The Week - UK (2020-09-12)

CITY 49

12 September 2020 THE WEEK

Commentators

Thenear-doublingofthegoldpriceover the past year,tonearly

$2,00 0 per ounce, isameasure ofits continuedroleas a“means

ofdefendingwealth”,saysJeremyWarner. Callitaninsurance

policyagainst“whenmoneydies”–thetitleofAdamFergusson’s

brillianthistory oftheWeimar hyperinflation.Thanks tostrong

institutionalframeworks,fewserious economists think we’re in

for arepeatofthatmonetarymeltdown–eventhough“currency

debasementisnowrife”tohelppayforthehugecostsofCovid-

19. Indeed,theUSFederalReserve seemsso relaxed aboutthe
    dangersofinflationthat itrecentlyannouncedit wouldprioritise
    “fullemployment objectives”instead. Arisinggoldpricereflectsa
    “lossoftrust” inthevalueoffiatcurrencies. “Butfor the metal to
    reallycomeintoits ownrequiresaprolongedperiodofrelatively
    highinflation.”Theconsensusremains that weareheadedin the
    oppositedirection –intoagreat deflation.But sincetheleast
    painfulway of dealing withabig debt is toinflateitaway, I’m not
    so sure. Neither, it seems, areagrowing number of“goldbugs”.

“Anoteworthypostscript”totheWirecardfraudsagaisthe

involvementofseveralCityadvisers,includingPRfirmFTI

ConsultingandlawfirmsHerbertSmithandSchillings,says

OliverShah.Itshowsthat“groupthink”–ofthesortthatallowed

theGermanpaymentsgianttocontinueoperatingdespite

warningsfromjournalistsandshort-sellers–isn’tconfinedto

countrieslikeGermanyandJapan(whichwasrockedbyasimilar

scandalatcamera-makerOlympusin2 01 1)with“lessglobal,

more-inward-looking”corporateculturesthanBritain.Onthe

contrary,theveryopennessof the Londonmarkethasshaped

a“peculiarbrandofgroupthink”thathas made itthe “world’s

capital ofblow-upsand frauds”. City adviserstend toadopta

taxi-rankmentality:“aslongasthepunterclamberingintothe

backhasthefare, itdoesn’tmatter ifthey’resoaked inblood

and carryingamachete”.Atleast Japan andGermany“have

thedecency toreflecton theirsporadic scandals”. InLondon,

it’sbusinessas usual.“Caveat emptor,mate–hard luck,” is

the attitude.“We are soinuredto it,we hardly evennotice.”

ThetiesbetweenWallStreetfinanciersandUSpoliticianshave

attractedmuchscrutinydowntheyears,saysTheEconomist:

there’sareasonwhyGoldmanSachsissometimesnicknamed

“GovernmentSachs”.Andnooneneedsremindingthatthese

mastersoftheuniversehavedeeppockets.Ofthe6 8 financiers

thatcouldbedeemed“WallStreet’selite”, 52 havegivencashto

politiciansoverthepasttwopresidentialelections.Together,these

individualsare“worth$ 31 0bn”.Mostliketohedgetheirbets,

donatingtobothRepublicansandDemocrats.Butthebiggest

donorsareoften“one-partyloyalists”.Financierswereoutin

forcein 20 16,butthestrikingthingaboutthiselectionisthat

“manyappeartobesitting 2020 out”.The“lowlysums”given

mayreflectthe“dispiritingreality”thatneitherDonaldTrump

norhisDemocratrival,JoeBiden,generatemuchenthusiasm.

Butatleastthoseworriedthat“WallStreethasWashingtonin

itspocket”canbeassuredthat–sofar,atleast–financiers

aren’tproviding“thesortofsumsthatcanhelpdefinetherace”.

We canthank thepandemicfor one thing, saysLex –new hope

in thefightagainstcancer.The world’s first therapeutic cancer

vaccine was developed as farbackasthe 1890s, and“progress

since thenhasbeenmodest”.Butoptimism aboutabreakthrough

is nowrunninghigh,thankstotechnologybeingdevelopedby

front-runnersin theCovid-19 vaccinerace. “Theaimwould be

cure rather than prevention.” The new vaccines wouldbe based

onasynthetic formof messengerRNA (mRNA) molecules, which

carry geneticinformation that could provoke an immune response

to fight off existingtumours.One suchdeveloper,Germany’s

BioNTech, is workingwith Pfizer onaCovidvaccine. Another

virus pioneer,Moderna,also hascancervaccines in clinical trials.

“Sceptics,includingModerna’s many short-sellers, can point to

ahistoryofdisappointments.” Anditremainstruethat“scientific

success doesn’t guarantee the commercialsort”. But thenew

generationof developers is benefiting fromrecent research:

“theurgent needforCovid-19 jabs is puttingmRNAvaccines

to an early test”.They look tohave a“promising”future.

DeliaBushell

Anunseemlyboardroom

rowattheJockeyClubis

threateningtotarnish“the

mostprestigiousorganisa-

tioninBritishhorse-racing”,

saidTheSundayTimes.

LawyersforformerCEO

DeliaBushell–whowas

oustedlastmonthafteran

investigationupheldclaims

of“bullying,racistcom-

mentsandsharingoffensive

materials”–havewrittento

theclubindicatingshemay

takelegalaction.Bushell

allegesa“stitch-up”,

claimingshewasbrought

downbya“cabalofmale

co-conspirators”–including

herreplacementasCEO,

NevinTruesdale.

AformerSkyandBTSport

executive,Bushell,48,set

outtomodernisetheclub

whenshewasappointedlast

October.Instead,shefound

herselfatthecentreofan

“extraordinarypublicclash”,

saidTheSundayTelegraph.

Shenowconcedesthatshar-

ingan“offensiveimage”of

singerSusanBoylewasa

“significantlapseinjudge-

ment”.Butherlawyerssay

allegedageistcomments

were“takenoutofcontext”.

Theyalsorejectaccusations

ofracismconnectedwith

commentsmadeabout

George Floyd, who was

killed by US police in May.

The 270-year-old Jockey

Club, which owns 15 race-

courses, “hoped to tap

Bushell’s experience to win

big-money broadcasting

deals”, noted The Sunday

Times. But the row has

shaken it to the core and

now “threatens to draw in

senior business figures”,

including the head of NHS

Track and Trace, Baroness

(Dido) Harding, who was

“on the sub-committee that

determined Bushell’s fate”.

Bushell’s friends apparently

include the racing broad-

caster Clare Balding. If this

affair gets to court, we can

expect quiteacommentary.

How will

Wall Street

vote in 2020?

Editorial

TheEconomist

The City’s

peculiar brand

of groupthink

OliverShah

TheSundayTimes

What the

gold price

really tells us

JeremyWarner

TheSundayTelegraph

Cancer jabs

aren’t such

along shot

Lex

Financial Times

City profile