MoneyWeek

“Reality checks will keep coming for those invested in some kind of magical thinking” This week we got the latest inflation numbers from the US. The consumer price index (CPI) for April came in at 8.3% higher than this time last year. Some saw this as good news: it is slightly lower than it was last month (8.5%). Some saw it as bad news: it is slightly higher than the market expected (the consensus was for 8.1%). But the key thing is not so much the number after the decimal point as the one before it. Last year, most commentators were flicking away the idea that inflation would be 3% at this point of this year, let alone over 8%. Last year, inflation was definitely transient. This year it is definitely…

Yoon Suk-yeol, South Korea’s new president, has become the first leader to shun the presidential palace known as the Blue House (pictured), says The Guardian. Instead, he has shifted his office into a former defence-ministry building in central Seoul, at a cost of KRW49.6bn (£32m). Yoon has described the palace as a “symbol of imperial power” because it was used by the Japanese occupiers of Korea between 1910 and 1945, and says he will open it to the public as a sign of his commitment to a more open presidency. But there has been speculation he consulted a shaman who advised him to steer clear of the palace to avoid the “curse” that has befallen his predecessors, many of whom have ended up dead or in jail.…

The 80/1 underdog Rich Strike won the Kentucky Derby – America’s most famous horse race – on Saturday after gaining entry into the race just one day before when another runner dropped out, says The Los Angeles Times. The three-year-old colt was the second-longest shot to win in the history of the race. Owner Rick Dawson, who bought Rich Strike for just $30,000 last September, will collect $1.86m in prize money. A marble bust bought for $34.99 at a Goodwill charity shop in Texas has turned out to be a Roman antique depicting military leader Sextus Pompey, says Artnet. Buyer Laura Young, who runs an antique business, later found that it had been taken from a Roman villa in Germany during the 1960s. The bust will be returned next year.…

Alleged drug dealer Marcellus Cornwell was arrested after police discovered a vending machine selling marijuana outside his home in Detroit, says Fox News. Cornwell had been reportedly making $2,000 a day from the device, which had been operating for more than four years and accepted credit cards and even ApplePay. A “virtual land sale” by Yuga Labs, creators of the Bored Ape Yacht Club non-fungible tokens (example pictured), has been a $5m windfall for scammers, says Vice. Yuga’s “land” auction for its Otherside game was so popular that many transactions failed. Scammers set up official-looking sites promising to refund fees and used them to fleece unaware users.…

Alex Rankine Markets editor The position of central bankers today “recalls an old joke about a cab driver telling a lost tourist asking for directions: If I were you, I would not be starting from here”, says John Plender in the Financial Times. The Bank of England has warned that inflation will top 10% later this year while issuing gloomy growth forecasts. As central banks “try to engineer a soft landing” the risk of a “policy error” that crashes the economy is high. “The Bank of England is skirting around the ‘r’ word but its grim set of growth forecasts all but confirm that the UK is heading for a recession next year,” says Mehreen Khan in The Times. Policymakers last week raised interest rates by 0.25 percentage points to 1%, the…

“Global investors had been hoping that big tech earnings would put the brakes on sliding stockmarkets, but it hasn’t quite worked out that way,” says Steven Frazer in Shares. The latest quarterly earnings results have been mostly solid, but stocks have kept plunging. The tech-heavy Nasdaq Composite is down more than a quarter so far this year and has dropped 12% over the last month alone. On Monday Cathie Wood’s flagship ARK Innovation ETF – a leading investor in speculative tech – plunged 10%, erasing all of the outperformance it has enjoyed against the wider US market since its launch in 2014. Expectations are getting tougher to beat after the pandemic turbocharged uptake of e-commerce, videoconferencing and streaming. “In 2020, Meta, Amazon, Google, Apple and Microsoft collectively produced $1.1trn in sales,”…