NEWS, VIEWS & TRUTHS (25TH JUN – 29TH JUN)

As we melt under the fantastic summer sun, welcome to this week’s, guaranteed football-free, News, Views and Truths.

In the summer, a young man’s fancy lightly turns to thoughts of beer. And meat.

And based on this week’s headline news, that’s not a good thing as we are in the midst of a carbon dioxide crisis.

The shortage has been caused by an unusually high number of closures of the factories that produce the gas. Now, I had no idea there were carbon dioxide factories and there aren’t. What we do have are fertiliser factories, specifically those that manufacture ammonia, which release vast quantities of CO₂ as a by-product. This is then captured and sold commercially to the food and drinks industry.

But because farmers need very little fertiliser over the summer, these factories shut down for essential maintenance. Problem is, it seems that the owners have all decided to shut down at once, causing a supply drought. The UK is the worst hit as only one factory remains open and as the cost of importing the gas is prohibitively high, food and drink producers rely upon local suppliers.

And as the sun beats down, the demand for fizzy pop and sausages goes up.

Carbon dioxide puts the bubbles in our drinks. It also puts the animals that provide our BBQ menu to sleep. And this is where the panic is setting in as certain retailers are rationing the sale of affected products. Tesco-owned wholesaler Booker is limiting the sale of beer and pop, capping sales to bars, restaurants and pubs at 10 cases of beer and 5 cases of cider and soft drinks. As of yet, this has not hit the shelves of the supermarkets, but you have been warned.

As for the markets, it’s definitely been a “risk-off” week, with bonds up and equities down. All developed markets slid into negative territory with the UK FTSE 100 and 250 down 0.79, Europe similar with a fall of 0.73% and the US S&P 500 down 1.08%. Emerging markets have continued to suffer under the strength of the US dollar with a fall of 2.76%.

Bonds however have reacted positively to this as investors moved assets to perceived safe havens. The FTSE UK Gilt All Stock index is up 0.57% and the Barclay Global Aggregate index up 0.87%. Thus endeth this week’s lesson on the merits of asset class diversification.

And to end this week in usual fashion, this week’s playlist comes courtesy of the summer. Keep your sunscreen topped up and stay hydrated; I shall see you all next week.


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