MoneyWeek 1101

“It isn’t just central banks who get to choose which mistake to make: investors do too” I used to think the worst job in the world would be chancellor of the exchequer. I’ve changed my mind. At least as chancellor you pretty much always have the opportunity to do things you know will improve the nation’s financial security, or even make people’s lives better. That chancellors often don’t use those opportunities very well doesn’t mean they aren’t available. That is not the case if you are a modern central banker. The heads of the Bank of England and the Federal Reserve do get choices. It is just that none of them are good choices. Such leeway as they have consists entirely of choosing which mistake to make when it comes to monetary…

Saudi princes have sold more than $600m of assets in the US and Europe since Mohammed bin Salman (pictured), the crown prince and de facto ruler, tightened the purse strings, says The Wall Street Journal. Members of the royal family had funnelled vast sums from Saudi Arabia’s oil wealth into artwork, real estate and yachts, but Mohammed bin Salman has curtailed their access to state funds. Many princes need cash to pay bills, but also want to avoid attracting attention with visible wealth. “Among the assets sold recently are a $155m British country estate, two yachts more than 200 feet long, and Mughal jewels gifted as wedding presents by a late king.” Sellers include Bandar bin Sultan, a former ambassador to the US, whose spokesman said he had sold his…

A Japanese court has ordered railway operator JR West to return ¥56 (33p) to the family of former train driver Hirofumi Wada, who was fined one minute’s wages in 2020 after causing a brief delay to a train, says NHK. Wada, who died of natural causes before the case was decided, had gone to the wrong platform. JR West says it has now changed its disciplinary procedures. A family in Massachusetts has been awarded $4.9m after their house was “terrorised” by golf balls, says The Boston Globe. The Tenczars claimed that shots from the 15th tee of the Indian Pond Country Club were a “continual bombardment” that regularly broke their windows. A jury awarded them $3.5m in damages for mental and emotional suffering, plus $1.4m in interest.…

A social-media storm over a herbal remedy for Covid-19 has cost Chinese scientist Wu Yiling RMB13bn (£1.6bn), says Bloomberg. Shares in Wu’s firm had soared after the government endorsed its Lianhua Qingwen remedy, giving him a RMB39bn fortune. But they fell by a third after a high-profile poster questioned whether the drug works and called for securities regulators to investigate. Barack (pictured) and Michelle Obama and Spotify will not renew their podcast deal when it expires this year, says The Guardian. The Obamas signed a contract worth a rumoured $25m in 2019, but are said to be frustrated that exclusivity limits their audience size, while Spotify wanted the Obamas to appear personally in more than the 17 episodes they have made so far.…

The last few weeks have been a “bloodbath” for bond investors, says Rachel Rickard Straus in The Mail on Sunday. Bonds are supposed to offer “a regular, safer income and a ballast against more volatile shares”. It hasn’t worked out that way. Global bond prices, as measured by the Bloomberg Global Aggregate index, are down 10% since the start of the year. Yields, which move inversely to prices, have spiked. “UK investors ditched £2.5bn of bond funds in February alone – the biggest outflow since the start of the pandemic”. As with so much else, the culprit is rising interest rates. “Bond issuers have to offer something even more enticing to investors than what they could get simply by putting their money in a low-risk, interest-paying account”. Higher yields mean investors…

“A surge in food and fuel prices is raising pressure on governments around the world to pick up the tab for consumers,” says The Wall Street Journal. “Spooked by protests that have broken out recently from Bangkok to Sicily, many governments have adopted subsidies or tax breaks to shield households and businesses.” Yet these handouts are causing government deficits and debt to balloon, just as borrowing costs are rising. In the eurozone, for example, governments are likely to run budget deficits of 4.5% of GDP on average this year. Governments have become used to the idea that ever-higher spending is both “manageable and sensible”, says Mike Dolan on Reuters, thanks to years of low inflation and low interest rates. This assumption will now be tested by a sharp shift in the economic…