The AXA ACT Framlington Clean Economy

The AXA ACT Framlington Clean Economy is a UK Unit Trust. The aim of this Fund is to: (i) provide long-term capital growth over a period of 5 years or more; and (ii) seek to achieve sustainable investment objective, in line with a responsible investment approach.

The Fund invests at least 80% of its assets in shares of listed companies of any size which are based anywhere in the world and which the fund manager believes will generate both above-average returns and a positive and measurable impact on environmental, social and governance (ESG) factors.In selecting shares, the fund manager applies AXA IM Group’s sector specific investment guidelines relating to responsible investment to the Fund.

Portfolio Analysis: Top 10 Holdings

Ameresco Inc 3.78% of the fund
NextEra Energy Inc 3.38% of the fund
Schneider Electric SE 3.24% of the fund
Darling Ingredients Inc 2.99% of the fund
TE Connectivity Ltd 2.98% of the fund
Trimble Inc 2.92% of the fund
Taiwan Semiconductor Manufacuting 2.86% of the fund
Infineon Technologies AG 2.76% of the fund
Hannon Armstrong Sustainable 2.73% of the fund
Aptiv PLC 2.56% of the fund

Total 30.16% of the fund.

https://adviser.axa-im.co.uk/fund-centre/-/funds-center/axa-act-framlington-clean-economy-z-gbp-acc-44754#/

The Ashoka India Equity Investment Trust PLC

The Ashoka India Equity Investment Trust PLC is an London listed investment trust, that has the strategy to achieve long-term capital appreciation, mainly through investment in securities listed in India and listed securities of companies with a significant presence in India.

It’s top ten holdings are:-

  1. Laxmi Organic Industries Materials 6.8% of the fund
  2. ICICI Bank Financials 6.1% of the fund
  3. Infosys Information Technology 4.9% of the fund
  4. Axis Bank Financials 4.7% of the fund
  5. Coforge Information Technology 4.6% of the fund
  6. Asian Paints Materials 3.5% of the fund
  7. Nestle India Consumer Staples 3.0% of the fund
  8. Crompton Greaves Consumer Electricals Consumer Discretionary 2.9% of the fund
  9. Cartrade Tech Consumer Discretionary 2.9% of the fund
  10. Bajaj Finserv Financials 2.8% of the fund

Total 42.3% of the fund

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

Oxford Nanopore PLC

Oxford Nanopore Technologies plc was founded in 2005 as a spin-out from the University of Oxford. The company now employs about 600 employees from multiple disciplines including nanopore science, molecular biology and applications, informatics, engineering, electronics, manufacturing and commercialisation

It has just floated on the London Stock Exchange.

Floatation price of 425p a share.

https://www.londonstockexchange.com/news-article/ONT/announcement-of-offer-price/15154688

it is flying high.

https://www.londonstockexchange.com/stock/ONT/oxford-nanopore-technologies-plc/company-page

HSBC Holdings PLC September Dividend.

Yesterday, 30th Sept 2021, HSBC Holdings, paid out is Sept 2021 dividend.

$0.07 a share = £0.051203 a share

https://www.hsbc.com

£0.051203 a share pence per share it the dividend that it to be paid.

https://www.londonstockexchange.com/news-article/HSBA/total-voting-rights/15117630

The total number of voting rights in HSBC Holdings plc is 20,426,332,840

Thus:

20,426,332,840 x £0.051203 = £1,045,889,520.40652

That is £1,045 Million = £1.045 Billion paid to shareholders, yesterday.

https://www.londonstockexchange.com/stock/HSBA/hsbc-holdings-plc/company-page

BT Pension Fund

BT is the UK’s premier telecommunications company.

https://www.bt.com

The BT pension fund is huge pension fund that looks after the assets and pays the pensions to BT’s retired workforce. The BT Pension Scheme (BTPS) is the UK’s largest corporate defined benefit pension scheme with assets of about £58 billion ($80 billion), paying more than £2 billion in pension payments per year. The scheme closed to new members in 2001, but remains responsible for securing the long-term financial wellbeing of approximately 320,000 current and future pensioners

The Scheme’s net assets were invested 37.5% in growth assets and 62.5% in liability hedging assets as at 30 June 2020

Total benefits paid were £2.5bn, in the year to 30 June 2020. That is about £208.33333 Million a month paid out in pensions to BT’s amazing retired workforce.

https://newsroom.bt.com/bt-announces-triennial-pension-valuation/

Distribution of investments:

Equities 18.3% of the fund
Government bonds and cash 33.2% of the fund
Secure income 1.4% of the fund
Investment grade credit 27.9% of the fund
Other growth assets 12.4% of the fund
Property 6.8% of the fund

Total Assets £57,493 Million

With such a large portfolio, it makes substatial investment income

Dividends from equities £202 million
Income from bonds £562 million
Net rental income from properties £61 million
Income from pooled investment vehicles £55 million
Derivatives £125 million
Longevity insurance contract £-(30) million
Interest on deposits and short-term investments £23 million

Total of £998 Million income.

https://www.btps.co.uk/MediaArchive/SchemeSite/BTPS_Report_Accounts_30_Sept_2020.pdf

Abrdn PLC September Dividend.

Tomorrow, Abrbn PLC pays out its quarterly dividend, on Tue 28th September.

Abrdn is the new name for StandardLifeAberdeen, the merged business of Standard Life PLC and Aberdeen Asset Management PLC.

https://www.abrbn.com

7.3 pence per share it the dividend that it to be paid.

https://www.londonstockexchange.com/news-article/ABDN/total-voting-rights/15118757

The Company’s issued share capital consists of 2,180,724,034 ordinary shares

Thus:

2,180,724,034 x £0.073 = £159,192,854.482

That is £159 Million = £0.159 Billion paid to shareholders, yesterday.

https://www.londonstockexchange.com/stock/ABDN/abrdn-plc/company-page

BP PLC September Dividend.

Yesterday BP PLC paid out its quarterly dividend, on Friday 24th September.

https://www.bp.com

3.9529 pence per share it the dividend that was paid.

https://www.londonstockexchange.com/news-article/BP./q2-2021-payments-of-dividends-in-sterling/15134476

The total number of voting rights in BP p.l.c. is 20,133,847,476

Thus:

20,133,847,476 x £0.039529 = £795,870,856.878804

That is £795 Million = £0.795 Billion paid to shareholders, yesterday.

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

Royal Dutch Shell (Shell PLC) September Dividend.

Yesterday Shell paid out its quarterly dividend, on Monday 20th September.

https://www.shell.com

Shell is a dual listed company.

https://www.londonstockexchange.com/news-article/RDSA/royal-dutch-shell-plc-second-quarter-2021-euro-and-gbp-equivalent-dividend-payments/15123355

Dividends on A Shares will be paid, by default, in euros at the rate of €0.2024 per A Share. Holders of A Shares who have validly submitted US dollars or pounds sterling currency elections by August 27, 2021 will be entitled to a dividend of US$0.24 or 17.38p per A Share, respectively. Dividends on B Shares will be paid, by default, in pounds sterling at the rate of 17.38p per B Share

https://www.londonstockexchange.com/news-article/RDSA/total-voting-rights/15083032

Royal Dutch Shell plc’s capital as at July 30, 2021, consists of 4,101,239,499 A shares and 3,704,709,414 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 July 30, 2021 is 7,805,948,913

Thus:

7,805,948,913 x £0.1738 = £1,356,673,921.0794

That is £1,356 Million = £1.356 Billion paid to shareholders, yesterday.

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

HM Government Borrowings: August 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 August 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” 5 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

24-Aug-2021 0 3/8% Treasury Gilt 2026 £3,000.0000 Million
17-Aug-2021 0 7/8% Treasury Gilt 2046 £2,274.2500 Million
11-Aug-2021 0 1/8% Index-linked Treasury Gilt 2039 3 months £705.0000 Million
10-Aug-2021 0¼% Treasury Gilt 2031 £3,437.4990 Million
03-Aug-2021 1¼% Treasury Gilt 2051 £2,000.0000 Million

Thus:-

£3,000.0000 Million + £2,274.2500 Million + £705.0000 Million + £3,437.4990 Million + £2,000.0000 Million = £11,416.749 Million

£11,416.749 Million = £11.416749 Billion

On another way of looking at it, is in the 31 days in August 2021, HM Government borrowed:- £368.28222580645161290322580645161 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 2026 through to 2051. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….

NatWest Group September 2021 Dividend.

Today, Friday 17th September, NatWest Group (formerly the Royal Bank of Scotland) pays out its September dividend.

3p a share

https://www.natwestgroup.com/

Total voting rights in NatWest Group is 46,121,249,780

https://www.londonstockexchange.com/news-article/NWG/total-voting-rights/15117681

Thus:-

46,121,249,780 x £0.03 = £1,383,637,493.4

That is £1,383 Million = £1.383 Billion paid out to shareholders

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

Lloyds Banking Group: September 2021 Dividend.

Today, 13th Sept 2021, Lloyds Banking Group pays out its Sept dividend.

http://www.lloydsbankinggroup.com

0.67p a share.

https://www.londonstockexchange.com/news-article/LLOY/total-voting-rights/15117362

Lloyds Banking Group plc with rights to vote which are exercisable in all circumstances at general meetings is 70,986,783,092 ordinary shares of 10p each.

Thus:-

70,986,783,092 x £0.0067 = £475,611,446.7164

That is £475 Million

https://www.londonstockexchange.com/stock/LLOY/lloyds-banking-group-plc/company-page

New York. The Greatest City.

Today is a date in history, we can never forget. The most generous people in the world are the Americans, always helping in famine, flood, and natural disaster, helping the ones who need help, liberating people from oppression, and the most technologically advanced nation, home to Apple, Google, IBM, Cisco, Intel, BNC Holdings, Ford Motor Company, Applied Materials, Air Products, S-One Communications, Verizon, AT&T.

Today is a day to remember our fallen New Yorkers, the Heroes of Flight 93 and the brave people at The Pentagon.

The Investment in Brexit

https://www.theguardian.com/commentisfree/2021/sep/06/boris-johnsons-biggest-lie-europe-coming-home-single-market

It was the big Brexit lie. No, not the £350m a week to spend on the NHS or the “bonfire” of red tape. The lie was that the shambles now enveloping British trade with Europe was an unavoidable price worth paying to leave the EU. That was rubbish.

In order to further his chances of becoming Tory leader Boris Johnson made two commitments. One was to resign from the EU, the other was to depart Europe’s customs union and single market, aspects of which embrace other non-EU states such as Norway. The second decision was an almost casual gesture to make him look macho to the party’s hardline Brexiters. It was not put to referendum and was beyond stupid.

No news item today is free of the consequences. Earlier this year, the effects of leaving the single market could be seen in plummeting trade with the continent, even accounting for the pandemic. Additional red tape is awesome. HMRC estimates traders will be handling 215m more import/export documents a year, at an estimated bureaucratic cost of £7.5bn a year. Tariffs may not apply but rules of origin and health standards do. Every truck, every cargo requires inspection.

As for migration, the overall shortage of seasonal farm labour, according to BBC Radio 4’s Farming Today, is 20% and often more. Fruit will rot in fields, pigs cannot get to abattoirs and Christmas turkeys will be a “nightmare”. Meanwhile, care homes in England are short of 170,000 staff, and delivery firms short of 100,000 drivers. Hotels have abandoned rooms and restaurant tables. Creative industries – worth £110bn to the UK economy – were forgotten by the Brexit negotiators and are now virtually isolated from Europe.

Wagamama. Wagamama struggling to find chefs at a fifth of its UK sites

This is not Brexit. Britain could have left Brussels and freed itself from a mass of rules and regulations. It is the result of leaving the single market, of Johnson’s xenophobic belief that European trade standards were somehow not British”. He was wildly in favour of EU workers when mayor of London but no longer as prime minister.

I am sure some of the current disruption will settle down but the idea that trade with Britain’s biggest partner by far, the EU, will ever recover outside some form of economic union is absurd. So is the theory that any losses from the present chaos will be met by gains elsewhere. It seems bizarre to have to explain to a Tory that prosperity lies in open markets not closed ones.

Johnson has significantly not set up a permanent trade and agriculture commission to guard British interests in new deals. He is clearly desperate for deals, however bad. In addition, the National Audit Office has yet to do the normal impact assessment of Lord Frost’s post-Brexit deal with the EU. It has not bothered. I imagine the assessment would be the colour of blood.

Brexit need never have so devastated the British economy. The damage has come from one decision, to depart the single market. The sensible path now would be for Johnson to eat humble pie and seek, as far and as fast as possible, readmission to that market. Britain would imitate the protocol it has agreed for Northern Ireland. This would not mean rejoining the EU, just rejoining Ireland – the most delicious of historical ironies.

Negotiating the single market in 1987 was Margaret Thatcher’s proudest free-trade achievement. It was in Britain’s and Europe’s interest and proved a success. Johnson reversed that achievement in an act of naked political ambition. He pretended it was necessary for Brexit. It was his biggest lie.

Simon Jenkins is a Guardian columnist

The Debt of Verizon.

Verizon Communications, is one of the world’s largest voice and data telecommunications companies.

https://www.verizon.com/

Created from the merger of the two baby bells, Bell Atlantic and NYNEX and the acquistion of GTE.

The company, Verizon Communications carries a lot of debt:-

https://www.verizon.com/about/investors/schedule-outstanding-debt

To be precise, total debt as of June 30, 2021 is at $155,294 Million.

That is $155bn.

The Global Scale of Quantative Easing.

The Global Scale of Quantative Easing.

Leading central banks now own more than £18 trillion in government bonds and other assets, an increase of more than 50% on pre-pandemic levels. This is an eye-watering expansion from the financial crash more than a decade ago. Since the start of the pandemic, the US Federal Reserve’s (the Fed) balance sheet has more than doubled to $8tn (£5.9tn). The European Central bank has total assets worth more than €8tn (£6.8tn), the Bank of Japan has about 722tn yen (£4.8tn), while the UK has doubled its QE programme to £895bn.

Despite the flood of cheap money, more than a decade of meagre growth has followed the 2008 crisis, as Quantative Easing only succeeded in pumping up asset prices – benefiting owners of shares and property most. However, the post-2008 recovery was sapped by governments launching damaging austerity policies, while central bankers argue Quantative Easing helped avoid worse job losses.

HM Government Borrowings: July 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 July 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” 6 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

27-Jul-2021 0 3/8% Treasury Gilt 2026 3,000.0000 Million
20-Jul-2021 1 5/8% Treasury Gilt 2071 1,562.5000 Million
07-Jul-2021 0 1/8% Index-linked Treasury Gilt 2051 3 months 701.0500 Million
06-Jul-2021 0¼% Treasury Gilt 2031 3,437.4990 Million
06-Jul-2021 0½% Treasury Gilt 2061 1,866.2500 Million
01-Jul-2021 0¼% Treasury Gilt 2025 4,232.4970 Million
Thus:-

£3,000.0000 Million + £1,562.5000 Million + £701.0500 Million + £3,437.4990 Million + £1,866.2500 Million + £4,232.4970 Million = £14,799.796 Million

£14,799.796 Million = £14.799796 Billion

On another way of looking at it, is in the 31 days in July 2021, HM Government borrowed:- £477.41277419354838709677419354839 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 2025 through to 2071. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

The Debt of National Grid.

National Grid is one of the world’s largest publicly listed utilities focused on transmission and distribution of electricity and gas in the United Kingdom and the United States. It plays a vital role in connecting millions of people to the energy
they use safely, reliably and efficiently.

It finances its operations from trading and debt. It currently has Net debt of £28.6bn as of March 31st 2021. It has to pay back this debt from now to the end of 2057.

The graph below shows that maturity profile.

https://www.nationalgrid.com/investors/debt-investors/debt-information

FOMC (Federal Open Market Committee) Chair Powell’s Press Conference July 28, 2021

A very interesting meeting, and the press conference identified some salient points:

https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20210728.pdf

  • worldwide shortage of semiconductors has sharply curtailed production so far this year.
  • in addition, The US Fed are continuing to increase their holdings of Treasury securities by at least $80 billion per month and of agency MBS by at least $40 billion per month

Vodafone August 2021 Dividend

On Friday 6th August, Vodafone PLC paid out its August 2021 dividend.

www.vodafone.com

€0.045 or 3.83432p a share.

The total number of voting rights in Vodafone is 27,786,049,932

https://www.londonstockexchange.com/news-article/VOD/total-voting-rights/15081941

Thus:-

27,786,049,932 x £0.0383432 = £1,065,406,069.7526624

That is £1065 Million = £1.065 Billion

https://www.londonstockexchange.com/stock/VOD/vodafone-group-plc/analysis

UK National Debt.

The UK Debt Management Office, that issues Gilts (UK Government Bonds) to help finance the HM Government’s spending commitments, has a website that is full of data.

https://www.dmo.gov.uk/

Currently, Total Amount Outstanding (including inflation uplift for index-linked gilts) = £2,054.14 billion nominal.

That £2,054.14 billion is £2.05414 Trillion.

https://www.dmo.gov.uk/data/pdfdatareport?reportCode=D1A

UK Wealth Gap

https://www.theguardian.com/business/2021/jul/12/uk-wealth-gap-widens-in-pandemic-as-richest-get-50000-windfall

UK wealth gap widens in pandemic as richest get £50,000 windfall
Resolution Foundation finds rising house and asset prices have ‘turbo-charged’ gap between richest and poorest

Britain’s wealth gap has ballooned during the pandemic with the richest 10% gaining £50,000 on average, dwarfing increases for the poorest third of the population, according to a thinktank report.

The Resolution Foundation said wealth had increased during lockdown as a result of a lack of spending opportunities and rising house prices, but the benefits had been skewed to the richest by a ratio of more than 500 to 1.

Jack Leslie, a senior economist at the thinktank, said it was rare for wealth to increase during a recession but the impact of events during 2020 and 2021 had been to “turbo-charge” the gap between rich and poor.

The Resolution Foundation – which focuses on improving living standards for those on low and middle incomes – said the findings of the report should cause the government to rethink its decision to scrap the £20 a week increase to universal credit in September.

The report, produced in partnership with the Standard Life Foundation, found that the average household had enjoyed a windfall of £7,800 per adult during the crisis – the first time wealth has increased during a recession since the mid-1940s

“The Covid-19 crisis has seen a highly unusual combination of a sharp reduction in economic activity, and a sharp increase in household wealth. Many families have been forced to save rather than spend during lockdowns, while house prices have continued to soar even while working hours have plummeted,” Leslie said.

Britain suffered its biggest-one year fall in output in more than 300 years in 2020 but since the start of the crisis in February 2020 total household savings had risen by £200bn, household debts (excluding credit cards) decreased by about £10bn, and house prices – which fell by an average of 22% over the previous four recessions – rose by 8%.

The thinktank report said total UK wealth had increased by £900bn to £16.5tn during the course of the pandemic, but the poorest households were more likely to have run down rather than increase their savings, and had not shared in the house price boom because they were less likely to own a home in the first place.

“As a result, the rising wealth gaps that marked pre-pandemic Britain have been turbo-charged by the crisis,” Leslie said. “With policymakers facing many tough decisions in the autumn – from protecting households as unemployment rises to paying for a decent system of social care – they can no longer afford to ignore the dominant role wealth is playing in 21st-century Britain.”

The richest fifth of households were four times as likely to have increased their savings during the crisis as the poorest fifth of households (47% versus 12%), and 2.5 times as likely to have reduced their debts. The thinktank said this reflected pandemic-induced spending reductions being concentrated among those on higher incomes.

According to the report, adults in the richest 10% of households now have wealth of £1.4m each following the £50,000 increase during the crisis, while the poorest 30% gained an average of just £86 per adult in additional wealth.

The wealth gap between the average and the wealthiest 10% of households had increased by £44,000 during the crisis (after a £350,000 increase between 2006-08 and 2016-18), the Resolution Foundation said. During the same period, the gap between the average and the poorest 10th of households had also grown, by £7,000 (a bigger increase than seen during the whole 2006-08 and 2016-18 decade).

Mubin Haq, the chief executive of Standard Life Foundation, said: “The rise in wealth for those at the bottom has been paltry even taking into account the £20 a week increase in universal credit payments to those on the lowest incomes. Wednesday’s announcement of the cut to UC risks further widening the wealth divide which ballooned during the pandemic.”

The Vanguard ESG Developed World All Cap Equity Index

The Fund aims to provide long-term growth of capital by seeking to achieve the performance of the FTSE
Developed All Cap Choice Index.

A £1,413.5m = £1.4 Billion fund.

Top Ten Holdings are:

APPLE INC. 4.4% of the fund
MICROSOFT CORP. 3.6% of the fund
AMAZON.COM INC. 2.8% of the fund
ALPHABET INC. 2.2% of the fund
FACEBOOK INC. 1.3% of the fund
TESLA INC. 1.2% of the fund
JPMORGAN CHASE & CO. 0.8% of the fund
SAMSUNG ELECTRONICS CO. LTD. 0.8% of the fund
VISA INC. 0.7% of the fund
UNITEDHEALTH GROUP INC. 0.6% of the fund

The assets in top holdings 18.4% of the fund

Nordea Global Climate and Environment Fund

This fund aims to achieve long-term capital growth through a diversified portfolio of equity or equity related investments in companies, which are expected to benefit either directly or indirectly from developments related to environmental challenges such as climate change. The fund shall invest globally and shall invest a minimum
of two thirds of its total assets in equities, other equity shares such as co-operative shares and participation certificates, dividend right certificates, warrants on equities and equity rights.

A £6,403.7m fund = £6.4 Billion

Top Ten holdings are:

LINDE 3.6% of the fund
REPUBLIC SERVICES 3.6% of the fund
AIR LIQUIDE 3.3% of the fund
ASML HOLDING 3.3% of the fund
WASTE MANAGEMENT 3.3% of the fund
SYNOPSYS 2.8% of the fund
INFINEON TECHNOLOGIES 2.6% of the fund
PARKER-HANNIFIN 2.5% of the fund
TRIMBLE 2.5% of the fund
INTERNATIONAL FLAVORS & FRAGRANCES 2.4% of the fund

The assets in top holdings 29.9% of the fund

Conditions are ripe for repeat of 1970s stagflation and 2008 debt crisis:-Nouriel Roubini

The conditions are ripe for repeat of 1970s stagflation and 2008 debt crisis

https://www.theguardian.com/business/2021/jul/02/1970s-stagflation-2008-debt-crisis-global-economy

Warning signs are there for global economy, and central banks will be left in impossible position

In April, I warned that today’s extremely loose monetary and fiscal policies, when combined with a number of negative supply shocks, could result in 1970s-style stagflation (high inflation alongside a recession). In fact, the risk today is even bigger than it was then.

After all, debt ratios in advanced economies and most emerging markets were much lower in the 1970s, which is why stagflation has not been associated with debt crises historically. If anything, unexpected inflation in the 1970s wiped out the real value of nominal debts at fixed rates, thus reducing many advanced economies’ public-debt burdens.

Conversely, during the 2007-08 financial crisis, high debt ratios (private and public) caused a severe debt crisis – as housing bubbles burst – but the ensuing recession led to low inflation, if not outright deflation. Owing to the credit crunch, there was a macro shock to aggregate demand, whereas the risks today are on the supply side.

We are thus left with the worst of both the stagflationary 1970s and the 2007-10 period. Debt ratios are much higher than in the 1970s, and a mix of loose economic policies and negative supply shocks threatens to fuel inflation rather than deflation, setting the stage for the mother of stagflationary debt crises over the next few years.

The same loose policies that are feeding asset bubbles will continue to drive consumer price inflation
For now, loose monetary and fiscal policies will continue to fuel asset and credit bubbles, propelling a slow-motion train wreck. The warning signs are already apparent in today’s high price-to-earnings ratios, low equity risk premia, inflated housing and tech assets, and the irrational exuberance surrounding special purpose acquisition companies, the crypto sector, high-yield corporate debt, collateralised loan obligations, private equity, meme stocks, and runaway retail day trading. At some point, this boom will culminate in a Minsky moment (a sudden loss of confidence), and tighter monetary policies will trigger a bust and crash.

But in the meantime, the same loose policies that are feeding asset bubbles will continue to drive consumer price inflation, creating the conditions for stagflation whenever the next negative supply shocks arrive. Such shocks could follow from renewed protectionism; demographic ageing in advanced and emerging economies; immigration restrictions in advanced economies; the reshoring of manufacturing to high-cost regions; or the Balkanisation of global supply chains.

More broadly, the Sino-American decoupling threatens to fragment the global economy at a time when climate change and the Covid-19 pandemic are pushing national governments toward deeper self-reliance. Add to this the impact on production of increasingly frequent cyber-attacks on critical infrastructure, and the social and political backlash against inequality, and the recipe for macroeconomic disruption is complete.

Making matters worse, central banks have effectively lost their independence because they have been given little choice but to monetise massive fiscal deficits to forestall a debt crisis. With both public and private debts having soared, they are in a debt trap. As inflation rises over the next few years, central banks will face a dilemma. If they start phasing out unconventional policies and raising policy rates to fight inflation, they will risk triggering a massive debt crisis and severe recession; but if they maintain a loose monetary policy, they will risk double-digit inflation – and deep stagflation when the next negative supply shocks emerge.

But even in the second scenario, policymakers would not be able to prevent a debt crisis. While nominal government fixed-rate debt in advanced economies can be partly wiped out by unexpected inflation (as happened in the 1970s), emerging-market debts denominated in foreign currency would not be. Many of these governments would need to default and restructure their debts.

At the same time, private debts in advanced economies would become unsustainable (as they did after the global financial crisis), and their spreads relative to safer government bonds would spike, triggering a chain reaction of defaults. Highly leveraged corporations and their reckless shadow-bank creditors would be the first to fall, soon followed by indebted households and the banks that financed them.

To be sure, real long-term borrowing costs may initially fall if inflation rises unexpectedly and central banks are still behind the curve. But, over time, these costs will be pushed up by three factors. First, higher public and private debts will widen sovereign and private interest-rate spreads. Second, rising inflation and deepening uncertainty will drive up inflation risk premia. And, third, a rising misery index – the sum of the inflation and unemployment rate – eventually will demand a “Volcker moment.”

When former Fed chair Paul Volcker increased rates to tackle inflation in 1980-82, the result was a severe double-dip recession in the US and a debt crisis and lost decade for Latin America. But now that global debt ratios are almost three times higher than in the early 1970s, any anti-inflationary policy would lead to a depression rather than a severe recession.

Under these conditions, central banks will be damned if they do and damned if they don’t, and many governments will be semi-insolvent and thus unable to bail out banks, corporations and households. The doom loop of sovereigns and banks in the eurozone after the global financial crisis will be repeated worldwide, sucking in households, corporations and shadow banks as well.

As matters stand, this slow-motion train wreck looks unavoidable. The Fed’s recent pivot from an ultra-dovish to a mostly dovish stance changes nothing. The Fed has been in a debt trap at least since December 2018, when a stock- and credit-market crash forced it to reverse its policy tightening a full year before Covid-19 struck. With inflation rising and stagflationary shocks looming, it is now even more ensnared.

So, too, are the European Central Bank, the Bank of Japan and the Bank of England. The stagflation of the 1970s will soon meet the debt crises of the post-2008 period. The question is not if but when.

Nouriel Roubini was 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.

HM Government Borrowings: June 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 June 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” 9 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

23-Jun-2021 0 1/8% Index-linked Treasury Gilt 2065 3 months £500.0000 Million
16-Jun-2021 0 5/8% Treasury Gilt 2035 £3,118.7500 Million
15-Jun-2021 0 1/8% Treasury Gilt 2028 £3,055.2810 Million
15-Jun-2021 1¼% Treasury Gilt 2051 £2,000.0000 Million
09-Jun-2021 0 1/8% Index-linked Treasury Gilt 2031 3 months £1,172.4380 Million
08-Jun-2021 0 3/8% Treasury Gilt 2026 £3,742.4970 Million
08-Jun-2021 1 5/8% Treasury Gilt 2071 £1,562.5000 Million
02-Jun-2021 0¼% Treasury Gilt 2031 £3,437.4990 Million
02-Jun-2021 0 7/8% Treasury Gilt 2046 £2,500.0000 Million

Thus:-

£500.0000 Million + £3,118.7500 Million + £3,055.2810 Million + £2,000.0000 Million + £1,172.4380 Million + £3,742.4970 Million + £1,562.5000 Million + £3,437.4990 Million + £2,500.0000 Million= £21,088.965 Million

£21,088.965 Million = £21.088965 Billion

On another way of looking at it, is in the 30 days in Jun 2021, HM Government borrowed:- £702.9655 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 2028 through to 2071. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

Climate Change: It is here.

New verified temperature record for Antarctic continent – British Antarctic Survey (bas.ac.uk)

We see the terrible consequences of changing weather:-

China floods: 12 dead in Zhengzhou train and thousands evacuated in Henan – BBC News

Europe floods: Victims face massive clean-up as waters recede – BBC News

However, to read this, is very concering:-

The World Meteorological Organization (WMO) has today (1 July 2021) recognised a new record high temperature for the Antarctic continent of 18.3° Celsius on 6 February 2020 at the Esperanza station (Argentina). It also rejected an even higher temperature, of 20.75°C, which was reported on 9 February 2020 at an automated permafrost monitoring station (Brazil) on Seymour Island.

The previous record for the Antarctic region (continental, including mainland and surrounding islands] was 17.5°C (63.5°F) recorded on 24 March 2015 at Esperanza Research Station. The record for the Antarctic region (all ice/land south of 60 degrees latitude) is 19.8C, taken on Signy Island in January 1982.

BT invests in unique Silicon Valley technology to measure and fight cyber risk

BT invests in unique Silicon Valley technology to measure and fight cyber risk

With the number and impact of cyber attacks continuing to increase rapidly, BT has today announced a multi-million pound investment in Safe Security, an industry-leading cyber risk management firm. Headquartered in Silicon Valley, their SAFE (‘Security Assessment Framework for Enterprises’) platform allows organisations to take a health check of their existing defences and understand their likelihood of suffering a major cyber attack

The investment will allow BT to combine the SAFE platform with its world-leading managed security services to provide customers with a real time view of how safe they are against an incredibly fast-moving cyber threat landscape. SAFE is unique in calculating a financial cost to customers’ risks and giving actionable insight on the steps that can be taken to address them. The platform ultimately enables organisations to surgically target gaps in their defences, and already protects multiple Fortune 500 companies and governments around the world.

Philip Jansen, Chief Executive of BT, said: “Cyber security is now at the top of the agenda for businesses and governments, who need to be able to trust that they’re protected against increasing levels of attack. Adding SAFE to BT’s proactive, predictive security services will give customers an enhanced view of their threat level, and rapidly pinpoint specific actions needed to strengthen their defences. Already one of the world’s leading providers in a highly fragmented security market, this investment is a clear sign of BT’s ambition to grow further.”

Saket Modi, Co-founder and CEO of Safe Security, said: “We’re delighted to be working with a proven global security leader in BT. Their investment and strategic partnership with Safe Security will further accelerate our vision of making SAFE scores the industry standard for measuring and mitigating cyber risks. By aligning BT’s global reach and capabilities with SAFE’s ability to provide real-time visibility on cyber risk posture, we are going to fundamentally change how cyber security is measured and managed across the globe.”

As part of this investment, BT will be granted exclusive rights to use and sell SAFE to businesses and public sector bodies in the UK, and will incorporate the platform within its wider global portfolio. In recognition of its experience in providing security solutions to organisations across the world, BT will be designated as the recommended global partner for improving a customer’s SAFE score. BT will also work collaboratively with Safe Security to develop future products.

About BT
BT Group is the UK’s leading telecommunications and network provider and a leading provider of global communications services and solutions, serving customers in 180 countries. Its principal activities in the UK include the provision of fixed voice, mobile, broadband and TV (including Sport) and a range of products and services over converged fixed and mobile networks to consumer, business and public sector customers. For its global customers, BT provides managed services, security and network and IT infrastructure services to support their operations all over the world. BT consists of four customer-facing units: Consumer, Enterprise, Global and its wholly-owned subsidiary, Openreach, which provides access network services to over 650 communications provider customers who sell phone, broadband and Ethernet services to homes and businesses across the UK.

For the year ended 31 March 2021, BT Group’s reported revenue was £21,331m with reported profit before taxation of £1,804m.

British Telecommunications plc is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on the London Stock Exchange.

For more information, visit www.bt.com/about

About Safe Security
Headquartered in Palo Alto, California, Safe Security is a pioneer and leader in the “Cyber security and Digital Business Risk Quantification” (CRQ) space. It helps organizations measure and mitigate enterprise-wide cyber risk in real-time using its ML Enabled API-First SAFE Platform by aggregating automated signals across people, process, and technology, both for first & third party to dynamically predict the breach likelihood (SAFE Score) & dollar risk of an organization.

The SAFE scoring model is built as joint research at MIT that incorporates cyber security sensors data, external threat intelligence, and business context and places it together in a Bayesian Network of a Supervised Machine Learning scoring engine to give out scores and dollar value risk that the organization faces. The scores are calculated both at a macro and micro level and can also be measured for particular Lines of Business / Crown Jewels / Departments.

The SAFE Scores will enable the organization to have a “common language” across teams, from the board all the way down to an analyst to be aligned with a consistent risk metric along with justifying investments in cyber security and purchase of cyber insurance for the organization.

For more information, visit https://www.safe.security/

BT Contact:
media@bt.com

Mining in the Pacific Ocean.

https://www.theguardian.com/world/2021/jun/23/minings-new-frontier-pacific-nations-caught-in-the-rush-for-deep-sea-riches

Mining in the Pacific Ocean.

Miners are pushing hard to extract metals from the ocean floor, but there is mounting concern about what it might do to the marine environment. Travel thousands of metres below the surface of the ocean, and you reach the seabed. Pitch black and quiet, it is largely unexplored, untouched, unknown.

What is known is extraordinary. The landscape at the bottom of the sea is as varied as the earth surface: 4,000m (13,000ft) down, abyssal plains stretch for miles like deserts; there are trenches large enough to swallow the Earth’s largest mountains; venting chimneys rise in towers like underwater cities; seamounts climb thousands of metres. Hot thermal vents – believed by some to be the places where all life on Earth started – gush highly acidic water at temperatures of up to 400C, drawing in an array of creatures.

So little is known about what happens this far under the sea that in the 25 years following the discovery of the hydrothermal vents, an average of two new vent species are discovered every month. They include the yeti crab, a ghostly white crustacean with silky-blonde bristles on its claws that give it a resemblance to the Abominable snowman. Others discovered in the last 20 years include the beaked whale and the Greenland shark, which dives to around 1,200m and has a lifespan of close to 400 years, making it one of the world’s longest-living organisms.

“Every time you go down into the deep, you see something incredible and often new,” says Diva Amon, a deep sea biologist and fellow at the Natural History Museum in London who has undertaken 15 deep sea expeditions.“There’s a bone-eating worm called Osedax, which lives on the bones of dead whales in the deep … Another special one was … an anemone whose tentacles were 8ft long.”

Anna Metaxas, professor of oceanography at Dalhousie University in Nova Scotia, Canada, recalls the first time she travelled to the deep sea, in waters near the Bahamas. “The most spectacular part of that dive was the bioluminescence. Because it gets dark at 1,000m they all light up, they all flash. I was in a submersible that had a plexiglass sphere, it was like flying through space.”

Mining’s new frontier


Ninety percent of the ocean – and 50% of the Earth’s surface – is considered the deep sea (areas deeper than 200m). Only 0.0001% of the deep seafloor has been investigated. Doing so is perilous, technically challenging and expensive. But despite these obstacles, companies have set their sights on the seabed as the new frontier for mining.

Since 1982, the International Seabed Authority (ISA), which is charged with regulating human activities on the deep sea floor, has issued 30 contracts for mineral exploration, taking in an area of more than 1.4m sq km. Most of these sites are in the Pacific Ocean, in the Clarion-Clipperton fracture zone (CCZ)

In particular, companies have their eyes on polymetallic nodules – bundles of ore that resemble potatoes, which litter the surface of the deep sea and are rich in manganese, nickel, cobalt and rare earth metals. The nodules are up to 10cm in diameter and are thought to form at the staggeringly slow rate of just a few centimetres every one million years.

A battery in a rock,” is how DeepGreen, one of the big players in the nascent industry describes the polymetallic nodules. It touts deep-sea mining as a less environmentally and socially damaging alternative to terrestrial mining, and says it is crucial for affecting a transition to a greener economy, with the nodules containing the minerals needed for the batteries used in electric vehicles.

“Society has an urgent, growing need for battery metals to enable a full transition to clean energy and electric vehicles. We believe that polymetallic nodules are the cleanest source of these metals, with by far the lightest planetary touch,” says the company on its website.

Its proposal is to dispatch ships to the CCZ and suck up the nodules through long pipes that stretch to the seabed. The nodules would be processed on the ship, with excess sediment pumped back into the sea.

So far, licenses in international waters have only been issued for exploration and not mining, but the ISA is working on a regulatory framework for mining of the deep sea, with DeepGreen saying it will be ready to begin the work by 2024.

Our largest ecosystem

There are concerns about the environmental impact deep sea mining could have on marine ecosystems, particularly given how little is known about them and the very slow pace of reproduction and growth at those depths.

Osedax mucofloris, which feeds on the bones of dead whales.
Osedax mucofloris, which feeds on the bones of dead whales. Photograph: The Natural History Museum/Alamy
An experiment in 1978, which involved the extraction of nodules from the seabed in the CCZ, pointed to how long-lasting the damage can be. The area was revisited in 2004, and researchers found the tracks made by mining vehicles 26 years earlier were still clearly visible on the seabed. There was also a reduced diversity of organisms in the disturbed area.

“You are talking about the destruction of the habitat on the seafloor. Any area you are mining will be destroyed,” says Duncan Currie, an international lawyer who has worked in oceans law for 30 years. He represents the Deep Sea Conservation Coalition which is calling for a moratorium on deep sea mining.

Amon was part of a project that conducted baseline surveys in the area of the CCZ that the UK has a licence to explore for potential mining.

“As part of the work we were doing out there, we found that of the megafauna, the larger animals, more than half of them were completely new to science, and more than half of them relied on the nodules as a surface to attach to. Things like corals, sponges, anemones – they actually need the nodules. So potentially mining in that area could have quite a drastic impact.”

“It’s also our largest ecosystem so it provides about 96% of all habitable space on earth,” says Amon. “I think most people still assume that that space is just sort of empty or there’s not a lot happening. But actually, it couldn’t be further from the truth, the deep ocean is a vast reservoir of biodiversity.”

“The deep sea has a PR problem,” says Amon. “It’s not something that people think about. There are some cute things, but there aren’t adorable pandas, but that doesn’t mean that those species aren’t important.”

Other environmental concerns range from worries that noise pollution will interfere with deep sea species’ ability to communicate and detect food falls, increased temperature from drilling and vehicle operation, materials being discarded and heavy vehicles crushing seabed organisms and compacting the seabed.

Most concerning, Currie says, is the potential impact of sediment plumes. After the minerals are processed on ships, the proposal is to return the non-useful sediment into the ocean via long pipes, or risers, depositing them at a depth of 1,500m.

“The return sediment plume will be almost 24/7 – a continuous plume pumped into the ocean. No one has any idea what it will do: will it go up, go down? Will it interfere with the breeding of squid? We know fish migrate up and down, will it affect that? It’s incredibly important and we know almost nothing about it,” he says.

DeepGreen disputes this saying its modelling and experiments show that the spread of the plumes is far smaller and the amount of sediment injected into the mid-water column is far less than is often cited by campaigners.

“The anti-DSM [deep-sea mining] community consistently catastrophises and misrepresents the impact assessments that don’t support their narrative,” said a spokesperson for DeepGreen, who added “we welcome and share many of the environmental concerns about the impact of nodule collection on the marine environment”.

“Our goal is to make sure that our activity does not cause any large-scale disruptions to ecosystem services and that we minimize the risk of biodiversity loss. That’s why we have partnered with the world’s leading academic and research institutions to baseline and better understand the entire water column, from seabed to surface.”

Concerns in the Pacific

Caught up at the centre of this huge push for a new extractive industry are Pacific island nations. Nations must sponsor companies that want to explore for minerals and among the countries that have issued licences are the tiny Pacific Island countries of Tonga, Cook Islands, Nauru and Kiribati.

DeepGreen holds rights to the exploration contracts sponsored by the Pacific countries of Nauru, Tonga and Kiribati and is one of the operators making the most noise about starting commercial mining in the near future. DeepGreen, a Canadian firm with an Australian chief executive, is in the process of being acquired by the Sustainable Opportunities Acquisition Corp. Once merged the company will be known as The Metals Company.

The relationship between DeepGreen and Nauru is of particular concern to observers of deep-sea mining. Observers have warned about an imbalance of power between the company and the tiny nation, which has a population of around 12,000.

Currie recalls an incident at the 2019 International Seabed Authority meeting in Kingston, Jamaica, when Gerard Barron, the Australian chief executive of DeepGreen (and now boss of The Metals Company) spoke for Nauru. “[There was] surprise, some shock among some of the seasoned NGO delegates. It’s just not done,” he said.

“Everybody was taken aback,” says Metaxas of the incident. “That doesn’t happen that a contractor takes the chair of a member state.”

A spokesperson for DeepGreen said that “Mr Barron was attending the ISA meeting as a member of the Nauruan delegation and Nauru chose to offer him the opportunity to address the Council…. There is nothing uncommon about this practice.” It said that on the same day, Belgium allowed the chairman of a company that holds two exploration contracts the opportunity to address the council.

“The Pacific nations I think are particularly vulnerable,” says Metaxas. “They have vulnerable economies, this is an opportunity for an economic boom in a country if it’s done right, if it’s successful. I’m sure it’s quite tempting, but I sure hope that there’s also some advice about how much to risk and how to manage it all.”

There are still questions to be resolved about whether the company or sponsoring state would be liable in the event of environmental damage or other harm.

DeepGreen says that its subsidiary NORI has indemnified Nauru for liability under both the sponsorship agreement and its Nauru’s International Seabed Minerals Act.

However, according to an advisory opinion issued by the International Tribunal for the Law in 2011, states can still be liable if there is a “causal link between the failure of that state to meet its responsibilities and the damage caused by the sponsored contractor.”

Some have voiced concerns about the capacity of small developing nations to monitor the work done by their partner companies, which could lead to liability.

“If Nauru is the sponsoring state, they have obligations under the law of the sea convention to exercise due diligence, they have to make sure that their contractors operate appropriately and if they don’t do that work properly, international law says they are liable,” says Currie.

But Ralph Regenvanu, the opposition leader of Vanuatu, says “there’s absolutely no capacity” of states like Nauru to do this monitoring. “We’d be interested to know what are the measures they’re taking, what are the safeguards they’re taking.”

In 2014, when he was minister for lands and natural resources, Regenvanu led a months-long consultation on the subject of deep sea mining in Vanuatu. “People thought basically it was too early to do anything, we shouldn’t do anything. There were calls even then for a moratorium,” he said.

Vanuatu’s government, along with the prime ministers of Fiji and Papua New Guinea, have called for a regional moratorium on deep-sea mining while more can be learnt about potential environmental harms and how to protect against them. “Pacific peoples are indigenous peoples. All countries of the Pacific have some of the highest rates of indigenous people as part of population in the whole world. Pacific peoples’ views towards our Earth, our resources, are very special ones,” says Regenvanu.

What next?
Before mining can commence, the ISA needs to release a code for the exploitation of the deep sea. This was due to be released and adopted in July 2020, but was delayed due to Covid. The ISA announced this week that it aimed to resume face-to-face meetings this year.


“It is not implausible to expect that the ISA will be in position to finalise the code by 2023,” said the DeepGreen spokesperson, who added the company expects submit their environmental impact statement in 2023 for review in the hope of beginning commercial mining in 2024.

Meanwhile, others are urging caution. This month the EU parliament advised the European Union to promote a moratorium on deep seabed mining until its environmental impacts could be better understood and managed. But DeepGreen’s boss, Gerard Barron, has suggested that if the ISA moves slowly on developing a regulatory framework, the company might invoke the so-called two-year rule, which allows a country sponsoring a mining contractor to notify the ISA that the company intends to begin mining. The ISA then has two years to finalise the regulations for deep sea mining. If it is unable to do so, the ISA is required to allow the contractor to begin work under whatever regulations are in place at the time.

“It’s something that’s consistently under review – it’s not off the table, that’s for sure,” Barron told China Dialogue Ocean about triggering the two-year rule.

In response to the Guardian’s questions on the subject, DeepGreen said the two-year rule is “only available to sponsoring states to use, not contractors like DG, which cannot invoke it” but that it was a “a valid option available to all member states of the International Seabed Authority.”

40 Years of the S&P 500 Index

A good bench mark to follow is the the S&P 500 Index. This is the index by Standard and Poors’, of America’s 500 largest corporations.

In July 1981 (Just 40 years ago) the index as show below….

was at 130 points.

Fast forward 40 years from then, to now.

The index is at 4297 points.
Imagine buying an S&P Index fund in 1981, when it was at 130 points……

Vodafone PLC Debt.

Today Vodafone PLC, owes over $40bn.

https://investors.vodafone.com/debt-investors/financing-strategy

The chart below shows that debt pile grow.

However, some interesting things to note.

https://investors.vodafone.com/sites/vodafone-ir/files/vodafone/debt-investors/bond-outstanding/pdf/t-30.pdf

In 2008, during the height of the financial crisis, when stability and solvency of banks was questioned, Vodafone was able to borrow €186,350,000, (€186 Million) for 20 years, via this bond issue at ZERO percent interest.
In o

100 Years of the Dow Jones 30 Index

The graphs below explain the logic behind index funds.

In June 1921, the Dow Jones Industrial Index which is made up of America’s 30 largest companies, was at 68 points.

In June 2021, 100 years later, the Dow Jones Industrial Index which is made up of America’s 30 largest companies, was at 34,502 points……

So, 68.45 points in June 1921…..

Fast forward 100 years…..

it is at 34,502.51 points. Imagine buying an index fund 100 years ago in the Dow 30….

M&G Better Health Solutions Fund

M&G Investments PLC, have launched a new investment fund, the M&G Better Health Solutions Fund.

https://www.mymandg.co.uk/better-health-solutions-fund

The Fund will invest in impactful companies whose solutions help to save lives or encourage better health, offering a powerful dual proposition for investors:

The potential for competitive, long-term financial returns. The opportunity to make a positive impact on people and communities around the world.
The fund stands apart from other health-focused global equities funds as it looks beyond the healthcare sector, to invest in companies that deliver better well-being too.

The fund embraces the UN Sustainable Development Goals (SDGs) framework and invests in companies that generally contribute most clearly to SDG 3: good health and well-being, but also;

SDG 2: zero hunger
SDG 6: clean water and sanitation
SDG 8: decent work and economic growth
SDG 11: sustainable cities and communities
SDG 12: responsible consumption and production

https://sdgs.un.org/goals

Tesco PLC July 2021 Dividend

Yesterday, Tesco PLC the UK’s largest supermarket group paid out its July 2021 dividend.

5.95p a share.

www.tescoplc.com

total number of voting rights in the Company as at 15 February 2021 is 7,731,707,820.

https://www.londonstockexchange.com/news-article/TSCO/share-consolidation-total-voting-rights/14864789

Thus:-

7,731,707,820 x £0.0595 = £460,036,615.29

That is £460 Million

https://www.londonstockexchange.com/stock/TSCO/tesco-plc/company-page

HICL Infrastructure Dividend: June Dividend.

Yesterday, Wed 30th June, HICL Infrastructure (HICL) paid out its quarterly dividend

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

2.07p a share.

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

the total voting rights in HICL is 1,936,813,501

Total Voting Rights – 07:00:05 31 Jul 2020 – HICL News article | London Stock Exchange

Thus:-

601,392,027 x £0.0207 = £40,092,039.4707

That is £40 million

John Laing Environmental Assets Group: June Dividend.

On Friday 25th June, John Laing Environmental Assets Group (JLEN) paid out its quarterly dividend

1.69p a share.

https://www.londonstockexchange.com/news-article/JLEN/total-voting-rights/14982129

the total voting rights in JLEN is 601,392,027

Thus:-

601,392,027 x £0.0169 = £10,163,525.2563

That is £10million

https://www.londonstockexchange.com/stock/JLEN/jlen-environmental-assets-group-limited/company-page

Inflation: examples of rising commodity prices.

There is huge demand for wood. (Lumber). This video shows that inflation is here.

The reason for price rises in wood is that people changed their homes due to the pandemic. As people moved out of cities, and that has resulted in a new construction boom. Also has restaurants and cafes are building out door areas for eating, this needs new construction. All a result of Covid19.

HM Government Borrowings: May 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” 7 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office to raise cash for HM Treasury:-

19-May-2021 0 5/8% Treasury Gilt 2035 £3,093.7490 Million
18-May-2021 0 1/8% Treasury Gilt 2024 £4,062.4950 Million
18-May-2021 1¼ % Treasury Gilt 2041 £2,812.4990 Million
11-May-2021 0 3/8% Treasury Gilt 2026 £3,283.7500 Million
11-May-2021 0½% Treasury Gilt 2061 £1,500.0000 Million
05-May-2021 0¼% Treasury Gilt 2031 £2,750.0000 Million
05-May-2021 0 7/8% Treasury Gilt 2046 £2,000.0000 Million

Thus:-

3,093.7490 Million + 4,062.4950 Million + 2,812.4990 Million + 3,283.7500 Million + 1,500.0000 Million + 2,750.0000 Million + 2,000.0000 Million = £19,502.493 Million

Another way of looking at it, is in the 31 days in May 2021, HM Government borrowed:£629.11267741935483870967741935484 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 2026 through to 2061. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…

Royal Dutch Shell June Dividend.

Today, one of the world’s energy companies, pays out its quarterly dividend.

http://www.shell.com

Shell PLC is a dual listed company, it has two share classes, Shell A and Shell B.

It is paying out $0.1735 or 12.26p per share on Shell A and Shell B shares.

https://www.londonstockexchange.com/news-article/RDSA/total-voting-rights/14997114

Royal Dutch Shell plc’s capital as at May 28, 2021, consists of 4,101,239,499 A shares and 3,706,183,836 B shares, each with equal voting rights. The total number of A shares and B shares in issue as at May 28, 2021 is 7,807,423,335

Thus:-

7,807,423,335 x £0.1226 = £957,190,100.871

That is £957million paid to shareholders.

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

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

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