MoneyWeek

I joined MoneyWeek 17 years ago, in August 2005. The Labour government had recently won its third election in a row under Tony Blair, with hand-wringing columnists bemoaning pitiful turnout levels and general voter apathy. The oil price had just breached the $60-a-barrel mark for the first time ever. Inflation in the UK was 2.4% and the Bank of England – rattled by signs of a mild slowdown, driven in part by high oil prices – had just cut interest rates by a quarter point from 4.75% to 4.5%, a gesture which helped to inject unwelcome energy into what had been a slowing housing market. The average UK house price, according to Nationwide, was about £158,000, having doubled in just five years, and plenty of us thought that was unaffordable. Since…

Eight professed heirs of Jamalul Kiram II, the last sultan of the archipelago of Sulu, are trying to seize $14.9bn of Malaysian assets in a dispute over an agreement made in 1878, says the Financial Times. The state of Sabah was leased to a British trading firm by a previous sultan of Sulu, then became part of Malaysia on independence in 1963. Jamalul Kiram II, the last recognised sultan, died in 1936, after which a series of residents of the Philippines – of which Sulu is now part – have claimed the throne, including the late Esmail Kiram II (pictured), whose followers tried to stage an armed invasion of Sabah in 2013. The claimants say they are entitled to a share of Sabah’s oil wealth and are now attempting to…

Recession? What recession? The US economy shrank at an annualised pace of 0.9% between April and June, its second successive quarterly contraction. In many countries that would meet the definition of a recession, but with unemployment close to a 50-year low and two vacancies for every jobseeker in May, the White House has rejected the label. “That doesn’t sound like a recession to me,” says president Joe Biden. “The official designation is determined by eight economists” at the National Bureau of Economic Research, who also look at measures of jobs growth, income and spending to make a recession call, say Nicole Goodkind and Tal Yellin for CNN. They don’t think this slowdown qualifies. Beyond the technical arguments, “what’s clear to everyone is the economy is slowing, prices are rising at their fastest…

“China’s deepening property bust is sending shock waves through the nation’s 400 million-strong middle class,” says Bloomberg News. House prices have fallen for ten months in a row. That is putting pressure on households, whose leverage has risen from 27.8% of GDP in 2011 to 61.6% at the end of 2021. A rise in homebuyers going on “mortgage strike” – stopping payments on uncompleted flats – is piling further pressure onto developers, says Evelyn Cheng on CNBC. S&P Global Ratings thinks that Chinese “property sales will probably drop by about 30% this year”. That would be worse than the 20% slump that the market suffered in 2008. China’s housing sales amounted to more than $2trn last year, making the sector a crucial driver of the world’s second-largest economy, says Jacky Wong…

Spacs, “once Wall Street’s hottest tickets”, are a ”hated trade” this year”, says Yun Li on CNBC. Special purpose acquisition companies (Spacs) are shell firms that list on the stockmarket to raise cash. They then use the money to buy an existing company. A CNBC index that tracks the shares of firms that have gone public via a Spac is down almost 50% this year, more than double the fall on the S&P 500 index. At least the banks made money from Spacs. Many then enjoyed “a second payday” by advising on mergers after the Spac’s listing. Regulatory scrutiny has now seen banks step back. Founders, the people who launch a Spac, are also in a pickle. As of early June, there were “more than 600 Spacs that have listed on…

The FTSE 100 is only a few percentage points up since its dotcom peak in December 1999, says James Yardley in the i newspaper. London is starting to resemble the similarly “hated” Japanese equity market, says Steven Andrew of fund manager M&G. “Places get this reputation from investors because they don’t make lots of money and they can be a bit dangerous if you own them at the wrong time.” “For all the criticism aimed at the UK benchmark,” note that “the FTSE 100 has delivered an average annual total return of 7.75% since its inception in 1984,” says Investors’ Chronicle. True, that lags America’s S&P 500, but “it’s easily more than double the average UK inflation rate over the same period”. What’s more, the London blue-chip index has been the best-performing…