Journal

Chamath would have made Bernie proud

I read today that Bernie Madoff, the operator of what was supposedly the biggest Ponzi scheme in history, has died in prison. I think the papers should have qualified that by recognizing that the they were restricting the comparison to those schemes that had been exposed as such. And I guess we should exclude the various unfunded liabilities that the public sector operates quite openly: is there anyone left who imagines that the National Insurance ‘Contributions’ they pay in is put into a fund which is set aside to pay their pensions in old age?

Well, SPACs and the rest of Project Ponzi will continue to thrive, and I’d love to jump on the bandwagon if only it could slow down long enough for me to leap on. A few stocks ($GSX, $NKLA, $WKHS) have lost their shine, but the others continue to defy gravity. I watch, with interest, from the sidelines.

On a separate note, it seems totally inhumane not to release prisoners who are terminally ill, to spend their remaining weeks with their families. I see no purpose in keeping them in jail, other than to boost the profits of the for-profit prison operators. The US is a cruel country. In the same vein, elderly prisoners in the UK (and globally) whose health is failing and maybe suffering from dementia, should not have to spend their final days miles from their families. At least let them go to a suitable care home.

Eric Basmajian, the new Lacy Hunt

Read his homage to Lacy here. Don’t get me wrong: I think there is a 50% chance that he is right!

Cameron in the desert

I’d heard about David Cameron, Lex Greensill and Mohammed bin Salman (‘MBS’) camping in the desert. I pictured them in shorts and sweaty tee-shirts struggling over a wobbly camping gas burner trying to heat up a tin of beans. Well, not really, but I had not imagined that they would ‘camp’ in the desert wearing suits, including ties. The whole idea is beyond parody, to me at least: a sleazy lobbyist, ex-PM, a banker on the make, and a murdering oil sheik, pretending to love each other, in the presence of the delightful Masayoshi Son, head of Softbank. Truly, the rich are different to you and me: they have more money, but less shame too.

Wrap

Mostly risk on. European markets up, US markets up, Everything up apart from Spain, Italy, Shanghai and Moscow. Moscow was down because there is talk of US sanctions on Russia (richly deserved IMHO). In local currency, this might not last. The ruble is down by ~1%, which will make mineral producers worth 1% more in local currency terms.

Bond yields were down again. The 10Y was grinding down to 1.55%. Over the YTD, all yields are up, but not by a lot (except Brazil). The Fed has promised not to raise rates until 2023, and not reduce bond buying before they start to raise rates. I think this has to start impacting longer dated T-bonds, but no evidence so far.

Quite a few food commodities are up a lot on the year. Corn has gone from $3.50 a bushel last August to $6.00 today. Food prices going up rapidly tends to result, in due course, to political instability in developing countries. Price levels seem spookily calm right now, but given a few coups d’etat in the developing world, things could look very different. It’s ten years since the Arab Spring, where food prices were a factor.

Oil and gold are moving together, even though the dollar is relatively flat.

1983 SDP Manifesto

This manifesto would have been one which the late Shirley Williams would have contributed, I am sure. I a remarkable number of its policies have been implemented, but many have proved too difficult. The devolution and green policies seem implemented. The union legislation, less so. The overseas aid done. The policies to modernize industry and training, partially. The policies to fix housing have not been implemented, and housing remains a major failure of successive administrations.

The section on inequality blandly asserts that spending on education will fix this. It seems clear that this will never work.

Education, Health and Housing

Building a united, civilized community requires decent standards in education, health and housing for everyone. The Tories have imposed savage cuts in the social services and an Alliance Government would increase spending to restore and improve standards.

But it will not be enough just to spend money. The social services are too centralised, too bureaucratic. They are often insensitive and unaccountable. We will aim to make the social services more democratic, attuned to the needs of the individual. In this way, also, they will become more efficient.