Merryn Talks Money

Dambisa Moyo is an economist and board member of Chevron and 3M. She’s also author of the 2018 book Edge of Chaos. In this week’s episode of Merryn Talks Money, Moyo and host Merryn Somerset Webb discuss whether the world has finally slipped off the edge.  Moyo says it feels that way. Most economies were already stagnating before the pandemic struck, she says. Growth was trending downwards, productivity was a problem and it was hard to see how countries could all grow their GDPs at 3% a year.Now there’s a new and urgent question, she says: what to do with people who won’t have work in an AI dominated economy. It won’t be long before pretty much every country—even the UK—has too many workers, she warns. There are, however, some easy wins Britain can notch, she says. Namely, lowering taxes and loosening regulations. The UK has gotten a bad rap thanks to Brexit and political uncertainty, Moyo says, but that doesn’t mean it can’t take advantage of its intellectual base and prime location. Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealth And as promised, Baroness Moyo's Maiden Speech.See omnystudio.com/listener for privacy information.

There’s not much you can do right now to dramatically improve your personal finances. But there’s at least one thing you can get on top of: cash savings accounts. You can now get 3 or 4% a year on your money if you look around. Take the easy win and move, says Simon Edelsten, manager of the Artemis Global Select fund, on this week’s episode of Merryn Talks Money.  This shift is symptomatic of the change in all markets, he explains. Rising rates are good for cash savers (although 4% doesn’t totally cut it when inflation is 10%), but they’re horrible for other sectors of the financial world. There are many unexploded bombs out there, he says, noting you may want to keep your eyes on the private equity sector.Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthSee omnystudio.com/listener for privacy information.

During the Panic of 1907, J.P. Morgan came up with a clever plan to slow the ongoing bank run. He told his tellers to count all the money twice before handing it over. The more time paying out the cash took, the more time there was to work on rebuilding confidence before money ran out. Of course, that kind of tactic can’t work anymore, Ruffer Investment Director Duncan MacInnes explained on this week’s Merryn Talks Money. Now, he says, people can use the internet to move money anywhere anytime in the blink of an eye, a fact the world witnessed in real time last month. “This,” MacInnes says, was “not your grandfather’s bank run.” But he adds that, for savers, it doesn’t really matter. Governments are standing by to protect depositors to the hilt. What you do need to worry about is the risk elsewhere. In the last decade, everyone has jumped up the risk curve in a desperate effort to make returns, MacInnes says. He’s seen those who once only invested in public markets move to private, those who used to do private equity go to venture capital—and the venture capitalists move to crypto. Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthSee omnystudio.com/listener for privacy information.

Sebastian Lyon says he’d been expecting inflation to rise for a long time. So when prices began to tick up, his firm was ready. Now the founder and chief investment officer of Troy Asset Management says be prepared for inflation to stick around awhile. Lyon says rates can still fall, and not every part of the economy that thrived in a low-interest environment will run into trouble. So what’s at risk? He says housing, growth stocks, bonds and banks for starters. In terms of protecting investor wealth, Lyon echoes others by suggesting gold.Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthSee omnystudio.com/listener for privacy information.

British pension funds used to have up to 55% of their assets in UK equities. That might have been too much. Now it’s more like 5% (and 70% in US equities). That might be too little. Why? Because those UK equities are cheap and US equities are expensive, explains Temple Bar Investment Trust Portfolio Manager Ian Lance on this week’s episode of Merryn Talks Money. He also argues that there’s an inverse correlation between the price you pay for an equity and the return you get on it long term. The less you pay, the more you get. So why are most investors holding lots of expensive things and not many cheap things? It is the “maddest thing in markets,” he says. Maybe it’s time to do something else: Lance says buy UK oil and mining companies—and maybe Marks & Spencers, too. Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthSee omnystudio.com/listener for privacy information.

In an earlier episode of Merryn Talks Money, reporter Neil Callanan joined the podcast to talk house prices. It’s fair to say his outlook for the UK housing market was not optimistic. It is, he said, entirely possible that prices across the UK will end this cycle down 40% in real terms (adjusted for inflation). This week, Bloomberg Opinion writer Marcus Ashworth joined Merryn Somerset Webb and John Stepek to make a different case. He contends that the mortgage rates actually paid by buyers are nothing like the ones you see on the panicked pages of Sunday newspapers. Not only that, but UK planning rules have kept supply far too tight, he argues, turning it into a “cash-led” market.Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthAnd sign up to be in the audience of our live podcast taping at Bloomberg Invest: Strategies For Wealth Creation: bloom.bg/3kTCmbH See omnystudio.com/listener for privacy information.

The world has been mired in a new Cold War for at least four years, according to Niall Ferguson, a columnist for Bloomberg Opinion and Milbank Family Senior Fellow. Ferguson joins this episode of Merryn Talks Money to discuss the implications for inflation, the Federal Reserve and how investors should navigate the current economic climate. Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthAnd sign up to be in the audience of our live podcast taping at Bloomberg Invest: Strategies For Wealth Creation: bloom.bg/3kTCmbH See omnystudio.com/listener for privacy information.

Inflation isn’t heading back to 2%, according to Pippa Malmgren, author and former adviser to President George W. Bush. She says it’s more likely to stay around 4 to 5%. Why? Malmgren contends that it’s because the main problem facing economies today is tied to supply and demand, and that means traditional inflation-fighting tools won’t really work. Malmgren joins this week’s episode of Merryn Talks Money to talk inflation targets, geopolitics and Britain's future in space. Sign up to John Stepek's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthAnd sign up to be in the audience of our live podcast taping at Bloomberg Invest: Strategies For Wealth Creation: bloom.bg/3kTCmbH See omnystudio.com/listener for privacy information.

The industry of providing people with investment advice has been around for a long time. Just how long is the subject of this week’s Merryn Talks Money. Host Merryn Somerset Webb speaks with Peter Knight and Helen Paul, two of the five authors of Invested: How Three Centuries of Stock Market Advice Reshaped Our Money, Markets and Minds. The new work is a review of centuries of pamphlets and books offering investment advice, and the authors didn’t come away very impressed. Too much of it, they write, offers false hope to an audience desperate to change themselves and their lives without putting in the work. Want to get rich quick? Knight says don’t bother with the actual investing—just write a best-selling book telling others how to do it. The authors say much of the advice doled out by generations of writers is remarkably similar: look for value, don’t pay too much in commissions, don’t over-trade, and don’t fall for fanciful stories. Common sense, in other words.Sign up to John Stepeker's daily newsletter Money Distilled. https://www.bloomberg.com/account/newsletters/uk-wealthAnd sign up to be in the audience of our live podcast taping at Bloomberg Invest: Strategies For Wealth Creation: bloom.bg/3kTCmbH See omnystudio.com/listener for privacy information.

The UK housing market is not in a good place. Mortgage rates are up, buyers are disappearing and so are sellers. The former don’t want to dump money in a falling market, and they can’t afford mortgages at current prices anyway. The latter don’t want to accept that prices are falling in the first place. The result? A standoff. And that means the number of transactions are dropping. And while prices aren’t sinking very fast right now, what happens when sellers can’t hold out any longer? If the past is any guide, prices will fall very fast indeed—just like they did in the early 1990s. How far and how fast? In this week’s episode of the podcast Merryn Talks Money, Senior Editor Neil Callanan and Senior Reporter John Stepek join Merryn Somerset Webb to discuss the scope of the potential implosion. There are an awful lot of vested interests out there insisting that prices won’t fall more than 10%, but without government intervention, they warn prices may drop as much as 40%. See omnystudio.com/listener for privacy information.