen above the 375p level I recommended for starting to go long. Overall, my long tips are making combined profits of £1,102, down from the £2,023 they were making just a fortnight ago. The good news is that five out of my six short tips have moved in my direction. Cinema chain AMC…

Shares in online mattress retailer Eve Sleep (Aim: EVE) have plunged 99% since listing in 2017, following profit warnings and years of continuous losses, says The Times. The firm was valued at £140m when it listed, despite just £12m in sales the previous year. It went on to lose a cumulative £56m between 2017 and 2021, and remains unprofitable. Now its prospects have been hit by the cost of living crisis. The firm has put itself up for sale after talks with an unidentified American investor fell through. The shares have fallen 78% in the last 12 months.…

Every winemaking country in the world has its icon wines and superstar winemakers, and South Africa is no exception. Over the last couple of decades, Eben Sadie (Sadie Family Wines), Marc Kent (Boekenhoutskloof), Chris and Andrea Mullineux (Mullineux & Leeu Family Wines), among other luminaries, have captured the attention of the world’s keenest wine collectors with their scintillating creations. I first came across Donovan Rall’s wines over a decade ago when I tasted his inaugural 2008 vintage releases. It was clear that he was a force to be reckoned with. Over the last ten years, I have been shadowing his new releases, and the other day, he came to London to present his current portfolio and a few soon-to-be-released wines. Every single bottle was a work of uncompromising art. I…

Never mind the signed and annotated first edition of Margaret Atwood’s The Handmaid’s Tale that’s for sale with Christie’s next month (see left). The Canadian author left her mark – or rather, she tried to – on an altogether different edition of her seminal work. Atwood attempted to set it on fire. Toronto-based companies Rethink, a creative agency, and The Gas Company, a graphic arts and bookbinding speciality studio, teamed up with publisher Penguin Random House and the author to produce a single copy of the 384-page novel made from Cinefoil, a specially treated aluminium product. The 82-year-old duly wielded a flamethrower and she was filmed directing a jet of blue flame at a prototype. “I never thought I’d be trying to burn one of my own books... and failing,”…

We are coming to the Decision of the Century. There are only two real choices. One way or another, this economy is going to blow up. So, the question is whether the Fed blows it up by facing reality and stopping inflation now. In the world of The Matrix, this would be taking the red pill. Or whether it rests content in delusion and takes the blue pill, letting inflation rip – only for the whole thing to blow up later anyway. Either way, there are hard times ahead. If the feds were to end the scam voluntarily, the wreck could be short and sweet, like ripping off a Band-Aid, with a crash followed by a depression, but ending in a fairly quick recovery. If the pre-Fed depressions (before 1913)…