Innehållsförteckning för 1128 från MoneyWeek

“Brazil is the country of the future, and always will be” is a dictum most investors will have come across. Latin America’s biggest economy has had a turbulent half-century, with its vast potential repeatedly thwarted by poor economic management and political instability. The 1980s and 1990s saw a financial crisis and hyperinflation: price rises reached around 70% per month in 1990. Matters improved after the turn of the century before the pace of growth lurched downwards again. Now, however, the future may finally be arriving. As James McKeigue of the LatAm Investor points out, inflation is under control – it is lower than Britain’s – and the country’s soft and hard commodities should allow it to profit from two key trends driving the world economy over the next 20 years.…

“Markets are not in charge. Governments and central banks are. Markets respond to the announcements made by government and central banks. And central banks have lost control of inflation [while governments have] lost control of the public [finances]... I think all central banks in the West, interestingly, made the same mistake. And during Covid-19, when the economy was actually contracting because of lockdown, central banks decided it was a good time to print a lot of money... That led to inflation. We had too much money chasing too few goods. ... That was predictable. It was predicted, and it happened. So that’s one problem we have to try to get out of. But the public finances both in the United States and the United Kingdom were not put on a…

US oil giant ExxonMobil has reported a profit of nearly $20bn in the third quarter, $4bn more than analysts had forecast and “almost matching the earnings of the tech giant Apple”, says Joanna Partridge in The Guardian. A barrel of Brent crude is now back in double digits, down from $120 in June, while Henry Hub natural gas prices are 40% below their August peak. Despite this, Exxon’s latest figures show quarterly profits increasing, helped by “record refining volumes [and] rigorous cost control”. Exxon may be making nearly as much money as Apple, but the oil giant, the world’s most valuable company ten years ago, is now “only worth a fifth of the $2.5trn technology firm”, says Robert Cyran for Breakingviews. Still, while Apple’s profits “have grown far faster over…

Shares in FRIWO, a German specialist in power supply and charging technology, are on the rise, says Börse Online. FRIWO’s products are sold to firms in areas including medical technology, consumer electronics, industrial automation and electric vehicles. Sales jumped by 52% in the first half of the year and orders had reached a record by mid-year. A joint venture with India’s vehicle-component maker Uno Minda to gain a foothold in the Indian market for electric two- and three-wheelers (“auto-rickshaws”) looks promising. One estimate suggests that by 2030 half the current crop of two and three-wheelers with petrol engines could switch to electricity, implying a market of 15 million vehicles.…

Politics & economics The UK government has held off setting a date for elections in Northern Ireland to avoid disruption and allow time for a “breakthrough in negotiations” with the EU over the Northern Ireland protocol, says Oliver Wright in The Times. Chris Heaton-Harris, the Northern Ireland secretary, had promised to call an election after the unionists refused to re-enter government with Sinn Fein, but won’t name a date. The last date an election could happen within the current legislation would be 19 January. In the 25 years since the Good Friday Agreement “laid the foundations for power-sharing between the region’s unionist and nationalist communities, the devolved executive has been paralysed almost as often as it has been functioning”, says Jude Webber in the Financial Times. The current…

In a matter of days US voters will go to the polls for the mid-term elections, so it’s a good time for a rundown of how the betting markets see the state of play. In terms of the House of Representatives, punters consider a Republican majority a near certainty. With £678,677 matched on Betfair, a Republican majority is at 1.09 (91.7%), the Democrats at 10.5 (9.5%) and no majority at 240 (0.41%). As I have said before, the picture for the senate race is a little more complicated due to the presence of independent senators such as Bernie Sanders and Angus King, who have joined a caucus with the Democrats, as well as the outside chance that independent Evan McMullin could win in Utah. With £606,133 matched, Betfair (which doesn’t…

Chemicals giant Linde, the biggest company quoted on Germany’s benchmark DAX index, announced last week that it was delisting in Germany and would be quoted in New York instead. At the same time, the much hyped flotation of Porsche flopped and BASF, another chemicals firm, announced it is moving much of its production out of the country permanently. Imagine if Shell, Unilever or GSK had quit the UK, and all the hysterical commentary that would provoke about how the economy was in ruins. We have lots to worry about in the UK, but Germany, it seems, is in almost as much trouble as we are. It was the kind of blow the battered DAX index could have done without. Linde decided it was being held back by trading its shares…

Asset allocation is the process of dividing your portfolio between different asset classes such as shares, bonds, property, cash and gold. Each of these asset classes should behave in different ways in different scenarios, and have different potential risks and returns. The aim of asset allocation is to blend these together in a way that produces a combined level of risk and return that best suits an investor’s needs. To take some extreme examples, a young investor saving for retirement a long way in the future and prioritising maximum growth above everything else might have 100% in shares, while a retiree who only cares about achieving a steady income might have 100% in bonds. More commonly, somebody who wants to achieve a combination of income and growth while also protecting…

“Everything we do in life is a bit stressful, we are always short of time, we’re short of money, there are all sorts of horrible things happening… and Bake Off is this safe space where the worst thing that can happen is somebody will drop their bake.” The Great British Bake Off judge Prue Leith (pictured), quoted in the Daily Mirror “I don’t think I have because I think ripper-offers go for people who look as if they’ve got something to rip off; whereas with expeditions my rule is: ‘Never pay anybody anything for anything at any time.’” Explorer Ranulph Fiennes on whether he has ever been ripped off, quoted in The Telegraph “I think back to the time where I put [work in television] on hold for a year…

theatlantic.com Beyond all the headlines about Britain’s political turmoil lies a “deeper story of decades-long economic dysfunction”, says Derek Thompson. The UK is “pretty poor for a rich place”. Living standards and wages lag those of western Europe. This “calamity” was decades in the making. The history since Thatcher can be summed up by saying that Britain chose finance over industry, austerity over investment, and a closed and poorer economy over an open and richer one (by voting for Brexit). The British media frets about robots taking the jobs, but the reality is closer to the opposite: low investment means too many people are doing low-productivity work that would be better done by machines. Meanwhile, the ageing population cares less about growth than about cultural issues, and votes accordingly. The…

Shares in Brazil’s national oil company, Petrobras (NYSE: PBR), fell by 8.5% the day after Lula’s victory was announced, wiping $4bn off the firm’s market capitalisation. One worry is that Lula will meddle with its management, although given that Bolsonaro sacked three of Petrobras’s CEOs for not lowering domestic oil prices, the company is probably used to political interference. In recent years Petrobras has achieved record profits by divesting non-core businesses and concentrating on oil and gas production. It is likely that Lula will put pressure on the company to invest in more clean-energy ventures, which will be less profitable. Nevertheless, other oil majors such as BP and Shell have already invested a far greater share of profits in renewables with less market backlash. Petrobras has ten billion barrels of…

■ Investment firms are starting to launch emerging-market and Asia products with no exposure to China, due to growing demand from investors “wary of rising policy and geopolitical risks in the world’s second biggest economy”, says Reuters. Chinese equities make up 31% of the MSCI Emerging Market index, but they have “floundered” over the last two years due to the government’s crackdown on its technology sector, a real-estate “liquidity crisis” and increasing tensions with the US. Matthews Asia, a US-based firm that specialises in investments in the region and oversees $14bn, is among those to have launched an Asia ex-China strategy, sources told Reuters. Nine emerging market ex-China equity mutual funds and ETFs were created in the US this year, according to Morningstar, including funds by Goldman Sachs, WisdomTree and…

If you move jobs regularly you may well have left a workplace pension behind. The number of lost pensions has soared by 75% since 2018. There are now 2.8 mllion pensions classed as lost, with a total value of £26.6bn, according to the Pensions Policy Institute. The average forgotten pension is worth £9,500. “Young people may be particularly likely to lose track of pensions as they have been especially badly hit by unemployment during the pandemic and because they may be less prone to monitoring their pensions, as they are further from retirement than older workers,” says Stefan Wagstyl in The Financial Times. The report from the Pensions Policy Institute estimates that around 9% of all UK pension savings are held by providers no longer in contact with the owner.…

Millions of small businesses worrying about the squeeze on their finances over the next few months may be overlooking one of the most serious problems of all. Amid the panic over relentlessly rising energy bills, increases in business rates set to come into effect next April may have been overlooked. The most serious impact is likely to be on businesses in the retail, hospitality and leisure sectors. Many of these companies are still benefiting from relief introduced during the height of the Covid-19 pandemic. That means that at present, they automatically receive 50% of their business-rates bills in a concession that is saving many firms tens of thousands of pounds. This scheme is due to come to an end next April. However, every business occupying premises also faces upheaval in…

Over the past two years the US housing market has been enjoying a boom. Prices rose by 40% during the pandemic as cheap money and generous fiscal stimulus encouraged people to move. However, recently there have been signs that this boom is coming to an end, with rising interest rates pushing up mortgage prices and the increasingly cost of living squeezing household budgets. Already, the major price measures, such as the S&P Case-Shiller Home Price index, are recording sustained falls for the first time in years, with virtually every pundit predicting some sort of correction. James Knightley of investment bank ING suggests that the average house price-to-income ratio is now even higher than it was at the height of the 2006 boom – and prices would need to fall by…

While 2022 has posed considerable challenges for British investors, we believe there is cause for optimism. There remain scores of high-quality UK small-cap companies. The agility and niche positioning of many smaller companies can allow them to navigate through economic headwinds more smoothly. Moreover, this year’s heightened uncertainty has meant many British small caps are trading at considerable discounts. To take advantage of this opportunity, here are three tactics and stocks investors could consider. “Hostelworld is likely to prove relatively resilient to the travel downturn” Technology-led tiddlers One strategy that can yield outsized returns over the long term is to target technology-led companies, including software providers and platforms. These companies are inherently asset-light, as they do not need to expend capital on shipping products or physical assets. Their more modest…

Watch buyers are getting younger and they are, increasingly, women. Consultancy firm Deloitte interviewed 70 senior watch industry executives and 5,579 consumers in 11 countries between mid-August and mid-September for its latest annual industry report, to find out “what made them tick”. Almost half of watchmakers responded that they planned to expand their range of watches aimed at women – 44% of whom said they preferred watches specifically designed for them, as opposed to 26% who opted for unisex designs. Makers are also increasingly calling on the services of female brand ambassadors to tout their wares, with, for example, Audemars Piguet turning to tennis star Serena Williams, Breitling to actress Charlize Theron and IWC to model Gisele Bündchen, among others. Meanwhile, Millennials (ie, people aged in their mid-20s to early…

Many theories have been put forward to explain the origins of the London Crash, the oddest wristwatch to come out of Cartier, a watchmaker better known for its demure collections. Some have proffered that the design was inspired by the twisted timepieces in Salvador Dalí’s surrealist painting The Persistence of Memory. Others that it came about as the result of an oval-shaped Cartier Baignoire that melted in a fire from a burning car. The truth, as auction house Phillips explains, is more prosaic. The original Crash was released in 1967 in London, when the three branches of Cartier in Paris, London and New York were operating independently of each other. Jean-Jacques Cartier, the great-grandson of the company’s founder, who ran the London operation, worked with Rupert Emmerson, one…

American house sales declined by the most on record in September as mortgage rates surged and prospective buyers were pushed out of the market. Prices have declined. Middle-class Americans store much of their wealth in their homes. If house prices were cut in half, so would be much of their wealth. And houses are typically a leveraged asset – that is, a liability as well as an asset. People owe money on it. As their asset declines, the gap between the asset and the liability narrows, and sometimes closes altogether. Then, they are “under water”, with no more asset left. Only liability. Household wealth is no easy-come, easy-go matter. We tend to see in it the story of who we are and where we came from, of personal challenges, successes…

Japanese media has been “agog” to learn that workers in fast-food restaurants in California may soon earn $22 per hour, says Gearoid Reidy on Bloomberg. At the current yen-dollar exchange rate, that’s ¥3,300 or almost four times Japan’s average minimum wage. Ever more shockingly, a burger flipper working a 40-hour week would get twice as much as a new graduate from a top Japanese university who joins one of the nation’s megabanks. The disparity is partly down to the recent weakness of the yen, but even allowing for that, “Japan’s famously hard-working masses are egregiously underpaid”. Average wages have stalled in real terms for about three decades and now rising inflation means that earnings are being severely squeezed. There are fears that this could drive a “brain drain” as younger…

The row over the Black Sea grain corridor rattled agricultural markets this week. Russia’s decision to suspend cooperation on a grain export deal with Ukraine at the weekend saw wheat futures jump by 6.4% in Chicago on Monday, with corn and soybean futures recording more modest rises. However Moscow’s decision to back down on Wednesday then reversed those gains, with wheat falling by 5%. Wheat prices have slipped by a third since a post-invasion spike in March, though at $8.49 a bushel as of Wednesday they are still up 12% since the start of 2022. The UN Food and Agriculture Organisation’s global food price index has fallen for seven successive months. Ukraine has shipped ten million tonnes of “corn, wheat, sunflower oil and other products” through the corridor since August…

Last year’s bitcoin boom saw the launch of several dedicated crypto exchange-traded funds (ETFs), but they have had a terrible debut, says Steve Johnson in the Financial Times. Excluding leveraged and inverse vehicles, crypto ETFs “account for five of the worst seven debuts in the history of the ETF industry”. The ProShares Bitcoin Strategy ETF (BITO), which tracks bitcoin futures, was launched in October 2021 but has since “lost a record $1.2bn of investors’ money” . The slump is a reminder of the drawbacks of “thematic” funds. “Specialised ETFs are launched just after the very peak of excitement around popular... themes”, says Rabih Moussawi of Villanova University. They seem to “cater to overoptimistic investors”.…

Business secretary Grant Shapps has ruled that billionaire Czech investor Daniel Kretinsky, dubbed the “Czech sphinx” for his “inscrutable approach to investing”, is free to increase his Royal Mail stake to more than 25%, say Oliver Gill and Matt Oliver in The Telegraph. The move comes after the government launched an inquiry into Kretinsky’s stake-building earlier this year on national security grounds. Kretinsky, already Royal Mail’s largest shareholder with 22%, “is thought to be supportive of plans to end Saturday letter deliveries” following a “dramatic decline” in post volumes. Such a move, which would require a change in the law, would free up the company “to turn its attention to parcels, “where it is struggling to compete with the likes of Amazon”. Technically, the decision, “does not mean ministers would…

Chip giant Intel spun off its self-driving car arm Mobileye last week, says the Financial Times. The stock debuted at $26.70, above the previously announced target range, and finished its first day at $28.97, valuing the company at $23bn and raising $861m. Intel had hoped for a valuation of $50bn when it first planned to list the business last year, but the initial public offering (IPO) is still considered a success. Mobileye boasts higher sales and lower losses than some of its peers, and has become the most valuable US firm to list this year, which, thanks to the bear market, has been a poor one for IPOs. They have raised just $7.4bn, down 94% from the same period last year.…

● Unilever is “jacking up” prices across its major brands to battle inflation, says Alistair Osborne in The Times. The group’s third-quarter trading update reported a 10.6% rise in underlying sales, which was entirely due to higher prices; volumes fell 1.6%. “No company can thrive for ever with that sort of growth pattern”, but Unilever still seems better placed than most. CEO Alan Jope (pictured) says he’s seen no evidence that consumers are trading down to retailers’ cheaper own-label products: indeed, Unilever’s top-12 premium brands are outgrowing its value ones. “The group clearly has pricing power.” ● “It’s one thing for the fabric of a business to fray slowly over time and quite another for it to burst apart at the seams in little more than a year of public…

“If your time horizon is longer than one year, you should do very well in the market,” says Bill Miller, the fund manager known for beating the S&P 500 every year between 1991 and 2005 while running the Legg Mason Capital Management Value Trust. In the words of Warren Buffett, John Templeton and Leo Tolstoy respectively: “Be greedy when others are fearful”, “the time of maximum pessimism is the best time to buy” and “the two most powerful warriors are patience and time”, he told a Forbes investing conference last month. The current downturn is causing many investors to shy away from growth stocks and tech companies, so this could be a good time to buy. “Stocks that worked in the last bull market for the last ten years or…

bloomberg.com The “precipitous fall” of Liz Truss has been credited to the discipline of financial markets, says Narayana Kocherlakota. “I see a different story.” The likely economic consequences of her policies would have taken months and years to play out. Yet her government fell in a matter of weeks. Why? The shocking drop in the price of 30-year gilts that is most credited with her downfall had little to do with rational investors revising their beliefs about the UK’s long-run prospects. It stemmed rather from regulators’ failure to limit leverage in UK pension funds. When gilt prices fell and yields rose, those funds were forced to sell gilts to raise cash, pushing down prices further and creating a “doom loop”. The Bank of England stepped in, but refused to extend…

Listed income funds have had a tough few months. With UK ten-year government bonds now yielding around 4% we’re seeing a massive repricing of risk. This has fed into the valuation models used by funds (they’re increasing their discount rates) and affected what investors demand. If the UK government will pay you a return of 4% per year over ten years, why take an extra private-sector risk for a yield of 4.5%? Suddenly, anything yielding below 5% looks less enticing. This has crept up the yield ladder and even affected funds that yield substantially over 5%. Discounts have widened, often despite relatively good news still coming from the underlying investments. Pricing has become so extreme that it’s worth spending some time looking at some of the lesser-known names among income…

If you need to travel by train this Christmas it is time to buy your tickets. Getting in before the festive rush could save you as much as £138, according to comparison site MoneySavingExpert. Whether you are heading home for Christmas or planning a trip to Edinburgh for Hogmanay, booking your train tickets now will save you money. Purchases made around 12 weeks ahead of travel are usually the cheapest. The ticketing website Trainline’s figures suggest that you will save £88 on average for every advance booking in the run-up to Christmas. But you don’t have to plan three months in advance to save money. You can buy an advance ticket up to a few minutes before you travel with some train operators. For example, Greater Anglia lets you pick…

For freelancers and small business owners irked by the government’s rapid about-turn on IR35 reforms, the chancellor’s volte-face on corporation tax may just be considered a consolation. With corporation tax rates now set to jump next April, the advantages of structuring your business as a limited company have been eroded. Indeed, even if you do have the option of working this way, it may no longer be the most tax-efficient option. A quick reminder. Ill-fated chancellor Kwasi Kwarteng had promised to dump the IR35 rules that force businesses taking on contractors to treat most of them as employees rather than trading with them as limited companies. His successor, Jeremy Hunt, then ditched that policy, as well as Kwarteng’s plan to roll back planned corporation-tax hikes. Businesses with profits of more…

With Russia limiting gas supplies to Europe to cause economic harm and destabilise opposition to its invasion of Ukraine, there is a scramble to find the fuel elsewhere. This means a bull market for companies that can reliably deliver it. The obvious place to turn is the US. It is the world’s biggest natural-gas producer, with a 23% market share last year. After Russia at 17%, the next-biggest producers are Iran and China with around 6% each. Texas-based Cheniere Energy (NYSE: LNG) is a clear beneficiary. It is the biggest operator in the US and number two in the world when it comes to the niche sector of liquefied natural gas, known as LNG. It can’t, of course, pipe natural gas directly to Europe from its facilities in Texas and…

Next Tuesday US voters will elect all 435 members of the House of Representatives and just over one third of the Senate in the mid-term elections. Both the Senate and the House of Representatives (as well as the presidency) are currently controlled by the Democrats, but there is a strong chance that the Republicans could gain control of at least one part of Congress, and possibly both. The website FiveThirtyEight gives them an 81% chance of winning the House and a 48% chance of securing the Senate. Some people argue that having the Republicans control at least one part of Congress will be good for the market, as it will make it much harder for the Democrats to bring in tax rises, generally considered negative for equities. But others argue…

Western Australian iron ore and lithium miner Mineral Resources (ASX: MIN) has seen its share price soar by 83% in a year, says The Motley Fool. The group reported A$2bn (£1.1bn) in revenues for the year to 30 June 2022, a marginal fall from the year before. But demand for lithium is booming thanks to the metal’s use in electric-vehicle batteries and investors have been encourged by the news that the group is on track to reach its targeted production levels at both its Australian projects. It plans to mine 300,000-330,000 dry metric tons (dmt) of lithium ore at its Mt Marion site, and 190,000-210,000 dmt in Wodgina.…

Benjamin Graham was born in London in 1894 and moved with his family to New York City shortly afterwards. He graduated at the top of his year from Columbia University and then became a messenger at Wall Street firm Newburger, Henderson & Loeb, quickly rising to the level of partner. In 1923 he left to manage money for private clients, forming an investment partnership with Jerome Newman in 1926. At the same time he taught part-time at Columbia Business School, and wrote Security Analysis in 1934 and The Intelligent Investor in 1949, both of which are now regarded as classics. What was the trade? In 1936 Geico (Government Employees Insurance Company) was set up by Leo and Lillian Goodwin, with the help of money from banker Cleaves Rhea, to directly…

I have written up two vintages of Elisabeth Salmon, 2000 and 2007, on this page. This epic Champagne has always been a firm favourite with MoneyWeek readers, so I am thrilled to announce that the new 2009 vintage of Elisabeth Rosé was released this week. With a heroic 11 years spent on its lees in the Billecart cellars in Mareuilsur-Aÿ, this wine matures with incomparable grace. After this period of astounding patience on behalf of the Billecart crew, the bottle is then dressed and shipped at the moment that it is perfectly ready to drink. As you will have noticed, many elite-level rosé Champagnes are dumped onto the market with alarmingly little age under their belts. Perrier Jouët’s Belle Époque Rosé, an inferior wine and one with a £60 higher…

Going… A rare handwritten manuscript by Charles Darwin, containing a passage from On the Origin of Species, is heading for auction with Sotheby’s in New York from 25 November. The document had been mistaken as a page from a working draft of the third edition of the landmark work. In fact, Darwin wrote it four years after the publication of the third edition, in the autumn of 1865, in response to a request from the editor of the Autographic Mirror magazine for a sample of his handwriting. Examples of Darwin’s autograph are “extremely rare”, notes The Guardian. It is expected to fetch between £530,000 and £700,000 as part of the Age of Wonder sale, which also features a first edition of On the Origin of Species and a rare copy…

£1.02 How much on average the price per litre of vegetable oil increased by in September from a year earlier – a rise of 65%, according to the Office for National Statistics. UK inflation has risen to a 40-year high of 13.2% by one measure. £9.5bn The sum British firms are set to spend on advertising in the run-up to Christmas this year. That is a 4.5% year-on-year increase in spending for the final quarter, the smallest rise for that period in almost a decade (excluding the Covid lockdown of 2020). €4.7bn What the German government could reap every year in taxes and cost savings from legalising cannabis. German health minister Karl Lauterbach has unveiled plans to legalise the purchase and possession of up to 30g of cannabis for recreational…

“2022 is looking unhappily like 2000 for the [technology] industry”, say Scott Rosenberg and Sara Fischer on Axios. Last week $800bn was wiped off the valuations of the biggest American tech shares following mediocre third-quarter results. Google-owner Alphabet reported a 27% profit drop last quarter compared with a year before as advertisement sales “seriously slowed”; and growth at Microsoft and Amazon’s cloud businesses also declined. The dotcom bust ultimately saw AOL and Yahoo replaced by Google at the top of the online ad business. This downturn may prompt a similar changing of the guard. Most vulnerable is Facebook-owner Meta (see page 6), which has reported a “second consecutive quarter of year-over-year revenue declines”, sending the shares down nearly one quarter last Thursday and taking their losses so far this year…

Investors “wiped $80bn” off the market capitalisation of Meta last week after it said profits had halved in the third quarter, say Joanna Partridge and Kari Paul in The Guardian. The 25% slump in Meta’s share price was “one of the most dramatic devaluations Wall Street has seen since... confidence in Silicon Valley stocks began to crumble at the start of the year”. The stock is now below $100, its lowest level in six years. Advertisers cut spending in the global slowdown. The key problem, however, is that investors are unconvinced by Mark Zuckerberg’s bet that his company’s future lies in the “metaverse”. Facebook’s co-founder has “bet his company, his fortune and his reputation” on the notion that the metaverse, an immersive world accessed by virtual-reality goggles, is the “next…

Six to buy Airtel Africa The Times Telecoms operator Airtel Africa sells mobile data and payments services across 14 African countries. It has “dramatically outpaced” the FTSE 100, returning 82% since it listed in 2019. Despite that it has “flown low under the radar”. The number of customers grew by 10% in the first half of the year and sales rose by 7%. There is vast scope for further growth: only half of adults in Africa have a mobile phone. The stock is almost as cheap as it has ever been, making now a good time to invest. 113p Ergomed Investors’ Chronicle Developers of small drugs are likely to “rank among the highest-risk equities” on the market, which is already volatile. Many biotech firms have also seen their share price…

Former prime minister Benjamin Netanyahu has staged a “dramatic comeback” in Israel, says Raffi Berg on the BBC. He was toppled from office in 2021 after 12 straight years in power; as MoneyWeek went to press, the results seemed to suggest that his party would finish first following Tuesday’s elections, and that his right-wing bloc would be able to form a narrow majority in parliament. This despite the fact that “Bibi” is Israel’s “most controversial political figure”. He is currently on trial for bribery, fraud and breach of trust, is a firm supporter of Israel’s settlement-building in the West Bank, and opposes the creation of a Palestinian state as a solution to the Israeli-Palestinian conflict. Israel’s proportional-representation election system “is a machine with a lot of small moving parts”, so…

There are two sides to every bear market. For somebody who is investing today and plans to draw on their money far in the future, a long slump is very welcome, even if it doesn’t feel like it at the time. As markets grind steadily lower, they can add new money or reinvest dividends at lower valuations, meaning their expected returns go up. Their likely future wealth rises. But for somebody who plans to draw on their investments in the near future, any kind of downturn is extremely unwelcome. If they have little flexibility about when to cash in, they risk having to sell after the market falls and before it has a chance to recover. They will suffer a permanent hit to their wealth. This kind of nuance gets…

Up against the limits to growth Simon Kuper Financial Times Over-construction and understaffing have become “global problems” since Covid-19, but the Netherlands had already “run out of space and staff”, says Simon Kuper. Even if a recession temporarily loosens the jobs market, the problem will “simply resurface whenever growth resumes”. The country, “well-suited” to globalisation, is probably the first “to hit the limits of economic growth”. Until 2008, Europe’s biggest port had had 26 years of unbroken growth. As a result its population “mushroomed”. Today, population density is nearly five times the EU average at 507 people per sq km. Yet as the quantity of habitable land shrinks due to rising seas and droughts damaging foundations, the demand for workers “seems insatiable”. A total of 84% of employers report labour…

spectator.co.uk Now that the final curtain has fallen on Liz Truss, it is time for reflection, says Julian Jessop, an economic adviser to the Truss team. What went wrong? A leadership campaign dominated by promises to cut taxes, to “disrupt” institutions, and to deal with what looked like being a massive energy crisis, set the tone for Kwasi Kwarteng’s budget. But the big mistake was not the energy subsidies, the tax cuts, nor suspending the usual analysis from the Office for Budget Responsibility. It was the “unexpected extras”, such as the cuts to income tax and abolishing the top rate, that “spooked” investors, and Kwarteng’s “doubling-down” on these measures on the Sunday, despite the markets’ “obvious and growing concerns about fiscal credibility”, did not help. This was frustrating as there…

Brazilians reacted passionately to last Sunday’s election win for “Lula”. The supporters of Luiz Inácio Lula da Silva, the socialist candidate, took to the streets across Latin America’s largest economy to celebrate with red flags and convoys of hooting cars. Meanwhile those of his defeated rival, outgoing president Jair Bolsonaro, held mass prayer meetings. The passion was understandable, given that the bitter election had been billed as a historical crossroads for the country. The market reaction was more muted, with early losses on Monday morning recouped by lunchtime. It was perhaps a reminder that the two rivals are far more similar, in economic terms at least, than their supporters would like to admit. After all, in their respective terms as president both spent too much, meddled with the national oil…

Billionaire activist investor Nelson Peltz is hunting for Unilever’s next chief executive, says The Times. Peltz, who secured a seat on the board after he amassed a £1.4bn stake through his investment firm Trian, has since approached two former bosses of rival companies to see if they want to succeed incumbent CEO Alan Jope. Peltz has previously sat on the boards of Heinz, Mondelez and Procter & Gamble, and has a record of pushing for major changes at companies he holds, prompting speculation that Unilever may offload its ice-cream division or list its food business separately. Jope, who has come under criticism after making a failed bid for GSK’s consumer healthcare business, will stand down at the end of 2023 after four years in charge.…

● “First-time buyers must now quadruple their deposits to get onto the housing ladder as mortgage rates stick at 6.5%,” warns Melissa Lawford in The Telegraph. If a first-time buyer wants to keep their mortgage repayments at the same level as they would have been when mortgage rates were at 2%, they will need to cover 43% of the value of their home with their deposit, according to research by Hamptons estate agents. So an average first-time buyer would need an extra £81,510. ● As the cost-of-living crisis worsens we are giving less to charity. “Donations fell from £11.3bn to £10.7bn last year,” says Stephanie Hawthorne in The Mail on Sunday. “But there are ways to donate that are tax-efficient and can financially benefit the giver.” If you are making…

● The Help to Grow support schemes aimed at small businesses could be abolished as part of a government review of potential cost savings, it has emerged. The schemes, originally launched by Rishi Sunak when he was chancellor, offer heavily subsidised training for small business leaders on topics ranging from leadership skills to financial management. They can also be used to support small companies with the cost of innovation and digitalisation. However, government sources are warning that Help to Grow’s days may be numbered as ministers look for cuts. ● Could your business save money with a cheaper broadband deal as a price war in the sector intensifies? Vodafone has just announced the launch of a new tariff for small businesses with no upfront fees and free broadband for a…

Four out of my six long tips rose in the past fortnight. Industrial and construction-rental equipment company Ashtead climbed from 4,382p to 4,673p, while retailer Dunelm increased from 820p to 894p. Pets at Home rose from 287p to 297p and online streaming service Netflix increased from $245 to $291. The only exceptions were fashion group Burberry, which dipped from 1,881p to 1,848p and Hays Recruitment, which declined from 112p to 110p. Overall, my long tips have swung from a loss of £452 to a profit of £458. My seven short tips’ performances have been more mixed, with four of the seven appreciating. Remote medicine group Teladoc Health rose from $24.61 to above $28, automatically closing the position. DWAC, the holding company for Donald Trump’s social-media firm, increased from $16.11 to…

Shares in sports retailer JD Sports (LSE: JD) have slid by 53% in the past year. In the six months to 30 July sales grew but profits slipped as operating expenses rose, while a board shake-up has also dented confidence. Earlier this month JD Sports announced that chief financial officer (CFO) Neil Greenhalgh was to stand down in 2023; his exit follows the departure of CEO Peter Cowgill in May. Investors are also fretting about the darkening outlook for the retail sector as jittery consumers grapple with the rising cost of living and cut back on shopping. Consumer confidence has fallen to a record low.…