Martin Vander Weyer

I once commissioned Michael Wolff —currently the world’s most talked-about journalist as the author of the White House exposé Fire and Fury — to write for The Spectator. It was just before the 2004 presidential election in which Republican incumbent George W. Bush looked set to see off the Democrat challenger John Kerry, and I invited Wolff to tell us the implications for the stock market. His thesis was that the Democrats had become ‘the party of wealth and Wall Street’ while the Republicans had become ‘non-players’, Bush having turned his back on business to be ‘a God-squad cheerleader’. America was waiting in vain for a president who could ‘cast a spell of optimism over consumers and markets’.

During the long interval since our pre-Christmas issue, Bitcoin has continued to generate crazy headlines — and crazy profits for those smart enough to sell at the peaks. The price tumbled from above $19,000 to below $13,000 but it did not crash out of sight, as sceptics continue to predict. Meanwhile, from Japan we hear that the ‘wealth effect’ of a million Bitcoin holders who believe themselves richer could be the turbo-boost to consumer spending that Japan’s flaccid economy has been seeking for decades. US news sources express concern about the environmental impact of global computer operations related to Bitcoin, which now consume as much electricity as three million American households or the whole of Denmark.

Over Christmas, Bitcoin has continued to generate crazy headlines — and crazy profits for those smart enough to sell at the peaks. The price tumbled from above $19,000 to below $13,000 but it did not crash out of sight, as sceptics continue to predict. Meanwhile, from Japan we hear that the ‘wealth effect’ of a million Bitcoin holders who believe themselves richer could be the turbo-boost to consumer spending that Japan’s flaccid economy has been seeking for decades. US news sources express concern about the environmental impact of global computer operations related to Bitcoin, which now consume as much electricity as three million American households or the whole of Denmark.

And so to my annual awards. Best business recovery of 2017: Lloyds Banking Group, which returned from the bailout sin-bin to full membership of the private sector in May. The year’s most lamented collapse: the upmarket Swan Hellenic cruise line in January. And the least lamented? The devil’s own PR firm, Bell Pottinger, in September. The best business books, by a long chalk, were Till Time’s Last Sand, David Kynaston’s richly entertaining history of the Bank of England; and The Spider Network by David Enrich, which unravels the part played in the Libor scandal by Tom Hayes, the UBS trader who is serving a long stretch for conspiracy to defraud.

This is an excerpt from Martin Vander Weyer's 'Any Other Business' column. I don’t know which is more worrying: that the bitcoin market becomes madder by the day, or that it becomes more mainstream. The market price of a unit of the cryptocurrency has spiked above $11,800, up from $750 a year ago, for no reason other than speculative fever. The total value of bitcoins in existence (if that’s the right word) has surpassed the GDP of New Zealand. The first bitcoin billionaires have been announced as Tyler and Cameron Winklevoss, the American twins who were in at the birth of Facebook. The Chicago Mercantile Exchange is about to launch its first bitcoin futures contract and an analyst at JPMorgan says bitcoin could soon rival gold as a safe-haven holding.

The revenge tragedy at the London Stock Exchange whose plot I outlined last month has reached its third act, but the carnage may not be over. Chief executive Xavier Rolet has left the building, rather than staying one more year as the LSE first announced, and declared that he won’t come back under any circumstances. Despite whispers that ‘aspects of his operating style’ sparked this row in the first place, Rolet is due a £13 million golden farewell — which the Daily Mail called ‘obscene’ but his fans see as fair reward for all the value he has delivered. Chief among those fans is LSE shareholder and hedge-fund princeling Sir Chris Hohn, who agitated for Rolet to stay and LSE chairman Donald Brydon to go.

One week you’re fighting to survive the dance-off amid vicious backstage rivalries, the next you’re scoring a perfect ten from Bruno Tonioli for your shimmering tango. As it was on Strictly for Debbie McGee, so it was — well, almost — for Philip Hammond at the despatch box. Unlike many of the Budgets of his predecessors Osborne and Brown, this one did not unravel immediately or prove full of black holes and political tricks. Clear in its analysis, frank in its forecasts, limited in its objectives, it took modest steps to ease the housing crisis and encourage entrepreneurs — and not much else.

Now the hubbub has subsided after last week’s sale of Leonardo’s ‘Salvator Mundi’ at Christie’s New York for $450 million, we can assess whether the record-shattering price was an indicator of an impending turn in the boom-bust cycle or merely an extreme example of art market operators conspiring to ease the burden of the super-rich. Yes, the era of cheap money and asset-price inflation has gone on too long and there are signals everywhere, from the madness of Bitcoin to the nervousness of IPO markets, that a downturn is due. But my own conclusion is that the Leonardo sale was less of a bellwether and more of a freak show.

The Chancellor sounded purposeful when he declared that he’ll do ‘whatever it takes’ to boost the rate of housebuilding — including pushing developers and councils to use up land banks and act on existing planning permissions — with a view to hitting a politically symbolic target of 300,000 units per year. But I wonder whether the post-Budget small print will reveal any sort of plan to overcome the most basic obstacle to achieving this objective, which is a critical shortage of bricks? When housebuilding went into sharp decline after the 2008 crisis, many British brick factories closed down. To build even half of Philip Hammond’s target, the industry needs more than 2.

Numerous readers told me they liked my recent tale — offered as an antidote to ‘media sniping at corporate capitalism’ — about the temporary school built by Porta-kabin after the Grenfell Tower fire. I’m on the lookout for other business stories that celebrate the positive, and I had it in mind to write about an entrepreneur I’ve known throughout his career who has built an international brand that pleases customers, creates skilled jobs and has carried him through tough times to a fortune. But when we spoke, our conversation took an unexpected turn. Did I realise, he asked, how he and his cohort are beginning to think in relation to the risk of an incoming Corbyn-McDonnell government?

What would a perfect tax system look like? For companies, profit taxes should be competitively low, to encourage inward investment, with generous reliefs for start-ups, research and capital projects; the corporate tax code should be designed to generate rising productivity and prosperity rather than to maximise short-term tax revenues, and companies should acknowledge a duty to contribute wherever their profits arise. For individuals, income tax rates should rise only to the lowest level that maximises revenue collection and thresholds should be high enough to keep low earners out of the net, while pension savers and first-time home-buyers should be incentivised.

Perhaps we should be relieved that Donald Trump has made a dull appointment to succeed Janet Yellen as chairman of the Federal Reserve, America’s central bank. He might have picked another alt-right wacko or Kremlin stooge — or his Las Vegas buddy Phil Ruffin, the casino owner he allegedly thought of sending as envoy to China. But in fact he has chosen Jerome ‘Jay’ Powell, an identikit lawyer-turned-banker who has been called the candidate of ‘continuity’ and ‘compromise’ after a late run to beat frontrunner Kevin Warsh, a former Trump adviser with more aggressive opinions on the need for monetary tightening.

There are occasions when an apparently negative economic indicator is also in some sense positive. September’s 9 per cent drop in new car registrations compared with the same month last year was no bad thing if it means fewer people are loading themselves up with debt to buy cars — and won’t hurt British car factories that are part of a global supply chain. Likewise, falling London house prices may carry a negative message about international confidence in the UK, but will help London workers to buy homes. And a quarter-point interest rate rise may look like a sign of concern at the Bank of England and a worry for mortgage borrowers, but is actually a tiptoe back towards the economic normality we have almost forgotten.

Another week, another blue-chip in the dock. The US Securities and Exchange Commission has brought fraud charges against London-based mining giant Rio Tinto and two former executives in relation to an ill-starred coal venture in Mozambique. Whatever its legalities, this was a colossal corporate cock-up. In 2010, Rio paid $3.7 billion for Riversdale, an Australian company that controlled large coal deposits in the Tete region of Mozambique. The plan was to send coal by barge 400 miles down the Zambezi river to the coast, for shipping to Chinese power stations. But the coal reserves proved disappointing, while the Mozambique government refused to permit the barge operation and a rail link proved too expensive.