What caught my eye this week.
Should the average Monevator reader – likely a passive investor – give two basis points about this week’s GameStop-centered mania in the markets?
On the one hand, no.
Even though it made the BBC News. Even after it drew an investing-related comment from your friend who only posts about cats and macramé.
Only a handful of stocks went bonkers this week. They’re immaterial to the indices.
You might argue mass fund ‘de-bulking’ in the face of the volatility caused prices to decline more broadly for the past few days; I’d agree it’s possible.
But we don’t invest with a time horizon of days around here.
These distortions will work out. We’ll hear about a hedge fund or two getting rescued. As for those long GameStop who say they’ll hold at any price – they’re probably already dead, in trading terms. They just don’t know it yet.
GameStop might have a brighter future. The initial short squeeze was inspired. But the firm surely wasn’t undervalued by a factor of 50 or more?
You have to know when you’ve won.
It ain’t what you takin’, it’s who you takin’ from
On the other hand, yes, all investors of all stripes should care.
I was going to write a lot more about this today. I said I would in the comments. But I feel like I’ve eaten two KFC buckets worth of information in one sitting.
And if I – an investing junkie – am stuffed, then 95% of you are, too.
So just a few quick discussion points:
- You can’t have major dealing platforms imposing and then removing and then reinstating trading restrictions without fallout, even if – perhaps especially if – it was outside their control.
- You can’t have hundreds of thousands of ordinary people making headlines around the world for apparently sticking it to gilded hedge funds without creating a narrative that will linger.
- You can’t help but notice we’ve had two destabilizing flash situations – the Washington insurrection and now this pile-on – already in 2021. Very different, ideologically, though some of the rhetoric is the same (elites, corruption, control). But both were partly nurtured by algorithms that notice and nudge and readjust and prod us ever more – and ever more of us – in a given direction. This seems all-important, in the same irreconcilable way that climate change does.
- Me and The Accumulator can’t agree on how much of the class warfare rhetoric that’s said to be motivating the Redditors is real and how much is window dressing. What’s undeniable is it strikes a chord. The gulf between the wealthiest and the rest looms larger than ever. (See the Oxfam report link below). We can’t say there were no canaries.
- There’s no way Wall Street (and the City, or specifically the cluster of streets around Berkeley Square) isn’t in on both sides of these trades.
- People complain about vocal shorting. But promoting long positions sustains an entire media industry and is just matter of fact investing. Why is that so different? It’s only in edge cases that shorting actually hurts a good company, aside from banks.
Money ain’t got no owners. Only spenders
Of course, if I have to choose I’m on the side of the ordinary guys.
The biggest hedge fund managers are ridiculously rich on the back of what they do, which is about as socially useful – on a relative ‘per pound of earnings’ basis – as if you and I sat down to have a game of Risk this weekend.
We need some custodians of capital and price discovery, sure. So let’s have ordinary fund managers paid outlandish six-figure salaries fighting the zero sum fight. Not eight-figure oligarchs.
With that said, shorting isn’t evil. And targeting hedge funds for a perceived role in the 2008 financial crisis is way off-base. (It takes respectable bankers to have the influence and debt to blow things up that badly.)
Anyway, I’ll outsource my defense of shorting to the excellent Cullen Roche in the links below, and my musings on where social media and attenuation fits into all this to the chap from ETF Trends.
Both are great reads, among much else good stuff this week.
You come at the king, you best not miss
Now for some good news: after this week’s announcements (again, see the links below) we have five Covid vaccines that work.
Broadly, it seems the tricky-to-handle mRNA vaccines have a very high efficacy and prevent the vulnerable from succumbing to the virus. The more traditional ones are less effective, but prevent serious illness.
So the former into the arms of the vulnerable, and the others ASAP for the rest of us for herd immunity. Hopefully that’s enough to get us out of this mess and away from our screens. (Those screens are getting to everyone!)
Indeed I believe it’s just possible we’re starting to see this working in the UK statistics, following the UK authorities’ commendably advanced rollout.
A BBC report I saw today dwelt on the apparently mysterious persistence of high Covid prevalence in today’s data from ONS random sampling, versus falling official Covid case counts and all the rest.
We should note the statistics do cover different time periods.
But could it also be that fewer people are developing strong symptoms and seeking a test because the vaccinations are now having an effect on the more vulnerable cohorts? Even while the continued spread of Covid means it’s still showing up as amok among those randomly sampled people, who maybe have little to no symptoms?
As our Covid article the other week explained, that’s the sort of thing we’d expect to see first as vaccination begins to have an impact.
Lars isn’t convinced yet, but I want to be optimistic. Of course my guess is as good as yours. We’ll have to see what the experts say.
Fingers crossed. Here’s to saner times – and more normal markets – to come.
From Monevator
How to calculate your personal inflation rate – Monevator
Stonking gains, hedge fund pains – Monevator
From the archive-ator: The problem with low interest rates – Monevator
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1
Private rents fall by up to 12% in UK’s big cities in Covid crisis – Guardian
Mega-rich have already recovery from pandemic losses, but it could take the poor a decade, says Oxfam – CNBC
Young women of colour navigate the risky world of forex trading – Guardian
‘Weaponised’ options trading turbocharges GameStop’s dizzying rally [Search result] – FT
Products and services
Contactless card limit in UK could soon rise to £100 – Guardian
Eight ways pensions are about to get better – Which
The coming freeze on free banking [Search result] – FT
How to avoid the new and costly Brexit-imposed import fees – ThisIsMoney
How to save with green heating and hot water technology – ThisIsMoney
JP Morgan to launch new UK digital-only bank – Guardian
Sign-up to Freetrade via my link and we can both get a free share worth between £3 and £200 – Freetrade
The top 10 companies for customer service – ThisIsMoney
Art deco homes for sale, in pictures – Guardian
Comment and opinion
Why it’s usually crazier than you expect – Morgan Housel
Larry Swedroe: Is there a whelk in your portfolio? – TEBI
Preparing for a stock market crash – Banker on FIRE
Let them vote – Of Dollars and Data
Can my wife retire? – Lazy Man and Money
Three retirement myths of the social media era – Incognito Money Scribe
For their sake – Humble Dollar
Mistaken – Indeedably
Pension procrastination: advice for freelancers – Freelance Finances
Actually, well-being does keep improving above $75,000 a year [Research] – PNAS
GameStop: once more with feeling
My view on short selling – Cullen Roche at Pragmatic Capitalism
Robinhood first restricts then later eases GameStop trading – CNBC
A broker explains why platforms had to restrict trading of these stocks [escalating collateral costs] – Yahoo Finance [See also John St Capital]
Freetrade was forced to disable trading of US stocks on Friday as mania spread – Reuters
Semantic density, algos, and GameStop: this time it’s different – ETF Trends
“They’re harassing me however they can”: Citron’s Andrew Left – Institutional Investor [h/t Abnormal Returns]
A GameStop sea shanty – TikTok via Twitter
How does the GameStop saga end? – A Wealth of Common Sense
[Primer if you’re lost] The WallStreetBets subreddit effect – Protocol
This is unacceptable.
We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.
As a member of the Financial Services Cmte, I’d support a hearing if necessary. https://t.co/4Qyrolgzyt
— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
Naughty corner: Active antics
Ark Invest’s Big Ideas 2021 [Research, PDF] – Ark Invest
Reducing a complicated portfolio to one ETF – FireVLondon
Bank compliance department causes £1m crypto profit – Finumus
Goldman Sachs: It’s not a bubble, but avoid these three sectors – Business Insider
The grocery store stock puzzle – Verdad
The pandemic and politics
New Novavax vaccine shot shows 89% efficacy in UK trials – BBC
Johnson & Johnson one-shot Covid vaccine also shown to work – Guardian
Despite vaccinations, Israel struggling with new variants – Bloomberg Quint
The pandemic has erased entire categories of friendship – The Atlantic via MSN
How Dr Anthony Fauci survived Donald Trump – The Atlantic
UK stands firm over special visa for Hong Kong residents – BBC
Kindle book bargains
Don’t have a Kindle? Buy one.
When: The Scientific Secrets of Perfect Timing by Daniel Pink – £0.99 on Kindle
The Squiggly Career: Ditch the Ladder, Discover Opportunity, Design your Career by Helen Tupper – £0.99 on Kindle
Essentialism: The Disciplined Pursuit of Less by Greg McKeown – £0.99 on Kindleg
The Organised Time Technique: How to Get Your Life Running Like Clockwork by Gemma Bray – £0.99 on Kindle
Off our beat
The climate crisis is worse than you can imagine. What if you try? – ProPublica
As birth rates fall, animals prowl humanity’s abandoned ‘ghost cities’ – Guardian
The high price of mistrust – Farnham Street
And finally…
“Cyberspace. A consensual hallucination experienced daily by billions of legitimate operators, in every nation.”
– William Gibson, Neuromancer
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I think hospitalisation rates are more important than infection rates. I can’t find it now, but I think it was the BBC had an article showing that while hospitalisation rates were generally down (due to lockdown) they were more down in the over 80s. Suggesting vaccination was preventing at least serious enough illness to need to go to hospital. Doubt a statistician would agree there is anything there yet, and you could argue over 80s are being more cautious now than before, but promising noises!
It’s great to see that pension schemes will need to manage climate-related risks though more will need to be done to wean society off the current consumption model.
I generally avoid articles about climate change because it is pretty harrowing to think about the potential state of the planet towards the last quarter of my life (c. 2060-2085). Lethal heatwaves, collapsing crop yields, increasing conflict, extreme weather events, water scarcity, mass migration… We need to be close to net zero by 2030 to mitigate the worst impacts of climate change, and we are way off the trajectory for even achieving net zero 2050.
How can we account in our financial plans for a planet with a shrinking population and mass instability? Alternatively, what would be the impact on our investments of a global economy that is no longer based on a growth and consumption model? Even the value of cash will be eroded away by inflation due to limited resources.
Electric cars, renewable energy, hydrogen trains – great for shareholders. In reality, we need a massive and sustained reduction in energy consumption and the billionaires aren’t advocating for that- I wonder why?
I wish they’d hurry up with the HK visas. Britain should have done this years ago, but better late than never. The moral argument aside, an influx of highly educated, skilled and young population might be just the thing to save old Blighty’s barnacle ass from the self inflicted Brexit debacle.
Great set of links this week @TA , The ARK white paper was worth the effort. If they are half right about half of it, ARM could earn Softbank quite a lot.
JimJim
I’m grateful the UK government has got at least one thing right in this pandemic – securing and funding multiple vaccine deals early on. On a personal level this means my elderly parents will get their vaccine next week and my children might finally return to school in March.
I guess we could see the services dependent UK economy recovering sharply in spring and summer, while the Eurozone struggles until the autumn due to ongoing lockdowns. I imagine the investing advice is the same as usual – everything already priced in, continue with passive trackers as normal.
*cough* I wish. Just once. 😉
I keep doing that, apologies, @TI
Not only have five vaccines been shown to work… but three are already in production at factories here…so with a bit of luck when they gain regulatory approval we will be vaccinating at 10x the EU rate rather than the current 5x
Self imposed brexit debacle indeed… seems to me both the EU and hard core remainers will look pretty silly when we’re all vaccinated five months before the mighty EU is….although it will be delicious to export vaccines to the failing EU once we are vaccinated…
as the ham sandwich snatching boarder guard said ‘Welcome to the brexit sir!’
Why are covid figures higher for the ONS survey (random representative sample, regardless of symptoms) vs NHS test figures?
The ONS survey does not seem to show a drop in the over 70s (its oldest cohort). If anything, drops seem to have been in children/young people.
A couple of weeks ago, the German virologist I listen to, Christian Drosten, suggested that viral loads had not been found to be higher, on average, in people with new British variant. So why is it more transmissible? One possibility was that those who have it might be asymptomatic-but-infectious, for a longer period before developing symptoms. So they run round untested, infecting others. I think this is just a theory, perhaps it’s hard to verify. But it would it help explain this discrepancy?
Thanks for providing the essential reading for lounging around on a Saturday morning!
I‘m suffering from confirmation bias but the articles about the price of mistrust and the fact that it’s difficult to let in the horrors of the climate crisis to its full extent, combined with the link to the ‚squiggly career‘ book, perfectly sum up my pondering over a major career change this year.
Thank you for always branching out beyond personal finance!
@BBlimp — I agree that now would not be the best week to go for that People’s Vote. 😉
With that conceded, let’s not get into a Brexit debate further this week. The vaccine supply debacle is more complicated than Brexit, and it’s going to cost lives. It’s also a bit unseemly with much of the rest of the world over a year from vaccines in size.
@Haphazard — I just mean the sheer size. ONS random sampling has 1/55 people infected, which as far as I’m aware is as high as it’s been. And yet ‘cases’ have come down to 20-something thousand a day, from a peak of 60-something thousand a day.
So something has changed, given that 40,000 cases a day appear to have dropped out of the daily pro-actively tested count, despite random sampling suggesting 1/55 are infected.
Of course it’s all noisy data, there’s the collection date mismatch etc. But I think it’s suggestive.
@hosimpson — Agreed. And credit where credit is due (as @bblimp has previously pointed out, from memory) granting visas to hundreds of thousands of Hong Kong citizens isn’t exactly xenophobic.
@JimJim — Hah. No worries. Happens to us all the time at parties, unless we get onto the subject of stock picking 😉
@Richard — Of course hospitalizations (and deaths!) are the gold standard. But all know about the lags by now.
@Limette @flashb — You’re welcome Limette. And yes, the warming is beyond daunting and has serious consequences for our wealth, ‘hilariously’ discounted to near-zero for years.
Here’s something I wrote back in 2010 about it:
https://monevator.com/environmental-degradation-and-wealth/
Another great read, thank you! Whether the GameStop story is a mixture of people’s reactions to either sticking it to the hedge fund managers or their inventiveness to work together to eek more rewards for their investments is interesting but it got me thinking:
1. OK so if more of this happens how does this effect the markets?
2. I then read a number of the other links as I generally do for more interesting items and read your bond verses inflation story which reminded me of a number of feeds stating Ray Dalio says don’t buy bonds and keeps his cash is trash sentiment.
3. I wondered further down the rabbit hole reading the Larry Swedroe article about how fees eat away at your portfolio.
If we assume gilts will remain in negative yields for the next couple of years (I realise it’s dangerous to assume anything) and we feel we want to avoid erosion but don’t want to raise the volativity risk too much what is the little guy too do?
My example: the all weather portfolio. In one interview Ray Dalio is reported to have said this portfolio was created in another time when bonds provided acceptable yields and maybe today he might not have the same outlook as bonds would not have the same effect. The story was a little vague on how he would rebalance the portfolio for today except to diversify into other asset classes such as currencies, property, gold, etc.
So my question is could we make a all weather portfolio 2.0 for today?
a. Can reducing (not totally removing) gilts or US treasuries with say more index linked bonds or gold be a potential
b. Could this be a time when investing a percentage in a conservative strategic bond fund such as Jupiter strategic bond be a possibility however fees would need to be considered?
c. Could buying the same index tracker in different currencies also be a runner?
d. What about including something like Vanguards equity income fund or adding a property fund?
I noticed one story suggest a utility fund over commodities as it suggested when back testing there was less volatility. Or do we look more towards the permanent portfolio structure but maybe not 25% gold or commodities.I’ve also read a number of the archive stories on asset allocation, lazy portfolios, bond yields, etc.
This is just a thought experiment as I’m curious to people’s thoughts if it is possible to make tweaks using funds which reduces some of the possible negative yield erosion while still getting a fair return but doesn’t increase volatility risk, costs or complexity too much.
Courtesy of the FT (it’s behind a paywall) an interesting glimpse of the mechanics behind the markets,
‘Heightened volatility evidently caused trouble. It usually takes about two days for a trade to settle. In that time, clearing brokers have to post margin with Wall Street’s central clearing hub, the Depository Trust and Clearing Corporation (DTCC). Asset price gyrations and trading surges — as with shares of GameStop — prompt the DTCC to demand more collateral.
The industry collateral requirements for the entire equity market went from $26bn to $33.5bn in one day. For JPMorgan, with common equity tier one capital of $205bn, the increase is an inconvenience. But if you are an upstart online broker, it is a problem. Robinhood ended up having to raise $1bn from its own investors.’
@Bal — The short answer is you can do all those things, and you will very probably get a higher return over a 10-year timeframe (though as you know, nobody knows).
The safest government bonds are yielding c.1% or less. Starting yield on government bonds nails on your return. So unless all other assets tank (always possible, though unlikely over 10 years if you count in income) they’ll be a drag on portfolio returns.
All this is known. However the fact is if the markets sell-off, most if not all other assets will lose go down. Something like an equity income fund as you suggest will surely fall. Corporate / strategic / junk bond funds (which I own currently with a small % of my portfolio) could well gap down, as we saw in March.
Even bitcoin and gold have been hit up for liquidity in the last couple of sell-offs.
High quality government bonds aren’t guaranteed to go up, but they have the possibility of doing so, and are unlikely to fall much.
Cash will do relatively well in such an environment (if in high inflation your other falling assets would be losing more in real terms) but otherwise isn’t going to give you much if any real return, and more likely a negative real return.
So the story is as it’s been for years now.
If you want truly ‘all-weather’ you have to own genuinely uncorrelated (ish) assets, especially gilts/treasuries. If you do so, your long-term returns will likely be lower than if you didn’t. But you might sleep better!
The choice: Do you want to pay for a slightly less volatile ride with lower expected returns, or do you want to pay for likely higher expected returns with bigger drawdowns and a higher (though still likely small) possibility of permanently losing capital value in real terms (an equity crash that doesn’t bounce back / Japan) over the long-term?
That’s the choice we make.
I believe for most passive investors it still boils down to ‘a bit of everything’, with maybe more cash than government bonds than in the past, and maybe overall more equities (but not dramatically lower) than government bonds than they would have held in the past.
You lack vision TI… let’s hope its in the millions and a ‘New Hong Kong’ sprouts up in the Royal Docks. If we lead on this, Australia and Canada will surely follow.
@BBlimp — Hah, as a rule I am a huge fan of the Chinese (not so much their politics) and I’d be all for it. Hope you’re right.
I’m not entirely sure I’ve picked up on what the aim of the Propublica climate change article really was. Is it just that the truth can be too painful to bear sometimes?
I think the vast majority of people are at least dimly aware that there’s a big problem there. But I’m also pretty sure that most people almost never think about it.
I certainly don’t. I could make myself, but what would be the rational point? There’s enough distressing news in the here and now, what would be the benefit to anyone of stressing myself with tomorrow’s disaster?
AIUI (tell me if I’m wrong) the huge drop off in emissions we saw because of the initial lockdowns last year still barely made a dent in the problem, which I’m afraid is not exactly a motivating factor personally speaking, given everyone will be back on Ryanair the very second they can.
Note, it’s not that I don’t care. I still very much advocate doing whatever we can in our circle of control, and pushing for parties to take action. I admire the passionate activists, we need Greta + co to at help at least perhaps give the human race a little more time. But there’s still no point in me destroying my mental health like the chap in the article seems to have done.
It’s obviously a far far less important thing, but I managed to make myself a very angry, bitter, prickly etc person for probably the period of a year over Brexit. The hourly revelations really got to me. Eventually, I said “F it” and deplugged myself almost entirely from the brexit twittersphere. It had become a poison to my mental state, and I wasn’t achieving anything in fretting about it except wallowing in anger and resentment. Likewise, I’m sure there are many people who care passionately about climate change who are also to some extent spoiling their lives in the effort to stay abreast of the latest catastrophe that there is little or nothing they can actually do about.
Sorry this probably also sounds rather blase and overly fatalistic. Did others see more in that article than I did?
@Bal – From your list, I’ve done a. so far (replacing much of Global mixed bond fund + VWRL with increased TIPS, Gold, Cash).
For the rest of VWRL, am aiming to replacing about 1/4 with various mixed ITs and resource ETFs / ITs to try to get more diversification.
I looked at the Dalio All-Weather, but indeed didn’t want such high bond exposure. Am trying to keep stocks below 45%, and bonds (including TIPS) below 25%.. proving challenging – am scared to go too high in Gold..
@Far_Wide — I think your response to the article *is* the point of the article. 🙂 You clearly care a lot, and have strategically decided you can’t do much about it individually so to preserve your mental health you don’t think about it all the time, and possibly don’t modify your behaviour much (unclear from your post).
I’ve been there. For example I totally cut out all short-haul trips except where demanded by work (not my choice) for five years. Eventually I gave up torturing myself because all my lefty crusading ‘green’ friends were taking literally 2-10 (!) short/long haul flights a year. Around the same time I read Guardian readers have the highest emissions per household of any newspaper reading cohort in the UK.
This (literally not for a bit!) journey made me more sympathetic to the US view (generalizing) that technology has to get us out the hole. I was arguing fossil fuels were on the way out and there’d be no peak oil well over 10 years ago (I think me and @ermine had a ding-dong about this, as he was in the oil-is-modern-civilization camp. But I may be misremembering).
But this change in thinking was from a position of weakness. It hasn’t solved anything for me personally, or for the wider world.
I had a big row with some good US friends who’d bought a holiday home on the Dalmatian Coast a couple of summers ago. Like all good hypocrites (I prefer devil’s advocates) I was having the argument whilst a guest in said home. Anyway, their kids were there and I asked them about the incongruity of being concerned about global warming (they profess massive concern), having kids (I don’t), and buying a get away cottage 5,000 miles away. They essentially said it was ridiculous to think this way, from a game theory perspective.
They are very smart. I wonder if they will feel so smart if their grandchildren need to live underground?
So the article says “what if you think and act congruently with your perception of the climate crisis?” It reminds us most of us don’t. And as you say illustrates why!
If my garden shed was on fire, I’d race to put it out and all my neighbours would be cheering me on if not asking what took me so long.
The planet? Not so much.
@TI – thank you for your comments. I didn’t have any answers, just more questions. The risk / return balance is always there. Little risk will generally provide little return. We probably need to ask ourselves when does increasing the risk a notch balance out enough with the expected return and can we keep it in our comfort zone.
My main thought was if Mr Dalio was able to conceed his portfolio idea may have been re-evaluated differently if it was in today’s investment landscape could it still be simple and how different, more costly, etc. would it potentially be in the attempt to reduce the negative yields or would it be better to just accept it’s going to take a hit in years where inflation is low along with the possibility of growth declines. And woulduld any other portfolios fair any better on the risk / return balance. With my limited knowledge I don’t see anything that stands out more than the others.
I was just seeking to learn more rather than put anything into action.
Thanks TI, I honestly felt I might be missing something there.
I once raised the “but, well, you have kids, so what about that” point over the dinner table too (in response to a “you fly a lot” comment. Wow, there was a sharp intake of breath to that one! I don’t think I’d want to do that again and keep friends who have kids 🙂
But it’s true, if one is being totally dogmatic, then the emissions that your children and your childrens children will surely far exceed any DINK couples flight footprint.
I’m with you, we need to techno-gizmo our way out of this pickle somehow. Just need to get Space Karen focused on it instead of buying Bitcoin.
@Far_wide — Just to be clear, I was talking about their kids in the “you have a stake in the future beyond your death” sense. I don’t, really. I love the natural world but it will survive us. I love people but I can’t be held responsible for our folly. Etc.
Of course I agree with you about the emissions of kids. Do you remember that BBC show a few years ago? From memory a couple spent a year trying to reduce emissions and then at the end they found out she was pregnant, and the experts redrew the carbon graphs with a new Y-axis scale 😐
@TI there are a couple of other thoughts why there are fewer positive tests. Maybe due to the lock down people are not urging on the side of caution so much. If you are going to basically sit at home for the next two months anyway why bother getting a test – esp if you only have a slight caugh or something. Or maybe the virus has already burnt through a lot of the high risk groups who exhibit symptoms and now we are seeing the formation of herd immunity, even before the vaccine. The ONS suggested something like 1m currently infected. Add on all those who have been infected over the past year you may be pushing into double digits infected.
@Algernond – thank you for the input. ITs could potentially reduce the negatives as long as they keep paying dividends and you have a diverse selection. I’m very small fry so the cost of buying ITs wouldn’t be practical.
One idea I had was to look at dividing the potential asset classes against there risk/return but didn’t get any ideal solution but came up with 10% cash, ,10% gilts, 5% gold, 5% property, 5% dividend income index, 5% index linked bonds, 5% industrial grade corporate bond, 55% global index (VWRL or Vanguard all cap).
This maybe impractical so thought of using a conservative strategic bond to cover bonds while gilts are very low / negative yields. Other substitute might be to see if there was a decent utilities index fund to compare against property index. This would change the portfolio to 10% cash, 5% dividend income, 5% utilities (depending on comparison) index, 5% gold, 55% global equity tracker, 20% strategic bond ( until gilt yields increase – due to active fund costs).
I’m not suggesting this is a good idea just the best I’ve thought of at the moment for a potential all weather portfolio 2.0.
Hi – The Which article contained this titbit “Pensions consultancy Willis Towers Watson estimates that the expected CDC pension is, on average, 70% higher than a DC pot and 40% higher than provided under a typical DB scheme.” Which I thought sounded a bit punchy…. found this fuller explanation from last year in case of interest https://www.ftadviser.com/pensions/2020/10/05/cdc-pensions-70-higher-than-traditional-dc/
@BBlimp
UK and the EU will only get out of COVID-19 together because so much of our freight comes from the EU accompanied in trucks.
When the new more contagious/deadly COVID strain was identified in the UK it was all across Europe in weeks.
If, because of too few vaccines, a new strain develops in mainland Europe it will be in the UK in weeks also.
Your England alone nirvana doesn’t exist unless you stop accompanied freight into the UK and that would halt much of UK industry plus cause food shortages.
Do you remember how much chaos blocking incoming freight for just a few days before Christmas caused?
Australia and New Zealand can only cut off their countries from the world because they are isolated islands than manufacture little and have no accompanied freight coming in.
But you just troll on like normal….
@Richard @TI, regarding fewer test positives. There’s another very important factor. Remember that under current lockdown conditions, the people at most risk of exposure are those who are still going to work. These tend to be people who don’t have the choice to wfh and don’t get proper sick pay (retail, food processing, manufacturing, call centres, care work, cleaning). Sometimes they don’t even get SSP. So I’d wager many go to work with symptoms, they don’t get tested because they can’t afford 2 weeks off work. In fact, Dido Harding said as much in her last grilling with MPs. It’s not just contacts who don’t comply with isolation, the bigger issue is people not getting tested in the first place. The economic disincentives are too great.
(This has been the gaping hole in our contact tracing approach from the beginning).
@Neverland – the only thing on variants is it only matters if you end up in hospital. So when a vaccine is reported as not to work on a variant does that mean it is totally useless and back to square one? Or does it mean you get ill but may not need to go to hospital? A lot of these reports say things like 65% effective but 100% prevented hospitalisation. The later is really the key, in my opinion. This is what would determine the risk of one place being vaccinated and another not (Covid in some form is here to stay for the long term in my view anyway)
@Vanguardfan – yes agree. Good point!
@Vanguardfan — Hmm, yes, I see. Makes sense.
Disappointingly Lars messaged me today to say he’s grown more pessimistic when looking at the Israeli data. I can’t see how it can’t be working in Israel unless the vaccines don’t work (!), surely any stubbornness in the death rate falling must be an artifact of other moving parts? Haven’t looked at Israel’s data for a week though, will go and have a poke about now.
p.s. This is the data Lars is favouring: https://ourworldindata.org/covid-vaccinations
He’s perturbed that the death rate seems stuck at 0.7%.
One ‘dare not speak it’s name’ explanation could be the one I/we discussed earlier on in the pandemic / last year…
…that is, that some residual percentage of deaths attributed to Covid could be people who were probably and unfortunately going to die dying *with* Covid — of something else — rather than *of* Covid.
In that instance the death rate of ‘deaths with Covid’ would not come down to zero, because Covid wasn’t killing this cohort, unless vaccination produces no detectable Covid on infection.
From memory I don’t think the trials showed that, I believe they focused as @Richard says on hospitalization/death outcomes?
But happy to hear from someone more familiar with the specifics of the trial data.
@The Investor
Technology might save us temporarily (and will certainly boost our investments!) but at what price?!
Most people and many scientists are unable to grasp and model potential second order effects of meddling with natural cycles that have established over thousand of years.
For example, what are the effects on nature of having mostly indoor farms? What are the effects of replacing the dying bee population with tiny drones that operate based on an algorithm? Can Man replace Nature in all its functions?
Many people are supportive of self-driving cars until they realise that this would mean cameras needed to be installed everywhere to ensure safety of most road users.
I think most people crying for tech solutions don’t know what they’re getting themselves into. Not to claim that I know but it’s good to look behind the shiny façade sometimes and beyond what’s convenient and would require the least amount of change from us.
@TI good question, I would also like to know. My understanding was when a vaccine was touted as, say, 65% effective it meant 65% of people displayed no Covid symptoms. 35% did, but these were not serious enough to need hospitalisation. For the goal is not no symptoms, just not being seriously ill.
P.s. and I would think in both those cases it is still possible for someone to test positive with Covid (the body still has to mount an immune response to get rid of it, but it is how fast and effective it does it)
@limette — Oh don’t get me wrong, I’m pretty pessimistic. I just think technology has more chance than asking people to sacrifice, as hugely demonstrated by all but a few fringe people declining to abstain from anything much, no matter how vocal and heart rending their complaints. They’d rather go on Twitter and complain about “big business and capitalism” on their iPhones in the departure lounge.
(I’m not even joking. One of my hypocritical friends of this sort both runs his own capitalist company and was tweeting about climate change from the tarmac of a runway having attended a deeply pointless industry conference/jolly. He got super hostile / cognitive dissonance when I pointed this out to him. The moral being probably don’t be my friend haha. 😉 )
The best solution is probably radical depopulation (down to a billion say) combined with massive global education efforts, to make up for the lost innovation of an absolute smaller pool (due to said depopulation) of smart and fortunately educated Western people working on technological solutions having accounted for all those working on clickbait algos and running zero-sum hedge funds etc.
But what actually happens is as soon as a country’s fertility goes below the replacement rate, the government is thrown into a crisis and everyone says something must be done. E.g. China scrapped one child policy, other countries have introduced tax penalties or breaks to encourage more birth, I read the other day that Iran (I think) is no longer giving out condoms or doing vasectomies, etc.
This is to say nothing of the “who will pay your pension?” complaints that emerge to justify their 2.1+ broods when I’m silly enough to raise this issue over dinner or whatnot. 🙂
I get it, many people want to have kids. That’s fine. But they could have 1 kid, or at least not castigate countries/people who don’t. It’d be a help.
Anyway that subject makes Brexit or inheritance tax look like a kumbaya sing song, so I’ll probably leave it there. 🙂
re vaccination rates and death rates in Israel – is it just the time lag? Eg if it’s 3 weeks from 1st jab to some immunity and 3 weeks from infection to death then today’s deaths are from infections 3 weeks ago when 20% had 1st dose – but the number with vaccine immunity at that time would be closer to the number vaccinated 3 weeks prior to that around 18th Dec = 0%
And I wouldn’t look at death rates due to Covid, I would look at excess death rates to normal times. Plus people who have been hospitalised because of Covid / people on ventilators because of Covid.
@james — yes that’s a factor, as per Lars’ article if you’ve not read. All equal he didn’t expect the rate to plateau though. If Covid really was killing most who die with it and vaccines stop that then death rate should continue to fall. Of course it could just be noise or something else.
@richard — of course. We don’t have that data yet though. (For context I am always thinking about this partly with my active investor hat on. There speed matters.)
@Richard
The point I was making that because COVID was running riot in the UK we got a variant that looks like its more infectious and deadly
It was in Europe in a week
If COVID runs riot in Europe because they have no vaccines its more likely there will be a variant that will be more infectious and deadly will develop
It will be in the UK in a week, lucky dip if our home grown vaccines work on it
This is exactly what happened with Spanish Flu in 1918, it was a mutation that killed most people
Its like living in a semi-detached house and saying that your neighbours house being on fire isn’t your problem
Re: Robinhood
People have short memories. Barely six months ago everyone was up in arms after a Robinhood trader killed himself over oil futures contracts
Now everyone thinks its a crime they can’t trade
https://www.ft.com/content/45d0a047-360f-4abf-86ee-108f436015a1
I watched the dotcom bubble from the sidelines in index trackers but this sure as hell looks like it
With yesterday’s figures just added, we’re now at 8.4 million people having received a first jab. The graph starts on 11th January with 145,000 recipients recorded on that first day (which from memory included a catch up of earlier dates as well). So we have almost 3 weeks of vaccination history now, which is the maximum period for the vaccine to take effect, which means it should be clear enough very soon whether this is leading to a fall in hospital admissions and therefore eventual deaths. I mean it will be clear from a patient’s medical records when they are admitted whether they received a vaccine and how long ago, and these numbers are going to be much more statistically significant than Israel’s due to their magnitude.
The graph I’m referring to is the daily update here: https://coronavirus.data.gov.uk/details/vaccinations
@Richard @TI, the vaccine trial endpoints varied, as I recall. So the efficacy rates can’t be compared directly across vaccines, you’d have to dig into the trial reports and look at the primary endpoints, how they were defined and measured. (Not to mention looking at the demographics of trial participants especially regarding age).
If I were looking for vaccine impact at a population level, as Richard says, I think hospitalisation rates are the key metric. I haven’t looked at Israeli data because I don’t know enough about how it’s collected to be able to interpret sensibly.
UK hospitalisation rates are coming down, in mid Jan it was about 4000 a day, now closer to 3000 (still massive! We really lost control in December).
How much is lockdown and how much vaccination is hard to say. If there are data by age group that shows the elderly making up a smaller proportion of admissions that would be hopeful I think.
Personally I think it will be gradual and then sudden, as per Tim Harford article in the FT. Fingers crossed. I am very impatient for my vaccine! (Hoping for April, I’m group 9, so still about 30 million people in front of me….it’s a good job we Brits are so good at queueing).
Regarding variants and vaccine escape, I’m not a virologist but those who are seem to think we can expect partial protection from current vaccines.
Of course it is true that variants will continue to arise in proportion to virus circulation, and we should not only be concerned with vaccinations here but also access globally (although, we need to make sure our own house is in order – we will have to work hard to reach everyone, otherwise we will just have continued circulation in unvaccinated segments of the community – already worryingly low uptake in care home workers for eg).
I suspect we will need to do as we do with flu, annual boosters. So no sooner have we we got through everyone once, we’ll need to start the (modified) autumn boosters to get through next winter….it’s a good job we overprocured….
TI,
Re: your dinner conversations about reproduction. I have found that biting the tip of your tongue while counting the shades of green on broccoli tends to help.
I started using the tongue-broccoli method shortly after one especially heated exchange with a (former) friend who happens to be a proud parent of three rather unremarkable offspring.
To my defence, they started it.
“And who will care for you in your old age?” they said.
I lost it. Oh, sorry, I hadn’t realised, so you’re encouraging all your children to train in elderly care? No? Well then whoever is going to care for me in my old age, it’s not going to be *your* kids, ya?
As I said, they are former friends now.
@hosimpson – maybe you had to be there, but you do sound out of order to me. And come on, you killed a friendship over that?
Maybe you are so wealthy you don’t need to worry as you can throw money at the problem, but many people are not and would either rely on their kids or a council funded care home. And who is paying for that council funded care home?
@The Investor
I see ! 🙂
On depopulation: the 2013 mystery series ‘Utopia’ makes for an entertaining and chilling watch – especially given the current pandemic. 😉
@Richard — We live in a globalized world that is literally overrun with at least 9bn too many people, many living in conditions much worse than ours, and all of us trashing the planet.
We could all stick a few grand every year into EM tracker funds / Western companies that do business in EM, generate the money for our old age, then employ said overseas types to care for elderly.
This is, of course, a lot of what we actually do already, as anyone who has been to an old age care home or hospital recently in the SE will know.
p.s. With that said I agree that you’re onto a loser @hosimpson arguing with people about children.
I get the impulse, even if I don’t have the impulse.
And in any event as the Inheritance Tax debates amply demonstrate, people’s atavism with respect to their genetic descendants make little England nationalists look like Bertrand Russell.
@TI – reasonable arguments. I guess first of all, can we all stick a couple of grand in EM? Could minimum wage employees in London do this? If I have nothing in old age, who is looking after me. Should I rely on the charity of strangers? Do you think everyone should stop having children? Feels self defeating to me.
These always feel like arguments of the well off. In which case, your argument is you have no issue paying other people’s children to look after you (and of course you can say it is for environmental reasons etc). In effect you are happy to pay for others to provide a necessary service. Fair enough! You are rich enough to take that option. But why would you destroy a friendship over it?
@Richard — Obviously the state would ideally fund the investment of those who can’t afford, via taxation etc, as it sort of does today, albeit in more of a Ponzi scheme tax-the-presentees way. There are not a materially large number of people living in Dickensian three-generation families (outside of certain communities which are beyond scope of this discussion, though certainly related). When I think of my elderly relatives in the provinces (not prosperous) I can’t think of any who lived with children, or got more than 1-2 visits a week really. This isn’t to say that weren’t helped in other ways by having kids of course.
As I said, I agree with you about the friendship aspect. But that is even more off-topic for Monevator. 🙂
@TI – I agree more than I disagree :). The funny thing is, investing as it stands today relies on the the constant expansion of consumerism. Why did the UK import so many ‘low paid’ workers? By not having kids – and suggesting the rest of us shouldn’t – you are surely working against the very thing this website is all about 😉
@TI
The ETF Trends link (Semantic density, algos, and GameStop: this time it’s different) has been moved (or was wrong in the first place 🙂 ).
It’s now at https://www.etftrends.com/retirement-income-channel/semantic-density-algos-gamestop-this-time-its-different/
@NewInvestor — Thank you! Yes, they appear to have moved it to nest under under a channel and altered the URL. Oh well, things happen. Appreciate you taking the time.
Thanks for recognizing my article in this round. I really appreciate it.
Like you say, there’s so much writing about GameStop that I don’t feel like I need to add more. However, at the same time, it’s hard to ignore when an “investing” story becomes the biggest headline.
I’m now a proud member of the Robin hood society, dressed in appropriate attire. I followed the wrong page but then decided to just go with it;
https://www.bbc.co.uk/news/uk-england-nottinghamshire-55849192
Ps I’ve heard that Boris might have a bias towards Johnson&Johnson’s vaccine
Seriously though I don’t think the vaccine is necessarily causing (much) asymptomatic covid because bear in mind that over 80s and healthcare workers might be regularly tested anyway, although it might be the case that the covid they get is too minor to even trigger the lateral flow tests
I believe that deaths must be starting to be helped a tad by the vaccine (although overwhelmingly lockdown at the moment) -and I believe that there will eventually be an effect on transmission but that’d be at an earlier stage -they say they can’t be 100% certain because they’re being professionally cautious
Delaying the second dose was right – perfection is the enemy of good, it bought us valuable time and protected the vulnerable, however when we start giving out 2nd doses we will see a drop off in 1st vaccines
WHO pressuring us to pause our rollout doesn’t seem to take into account the method we used – delaying 2nd jab to improve the numbers. I understand why poor countries might be behind but 1st world US and EU have no excuse, and really would they help us if the roles were reversed? How can it be in our national security to share with foreign powers? – knowing that doing so will cause deaths of our own? Don’t want to be mean but this is an opportunity for us to get the jump on rivals – or if you were to give vaccines you can use it as a sweetener to try to one day secure better trade deals or alliances. It’s a dog eat dog world, don’t be eaten
@neverland – we got the pandemic and it started in Wuhan . There is a huge world outside of Europe.
Ofcourse I hope the U.K. assists Europe and other failing parts of the world with their vaccination problems once we’ve finished with ours, same way I’m glad we’re helping the rest of the world ( as in the whole of the rest of the world not just the tiny bit of it closest to us) map the variants.
Just read a piece on the FT Money section on debt cancellation. https://www.ft.com/content/86418c40-8d42-4005-a813-f1697b3a00e0
And I’m trying to get my head around it’s usefulness. On the one hand it could decrease the stress that nine million Brits have with problem debt and reduce a rather grubby trade in debt management, which IMO needs tougher regulation. But on the other hand it could increase consumerism which is perhaps detrimental to the health of the world. Any thoughts?, It seems it only took 20k to cancel 1.2M in the documentary…
JimJim
Really simple action any citizen could take on the climate emergency – vote for the party with the strongest climate change policies. The more people vote on the issue, the quicker parties get with the programme.
@ Bal – negative yields are not new with bonds – not if you think in real returns.
What are your strategic objectives? To drive return or risk management? I guess both? So how much of your allocation is going to help you during a market bloodbath? When equity correlations tend to 1?
I agree that in the current environment it looks like we need to take more risk. But how much?
There are a lot of ‘alternative asset’ stories out there that are getting airtime because our traditional sources of risk and return look overvalued. Sometimes there aren’t good options.
Depending on your risk tolerance it may be better to accept some negative return than end up selling in a downturn.
https://monevator.com/how-to-estimate-your-risk-tolerance/
Your idea about a utilities fund is interesting. It’s a theory that’s more fully realised by the low volatility premium. We’ve got a piece to help you explore that option:
https://monevator.com/low-volatility-premium/
@TA – exactly. Look what happened when people started voting for UKIP 😉 but it does 100% supports your point, it pushes the issue up all the parties agenda.
@anyone who might be interested 🙂
I had my AZ jab on Friday, at a nearish vaccination centre, and with the booster booked for 12 weeks down the track. Good approach roads signage, spacious parking, friendly and efficient staff, amiable fellow “jabees”. Were I to wish to fault it, I couldn’t. As and when we all can, let’s “get vaccxit done”!
@ Factor – that is a real shot in the arm! Seriously though, it’s put a smile on my face to hear you had a good experience. My mum is having her jab tomorrow. Couldn’t agree more with your slogan.
@ Richard – yes, UKIP vs the EU is the case par excellence. Somewhere out there is an alternate universe where exactly the same process was repeated but the issue was climate change and the party were the Greens. Can I live there, please?
Interactive Lockdown Ending Estimation tool over at The Times:
https://www.thetimes.co.uk/article/when-will-lockdown-end-three-scenarios-for-the-next-few-months-xtdbm255d
Not earthshattering, but it’s raining.
Hard to make it say Vaccxit before mid-April / May, realistically, unless we assume the government will go with high cases (because of a presumed lower hospitalisation). Ho hum.
(Vaccxit is fun, did you coin that @Factor?)
There is an article on Reuters about how the Israeli numbers might be impacted by the behaviour of some communities who are completely ignoring any restrictions and avoiding vaccination, so it is probably too early to get worried at this stage.
But at least they don’t have the EU and WHO trying to steal their vaccine stash.
Anyway back to investing/gambling, who is buying Silver tomorrow – the GameStop of metals? 😉
@TI #64
Yep 🙂
The Devil makes work for idle brains to do!
Below is the link that I believe @SemiPassive is referring to but not sourcing (tsk! 🙂 )
https://www.reuters.com/article/us-health-coronavirus-israel/israel-sees-delay-in-covid-19-turnaround-political-wrangling-could-hamper-fresh-lockdown-idUSKBN2A00EF
Silver now getting the WSB/GameStop treatment. Could be another crazy week.
https://www.kitco.com/news/2021-01-31/Unprecedented-silver-demand-forcing-bullion-deals-to-stop-taking-orders-before-market-opens.html
Yeah, silver. The nut jobs at Zero Hedge were harking on last week about silver being the likely next GME. I dismissed it then as just another manifestation of ZH’s perma-hardon for precious metals (and pretty much nothing else).
While I don’t share in either their politics (wtf, by the way, has happened there… their usual libertarian sort of right leanings have over the past couple of years gone into the fucking crazy Fourth Reich territory. I’m afraid to open that blog on my work computer lest it gets me fired, ffs!), I’ll agree with ZH on one thing. The people who are leading these short squeezes appear to know quite a lot about derivatives trading, have enough capital to give the initial upwards nudge (more than you’d accumulate doing charity work) and have access to Bloomberg terminals. The people who follow them in pile-ons do not. I don’t necessarily think there’s anything sinister going on here, but I agree that a swarm is not a cooperative, and I don’t think the gains are being shared equally, either. I fear some millennials could end up losing their avocado toast money. While the school of hard knocks has its merits, I hope the knocks don’t prove too hard and whatever happens doesn’t end up putting the young’uns off from investing.
@TI, in terms of your musings about how many covid victims would have died anyway,
https://www.theguardian.com/commentisfree/2021/jan/17/statistics-explained-covid-19-excess-deaths-david-spiegelhalter
‘From ONS data, we can calculate that between September and the end of 2020 there were around 21,000 excess deaths in England and Wales. Yet there were 29,000 deaths with Covid on the death certificate, so there has been a substantial deficit of around 8,000 non-Covid deaths. We are, then, faced with a statistical challenge – how could this happen?
‘First, around half of this 8,000 will be people whose primary cause of death was something else: they died “with”, rather than”‘from”, Covid. Second, there has been almost no flu. But sadly, we are seeing the absence of the many elderly people who were among the 59,000 excess deaths between March and June, but would otherwise have survived until later in the year.’
New reader here, great articles and supportive community in the comments.
The “Preparing for a stock market crash – Banker on FIRE” article is really very good seeing that data pulled together
TI,
You don’t have any published commenting rules, but I’ve always taken these to be something like don’t be racist or bigoted, or go way off topic, or get into long-ass fights, etc. I’m afraid in this instance I feel compelled to violate the rule about long-ass fights, and so I apologise in advance for saying this:
Richard,
First of all, sir doth protest too much.
Second (of all), the Killing Of the Friendship is too dramatic a description for a fizzled out relationship due to one of the parties becoming too boring to bear. The party in question, since spawning a few times to produce offspring with no discernible talents, are now unable to talk of anything other than their Procreation Project. Their hobbies and interest, which we previously shared, have been reduced to one which we do not.
But their main offence is the evangelism. Imagine a friend of yours joins a Basket Weaving Society and starts spending all their days – dawn till dusk and beyond – weaving baskets. They can’t go on holidays because they have baskets to weave. Every meeting with you without their baskets is a sacrifice on their part, and every social interaction begins with a lengthy description of the metaphorical mountains they had to climb to come here basketless. This, obviously, makes the time they give you so much more precious than the your time given to them. Mostly though they bring their baskets with them, and then every adult has to devote all their attention to said baskets. They cannot rejoice in your achievements – insignificant as they may be – if these achievements don’t involve baskets. And they tell you without reservation that yours and everyone else’s lives are meaningless unless you have experienced the joy of producing at least one basket. When you say you’d rather eat napkins they go on the offensive: but just picture yourself (over this dinner which we’re washing down with very nice wine) as a geriatric invalid. Go on. Picture. Now. Right now. Wouldn’t you like to have a basket to wipe your ass?
Which is why I take exception to your “by not having kids – and suggesting the rest of us shouldn’t …” The evangelism, my friend, goes entirely the other way around. You’d like a few examples? Happy to oblige.
1) I’ve never started a conversation with any parent to inform them that their life would be better if they put up their offspring for adoption. I have been encouraged many times by people who are parents to think about “starting a family”.
2) Assholes at work who used to schedule lunch meetings because they couldn’t do meetings due to their school runs. The same people are now unavailable during business hours, because: home schooling.
3) Child benefit – why can’t I levy a tax on everyone to subsidise something that I might enjoy doing?
4) Maternity / paternity leave – why don’t we all get, say, two years of state-sponsored various-interests-which-might-include-parenthood leave to be taken at our discretion? If you choose to use your leave on having a kid – that’s great!
4) Adoption leave given to people who adopt human children but not pets. Have you tried raising a gun dog puppy? It’s hard if you do it right. And yet, for some bizarre reason, my boss has not been directed by the HR to schedule time with me to talk about how he could help organise my job better so I can allocate adequate time to recall training during lockdown.
@hosimpson – top ranting.
I’ve two baskets myself and it drives me mad these other basket-makers going on about their talentless baskets as though they’re even vaguely comparable to my fantastic, talented baskets.
@hosimpson
“Good morrow”, and hopefully the BP is back nearer to 170/80 now.
My homemade technique for dealing with “l’enfer, c’est les autres” occurrences in life is firstly to say, in a calm and non-combative way, “We are all different”, followed if they persist by, “We don’t choose our DNA”, and followed if they persist in persisting by, “We all have different priorities”.
Should they still continue, I go back to square one, and calmly repeat the loop, “ad infinitum” if needs be, until they signal defeat albeit sometimes with less than total grace. It works every time, and if it results in my no longer being on their Christmas card list, then that’s probably for the best.
In other news, I’m pleased to report no adverse after-effects of any kind whatsoever following the AZ jab last Friday, not even the almost obligatory sore arm, so as ever “Well done” to the NHS!
Hosimpson, agree on Zerohedge. It is a guilty pleasure and there are often a few thought provoking articles on there, but the comments are usually a combination of nutcases, conspiracy theorists and neo-nazis.
Anyway, silver coming off the boil now. You would actually be down if you had bought at UK open. This will give fuel to the conspiracy theorists that silver is being suppressed by The Man and his shadowy forces. Who knows, maybe it is.
Top rant on parents btw.
@hosimpson — There is no comment policy. Comments are (overwhelmingly) published or (much less than 0.5%) deleted on my whim.
Mostly I look for something constructive. And as you say I’m allergic to overt racism, sexism, bigotry. (Not the woke variations, the 1990s versions). So those are usually instant deletions, unless I think there’s a point to be made by leaving them up.
I also far prefer someone to play the ball not the (wo)man. This is one place where trolls fall over so often, including our house troll.
Anyway if your comment was all we were talking about on here, a financial site, I’d be concerned. But I think you make the point well, if forcefully, and you don’t seem particularly vindictive towards the other poster.
It passes the whim test. Thanks for the thought!
@hosimpson – I was perhaps a little harsh in my post to you, it was the Saturday drink I can assure. But your initial post made it sound like they asked, in a jovial way, who was going to look after you in your old age – something I may even ‘jokingly’ ask my own friends. And you then made it sound like you flipped out. With more context your reaction makes more sense.
I don’t really agree with you even so, as you could probably tell. I do agree, it is 100% your choice and I do agree with current population levels there is a major environmental impact. But the question ‘who is going to look after you in your old age’ is still a valid one, if we are looking at it beyond a single individual. Who will keep the ponzi going? Who will invent the tech of the future? These ‘perks’ are incentives to get people to have children to continue to feed the economy, the same way as we offer tax breaks to drive certain behaviours or certain industries. They should be looked as the investment on future economic potential, not as just ‘free’ perks for parents. So when I say ‘by not having children and encouraging others to not have children’ it is purely from this economic point of view I make the comment. If we all stopped, that would help the environment, but more because we would go extinct.
But maybe my ‘selfish’ genes should be glad – you are after all an evolutionary dead end 😉
On Israel. Seems the data is showing a more clearcut decline in severe cases. The Israeli Health Ministry is saying 1,094 severe cases vs. 1,143, 1,183, 1,184 and 1,189 over prior 4 days. At this point 80% of 70y+ have had 2 vaccine doses and 65% of 60-69y olds.
Also a Maccabi case study was published over weekend (they are top 4 healthcare provider with 240k clients in Israel) showing a big difference in their sample who have been vaccinated vs. their control group who had not. Moreover, they have seen no hospitalized cases from those who have had 2 doses of the vaccine.
This is perhaps an interesting read on developed nations fertility ‘issues’, government policies and the burden of raising future human capital. A bit old now.
https://www.ageing.ox.ac.uk/download/40
It doesn’t help explain insufferable parents though.
@hosimposn #72
Chapeau for a top rant and deconstruction of the problem. There’s nothing wrong with basket-weaving. I have always been puzzled by the number of parents of >1 who suddenly become ardent environmentalists. Be the change you want to see…
I would like to see low-cost air travel destroyed by the crisis. There’s no good reason for low-cost airlines to exist, and this could be an ill wind that could root out this market pathology. I recall a short-haul flight to Europe was about £200 in the 1990s. That was about right, enough to make you stop and think a little bit. It didn’t make it impossible – people did manage to fly to Benidorm even in the 1970s, but they didn’t do it four times a year. Just make it dearer, and make the airlines pay their VAT on fuel and all that good stuff. It may have made sense once to favour air travel so that nation may speak unto nation in the post-war era, but the moment has passed.
> I think me and @ermine had a ding-dong about this, as he was in the oil-is-modern-civilization camp. But I may be misremembering
It was me. And I am more than happy to concede, looking at Shell’s results, and the general direction of travel 😉 I wouldn’t quite go as far as we’re out of the woods yet, and let’s see how the power system holds up with 50% electric cars, although that is a question of engineering if it becomes an issue. You still need an hour’s worth of the full output of Sizewell to get a Jumbo on a long-haul flight in energy terms, so if we don’t dig it out of the ground all those Guardian-readers’ holidays are going to need some serious nukes. I think more than 24 long-haul flights depart Heathrow every day 😉
These arguments about children are slightly bizarre. The way the economy works, we need children to be born and some of them to turn into passionate young adults to create exciting new companies, industries and cultures (there’s even a Monevator article somewhere about how great the young are). And we need some of them to work really hard for not very much money while they learn the ropes or before they move onto better things. If the birth rate drops then countries increase immigration – otherwise you will soon have severe labour shortages in bars, coffee shops, cleaning companies, and many other industries.
For most of human history, and even today in much of the world, raising children was a shared endeavour, and children would have been around everyone all the time. It’s only in modern western civilisations that society has broken down so much that parents are left to do most of the job alone – which is very hard work, mainly carried out by women, and more or less unpaid. You now have the crazy situation where maybe half the population have never had any involvement in or responsibility for the next generation at all, yet they clearly have an interest in how those people turn out and behave. This is why the state has to step in – hence the tax breaks, the free state schooling, and so on.
If you don’t personally want children then that’s fine. But the way I see it, that proportion of the population is effectively outsourcing the job to someone else either at home or abroad. The environmental boasts remind me a bit of western countries that claim a low carbon footprint when the reality is that they have simply shifted their manufacturing energy usage to Asia.
@David — You make your point well. However you don’t even nod at ‘our’ point, which is that the world neither needs nor (seemingly) can support the nearly eight billion people already living on it at anything like the same standard of living that we in the UK currently enjoy.
In the space of 200 years we’ve gone from huge tracts of wilderness replete with mega fauna to most of the best of the natural world being a sliver of nature reserve, and the rest of the world at best, effectively, a farm, and at worst a rubbish heap. Most biological resources have been woefully depleted; the fishing industry the Government (ridiculously) made such a song and dance about pulls thimbles of fish from collapsed stocks. And thanks to global warming, on the current trajectory your great grandchildren face a hugely uncertain future, and possibly a hell-scape.
There’s something we can do about a lot of this — I’ve been arguing that the energy transition is coming to us at pace for a decade, for instance — but it’s clear the entire challenge would be easier with fewer people, especially in the resource hungry West (which the rest of the world is of course and understandably trying to emulate ASAP).
How many fewer? For me a global billion sounds still too many. The population was only 3 billion as recently as the 1960s. Clearly reasonable minds can disagree, but I don’t see why we “need” 8 billion let alone 10bn or more.
If the alternative is carrying on as we’ve carried on, then would you say the same if the population doubled to 16bn, with all the consequences?
Maybe you would, we differ in what’s important to us. I’m keenly aware that this country has been denuded of much of its wildlife in just a hundred years, but lots of people probably don’t notice. Maybe a future generation would care if there weren’t, say, any birds outside their back doors, or maybe just crows. Or maybe some kind of desert bird. We don’t miss what we don’t know.
But personally I think people who don’t have children should get a medal, and maybe a tax break underwritten by some sort of long-term debt from the hope that future generations don’t need to step outside wearing breathing apparatus.
Okay, I’m dreaming (/ranting). But my point is that parents being a bit tedious about their run of the mill offspring isn’t really the important issue for those of us who worry about overpopulation. 🙂
Late to the party on reading this article, but wanted to say that I’m here for any and all references from The Wire. Thanks TI!