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Weekend reading: Winging it when it comes to the economy

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What caught my eye this week.

Right now it can be hard to picture the economic damage caused by the Covid-19 pandemic.

We know it’s bad. The leading indicators – joblessness, factory orders, early GDP reports – tell us that.

But the full impact is being softened by government and central bank countermeasures.

Also, the more insidious affects will take years to be appreciated.

Consider the massive hit to the gazillions of small businesses that aren’t listed on markets, and are currently sheltering-in-place behind furlough schemes and cheap loans. Or the disruption and perhaps permanent impairment of some supply chains and other inter-linkages. The mental and physical health consequences. The loss of innovation.

The list goes on – but happily the world’s best minds are on the case!

Here’s an illustration of the woes in the start-up ‘unicorn’ space from the full-year results of Softbank, the firm behind the $100+billion venture capital Vision Fund:

Don’t expect to understand this graphic unless you have an MBA.

Oh SoftBank, I’m only teasing you.

As someone who reads company reports like normal people read about the Beckhams, it’s fun to come across a graphic like this.

(Although, SoftBank, I’m not sure unicorns have wings? Are you suggesting start-ups will have to mutate to survive? Or was it just too messy to illustrate a unicorn receiving a giant capital infusion at a massively lower valuation to float it out of that ditch?)

If in the future there are fewer identikit software start-ups with names that sound like forgotten children’s toys (Preppy! Snoozer! BarfBoy! TimeTurd!) raising millions to no useful end, then maybe some good will have come out of the crisis…

Oh dear – Covid-19 has turned me into a cynic. The list of symptoms keeps growing, eh?

Have a great weekend.

From Monevator

Salary sacrifice: the potential downsides in a crisis – Monevator

The revenge of the latte factor – Monevator

From the archive-ator: the recession is not a lifestyle choice – 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

At least 5% of UK has had coronavirus, with 17% in London, antibody study suggests – ITV

The UK just sold its first-ever negative-yielding government bond – CNBC

Top 1% of UK earners get 17% of income – Guardian

Why should companies use bankers to issue equity when an app [Primary Bid] does the job? – Yahoo Finance

Taxpayers set to be saddled with £10bn of bad emergency loans as 43% of borrowers say they don’t expect to be able to pay them back – ThisIsMoney

UK house prices rose 2.1% in March before lockdown hit, says ONS – Mortgage Strategy

Jacinda Ardern flags four-day working week as way to rebuild New Zealand after Covid-19 – Guardian

Face masks and no duty free: EU issues coronavirus air safety guidelines – Guardian

Roughly 66% of hedge fund assets are run by about 5% of managers [Search result]FT

Products and services

Mortgage holidays extended by three months: How do you get one, and what will it cost you? – ThisIsMoney

Superdrug is now selling a Coronavirus antibody test online – Superdrug

Sign-up to Freetrade via my link and we can both get a free share worth between £3 and £200 – Freetrade

Saving rates continue to decline: how to find the best accounts… – Which?

…though note that NS&I is now offering many of the best deals – ThisIsMoney

Here’s when the shops could reopen – Which?

Homes for growing your own food [Gallery]Guardian

Comment and opinion

Who invented the index fund? A brief history – Get Rich Slowly

Will UK taxes have to rise to pay for the pandemic? [Podcast]FT

Why failed predictions don’t matter – Of Dollars and Data

A poisoned chalice – Humble Dollar

Have the record number of investors in the US stock market lost their minds? – New Yorker

Doppelgänger – Indeedably

Should UK pensioners be forced to pay the bill for coronavirus? – Guardian

Seven pieces of advice for new graduates – Morningstar

Low bond returns are nothing new [US specifics but relevant]A Wealth of Common Sense

What will we do with our world when this is over? – Simple Living in Somerset

Factor diversification and why it matters in a new market regime [Allegedly!]Wisdom Tree

The case against factor investing – Factor Research

Naughty corner: Active antics

Scottish Mortgage trust: The biggest and the best? – IT Investor

Know what you don’t know, and other tips from Howard Marks – CFA Institute

Merryn Somerset-Webb: Neil Woodford, Mark Barnett, and the case for active management – FT

Wow! – The Brooklyn Investor

When and how to take risk in bonds – Verdad

The crypto price-innovation cycle – Andreessen Horowitz

Covid-19 corner

The meaning of R – John Kay

Early data shows Moderna’s Covid-19 vaccine generates immune response – Stat

The case for reopening economies by sector – Harvard Business Review

At least six countries reimposed lockdown when Covid-19 flared up again. Here’s how – Business Insider

Assessing the UK’s public health response to Covid-19 – The BMJ

The ‘just stay at home’ message will backfire [US but relevant]The Atlantic

I’m an NHS doctor, and I’ve had enough of people clapping for me – Guardian

Covid-19 – Epidemic ‘Waves’ – CEBM

A pandemic plan was in place. Trump abandoned it — and science — in the face of Covid-19 – Stat

The 13 kinds of pandemic ads – Slate

People who believe Covid-19 conspiracies have these seven tendencies – Fast Company

The cult of Elon is cracking – The Atlantic

Kindle book bargains

Pig Wrestling: The Brilliantly Simple Way to Solve Any Problem by Pete Lindsay – £0.99 on Kindle

The Basic Laws of Human Stupidity by Carlo Cipolla – £0.99 on Kindle

Digital Transformation: Survive and Thrive in an Era of Mass Extinction by Thomas Siebel – £0.99 on Kindle

Money: A User’s Guide by Laura Whateley – £0.99 on Kindle

Off our beat

The three sides of risk – Morgan Housel

As machines get smarter, how will we relate to them? – Wired

Doordash and pizza arbitrage – Margins

Farewell office. You played a crucial and happy role [As often with these links, I have a different view]NYT

The US can prevent another Great Depression. It’ll take $10 trillion – The Atlantic

How many people die each day? [Infographic]Visual Capitalist

Have AI developers created a model that can learn to write code? [Video, v geeky, probably not]YouTube

“I’ve dealt with this before” Seth’s Blog

And finally…

“There is such a thing as too much choice. Last time I checked (and the number has probably already crept up), there were 4,987 different insurance policies available for you to pick from. That is over 1,200 more than there were in 2015, and almost 4,000 more than in 2003, according to money analyst Defaqto. This number includes 976 separate annual travel insurance policies and 952 single-trip travel insurance policies; 159 to cover mobile phone and gadgets and 721 car-breakdown policies all offered by 1,579 different insurance ‘providers’. There were just 560 such providers in 2003.”
– Laura Whateley, Money: A User’s Guide

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{ 103 comments… add one }
  • 101 Sparschwein May 29, 2020, 9:48 pm

    @Snowman – Balloux never said what you imply. You are referencing him incorrectly.
    In fact, in another thread on 27 May he said: “Cross-immunisation is a ‘wilder’ hypothesis…”

    That’s what assuming some other form of immunity is, at this point. A *wilder hypothesis*. Everyone should know this, be responsible and act accordingly.
    Protect others from an infection that could kill them.
    Already now the UK has a terrible Covid-19 death toll, one of the worst in the world.

    Sikora is actually a cancer doctor. He is *not* an expert in any of the relevant disciplines: virology, immunology, epidemiology, biostatistics…
    Sikora is not an expert in this pandemic at all.

    Sikora does however have a huge conflict of interest, that should always be mentioned when quoting his personal opinion on Covid-19.
    Sikora is co-founder and owns a multi-million stake in Rutherford Health (name changed recently from Proton Partners), a chain of private cancer centres that got embroiled in the Woodford mess. They made a huge operating loss already before Covid-19, and surely they are struggling even more now.

  • 102 Snowman May 30, 2020, 8:18 am

    @Sparschwein

    I merely linked to the Balloux thread as it contained a paper that further discussed some of the possible mechanisms for non-antibody immunity. The point is the experience and epidemic curves in different countries suggest something like this is going on, and the twitter thread just indicates that there could be mechanisms that do explain it, wild as any individual theory may or may not be at the moment. Better to remain open minded while the evidence is unclear rather than assume all who encounter the virus produce detectable antibodies. Form a view, but be prepared to change that view. That’s where I’m at, and I respect the opinion of those who have coherently posted an alternate view above.

    If you want to be constructive then please link to a single paper that has studied specifically the asymptomatic or those in households where somebody else has had covid-19 but had no symptoms themselves and shows they still have detectable antibody protection? I am genuinely interested if you can provide study a study.

    I agree conflicts of interests are always important, but for balance Professor Sikora has stated his motives as

    ‘The whole reason I joined this debate was to stand up for the forgotten cancer patients. We’ve made some progress, but it isn’t moving quickly enough. Despite what we read, Coronavirus is not the only thing killing people.’

    Sometimes it is experts outside the direct field (but still medically eminent in this case) who can look at things with an open mind and avoid the group think that partly derives from conflicts of interest amongst other things. Yes maybe he has a bias towards the cancer patients, but it’s good that someone is able to make a minor dent in the bias in the other direction.

    The immunologists and virologists don’t generally have any expertise in cancer. So presumably they should give no opinions on how to control the epidemic because they can’t judge the indirect deaths side of things?

    Your use of emotive language isn’t helpful, and when I see that it rings an alarm bell that someone isn’t thinking clearly, it’s understandable, but dangerous. What about all those people who will die of cancer because they aren’t diagnosed, what about all those who die through the indirect results of all this? The longer this goes on the more who will be affected.

    You say ‘already now the UK has a terrible Covid-19 death toll, one of the worst in the world’. Do you judge success (for want of a better word) as how many have died so far? Do you think we should take into account those who die in the future from covid-19 and the indirect deaths in judging success, and take into account the average years lost for each of those deaths? And should we look at excess death figures or covid-19 recorded deaths only? Do you think a country that didn’t take action before covid-19 had widely spread through the population, could stop the virus entering the population indefinitely or until a safe scalable vaccine is found, because that is the only scenario I see for judging things based on deaths to date. All deaths are sad of course past, future, covid-19 or non covid-19.

  • 103 Minikins May 31, 2020, 11:06 pm

    The big data on testing, symptoms and outcomes will come with the test and trace programme which they will hold for 20 years

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