Innehållsförteckning för 1092 från MoneyWeek

This is not a normal environment – and there is no reason to think it should be. The last decade has seen a variety of extraordinary monetary experiments and the last two years have jumped every possible shark. We’ve seen rolling economic shutdowns, a new level of quantitative easing (QE), helicopter money, insanely-low interest rates, the biggest recession ever, and of course, the biggest recovery ever. “The last two years have seen us jump every possible macroeconomic shark” We’ve watched vast fortunes being made in tech stocks and in crypto – and of course, in housing. Now we have supply crunches, the (fast) return of inflation, a shift in power from capital to labour, and one hell of a pivot from behind-the-curve central banks. With all that in mind you…

A collection of vintage cars owned by racing engineer Ewen Sergison was badly damaged when Storm Eunice flattened his barn, just half an hour after he got home from a “terrifying” flight from New York to Heathrow in high winds, says the Daily Mail. A £30,000 Aston Martin V8 Vantage, two £20,000 TVRs and a £15,000 Mini Marcos were among those crushed, although a £350,000 Alfa Romeo GTA belonging to a customer fortunately escaped serious harm. Accountant Graham Wildin faces a £297,630.65 tax bill for a luxury “man-cave” that he must also knock down, says The Times. Wildin claimed his private cinema, bowling alley and casino were tax deductible expenses for a holiday-let business, but a tribunal disagreed. Last year, the Court of Appeal said he must demolish the building,…

“British shares are making a comeback”, says Sam Benstead in The Telegraph. Rising interest rates and commodity prices mean global investors are selling off tech stocks and rushing into sectors, such as mining, energy and finance. That is London’s speciality – those three industries account for 43% of the FTSE 100 index. The UK market is flat since the start of the year. That may not set the pulse racing, but it is much better than the S&P 500 (down 9%) or Germany’s Dax (down 8%). Still, a short run of outperformance can’t disguise the fact that the FTSE 100 is barely higher than it was on the eve of the pandemic, compared to a 44% gain for America’s Nasdaq tech index in the same period, says Katie Martin in…

South Korea is usually classed as an emerging market by stock index providers, while Japan is a developed market. Yet this is for technical market-access reasons, as this chart makes clear. While Japan still has around 25% higher income per head in nominal terms, Korea overtook Japan in 2018 in purchasing power parity (PPP) terms (a measure that corrects for the cost of living). Japanese productivity growth has struggled to keep pace with other developed economies since the mid-1990s, says Richard Katz on Substack, while Korean productivity has kept rising. Korea also outperformed Japan during the pandemic: the IMF forecasts that by next year Japan’s GDP will be just 0.2% above pre-Covid-19 levels, while Korea’s GDP will be 6% larger.…

• ”Roblox’s virtual worlds are thriving, but its metaverse premium is deflating,” says Robert Cyran on Breakingviews. The online game platform for children had one-third more users in January compared to a year ago, but purchases of virtual currency were flat. Children returning to school in the US and the UK may be partly responsible, reckons CEO David Baszucki: most spending comes from those two markets. The news knocked about 25% – $10bn – off its market value, yet Roblox is still richly priced and leaves “little room for doubt”. If it “can’t wring more dollars out of established markets” or turn new ones into big spenders, “its metaverse premium could suffer a further real-world downgrade”. • US food-delivery leader DoorDash “had investors eating out of its hand” last week,…

Chinese rural e-commerce platform Huitongda has raised HK$2.2bn (£208m) in an initial public offering (IPO) after pricing shares at the bottom of its range, says Bloomberg. The firm had hoped to raise almost four times as much last year, but put plans on hold amid choppy markets and a regulatory crackdown. Huitongda, which sells items such as electronics and fertiliser to wholesalers and retailers, had revenues of ¥46.5bn (£5.4bn) in the last nine months, up by a third year-on-year, says Reuters, but gross margins were just 2.6%. Online retail giant Alibaba has a 17% stake, while six cornerstone investors, including TV maker Skyworth, bought around half the shares offered in the IPO.…

Two long years after the first cases of Covid-19 were reported in the UK and the pandemic is now, to all intents and purposes, over. With infection rates down and vaccination reducing the number of deaths and hospitalisations, we can accept that Covid-19 is, for most of us, a mild virus that will probably circulate forever. We can get back to normal again. Yet companies are still struggling to do so. Many offices are still half-empty and staff reluctant to go back to their desks five days a week. Businesses are still fobbing off their customers with lame “because of Covid-19” excuses. The public sector is still operating in second gear, with simple tasks such as driving tests taking months to book. Many universities are still teaching remotely, trade shows…

Central banks have admitted that they can no longer describe inflation as “transitory” with a straight face. But they still seem to be confident that they can tackle it without too much trouble. A new paper from Vincent Deluard, analyst at US financial services group StoneX, titled Inflation is inflationary, suggests it’s not as simple as that. First, Deluard looks at US consumer price index data going back to 1871, a period during which inflation averaged 2.2% a year. Overall, he finds that inflation follows a “random walk” pattern. In other words, you cannot reliably predict its future path by extrapolating from today’s data. However, once inflation goes above 7%, “things get weird”. First, inflation becomes “a lot less stable when it is elevated”. Second, “high prices beget higher prices”.…

Time to lure back the boomers Helaine Olen The Washington Post The “Great Retirement of the baby boomers” has the power to “upend” the US economy, says Helaine Olen. Goldman Sachs estimates that more than half of those who left the workforce during the pandemic are over 55. Employers are dependent on this “outsize” cohort, and their retirement is contributing to worker shortages in sectors from nursing to hospitality. This is a “significant reversal”. Pre-pandemic, many Americans said they wanted to work “well past the traditional retirement age”, not just because so many can’t afford to retire, but because work provides a sense of purpose. This was a boon for the economy, helping to compensate for falling immigration and declining birthrates. The “sudden exit” of this cohort, on the other…

bam.kalzumeus.com Since “the iPhone hit pockets”, there have been at least five innovations in how we make payments, says Patrick McKenzie. The latest – Buy Now Pay Later, or BNPL – has provoked controversy. BNPL allows customers to receive certain consumer goods (clothes and make-up, say, but not food or cars) up front and pay what is owed in instalments, at 0% interest. BNPL providers make their money from retailers, who pay more than they do for debit and credit cards, partly in the hope that they will make more sales as a result. So customers get what they desire, retailers get paid immediately and increase sales, and the credit risk is split between the BNPL provider and its financial partners. What’s not to like? Worrywarts see, in the social…

For someone who likes adventurous ideas, I must admit I’m nervous mentioning collateralised loan obligations (CLOs) in a publication aimed at private investors. These securities are complex, they can be volatile and they are largely held by institutions. They are a high-risk, high-return investment that is the first to get burnt in a crisis. However, for the most part CLOs have survived the global financial crisis (GFC) and the pandemic intact, and have gone on to prosper. If you understand the risks and want a robust income in this inflationary environment, listed CLO funds could be worth exploring. Slicing up risk CLOs are bundled-up loans that allow investors to buy corporate credit risk, largely through senior loan portfolios structured into several debt tranches plus a bottom layer of equity. Different…

It’s confession time. I have finally come out as a fully-fledged tree-hugger. Aged ten, I planted my first tree (a eucalyptus), bought a polecat ferret (I had confused endangered polecats with polecat ferrets) and gave my first eco-donation to Save the Whales. These were not things to declare openly, being un-cool. Later, like many people, I was sceptical over the more dramatic claims made by climate doom-mongers. But the simple observation of the loss of so many animal and plant species combined with visible environmental destruction forced me to accept that change is needed. Remedial environmental action is long overdue, but my super-cynical City background makes me certain that government programmes have little chance of being effective. Yet there are four good reasons to be cheerful and to believe that…

If you have excess savings and interest-bearing debts, it will almost always make sense to use the savings to pay off the debts. To see why, assume you have £1,000 in an account earning 0.7% interest, but you owe £1,000 on a credit card at 19.9%. Over a year you would earn £7.02 interest on your savings, but you would pay £93 interest on the credit card even if you paid off £100 a month. So the most profitable option is to use your savings to clear the debt and avoid the £93 interest. The only form of debt that most sensible savers may leave unpaid while also keeping a substantial cash balance is mortgage debt. Mortgages are a long-term loan with a comparatively low interest rate. The amount you…

Many small businesses face the same dilemma: improved performance since an easing in the Covid-19 crisis has lifted confidence and encouraged expansion – but committing to investment in growth is difficult at this time. Around 40% of small and medium-sized enterprises want to hire new staff before the end of March, but almost two-thirds are worried about spiralling inflation, according to recent research by Barclaycard. “Alternatives to permanent staff give you more flexibility” These are uncertain times for many business owners. If they hire new permanent employees to take advantage of growth opportunities, will they regret that decision in a few months’ time? If taking on new staff doesn’t drive revenue growth quickly enough, firms may struggle to cope with cost pressures. The worst-case scenario is they end up having…

We invest in exciting, fast-growing and innovative Asian companies. This means going on a journey in which we find and research companies in Asia (excluding Japan) that are trying to do something new and difficult and that are able to double sales and/or profit within three to five years. Usually, such a rapid pace of growth also provides an outsized return, enabling the share prices of the companies we invest in potentially to double within three years and triple within five. We call this our growth-squared philosophy. Currently, we believe there is a structural shift under way in semiconductors. On the demand side, the digitalisation of consumer electronics (smart products such as robotic vacuum cleaners), their connectivity to the internet and the soaring preference for electric over traditional petrol-fuelled vehicles,…

“The Enigma is the world’s largest cut diamond and sold for £3.2m” Provenance is usually one of the first things auction buyers want to know. But when it comes to the Enigma, a 555.55-carat Fancy Black Natural Colour diamond that went on sale with Sotheby’s earlier this month, that is a mystery. The prevailing theory is that it came from outer space, either from a meteoric impact or from a diamond-bearing asteroid that collided with Earth, says Sotheby’s. That event probably took place some time between 2.6 billion and 3.8 billion years ago. What we do know is that it is big. The Guinness Book of World Records certified the Enigma as the world’s largest cut diamond in 2006. Black diamonds are only found in two places on Earth –…

Hollywood star Brad Pitt is suing his ex-wife, Angelina Jolie, after she sold her share of their Château Miraval wine estate to a Russian oligarch, says Sky News. Pitt and Jolie bought the Saint Tropez property in 2008 for €25m and were married there in 2014. Since then, Pitt has transformed the estate into a successful vineyard that has become “a multimillion-dollar international success story and one of the world’s most highly regarded producers of rosé wine”, claim papers filed by his lawyers in Los Angeles. The vineyard, which is now said to be worth around €140m, reportedly has revenues of $50m per year, says Agence France-Presse. But Jolie has now sold her 50% share to a company controlled by Yuri Shefler, who owns the rights to Stolichnaya vodka and…

“There is a whiff of 1914 to the crisis in Ukraine,” says Jeremy Warner in The Telegraph. Russian president Vladimir Putin’s decision to send troops into two separatist-held regions in eastern Ukraine (see page 8) has heightened the risk of “the most serious outbreak of hostilities in Europe since the Second World War”. Yet major stockmarkets are surprisingly “insouciant”. Investors may think a major war would be irrational for all sides and therefore won’t happen, but “the irrational has always played a major role in history”. The Ukraine crisis has so far been felt most acutely in energy markets. Brent crude oil prices rose above $99 a barrel on Tuesday, their highest level since 2014. Russia provides about one-tenth of the global oil supply, but those exports may be curbed…

“[Shares in] chip designer Arm, the UK’s flagship tech company… were quoted in London until its 2016 sale to Japanese financial conglomerate SoftBank, whose boss Masayoshi Son now wants [Arm] to float on the Nasdaq [in America]… If he goes ahead, it will be a grave setback for the government’s plans for a vibrant tech sector. Son’s proposal is an insult. The City is not a primitive backwater, but a premier global financial centre… the fiction that London is a second-rate market for tech, has more than a whiff of self-interested propaganda… from founders who would like to see the UK relax listing rules they find irksome… It may seem an arcane debate, but where Arm chooses to float will set the tone for tech. Whichever choice it makes could…

“HSBC has become the latest British bank to enjoy a boom in profits as the coronavirus crisis recedes,” says Ben Martin in The Times. The firm announced pre-tax profits had surged to $18.9bn last year, up from $8.8bn in 2020. HSBC is benefiting from the fact that “the fallout from the pandemic proved to be less severe than originally feared”, allowing it to reduce impairments for expected credit losses. At the same time, the rise in interest rates will also “help it to reach one of its main profitability targets sooner than planned”. HSBC is likely to do particularly well from the normalisation of interest rates, as it is “more geared to tighter monetary policy than some peers”, with interest income accounting for 53% of revenue last year, says Antony…

Three to buy Avingtrans The Mail on Sunday The Sellafield nuclear power station houses thousands of tons of nuclear waste, which needs to be packaged and stored securely. Avingtrans “will play a key part in that”: its Metalcraft division makes the steel boxes that store waste and has been awarded a £70m contract to supply around 1,000 units over the next six years. More contracts are likely: Sellafield will need around 70,000 containers over the next three decades. Avingtrans’s wider strategy is to buy struggling companies in the energy and power sectors, turn them around and sell for a profit. Rising inflation could provide a “tougher environment” for struggling firms, increasing opportunities for new deals. 400p B&M Shares A dip in value-goods retailer B&M’s shares “present a compelling entry point…

Fears are growing in Taiwan that Russia’s invasion of Ukraine could embolden China to make a move on the island, says Richard Lloyd Parry in The Times. Just as Russian president Vladimir Putin claims at least part of Ukraine (see story left), China considers Taiwan a “renegade province” that must be reunified with the mainland, with force if need be. The government in Taipei has ordered military exercises to protect its outlying islands. There are obvious parallels: Taiwan too is a “Western-friendly democracy” that is at risk of being “upended” by a “powerful autocracy”, says Simone McCarthy on CNN. Beijing is likely to be “carefully monitoring the situation in Ukraine for signs of how Western powers respond”. Still, “there are limits to the parallels”. The US has a much stronger…

• Jane Fraser (pictured), chief executive officer of Wall Street bank Citigroup, was paid $22.5m for her first year in the job, says The Wall Street Journal. Her pay packet for 2021 consisted of $14.8m in performance-based restricted stock, a $6.4m cash bonus, and $1.3m in salary. Michael Corbat, her predecessor at Citi, had been paid $19m for 2020, following a $400m fine imposed on the bank for failing to improve risk-management systems. • Shareholder advisory firm ISS has urged investors in tech giant Apple to vote against the company’s pay plan at the annual meeting on 4 March, says Bloomberg. CEO Tim Cook was paid $99m for last year, made up of $82m in stock awards, a $12m cash bonus, $3m in salary and other compensation. Half of the…

Spac stands for “special purpose acquisition company”. A Spac is listed on the stock exchange like a normal business. However, a Spac doesn’t have any business operations of its own; instead, its sole purpose in listing is to raise money to buy an existing company. Spacs are thus also known as “blank cheque companies” in the US. In the UK, they’d more commonly be described as “cash shells”. Investors in the Spac pay $10 per unit. That buys a share in the Spac, plus other securities (“warrants” and “rights”) whose future value will depend mostly on the value of any deal the Spac does. Once it has listed, the Spac generally has two years to find a deal. If it doesn’t then it has to return the cash to shareholders.…

“The Republicans are the party that says government doesn’t work and then they get elected and prove it.” Satirist P. J. O’Rourke (pictured), who died last week, quoted in The Spectator “When you have that much failure – and I had a long list of failed projects – you start to wonder whether you have anything left in you that is of value.” Actor Bob Odenkirk on his late success, quoted in The Guardian “My celebratory gift to the troops cost me a shade under £4m and was the best £4m I could have spent. Obviously the love didn’t last, but hey-ho… I suggest that anyone considering selling their business, and wishing to preserve their culture, should at least consider this form of exit.” Julian Richer, founder of Richer Sounds,…

thecritic.co.uk In Whitehall, there seems to be a “code of silence” on marriage, says Frank Young. The government’s “levelling up” white paper has a single reference to it, despite the fact that being married is a “big predictor” of life satisfaction. Most people understand that having a long-term companion who “sticks with you through thick and thin” is “actually quite good for wellbeing”. Children with married parents have significantly reduced odds of suffering from mental problems in adolescence. “Getting the nation smiling” is national mission number eight of 12, according to the white paper. Wedlock is the way. So why the silence? Politicians are squeamish about moral righteousness, but talking about marriage doesn’t have to be unpopular. Upwards of 75% of young adults actively aspire to it. It would be…

Board games and toy manufacturer Hasbro is being pressured by activist investor Alta Fox to spin off its highly successful Wizards of the Coast fantasy-games unit, says CNBC. The hedge fund says spinning off Wizards of the Coast – which owns franchise brands such as Dungeons and Dragons and Magic: The Gathering – could increase the value of Hasbro’s shares by $100 (the shares are currently trading at around $97). Wizards has a different growth, margin and valuation profile, argues Alta Fox, which has a 2.5% stake in Hasbro worth $325m. The fund’s proposals in a letter to Hasbro shareholders comes a week after the firm reported strong results, but said that it does not expect the pandemic-driven boom in toy sales to persist.…

When the American robber Willie Sutton was asked why he stole from banks, he simply replied: “Because that’s where the money is.” Similarly, asset managers have raced to re-brand themselves as generally very nice and responsible. In the fourth quarter last year alone, environmental, social and governance (ESG) funds globally had net inflows of $142.5bn. Yet according to an independent report by think-tank InfluenceMap, 421 out of the 539 largest funds are not aligned with the 2015 Paris Climate Agreement. In the UK, a mere 12 from the top 200 by size have a neutral or positive score. I will focus on some that do. Merchants Trust (LSE: MRCH) is the second-best performing UK equity income fund over the last five years, with a total return of 61%. The portfolio…

• State-owned savings bank NS&I upped the rate on its green bonds last week, with a new issue of three-year fixed-rate bonds paying 1.3%. That’s double the 0.65% the last issue was paying. The new rate isn’t the best deal available – you could get 1.87% from Ahli United Bank – but will still attract plenty of money. The good news is if you recently invested in the old NS&I green bonds you may be able to jump to the new rate. “Savers who bought bonds at the old rate between 22 October and early January are stuck on that rate,” says George Nixon in The Sunday Times. However, “those who bought them within the past 30 days can move because savers who take out fixed-rate bonds… are given a…

Trades unions and business groups are urging employers to set clear policies for staff following the government’s latest relaxation of Covid-19 restrictions. In particular, they want employers to be entirely clear about when they want staff who contract Covid-19 to return to the office. With mandatory self-isolation coming to an end, employers will need to set their own rules. Employees who don’t feel well enough to work cannot be expected to do so – but once they feel better, when should they return? And what about asymptomatic staff with positive test results? Employers will take different views. Some may want staff to continue following the government’s previous self-isolation regime, even if they do not feel unwell. If they come into work they risk infecting other staff who may develop symptoms,…

Data- and document-management firm Restore (AIM: RST) is returning to its pre-pandemic self, says The Daily Telegraph. The office-services specialist reported sales were up by 18% compared with 2019, boosted by eight purchases in 2021 that will increase economies of scale. Analysts are forecasting pre-tax profits of £24.9m in the year just ended and £35m for the one just begun, compared with £4m in 2020. The firm’s relocation and recycling divisions mean that it looks well-placed to benefit from workers returning to the office. The share price is up by 18.2% over the last 12 months.…

Sarah Jennings was born in St Albans in 1660, becoming lady in waiting to Mary of Moderna (wife of James, Duke of York, later James II) in 1673. In 1677 she would inherit her brother’s estates and marry John Churchill shortly afterwards. Over the next four decades, the couple rose in status thanks to his success as a soldier, especially during the wars of the Spanish Succession, and her political skills, especially her friendship with Queen Anne. In 1702 Churchill was made Duke of Marlborough, making Sarah Duchess of Marlborough. What was the investment? From around 1705 the Duchess began taking an interest in investing. Initially her investments were restricted to loans to the Treasury and shares in the Bank of England. She later become more adventurous, investing in the…

Going… The original photograph of Le Violon d’Ingres (pictured), surrealist artist Man Ray’s masterpiece from 1924, of a nude woman whose back is adorned with violin markings that emphasise her hourglass figure, is to be sold with Christie’s in May, says The Wall Street Journal. The title of the photo is a French idiom for “hobby”, referring to painter Jean-Auguste-Dominique Ingres’s famous wish to be known for his violin-playing. How it fares at auction “should offer a fresh test of demand for surrealist works and vintage photography overall”. It is expected to sell for at least $5m. Gone… A rare photograph of a teenage Princess Elizabeth and her sister, Princess Margaret, in costume for a pantomime at Windsor Castle, sold at auction for £800 with Cambridgeshire auctioneers William George last…

• I am not at all surprised that research has revealed we were happier 40 years ago, says Karren Brady in The Sun on Sunday. The 1980s were a time of opportunity and optimism, and of Dallas, George Michael (pictured), Duran Duran, ra-ra skirts, leg warmers and pixie boots. It was a great time for a young woman to come of age. “No one was shy to say they wanted to be successful and make money.” And that was reflected in the fashion. Women could be feminine and ballsy, although even today, we still have some way to go on equal pay. Life was simpler, too. With no mobile phones, “I was always being yelled at to ‘get off the phone’”. The alternative was to save up your 2p coins…

£2,324,252,080,110 The amount on the cheque sent to Gareth Hughes of West Yorkshire by utility Northern Powergrid as compensation for a power outage last November. Several other customers also received trillion-pound cheques due to a “clerical error”. 16,593 How much in cryptocurrency ether (£36.4m) supporters of Wikileaks founder Julian Assange paid for digital artwork Clock at an auction online, with the proceeds going towards Assange’s legal costs. Assange is currently in London, fighting extradition to the United States. $5.7bn The value of the five million shares in Tesla that the electriccarmaker’s founder and chief executive officer, Elon Musk, donated to unnamed charities over the course of a week in November, according to a filing. Charitable donations help to offset hefty tax bills, notes The Wall Street Journal. €83m How much…

Pop singer Britney Spears (pictured) has struck a $15m deal with publishers Simon & Schuster for the rights to her memoir, says Page Six. The book is expected to cover the controversial conservatorship arrangement under which Spears’s life was tightly controlled by her father for nearly 14 years following a series of mental breakdowns. TV presenter Adrian Chiles has been spared a tax bill of up to £500,000 after winning a seven-year legal fight, says The Telegraph. HMRC claimed that Chiles should have been taxed as an employee of the BBC and ITV between 2012 and 2017. However a tribunal ruled there was “no suggestion Chiles set out to avoid paying tax” by working as a contractor through his own company.…

Shares in the luxury goods maker Hermès fell 7% – their worst day since September 2016 – last week after disappointing fourth quarter results, says Karen Gilchrist on CNBC. Sales of leather goods (43% of revenues) declined 5.4% due to manufacturing capacity constraints. Price hikes meant that total sales still rose, but they still failed to meet expectations, which were high following “stellar performance in the company’s prior three quarters”. Total sales for the year were up by 42% from 2020 and by 33% from 2019. Hermès isn’t the only company in the world of tanning and stitching to have supply problems: the entire sector is “battling procurement issues just like your high street burger joint”, says Lex in the Financial Times. The lower consumption of beef during lockdown has…

Brookfield Infrastructure “invests in businesses around the world that form the backbone of the economy”, says John Heinzl in The Globe and Mail. These include utilities, railways, toll roads and pipelines, as well as digital infrastructure such as telecom towers and data-storage centres. These are “big-moat businesses with high barriers to entry” that “generate steady cash flows in good times and bad”. About 70% of its revenues are indexed to inflation. The annual dividend of $2.16 – which should grow at 5%-9% per year – amounts to a yield of 3.2% on its corporation shares and 3.6% on its partnership units. (The choice between the two depends on tax and what kind of account it will be held in.)…

Boris Johnson faced accusations from MPs of all parties this week that the sanctions against Russia weren’t tough enough. The “timidity” of the measures – sanctions on five Russian banks and three oligarchs – will have surprised those who heard Johnson promising to “come down like a steel trap”, says The Times. Three of the banks and all three of the individuals have been under US sanctions for years. Johnson insisted he had “weapons in reserve”, including preventing Russian companies raising money on London markets (though only three have listed here since 2014) or “stopping them even trading in pounds or dollars”, says the Financial Times. Foreign secretary Lynn Truss said Conservative party donors with links to Russia could be targeted, says Emily Ferguson on iNews. What Johnson didn’t do,…

As I noted a few weeks ago, there have been relatively few ways to bet on the upcoming local elections, which are due to take place in May. Ladbrokes, however, now has several markets based on them. You can bet on who will win control of Barnet, Westminster, Wandsworth and Hillingdon councils, for example. At the moment all of these are held by the Conservatives, but they could be vulnerable to Labour given the fact that Labour leads the Conservatives in the national polls. Of these, the most interesting contest is Barnet. Ladbrokes thinks that the fight will be close, putting Labour as slight favourites to win at 10/11 (52.3%), with the Conservatives on evens (50%) and no overall control at 10/1 (9.1%). I think this underestimates Labour’s chances. While…

Nine water-company “fat cats” received a combined £15.1m in pay and bonuses last year, even as the number of times their firms pumped raw sewage into seas and rivers rose by 37%, say Andrew Kersley and Nick Sommerlad in the Daily Mirror. On average, bosses took home nearly £1.7m each, while their salaries typically rose by 27% on the previous year. None took a pay cut, despite the outcry over pollution. Together, the nine companies made almost £2.8bn in profits in 2021, and four firms among the six worst polluters paid £776m in dividends to shareholders. Steve Mogford, CEO of United Utilities, and Seven Trent’s boss, Liv Garfield, were the two biggest earners, having been paid £2.9m and £2.8m. According to the Water Services Regulation Authority, their companies missed sewer…

“Many of today’s headlines… take an overly simplistic view of what is happening,” Abby Joseph Cohen, recently retired as Goldman Sachs’ senior investment strategist, tells Barron’s. “I recognise that there has been an increase in core inflation, and that wages are rising. But... much of the increase in measures like the... consumer price index comes from factors that are onetime events.” For example, the prices of used cars and property have spiked, but these are large one-off purchases that don’t bite into everyday spending. Elsewhere, energy costs have surged, but with crude oil prices already above $90 a barrel, the pace of increase is unlikely to match last year. That said, Cohen still expects US GDP growth to slow down to about 3% this year, partly due to tough comparisons…

chrisbond.substack.com The modelling used to assess the costs of hitting net zero targets tends to make wildly optimistic assumptions and then draw firm conclusions, says Chris Bond. Instead, I have analysed verifiable real data of energy usage in the UK in recent years to get an “order-of-magnitude” feel of the task. The big picture that emerges is that, in order to decarbonise the UK’s electricity grid for current demand and recent actual generation patterns, the UK will need two and a half to three and a half times its current wind generation capacity plus around ten to 20 million MWh of electric storage capacity – or at least 100,000 times the capacity of Europe’s largest operating battery. Taking the cost of an Australian project as a guide, the storage alone…

■ TwentyFour Asset Management is facing criticism from investors after announcing plans to merge its underperforming £145m UK Mortgages fund with its larger TwentyFour Income Fund (TFIF), says the Financial Times. UK Mortgages investors will receive TFIF shares at a 1.25% premium to the fund’s prevailing net asset value and have been given an opportunity to cash out in the firm’s fourth quarter. UK Mortgages investors had been pushing for an exit route since management rejected a takeover approach from M&G in 2020. However, TFIF investors are questioning how they will benefit from a deal that will increase the weight of “relatively illiquid” residential mortgage-backed securities from 49% to 60% of assets and have accused TwentyFour of trying to save face and bail out a “failed experiment”. TwentyFour said it…

It has become conventional wisdom that the pandemic is bad news for the office property sector. The shift to working from home will be partly permanent with people spending only two, three or four days a week in the office. Offices will need to be reconfigured to allow for desk-sharing, an increased number of meeting rooms and improved amenities to make working there more attractive, but overall demand will still be lower. The principal victim of this downsizing process will be the owners of large office buildings, who will struggle to find tenants requiring so much space. The most obvious of these is Canary Wharf, a development based on office spaces of half a million to one million square feet. Perhaps Canary Wharf could even become a white elephant as…

Thousands of people who bought prepaid funeral plans face having them cancelled over the coming months, says Jeff Prestridge in The Mail on Sunday. From 29 July 2022, the Financial Conduct Authority will begin to regulate the funeral plan industry and only authorised providers will be able to sell plans. The move is intended to help clean up the funeral plan industry, which has been rife with mis-selling problems. Once regulation begins, consumers will be able to make complaints to the Financial Ombudsman Service and the plans they have bought will be protected by the Financial Services Compensation Scheme if the seller goes bust, says George Nixon in The Times. However, this overdue tightening of the rules may still create complications for customers of firms that don’t become authorised. Many…

• Just 2,500 small and medium-sized enterprises (SMEs) have signed up the government’s Help to Grow programme, which had hoped to recruit 30,000 SMEs. Figures show the scheme, which is designed to improve firms’ productivity with training in areas such as management and digital skills, is finding it difficult to attract SMEs, and there are calls to revamp it. While the scheme is free at the point of use, many firms say red tape and bureaucracy makes it too difficult to sign up. • Is your business still waiting for a support grant from your local authority? The Federation of Small Businesses (FSB) says councils across England have failed to allocate up to £1bn of grants aimed at businesses in sectors of the economy worst-affected by the pandemic. The money…

De La Rue (LSE: DLAR), which makes banknotes and passports, saw its shares slump in January after it announced that profits will be dented by supply-chain disruption, says the Financial Times. Annual profits to 26 March are expected to be up to £11m lower than the market consensus, due to the combined effects of the Omicron variant, the global chip shortage and higher raw-material costs. These pressures are expected to hit next year’s profits too; the firm’s three-year turnaround plan, unveiled in 2020, has been extended by 12 months. The shares have fallen 29% in the last year.…

2020 Crozes-Hermitage Rouge, Maison Les Alexandrins, Northern Rhône, France £29.70, hedonism.co.uk The 2020 Rhône Valley offers are whizzing around the wine world like racing pigeons. One eminent wine merchant tells me that, in spite of this annual flurry of activity, the Rhônes En Primeur season is often a veritable damp squib, sandwiched each year by the frenzied bun fights of Burgundy EP in January and Bordeaux EP in April/May. This is a great shame because, unlike the aforementioned mega-regions, the Rhône still manages to offer world-class wines at affordable prices. While I know keen fans will sink their teeth into their favourite wines, I thought I would sound the alarm from this page with a wine that you do not have to wait to buy or indeed drink. If any…

A jewel-encrusted sphinx talisman (above), purported to have belonged to Napoleon, is to be auctioned in the US on 4 March, with a “jaw-dropping” estimate of $150m-$250m, says Ben Davis on Artnet News. Art historian are sceptical. The story, according to an official website, begins in late 2004, when the present owner, Glenn Randall “Randy” Jensen, came across it listed on eBay. The seller’s father had dug it up in the Netherlands as a teenager and Jensen was able to obtain it in exchange for a set of golf clubs. Jensen set about decoding the Rosicrucian (referring to the spiritual movement holding that a “secret wisdom” has been handed down through a brotherhood since antiquity) symbols on the sphinx. The 114 precious stones, plus the quartz crystal sphinx, can be…

Voters are starting to feel the pinch. One headline put the increase in monthly expenses per US household as a result of inflation at $256. “Do something” is the word going out to Federal Reserve governors. But “go easy”, says the elite. The last thing it wants is a screaming crash on Wall Street. The Fed has put itself in a vice. On one side is the interest-rate suppression and money-printing that has paid the feds’ bills and made the rich richer. On the other side is the Main Street economy, which craves stability, steady prices and honest interest rates. On one side are the 90% of Americans – hard-working families with limited budgets who suffer inflation as they do tooth decay, painful and debilitating. On the other is Wall…