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MoneyWeek has been around long enough to see several big trends recur. Most of them have been fascinating to cover. But one key theme of the past decade fills me with dread, because it was like watching a slow-motion car crash: the euro crisis. It may now be making a comeback, as Alex explains on page 14. The launch of the euro coincided with the start of a global upswing, so the currency’s intrinsic flaws were overlooked. Everyone was getting used to the conversion rates (an irksome 13.76 schillings to one euro in Austria). Because the eurozone encompassed most EU members it was trumpeted as a giant leap forward for European integration. A sub-optimal currency area Many analysts, however, pointed out that there had never been a successful single currency…

“Between 2000 and 2015, [US] consumption of steel fell 15%, aluminium 32% and copper 40%. Energy consumption, which has always been directly correlated with GDP, fell 2% between 2008 and 2017, while GDP expanded by 15%. How has this happened? Capitalism, the profit function and innovation... The incentive to dematerialise is about to get a lot stronger. The war in Ukraine has pushed up the price of... oil by 30%... this year, fertiliser prices have almost doubled and unionised workers are pushing for pay increases... To respond to these inflationary forces and maintain healthy profit margins, [firms will have to] digitise faster... If the impact of... geopolitical uncertainty is less oil, less trade and more expensive labour then we are only going to arrive there faster... For tech investors, that…

Last week saw some bad news for investors in S4 Capital, Martin Sorrell’s (pictured) ”rapidly expanding advertising start-up”, says Patricia Nilsson in the Financial Times. The shares halved after the company cut its full-year guidance on earnings before interest, taxes, depreciation and amortisation to £120m, which was much lower than the previous consensus of between £154m and £165m. S4 claimed that revenues were still “robust” and blamed the reduced profits on soaring staff costs, especially in the creative department “where the content for the digital marketing that S4 has pitched itself as an expert in gets made”. S4 has suffered a “disastrous period”, says Jamie Nimmo in The Sunday Times. The share price has plunged from £8.70 last September, valuing it at £5bn, to a mere £1.24. Confidence in S4…

Troubled times call for reliable sources of growth and income, says Focus-Money. Enter America’s pharmaceuticals giant Eli Lilly. It has been paying its investors a dividend for more than 100 years, while it also has a very promising pipeline. It has just received approval for a new diabetes treatment that helps people monitor their blood-sugar level. Tirzepatide may also be approved as a weight-loss treatment: it is the first drug of its type to activate two hormones present in the intestine. These then produce insulin and temper hunger pangs. Five more drugs are to be launched in the next 18 months. Producing an antibody treatment for Covid-19 has bolstered recent profits further.…

Politics & economics US House speaker Nancy Pelosi’s planned visit to Taiwan would make her the most senior US politician to visit the country in 25 years, but her trip is causing anxiety. US president Joe Biden has said the Pentagon is not in favour of the visit. China, which claims the democratically governed island as part of its territory, has warned of “forceful measures” if it goes ahead. The concern in Taipei, says the Financial Times, is that it is trapped between two bad outcomes – of being punished by China if the trip goes ahead, and of China being emboldened if Pelosi cancels the trip. Pelosi should go, says Henry Olsen in The Washington Post. Taiwan is an important part of the global economy – dominating…

With £3.8m matched on Betfair on the market on who will be the next PM and £3.5m matched on that for the next Conservative leader, punters appear convinced that Liz Truss will be succeeding Boris Johnson – she is the clear favourite to beat Rishi Sunak. Indeed, she is now on 1.21 (82.6%) in both the next Conservative leader and the next PM markets; her opponent is at 6 (17.2%) to become the next leader. Punters have also dismissed the idea that Johnson might try to withdraw his resignation – you can get 1.02 (98%) on him not being prime minister by the time of the next Conservative party conference. Perhaps the most interesting market is that on Truss’s vote share. According to Ladbrokes, 55%-60% is the favourite at 9/4…

There have been rumours for years. There have been presentations, speculations, and occasionally even a minor product launch. But right now it is finally happening. The technology giants are making their long-awaited push into healthcare. As so often, Amazon led the way, paying $3.9bn for One Medical in the US, a primary healthcare organisation that covers almost 800,000 people across 25 states. For Amazon, it is a huge step up in its attack on the medical market. It bought online pharmacy PillPack for $750m in 2018 and since then has started selling through its own pharmacy as well. But this is the first time it has taken control of a major healthcare provider. Apple has similar ambitions. Last week, the company set out its strategy for making healthcare its next…

Investors in stocks can follow a number of different approaches – often referred to as “styles” – when deciding which stocks to invest in. Of these, the two most often used to classify investors are “growth” and “value”. Growth investors look for companies that are expected to grow their earnings faster than their sector or the wider market. They will often be willing to buy shares on valuations that appear quite high compared with other companies if they believe they may be justified by future profits. This approach places more emphasis on the firm’s potential, as opposed to its current financial situation. Value investing is the opposite. Value investors focus on companies that appear to be cheap today (or sometimes stocks that should be cheap in the very near future…

“I probably should have those big career thoughts, shouldn’t I? It actually came about by accident, but it’s ended up being the biggest labour-of-love job I’ve done.” Comedian Frank Skinner (pictured) on whether he started out with a plan to become successful, quoted in The Guardian “I believe in the yogic concept of dharma, meaning the world will provide for you. If you relax, have the right energy, and focus on what you want, the money you need to live that life will come. People might think that’s airy fairy nonsense, but it does seem to happen.” Explorer Ed Stafford, in The Sunday Times “Money don’t mean s*** to me… I always tell people – they think money’s gonna make them happy, they’ve never had money before – when you…

tinyurl.com/4tdudwh4 With more and more people quitting their jobs or taking early retirement, it seems we are living in an age of “anti-ambition”. As “one of that happy band, let me suggest why”, says Chris Dillow. With modest effort, it is possible to live well on an average income. Beyond a certain point, “most middle-class 50-somethings” will have acquired enough wealth to be able to enjoy a good standard of life, spend more time with loved ones, take days out and holidays, and enjoy most of the best culture has to offer. The acquisition of wealth beyond this point is “futile”. All Jeff Bezos has over you are the dubious pleasures of going on amusement park rides alone and taking trips into near-space, putting him on a par with a…

Is the rise in bond yields and corresponding fall in prices bad news or good news? It depends on your perspective. In the past year yields on ten-year gilts have risen from 0.5% to a mid-June peak above 2.5%, though they have since slipped back below 2%. Yields on 30-year gilts have risen from less than 1% to over 2.5%, resulting in a capital loss of 20%. Given that these yields remain below those of the comparable US Treasuries, against the historic norm, it is likely that they will continue to rise and that the multi-century lows of a year or two ago were an anomaly. This is clearly bad news for holders of gilts, but most private individuals sold out long ago. Maybe some pension funds have kept hold…

■ Jupiter UK Mid Cap has slashed the value of its stake in Starling Bank by around 16%, opening up “an extraordinary gap between how it and Jupiter’s Chrysalis investment trust value their shared top holding”, says Citywire. Chrysalis, which makes late-stage investments in unlisted growth companies, has been under fire for paying a £112m performance fee to Jupiter last year before suffering several setbacks, including a huge writedown in its stake in buy-now-pay-later provider Klarna. The “relative resilience” of Starling has shielded it from even bigger losses, but the writedown at UK Mid Cap – which is run by Richard Watts, Chrysalis’s co-manager – “could pave the way for Chrysalis to cut the value of its own Starling stake during the next quarterly valuation”. Starling accounts for 25.1% of…

In the past fortnight my open long tips have put in a strong performance, with two out of the three tips rising. Telecoms firm Airtel Africa climbed from 146p to 171p, while equipment-rental company Ashtead rose from 3,785p to 4,142p. Fast-food chain Domino’s Pizza Group fell very slightly, from 276p to 275p. The pending tips in both Hays Recruitment and sportswear retailer JD Sports rose above the levels at which you should go long on them, at 125p and 140p respectively. However, pet-supplies retailer Pets at Home and online-fashion retailer Asos still remain below the price at which you should start going long. Overall, my long tips are making combined profits of £3,092. Unfortunately, my short tips didn’t do so well last week, with four of my six open tips…

● Victims lost £1.5m to “Mum and Dad” WhatsApp scams between February and June this year, says The Sunday Times. The ruse involves someone sending you WhatsApp messages, purportedly from a friend or family member, saying they’ve lost their phone and have got a new number. Once they gain your trust they begin asking you for money. One person told the paper how she foiled the scam by texting “I know this sounds silly, darling, what’s your middle name?” after receiving messages supposedly from her daughter asking her to pay an invoice. The reply? “I forgot. X” That stopped her transferring any money. ● The price of second-hand cars has fallen from a record high as soaring fuel costs have cut demand. Earlier this year secondhand car prices overtook the…

● Leading banks are failing to treat their small business customers fairly, a new report from the Financial Conduct Authority (FCA) warns. The regulator says that too many banks are not providing support to small businesses trying to arrange payment plans when struggling to repay loans – often because staff have been poorly trained. Businesses that have suffered may be able to make a complaint to the Financial Ombudsman Service. The scheme is open to small firms with an annual turnover below £6.5m and fewer than 50 employees. ● Small businesses struggling with rising costs are also being hit with swingeing insurance premium increases,says the Federation of Small Businesses (FSB). Three in five have seen their insurance premiums rise in the last year. While many have sought to switch insurer…

Online furniture retailer Made.com’s (LSE: MADE) share price has slumped further following its third profit warning in less than a year, says The Guardian. The cost-of-living crisis is denting consumers’ home-improvement budgets. Made.com also announced job cuts. It now expects to make a £50m-£70m loss for 2022, with sales for the first six months of the year down by 19% compared with the same period in 2021 (although they were still up by 55% from 2019). Supply disruptions at ports, along with the need to clear excess inventory, have raised costs. The stock has fallen by 89% in 12 months.…

£21.88, laywheeler.com Made from the rare chasselas grape, this incredible white wine comes from sauvignon blanc’s spiritual home in Pouilly-sur-Loire. So, why does Pabiot bother making a chasselas – a grape that very few have ever heard of? The short answer is that it is drop-dead gorgeous, but the longer answer is more intriguing. Jonathan’s grandfather, Lucien, planted just one half-acre plot of chasselas, and the vines are now 45 years old. Jonathan has farmed his family’s vineyards first organically and now biodynamically and it seems to me that this extraordinary care and attention taken in the vineyards has paid great dividends. While all of Jonathan’s other wines are made of sauvignon blanc, this scintillating white is a constant memory of his grandfather while also celebrating a historical grape variety.…

It seems like just about everyone and their West Highland terrier has gone cask-whisky crazy. Edinburgh-based Artisanal Spirits Company, which listed on the London Aim junior stockmarket in June last year, says membership of its Scotch Malt Whisky Society (smws.com) grew by almost a quarter year-on-year in the six months to the end of June, to 35,500. First-half sales rose to nearly £10m, from £7.9m a year earlier, with revenues for 2022 forecast at around £21.6m. The club seeks out casks from 140-odd distilleries, which it then bottles and offers to members at cask strength. It’s a business model that is becoming increasingly popular as whisky enthusiasts seek out undiscovered gems away from the main distillery offerings. House of Hazelwood is a collection of whiskies spanning seven decades and…

You’d think inflation was like an invasion from space. It caught us all by surprise; no one on earth had anything to do with it. Janet Yellen was chairman of the president’s council of economic advisers, a regional US Federal Reserve bank boss, then vice-president of the Fed, then Fed chair and now treasury secretary. She, more than any human being, should be held responsible for the last quarter of a century’s inflationary policies. She was right there in the room and at the head of the table when the Fed was pumping in cash and credit. Yet from her comments to the press you’d never get the idea that she had anything to do with it. Yellen’s brainwave She is, though, now committed to bringing it back down. And…

£39m How much the rock band Queen earned from royalties last year, according to the accounts of their company, Queen Productions Ltd. The band has become the first in Britain to sell seven million copies of an album – the band’s Greatest Hits compilation is owned by one in four households. £187m The combined total value, in today’s figures, of assets belonging to several generations of the Windsor family that were kept hidden from the public thanks to an exception in the law that requires British wills to be published, says The Guardian. £79,967 The value of a large diamond ring in the shape of a pink oyster mushroom that has broken the record for the most diamonds set in one ring, says Guinness World Records. The piece of jewellery,…

Trading basketball trainers is no longer a slam dunk, says The Wall Street Journal. Demand for limited-edition shoes had soared in recent years, boosted by easy money, the growth of online marketplaces and pandemic-induced supply shortages, and the global resale market was estimated to be worth $6bn last year. Now, as the economy slows, prices are slumping. A pair of Nike Dunk Low Retro White Black trainers sold for $290 on the StockX online marketplace in February, but are now going for less than $200, while a pair of Air Jordan 1 Retro High OG “Patent Bred” valued at $300 in April now fetches around $230. However, “some hotly anticipated releases of limited-edition shoes still command top dollar”. Earlier this month, Nike released a limited edition of Air Force 1…

Gold is being overshadowed by “king dollar”, says Ranjeetha Pakiam on Bloomberg. The greenback’s strength this year is weighing on the yellow metal, which is priced in dollars. Prices have fallen to a 16-month low of $1,700 an ounce. You would think that “market turmoil, inflation and war” would boost gold, says Hardika Singh in The Wall Street Journal. Yet higher US interest rates and a strong dollar are major headwinds. “People associate high inflation with a strong gold market [but] what really matters is how central banks [deal with] inflation,” says Bart Melek of TD Securities. Investors think that central banks will hike interest rates aggressively, which has sent yields on government bonds surging. Gold and bonds compete as “safe-havens”. Unlike gold, bonds also pay interest, making them more…

America’s benchmark blue-chip S&P 500 may have grabbed the financial headlines over the past decade, but on a total-return basis (including dividends) the humble FTSE 250 has performed better over the past 25 years. The UK mid-cap index has returned 813% since the middle of 1997, compared with 611% for the S&P 500. “Smaller companies find it easier to grow their businesses than large firms. They’re also more nimble and able to change their strategy more quickly,” says David Brenchley in The Sunday Times. The FTSE 250 has tumbled 17% this year, but that may represent a buying opportunity given the index’s record. The FTSE 250’s forward price-to-earnings (p/e) ratio has fallen from 19 in June last year to a bargain 12.8 times this April.…

Shares in the French satellite company Eutelsat fell by 17% after it confirmed merger talks with OneWeb, a British rival part-owned by the UK government, says The Guardian. The idea is that Eutelsat will merge with OneWeb, which provides broadband coverage from space, to create a business “50/50 owned by shareholders in both companies”. The British government currently owns almost a fifth of OneWeb, while French and Chinese state-owned entities hold stakes of 20% and 5% respectively in Eutelsat. The governments of the UK and France would each have seats on the board, while Sunil Bharti Mittal, whose Bharti telecoms business is the largest shareholder in OneWeb, will become co-chair of the new firm with an 18% shareholding. This deal, sold as a “merger of equals”, represents an apparent vindication…

Hong Kong-based financial services platform AMTD Digital has become the New York Stock Exchange’s biggest initial public offering (IPO) this month, says Bloomberg. The company offers insurance advice and broking along with marketing and asset management services. AMTD sold 16 million shares at $7.80 each to raise $125m during the offering, implying a market capitalisation of $1.44bn. The shares soared by 108% on listing, marking the biggest first-day jump this year for an IPO worth over $25m. It has been a quiet year for IPOs: 2022’s 145 flotations have raised just $18.7bn, compared with 648 firms mustering a record $219bn at this stage last year.…

London Price hikes: Consumergoods giant Unilever upped its prices by 11% in the three months to June from the year before as it sought to pass cost increases on to consumers, says Judith Evans in the Financial Times. The company is also investing in advertising to foster loyalty and keep consumers from being tempted by cheaper alternatives. But finance chief Graeme Pitkethly (pictured) warned that the company was navigating a “truly unprecedented cost landscape”. He expects profit margins to remain lower for the rest of the year; cost inflation is predicted to peak in the second half. Unilever has had to contend with steep rises in commodities such as palm and crude oil, natural gas and kerosene distillates. Underlying sales grew 9% in the second quarter from a year earlier,…

● When Marks & Spencer unveiled its new top trio of executives in March, chairman Archie Norman said the three would be “flying in formation”. That plan didn’t last long, says Nils Pratley in The Guardian. “Wingman Eoin Tonge, aka the finance director and chief strategy officer, has pressed the eject button.” Tonge is off to AB Foods – which owns Primark and various food businesses – for understandable reasons. “ABF, worth £13.3bn, is a relative jumbo jet compared with M&S’s £2.8bn.” Now M&S’s future will depend more than ever on how well co-chief executives Stuart Machin and Katie Bickerstaffe work together. “Other companies have found the double-act formation hard to sustain.” ● Mark Hartigan, the CEO of insurer LV, has finally loosened his “limpet-like” hold on his job, says…

Despite doing better in relative terms in recent times, the valuation gap between value and growth stocks (see below for definition) is still vast compared to history, Cliff Asness, co-founder of AQR Capital Management, tells Bloomberg. Indeed, it’s “still within hailing distance of the tech bubble peak... We still have prices I didn’t think I’d see again in my career.” AQR, which specialises in “quant” investing strategies, has had a very strong year, with its longest-running strategy gaining more than 35% in the five months through May, reports Bloomberg. Yet despite this massive gain (particularly given the backdrop of a nasty fall in wider markets), Asness believes the value rebound could last for some time longer. “The last time we saw this, the tech bubble, it took about three, four…

thecritic.co.uk The Tory leadership contest has focused on tax as an issue, but more important is to tackle the “root causes” of the problems in our society, says Rakib Ehsan. That means supporting family life, as a new report from the Centre for Social Justice argues. Family, as the academic Tony Sewell has said, is the “bedrock of our society”, and there is “overwhelming” evidence that two-parent families provide the best start in life for children. It is the arrangement that is “most strongly associated with stable family life and positive youth outcomes, such as school attainment, mental well-being, cognitive development and non-involvement with crime”. Yet the marriage rate is at its lowest level since records began. In 1971, the UK had 570,000 one-parent families; 50 years on, in 2021,…

London’s retail bond market was launched a few years ago to help private investors buy corporate bonds. It seemed a good idea at the time – private investors in the US and Italy regularly buy individual fixed-income securities, such as tax-efficient municipal bonds. Yet it has never really taken off and in recent years new issuance has slowed to a trickle, mostly from smaller charities. However, a few commercial issuers have stuck with the retail bond market, among them alternative lender LendInvest. It issued two five-year bonds: one in 2017, paying 5.25%, and another in 2018, paying 5.375%. Both were oversubscribed. The company has now announced a third five-year bond, this time with a substantially increased yield of 6.5%. Even in an era of sharply rising interest rates, this may…

Covid-19 has shaken up the world of retail, creating both winners and losers. For the first 18 months it looked as if the home furnishing retailer Dunelm (LSE: DNLM) was one of the winners. Even though its shops were closed, it managed to shift quickly to online sales. It also benefited from people using the money they saved on travel and going out to improve their homes. Between the end of March and October 2020, Dunelm’s share price nearly tripled. Even as late as last September it was still substantially above the level it was in February 2020. However, over the past year its share price has fallen by more than 40% and is now languishing well below the pre-pandemic level, even though sales are much higher. Of course, there…

More and more people are having to pay death duties. The Treasury raked in £300m more in inheritance tax (IHT) between April and June 2022 than in the same period in 2021. The average IHT bill has risen by 27% in a year thanks to a combination of rising house prices and frozen IHT thresholds. Estates that are liable for death duties can now expect to pay an average of £266,000 to HMRC. The amount beyond which IHT is due has been frozen at £325,000 since 2009. Inflation has risen “45% over this time and average house prices have increased 67%, pushing many over the threshold,” notes Jessica Beard in The Telegraph. HMRC has doubled its IHT receipts in a decade. The government also announced that both the £325,000 IHT…

The Recovery Loan Scheme (RLS) was launched to support businesses seeking to bounce back from the Covid-19 pandemic, but it struggled to gain traction before finally coming to an end on 30 June. Now, however, the government is relaunching the scheme amid growing concern about the difficulties many smaller businesses face raising capital. The RLS went live on 1 April 2021 as the emergency-loan schemes for businesses set up during the pandemic came to an end. It offered loans of up to £10m per firm, with banks encouraged to lend through a government guarantee promising that the taxpayer would cover a sizeable chunk of any debt remaining should a borrower default. A second flop At the beginning of the year the RLS was revamped, with new rules to tailor it…

Billionaires are billionaires for a reason. Our global equity fund researched the performance of companies overseen and guided by billionaire owners back to 2004 and found that they outperformed their rivals. We now invest in 115 large-cap global companies held by 100 of the top billionaires (as ranked by Forbes and Bloomberg). Each stock makes up 1% of the fund and the maximum exposure to a single stock is capped at 1%. We rebalance the portfolio every January and this year applied a new environmental, social and governance (ESG) filter that eliminated some Russian oligarchs and underperforming Chinese billionaires. It has been a tough two years for global stocks, particularly in emerging markets, but historically these have been first to recover. Asia is becoming increasingly important to the global economy…

Jennifer Lopez postponed her wedding to actor Ben Affleck days before the ceremony was due to take place in 2003. “Twenty years, three marriages, five children, a Las Vegas residency” and “more than 18 fragrance launches” later, “Bennifer has been born anew for 2022”, says the Financial Times. Earlier this month, the couple were quietly married at the drive-through Little White Chapel in Las Vegas. Cynics may say that “Bennifer, the rematch” has “only vivified a flagging interest” in the couple’s upcoming projects. “But it’s hard not to feel a pinwheel of excitement for a fairytale narrative in which the publicly broken Affleck has been rescued by his Latina queen.” And J.Lo, aged 53, is certainly on the up, having “clawed back a career from the precipice of irrelevance” over…

This year has seen a “brutal sell-off” in emerging markets (EMs), say Marcus Wong and Melissa Cheok on Bloomberg. EM dollar-denominated bonds posted the worst first-half showing since at least 1994; local-currency debt saw record losses and stocks tumbled the most since 1998. Commodity exporters have been a bright spot, says Netty Idayu Ismail, also on Bloomberg. Soaring prices for energy, foodstuffs and metals made “the currencies and bonds of Brazil to Mexico and South Africa… the best performers among developing-nation peers in the first five months of 2022”. Yet even that trade has turned as materials prices soften on fears of an impending recession. The iShares MSCI EM ETF has lost 19% so far this year. “More pain for EM assets lies in store,” says Franziska Palmas of Capital…

Three to buy Pets at Home The Telegraph Pet food and accessories retailer Pets at Home has outperformed the FTSE 250 index by 13 percentage points since February 2020. The group operates 457 shops across the UK and offers grooming services and veterinary appointments. It has a strong online presence, a new distribution facility opening next year and a “sound” financial position. What’s more, the demand for pet-related products and services is “relatively inelastic”. The stock’s current price does not reflect its long-term growth potential or its ability to navigate weak consumer confidence. 321p Pod Point The Sunday Times This electric-vehicle (EV) charging business has had a “disastrous time” since it listed at 225p last November; the shares now sit at around 100p. Charging infrastructure has not kept up with…

“Barely had the ink dried” on last week’s deal, agreed with both Russia and Ukraine via the UN and Turkey, to allow grain exports to resume from blockaded Ukrainian ports, when Russia hit the port of Odesa with two cruise missiles, says the Financial Times. The strikes were purportedly aimed at military targets in the port area, rather than at the ships themselves, but the deal was thrown into question by the attacks. Wheat future prices, which fell after the deal, ticked back up again after the strikes. Even before the attacks there was widespread scepticism about how many ship owners would be prepared to risk sailing into Ukrainian ports or pay the hefty risk premiums being demanded by insurers. If the deal fails, that could have serious consequences for…

Sentiment is a useful thing for investors to keep an eye on. The logic behind this is that markets are driven by expectations. As a result, if sentiment is at an extreme – either bullish or bearish – then there’s a good chance that markets are at a turning point. Why? Because if everyone is a bull, there’s no one left to buy. And if everyone is bearish, well, things can only get better. With this in mind, the latest monthly survey of global fund managers from Bank of America (BoA) is quite the eye-catcher. It reveals that global fund managers are pessimistic to an extent only seen at periods of extreme investor stress, such as the Lehman Brothers collapse of late 2008 and the peak of coronavirus chaos in…

A wake-up call for Germany Charlemagne The Economist “Years of complacency have landed Germany in a pickle,” says The Economist’s Charlemagne columnist. For decades, political leaders lulled voters with “intoxicating talk of perpetual prosperity with minimal friction and zero emissions”. They woke to the sound of Russian tanks rolling into Ukraine, and now find that all the promises were built on cheap imported manpower and energy. The reckoning with past mistakes lacks urgency. Half of Germany’s nuclear power-generation capacity was shut down virtually overnight in the wake of the Fukishima disaster, yet the Greens in the coalition government are still insisting that closure of the remaining ones go ahead. And despite sitting on plentiful natural gas reserves of its own, German production has collapsed, partly because extraction would rely on…

bloomberg.com/opinion Modernisation and economic development created a mad rush to erect tall buildings in China over the course of the 20th century, says Adam Minter. The towering skyline in Shanghai’s business district came to symbolise China’s rise. The rest of the country quickly followed suit and China now leads the world in terms of the number of skyscrapers. The rush to build urban environments that would signal China’s rise in the global hierarchy helped created a booming economy and construction industry, and the benefits were far-reaching. But although the towering business districts may look impressive from a distance, the result was lifeless streets in unaffordable locations, and dangerous, poor-quality buildings. Now, the country’s chief economic planning and housing agencies have announced restrictions on the construction of tall buildings. The new…

Activist investor Elliott Management has built a 9% stake in Pinterest, the image-sharing social-media company that boomed during the pandemic but is now struggling with a drop in users, says the Wall Street Journal. Pinterest reported a full-year profit for the first time in February, but slipped back to a loss in the next quarter as users spent more time offline. Co-founder Ben Silbermann stepped down as CEO in June and has been replaced by Bill Ready, who previously headed the commerce division at Alphabet. Eliott’s investment looks like a sign of confidence in Ready’s ability to boost profits through higher ad revenue from international markets, greater use of e-commerce, and expanding its user base to include more male users, says CNBC.…

The temperature has finally cooled down after shattering records last week, but what impact does extreme weather have on the market? Studies have shown that sunny weather is generally associated with stronger stock performance, perhaps because it makes people feel more optimistic. For example, a 2015 study by Gary Smith and Michael Zurhellen of Pomona College, California, compared the average stock returns on the US market days that were sunny (in New York) with those on cloudy days between 1948 and 2013. They found that the market did better on sunny days. However, it appears the market is much less happy about high temperatures, which research suggests can actually hit returns. A 2019 study by Paul Griffin of the University of California, Davis; and David Lont of the University of…

After years of misery, things are looking up for savers at last. Numerous banks and building societies have finally been increasing interest rates on savings accounts following the repeated rises in the Bank of England base rate. Last week we heard that National Savings & Investments – the government-backed savings provider – has increased rates on several popular products. The interest rate on its Direct Saver and Income Bonds has risen from 0.5% to 1.2%. NS&I’s Direct Isa rate has gone up from 0.35% to 0.9%, and its Junior Isa rate has risen to 2.2%. “NS&I is the latest to join the fray, significantly increasing the interest rates on a range of its products to boost their appeal,” Laura Suter, head of personal finance at AJ Bell, told the Financial…

Do your customers offer working-capital finance? Growing numbers of large companies are putting such arrangements in place for suppliers, enabling smaller businesses to secure finance on more affordable terms. The schemes are a twist on the traditional forms of invoice finance available to small businesses, which enable them to borrow against the value of invoices yet to be paid, unlocking the cash tied up in their customers’ bills. The provider charges fees and interest to provide the arrangement. This type of invoice finance is useful but can prove expensive because small businesses often don’t have strong credit ratings. Many large companies are now offering invoice-finance schemes of their own to suppliers, with the debt arranged through their own superior credit ratings, giving suppliers cheaper invoice finance. The growing number of…

Shares in Euromoney Institutional Investor (LSE: ERM) jumped after it was sold to a private-equity consortium for £1.6bn, says Bloomberg. The offer, from Luxembourg-based private-equity group Astorg Asset Management Sarl and Britain’s Epiris, represented a 34% premium to the undisturbed share price. The company sells subscriptions to Euromoney, a financial magazine, and runs conferences, which are expected to recover now that Covid-19 is retreating. The firm will be split between commodity-pricing data segment Fastmarkets and the rest of the divisions. The shares are up 46% in year.…

Born in 1957 in Milwaukee, Wisconsin, Jim Chanos (pictured) graduated from Yale. He later joined Gilford Securities as an equity analyst, where he made his name as one of the first people to question the opaque accounts of Baldwin-United, a piano retailer that became an investment company; it later declared bankruptcy. In 1985 he set up hedge fund Kynikos Associates (named after the ancient Greek for “cynic”), which takes short positions balanced by being long on the wider market. What was the investment? In the 1990s Enron was deemed one of the top energy companies in the world. However, in late 2000 a friend told Chanos about an article on the controversial accounting practices of energy firms, including Enron, which were treating expected profits from future deals as current profits.…

Going… The Teflon-coated white coverall jacket worn by astronaut Edwin “Buzz” Aldrin during his trip to the moon and back as part of the Apollo 11 mission in 1969 was heading for auction this week with Sotheby’s. It is the only piece of clothing from the mission that is available for private ownership (the others are kept in the National Air and Space Museum collections in Washington, DC ), and as such was expected to sell for $2m. Following his moonwalk with Neil Armstrong, Aldrin found the engine arm circuit breaker switch had broken off and was lying on the floor of the lunar module. Without it, they couldn’t return home. Aldrin, ever resourceful, jammed his plastic-tipped pen into the hole, and saved them both. The pen and switch were…