Martin Vander Weyer

Our cinema is showing Mamma Mia! Here We Go Again and I’m reminded of a remark attributed to Mark Twain, that ‘history doesn’t repeat itself but it often rhymes’. On 3 October 2008, three weeks after the bankruptcy of Lehman Brothers, treasury secretary Hank Paulson’s $700 billion bailout for the US banking system was passed into law at the very hour when I was watching the original Mamma Mia! movie and observing the impact of a mass inoculation of feelgood on a crowd battered by frightening financial news. And it was early the following Wednesday that I heard of chancellor Alistair Darling’s de facto nationalisation of RBS and Lloyds-HBOS and his emergency liquidity scheme to keep the nation’s cash machines working. ‘See Mamma Mia!

All good things must come to an end, including summer holidays and bull markets. The bull run in US shares that began in the aftermath of the financial crisis in March 2009 has now officially passed the previous record of 3,452 more-up-than-down days from October 1990 to March 2000. This time round, the S&P500 index of US stocks has risen by more than 300 per cent — and that rise has continued throughout Donald Trump’s reign, despite his trade war threats and other follies. But it has not been reflected in major European markets, which have drifted sideways, and has been increasingly sustained by a small number of top tech stocks that have outperformed everything else on the planet.

The wonder of Wonga is that it lasted so long. The arch-villain of the payday loan sector, which grew like a mutant fungus out of the wreckage of the financial crisis, once clocked up a record Representative Annual Percentage Rate (APR) on its loans to gullible and desperate cash-seekers of 5,853 per cent, and was ordered in 2014 to write off the debts of 330,000 delinquent borrowers who could never have passed proper ‘affordability’ checks. The imposition by the Financial Conduct Authority of a cap of 0.8 per cent per day on lending rates, plus limits on default charges, knocked out many smaller competitors, but Wonga (with a 30 per cent market share) carried on — accumulating trading losses and compensation claims as it did so.

As to public subsidy for broadband, the conclusion to be drawn from the DCMS report, though it may not please some readers, is that it should be heavily tilted towards business premises. The report comes up with a benefit-to-cost ratio per pound of subsidy of £1.18 for residential superfast connections but £12.28 for non-residential. The ‘wellbeing’ effects of more movie choices from the sofa and everything else home broadband brings are worth having and we now see them as an entitlement. But the effects on productivity, job creation, small-business viability and export potential are vital for future prosperity — and the competitive disadvantage of having poorer broadband than our trading rivals is plain.

As I set to compiling your email responses into our ‘broadband dossier’ to send to BT chairman Jan du Plessis, the government issued its own evaluation of the ‘economic impact and public value’ of the superfast broadband roll-out programme launched in 2010. Compiled by outside experts, this document from the Department for Digital, Culture, Media and Sport (DCMS) estimates that the additional economic activity and ‘wellbeing’ generated by spending public money to subsidise connections for remote and difficult locations: 5.3 million customers will eventually benefit at an estimated unit cost of £211, creating a total bill for the taxpayer of just over £1 billion.

The award by a Californian court of $289 million in damages to Dewayne Johnson, a groundsman who claimed the weedkiller Roundup caused his cancer, has the makings of what investment pessimists call a ‘black swan’: an unforeseen event with extreme consequences. Roundup is made by Monsanto, the US company that leads the world in genetic modification of seeds and is regarded by the green movement as Satan. Monsanto was recently acquired by the German pharma giant Bayer for $66 billion; Bayer’s shares plunged on news of the Californian award and — with thousands of similar claims pending — could fall a lot further if the jury’s decision is not overturned.

This column has consistently stood up for Mike Ashley, even when the lonesome billionaire’s notions of corporate governance at Sports Direct and staff welfare at its Shirebrook warehouse made that a challenging position to sustain — not to mention his troubled ownership of Newcastle United. Ashley has grown his core business over 35 years from one outlet in Maidenhead to a remarkably robust retail empire by doing the detail, taking shrewd bets and swallowing competitors.

Let’s remind ourselves what we mean by ‘disruptor’. A truly disruptive business revolutionises its marketplace by delivering radical improvements in choice, price and accessibility. A disruptor may be a boffin or a bold lateral thinker: Henry Ford did not invent the motorcar any more than Airbnb invented the ‘homestay’, but both created systems that made the product cheaper and more available than ever before — and both count as great disruptors. But these days ‘disruptor’ status is claimed by all manner of ventures. So in choosing our shortlist for the Award sponsored by Julius Baer, we had to sort the original from the derivative and distinguish those that are already delighting customers from those that are still testing concepts.

What are we to make of a 19 per cent fall in both Facebook and Twitter shares at the end of last week, with Facebook shedding a barely imaginable $120 billion of value in a single day? Of course there are factors relating to performance: Twitter user numbers have been declining and Facebook’s profitability is under threat as it strives to clean up after the Cambridge Analytica scandal. But in short, what the sudden reversal tells us is that valuations of America’s leading tech stocks have become insanely high.

My anecdote last week about upgrading to BT’s ‘superfast’ broadband provoked several readers, unasked, to tell me their own unsatisfactory experiences. So I thought we should compile a Spectator dossier on the subject — as we did to good effect on the issue of high street bank branch closures, on which your combined report reached the desks of a selection of banking’s top dogs. We did not persuade them to reverse the trend but I know we made them think about how to make it less irritating for customers. In the same spirit, feel free (if your wifi connection is working) to tell me how good or bad the broadband service is where you live.

Those twice-weekly sales emails from Foxtons that the recent GDPR clean-up has failed to stop have lately been spattered with the words ‘recent price reduction’ in big red capitals. Hence no surprise that the glossy estate agent and bellwether of London residential property has just reported a first-half loss of £2.8 million, compared to £3.8 million profit in the first half of last year and reflecting a sharp drop in sales revenues. Chief executive Nic Budden says his marketplace ‘is undergoing a sustained period of very low activity levels’.

Elon Musk, the California-based entrepreneur behind the Tesla electric car, the SpaceX commercial rocket venture and several other wacky start-ups, made a fool of himself with his attempt to intervene in the Thai cave rescue and subsequent Twitter spat, but there’s no doubt he’s an original thinker and a remarkable businessman. If the futuristic Tesla is a fine feat of technology, what’s more impressive is that the company is not only still in business after 15 years without turning a profit and having lost at least $3.5 billion since 2015, but that its market capitalisation, at $52 billion, is bigger than Ford’s at $42 billion. Tesla built more than 100,000 cars last year compared with 6.6 million by Ford worldwide.

When I first visited Canary Wharf in the early 1990s, I was struck by a set of black-and-white posters in the shopping concourse advertising the Co-op Bank’s ethical banking stance: essentially, no lending to arms, tobacco, gambling or oil companies, or to regimes that disrespected human rights. A cynic might have argued that it was all about virtue signalling (before we learned that phrase) in the sense that no landmine manufacturer or brutal Third World dictator had ever been known to pop into a Co-op branch, ask for a loan and be met with a polite refusal and a copy of the policy. But it was a smart exercise in market positioning that won many new customers at the time — and a bold statement to buy poster sites beneath Canary Wharf’s burgeoning towers of finance.