Trickss

Counterpoint: Most retirees' largest asset is their home, thus they are overexposed to the UK. Aggressively diversifying their share portfolio is therefore sound financial planning.

Riio-3 final determinations dropped yesterday. 5.7% cost of equity vs CMA's (draft) 5.9%. Very derisked gas controls, very wide risk leccy transmission. Have Ofgem called the peak for the investor WACC rally caused by the post '22 interest rate surge?

I see a general moan about complexity and tradeoffs in the strategy, but what the fuck do they expect? It is a 40-50bn per annum investment they are talking about. Damn straight there should be some checks and balances on that. Customers should expect vfm - and companies should recognise why...

... you have to first pay the inflated equity value of the US company, depressing your returns. Also relevant is that US inflation protection is much less generous than in the UK (no annual indexation to outturn inflation). So you would a priori expect a lower UK return, ceteris paribus.

This is important because it means the generous allowances by US regulators inflate the equity valuations of their companies. It is not true therefore that the 9-10% rate of return competes with the UK rate. It is not gettable as an external investor as you cant simply create more assets...

Exhibit one, the very high premium over book value of US firms www.economicliberties.us/wp-content/u...

'Returns that are internationally comparable' is basically the capitulation to the bollocks argument that because US allowed returns are 9-10% nominal and UK are 7-8% that we are not competitive. A lot of relevant context is lost in this.

Increasingly worried the Govt's 10 year infra plan has been captured by private company talking points: assets.publishing.service.gov.uk/media/6853c5... (THREAD:)

Blergh! I am ashamed to share a Y chromosome with them. Congratulations on your PhD!

Have you considered the possibility she is just there to undermine Starmer by saying unhelpful things that the membership want to hear?

She is not very bright, is she?

You get paid to disconnect in scenario 2.

The key difference is they are accepted as a unit of exchange (NFTs are not) plus the hard caps on number of btc play to the conspiracy minded concerns of goldbugs who think fiat money is a tool of financial repression.

All in favour, but can we please claw the money back from all the wealthy estates that were built on slave money rather than the tax rake off of working people who were not responsible or beneficiaries...?

Willing to wager Neil would also not like the alternative of government derisking itself of the future burden by increasing base salary by the govt pension contribution...

Shittest resignation apology ever - proper piss take.

UK homelessness minister resigns after tenant eviction claims Rushanara Ali was accused of hypocrisy after claims she removed tenants before rent rise of almost £700 a month

Please, Sir- could we have left wing politicians who are a bit less shit than this? www.theguardian.com/politics/202...

Hmm - not really a fair comparison - inflation from Covid/Ukraine vs. inflation from a slightly looser fiscal stance. From a vox pop sustainability view, higher taxes seems more shit than doing nothing and blaming inflation on World stuff...

But inflation is at least easier to blame on other things...

A crisis for financialisation - aka music for most people's ears. More power to Zohran's elbow! Euthanase the rentier class! (copyright JM Keynes)

Yogi Berra's spiritual heir

(4) Finally, bond markets do not like what they see in the UK economy and are pricing gilts accordingly. The optics of kowtowing to the hard left and assuming a £10bn/y investment requirement (c. half requiring external injection) would be dire and push up gilt yields yet further.

(3) It's mainly a bad idea because currently shareholders bear most equity risks like overspends. Nationalisation would see that role held by govt. You just need to look at the scary HS2 numbers to see what large infra planning when its not your money looks like.

(2) The cost would certainly be less than Labour's mooted £100bn. That is a debt and equity estimate, but no reason why you should buy debt out. The equity book value is c.30bn, and this is currently likely close to fair value overall (some companies would attract a premium, others the reverse)

Cunliffe has surfaced a lot of arguments that we should just nationalise the whole sector. I argue Labour's £100bn cost estimate is nonsense, but it is still a risky (and in my view, bad) idea. (1/n)

By which I mean, in such disputes the debate on where to pick the point estimate within the CAPM range is as important as the parameter ranges themselves. That discussion is inherently sector-specific, and the CMA will not be able to adopt its one-and-done approach on that.

(4) The Cunliffe view is that CMA could consult on approach to common WACC parameters and then rule out appeals on said parameters *across all sectors* a all interested stakeholders had had their voice heard. Assumed unrealistic ability to predict the world, and ignores degree of aim up discussions

While respecting the magnitude of the task and considerable time pressure placed on Cunliffe, it is clear that large parts of it (especially on returns) are regurgitated investor/Helm talking points. "We were told X - our solution is Y"... scant evidence of attempts to verify or contextualise X.

(3) The proposals on WACC are noteworthy - Cunliffe seemingly of the view that this has recently been set too low and should be mostly devolved to the CMA. The devil is in the detail here - seems awkward that the appeals body could credibly take charge of such a big area - what happens if contested?

(2/) Cunliffe seems to distrust comparative benchmarking as 'one size fits all' and prefers a supervisory approach. Not clear he appreciates how resource-intensive this would be to provide comprehensive coverage of water activitie, or how to fend off obvious risk of regulatory capture...