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MoneyWeek 1045

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MoneyWeek is a weekly magazine that enables you to become a better-informed, smarter investor and enjoy the rewards of managing your money with confidence. 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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United Kingdom
Dennis Publishing UK
51 Issues

in this issue

3 min.
from the executive editor...

In his book, The Great Crash 1929, economist J. K. Galbraith came up with one of the most useful concepts ever coined in finance: “the bezzle”. In short, it’s the as-yet-unrevealed inventory of nasty shocks that builds up in the economy during the good times, when “people are relaxed, trusting and money is plentiful”, only to reveal itself when tougher times arrive. While Galbraith describes this as “embezzlement”, “bezzle” is not necessarily outright criminal. Rather I see it as being similar to the Austrian economic notion of “malinvestment”. So it’s not just about the Bernie Madoffs of this world. It’s also the overambitious founder who is better at selling his idea than turning it into a successful business. Or the blatantly whacky investment fad that nevertheless takes off. Or the…

1 min.
a £100m clean-up bill

Chewing gum manufacturers face paying higher taxes unless they agree to cover the costs of cleaning up what Boris Johnson has described as “a monstrous acne of sticky grey blotches” from Britain’s streets, says Tim Shipman in The Times. The proposed chewing gum tax is part of the prime minister’s push to “make Britain’s high streets more attractive”, as part of the post-pandemic “build back better” plan. The Local Government Association and the Clean Up Britain campaign both back the idea, while Johnson was a “vocal supporter” of such measures as mayor of London. The government now seems likely to “justify a crackdown on environmental grounds”, as chewing gum contains plastic. Apparently at any given time there can be as many as 300,000 pieces of gum on Oxford Street in…

1 min.
good week for:

Author George R. R. Martin (pictured) signed a five-year, eight-figure deal with broadcaster HBO this week, say James Hibberd and Lesley Goldberg on The Hollywood Reporter. Martin struck a deal to license his A Song of Ice and Fire fantasy novels in 2007. The filmed adaptation – Game of Thrones – proved to be HBO’s biggest ever hit, and several prequels are in the works, even though Martin is yet to finish the original series of novels. The world’s largest painting was sold for £45m this week, all of which is going to global children’s charities, says the BBC. British artist Sacha Jafri spent eight months painting the 1,600 sq m artwork and planned to sell it in 70 parts, but French businessman Andre Abdoune bought the entire work.…

1 min.
bad week for:

Reports of possible furlough fraud have doubled since October to more than 26,000, says Jill Treanor in The Times. The scheme, which has cost taxpayers £57bn since it launched a year ago, has protected around 11.4m jobs. There have also been 24,000 reports of potential misuse of the £46bn “bounce back” loan scheme. A Singaporean blogger was ordered to pay S$133,000 (£71,900) in defamation damages to prime minister Lee Hsien Loong for reposting an article from a Malaysian news outlet, linking the prime minister to the financial scandal at Malaysia’s state fund, on his Facebook page in 2018, reports Reuters. A total of 45 people responded to Leong Sze Hian’s post, which he shared without comment. Lee’s lawyers said the links were “false and baseless”.…

2 min.
the new suez crisis will boost inflation

No matter how bad your week was, at least you didn’t halt “global trade during a pandemic by parallel parking [a] 50,000-ton cargo ship in a tiny canal”, says Twitter user Oliver Fletcher. The grounding of the Ever Given container ship halted traffic on the Suez Canal for almost a week before the vessel was finally freed on Monday. The blockage resulted in vast maritime tailbacks as hundreds of container ships waited to pass between the Mediterranean and the Red Sea, disrupting an estimated £7bn of trade in goods every day, according to shipping data from Lloyd’s List. Shipping line Maersk warned that knock-on congestion at ports could potentially take “months” to clear. A crucial chokepoint The Suez Canal carries about 12% of world trade. It reduces shipping times between Europe and Asia by…

1 min.
the great global semiconductor squeeze

Delays at Suez will do nothing to ease the global “supply-chain crisis”, says George Stahl in The Wall Street Journal. The semiconductor industry is looking particularly stressed. Computer-chip shortages have been driven by the demand side of the market, says Mark Sweney in The Guardian. Lockdowns have brought soaring sales of games consoles, televisions and home computers. Meanwhile, modern cars need more chips than ever before (40% of the manufacturing cost of anew car goes on electronics). “Nearly every” big carmaker has been forced to cut back on production or even temporarily close plants for want of chips, says Stahl. Toyota says that it is not just semiconductors that are in short supply: it has also been hit by a dearth of plastics after freak weather hit the Texan petrochemical industry in…