Good reads from around the Web.
Well here we are, one month into the year of the people Taking Back Control. Isn’t it going well everyone?
In the UK the people have Taken Back Control and given it to a handful of Tory MPs. This right-wing minority of a centre-right party will now unilaterally establish how this country trades, regulates, and protects its citizens for generations.
What could possibly go wrong for the provincial masses1 [1] who voted for Brexit?
Of course, MPs have been told they’ll get a vote on the final terms of our departure from the EU. And as this week has shown they’ll be called traitors and enemies of the people if they don’t simply wave it through.
What part of democracy don’t I understand? That’s what Brexiteers have been shouting all week, as they lambasted anyone who questioned giving the government the right to pull us out of Europe before we’d reached any sort of national consensus on what Brexit should and should not entail.
An admittedly Herculean task, given the flat-out contradictory hopes and motivations of Leave voters, but that’s on a Leave voter’s conscience, not mine.
No, we voted out, that’s the litmus test for all routes forward. That’s the constant refrain. It’s like going to the doctor because you have an ingrown toenail and seeing your leg amputated. “Yes, but we’ve dealt with the toenail!”
Top trumped
Meanwhile in the US the people have Taken Back Control and given it to a thin-skinned autocrat who seems to be deliberately probing the system for its weakest links. He’s also openly scornful of the international institutions and alliances assembled in the past 70 years to keep the great powers in check and stave off total war, and the globalization that has helped take a billion [2] people out of poverty in the past 20 years.
And he is not wasting any time in sorting out America’s problems!
On Friday he announced his administration would tear into the post-financial crisis regulations to get banks to lending again.
He literally [3] – I shit you not – stated that he has “friends” who can’t borrow.
But let’s cut him some slack; you can see the lack of lending pretty clearly in this chart from the US Federal Reserve:
US commercial and industrial lending in billions since 2007.
Source: St Louis Fed [4]
I mean, I know it looks like total US commercial and industrial loans are now running about 30% higher than before the financial crisis.
But that’s just a fact!
You’ve get to get hip to alternative facts. You know, bogus funding claims written on buses, massacres that didn’t happen [5], nonsense theories that sound right but that are flatly wrong about the impact of immigration, trade, and so forth.
These distortions might all make for good sport in a world without nuclear weapons.
Unfortunately we don’t live in such a world. As with all his predecessors, a man follows the new President around day and night with the nuclear codes that enable him to begin World War 3 in about the time it takes to compose a Tweet.
Died in the wool
I would like to think those reasonable people who voted us out of Europe for reasons of sovereignty or even economics would at least now acknowledge the downsides of the alliance they made with nationalists, racists, and fascists to push them over the 50% mark.
Social media suggest they won’t. People are getting more entrenched, not less. There’s every chance it could get worse before it gets better.
I also don’t know if there are any Barry Blimps [6] still reading Monevator. But there should be fewer than there were just through the natural attrition of the Leave voting cohort.
Here’s some – not to be taken hugely seriously – maths I shared with friends this week:
I’ve just been looking at Office for National Statistics data on deaths. I estimate at least 300,000 UK citizens have died since the Referendum.
Around 64% of over 65-year olds voted Leave, compared to just 29% of 18-24-year olds. Very few people die before 55, which is around the age that people started to favour Leave. Mostly the oldest Leave-ist voters die. Voter turnout was 72%.
Consider older people were more likely to turnout, assume people don’t change their vote as they get older, squint a bit, and I guestimate about 22,000 Leave voters are dying every month.
Brexit won by 1.2m votes. Within about five years Leave’s existing margin of victory will probably be dead, leaving us to lump it.
But wait – what about the new young? If we assume 70% or so would vote Remain and constant turnout, then Remain might win a Referendum within three years.
No wonder they want to trigger Article 50 and get us out in two.
(Caveat: All sums done in my head, your mileage may vary.)
Of course you can quibble with my assumptions.
For instance it’s possible young people are looking at the cabal of Conservative ministers heading off to Brussels to decide the future of the UK for themselves, at Nigel Farage chilling with Donald Trump, at the US refusing entry to its own legal residents [7] for a period on a presidential whim and they’re thinking: “Hey, I don’t know what that guy is smoking but I want some of it!”
What do I know? I’m just a liberal elite snowflake.
QED.
From the blogs
Making good use of the things that we find…
Passive investing
- The quant godfather thinks most people should index – The Irrelevant Investor [8]
- This is why you need a process – A Wealth of Common Sense [9]
- My investment portfolio: 2017 – Can I Retire Yet? [10]
Active investing
- The transience of economic moats – Todd Wenning [11]
- Breaking news or braking news? Dow 20,000 – Investing Caffeine [12]
- On forecasts and expert opinion [PDF] – Howard Marks [13]
- When to buy a company with a falling share price – The Value Perspective [14]
- This is the UK’s best AGM – Richard Beddard [15]
- Most individual stocks fail to beat Treasury bills – Alpha Architect [16]
- Should we be holding more cash? [Nerdy, academic] – Newfound Blog [17]
Other articles
- The other side of uncorrelated – Charlie Bilello [18]
- Choose life – SexHealthMoneyDeath [19]
- How to make sense of bond pricing – Wade Pfau [20]
- The Brexit boost conundrum – Simple Living in Suffolk [21]
- Behavioural biases and the hierarchy of retirement needs – Michael Kitces [22]
- Did China eat America’s jobs? [Podcast] – Freakonomics [23]
- Charlie Rose talks to Bill Gates and Warren Buffett [Video] – TRB [24]
- We are not materialistic enough – Raptitude [25]
Product of the week: ThisIsMoney reports [26] that Tesco Bank has pledged not to cut the 3% interest rate paid on cash held in its current account [27] for the next two years. That’s welcome, given how the likes of Santander have taken the axe to their own rates. Unfortunately you’re only paid 3% on balances up to a maximum of £3,000. Still, that’s good for £88 a year. [Insert obligatory “Every Little Helps” quip here.] [Update: See @BigPat’s comment [28] below about holding multiple accounts as one individual!]
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.2 [29]
Passive investing
- The limits of investment maths – Morningstar [30]
- Passive investing set to claim half of equity and bond markets [Search result] – FT [31]
Active investing
- Inside the high-stakes world of binary options [Bargepole! Search result] – FT [32]
- Here’s a theory for investors: Trump is an alien [Search result] – FT [33]
- US companies reconsider corporate citizenship – Strategy Business [34]
- Neil Woodford getting ready to launch a higher income fund – ThisIsMoney [35]
- US hedge funds start to bet big on Europe [Search result] – FT [36]
A word from a broker
- Are emerging markets developing into a powerhouse? – TD Direct [37]
- Royal Dutch Shell: Dividend steady, debt falling – Hargreaves Lansdown [38]
Other stuff worth reading
- Are you a financial ostrich, engineer, or pragmatist? [Search result] – FT [39]
- Estate agents asking buyers to pay to prove they’re serious – Guardian [40]
- Steven Webb calls for ISA limits to be slashed to encourage investment – ThisIsMoney [41]
- Are ‘split ticket’ websites the best way to save on train travel? – Guardian [42]
- Buy an artwork, fund an artist’s pension [Search result] – FT [43]
- Becoming Warren Buffett: The man – The New Yorker [44] & Business Insider [45]
- Five things that prove rich people are cheap – Market Watch [46]
- AI/Super-intelligence debate with Elon Musk and more [Video] – YouTube [47]
- Did going to college help Michael Corleone? [Podcast] – Bloomberg [48]
- Trump: An insurgent in the White House – The Economist [49]
- Doomsday prep for the super-rich – The New Yorker [50]
- Ken Clarke’s anti-Brexit speech in full [Video] – The New Statesman [51]
Book of the week: I hope it rains this weekend, as I can’t wait to get stuck into Ed Thorp’s autobiography: A Man For All Markets [52]. Ed Thorp – who had lunch with the FT [53] this week – was the first person to figure out the maths of card-counting in Vegas. He then went on to make millions on Wall Street, where his hedge funds pretty much pioneered quant investing. Thorp is in his mid-80s and his life story has just been published. I expect to be inspired!
Like these links? Subscribe [54] to get them every week.
- Yes, I understand not every Leave voter was a member of the provincial masses. Perhaps you weren’t. But they are the ones I am talking about here. See how it works? Maybe I’ll write about another kind of Brexit voter later on. Who can tell! [↩ [58]]
- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩ [59]]