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Tuesday, 31 August 2021

We probably can’t invest our way out of a climate disaster, but the accountants will still make bank (working from home) as we try

We (probably) can’t invest our way out of climate disaster: The former chief exec of Norway’s titanic sovereign fund is getting real about ESG. The climate crisis represents the “biggest market failure of all time,” Knut Kjaer told Bloomberg, adding that the markets’ inability to adapt for a green economy now means they will experience “a much bigger transitional shock later.” One problem with ESG, according to Kjaer, is that investors don’t think on the decade-plus timescale needed to make fundamental change. Then there are the other, more dramatic failures of responsible investing: the underpricing of carbon, the misleading and vague claims, the alleged international fraud. Kjaer hasn’t given up yet: He’s still trying to change the world with his responsible investment firm. But he’s also realistic about the fact that it’s too late to reverse some of the damage, as reflected by a strategy that focuses as much on adapting to the consequences of climate change as mitigating it.

And speaking of ESG: You know who bloody loves it? The accountants, who dream of being asked to account for things other than financial statements. You could go read this Financial Times piece about how the Big Four have gotten religion and are now lining up at the fee trough — or go read Matt Levine’s pleasantly snarky take here.

Cryptocurrencies are a “bubble that will eventually prove to be worthless”: So says the man who made his fortune by trading on the subprime mortgage collapse that triggered the financial crisis. Fast-forward more than a decade and John Paulson’s Spidey senses for speculation are tingling again. In an interview with Bloomberg Wealth TV on Monday, Paulson says he’s worried about high inflation amid a rapid increase in money supply, recommending gold as the best safe-haven from cash. He calls BS on more fashionable assets including SPACs and digital currencies, which he describes as “a limited supply of nothing … to the extent the demand falls, then the price would go down. There’s no intrinsic value to any of the cryptocurrencies except that there’s a limited amount.” To which one might reasonably reply: Like basically everything else, then? But Paulson prefers tangible assets these days. After netting himself USD 10 bn in the 2008 crash that saw 10 mn Americans lose their homes, he now says that the rising housing market means the best investment for USD 100k is to buy a USD 1 mn house — with a 900k mortgage. Ironies abound.

A “silent majority” of American white-collar workers want to go back to the office — at least a few days a week — and are worried their dream may not come true as corporations mull staying remote until the fourth wave of covid-19 subsides. In a poll of US workers that we suspect is probably generalizable to corporate Egypt: a “vocal minority” of 31% said they want WFH on a full-time basis, while 45% want to be back to the office full time and 24% want a mix of the two. With some businesses suggesting remote work may drag on for another two years, CEOs aren’t the only ones getting a bit antsy.

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