News & Politics

MoneyWeek Issue 968

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.

United Kingdom
Dennis Publishing UK
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51 Issues

in this issue

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

A few months ago in an article headlined “15 business and finance writers this billionaire always reads”, US columnist and asset manager Ken Fisher noted that he always reads me, for the simple reason that “Merryn Somerset Webb attacks virtually everything Ibelieve in”. Everyone likes a challenge. He will be surprised then to find that I agree with much of what he has written in a Financial Times article this week. Conventional monetary policy assumes, he says, that low interest rates (which make borrowing cheaper) will make people want to borrow more. But beyond a certain point that isn’t true. Very low rates kill the profitability of loans (by crunching the spread between the rate at which a bank can borrow and that at which it can lend – see page…

2 min.
loser of the week

Musician Pete Doherty has been banned from driving for six months and fined £9,200 after being caught speeding four times by the same camera in Kent, reports the Daily Mirror. Doherty, lead singer in The Libertines and Babyshambles, told Folkestone magistrates that he earned £10,000 a month. He said that a broken dashboard light meant he was unable to see the speedometer in his VW van. After sentencing, Doherty warned that he had “a feeling that I might be back in here soon”, mentioning that he had been stopped by police while riding an electric scooter along the seafront. In response, the chairman of the bench, Andrew Henderson, said the ban would include “this electric scooter you mentioned as well”. Good week for: Warner Bros’ latest film, Joker, has been a huge…

2 min.
traders keep their faith in the fed

“Bad economic data emerges, stockmarkets fall. Investors then predict an interest-rate cut, and stocks rise,” says John Foley on Breakingviews. That familiar pattern played out again last week in the US, when the S&P 500 closed higher even though the latest Institute for Supply Management (ISM) surveys suggested a contraction in the manufacturing sector and asharp slowdown in services. Yet while it’s not entirely a shock that US growth is slowing down after more than a decade of steady expansion, the market’s reaction “certainly looks too sanguine”. Most economists still don’t expect a recession: consensus forecasts are for around 2% annualised growth in the next two quarters. But what if the slowdown worsens? The push to impeach President Donald Trump means that odds of Democrats and Republicans co-operating on measures to…

1 min.
the overhyped statistic that moves markets

The Bureau of Labor Statistics’ monthly non-farm payrolls report sounds immensely dull, but it is one of the most closely watched pieces of economic data in the US. As the name implies, this tracks employment outside the agricultural sector – the reason for leaving out farm jobs is that they tend to be both highly seasonal and difficult to count. The figures also exclude many workers in government, private households, non-profit organisations and the self-employed, but in total they cover jobs contributing to around 80% of GDP. The latest data is normally released on the first Friday of the following month (ie, the report for September was out on Friday 4 October), so it’s available extremely quickly compared to many other statistics. This explains why markets latch onto it. The only…

1 min.
india’s banking crisis deepens

Yes Bank “could use a helping hand”, says Una Galani on Breakingviews. Bad loans at the private-sector bank – the fourth-largest in India by assets – are rising and the lender needs fresh capital to plug the gap. But with its shares down by 80% this year, investors are reluctant to step forward. And India has “no up-to-date framework on how to deal with troubled financial institutions”, so it’s unclear how the policymakers will resolve the issue, even though it’s certain that “allowing Yes Bank to flail would be the worst decision”. Yes is “a particularly marked example”, but it is “not alone in its troubles”, says The Economist. “India’s banks are obviously faltering” as they deal with “the overhang from a splurge of bad lending years ago” – much of…

1 min.

“Elon Musk has been mercifully quiet [of late]… but WeDontWork’s Adam Neumann [has] picked up the slack with his flailing efforts to bring his money-losing train wreck of a company public… Recent reporting [has] described Neumann as even more megalomaniacal than Musk, which is quite a feat though hardly conducive to... long-term business success… Neumann likes to muse about living forever [or] becoming… the first trillionaire… The fact that an individual who behaves like a total buffoon is indulged by institutional investors illustrates how detached from reality the so-called global elite has become and how inflated the current stockmarket bubble and particularly the tech market bubble has grown… groupthink... leads investors… to ignore not only its obvious absurdity, but also the dangers it poses to financial and societal stability.”…