Notícies i Política

MoneyWeek Issue 970

There's a reason MoneyWeek is Britain's best-selling financial magazine. We exist to help you ground your portfolio so that it keeps your money safe during rough patches and growing in the good times. We don't just look at how to maximise your returns and limit your losses, we also like to look at how you can keep more of the money you've made. Week-in, week-out we'll guide you through the financial world as it changes, alerting you to all the opportunities to profit and dangers to avoid, as they appear. Income strategies, rising-star companies, the best funds and trusts, clever ways to preserve your wealth during market turmoil... you will get the best ideas from the sharpest financial minds and investing professionals in Britain.

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3 min.
from the editor-in-chief...

The most miserable story of the week has to be that of Neil Woodford. Again. It comes with a few amusing bits, of course. The excellent investigation into the saga in last weekend’s Financial Times notes that Woodford spent so much time bouncing around on his expensive eventing horses that “the company brought in phones with special recording functions so he could make trading instructions while out riding”. But mostly there is nothing funny about the demise of Woodford’s firm. Tell the story from scratch to someone not following it and it will sound unbelievable. Tens of thousands of people gave billions of pounds to a man to invest using a style he could produce no track record for in an environment he had no experience of. That man made every mistake…

2 min.
divine mismanagement of the week

A book published this week claims that the Vatican could default on its debts within the next four years, says Tom Kington in The Times. The city state lost €44m last year, according to Gianluigi Nuzzi in Universal Judgment, up from €32m the year before. High-profile sex abuse scandals have damaged the Church’s reputation and caused the value of donations to fall from €101m in 2006 to less than €60m now. Meanwhile, cardinals have been squirrelling funds into “mysteriously large bank accounts”. The Vatican’s portfolio of almost 3,000 properties has been shoddily managed and made a loss of €22.6m in 2018. Pope Francis has vowed to increase transparency and has created a “task force” to avert a “financial meltdown”. Good week for: Brian Souter, founder of the Stagecoach transport group, has made…

2 min.
china’s downturn threatens global growth

China’s latest growth figures were “dire”, says Freya Beamish of Pantheon Macroeconomics. Official data shows that growth in the world’s second-largest economy slowed to 6% year-on-year in the third quarter of 2019. The Shanghai Composite index fell by more than 1% on the news, report Martin Strydom and Gurpreet Narwan in The Times. Western markets also retreated. The limits of stimulus The GDP figures “do not paint a bright picture” of the Middle Kingdom’s economy, says Andrew Batson of Gavekal Research. What’s more, recent economic indicators offer “few signs that the slowdown of recent months has ended”. Take the automotive sector: vehicle sales are down by more than 10% so far this year. With total debt topping 300% of GDP, Chinese authorities are unwilling to turn on the credit taps. While targeted…

1 min.
the fed has a plumbing problem

The US Federal Reserve has started purchasing Treasury bonds with printed money. But don’t call it quantitative easing (QE), says Jeanna Smialek in The New York Times. It will buy $60bn of short-dated debt a month. After the crisis the Fed bought $4trn in assets with printed money in three rounds of QE. It began to unwind the programme in 2017 as the economy improved. Yet this “quantitative tightening” has created an unexpected shortage of dollars in money markets. That caused rates to spike as high as 10% last month in the “repo” market, where banks go for short-term loans. Some have billed the latest round of purchases as “QE4”, the fourth round of easing since 2008, notes Matthew Klein for Barron’s magazine. That is misleading. There is a complex and…

1 min.
can jokowi boost indonesia?

Indonesian president Joko Widodo, known as “Jokowi”, has been sworn in for asecond five-year term, says Amy Chew in the South China Morning Post. He pledged to turn his country into one of the world’s top five economies by 2045 by overhauling an “inefficient, corruption-riddled bureaucracy”. Asia’s third-largest country by population, Indonesia has vast potential. Half of the population is under 30. While Jokowi presents himself as a business-friendly reformer, he has also formed an alliance with his country’s Islamist movement. Plans to outlaw insulting the president and expand blasphemy laws sparked a wave of protests recently. Planned reforms to labour laws have also seen workers rebel. Indonesia rose from 128th to 73rd in the World Bank’s “ease of doing business index” during Jokowi’s first term in power, note Jun Suzuki and…

1 min.

“Deficit doomsaying has fallen out of fashion and yesterday’s advocates of austerity are now spending like drunken sailors on... shore leave. This swapping of hair shirts for Hermès has been particularly pronounced in the US, where the federal deficit has swollen dramatically. This raises the question of who is prepared to pay for this profligacy and the answer is, of course, all of us (it is a task well beyond the resources of America alone). The nattering nabobs of negativity fret that foreigners may lose their taste for US government paper, prompting a surge in Treasury yields, a collapse in the US dollar and the end of civilisation as we know it…. but there is little sign of this... foreign holdings of US Treasuries hit an all-time high in August.…