Innehållsförteckning för 1065 från MoneyWeek

Amazon Studios is moving production of its Lord of the Rings TV series to the UK from New Zealand, after spending nearly £337m on the first season, reports the Financial Times. The move is “a blow to the Pacific nation’s two-decade relationship” with the franchise: Peter Jackson’s original film trilogy, based on J.R.R. Tolkein’s novels, was filmed there and is thought to have boosted numbers of tourists by 40% between 2001 (when the first film premiered) and 2006. A Californian man is suing a waste management group and a home owners’ association (HOA) in Nevada after twisting his ankle and hurting his back while retreating from a bear he found hiding in one of their bins, says The Guardian. John Donaldson, who had rented a cottage in the area, is…

US housing is “red hot”, says John Detrixhe on Quartz. Prices soared by 16.6% in the year to May, according to the S&P CoreLogic Case-Shiller index, a record jump. And there is plenty of “fuel” to keep the rally running, from ultra-low interest rates to the “mountain of personal savings” that Americans accumulated during the pandemic. The surge is reviving memories of the mid-2000s housing bubble that ultimately caused the 2008 financial crisis. That market slump led to “chronic” underinvestment, says Dana Peterson on CNN. That sowed the seeds of the “woefully insufficient” housing stock powering today’s boom. Yet where the 2005-2007 boom and bust rested on “speculation” and “predatory lending”, today’s rally looks more secure. Housebuyers have better credit scores than those who leveraged up before 2007. Stricter regulation…

The latest GDP figures show that Britain’s V-shaped recovery is well under way (see page 10), says David Smith in The Sunday Times. But there’s a problem. Investment in new kit and technology is a key factor driving long-term productivity growth and greater wealth. Alas, the UK has long been an investment laggard among advanced economies. Uncertainty after the 2016 referendum halted an upswing; then the pandemic struck. Business investment is still 15.3% below pre-Covid-19 levels and made scant progress in the second quarter, despite the chancellor’s attempt to promote it with a “super-deduction” against corporation tax. Without a pickup in investment, the recovery will “be built on sand”.…

Egypt is preparing for a record initial public offering (IPO), says Mirette Magdy on Bloomberg. It plans to sell a stake in Administrative Capital for Urban Development, the state company behind the new capital city. East of Cairo, the hitherto unnamed new city is one of many multibillion “mega-projects” launched by president Abdel Fattah El-Sisi to bolster growth. The company’s boss Ahmed Zaki Abdeen has said the firm is “in the planning stage” and will decide on the size of the listing early next year, but that they hope it will be the country’s largest ever. El-Sisi said the company has around £100bn in liquid assets and as much as£4trn in total assets.…

In early 2020 if you asked someone what they thought of Big Pharma they would probably cite “allegations of predatory drug pricing” and links with “America’s opioid crisis”, says Harriet Clarfelt in the Investors’ Chronicle. But thanks to Covid-19 vaccines, a sector “previously resigned to negative airtime” has shown that it is indispensable. The drugmakers may yet squander the goodwill. While AstraZeneca has sold its jab at close to the cost price, others are raising their prices, says Sabah Meddings in The Sunday Times. “Pfizer is said to be charging the UK £22 a dose for booster jabs, compared with £18 previously.” Earnings have soared. The share price of Moderna has increased by more than 250% this year. Moderna’s chairman Noubar Afeyan (pictured) is “unapologetic”, pointing out that his company…

Only a few months after its controversial float, the food-delivery company Deliveroo may be heading off the market again. Last week, its German rival Delivery Hero revealed it had taken a 5% stake in the business, sending the shares almost back up to the price they were listed at. A full-scale offer is not imminent, but it is hard to understand why you would want to own a twentieth of the loss-making Deliveroo unless you were planning an offer for the whole business. If it does eventually take the business over, it will be far from alone. Last year, its rival JustEat was folded into the Netherlands-based Takeaway and the merged company is now listed in Amsterdam. And last week, the US-based Gopuff, operating in the fast-growing instant delivery market,…

Is inflation here to stay? It’s the biggest question in markets right now. At MoneyWeek, we’re of the view that the answer is “yes, probably” – we’re moving into a more inflationary era and central banks will be happy to tolerate it. However, not everyone agrees. Among the sceptics are James Montier and Philip Pilkington of US asset manager GMO, who have just published a paper titled “Inflation – Tall Tales and True Causes”. “When there is no inflation, you don’t need to be in a union” Montier and Pilkington don’t deny that inflation is and will be higher in the short term as the economy reopens. They draw an analogy with rationing in Britain after World War II. “Like a lockdown, rationing represents an arbitrary restriction of supply in…

Britain has a growing shortage of affordable housing. The number of new houses registered in the UK’s affordable and build-to-rent sector last year was 42,084, according to the National House Building Council – up just 20% since 2008. Part of the problem is that housing associations – which account for 94% of social housing in the UK – “are scaling back investment in new properties to focus on fire safety and energy efficiency”, says Ben Fry, manager of Residential Secure Income (LSE: RESI). That why “the government is keen to support new entrants to the sector” – which is where his fund comes in. Two growth markets RESI, which listed in 2017, owns a portfolio valued at £346m, including 2,222 retirement homes and 549 shared-ownership homes (plus 289 houses leased…

The era of dictator inflation Péter Krekó Foreign Policy The geopolitical order is in flux and democracies are “losing ground globally”, says Péter Krekó. But perceptions are outrunning the reality. Russia, China and other authoritarian powers are adept at “puffing themselves up” to look more powerful than they really are. Call it “dictator inflation”. Remember the Kremlin’s much publicised meddling in the 2016 USelection? As opposition leader Alexei Navalny observed, Putin “can spend $500,000 on Facebook ads and the whole establishment of a huge Western country will go nuts”. The investments are minimal, but they gain the front pages and power. More recently, Russia’s Sputnik vaccine has allowed it to pose “as the world’s saviour”, even as its own healthcare system is collapsing. China also exaggerates its global role: in…

conversableeconomist.wpcomstaging.com The Congressional Budget Office has just published data on income inequality in the US for 2018, says Timothy Taylor (it takes years to pull the data together). It confirms the well-known fact that inequality of income has expanded in recent years, with the biggest gains going to the top earners. However, when you drill down into the details, a different picture emerges. Average federal taxes for the top 1% and the top fifth haven’t changed much since the 1990s, but they have fallen for the rest of the income distribution and especially for the bottom quintile. In other words, the share of taxes paid by those with higher incomes has risen. And the growth in income for the poorest fifth is actually much the same as for the richest…

“Put 10% of your portfolio in gold and hope it doesn’t go up,” says a Wall Street adage. Never has the advice seemed more apt than during the past 12 months. Stocks have been almost unstoppable. America’s benchmark S&P 500 index is about 40% higher than it was a year ago. The UK mid-cap FTSE 250 has done almost as well. Even the FTSE 100 blue-chip index has jumped – and by nearly 1,000 points. And yet gold, at around $1,790 an ounce, is down by 15%, and silver by more. A year ago, gold was north of $2,000/oz. Silver was testing $30/oz. Today gold is at $1,790/oz; silver, $23/oz. Find me another asset that has fallen in price with all the quantitative easing, or money printing, that is going…

Smart gas and electricity meters sound simple. The devices send regular wireless updates about your energy usage to your supplier. That means an end to the hassle of estimated bills and manual meter readings. They also provide you with an “in-home display”, asmall screen that lets you track your energy usage and costs in real time. As well as being a constant reminder to keep the lights dimmed, they can help you spot problems early: it’s better to realise the old boiler is inefficient and needs replacing now, rather than when you get a huge bill later. But the rollout has been far from smooth. The government wants 53 million of the things to be installed by the end of 2025. Energy suppliers face fines if they fail to meet…

• Supermarket giant Tesco has left the government-backed Prompt Payment Code, undermining confidence in the voluntary scheme, which aims to ensure small businesses’ invoices are settled promptly. Tesco left the scheme in June, weeks before an overhaul of the code, which now requires signatories to pay 95% of invoices from companies with fewer than 50 employees within 30 days, down from 60 days previously. The supermarket said it did not classify suppliers by number of employees, so it could not comply with the changes. The government insists that the code, to which around 3,000 large businesses still belong, is helping to confront the late-payments crisis that has dogged many small companies, but critics say formal protections in law are required to protect them. • Almost two-thirds of small businesses are…

Shares in online supermarket Ocado (LSE: OCDO) have sunk by a fifth over the last year. The online grocer was forced to cancel thousands of orders after a collision between robots at one of its warehouses last month, says Jasper Jolly in The Guardian. The shares are still up on their pre-pandemic level, thanks to the rise of online shopping. Sales jumped by almost 20% year-on-year in the six months to the end of May. Now, however, higher short-term costs and the easing of restrictions, which could send some customers back to bricks and mortar shops, could hamper profit growth.…

2020 Dog Point Vineyard, Sauvignon Blanc, Marlborough, New Zealand £14.95, thewinesociety.com Ivan Sutherland and James Healy met at Cloudy Bay over three decades ago. Along with fellow wine legends Kevin Judd and David Hohnen, these visionary gentlemen put the sauvignon blanc grape variety on everyone’s lips. Long before Cloudy Bay launched in the mid-Eighties, Ivan and his wife Margaret were among the earliest Marlborough wine industry pioneers planting grapes in the late 1970s. After leaving Cloudy Bay, the Sutherlands and Healys set up Dog Point Vineyard and launched this stellar label in 2004. I have followed this brand from day one, and they have only ever released exemplary wines. With this extraordinary history, pioneering spirit and genuine influence on the whole of the wine world and its drinkers, it was…

£2.3bn How much the government spends each year on keeping old computers and software systems going rather than updating them, according to a Cabinet report. An annual total of £4.7bn is spent on IT across all departments. £163,000 The bill for the government’s Union Jacks, bought this year and last, says The Guardian. It accounts for 85% of the British flags bought over the past four years, with the Ministry of Defence (£118,000 since 2018) and the Department for Digital, Culture, Media and Sport department (£54,420 last year), the most outwardly patriotic. €235m The last asking price for the late Microsoft co-founder Paul Allen’s superyacht, Octopus, before it was sold for an undisclosed sum. The eight-deck “explorer” yacht, which is designed to travel long distances, was originally offered for €295m…

Blue Origin, the firm owned by Jeff Bezos (pictured), is suing Nasa over its decision to award Elon Musk’s SpaceX a $2.9bn lunar lander contract, exacerbating “tensions” between the world’s two richest men, says The Times. Nasa awarded SpaceX the contract to build a spacecraft that will take US astronauts to the moon for the first time since 1972. The space agency had hoped to offer multiple contracts to develop two competing lunar landers, but awarded just one due to a lack of funding, prompting complaints of unfairness from Blue Origin. While a US government watchdog has backed Nasa’s decision, Blue Origin claims there were “fundamental issues” with the award process and that its lawsuit is “an attempt to remedy the flaws”. It has also claimed that SpaceX’s plan to…

When does “transitory” inflation “become persistent?” asks The Wall Street Journal. The US Federal Reserve has spent the year insisting that soaring prices are a “transitory” effect caused by reopening. Yet US consumer prices rose by 5.4% in July compared with a year earlier for the second month running. Energy prices are rising. Ordinary workers are being hurt. “Real (after inflation) average hourly earnings have declined for seven consecutive months.” This week we learnt that UK consumer prices rose by 2% year-on-year in July (see page 10). Price pressures pause Some of the data supports the transitory case, says The Economist. Month-on-month US inflation fell to 0.5%, down from 0.9% in June. The inflationary spike has arguably been concentrated in areas stressed by the reopening, such as used cars and…

House prices are not really wealth... A rise in house prices is... another way of saying that the cost of housing has risen... If the price of your house rises, how can you benefit? [You can] trade down. But this means consuming less housing. You’re better off –but only in the same way that you’d be better off if you consume less food... This point applies to landlords. They only profit from higher house prices when they cash out. But where do they put their money? Either back into housing, for which they must pay more, or into [low-yielding] cash and bonds where interest rates and hence future incomes are lower... [H]igher house prices... make us poorer by depressing productivity (especially of commuters), or increasing economic instability... imagine half the…

Three to buy Ocean Outdoor The Mail on Sunday Outdoor advertising “had limited appeal” in 2020: turnover at ad agency Ocean Outdoor fell by 28% to £86m. But the firm “used the year wisely, bedding down 2019 acquisitions, renegotiating contracts with landlords and investing in the future”. Demand is recovering quickly and profits of £14.5m are expected next year, with “substantial gains” pencilled in for the years to come. The firm specialises in digital advertising, one of the fastest-growing subsectors $8.38 Serco Investors’ Chronicle The Covid-19 Test & Trace contract made up 17% of public-sector outsourcing group Serco’s revenues and led to a 31% increase in operating profit in the first half of 2021. Sales are expected to be lower in the second half of the year as Covid-19 “dissipates”,…

• Tired of Chinese tech? Try trainers, says Jacky Wong in The Wall Street Journal. Shares in local brands such as Li-Ning and Anta have soared amid a “five-year mass fitness” programme: China wants its citizens to get in shape. A backlash against foreign labels has also helped. Chinese shoemakers have slowly shed their image of being “cheap knockoffs”. They can also draw on a better understanding of what appeals to local consumers. Nike and Adidas are still in the lead, accounting for 43% of the Chinese sportswear market between them. But they “should be watching their backs”. • The UK defence sector is being sold off to Americans, says Nils Pratley in The Guardian. Ultra Electronics and Meggitt are the latest firms to be on the verge of takeover.…

• BBC newsreader Huw Edwards says he is angry that the broadcaster revealed his salary of £529,000, says The Sun. Edwards (pictured), who last year saw his pay cut from £599,999 in an attempt to address the gender pay gap, believes the BBC was under pressure to release the details of anyone paid more than £150,000. Edwards doesn’t think his salary is anyone’s business but his own. • Jensen Huang, founder and chief executive of chipmaker Nvidia, has taken advantage of a spike in his company’s share price to offload $160m (£115m) worth of stock, reports The Times. Nvidia’s share price had been driven up by news of a$40bn bid for UK chip designer ARM Holdings, currently owned by Japanese conglomerate SoftBank. But the sale could be in doubt, as…

A variable interest entity (VIE) is a type of financial vehicle that has been in the news recently amid the Chinese government’s crackdowns on certain stocks and business areas. The VIE structure – which underpins the majority of overseas-listed shares in big Chinese tech stocks, such as Alibaba – is used to get around Chinese rules that prevent foreigners from owning companies in key sectors. Here’s how it works. Say a Chinese tech company wants to list in the US to raise funds. It would establish a VIE structure, which involves setting up an offshore holding company that enters into a series of contracts with the Chinese company itself. The end result is that investors do not own shares in the underlying company. Instead they own the offshore firm, which…

Dan Loeb’s Third Point “is a prototypical activist investor”, says The Wall Street Journal – but now it is “the target of an activist campaign of its own”. Third Point Investors, a $0.9bn (£0.65bn) London-listed fund managed by Loeb, is being targeted by Asset Value Investors (AVI), which holds a stake of more than 10%. AVI, which manages around £1.5bn, began “clamouring for changes” in May, saying that the fund was trading at too large a discount to net asset value and the board’s plan to continue share buybacks and to invest more in unlisted companies “didn’t go far enough”. The board has rejected AVI’s suggestions for regular tender offers, but the fund’s discount to NAV has shrunk slightly from 17% to 12% since the activist campaign began.…

“I feel that fashion is one of the only industries where women are more empowered than men — female models are paid more than male models, the consumers are predominantly female, it is a very female-centric industry. And so, in a strange way, I felt very empowered.” Model Lily Cole (pictured), in The Sunday Times “Not many banks want to take a punt on me. I haven’t had the best results with finances.” Duchess of York Sarah Ferguson, quoted in the Financial Times “Fraud was not just the family business. It was a way of life. Nothing that’s alleged to have gone on surprises me.” Mary Trump, niece of the former president, on the New York state tax investigation into the Trump family’s finances, quoted in The Times “Beginner’s luck…

ofdollarsanddata.com The self-help shelves groan with books full of advice about how to improve your career, says Nick Maggiulli. But there’s one ruling idea that applies to everyone: “reduce uncertainty for others as much as you can”. People hate uncertainty. One study showed that people experienced far more stress from the prospect that they might get an electric shock than when they knew one was definitely coming. This is why Amazon is so popular –it has reduced the uncertainty you experience when you order packages. The single best investment the London Underground ever made to increase passengers’ satisfaction was to put up signs telling them when the next train would arrive. Similarly, in your work life, if you can make other people’s lives less uncertain, they will “sing your praises”.…

The post-lockdown recovery has been a relief to struggling small businesses, but many now face a new problem. They are being asked to repay funding provided by the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back loans, the government-backed emergency aid packages. By some estimates, as many as two-thirds of firms may struggle to make these repayments, although official statistics suggest default rates, for now at least, are lower than the most pessimistic predictions. The state stands behind CBILS and Bounce Back loans, but this protection is for lenders, rather than for businesses. If your firm can’t repay, the government will pick up a large portion of your lender’s losses, but that doesn’t help you. Take action as soon as possible if you see a crunch coming. For small…

As we come out of the pandemic, we are identifying numerous structural-growth opportunities in several key areas. This comes as governments deploy sizeable fiscal stimuli to support the economic recovery. These target global infrastructure programmes, which could create attractive long-term opportunities in sectors such as green infrastructure, robotics and automation, and healthcare infrastructure. Green infrastructure developments focus on renewable energy, electric transportation, energy efficiency and greener buildings. Robotics and automation trends should accelerate, with companies making their manufacturing capacities and supply chains more resilient. Healthcare infrastructure is likely to be channelled into upgrading physical care facilities and extending digitalisation to improve patient care. “Air compressors are crucial to sectors including cars and semiconductors” The latter implies more remote patient monitoring and virtual care. We seek out firms with sustainable franchises,…

• No wonder the chancellor, Rishi Sunak, is the golden boy prime-minister-in-waiting, says Richard Littlejohn in the Daily Mail. “It’s easy to buy popularity when you are borrowing money to give away.” Sunak (pictured) was rightly praised for preserving jobs, but that might not last when furlough ends next month. Amid attempts to recoup the borrowed billions through tax rises and tighter public spending, “he can expect abarrage of abuse along the lines of ‘typical heartless Tory cuts’”. We have no idea if he is any good as a chancellor. He’s never delivered a proper Budget. “Rishi’s image is fashioned upon a carefully cultivated social-media presence and his recent ability to hose down the country with free money.” Take that away and all you have is a 12-year-old boy in…

Alexia Inge, “a model turned entrepreneur”, is thought to have made “tens of millions” after she sold her upmarket online cosmetic business, Cult Beauty, to The Hut Group for £275m, reports Ashley Armstrong in The Times. Inge (pictured) said that early seed investors, including friends, family and ten senior staff, had received “life-changing” sums as a result of the deal. E-commerce giant Amazon has overtaken rival Walmart as the largest seller of consumer goods outside of China, report Karen Weise and Michael Corkery in The New York Times. A boom in online shopping saw customers spend more than $610bn via Amazon in the 12 months to June, versus $566bn for Walmart in the year to July. China’s Alibaba remains the world’s biggest seller.…

When it comes to pulp, paper and packaging, Finland’s Stora Enso is the top choice for investors, says WirtschaftsWoche. Sales rose by 13% to €4.9bn in the first half, while net income climbed by a fifth to €353m. There should be years of structural growth ahead now that the global economy is recovering and the trend towards environmental sustainability is gathering pace. Prices for raw materials are on the rise, but the firm should be able to compensate for the cost by charging higher prices. The group is working on anew recycling process for drink-cartons with Tetra Pak and is producing paper-based bottles as an alternative to glass and PET plastic. The stock yields 2%.…

The world’s biggest listed miner has announced plans to leave the FTSE 100. The move by Anglo-Australian operator BHP comes as part of a restructuring that will also include the sale of its oil and gas business. The £128bn behemoth is the second most valuable firm on the London market after AstraZeneca and an important source of dividends for British investors. It has been enjoying booming demand for its iron ore, reporting the best profits in nearly a decade and a record £7.2bn final dividend. BHP is “at the heart of the global energy transition”, say Louisa Clarence-Smith and Ben Martin in The Times. It is exposed to metals such as copper, a prime beneficiary of decarbonisation, but about 10% of earnings still come from the oil and gas business.…

“America’s chaotic departure from Afghanistan [shows] horribly inadequate foresight and planning… [but the]… economic case for pulling out is clear,” says Richard Beales on Breakingviews . The war has cost $2.3trn and the lives of almost 2,500 US soldiers. Add in conflicts such asIraq and Syria and the financial harm alone is more than $5trn. It’s easy to see why the public is tired of the outlay and why politicians felt that 20 years of involvement in the region had to end. Biden’s successors may thank him for making the hard decision. “But because politics and American power are about more than financial costs and benefits, he may still regret it.” Indeed, one of the biggest costs of leaving is to “the credibility and the reliability of the US”, says…

The shortage of hauliers and delivery drivers is driving up pay in the sector, with many companies now offering new drivers starting bonuses. Tesco is offering £1,000 to lorry drivers who take the wheel before 30 September, reports the BBC, while Dixons Carphone is giving new and retained drivers £1,500, says Motor Transport. And it’s not just the private sector. Somerset Waste Partnership isgiving new recruits £1,000 too. Raising the bar are Marks & Spencer and Poundland, both of which the Retail Gazette says are offering up to £2,000. And John Lewis has said it will increase wages by “up to £5,000”, says The Daily Telegraph, aswell as offering a £1,000 sign-on bonus. “There’s a shortage of 100,000 drivers nationally and that is not going to disappear overnight,” says Mickey…

Richard Bernstein, chiefexecutive, Richard Bernstein Advisors “We are right in maybe the biggest bubble of my career,” Richard Bernstein, the founder of Richard Bernstein Advisors and former chief investment strategist at Merrill Lynch, tells CNBC’s Trading Nation. Bernstein blames aggressive monetary policy. The Federal Reserve (and other central banks) have been buying long-term government bonds to drive down borrowing costs. A side effect has been to push up what Bernstain describes as “long-duration assets”. Long-duration assets are those whose payoffs are weighted heavily towards the future. This makes them ultra-sensitive to falling interest rates, which boost the present value of future profits relative to near-term ones. Traditionally the term applies to long-term bonds, but Bernstein applies it to assets such as big tech stocks, bitcoin, and “Reddit rebellion stocks” –…

■ Investment-trust dividends have fallen for the first time in a decade, according to shareholder registrar Link Group. Payouts fell by 3.1% to £891.9m in the first half of 2021 – a £29m decrease from the same period in 2020 – even though UK companies raised first-half dividends by 8% as they started to reverse the cuts of 2020. Changes in investment-trust dividends lag behind the market because they are paid out of company dividends the trusts have received over the past year. Still, the drop is “barely a blip” compared with the underlying dividend decline during the pandemic: UK dividends fell by 34.6% between Janury 2020 and June 2021, while global dividends were down 5.9%. The “modest” fall is due to the £2.13bn in reserves that they had accumulated…

mises.org US president Joe Biden’s “ridiculously high” spending proposals will require “equally ridiculous” tax rises, says McCoy Dorr. According to the Tax Foundation, Biden’s proposals will take the top federal rate on capital gains to 43.4%. After accounting for state and local rates, the average top rate will be 48%, up from 29%. Progressives will see this as a tap on the flows of wealth to the richest, which can be redirected to the needy. What they do not see is the long-term effects. A capital-gains tax alters incentives and hence business and investment decisions –it becomes more costly to move capital from relatively inefficient uses to more efficient ones. It hence prevents flows of capital moving to those places where it might better provide goods, services and jobs, and…

Investors received a rude shock last month when Beijing abruptly changed the rules for US-listed Chinese education companies. With one stroke, shares in TAL Education and New Oriental Education and Technology became almost worthless. The Nasdaq Golden Dragon index of Chinese stocks listed in New York fell to half its peak. Investors suddenly realised their legal claims on these foreign listings were extraordinarily weak. Foreign investments on the mainland may not be much safer. Chinese companies listed in the US used a complex offshore structure known as a variable interest entity (VIE), which allowed them to evade restrictions on foreign ownership of Chinese media and technology groups. VIEs were always a questionable arrangement, neither condoned nor explicitly repudiated by Beijing. Western investors received dividends from the mainland company, but had…

The government’s Recovery Loan Scheme (RLS) is attracting little interest, according to small-business advisers, even though it offers loans of up to £10m to firms attempting to recover from Covid-19. Reports suggest demand is proving limited because its terms aren’t especially generous. Certainly, the RLS, which replaced the emergency CBILS and Bounce Back loan schemes earlier this year, is a less attractive option than its predecessors. It offers loans of up to £10m, underwritten by the state, but repayments begin straight away, and lenders can charge up to 15% a year. That compares unfavourably with the CBILS and Bounce Back schemes, where businesses did not have to begin making repayments for a year, and where interest rates were capped at much lower levels. And while the new scheme can be…

Joules (Aim: JOUL) sells clothing and homeware. The group recently posted positive results for its 2020-2021 financial year: sales increased by 4.3% to £199m. In-store sales were down to £36.6m from £63.2m, but online sales increased by 48% to £122m, offsetting the impact of store closures owing to the pandemic. The group also reported an increase to 1.7 million active customers from 1.4 million the year before, and “record brand awareness”, which appears to be a result of its online presence. Impressed investors have sent the stock soaring. It is 176% up on 12 months ago.…

Charles Ponzi was born in Italy in 1882 and emigrated to the US in 1903. For the next 16 years he held various menial jobs and served time for various crimes, including fraud. In 1919 he set up a business to exploit the difference in price between international postal coupons by buying them in Europe where they were cheap and redeeming them in the US. He raised money from the public by promising them he would double their money within 90 days (quickly changed to a 50% return in 45 days). How did the fraud work? Ponzi quickly realised that, although the arbitrage opportunity was real, delivering the expected returns was a practical impossibility since it would involve buying more coupons than could be transported. Even satisfying the original 18…

The $1trn US infrastructure bill and the $3.5trn “human infrastructure” budget has moved along in Congress… and stocks hit new record highs following what was reported as a “blowout” jobs report. That is to say, we are making progress. The delusions grow more extreme. The bubble gets bigger. And the day that it will all blow up comes closer. “People come to think what they need to think when they need to think it” is one of our old dicta here on the back page. So it is that people whose real (that is, after inflation) incomes are falling come to believe that they don’t really need to own anything anyway. They can get a job – and depend on the feds to maintain full employment. And if they need…