Thanks for this, Simon. Your line: "The steady collapse of the Thatcherite economic model" and the lines that followed have captured my imagination and the idea deserves to be picked up elsewhere.
One factor in the steady reduction of UK pension fund commitment to UK equities - and equities in general - that is never mentioned is the closure of DB funds and their increasing maturity. If you are covering the pensions of aging beneficiaries you play safe and stick to bonds. It testifies to your point that this process has been going on for decades.
Yes, I was writing about liability driven investing and the switch to bonds more than 20 years ago. A lot of it was driven by new rules that came in with the creation of the Pension Protection Fund which itself was a response to the collapse of Equitable Life. It really annoys me when City folk blame PF de-equitisation for the demise of the stock market since, as I say in the piece, it was over by 2016 when the under-performance began and the valuation discount opened up. I think a lot of the people making this argument have an agenda. Like GS, they want those on DB schemes to be forced to invest part of their grossly inadequate savings into underperforming UK shares in the hope that it will save their ecosystem. It won’t of course.
Well the EU has the option to remove voting rights of non compliant member states. They might keep that powder dry for the day Hungary boycots something serious
Trump seems rather like one European - Petain - who ended the conflict between France and Nazi Germany in 1940,, but unlike Petain, he wants to surrender someone else’s country and not his own to a brutal aggressive dictatorship.
Thanks for this, Simon. Your line: "The steady collapse of the Thatcherite economic model" and the lines that followed have captured my imagination and the idea deserves to be picked up elsewhere.
One factor in the steady reduction of UK pension fund commitment to UK equities - and equities in general - that is never mentioned is the closure of DB funds and their increasing maturity. If you are covering the pensions of aging beneficiaries you play safe and stick to bonds. It testifies to your point that this process has been going on for decades.
Yes, I was writing about liability driven investing and the switch to bonds more than 20 years ago. A lot of it was driven by new rules that came in with the creation of the Pension Protection Fund which itself was a response to the collapse of Equitable Life. It really annoys me when City folk blame PF de-equitisation for the demise of the stock market since, as I say in the piece, it was over by 2016 when the under-performance began and the valuation discount opened up. I think a lot of the people making this argument have an agenda. Like GS, they want those on DB schemes to be forced to invest part of their grossly inadequate savings into underperforming UK shares in the hope that it will save their ecosystem. It won’t of course.
Terrific read. All three make the most depressing reading which I suppose seems to be how substacks work for masochists.
Well the EU has the option to remove voting rights of non compliant member states. They might keep that powder dry for the day Hungary boycots something serious
Trump seems rather like one European - Petain - who ended the conflict between France and Nazi Germany in 1940,, but unlike Petain, he wants to surrender someone else’s country and not his own to a brutal aggressive dictatorship.