BP June 2021 Dividend.

Tomorrow BP PLC, one of the world’s largest energy companies, pays out its June quarterly dividend.

http://www.bp.com

$0.0525 a share = 3.7118p

https://www.londonstockexchange.com/news-article/BP./total-voting-rights/14997281

The total number of voting rights in BP p.l.c. is 20,242,824,246

Thus:-

20,242,824,246 x £0.037118 = £751,373,150.363028

That is £751 million

https://www.londonstockexchange.com/stock/BP./bp-plc/company-page

Vanguard: LifeStrategy® 100% Equity Fund

The Vanguard LifeStrategy® 100% Equity Fund is a fund of funds from Vanguard, on the largest money managers.

The Fund seeks to hold investments that will pay out money and increase in value through a portfolio comprising approximately 100% shares. The Fund gains exposure to shares by investing more than 90% of its assets in Vanguard passive funds that track an index

The Vanguard U.S. Equity Index Fund

The Vanguard U.S. Equity Index Fund is a passive investment fund. The Fund seeks to track the performance of the Standard and Poor’s Total Market Index (the “Index”).
The Index is comprised of large, mid, small and micro-sized company shares in the US. It holds 3746 stocks in the fund.

Legal and General May 2021 Dividend.

On Thursday 27th May, Legal and General paid out its May dividend.

www.legalandgeneralgroup.com

12.64p a share.

https://www.londonstockexchange.com/news-article/LGEN/total-voting-rights/14963236

The total number of voting rights in the Company is 5,967,612,282

Thus:-

5,967,612,282 x £0.1264 = £754,306,192.4448

£754million

https://www.londonstockexchange.com/stock/LGEN/legal-general-group-plc/analysis

Standard Life Aberdeen PLC May 2021 Dividend.

Standard Life Abderdeen, the Edinburgh asset manager paid out its May 2021 dividend.

https://www.standardlifeaberdeen.com/

it is 7.3p a share.

https://www.londonstockexchange.com/news-article/SLA/total-voting-rights/14962648

The total number of voting rights in the Company, as at 30 April 2021, is therefore 2,180,723,378.

Thus:-

2,180,723,378 x £0.073 = £159,192,806.594

That is £159 million

https://www.londonstockexchange.com/stock/SLA/standard-life-aberdeen-plc/company-page

JPMorgan Asia Growth & Income Trust.

The JPMorgan Asia Growth & Income Trust is a London listed investment trust.

https://www.londonstockexchange.com/stock/JAGI/jpmorgan-asia-growth-income-plc/company-page

Top Ten holdings:-

Taiwan Semiconductor Information Technology 8.7% of the fund
Tencent Communication Services 8.0% of the fund
Samsung Electronics Information Technology 7.8% of the fund
Alibaba ADR Consumer Discretionary 6.7% of the fund
AIA Financials 4.3% of the fund
Ping An Insurance H Financials 3.1% of the fund
China Resources Land Real Estate 2.8% of the fund
HDFC Bank Financials 2.5% of the fund
SK Hynix Information Technology 2.4% of the fund
Yum China Consumer Discretionary 2.2% of the fund

Gross assets of £463.49 Mn

Commodities.

Their could be a commodity boom. The need for raw materials for electric cars or to build out power lines to the new off shore power station such as windfarms. We are going to need more Lithium, Copper, Coltan etc.

Stock | London Stock Exchange

BCOG is something to look at, the L&G ALL COMMODITIES GO UCITS ETF. The graph below shows a trend.

HM Government Borrowings: April 2021

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In April 2021 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 8 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

28-Apr-2021 0 1/8% Index-linked Treasury Gilt 2031 3 months £1,113.6500 Million
21-Apr-2021 0 5/8% Treasury Gilt 2035 £3,124.9990 Million
20-Apr-2021 0 1/8% Treasury Gilt 2024 £4,062.4980 Million
14-Apr-2021 0 1/8% Index-linked Treasury Gilt 2051 3 months £713.8250 Million
13-Apr-2021 1 5/8% Treasury Gilt 2071 £1,000.0000 Million
08-Apr-2021 0¼% Treasury Gilt 2031 £3,437.5000 Million
07-Apr-2021 0 3/8% Treasury Gilt 2026 £3,394.0000 Million
07-Apr-2021 0 7/8% Treasury Gilt 2046 £2,000.0000 Million

Thus:-

£1,113.6500 Million + £3,124.9990 Million + £4,062.4980 Million + £713.8250 Million + £1,000.0000 Million + £3,437.5000 Million + £3,394.0000 Million + £2,000.0000 Million = £18,846.472 Million.

£18,846.472 Million = £18.846 Billion

Another way of looking at it, is in the 30 days in April 2021, HM Government borrowed:£628.21573333333333333333333333333 Million each day for the 30 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2024 through to 2071. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…

NatWest Dividend May 2021

Yesterday, NatWest Group (formerly Royal Bank of Scotland) paid out its May 2021 dividend.

3p a share.

https://www.londonstockexchange.com/news-article/NWG/total-voting-rights/14959882

46,307,677,708 are the total voting rights in NatWest Group PLC.

Thus:-

£0.03 x 46,307,677,708 = £1,389,230,331.24

Was paid to shareholders yesterday.

£1.389 Billion.

https://www.londonstockexchange.com/stock/NWG/natwest-group-plc/company-page

HSBC Holdings April 2021 Dividend.

Today HSBC, plays out its first dividend, since the dividend was suspended due to Covid19 in April 2020.

https://www.hsbc.com/

It is paying out $0.15 or 10.7923p a share.

https://www.hsbc.com/-/files/hsbc/investors/results-and-announcements/stock-exchange-announcements/2021/april/210401-b-obyrne-n-matos-and-s-moss-sip.pdf

The total number of voting rights in HSBC Holdings plc is 20,423,842,747

Thus:-

20,423,842,747 x £0.107923 = £2,204,202,380.784481

That is £2.204 Billion.

Warren Buffet: Why Index Funds are Amazing

In the 20th century, the United States of America endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

Just over 20 years later, today the Dow is now at over 31,000 points.

HM Government, March 2021 Borrowings.

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In March 2021 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 10 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

24-Mar-2021 0 1/8% Index-Linked Treasury Gilt 2056 3 months 357.2500 Million
23-Mar-2021 1¾% Treasury Gilt 2049 2,250.0000 Million
17-Mar-2021 0 5/8% Treasury Gilt 2035 2,500.0000 Million
16-Mar-2021 0 1/8% Treasury Gilt 2024 4,375.0000 Million
16-Mar-2021 1 5/8% Treasury Gilt 2054 1,633.0000 Million
10-Mar-2021 0 1/8% Index-linked Treasury Gilt 2031 3 months 878.9750 Million
09-Mar-2021 1¼ % Treasury Gilt 2041 2,812.5000 Million
04-Mar-2021 0¼% Treasury Gilt 2031 3,437.5000 Million
02-Mar-2021 0 3/8% Treasury Gilt 2026 3,147.3510 Million
02-Mar-2021 0½% Treasury Gilt 2061 1,562.4990 Million

Thus:-

357.2500 Million + 2,250.0000 Million + 2,500.0000 Million + 4,375.0000 Million + 1,633.0000 Million + 878.9750 Million + 2,812.5000 Million + 3,437.5000 Million + 3,147.3510 Million + 1,562.4990 Million = 22,954.075 Million

22,954.075 Million = £22.954 Billion

On another way of looking at it, is in the 31 days in March 2021, HM Government borrowed:£740.45403225806451612903225806452 Million each day for the 31 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2024 through to 2061. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…

Legal & General Future World Multi-Index 5

The Legal & General Future World Multi-Index 5 is a multi-asset index fund from Legal and General Investment Management (LGIM)

The fund provides exposure to a welldiversified range of index tracker funds and individual investments,
within a pre-determined risk profile, while integrating environmental, social and corporate governance factors.

https://fundcentres.lgim.com/srp/lit/Xb9OZG/Fact-sheet_Legal-General-Future-World-Multi-Index-5-Fund_28-02-2021_UK-INST_UK-ADV_UK-PRIV.pdf

The TOP 10 HOLDINGS (%)
L&G Future World ESG Developed Index Fund 27.3% of the fund
L&G FW ESG UK Equity Index Fund 12.0% of the fund
L&G UK ESG Corporate Bonds ETF 9.0% of the fund
L&G Global Emerging Markets Index Fund 5.0% of the fund
L&G Japan Index Trust 4.3% of the fund
L&G European Index Trust 4.0% of the fund
L&G Global Infrastructure Index Fund 4.0% of the fund
L&G Future World Global Credit Fund 3.5% of the fund
L&G ESG Eemerging Markets Government Bond (USD) Index Fund 3.5% of the fund
L&G Pacific Index Trust 3.0% of the fund

The Legal & General Future World Multi-Index 4 Fund

The Legal & General Future World Multi-Index 4 Fund is a multi-asset index fund from Legal and General Investment Management (LGIM).

The fund invests in a risk-profile targeted range of index tracker funds and individual investments including property. Typically has higher exposure to bonds than to shares in companies, relative to other funds in the Multi-Index Fund range.

https://fundcentres.lgim.com/srp/lit/m2RLPP/Fact-sheet_Legal-General-Future-World-Multi-Index-4-Fund_28-02-2021_UK-INST_UK-ADV_UK-PRIV.pdf

The TOP 10 HOLDINGS (%)

L&G Future World ESG Developed Index Fund 17.8% of the fund
L&G UK ESG Corporate Bonds ETF 11.0% of the fund
L&G FW ESG UK Equity Index Fund 9.3% of the fund
L&G Future World Global Credit Fund 5.0% of the fund
Cash 4.5% of the fund
L&G Japan Index Trust 4.0% of the fund
L&G Global Infrastructure Index Fund 4.0% of the fund
L&G ESG Emerging Markets Government Bond (USD) Index Fund 4.0% of the fund
L&G Global Inflation Linked Bond Index Fund 3.5% of the fund
L&G Short Dated Sterling Corporate Bond Index Fund 3.0% of the fund

The Legal & General Future World Multi-Index 3 Fund

The Legal & General Future World Multi-Index 3 Fund is a multi-asset index fund from Legal and General Investment Management (LGIM)

The Future World philosophy encapsulates how we identify long term themes and opportunities, while managing the risks of a changing world. LGIM use our scale and influence within the market to propel positive change on environmental, social and governance (ESG) issues, at the same time as seeking to achieve financial success

https://fundcentres.lgim.com/uk/en/fund-centre/Unit-Trust/Future-World-Multi-Index-3-Fund/

The find provides exposure to a well diversified range of index tracker
funds and individual investments, within a pre-determined risk profile,
while integrating environmental, social and corporate governance factors

TOP 10 HOLDINGS (%) are:-

L&G UK ESG Corporate Bonds ETF 14.0% of the fund
Cash 11.8% of the fund
L&G Future World ESG Developed Index Fund 11.3% of the fund
L&G Global Inflation Linked Bond Index Fund 9.3% of the fund
L&G Future World Global Credit Fund 7.0% of the fund
L&G High Income Trust 5.0% of the fund
L&G FW ESG UK Equity Index Fund 5.0% of the fund
L&G All Stocks Gilt Index Trust 4.8% of the fund
LEGAL & GENERAL UT GLOBAL REAL ESTATE DIVIDEND 3.5% of the fund
L&G Global Infrastructure Index Fu

Digital 9 Infrastructure plc

Digital 9 Infrastructure plc is a newly established, externally managed investment trust which will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet.
“Digital infrastructure” refers to the critical infrastructure required for the internet to operate and, essentially, refers to everything from fibre networks that connect continents, businesses and homes (the very “backbone” of the internet), to the data centres that organisations use to house their critical networks of computer and storage resources, and to the towers and small cells that carry data traffic wirelessly to the end user

Digital 9 Infrastructure plc (DGI9) is a newly established, externally managed investment trust. It will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The portfolio will comprise future proofed, non-legacy, scalable platforms and technologies including (but not limited to) subsea fibre, data centres, terrestrial fibre, tower infrastructure and small cell networks (including 5G). DGI9 will focus, primarily, on digital infrastructure investments which are operational and with an existing customer base.

Following the completion of the offer, DGI9 will acquire Aqua Comms, a platform owning and operating some 14,300km of the most reliable and resilient trans-Atlantic sub-sea fibre systems – the very “backbone” of the internet.

DGI9’s investment manager is Triple Point Investment Management LLP, an experienced manager with over £1.8 billion of private, institutional, and public capital and has extensive experience in asset and project finance, portfolio management and structured investments

https://www.londonstockexchange.com/stock/DGI9/digital-9-infrastructure-plc/company-page

DGI9’s shares started trading on the London Stock Exchange on Wed 31st March 2021, after which it will complete the acquisition of Aqua Comms, which owns and operates America Europe Connect-1 (AEC-1), America Europe Connect-2 (AEC-2), and CeltixConnect-1 (CC-1), which run between key hubs in the US and Europe (UK, Ireland, Scandinavia). DGI9 aims to build a portfolio of companies primarily related (but not limited) to subsea fibre, data centres, terrestrial fibre, tower infrastructure and small cell networks (including 5G). Its primary focus will be digital infrastructure investments that are already operational and with an existing customer base.

Investment in “reaching out and touching the flame”

U2 – Where The Streets Have No Name (Official Music Video) – YouTube

I want to run, I want to hide
I wanna tear down the walls that hold me inside
I wanna reach out and touch the flame
Where the streets have no name, ha, ha, ha
I wanna feel sunlight on my face
I see that dust cloud disappear without a trace
I wanna take shelter from the poison rain
Where the streets have no name, oh, oh
Where the streets have no name
Where the streets have no name
We’re still building then burning down love
Burning down love
And when I go there, I go there with you
It’s all I can do
The city’s a flood
And our love turns to rust
We’re beaten and blown by the wind
Trampled in dust
I’ll show you a place
High on the desert plain, yeah
Where the streets have no name, oh, oh
Where the streets have no name
Where the streets have no name
We’re still building then burning down love
Burning down love
And when I go there, I go there with you
It’s all I can do
Our love turns to rust
We’re beaten and blown by the wind
Blown by the wind
Oh, and I see love
See our love turn to rust
Oh, we’re beaten and blown by the wind
Blown by the wind
Oh, when I go there
I go there with you
It’s all I can do

HICL Infrastructure Quarterly Dividend.

On Wednesday 31st March, HICL Infrastructure paid out is latest quarterly dividend.

2.06p a share

https://www.londonstockexchange.com/news-article/HICL/total-voting-rights/14635932

The total issued share capital with voting rights is 1,936,813,501.

Thus:-

1,936,813,501 x £0.0206 = £39,898,358.1206

That is £39m

https://www.londonstockexchange.com/stock/HICL/hicl-infrastructure-plc/company-page

Legal and General Annual Results

The UK’s largest money manager, Legal and General announced its annual results earlier in the week

www.legalandgeneralgroup.com

Some salient points from the results:-

-Full year dividend of 17.57p per share (2019: 17.57p) (maintaining the dividend year on year)
-Assets Under Management up 7% at £1,279bn (2019: £86.4bn; £1,196bn)- -That is £1.279 Trillion. (yes TRILLION)
-Our traded credit portfolio (excluding gilts), which is actively managed, has had no defaults
-That means all the debt it owns (bonds) have not defaulted, thus Legal and General as a creditor to large companies, those large companies have paid all debt repayments to Legal and General.

The Keystone Positive Change Investment Trust

The Keystone Positive Change Investment Trust aims to generate long term capital growth with the aim of the NAV total return exceeding that of the MSCI AC World Index in Sterling terms by at least 2% per annum over rolling five-year periods and contribute towards a more sustainable and inclusive world by investing in the equities of companies whose products or services make a positive social or environmental impact.

https://www.bailliegifford.com/en/uk/individual-investors/funds/keystone-positive-change-investment-trust/

Run by the highly regarded Baille Gifford investment house of Scotland.

Its top ten holdings are:-

Tesla 9.7% of the fund
M3 7.6% of the fund
TSMC 6.1% of the fund
ASML 5.5% of the fund
MercadoLibre 5.2% of the fund
Moderna 4.3% of the fund
Illumina 4.1% of the fund
Dexcom 3.6% of the fund
NIBE 3.1% of the fund
Umicore 3.0% of the fund

Top Ten holdings make up 52.2% of the fund

https://www.londonstockexchange.com/stock/KPC/keystone-investment-trust-plc/company-page

Royal Dutch Shell: March Dividend.

Today, Royal Dutch Shell PLC paid out its March 2021 dividend.

www.shell.com

11.96p a share.

Shell PLC is made of 2 share classes, Shell A and Shell B

Royal Dutch Shell plc’s capital as at 26 February 2021, consists of 4,101,239,499 A shares and 3,706,183,836 B shares, each with equal voting rights. Royal Dutch Shell plc holds no ordinary shares in Treasury. The total number of A shares and B shares in issue as at 26 February 2021 is 7,807,423,335

https://www.londonstockexchange.com/news-article/RDSA/voting-rights-and-capital/14880793

Thus:-

7,807,423,335 x £0.1196 = £933,767,830.866

That is £933million.

Total cash paid to shareholders today is £933million.

BP’s PLC’s March 2021 Dividend.

Tomorrow, BP one of the world’s largest oil majors, pays out it March 2021 Dividend.

https://www.bp.com/

3.7684p

https://www.londonstockexchange.com/news-article/BP./total-voting-rights/14881231

The total number of voting rights in BP p.l.c. is 20,352,302,626

Thus:-

20,352,302,626 x £0.037684 = £766,956,172.158184

That is £766 Million

https://www.londonstockexchange.com/stock/BP./bp-plc/company-page

5G Radio Spectrum Auction.

The UK Government on Wednesday 17th March, auctioned off some radio spectrum:-

A total of 200 MHz of spectrum was available to bid for in the auction, split across two bands:

80 MHz of spectrum in the 700 MHz band. These airwaves consist of 2×30 MHz of paired frequency spectrum, and 20 MHz of supplementary downlink spectrum. The 700 MHz airwaves are ideal for providing wide area coverage – including in the countryside.

120 MHz of spectrum in 3.6-3.8 GHz band. These important airwaves are part of the primary band for 5G and capable of boosting mobile data capacity, carrying lots of data-hungry connections.

The winners were:-

EE Limited has won 2×10 MHz of paired frequency spectrum in the 700 MHz band at a cost of £280,000,000; 20 MHz of supplementary downlink spectrum in the 700 MHz band at a cost of £4,000,000; and 40 MHz in the 3.6-3.8 GHz band at a cost of £168,000,000.

Hutchison 3G UK Limited has won 2×10 MHz of paired frequency spectrum in the 700 MHz band at a cost of £280,000,000.

Telefónica UK Limited has won 2×10 MHz of paired frequency spectrum in the 700 MHz band at a cost of £280,000,000; and 40 MHz in the 3.6-3.8 GHz band at a cost of £168,000,000.

Vodafone Limited has won 40 MHz in the 3.6-3.8 GHz band at a cost of £176,400,000.

The total revenue raised from the principal stage is £1,356,400,000. The money raised by this auction will be passed on to HM Treasury.

For EE (A wholly owned subsidiary of BT, the UK’s premier telecommunications and media company), spent in total, £280,000,000 + £4,000,000 + £168,000,000 = £452,000,000 = £452 Million.

For EE, the lower-frequency 700MHz spectrum is seen as crucial for wider and better indoor coverage It will also be useful for expanding the reach of 5G across rural areas in the years ahead. Meanwhile, the mid-range 3.6GHz spectrum will help to deliver greater capacity and speed, both of which are vital in supporting the growing use cases associated with 5G technologies.

Keep in mind that that EE’s investment is approx £5.7 Million per MHz

Globally,

In India recommended price £49.2 Million per MHz as base price.
In Italy was £18.2 Million per MHz,
In Australia was £3.5 Million per MHz,

https://www.ofcom.org.uk/about-ofcom/latest/features-and-news/spectrum-auction-principal-stage-results

Investment in Innovation

DigiTech Centre | University of Suffolk (uos.ac.uk)

BT’s Research and Development HQ is at the world famous site of Martlesham Heath, BT Adastral Park.

https://www.uos.ac.uk/digitech

Now BT has brought on site an academic parter.

Adastral Park is BT’s global Research and Development centre and has played a pivotal role in telecommunications research, such as the commercialisation of single-mode optical fibre. The DigiTech Centre will lead to a unique partnership uniting our young, and modern University with a world leading telecommunications company in BT. In a rapidly developing technological age, we want the DigiTech Centre to be a state of the art ‘solution centre’ for SMEs and other businesses as well as research and knowledge transfer hub. The Centre will have world-class co-working specialist laboratories and will make Suffolk a recognised destination for industry-focused ICT and Digital Creative study programmes and an internationally recognised destination for continuous professional development in digital technologies

VP of Engineering at Matrixx, Paul Graham

DigiTech Centre from University of Suffolk on Vimeo

HM Government Borrowings Feb 2021

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

https://www.dmo.gov.uk/dmo_static_reports/Gilt%20Operations.pdf

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In Feb 2021 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 8 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

23-Feb-2021 0 5/8% Treasury Gilt 2050 £2,499.998 Million
17-Feb-2021 0 5/8% Treasury Gilt 2035 £2,500.0000 Million
16-Feb-2021 0 1/8% Treasury Gilt 2024 £3,250.0000 Million
16-Feb-2021 1¾% Treasury Gilt 2057 £1,250.0000 Million
10-Feb-2021 1¼ % Treasury Gilt 2041 £2,000.0000 Million
03-Feb-2021 0¼% Treasury Gilt 2031 £3,143.0000 Million
02-Feb-2021 0 1/8% Treasury Gilt 2026 £3,000.0000 Million
02-Feb-2021 1 5/8% Treasury Gilt 2071 £1,071.2500 Million

Thus:-

£2,499.9980 Million + £2,500.0000 Million + £3,250.0000 Million + £1,250.0000 Million + £2,000.0000 Million + £3,143.0000 Million + £3,000.0000 Million + £1,071.2500 Million = £18,714.248 Million

£18,714.248 Million = £18.714248 Billion

On another way of looking at it, is in the 28 days in Feb 2021, HM Government borrowed:- £668.366 Million each day for the 28 days.

We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2024 through to 2071. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

Bitcoin and Robinhood will end badly for those who can least afford it: Nouriel Roubini

https://www.theguardian.com/business/2021/mar/03/bitcoin-and-robinhood-will-end-badly-for-those-who-can-least-afford-it

Millions in precarious jobs are betting scant savings on worthless stocks and cryptocurrencies via share-dealing apps

The US economy’s K-shaped recovery is under way. Those with stable full-time jobs, benefits, and a financial cushion are faring well as stock markets climb to new highs. Those who are unemployed or partially employed in low-value-added blue-collar and service jobs – the new “precariat” – are saddled with debt, have little financial wealth, and face diminishing economic prospects.

These trends indicate a growing disconnect between Wall Street and Main Street. The new stock market highs mean nothing to most people. The bottom 50% of the wealth distribution holds just 0.7% of total equity market assets, whereas the top 10% commands 87.2%, and the top 1% holds 51.8%. The 50 richest people have as much wealth as the 165 million people at the bottom.

Rising inequality has followed the ascent of “big tech”. As many as three retail jobs are lost for every job that Amazon creates, and similar dynamics hold true in other sectors dominated by tech giants. But today’s social and economic stresses are not new. For decades, strapped workers have not been able to keep up with the Joneses, owing to the stagnation of real (inflation-adjusted) median income alongside rising costs of living and spending expectations.

For decades, the “solution” to this problem was to “democratise” finance so that poor and struggling households could borrow more to buy homes they couldn’t afford, and then use those homes as cash machines. This expansion of consumer credit – mortgages and other debt – resulted in a bubble that ended with the 2008 financial crisis, when millions lost their jobs, homes, and savings.

Now, the same millennials who were shafted over a decade ago are being duped again. Workers who rely on gig, part-time, or freelance “employment” are being offered a new rope with which to hang themselves in the name of “financial democratization.” Millions have opened accounts on Robinhood and other investment apps, where they can leverage their scant savings and incomes several times over to speculate on worthless stocks.

The recent GameStop narrative, featuring a united front of heroic small day traders fighting evil short-selling hedge funds, masks the ugly reality that a cohort of hopeless, jobless, skill-less, debt-burdened individuals is being exploited once again. Many have been convinced that financial success lies not in good jobs, hard work, and patient saving and investment, but in get-rich-quick schemes and wagers on inherently worthless assets such as cryptocurrencies (or “shitcoins” as I prefer to call them).

Wall Street versus the Redditors: the GameStop goldrush

Make no mistake: The populist meme in which an army of millennial Davids takes down a Wall Street Goliath is merely serving another scheme to fleece clueless amateur investors. As in 2008, the inevitable result will be another asset bubble. The difference is that this time, recklessly populist members of Congress have taken to inveighing against financial intermediaries for not permitting the vulnerable to leverage themselves even more.

Making matters worse, markets are starting to worry about the massive experiment in budget-deficit monetisation being carried out by the US Federal Reserve and Department of the Treasury through quantitative easing (a form of Modern Monetary Theory or “helicopter money”). A growing chorus of critics warns that this approach could overheat the economy, forcing the Fed to hike interest rates sooner than expected. Nominal and real bond yields are already rising, and this has shaken risky assets such as equities. Owing to these concerns about a Fed-led taper tantrum, a recovery that was supposed to be good for markets is now giving way to a market correction.

Meanwhile, congressional Democrats are moving ahead with a $1.9tn rescue package that will include additional direct support to households. But with millions already in arrears on rent and utilities payments or in moratoria on their mortgages, credit cards, and other loans, a significant share of these disbursements will go toward debt repayment and saving, with only around one-third of the stimulus likely to be translated into actual spending.

Why the GameStop affair is a perfect example of ‘platform populism’

This implies that the package’s effects on growth, inflation, and bond yields will be smaller than expected. And because the additional savings will end up being funneled back into purchases of government bonds, what was meant to be a bailout for strapped households will in effect become a bailout for banks and other lenders.

To be sure, inflation may eventually still emerge if the effects of monetized fiscal deficits combine with negative supply shocks to produce stagflation. The risk of such shocks has risen as a result of the new Sino-American cold war, which threatens to trigger a process of deglobalization and economic Balkanisation as countries pursue renewed protectionism and the re-shoring of investments and manufacturing operations. But this is a story for the medium term, not for 2021.

When it comes to this year, growth may yet fall short of expectations. New strains of the coronavirus continue to emerge, raising concerns that existing vaccines may no longer be sufficient to end the pandemic. Repeated stop-go cycles undermine confidence, and political pressure to reopen the economy before the virus is contained will continue to build. Many small- and medium-size enterprises are still at risk of going bust, and far too many people are facing the prospects of long-term unemployment. The list of pathologies afflicting the economy is long and includes rising inequality, deleveraging by debt-burdened firms and workers, and political and geopolitical risks.

The GameStop affair is like tulip mania on steroids

Asset markets remain frothy – if not outright bubbly – because they are being fed by super-accommodative monetary policies. But today’s price/earnings ratios are as high they were in the bubbles preceding the busts of 1929 and 2000. Between ever-rising leverage and the potential for bubbles in special-purpose acquisition companies, tech stocks, and cryptocurrencies, today’s market mania offers plenty of cause for concern.

Under these conditions, the Fed is probably worried that markets will instantly crash if it takes away the punch bowl. And with the increase in public and private debt preventing the eventual monetary normalization, the likelihood of stagflation in the medium term – and a hard landing for asset markets and economies – continues to increase.

Nouriel Roubini is professor of economics at New York University’s Stern School of Business. He has worked for the IMF, the US Federal Reserve and the World Bank.

US Federal Reserve Response to Covid-19

US Central bank undertook a huge quantitative easing programme of expanding the money supply in the US Economy. So nearly 12months on since the Covid-19 pandemic hit the world, I thought I would look at how much the US Federal Reserve has grown its balance sheet in the pandemic. So the numbers are vast, in March 2020 the assets on the balance sheet was $4,241,507 Million ($4.2 Trillion) and has now grown to $7,557,402 Million ($7.5 Trillion) worth of assets, that is an increase of $3,315,895 Million ($3.3 Trillion) assets, just huge asset purchase programme by the Fed, buying assets off the US commercial banks. As you can see from the pictures below, that mass expansion of the balance sheet is much larger than the US Federal Reserve’s response to the Global Financial Crisis of 2008. The damage done by the pandemic is clearly more worse than the insolvency and collapse of Lehman Brothers.

Investment in Poetry: Stairway to Heaven

There’s a lady who’s sure all that glitters is gold
And she’s buying a stairway to heaven
When she gets there she knows, if the stores are all closed
With a word she can get what she came for
Ooh, ooh, and she’s buying a stairway to heavenThere’s a sign on the wall, but she wants to be sure
‘Cause you know sometimes words have two meanings
In a tree by the brook, there’s a songbird who sings
Sometimes all of our thoughts are misgiven
You knowThere’s a feeling I get when I look to the west
And my spirit is crying for leaving
In my thoughts I have seen rings of smoke through the trees
And the voices of those who stand looking
That’s youAnd it’s whispered that soon, if we all call the tune
Then the piper will lead us to reason
And a new day will dawn for those who stand long
And the forests will echo with laughter
Remember laughter?Oh yeah, yeah, yeah…And it makes me wonder
If there’s a bustle in your hedgerow, don’t be alarmed now
It’s just a spring clean for the May queen
Yes, there are two paths you can go by, but in the long run
There’s still time to change the road you’re onYour head is humming and it won’t go, in case you don’t know
The piper’s calling you to join him
Dear lady, can you hear the wind blow, and did you know
Your stairway lies on the whispering wind?And as we wind on down the road
Our shadows taller than our soul
There walks a lady we all know
Who shines white light and wants to show
How everything still turns to goldAnd if you listen very hard
The tune will come to you at last
When all is one and one is all, that’s what it is
To be a rock and not to roll, oh yeahAnd she’s buying a stairway to heaven

HM Government Borrowings: Jan 2021

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

https://www.dmo.gov.uk/dmo_static_reports/Gilt%20Operations.pdf

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In October 2020 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 8 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

27-Jan-2021 0 1/8% Index-linked Treasury Gilt 2031 3 months £1,036.3000 Million
26-Jan-2021 0 5/8% Treasury Gilt 2035 £2,936.2500 Million
26-Jan-2021 0 5/8% Treasury Gilt 2050 £1,750.0000 Million
21-Jan-2021 0 1/8% Treasury Gilt 2024 £3,250.0000 Million
13-Jan-2021 0 1/8% Index-linked Treasury Gilt 2065 3 months £375.0000 Million
12-Jan-2021 0 1/8% Treasury Gilt 2028 £3,000.0000 Million
12-Jan-2021 1 5/8% Treasury Gilt 2054 £1,450.6240 Million
06-Jan-2021 0¼% Treasury Gilt 2031 £3,749.9990 Million

Thus:-

£1,036.3000 Million + £2,936.2500 Million + £1,750.0000 Million + £3,250.0000 Million + £375.0000 Million + £3,000.0000 Million + £1,450.6240 Million + £3,749.9990 Million = £17,548.17 Million

£17,548.17 Million = £17.54817 Billion

On another way of looking at it, is in the 31 days in Jan 2021, HM Government borrowed:- £566.0700968 Million each day for the 31 days.

We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2024 through to 2054. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….

Tesco Feb 2021 Dividend.

Tomorrow Tesco PLC pays out a special dividend

www.tescoplc.com

Its dividend is 50.93p a share

https://otp.tools.investis.com/clients/uk/tesco/rns/regulatory-story.aspx?cid=55&newsid=1448957

The total number of voting rights in the Company is 9,793,496,572.

Thus:-

9,793,496,572 x £0.5093 = £4,987,827,804.1196

That is £4,987 Million = £4.987 Billion.

Just shy of a £5 Billion dividend to shareholders. Every Little Dividend Helps.

Ashoka India Equity Investment Trust plc

The Ashoka India Equity Investment Trust plc is a London listed investment trust.

Its top ten holdings are:-

Infosys 7.5% of the fund
ICICI Bank 7.2% of the fund
Bajaj Finserv 5.0% of the fund
HDFC Bank 4.6% of the fund
Nestle India 4.5% of the fund
Coforge 3.5% of the fund
Asian Paints 2.8% of the fund
Garware Technical Fibres 2.7% of the fund
Mphasis Information 2.5% of the fund
Cholamandalam Investment and Finance 2.5% of the fund

Top 10 holdings in the portfolio are 42.8% % of the fund

https://ashokaindiaequity.com/wp-content/uploads/2021/02/Ashoka-India-Equity-Investment-Trust-PLC-Factsheet-January-2021.pdf

Janet Yellen, the incoming US Treasury Secretary in the Biden administration.

7 years ago, Janet Yellen when chair of the US Central Bank, The Fed gave an powerful speach about rising inequality in the US society. Covid 19 has brought these to the surface in stark reality.

Perspectives on Inequality and Opportunity from the Survey of Consumer Finances
Chair of US Federal Reserve, Janet L. Yellen, October 17, 2014
At the Conference on Economic Opportunity and Inequality, Federal Reserve Bank of Boston, Boston, Massachusetts

The distribution of income and wealth in the United States has been widening more or less steadily for several decades, to a greater extent than in most advanced countries.1 This trend paused during the Great Recession because of larger wealth losses for those at the top of the distribution and because increased safety-net spending helped offset some income losses for those below the top. But widening inequality resumed in the recovery, as the stock market rebounded, wage growth and the healing of the labor market have been slow, and the increase in home prices has not fully restored the housing wealth lost by the large majority of households for which it is their primary asset.

The extent of and continuing increase in inequality in the United States greatly concern me. The past several decades have seen the most sustained rise in inequality since the 19th century after more than 40 years of narrowing inequality following the Great Depression. By some estimates, income and wealth inequality are near their highest levels in the past hundred years, much higher than the average during that time span and probably higher than for much of American history before then.2 It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.

Some degree of inequality in income and wealth, of course, would occur even with completely equal opportunity because variations in effort, skill, and luck will produce variations in outcomes. Indeed, some variation in outcomes arguably contributes to economic growth because it creates incentives to work hard, get an education, save, invest, and undertake risk. However, to the extent that opportunity itself is enhanced by access to economic resources, inequality of outcomes can exacerbate inequality of opportunity, thereby perpetuating a trend of increasing inequality. Such a link is suggested by the “Great Gatsby Curve,” the finding that, among advanced economies, greater income inequality is associated with diminished intergenerational mobility.3 In such circumstances, society faces difficult questions of how best to fairly and justly promote equal opportunity. My purpose today is not to provide answers to these contentious questions, but rather to provide a factual basis for further discussion. I am pleased that this conference will focus on equality of economic opportunity and on ways to better promote it.

In my remarks, I will review trends in income and wealth inequality over the past several decades, then identify and discuss four sources of economic opportunity in America–think of them as “building blocks” for the gains in income and wealth that most Americans hope are within reach of those who strive for them. The first two are widely recognized as important sources of opportunity: resources available for children and affordable higher education. The second two may come as more of a surprise: business ownership and inheritances. Like most sources of wealth, family ownership of businesses and inheritances are concentrated among households at the top of the distribution. But both of these are less concentrated and more broadly distributed than other forms of wealth, and there is some basis for thinking that they may also play a role in providing economic opportunities to a considerable number of families below the top.

In focusing on these four building blocks, I do not mean to suggest that they account for all economic opportunity, but I do believe they are all significant sources of opportunity for individuals and their families to improve their economic circumstances.

Income and Wealth Inequality in the Survey of Consumer Finances
I will start with the basics about widening inequality, drawing heavily on a trove of data generated by the Federal Reserve’s triennial Survey of Consumer Finances (SCF), the latest of which was conducted in 2013 and published last month.4 The SCF is broadly consistent with other data that show widening wealth and income inequality over the past several decades, but I am employing the SCF because it offers the added advantage of specific detail on income, wealth, and debt for each of 6,000 households surveyed.5 This detail from family balance sheets provides a glimpse of the relative access to the four sources of opportunity I will discuss.

While the recent trend of widening income and wealth inequality is clear, the implications for a particular family partly depend on whether that family’s living standards are rising or not as its relative position changes. There have been some times of relative prosperity when income has grown for most households but inequality widened because the gains were proportionally larger for those at the top; widening inequality might not be as great a concern if living standards improve for most families. That was the case for much of the 1990s, when real incomes were rising for most households. At other times, however, inequality has widened because income and wealth grew for those at the top and stagnated or fell for others. And at still other times, inequality has widened when incomes were falling for most households, but the declines toward the bottom were proportionally larger. Unfortunately, the past several decades of widening inequality has often involved stagnant or falling living standards for many families.

Since the survey began in its current form in 1989, the SCF has shown a rise in the concentration of income in the top few percent of households, as shown in figure 1.6 By definition, of course, the share of all income held by the rest, the vast majority of households, has fallen by the same amount.7 This concentration was the result of income and living standards rising much more quickly for those at the top. After adjusting for inflation, the average income of the top 5 percent of households grew by 38 percent from 1989 to 2013, as we can see in figure 2. By comparison, the average real income of the other 95 percent of households grew less than 10 percent. Income inequality narrowed slightly during the Great Recession, as income fell more for the top than for others, but resumed widening in the recovery, and by 2013 it had nearly returned to the pre-recession peak.8

The distribution of wealth is even more unequal than that of income, and the SCF shows that wealth inequality has increased more than income inequality since 1989. As shown in figure 3, the wealthiest 5 percent of American households held 54 percent of all wealth reported in the 1989 survey. Their share rose to 61 percent in 2010 and reached 63 percent in 2013. By contrast, the rest of those in the top half of the wealth distribution–families that in 2013 had a net worth between $81,000 and $1.9 million–held 43 percent of wealth in 1989 and only 36 percent in 2013.

The lower half of households by wealth held just 3 percent of wealth in 1989 and only 1 percent in 2013. To put that in perspective, figure 4 shows that the average net worth of the lower half of the distribution, representing 62 million households, was $11,000 in 2013.9 About one-fourth of these families reported zero wealth or negative net worth, and a significant fraction of those said they were “underwater” on their home mortgages, owing more than the value of the home.10 This $11,000 average is 50 percent lower than the average wealth of the lower half of families in 1989, adjusted for inflation. Average real wealth rose gradually for these families for most of those years, then dropped sharply after 2007. Figure 5 shows that average wealth also grew steadily for the “next 45” percent of households before the crisis but didn’t fall nearly as much afterward. Those next 45 households saw their wealth, measured in 2013 dollars, grow from an average of $323,000 in 1989 to $516,000 in 2007 and then fall to $424,000 in 2013, a net gain of about one-third over 24 years. Meanwhile, the average real wealth of families in the top 5 percent has nearly doubled, on net–from $3.6 million in 1989 to $6.8 million in 2013.

Housing wealth–the net equity held by households, consisting of the value of their homes minus their mortgage debt–is the most important source of wealth for all but those at the very top.11 It accounted for three-fifths of wealth in 2013 for the lower half of families and two-fifths of wealth for the next 45. But housing wealth was only one-fifth of total wealth for the top 5 percent of families. The share of housing in total net worth for all three groups has not changed much since 1989.

Since housing accounts for a larger share of wealth for those in the bottom half of the wealth distribution, their overall wealth is affected more by changes in home prices. Furthermore, homeowners in the bottom half have been more highly leveraged on their homes, amplifying this difference. As a result, while the SCF shows that all three groups saw proportionally similar increases and subsequent declines in home prices from 1989 to 2013, the effects on net worth were greater for those in the bottom half of households by wealth. Foreclosures and the dramatic fall in house prices affected many of these families severely, pushing them well down the wealth distribution. Figure 6 shows that homeowners in the bottom half of households by wealth reported 61 percent less home equity in 2013 than in 2007. The next 45 reported a 29 percent loss of housing wealth, and the top 5 lost 20 percent.

Fortunately, rebounding housing prices in 2013 and 2014 have restored a good deal of the loss in housing wealth, with the largest gains for those toward the bottom. Based on rising home prices alone and not counting possible changes in mortgage debt or other factors, Federal Reserve staff estimate that between 2013 and mid-2014, average home equity rose 49 percent for the lowest half of families by wealth that own homes.12 The estimated gains are somewhat less for those with greater wealth.13 Homeowners in the bottom 50, which had an average overall net worth of $25,000 in 2013, would have seen their net worth increase to an average of $33,000 due solely to home price gains since 2013, a 32 percent increase.

Another major source of wealth for many families is financial assets, including stocks, bonds, mutual funds, and private pensions.14 Figure 7 shows that the wealthiest 5 percent of households held nearly two-thirds of all such assets in 2013, the next 45 percent of families held about one-third, and the bottom half of households, just 2 percent. This figure may look familiar, since the distribution of financial wealth has concentrated at the top since 1989 at rates similar to those for overall wealth, which we saw in figure 3.15

Those are the basics on wealth and income inequality from the SCF. Other research tells us that inequality tends to persist from one generation to the next. For example, one study that divides households by income found that 4 in 10 children raised in families in the lowest-income fifth of households remain in that quintile as adults.16 Fewer than 1 in 10 children of families at the bottom later reach the top quintile. The story is flipped for children raised in the highest-income households: When they grow up, 4 in 10 stay at the top and fewer than 1 in 10 fall to the bottom.

Research also indicates that economic mobility in the United States has not changed much in the last several decades; that mobility is lower in the United States than in most other advanced countries; and, as I noted earlier, that economic mobility and income inequality among advanced countries are negatively correlated.17

Four Building Blocks of Opportunity
An important factor influencing intergenerational mobility and trends in inequality over time is economic opportunity. While we can measure overall mobility and inequality, summarizing opportunity is harder, which is why I intend to focus on some important sources of opportunity–the four building blocks I mentioned earlier.

Two of those are so significant that you might call them “cornerstones” of opportunity, and you will not be surprised to hear that both are largely related to education. The first of these cornerstones I would describe more fully as “resources available to children in their most formative years.” The second is higher education that students and their families can afford.

Two additional sources of opportunity are evident in the SCF. They affect fewer families than the two cornerstones I have just identified, but enough families and to a sufficient extent that I believe they are also important sources of economic opportunity.

The third building block of opportunity, as shown by the SCF, is ownership of a private business.18 This usually means ownership and sometimes direct management of a family business. The fourth source of opportunity is inherited wealth. As one would expect, inheritances are concentrated among the wealthiest families, but the SCF indicates they may also play an important role in the opportunities available to others.

Resources Available for Children
For households with children, family resources can pay for things that research shows enhance future earnings and other economic outcomes–homes in safer neighborhoods with good schools, for example, better nutrition and health care, early childhood education, intervention for learning disabilities, travel and other potentially enriching experiences.19 Affluent families have significant resources for things that give children economic advantages as adults, and the SCF data I have cited indicate that many other households have very little to spare for this purpose. These disparities extend to other household characteristics associated with better economic outcomes for offspring, such as homeownership rates, educational attainment of parents, and a stable family structure.20

According to the SCF, the gap in wealth between families with children at the bottom and the top of the distribution has been growing steadily over the past 24 years, but that pace has accelerated recently. Figure 8 shows that the median wealth for families with children in the lower half of the wealth distribution fell from $13,000 in 2007 to $8,000 in 2013, after adjusting for inflation, a loss of 40 percent.21 These wealth levels look small alongside the much higher wealth of the next 45 percent of households with children. But these families also saw their median wealth fall dramatically–by one-third in real terms–from $344,000 in 2007 to $229,000 in 2013. The top 5 percent of families with children saw their median wealth fall only 9 percent, from $3.5 million in 2007 to $3.2 million in 2013, after inflation.

For families below the top, public funding plays an important role in providing resources to children that influence future levels of income and wealth. Such funding has the potential to help equalize these resources and the opportunities they confer.

Social safety-net spending is an important form of public funding that helps offset disparities in family resources for children. Spending for income security programs since 1989 and until recently was fairly stable, ranging between 1.2 and 1.7 percent of gross domestic product (GDP), with higher levels in this range related to recessions. However, such spending rose to 2.4 percent of GDP in 2009 and 3 percent in 2010.22 Researchers estimate that the increase in the poverty rate because of the recession would have been much larger without the effects of income security programs.23

Public funding of education is another way that governments can help offset the advantages some households have in resources available for children. One of the most consequential examples is early childhood education. Research shows that children from lower-income households who get good-quality pre-Kindergarten education are more likely to graduate from high school and attend college as well as hold a job and have higher earnings, and they are less likely to be incarcerated or receive public assistance.24 Figure 9 shows that access to quality early childhood education has improved since the 1990s, but it remains limited–41 percent of children were enrolled in state or federally supported programs in 2013. Gains in enrollment have stalled since 2010, as has growth in funding, in both cases because of budget cuts related to the Great Recession. These cuts have reduced per-pupil spending in state-funded programs by 12 percent after inflation, and access to such programs, most of which are limited to lower-income families, varies considerably from state to state and within states, since local funding is often important.25 In 2010, the United States ranked 28th out of 38 advanced countries in the share of four-year-olds enrolled in public or private early childhood education.26

Similarly, the quality and the funding levels of public education at the primary and secondary levels vary widely, and this unevenness limits public education’s equalizing effect. The United States is one of the few advanced economies in which public education spending is often lower for students in lower-income households than for students in higher-income households.27 Some countries strive for more or less equal funding, and others actually require higher funding in schools serving students from lower-income families, expressly for the purpose of reducing inequality in resources for children.

A major reason the United States is different is that we are one of the few advanced nations that funds primary and secondary public education mainly through subnational taxation. Half of U.S. public school funding comes from local property taxes, a much higher share than in other advanced countries, and thus the inequalities in housing wealth and income I have described enhance the ability of more-affluent school districts to spend more on public schools. Some states have acted to equalize spending to some extent in recent years, but there is still significant variation among and within states. Even after adjusting for regional differences in costs and student needs, there is wide variation in public school funding in the United States.28

Spending is not the only determinant of outcomes in public education. Research shows that higher-quality teachers raise the educational attainment and the future earnings of students.29 Better-quality teachers can help equalize some of the disadvantages in opportunity faced by students from lower-income households, but here, too, there are forces that work against raising teacher quality for these students. Research shows that, for a variety of reasons, including inequality in teacher pay, the best teachers tend to migrate to and concentrate in schools in higher-income areas.30 Even within districts and in individual schools, where teacher pay is often uniform based on experience, factors beyond pay tend to lead more experienced and better-performing teachers to migrate to schools and to classrooms with more-advantaged students.31

Higher Education that Families Can Afford
For many individuals and families, higher education is the other cornerstone of economic opportunity. The premium in lifetime earnings because of higher education has increased over the past few decades, reflecting greater demand for college-educated workers. By one measure, the median annual earnings of full-time workers with a four-year bachelor’s degree are 79 percent higher than the median for those with only a high school diploma.32 The wage premium for a graduate degree is significantly higher than the premium for a college degree. Despite escalating costs for college, the net returns for a degree are high enough that college still offers a considerable economic opportunity to most people.33

Along with other data, the SCF shows that most students and their families are having a harder time affording college. College costs have risen much faster than income for the large majority of households since 2001 and have become especially burdensome for households in the bottom half of the earnings distribution.

Rising college costs, the greater numbers of students pursuing higher education, and the recent trends in income and wealth have led to a dramatic increase in student loan debt. Outstanding student loan debt quadrupled from $260 billion in 2004 to $1.1 trillion this year. Sorting families by wealth, the SCF shows that the relative burden of education debt has long been higher for families with lower net worth, and that this disparity has grown much wider in the past couple decades. Figure 10 shows that from 1995 to 2013, outstanding education debt grew from 26 percent of average yearly income for the lower half of households to 58 percent of income.34 The education debt burden was lower and grew a little less sharply for the next 45 percent of families and was much lower and grew not at all for the top 5 percent.35

Higher education has been and remains a potent source of economic opportunity in America, but I fear the large and growing burden of paying for it may make it harder for many young people to take advantage of the opportunity higher education offers.

Opportunities to Build Wealth through Business Ownership
For many people, the opportunity to build a business has long been an important part of the American dream. In addition to housing and financial assets, the SCF shows that ownership of private businesses is a significant source of wealth and can be a vital source of opportunity for many households to improve their economic circumstances and position in the wealth distribution.

While business wealth is highly concentrated at the top of the distribution, it also represents a significant component of wealth for some other households.36 Figure 11 shows that slightly more than half of the top 5 percent of households have a share in a private business. The average value of these holdings is nearly $4 million. Only 14 percent of families in the next 45 have ownership in a private business, but for those that do, this type of wealth constitutes a substantial portion of their assets–the average amount of this business equity is nearly $200,000, representing more than one-third of their net worth. Only 3 percent of the bottom half of households hold equity in a private business, but it is a big share of wealth for those few.37 The average amount of this wealth is close to $20,000, 60 percent of the average net worth for these households.38

Owning a business is risky, and most new businesses close within a few years. But research shows that business ownership is associated with higher levels of economic mobility.39 However, it appears that it has become harder to start and build businesses. The pace of new business creation has gradually declined over the past couple of decades, and the number of new firms declined sharply from 2006 through 2009.40 The latest SCF shows that the percentage of the next 45 that own a business has fallen to a 25-year low, and equity in those businesses, adjusted for inflation, is at its lowest point since the mid-1990s. One reason to be concerned about the apparent decline in new business formation is that it may serve to depress the pace of productivity, real wage growth, and employment.41 Another reason is that a slowdown in business formation may threaten what I believe likely has been a significant source of economic opportunity for many families below the very top in income and wealth.

Inheritances
Along with other economic advantages, it is likely that large inheritances play a role in the fairly limited intergenerational mobility that I described earlier.42 But inheritances are also common among households below the top of the wealth distribution and sizable enough that I believe they may well play a role in helping these families economically.

Figure 12 shows that half of the top 5 percent of households by wealth reported receiving an inheritance at some time, but a considerable number of others did as well–almost 30 percent of the next 45 percent and 12 percent of the bottom 50. Inheritances are concentrated at the top of the wealth distribution but less so than total wealth. Just over half of the total value of inheritances went to the top 5 percent and 40 percent went to households in the next 45. Seven percent of inheritances were shared among households in the bottom 50 percent, a group that together held only 1 percent of all wealth in 2013.43

The average inheritance reported by those in the top 5 percent who had received them was $1.1 million. That amount dwarfs the $183,000 average among the next 45 percent and the $68,000 reported among the bottom half of households. But compared with the typical wealth of these households, the additive effect of bequests of this size is significant for the millions of households below the top 5 that receive them.

The average age for receiving an inheritance is 40, when many parents are trying to save for and secure the opportunities of higher education for their children, move up to a larger home or one in a better neighborhood, launch a business, switch careers, or perhaps relocate to seek more opportunity. Considering the overall picture of limited resources for most families that I have described today, I think the effects of inheritances for the sizable minority below the top that receive one are likely a significant source of economic opportunity.

Conclusion
In closing, let me say that, with these examples, I have only just touched the surface of the important topic of economic opportunity, and I look forward to learning more from the work presented at this conference. As I noted at the outset, research about the causes and implications of inequality is ongoing, and I hope that this conference helps spur further study of economic opportunity and its effects on economic mobility. Using the SCF and other sources, I have tried to offer some observations about how access to four specific sources of opportunity may vary across households, but I cannot offer any conclusions about how much these factors influence income and wealth inequality. I do believe that these are important questions, and I hope that further research will help answer them.

Angela Merkel

Tribute to Angela Merkel: She also eschews the trappings of power and lives a simple, quiet life with her second husband, a reclusive chemistry professor (Merkel herself has a doctorate in physical chemistry). She is modest. She does her own shopping at supermarkets. She lives in the apartment in central Berlin 

HM Government Borrowings: Dec 2020

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

https://www.dmo.gov.uk/dmo_static_reports/Gilt%20Operations.pdf

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In October 2020 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 7 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

09-Dec-2020 0 5/8% Treasury Gilt 2035 £3,011.1020 Million
08-Dec-2020 0 1/8% Treasury Gilt 2024 £4,029.3720 Million
08-Dec-2020 0 5/8% Treasury Gilt 2050 £2,500.0000 Million
02-Dec-2020 0 1/8% Index-linked Treasury Gilt 2028 3 months £1,250.0000 Million
02-Dec-2020 0¼% Treasury Gilt 2031 £2,750.0000 Million
01-Dec-2020 0 1/8% Treasury Gilt 2026 £3,669.3550 Million
01-Dec-2020 1¼ % Treasury Gilt 2041 £2,250.0000 Million

(£3,011.1020 Million) + (£4,029.3720 Million) + (£2,500.0000 Million) + (£1,250.0000 Million) + (£2,750.0000 Million) + (£3,669.3550 Million) + (£2,250.0000 Million) = £19,459.83 Million.

£19,459.83 Million = £19.459 Billion

On another way of looking at it, is in the 31 days in December 2020, HM Government borrowed:- £627.7364194 Million each day for the 31 days.

We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2024 through to 2050. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….

Aviva PLC dividend

Today, one of the UK largest insurance firms Aviva PLC pays out its Jan 2021 dividend.

www.aviva.com

The dividend is 7p a share

https://www.londonstockexchange.com/news-article/AV./total-voting-rights/14810813

Thus they payout is:-

Therefore, the total number of voting rights in Aviva plc is 3,928,488,308 * £0.07 = £274,994,181.56

That is £274 Million.

A yield of 5.9%

https://www.dividenddata.co.uk/dividend-yield.py?epic=AV.

The 30 Dow Jones Components

The Dow Jones Industrial Average is made up of 30 US companies:-

MSFT Microsoft
AAPL Apple
JNJ Johnson & Johnson
V Visa
WMT Walmart
PG Procter & Gamble
JPM JPMorgan Chase
UNH UnitedHealth
INTC Intel
HD Home Depot
VZ Verizon
MRK Merck & Co
KO Coca-Cola
DIS Walt Disney
CSCO Cisco Systems
CVX Chevron
CRM Salesforce.com
AMGN Amgen
NKE Nike
MCD McDonalds
IBM IBM
HON Honeywell International
MMM 3M
BA Boeing
AXP American Express
GS Goldman Sachs
CAT Caterpillar
GE General Electric
DWDP DuPont de Nemours, Inc.
TRV Travelers Companies

3i Infrastructure Jan 2021 Dividend

Today on Monday 11th Jan 2021, 3i Infrastructure pays out its Jan 2021 dividend.

https://www.3i-infrastructure.com/

4.9p a share.

https://www.londonstockexchange.com/news-article/3IN/total-voting-rights/14288784

3i Infrastructure had 891,434,010 issued ordinary shares with voting rights, thus:

891,434,010 * £0.049 = £43,680,266.49

That is £43m

https://www.londonstockexchange.com/stock/3IN/3i-infrastructure-plc/company-page

The Renewables Infrastructure Group December 2020 Dividend

Today, the FTSE250 company The Renewables Infrastructure Group pay out its Dec 2020 dividend.

https://www.trig-ltd.com/

It owns:-

45 Wind farms
28 Solar farms
01 Battery Storage

https://otp.tools.investis.com/clients/uk/renewables_infrastructure_group1/rns/regulatory-story.aspx?cid=669&newsid=1436509

The total number of Ordinary Shares in issue on Admission will be 1,903,402,338 each with one voting right.

Thus:-

1,903,402,338 x £0.0169 = £32,167,499.5122

That is £32million

https://www.londonstockexchange.com/stock/TRIG/the-renewables-infrastructure-group-limited/company-page

L&G Clean Energy UCITS ETF

The L&G Clean Energy UCITS ETF is a listed Exchange Traded Fund that invests in Clean Energy companies

https://fundcentres.lgim.com/uk/professional/fund-centre/ETF/Clean-Energy?isin_code=IE00BK5BCH80

The L&G Clean Energy UCITS ETF (the “Fund”) is a passively
managed exchange traded fund (“ETF”) that aims to track the
performance of the Solactive Clean Energy Index NTR (the “Index”)

https://www.londonstockexchange.com/stock/RENG/legal-and-general-asset-management/company-page

The graph speaks volumes

BP December 2020 Dividend.

Yesterday, BP PLC paid out its quarterly dividend.

http://www.bp.com

This is an oil major.

$0.0525 (3.9169p) a share.

https://www.londonstockexchange.com/news-article/BP./total-voting-rights/14774649

The total number of voting rights in BP p.l.c. is 20,273,698,735

Thus:

20,273,698,735 x 0.039169 = £794,100,505.751215

That is £794 Million.

https://www.londonstockexchange.com/stock/BP./bp-plc/company-page

Royal Dutch Shell: December 2020 Dividend.

Yesterday, (Wed 16th Dec 2020), Royal Dutch Shell paid out its quarterly dividend.

www.shell.com

Shell PLC is a dual listed company, Shell A and Shell B shares.

RDSA Royal Dutch Shell A, pays out $0.1665 (12.48p) a share.
RDSB Royal Dutch Shell B, pays out $0.1665 (12.48p) a share.

Royal Dutch Shell plc’s capital as at 30 November 2020, consists of 4,101,239,499 A shares and 3,706,183,836 B shares, each with equal voting rights. Royal Dutch Shell plc holds no ordinary shares in Treasury.

https://www.londonstockexchange.com/news-article/RDSA/voting-rights-and-capital/14774381

Thus:

4,101,239,499 x £00.1248 = £511,834,689.4752
3,706,183,836 x £00.1248 = £462,531,742.7328

That is £511,834,689.4752 + £462,531,742.7328 = £974,366,432.208.

That is £974 Million

https://www.londonstockexchange.com/stock/RDSA/royal-dutch-shell-plc/company-page

HM Government Borrowings Nov 2020

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.

Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

https://www.dmo.gov.uk/dmo_static_reports/Gilt%20Operations.pdf

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In October 2020 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 15 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

24-Nov-2020 1¼% Treasury Gilt 2027 £3,002.7500 Million
24-Nov-2020 1¾% Treasury Gilt 2057 £1,562.4990 Million
18-Nov-2020 0 5/8% Treasury Gilt 2035 £2,500.0000 Million
17-Nov-2020 0 1/8% Treasury Gilt 2024 £4,062.4990 Million
17-Nov-2020 0 5/8% Treasury Gilt 2050 £2,500.0000 Million
12-Nov-2020 0¼% Treasury Gilt 2031 £3,749.9990 Million
12-Nov-2020 1 5/8% Treasury Gilt 2054 £1,562.4990 Million
11-Nov-2020 0 1/8% Index-linked Treasury Gilt 2036 3 months £861.4000 Million
04-Nov-2020 0 1/8% Treasury Gilt 2026 £3,000.0000 Million
03-Nov-2020 0 1/8% Treasury Gilt 2028 £3,405.6250 Million
03-Nov-2020 1¼ % Treasury Gilt 2041 £2,499.9990 Million

[£3,002.7500 Million+£1,562.4990 Million+£2,500.0000 Million+£4,062.4990 Million+£2,500.0000 Million+£3,749.9990 Million+£1,562.4990 Million+£861.4000 Million+£3,000.0000 Million+£3,405.625 Million+£2,499.9990 Million = £28,707.27 Million]

£28,707.27 Million = £28.70727 Billion

On another way of looking at it, is in the 30 days in November 2020, HM Government borrowed:- £956.909 Million each day for the 30 days.

We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2024 through to 2045. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

Helium One.

The world is running out of Helium.

Despite its prevalence across the universe, helium is rare on Earth. It is usually found with oil and natural gas. The US is the world’s largest producer, accounting for roughly 40% of supply. However, the US National Helium Reserve in Amarillo, Texas, the world’s single largest source of helium for the past 70 years, is now exhausted.

Apart filling birthday balloons. It plays a critical role in a number of high-tech applications, from barcode readers to semiconductors to liquid-crystal display (LCD) panels. Magnetic resonance imaging (MRI) machines can’t work without it. Google, Netflix and Amazon have been buying massive quantities of it for their data centers

However there are opportunities to invest in Helium explorers.

Helium One is a new London Listed company looking for Helium in Tanzania.

Its shares were listed on Fridy 4th Dec 2020

https://polaris.brighterir.com/public/helium_one/news/rns/story/x2jm9zw

https://www.londonstockexchange.com/stock/HE1/helium-one-global-ltd/company-page

The Ashoka India Equity Investment Trust PLC

The Ashoka India Equity Investment Trust PLC is a London listed investment trust investing in India.

TOP 10 HOLDINGS (as at 30 November, 2020)

ICICI Bank Financials 6.8% of the fund
Infosys Information Technology 6.6% of the fund
Bajaj Finserv Financials 5.6% of the fund
HDFC Bank Financials 5.3% of the fund
Nestle India Consumer Staples 5.0% of the fund
Asian Paints Materials 4.3% of the fund
Coforge Information Technology 3.9% of the fund
Kotak Mahindra Bank Financials 3.0% of the fund
Garware Technical Fibres Consumer Discretionary 3.0% of the fund
Navin Fluorine International Materials 2.9% of the fund

Total Portfolio 46.4% are the top 10 holdings.

https://www.londonstockexchange.com/stock/AIE/ashoka-india-equity-investment-trust-plc/company-page

The graph below makes interesting viewing.

The Legal & General Global 100 Index Trust

The Legal & General Global 100 Index Trust is an Index fund, the objective of the Fund is to provide growth by tracking the capital performance of the S&P Global 100 Index

Top 10 holdings (%):-

Apple Inc 13.1% of the fund
Microsoft Corp 11.1% of the fund
Amazon.Com Inc 9.4% of the fund
Alphabet Cl A 3.1% of the fund
Alphabet Cl C 3.0% of the fund
Johnson & Johnson 2.7% of the fund
Nestle 2.4% of the fund
Procter & Gamble Company 2.4% of the fund
JPMorgan Chase & Co 2.1% of the fund
Samsung Electronics Co Ltd 1.8% of the fund

£308.8m fund.

The Legal and General Global Technology Index Fund.

The Legal and General Global Technology Index Fund is a Unit Trust. The objective of the Fund is to provide growth by tracking the performance of the FTSE World -Technology Index (the “Index”). This objective is after the deduction of charges and taxation.

https://fundcentres.legalandgeneral.com/uk/Private/fund-centre/Unit-Trust/Global-Technology-Index-Trust

£967.2m of Technology assets.

Top 10 holdings (%)

Apple Inc 16.5% of the fund
Microsoft Corp 13.4% of the fund
Facebook 4.6% of the fund
Alphabet Cl A 4.1% of the fund
Alphabet Cl C 4.1% of the fund
Taiwan Semiconductor Manufacturing 3.4% of the fund
Nvidia Corp 3.0% of the fund
Adobe Inc 2.2% of the fund
Samsung Electronics Co Ltd 2.2% of the fund
Intel Corp 2.1% of the fund

The graph below shows its growth:-

The Polar Capital Technology Investment Trust plc

The Polar Capital Technology Investment Trust plc is a London listed investment trust.

https://www.polarcapitaltechnologytrust.co.uk/

£2,972.87m is it market capitalisation

Its top 15 holdings (%)
Apple 9.3% of the trust
Microsoft 8.2% of the trust
Alphabet 6.3% of the trust
Facebook 5.0% of the trust
Alibaba 4.0% of the trust
Tencent 3.8% of the trust
Samsung 2.8% of the trust
Amazon.com 2.6% of the trust
Taiwan Semiconductors 2.6% of the trust
Adobe Systems 2.2% of the trust
NVIDIA 2.0% of the trust
Advanced Micro Devices 1.8% of the trust
Salesforce.com 1.7% of the trust
Netflix 1.4% of the trust
Qualcomm 1.3% of the trust

https://www.londonstockexchange.com/stock/PCT/polar-capital-technology-trust-plc/company-page

The graph below shows its growth:-

Sainsburys Bank

Their is news in the media, that Sainsbury’s Bank (part of the Sainsbury’s supermaket group) is to be sold to National Westminister Group.

https://news.sky.com/story/taxpayer-backed-natwest-among-initial-suitors-for-sainsburys-bank-12130791

Some figures from the Sainsbury’s annual report

https://www.about.sainsburys.co.uk/~/media/Files/S/Sainsburys/documents/reports-and-presentations/annual-reports/sainsburys-ar2020.pdf

Customer deposits of £6300 million.

Customer lending £7400 million

Legal & General Japan Index Trust

The Legal & General Japan Index Trust in an Index Fund managed by Legal and General.

A £1,321.9m fund. The objective of the Fund is to provide growth by tracking the capital performance of the FTSE Japan Index

Its top ten holdings are:

Toyota Motor Corp 4.2% of the fund
Sony Corp 2.4% of the fund
Softbank Group Corp 2.3% of the fund
Keyence Corp 2.2% of the fund
Nintendo 1.6% of the fund
Daiichi Sankyo Co Ltd 1.5% of the fund
Takeda Pharmaceutical Co Ltd 1.4% of the fund
Shin-Etsu Chemical Co Ltd 1.3% of the fund
Mitsubishi UFJ Financial Group 1.3% of the fund
Recruit Holdings Co Ltd 1.3% of the fund

It invests across 10 sectors:

Industrials 24.0% of the fund
Consumer Goods 22.7% of the fund
Health Care 11.6% of the fund
Financials 11.2% of the fund
Consumer Services 9.9% of the fund
Technology 6.8% of the fund
Telecommunications 6.2% of the fund
Basic Materials 5.5% of the fund
Utilities 1.5% of the fund
Oil & Gas 0.6% of the fund

https://fundcentres.legalandgeneral.com/srp/lit/74gMOx/Fact-sheet_Legal-General-Japan-Index-Trust_30-09-2020_UK-ADV_UK-PRIV.pdf

Investment in ONE

Is it getting better
Or do you feel the same?
Will it make it easier on you now?
You got someone to blame
You say one love, one life (One life)
It’s one need in the night
One love (one love), get to share it
Leaves you darling, if you don’t care for it
Did I disappoint you?
Or leave a bad taste in your mouth?
You act like you never had love
And you want me to go without
Well it’s too late, tonight
To drag the past out into the light
We’re one, but we’re not the same
We get to carry each other
Carry each other
One, one
One, one
One, one
One, one
Have you come here for forgiveness?
Have you come to raise the dead?
Have you come here to play Jesus?
To the lepers in your head
Well, did I ask too much, more than a lot?
You gave me nothing, now it’s all I got
We’re one,…

HM Government Borrowings: October 2020

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

https://www.dmo.gov.uk/dmo_static_reports/Gilt%20Operations.pdf

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In October 2020 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 15 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

28-Oct-2020 0 3/8% Treasury Gilt £3,084.9990 Million
27-Oct-2020 0 1/8% Treasury Gilt 2024 £3,510.7420 Million
27-Oct-2020 1 5/8% Treasury Gilt 2071 £1,249.9990 Million
22-Oct-2020 0 5/8% Treasury Gilt 2035 £2,632.0000 Million
22-Oct-2020 0 5/8% Treasury Gilt 2050 £1,986.8750 Million
20-Oct-2020 1¼% Index-linked Treasury Gilt 2032 3 months £697.0490 Million
14-Oct-2020 0 7/8% Treasury Gilt 2029 £3,125.0000 Million
13-Oct-2020 0 1/8% Treasury Gilt 2026 £3,000.0000 Million
13-Oct-2020 1¾% Treasury Gilt 2057 £1,562.4990 Million
07-Oct-2020 0 3/8% Treasury Gilt 2030 £2,500.0000 Million
07-Oct-2020 0 1/8% Index-linked Treasury Gilt 2041 3 months £884.1490 Million
06-Oct-2020 0 1/8% Treasury Gilt 2024 £3,518.4520 Million
06-Oct-2020 1¾% Treasury Gilt 2049 £2,000.0000 Million
01-Oct-2020 0 1/8% Treasury Gilt 2023 £3,250.0000 Million
01-Oct-2020 1¼ % Treasury Gilt 2041 £2,000.0000 Million

(£3,084.9990 Million + £3,510.7420 Million + £1,249.9990 Million + £2,632.0000 Million + £1,986.8750 Million + £697.0490 Million + £3,125.0000 Million + £3,000.0000 Million + £1,562.4990 Million + £2,500.0000 Million + £884.1490 Million + £3,518.4520 Million + £2,000.0000 Million + £3,250.0000 Million + £2,000.0000 Million) = £35,001.764 Million

£35,001.764 Million = £35 Billion

On another way of looking at it, is in the 31 days in October 2020, HM Government borrowed:- £1129.089161 Million each day for the 31 days.

We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2023 through to 2071. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….

Bank of England November 2020 QE Programme

https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2020/november-2020

On Thursday 5th November, The Bank of England, extended its QE programme by an additional £150bn.

” The Committee voted unanimously for the Bank of England to continue with the existing programme of £100 billion of UK government bond purchases, financed by the issuance of central bank reserves, and also for the Bank of England to increase the target stock of purchased UK government bonds by an additional £150 billion, financed by the issuance of central bank reserves, to take the total stock of government bond purchases to £875 billion. “

Since the start of the financial crisis that began in 2008, the UK Central Bank, has created £875 billion of new money.

Now the QW programme was at £435bn in June 2016, and since Covid has jumped. It went up by £200bn when Covid19 hit in March.

https://www.bankofengland.co.uk/monetary-policy/quantitative-easing

and now jumped again:-

Source Bank of England [ https://www.bankofengland.co.uk/monetary-policy/quantitative-easing ]

HM Government Borrowings: September 2020

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands. [www.dmo.gov.uk]

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In September 2020 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 11 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

29-Sep-2020 0 1/8% Treasury Gilt 2028 £3,437.4990 Million
24-Sep-2020 0 1/8% Treasury Gilt 2026 £3,749.9990 Million
24-Sep-2020 0 1/8% Index-linked Treasury Gilt 2028 3 months £1,310.7490 Million
16-Sep-2020 0 3/8% Treasury Gilt 2030 £3,124.9990 Million
15-Sep-2020 1¼% Treasury Gilt 2027 £2,867.5000 Million
15-Sep-2020 1¾% Treasury Gilt 2037 £2,187.5000 Million
10-Sep-2020 0 1/8% Treasury Gilt 2023 £3,250.0000 Million
10-Sep-2020 0 5/8% Treasury Gilt 2050 £2,421.7490 Million
03-Sep-2020 0 1/8% Treasury Gilt 2028 £3,412.7490 Million
03-Sep-2020 1¼ % Treasury Gilt 2041 £2,500.0000 Million
02-Sep-2020 0 1/8% Index-Linked Treasury Gilt 2056 3 months £459.0500 Million

= £3,437.4990 Million + £3,749.9990 Million + £1,310.7490 Million + £3,124.9990 Million + £2,867.5000 Million + £2,187.5000 Million + £3,250.0000 Million + £2,421.7490 Million + £3,412.7490 Million + £2,500.0000 Million + £459.0500 Million = £28,721.794 Million

£28,721.794 Million = £28.721 Billion

On another way of looking at it, is in the 30 days in September 2020, HM Government borrowed:- £957.3931333333333 Million each day for the 30 days.

We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2023 through to 2056. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

BP’s Quarterly Results.

The oil major BP had some interesting results in the Q2 figures.

www.bp.com

A huge oil and gas company that is transitioning into Green energy.

https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-second-quarter-2020-results.pdf

Its balance sheet on page 17 has some very interesting figures:

Cash position £34.217 Billion.

It has a pension surplus, in its Defined benefit pension plan of £6.346 Billion

Page 27 has some interesting Deb figures:

Finance debt £76.003 Billion

Gearing of 33.1%.

The Gresham House Energy Storage Fund September 2020 Dividend

The Gresham House Energy Storage Fund paid out its September dividend on the 30th Sept.

https://greshamhouse.com/real-assets/new-energy-sustainable-infrastructure/gresham-house-energy-storage-fund-plc/

It was 1.75p a share

https://www.londonstockexchange.com/news-article/GRID/total-voting-rights/14483969

The Company’s issued share capital consisted of 234,270,650 Ordinary Shares.

thus:-

234,270,650 x £0.0175 = £4,099,736.375

https://www.hl.co.uk/shares/shares-search-results/g/gresham-house-energy-storage-ord-gbp0.01

A yield of 4.01%

Standard Life Aberdeen PLC September dividend

Standard Life Aberdeen paid out its September dividend on the 30th Sept.

https://www.standardlifeaberdeen.com/

It was 7.3p a share

https://www.lse.co.uk/rns/SLA/total-voting-rights-w5s1goqtue7qnsu.html

The total number of voting rights in the Company, as at 30 September 2020, is therefore 2,225,782,374

thus:-

2,225,782,374 x £0.073 = 162,482,113.302

https://www.hl.co.uk/shares/shares-search-results/s/standard-life-aberdeen-plc-ordinary-13-616

A yield of 9%

The US Federal Reserve Balance Sheet

A picture paints a thousand words. The most highly regarded and respected financial institution in the world is arguably is the United States central bank, the US Federal Reserve, affectionately known as The Fed. It’s current chairman is Jerome Powell, the former chair persons, all have vast intellectual capacity, famous name such as Janet Yellan, Ben Bernanke, Alan Greenspan, Paul Volcker people of incredible calibre and wisdom. Since 2008 the world has had huge financial turmoil, from the 2008 global financial crisis to the now terrible impact of Covid19 on the global economy. What is very interesting to observe is shear scale of the financial intervention into the markets that The Fed has undertaken, effectively injecting huge quantities of cash (liquidity) into the market, to buy assets off commercial banks, to keep markets functioning. A good way to see that scale of intervention is to look at the movement in size of The Fed’s balance sheet.https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm From 2008, just before the financial crisis hit, the assets on the US Federal Reserve were $914,632 Million = $914 Billion = $0.914 Trillion dollars. Then the credit crisis hits and then the Fed intervened into the market by buying mortgage securities and also buying US Treasuries (US Government bonds = US Government Debt) what we know as Quantitative Easing (QE). Then the balance sheet jumped to $2,871,301 Million = £2,871 Billion = $2.871 Trillion dollars, and then by March this year that grown to $4,241,507 Million = $4,241 Billion = $4.241 Trillion dollars just before Covid19 hits, and then the acceleration in the size of the balance sheet, rockets to now where it stands at $7,056,129 Million = $7,056 Billion = $7.056 Trillion. Its scale can not be under-estimated, the fire power of the US Federal Reserve is vast. However what we are seeing is a huge scale market intervention from the central bank to ensure market stability by pumping massive quantities of cash into the system by asset purchases, and then question becomes, are asset prices rising because of the level of national debt, globally, as we are seeing soaring equity prices and perhaps inflation is on the horizon that will wipe out the value of our cash savings.

The Renewables Infrastructure Group Sept 2020 dividend

The Renewables Infrastructure Group paid out its September dividend on the 30th Sept.

https://www.trig-ltd.com/

It was 1.69p a share

https://www.londonstockexchange.com/news-article/TRIG/total-voting-rights/14704386

The total issued share capital with voting rights is 1,741,925,855.

thus:-

1,741,925,855 x £0.0169 = £29,438,546.9495

https://www.investments.halifax.co.uk/shares-centre/investment-trusts/details/TRIG/GG00BBHX2H91/F00000Q7PL

A yield of 4.86%

The total Debt of Astra Zeneca

Astra Zeneca is the UK’s largest company. The pharma giant.

www.astrazeneca.com

It carries debt as a part of its funding strategy.

https://www.astrazeneca.com/investor-relations/debt-investors.html

Currency Notional (m) Issue date Maturity date Coupon Frequency ISIN
USD 1,600 16-Nov-15 16-Nov-20 2.375% Semi-annual US046353AK44
EUR 500 12-May-16 12-May-21 0.25% Annual XS1411403709
EUR 750 24-Nov-14 24-Nov-21 0.875% Annual XS1143486865
USD 250 12-Jun-17 10-Jun-22 3m Libor + 0.62% Quarterly US046353ap31
USD 1,000 12-Jun-17 12-Jun-22 2.375% Semi-annual US046353AQ14
USD 850 17-Aug-18 17-Aug-23 3.50% Semi-annual US046353AR96
USD 400 17-Aug-18 17-Aug-23 3m Libor + 0.665% Quarterly US046353AS79
USD 287 15-Nov-93 15-Nov-23 7.00% Semi-annual US98934KAB61
EUR 900 12-May-16 12-May-24 0.75% Annual XS1411404855
USD 2,000 16-Nov-15 16-Nov-25 3.375% Semi-annual US046353AL27
USD 1,200 06-Aug-20 08-Apr-26 0.70% Semi-annual US046353AV09
USD 750 12-Jun-17 12-Jun-27 3.125% Semi-annual US046353AN82
EUR 800 12-May-16 12-May-28 1.25% Annual XS1411404426
USD 1,000 17-Aug-18 17-Jan-29 4.00% Semi-annual US046353AT52
USD 1,300 06-Aug-20 06-Aug-30 1.375% Semi-annual US046353AW81
GBP 350 13-Nov-07 13-Nov-31 5.75% Annual XS0330497149
USD 2,750 12-Sep-07 15-Sep-37 6.45% Semi-annual US046353AD01
USD 1,000 18-Sep-12 18-Sep-42 4.00% Semi-annual US046353AG32
USD 1,000 16-Nov-15 16-Nov-45 4.375% Semi-annual US046353AM00
USD 750 17-Aug-18 17-Aug-48 4.375% Semi-annual US046353AU26
USD 500 06-Aug-20 06-Aug-50 2.125% Semi-annual US046353AX64

That is:-

£350m
€2950m
$16,637m

That is in UK £ = 16,019m

HM Government Borrowings: August 2020

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties.
Now we are in a Covid 19 world. UK’s HM Government needs to fund many new demands.

Another deficit month, thus to bridge the gap, needs to borrow on the bond market In August 2020 , the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement. There were “only” 14 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

26-Aug-2020 0 3/8% Treasury Gilt 2030 2,750.0000 Million
25-Aug-2020 0 1/8% Treasury Gilt 2026 3,000.0000 Million
25-Aug-2020 1 5/8% Treasury Gilt 2054 1,342.3750 Million
20-Aug-2020 0 1/8% Index-linked Treasury Gilt 2028 3 months 1,374.9990 Million
19-Aug-2020 0 7/8% Treasury Gilt 2029 3,437.5000 Million
18-Aug-2020 0 1/8% Treasury Gilt 2023 4,062.4970 Million
18-Aug-2020 0 5/8% Treasury Gilt 2050 2,477.2500 Million
12-Aug-2020 0 1/8% Treasury Gilt 2028 3,437.4990 Million
11-Aug-2020 0 5/8% Treasury Gilt 2025 3,250.0000 Million
11-Aug-2020 1¾% Treasury Gilt 2057 1,250.0000 Million
05-Aug-2020 0 1/8% Index-linked Treasury Gilt 2048 3 months 562.2500 Million
05-Aug-2020 0 3/8% Treasury Gilt 2030 2,750.0000 Million
04-Aug-2020 0 1/8% Treasury Gilt 2026 4,062.4990 Million
04-Aug-2020 1¼ % Treasury Gilt 2041 2,812.4990 Million

Thus:

2,750.0000 Million+3,000.0000 Million+1,342.3750 Million+1,374.9990 Million+3,437.5000 Million+4,062.4970 Million+2,477.2500 Million+3,437.4990 Million+3,250.0000 Million+1,250.0000 Million+562.2500 Million+2,750.0000 Million+4,062.4990 Million+2,812.4990 Million = £36569.368 Million

That is £36.569368 Billion

On another way of looking at it, is in the 31 days in August 2020, HM Government borrowed:- £1.179657032 Billion each day for the 31 days.

We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature from 2023 through to 2057. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

Royal Dutch Shell September Dividend.

Today, Royal Dutch Shell pays out its quarterly dividend.

www.shell.com

it is 12.09p a share.

Shell PLC is a dual listed company

https://www.londonstockexchange.com/stock/RDSA/royal-dutch-shell-plc/company-page

and

https://www.londonstockexchange.com/stock/RDSB/royal-dutch-shell-plc/company-page

Royal Dutch Shell plc’s capital as at 31 August 2020, consists of 4,101,239,499 A shares and 3,706,183,836 B shares, each with equal voting rights. Royal Dutch Shell plc holds no ordinary shares in Treasury.

https://www.londonstockexchange.com/news-article/RDSA/voting-rights-and-capital/14671798

Thus:

4,101,239,499 A shares x 12.09p = £495,839,855.4291
+
3,706,183,836 B shares x 12.09p = £448,077,625.7724

Thus
[£495,839,855.4291]+[£448,077,625.7724]= £943,917,481.2015

That is £943million of cash

Norway’s wealth fund loses £16bn in first half of 2020 after Covid panic

www.nbim.no

Norway’s sovereign wealth fund – the world’s largest – made a £16bn loss in the first half of the year and warned that financial markets could face further volatility as the Covid pandemic was still out of control.

The £895bn fund said it suffered a 3.4% drop in returns in the first six months of 2020, equivalent to a 188bn kroner (£16bn) decline, when its investments were hit by the early-March market sell-off sparked by panic about the coronavirus outbreak.

While investor confidence had been restored by “massive” state support packages, the fund’s deputy chief executive, Trond Grande, said financial markets were not reflecting the real economic impact of the virus, which he said was not under control “in any shape or form”.

He said: “We have already seen some sort of V-shaped recovery in the financial markets. I think there is a slight disconnect between the real economy and the financial markets.”

He also warned that there could be further market volatility, particularly if there was a surge in coronavirus cases later this year.

“We could be in for some turbulence this fall as things unfold and whether or not the coronavirus pandemic recedes, or gains some force,” Grande said, and the full impact on sectors such as travel and leisure was yet to be seen.

The fund’s deputy also noted that state support for national economies may not be sustainable long-term.

A further drop in share prices would cause further pain for the sovereign wealth fund, which was founded in 1996 and invests the country’s oil revenues abroad to shield its economy from market turmoil. The fund owns nearly 1.5% of all globally listed shares, with stakes in over 9,000 companies.

The Norwegian fund’s shareholdings in oil and gas companies suffered the biggest declines in the first six months of 2020. The stocks lost 33.1% of their value as oil prices plunged amid coronavirus travel restrictions, which dramatically reduced demand.

Its bank investments also performed poorly, with financial stocks declining nearly 21% over in first six months of the year. Lender profits were hit by lower interest rates and provisions for future defaults on loans, as a number of countries plunged into economic recessions due to Covid-19. Norway’s returns were also impacted by a drop in shareholder payouts, after regulators pressure banks to either scrap or reduce dividends at the start of the year.

The worst performers in its portfolio included Royal Dutch Shell, HSBC and JP Morgan.

Amazon was one of the strongest performers, alongside Microsoft and Apple. Overall, the tech sector delivered a 14.2% return for the fund thanks to strong demand for online services around remote working, education, shopping and entertainment during the pandemic.

The UK – which accounts for the fund’s largest equity holdings at 6.9% – was the worst regional performers, after the fund’s share of London-listed stocks losing 24.3% of their value over the period.

It comes after the UK reported a 20.4% drop in gross domestic product in the second quarter, which was the worst of any G7 nation in the three months to June. It also marked the deepest recession since records began.

The Legal and General Global Technology Index Trust

The Legal and General Global Technology Index Trust is an index fund managed by Legal and General. It aims to provide growth by tracking the performance of the FTSE World-Technology Index.

Its top ten holdings are:-

Apple Inc 15.5% of the fund
Microsoft Corp 15.5% of the fund
Alphabet Cl A 4.6% of the fund
Alphabet Cl C 4.4% of the fund
Facebook 4.4% of the fund
Taiwan Semiconductor Manufacturing 2.7% of the fund
Intel Corp 2.7% of the fund
Nvidia Corp 2.4% of the fund
Adobe Inc 2.2% of the fund
Samsung Electronics Co Ltd 2.2% of the fund

It is £807.3m fund.

United States is where 80.5% of the assets are held.

Greencoat UK Wind August 2020 Dividend

Tomorrow, Greencoat UK Wind pays out is dividend.

https://www.greencoat-ukwind.com/

1.775p a share

https://otp.tools.investis.com/clients/uk/greencoat/rns/regulatory-story.aspx?cid=2184&newsid=1388994

the total voting rights figure will be 1,518,162,889

Thus:

1,518,162,889 x 0.01775 = £26,947,391.27975

That is £26million

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=7013076&action=

4.8% yield.