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News & Politics

MoneyWeek Issue 1027

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 editor-in-chief...

“The good news is that things may not be anywhere near as bad as Rishi Sunak fears” Misery. Misery. If you listened to Chancellor Rishi Sunak’s Spending Review on Wednesday, that is pretty much all you would have heard (see page 16). The response to Covid-19 has cost a fortune. According to data from George Cooper at Equitile Investments, we have spent in the region of £1m per what statisticians call “quality-adjusted life years” (see moneyweek.com). That’s before we start on the less obvious costs (eg, crime and falling cancer referrals – see page 25). Our debt-to-GDP ratio is heading for 100% by 2025. We will borrow something in the region of £400bn this year. That’s 19% of GDP, the most ever during peacetime. The UK economy will end this year…

1 min.
scam alert of the week

A hedge fund based in Sydney collapsed after suffering a cyber attack which used a fake Zoom invitation to con the company into paying the hackers A$8.7m (£4.7m), say Angus Grigg and Jemima Whyte on the Australian Financial Review. It’s the latest in a series of attacks by criminal gangs against Australian fund managers. Levitas Capital, which had managed A$75m, was forced to close after its largest client withdrew its money following the attack in September. Criminals gained access to Levitas co-founder Michael Fagan’s computer with the fake Zoom invite. They then sent fake invoices, worth nearly A$9m in total, from his email account to the fund’s trustee and administrators. Though there were apparently “many red flags” around the transactions that should have been spotted, the transfers were mistakenly approved…

1 min.
good week for:

Wrexham Football Club is looking at a £2m investment after it was bought by Hollywood stars Ryan Reynolds (pictured) and Rob McElhenney, says BBC Sport. The club has been owned by fans since 2011, but members of the Wrexham Supporters Trust voted overwhelmingly in favour of the takeover by the pair. The actors have told trust members they plan to turn Wrexham into a“global force” and plan to attend matches when work allows. The British entertainment industry is set for a windfall as Netflix announced it plans to boost its spending on UK TV shows by 50% to $1bn, says Mark Sweney in The Guardian. The streaming company, which makes shows like The Crown and Sex Education in the UK, has made the UK its “most important international production hub”, second…

1 min.
bad week for:

Celine Dion has lost a $13m dispute with her former agent Rob Prinz, reports Dave Brooks on Billboard. Dion took Prinz to court, alleging he was “wildly overpaid” for negotiating a $489m touring contract in 2017, but Prinz’s lawyer said his commission fee, which will amount to as much as $13m by 2026, was clearly established in contract and oral agreements. The California Labor Commission ordered Dion to keep paying Prinz in full. She plans to appeal. Bargain hunters run the risk of being bamboozled this weekend as new research from Which? found that in 2019, nine out of ten “Black Friday” deals were nothing of the sort. Which? checked the prices of 219 products for six months before Black Friday 2019, and found only three were “at their cheapest price”…

2 min.
stockmarkets shrug at latest vaccine

“Bored already”, says Alistair Osborne in The Times. Equity markets were overjoyed when positive news of Pfizer’s Covid-19 vaccine trials broke earlier this month. But a similar update from AstraZeneca this week (see page 10) brought little more than a shrug. Global stockmarkets didn’t leap, but they have continued to trade close to recent highs. The MSCI World Index is up by 10% since the start of the month, with America’s S&P 500 up by 9%. The FTSE 100 has been a standout performer, gaining 15% in November, although British blue chips are still down by 15% for the year to date. Bulls have gone rampaging through bitcoin and oil markets (see pages 7 and 17). Caught between Covid-19 and a cure Never mind the market reaction, says Craig Erlam of OANDA…

1 min.
the monetary punchbowl is as full as ever

There has been a rare public spat between the US Treasury and the Federal Reserve. At the end of last week outgoing treasury secretary, Steven Mnuchin, ended a raft of Fed-run emergency lending programmes established in response to Covid-19. The programmes, which include support for corporate bond markets as well as a provision to lend to smaller businesses, have not been widely used but played a major role in restoring confidence to global credit markets after their meltdown this spring. Mnuchin says that the policies have “clearly achieved their objectives” – bond markets are far calmer now – and should end on 31 December. Although it complied with Mnuchin’s request, the Fed said it would “prefer the full suite of emergency facilities… to serve their important role as a backstop for…