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I have always believed that around 80% of statistics are nonsense. This has been quite a week for them. One that has spread through the financial media like a rash, despite sounding wildly unrealistic, is former Bank of England governor Mark Carney’s claim that the British economy is now less than 70% the size of Germany’s, whereas in 2016 it was 90% as big. The idea that we could have become so much poorer in such a short time seems highly unlikely, and of course we haven’t. Economist Julian Jessop notes that Carney seems to have compared nominal growth in Germany (GDP without stripping out inflation) to real, inflation-adjusted GDP here. But more importantly, he gauges the size of national incomes using market exchange rates: converting GDP into another currency.…

“Building your house on the sand probably won’t end well... the same holds for financial sandpiles... this time [our pensions are] in the sandpile’s shadow... [years of] lower interest rates [have] reduced the return on [bonds]... pension funds simply couldn’t make their target returns (typically 7%... ) when 40%+ of the portfolio was making 2%-3%... low fixed-income rates led [US pensions] to fill their portfolios with riskier assets like stocks, real estate, venture capital and assorted “alternative” investments... [so] what do you think will happen when the S&P 500 has an extended bear market?... [Pension] plans will all change course at once, stampeding like buffalo to whatever they consider safer ground... This [will] create a future crisis in the US which... makes the [recent] UK pension problems [look like] small…

Shares in housebuilder Persimmon fell by 6% last Tuesday after it cut its dividend owing to mounting uncertainty and rising taxes, says George Hammond in the Financial Times. The company admitted there were “clear signs the housing market was slowing”. The sales rate across its sites has slipped by a fifth in the past six weeks while the number of buyers cancelling their home purchase has risen by a third. Persimmon has also increased the amount set aside to cover the costs of repairing flat blocks caught up in building safety concerns to £350m. While it did not provide specifics about its new dividend policy, analysts estimate the changes mean payouts could halve. The drop in sales, which it blames on the “chaos” in the mortgage market since September, has…

Companies that make the world more secure should have plenty to do in the years ahead, says Focus Money. One is Austria’s Frequentis, which supplies IT and communications systems for air-traffic controllers (both civilian and military), and police, fire and ambulance services. The group’s order book jumped by 10% year-on-year to around €500m in June 2022, and sales rose by an annual 16% in the first half. The group is having no trouble passing on higher costs; net income is expected to reach €18m this year. That implies a prospective price/earnings ratio of 18, hardly excessive for a company with this kind of potential. Frequentis also boasts a solid balance sheet.…

Britain faces a winter of strikes, says The Economist. The ongoing train strikes are “nothing compared with the chaos that may follow if large chunks of the public sector” follow suit, particularly if unions’ calls for synchronised strikes are heeded. The Royal College of Nursing is expected to announce that its 300,000 members will strike for the first time in its 106-year history. The University and College Union has announced strikes on 24, 25 and 30 November by staff at 150 universities across the UK. Teachers may take industrial action, too, and Royal Mail workers say they will strike on Black Friday and Cyber Monday (25 and 28 November). In total, almost 1.7 million workers are being balloted this month or have already voted, say Heather Stewart and Phillip Inman…

At the time of writing, with several races too close to call and the prospect of a run-off election in Georgia, the Democrats were heavy favourites at 1.21 (83.3%) with Smarkets to retain control of the Senate in the US mid-term elections (see story, left); the Republicans were at 1.08 (92.6%) to control the House. The big story of the past few days though has been the dramatic change in the betting on who will become the next president. At one point last week, with expectations of a Republican landslide, punters had the former president Donald Trump at almost 30% to regain the White House in the next presidential election. Now, in light of the Republican party’s underwhelming showing, Florida’s governor Ron DeSantis is the favourite to win the White…

Apple became the first company in the world to breach the $1trn market value barrier in June 2018 (leaving aside PetroChina, which managed it briefly in 2007 in a bull run for Chinese shares). It was greeted as a major milestone in the rise of the US stockmarket and its growing dominance by a handful of technology companies. Far from being a one-off, that marked just the start of a trend. In September of that year, Amazon joined the club, followed by Microsoft in April 2019 and then Meta in September of 2021. Add in Saudi Aramco, the Saudi state-owned oil company, which joined on its initial public offering, and it was quite a collection. Every portfolio of any significance was almost certainly going to include some if not all…

In weightlifting, a barbell is a long and relatively light metal bar to which heavy weights are attached at both ends. Similarly, a barbell investment strategy means weighting a portfolio towards the two extreme ends of an asset class with nothing in the middle. This generally means the investor ends up with a combination of lower-risk, lower-return and high-risk, higher-return holdings. Unlike a real barbell, the amount invested at each end of the portfolio isn’t necessarily the same. For example, you might have 80% in safer assets and 20% in riskier assets, depending on what will produce the best balance of risk and return. The traditional use of the barbell approach is in bond investing. A bond barbell consisted of very short-term bonds (which offer lower yields, but will mature…

“Michael and I got a Clover butter advertisement that bought this house.” Actor Judi Dench on how she and her husband came to afford their £8m farmhouse, quoted in the Daily Mirror “Outside the Twittersphere, how is [Tesla founder Elon] Musk a joke? He survived a brutal childhood in South Africa, escaped to the US and then made a fortune co-founding what became PayPal. It’s often said, dismissively, that Tesla relies on handouts, as if we’d all be car magnates if only we knew where to apply for subsidies.” Mary Wakefield, writing in The Spectator “During the pandemic there was no touring and no exhibitions. With those income streams cut off it was something like £1m in royalties. Take on Me is the biggest earner by far.” Pop group A-ha’s…

theguardian.com In a sign of the times, TV chef Jamie Oliver has moved into “crisis-budget cookery”, says Jack Seale. Jamie’s £1 Wonders promises to show us how to knock up toothsome grub that comes in at less than £1 per portion. “It is an awkward watch.” Where he goes wrong is not so much with the advice, some of which is clever and helpful, but with the tone. “We all know Oliver is a millionaire who could order from Nobu on Deliveroo every night, and he knows we know.” Oliver’s solution to this “bleak conundrum” is to portray his “poverty cuisine” as a fillip that will “keep you smiling darlin’”. The word “optimistic” features heavily, but the moment you “try to find joy in a standard supermarket mixed-pepper trio might…

One investment trust focused on smaller companies is Strategic Equity Capital (LSE: SEC). This fund is run by Ken Wotton with the idea of taking “a private-equity approach to investment in public companies”, using its position as either the largest or second-largest shareholder to engage with the boards and management teams of the firms that it invests in. It currently has a concentrated portfolio of 17 holdings, including teleradiology firm Medica and XPS Pensions Group. SEC Capital has an annual performance charge of 0.75% and has beaten the UK Smaller Companies sector over the past one, three and five years. The FP Octopus UK Micro Cap Growth fund is managed by Richard Power, who has been active in small-cap investing since the 1990s, with Chris McVey and Dominic Weller as…

Early 2021 saw the flotation of two trusts specialising in digital infrastructure, Digital 9 (LSE: DGI9) and Cordiant Digital Infrastructure (LSE: CORD). Both flotations were well received, raising £300m and £370m respectively, Since then D9 has issued another £600m of equity and Cordiant £385m, yet the shares have fallen to discounts of 9% and 17%. This is unusual in the infrastructure sector, especially when the quality of the assets, the expertise of the management team and the price paid for assets is taken into account. Half of Cordiant’s assets were still in cash at the end of September, but the cash was committed to a new investment awaiting regulatory approval. The fund generated a return of 10% in its first financial year to 31 March, ahead of its 9% target,…

Some companies sell things you cannot do without – healthcare and cleaning items never seem to go out of fashion, for instance. With consumers dependent on these crucial products, the manufacturers should be practically recession-proof. However, the story may not be that simple. FTSE 100 firm Reckitt (LSE: RKT), previously known as Reckitt Benckiser, is a case in point. Both the Reckitt and the Benckiser segments of the company (they merged in 1999) have a 200-year history, during which their portfolio of brands kept expanding. The group is split into three divisions: health (where key names include Clearasil, Dettol, Durex, Gaviscon, Nurofen and Strepsils); hygiene (Air Wick, Finish, Harpic and Vanish); and nutrition (infant formula brands Enfamil and Nutramigen). The products are leaders in their field and available in 200…

Lifetime individual savings accounts (Isas) were introduced to help people save for their first home or retirement. Anyone aged between 18 and 40 could open an account and save up to £4,000 each year. The money could grow tax-free, and you would also get a 25% bonus from the government too. “That 25% bonus has proved attractive, and it is thought that one million lifetime Isas have been opened,” says Rupert Jones in The Guardian. The money can be withdrawn once you have turned 60, or earlier in order to buy your first home. However, you can only use it on a property worth up to £450,000. That cap that hasn’t changed since April 2017, even though house prices have risen by 35% since then, according to the Land Registry.…

While the Bank of England felt compelled to intervene in the gilts market after the mini-budget in order to protect pension schemes threatened by a liquidity crunch, new data reveals that overall, schemes witnessed a marked improvement in their funding positions. The average defined-benefit pension scheme in the UK now has 103% of the assets it needs to fund pension promises made to members, analysis from consultant XPS reveals. The market volatility seen during October following the government’s ill-fated mini-budget prompted the Bank of England to step in to protect pension schemes with complex derivatives positions. These holdings are supposed to insure schemes against market movements, but the extreme volatility saw them suddenly become much more expensive. By contrast, for most defined-benefit pension schemes, the level of gilt yields in…

Oil and gas industry-services provider Hunting (LSE: HTG) has seen its shares bounce following an encouraging third-quarter earnings report, says Morningstar. The group specialises in sophisticated metal tools and components to help explorers drill for oil and gas, both onshore and offshore. Hunting is benefiting from the global rush to secure energy supplies and recent rises in the oil price. Hunting recorded Ebitda of $36m in the nine months to 30 September, up from $20.6m in the first six months of the year. A robust order book bodes well for 2023. The stock has gained 77% in the last year.…

Samuel Langhorne Clemens, later better known by his pen name Mark Twain, was born in Florida, a village in Missouri, in 1835, and grew up in the nearby town of Hannibal. His father died when he was 11 and Samuel became the apprentice to a printer, then later a steamboat pilot. After briefly fighting on the Confederate side in the American Civil War, he became secretary to the governor of the then Nevada territory, and dabbled in promoting a mine before finally achieving fame as a writer and journalist as Mark Twain, most famously for Tom Sawyer and Huckleberry Finn. What was the investment? Twain was interested in scientific development and was an early adopter of the then new technologies of the telephone and typewriter. He also came up with…

(£17.90, reduced to £15.85 each by the case of six half bottles, hhandc.co.uk; £100 in bond per case of six half bottles, farthinghoefinewine.com; £18.90, half bottle, diatomists.co.uk) It is International Sherry Week and I have a tremendous suite of wines for you to enjoy. A diatomist is the name given to one who masters the art of diatom arrangement, and diatoms are single-cell algae that create complex glass shells around themselves. Jerez was underwater five million years ago, which explains the unique soils rich in diatom fossils. Diatomists is a new range of exquisite sherries that focuses on terroir first as opposed to the bodega or winery and the solera systems and the skill of blending. These wines are incredibly pure and focused; I love every wine in the range.…

The Man Who Broke Capitalism How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America — and How to Undo His Legacy David Gelles Simon & Schuster, £20 Before the 1980s, it was generally agreed that companies were “a partnership with the public”, says Barry Ritholtz on his blog, The Big Picture. The company’s purpose was to produce products for customers and its employees were an essential asset. Over the next four decades, this consensus was overturned. Companies were then seen as “beholden to nobody”; superstar CEOs were their “laudable titans”, and the pursuit of shareholder value was all. Perhaps the most emblematic CEO of this new era was General Electric’s “Neutron” Jack Welch, who between 1981 and 2001 combined “financial shenanigans” with a ruthless attitude towards…

We spent last week on the road, down US 95 to Florida, and back. We had business to attend to and the thought of getting on another aeroplane was just too depressing to face. Instead, the wheels under our Ford F-150 pickup rolled along nicely. The cab was comfortable. And we could stop along the way to visit friends. Some observations. Thank God for the industrial revolution! Before railroads and highways, it would have taken weeks of hard travel to go from Maryland to Florida and back. Today, it is easy, and can be enjoyable. Virginia’s “Northern Neck” is a pleasant area. It’s far enough away from Washington to maintain a little dignity. There are a lot of pick-up trucks and churches. Many of the houses are old and the…

$107bn The sum the US Federal Reserve sent to the US Treasury last year in profits from the interest it earned on the $8.3trn in bonds and mortgage securities it holds, amounting to almost $1trn over the last decade. The Fed now makes a loss as the benchmark interest rate it pays banks to park their cash with it (3.75%-4%) exceeds the average interest (2.3%) it earns. $1.9bn How much in cryptocurrency has been spent in the past year on buying virtual land in the “metaverse” of various online virtual worlds, according to analysts DappRadar. £20,000 What the government spent on a 12-month contract with a research firm chaired by a former Conservative MP to monitor global media coverage of the monarchy in the wake of the Queen’s death, says…

The banana market is as hot as a flambé, says Laurence Girard in Le Monde. The soaring costs of freight, fertiliser, cardboard and fuel combined with the lack of availability of boats to ship the fruit have all caused the market to “seize up”. Banana industry insiders say that production is falling in Africa, Costa Rica, Ecuador and Guatemala, contributing to a global supply slump of roughly 20% and sending prices soaring. The price of a carton of bananas has almost doubled in a year to over €21. However, consumers are yet to feel the pain. France’s supermarkets consider cheap bananas a marketing tool, so the Leclerc chain is proudly offering six of the yellow fruit for “the modest sum of 89 cents” while declaring that “we’re putting prices on…

US two-year Treasury yields have been higher than their ten-year counterparts since July, a situation known as an inverted yield curve. Now the yield on the three-month Treasury bill has inched above that on the ten-year bond. Since the 1960s, “this part of the yield curve has inverted roughly a year before the start of a recession”. The yield curve plots the yields on different maturities of US government bonds. Longer-duration bonds usually carry higher yields, but if investors think that interest rates in the future will be lower than they are today – typically because a recession forces interest rate cuts – then the usual pattern can invert. Hawkish signals from the US Federal Reserve have driven the gap between the two-year and the ten-year to its steepest inversion…

Poland has more than the war in neighbouring Ukraine to worry about. Warsaw’s borrowing costs have more than doubled this year to levels not seen for 20 years, says Lex in the Financial Times. The country’s debt pile is “a relatively low 55% of GDP” but investors don’t like the direction of travel. The central bank called “an end to its tightening cycle last month” despite interest rates still being well below the rate of inflation. Annual inflation is running at almost 18%, but rather than trying to fix the problem the government is promising “pay rises and tax cuts despite a widening budget gap” ahead of elections next year. A dispute with Brussels over the rule of law also jeopardises the ruling party’s access to EU funds.…

Apple has warned that China’s ongoing zero-Covid policy means an outbreak of Covid is causing “havoc” at the factory of its main supplier Foxconn, says the Financial Times. It will almost certainly delay global shipments of its latest high-end iPhones. While Apple is trying to get around the problem by shifting production to other parts of China this is likely to take some time, as the Foxconn factory, which employs up to 200,000 people, “is responsible for 80% of its iPhone 14 production capacity”. If shipments of the iPhone are disrupted, this will provide “significant headwinds to revenue growth”, as the iPhone “powers about half of Apple’s global sales”. The disruption “could rank as the biggest Covid-era blow yet to Apple”, which, up until now, has been “mostly able to…

Hua Hong, China’s second-largest semiconductor maker, currently listed in Hong Kong, is to float on Shanghai’s tech-heavy STAR market, says Reuters. The initial public offering (IPO), set to be worth RMB18bn (£2.2bn), will fund the construction of a new chip plant in the east of the country. With the US imposing severe restrictions on the export of chips and associated equipment, the Chinese chip sector is bolstering its own production capacity. This IPO would be the STAR market’s third-largest after China’s top chipmaker Semiconductor Manufacturing International and biotech firm BeiGene, which raised RMB53bn (£6.4bn) and RMB22bn (£2.6bn) respectively.…

● Shareholders “have little to show” for the demerger of GlaxoSmithKline into pharma group GSK and consumer-products company Haleon earlier this year, says Nils Pratley in The Guardian. GSK’s share price has barely budged since the split took place. The problem is investors’ “sudden panic” over US lawsuits alleging that Zantac, an old heartburn drug, is linked to cancer. One analyst has estimated that if damages are awarded, the industry-wide cost could be up to £40bn, although it’s impossible to say what GSK’s share might be, since many other firms have held the rights to sell the drug. GSK is defending the claims, but CEO Emma Walmsley (pictured) has every right to feel frustrated. After all, in other respects “the day job of reinventing GSK after a lost decade seems…

“The Fed’s job is to take the punch bowl away as the party gets started, but this version of the Fed took the punch bowl away at 4am,” says David Rosenberg, the former Merrill Lynch economist who now runs his own firm. The US central bank waited too long to raise interest rates and battle inflation, yet it is now moving too far and too fast, he tells Marketwatch. Fed chair Jerome Powell “went from Bambi to Godzilla”, and the full effects of this haven’t been felt yet. The Fed “is consumed with elevated inflation and very concerned that it’s going to feed into a wage-price spiral even though that hasn’t happened yet… they are willing to push the economy into recession in order to slay the inflation dragon… It’s…

ez.substack.com Mark Zuckerberg thinks he’s pretty incredible, but one thing he is not is a good CEO, says Ed Zitron. The Facebook founder has over the last ten years or so transformed his firm from something you could use to catch up with your friends into a “social-engineering trap” that desperately tries to wring money out of you. The trap the firm finds itself in now, as revenues slide, is that the only way to make more money is to make the products worse until users give in and quit. Zuckerberg’s rescue plan was to change the company name to “Meta” and funnel billions into creating a “metaverse” – an interconnected online world – instead. Yet this is haemorrhaging money too, and all he has to show for it so…

Most commentators think that the major cause of the gilt-market crash was the Liz Truss government’s “mini-budget”. The fact that gilts have now recovered most of their dramatic losses is widely interpreted as confirmation that “Trussonomics” was the problem. While Truss’s policies were unwise, this perspective misunderstands how financial markets work. They are manifestations of leverage more than they are reflections of, or predictions about, the economy. In the book The Rise of Carry my co-authors and I argue that this leverage can mostly be understood in terms of carry. Carry trades are financial positions, trades or structures that provide positive returns over long periods unless “something bad happens”, when they can produce sudden severe losses. “Something bad happening” means a sharp rise in volatility. Think of a simple buy-to-let…

Activist investor Starboard has taken a 7.4% stake in Vertiv, a designer and maker of critical infrastructure for data centres and communications, says CNBC. Vertiv delivered “solid results” after it went public in 2020, but it started to miss forecasts when it failed to raise prices in line with inflation and costs. Former CEO Rob Johnson, who focused on growth rather than margins, has stood down, and executive chairman Dave Cote has promised investors “increased involvement and complete oversight of the company’s operations”. Starboard is likely push for a seat on the board to monitor management’s efforts to “close the margin gap”. Key rivals such as Schneider Electric and Eaton have operating margins that are twice as large as those of Vertiv.…

● You will soon be able to use cryptocurrency to pay for a pint of milk, says Lily Russell-Jones in The Sunday Times. Finance app Revolut will allow users to make purchases and pay with cryptocurrencies such as bitcoin, ethereum and dogecoin. Customers can use any of the 100 digital currencies supported by the app to pay for things in pounds or euros – the app will automatically convert them. Revolut’s customers will earn 1% cashback in the currency they use. ● Sales of woodburning stoves are booming as consumers wrestle with high energy bills. The Stove Industry Alliance reports a 40% increase in sales between April and June 2022. However, a wood burner may not save you money. “Smokeless fuel prices have risen by more than 50% this year,…

● Thousands of Britons who have retired overseas are facing hardship because their frozen state pensions are being destroyed by inflation. People moving abroad have their state pension frozen at the level it was at when they left the UK or first claimed their pension overseas, unless their new country has an agreement with the UK that says otherwise. Successive governments have resisted calls to change the rules – which apply in countries including Australia, Canada, and New Zealand – but with inflation up sharply worldwide, expatriates say the system is even more unfair. ● The amount of cash tied up in pension schemes with which savers have lost touch has reached £26.6bn, according to the Pensions Policy Institute, £7bn more than four years ago. The think tank believes as…

The stock of US used-car retailer Carvana (NYSE: CVNA) has slumped as sales have fallen from the record levels seen during the pandemic, says the Financial Times. The business became famous for selling used cars through multi-storey “vending machines”, which would deliver cars to customers after they had paid via the company app. However, the rise in interest rates to combat inflation has made Carvana’s car loans, which account for half of gross profits per unit, unaffordable for many consumers. Losses widened to $500m in the third quarter. Carvana’s shares are down by 97% in 12 months.…

The market’s search for a monetary “pivot” is proving as fruitful as “the hunt for Big Foot”, says Katie Martin in the Financial Times. Several times this year investors have seized on hints that an end to interest-rate hikes is at hand, only to be disappointed by high inflation and hawkish central bankers. Global stocks climbed by 7% in October, but this latest “halfhearted” bear-market rally has been spoiled once again by America’s Federal Reserve. Last week the Fed again raised US interest rates by 0.75% to a range of 3.75%-4%. Fed chair Jerome Powell warned that it was still “very premature to think about pausing” the current rate-hike cycle. Spoiling the punchbowl “Investors are their own worst enemies,” says Michael Lewitt on The Credit Strategist Blog. By seizing on…

Made.com, the once-fashionable online furniture seller, has been put into administration and its brand, website and intellectual property sold to retailer Next, says James Sillars on Sky News. The collapse of the company, which will lead to all 573 employees losing their jobs, comes after its shares were suspended last week. Co-founder Ning Li (pictured, right) – who stepped down as CEO in 2017 – said that he had made three bids to rescue the business and save at least 100 jobs, but all had been rejected. It’s a dramatic end for a company that “became a darling of the stock market” as sales boomed during the pandemic, but has struggled since. Yet it’s easy to see why Made’s shares have fallen from 200p at the flotation in June 2021…

Three to buy IMI The Telegraph Specialist-engineering company IMI’s stock is 27% cheaper than at the start of the year, which presents a buying opportunity for long-term investors. The company manufactures products that control the “precise movement of fluids” and “environmental, demographic and technological change” all present new areas of high demand for its products. Its valve technology is used in fertiliser spraying, to reduce vehicle emissions and in hydrogen storage. It has diversified away from the oil and gas industry, which provides it with further growth potential. The shares look undervalued. 1,300p SRT Marine Systems The Mail on Sunday Around 90% of the world’s trade is by sea, yet the ocean remains highly unregulated compared with the skies. Nevertheless, times are changing and “many governments are recognising that they…

In a move to tighten restrictions on non-European investment in critical infrastructure, Germany has barred the sale of the Elmos Semiconductor silicon-wafer plant to China-owned Silex Microsystems, says the Financial Times. Chancellor Olaf Scholz (pictured) has said there is a need to reduce dependence on China and to diversify supply chains. Germany has long followed a “trade-driven” approach to foreign policy, but this has come under attack in the wake of Russia’s invasion of Ukraine (Germany was heavily reliant on Russian energy flows). Germany follows in the footsteps of the US, whose sanctions are squeezing China’s chip industry. Yet the German government and industry remains “deeply divided” on how to deal with China, which is the country’s biggest trading partner, says Hanns Maull in Nikkei Asia Review. Despite Scholz’s shift…

One of the biggest traps in investing is thinking that the future will play out exactly like the past. Some investment strategists like to produce charts where they overlay recent trends with past events to imply that tech stocks have another 50% to fall or gold will shoot up 100%. Analyses like this always seem the equivalent of palmistry to me. History can offer ideas, but every bull market is different. What happens depends on trends in growth, inflation, monetary policy, politics, technology and more that will not repeat exactly. That said, markets often seem to follow long cycles. An asset comes into fashion or goes out of favour, and the resulting boom or bust lasts much longer than you’d expect. What did best in the last cycle generally doesn’t…

How Hunt can boost growth John Muellbauer Financial Times Chancellor Jeremy Hunt “urgently needs market-credible solutions that enhance long-term growth”, says John Muellbauer. One element should be fairer sharing between private landowners and society (ie, taxpayers) of the rise in the value of land that results from development permission. This could provide a “significant source” of funding for authorities to “help meet infrastructure and housing needs” while reducing “the constraints on growth that come from landowners and from the high prices of land with development permission”. First, the planning system should direct gains in value from change of use to be split 50/50 between the planning authorities and the landowner. Second, amend the 1961 Land Compensation Act to allow the authorities to compulsorily purchase land at a price close to…

stumblingandmumbling.typepad.com The Tories’ spending cuts are being presented as a technocratic necessity, says Chris Dillow. This is a “con trick”: they are a political choice. A big part of the trick is to say that there is a fiscal “black hole” that needs to be filled. Fiscal black holes, however, are not like stellar ones. They are not objective physical facts, but subjective man-made artefacts. They are products of economic forecasts, and any forecast depends on the assumptions made about economic growth, inflation and interest rates. It also depends on fiscal rules, such as shrinking the debt over the medium term. But this too is a choice. Why shrink it at all? Why isn’t mere stability sufficient? What does medium term mean? And shouldn’t the requirement to cut debt be…

■ Property funds are trying to sell more than £1bn of London commercial assets as “pressure mounts to meet redemption requests”, says the Financial Times. Real-estate funds run by Abrdn, Legal & General, M&G and Schroders are among those marketing at least 18 properties, and estate agents expect that some will have to accept “big discounts” to be able to sell. Fund managers say the sales are driven by portfolio rebalancing, but agents say that activity is far higher than normal. Property funds have faced increased withdrawals since former chancellor Kwasi Kwarteng’s mini-budget sent gilt yields soaring, making commercial property a “less attractive asset”. Investors pulled £184m from institutional and retail property funds last month, up from £89m in September, according to fund-flow tracker Calastone. Last week, Legal & General…

There was one key group of winners from the mini-budget: pension savers buying an annuity. Annuities are a product that will pay you a set income in return for a lump sum. They have fallen out of favour over the past decade. This is partly due to rule changes in 2015 which meant you weren’t forced to buy one on retirement, and also because rates have been pitifully low. But the sell-off in the bond market led to soaring yields on government bonds, or gilts. Insurers set their annuity rates based on the income they can earn from gilts. As a result, annuity rates hit a 14-year high in October. But as the market has calmed down, annuity rates have begun to slide. “The highest income available to a 65-year-old…

Fraudsters are targeting pension savers with a massive barrage of scam attempts. A survey conducted by pension provider Scottish Widows found that 18% of men had been targeted at least once by scammers, though the figure was lower among women, at 7%. Overall, 28% of savers are anxious about falling victim to a fraud. The research follows analysis by The Pensions Regulator (TPR), a watchdog responsible for policing parts of the pension industry. It said it had identified seven separate types of scam, variations of which are now commonly pursued by fraudsters. And while these scams are outright frauds – criminal acts by con men – TPR also wants savers to be on their guard against practices that might not be illegal, but which would still cause them harm. The…

This year has been dominated by volatility and uncertainty, from Russia’s invasion of Ukraine to the rampant inflationary pressures and aggressive tightening of monetary policy that followed, as well as the political turmoil that engulfed the UK. Our investment process is built around the forensic analysis of company cash flows, investors’ and corporate behaviour and market valuations. It is through this prism that we observe market reaction to the extremely unpredictable macroeconomic backdrop. What our anxiety indicator says We have an investor-anxiety indicator, which has been a very effective gauge of market inflection points and how we should then be positioned. For example, in early 2020 a spike in anxiety and a very attractive valuation signal for European markets prompted us to add a number of contrarian value investment opportunities…

“We already love the Maserati MC20,” says Jethro Bovington in Evo. We love it for its wild twin-turbocharged “Nettuno” V6 engine that “squeezes” 621bhp from just three litres. We love it for its shape and simplicity of interior. But most of all, we love it for its sense of identity. “Somehow, from the chaos of Maserati’s history the MC20 finds a pure, distilled essence of what a car wearing the Trident should be all about.” It has confidence, understatement and a sense of humour. Now, Maserati has gone one better by releasing a convertible version, called the Cielo, meaning “sky” in Italian. “It’s just really bloody cool.” The Cielo costs around £25,000 more than the MC20 coupé and adds 65kg to the weight. But the performance is pretty much the…

The Long Shot The Inside Story of the Race to Vaccinate Britain Kate Bingham and Tim Hames Oneworld Publications, £18.99 B ritain’s rapid vaccination programme is generally acknowledged to have been the one bright spot in its otherwise dismal response to the Covid-19 pandemic. Yet the road to success looked far from assured as the crisis was unfolding, as Kate Bingham, head of the Vaccines Taskforce, makes clear in her book. Most people were sceptical that a vaccine could be approved in a short time, or that a successful one could ever be made at all, and even when Britain became the first country to approve and deploy one outside of a clinical trial, the efforts were sniped at by critics. Beginning in April 2020, Bingham and her team had…