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European Commission president Ursula von der Leyen travelled to Kyiv on Friday to announce a multibillion EU loan for Ukraine as part of a G7 plan to raise $50bn on the back of future profits from frozen Russian state assets.

On her eighth visit to Ukraine, von der Leyen wrote on X upon arrival that she would meet leaders in Kyiv to discuss a range of issues from “winter preparedness to defence, to [EU] accession and progress on the G7 loans”.

The loan announcement comes at a time of additional and urgent need of Ukraine aid due to Russia’s repeated attacks on its energy infrastructure, and after months of negotiations with G7 partners about their share and structure of the loan.

“These assets should be used to protect lives in Ukraine against Russian aggression,” President Volodymyr Zelenskyy said on Thursday evening.

“There is a clear decision regarding $50bn for Ukraine from Russian assets, and a mechanism for its implementation is needed to ensure that this support for Ukraine is felt in the near future,” he added.

G7 leaders agreed in June to make $50bn available in loans to Ukraine and divide that according to their relative economic weight, which would have resulted in the EU and US covering $20bn each, with Canada, Japan and the UK making up the rest.

But the US conditioned its participation on legal reassurances that the assets would stay frozen for longer. The EU, where nearly €200bn of Russian state assets are immobilised, has however been unable to guarantee that, due to Hungary’s opposition to extending the sanctions regime against Russia.

To make up for American no-show and bypass Budapest’s veto, the commission sought to increase its share of the loan to up to €40bn, guaranteed against the bloc’s common budget. But EU capitals baulked at the figure, pressuring Brussels to get the UK, Canada and Japan to increase their share.

A majority of EU countries and the European parliament need to approve the EU loan before year’s end.

UK retail sales enjoyed a robust performance in August, with volumes rising by 1%, surpassing economists’ forecasts, according to the Office for National Statistics (ONS).

The latest figures mark a continued recovery, following a 0.7% increase in July, and lift year-on-year sales by 2.5%. This outpaced the City consensus of a 1.4% rise.

August’s gains were driven by favourable weather conditions, which boosted demand for clothing and supermarket purchases. Textile, clothing, and footwear stores led the charge, posting a 2.9% increase in sales, while food retailers also saw a notable 1.8% rise.

ONS chief economist Grant Fitzner said: “Retail sales rose in August as warmer weather and end of season promotions helped to boost sales, most notably for clothing and food shops. Supermarkets, in particular, contributed to the largest annual rise for food sales since the summer of 2021.

“Looking at the broader picture, retail sales have also increased across the three month and annual period, following strong growth from online retailers. However, sales overall remain slightly below their pre-pandemic level.”

Read more: Best savings accounts that offer above-inflation rates

Food stores sales volumes rose by 1.8% in August 2024, following a rise of 0.3% in July 2024. Compared with August 2023, sales volumes rose by 0.6%, the largest yearly increase since July 2021.

Non-food stores sales volumes, the total of department, clothing, household and other non-food stores, rose by 0.6% in August 2024, with clothing stores having the largest impact.

Sales in the three months to August grew 1.2% compared with the previous quarter and by 1.0% year-on-year.

Phil Monkhouse, UK country manager at global financial services firm Ebury, said: “Consumers seem to be finding their footing, bolstered by the Bank of England’s first rate cut since 2020, which has eased mortgage pressures and sparked renewed confidence in the UK’s economic outlook.

“With summer now over, retailers will now need to focus on sustaining growth ahead of the autumnal weather threatening future footfall.

“Alongside utilising the back-to-school season, agile strategies to meet consumer demand and adopting hedging strategies to protect against international disruptions will help businesses navigate any challenges in the months ahead.”

Read more: Funds set to benefit from falling interest rates

However, consumer confidence appears to have taken a big hit in the run-up to next month’s budget.

GfK’s long-running barometer slumped by seven points in September to minus 20, taking the survey back to levels seen at the beginning of the year.

Story continues

Kris Hamer, director of Insight at the British Retail Consortium, said: “Clearly, the high cost of living still bears down on consumers, meaning demand may dip further when energy bills rise once again in October.

“On top of difficult trading, retail faces a disproportionate tax burden compared to other industries, holding back investment, and contributing to a decline in shops and jobs.”

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Well that makes my katzenjammer even worse. On top of a cold, as well as a hangover from trying to match dad — who just landed from Australia — on the shiraz front, my portfolio now lags behind the 60-80 per cent equity index in the table below for the first time this year.

As wake-up calls go, less a splash of water on the face and more a slap. I had long ceased hoping to outdrink the S&P 500 in 2024 — the AI boom and strong pound ensured that. But beating a benchmark hand-chosen by me?

Two months ago my portfolio was 250 basis points ahead of the Morningstar index in the year to date. How did I stuff up? Well, for starters, it has slightly more equities than me and they continue to rally the world over.

But my 74 per cent weighting is my decision, so no excuse. Another reason I trail the benchmark is because well over half of its bond exposure is sterling-denominated. Only Treasuries comprise my fixed income fund.

While many saw entrenched US inflation, I was correct in thinking that short-end interest rates would eventually head south again. The Federal Reserve’s half-point cut in policy rates on Wednesday sits nicely with this view.

That said, I didn’t think through the purchase of a non-hedged exchange traded fund. If I were correct on lower short-term rates, the dollar would probably decline versus the pound. Thus my Treasury fund is only flat since January. And it’s in the red this week.

Two months ago my portfolio was 250 basis points ahead of the Morningstar index in the year to date. How did I stuff up?

Annoying or what? Especially as the returns this year from my UK and Asian equity funds are both in double digits. But a valuable lesson learnt. It is fine making currency bets but not if they are inconsistent with your core thesis.  

Finally, Japanese stocks are still reeling from the hiki-taoshi they received in early August. Like pulling an opponent to the floor in sumo, the Nikkei 225 index collapsed by a fifth under the weight of a strong yen and investor nerves.

Onward and upward, though! There is still more than a quarter to go until the year is done. So how do I rate the structure of my self-managed portfolio today — the existing positions as well as the gaps? On what am I focused?

It seems to me I have to answer three very important questions if I want to boost significantly the value of my pension pot before Christmas, let alone achieve an annual return commensurate with the goal of doubling my assets in the next eight years.

The first is: how much risk I am willing to take? Losing half of my chips on the first spin of a roulette wheel and then choosing correctly the next two times also doubles my money — green pocket excluded. But the trade-off between returns and volatility is terrifying (a Sharpe ratio of 0.5, in this case).

So yeah, I could own just one stock and be lucky. At the other extreme, an academic paper over the summer by Ronald Doeswijk and Laurens Swinkels — beautifully summarised by my colleagues on Alphaville — proves the value of extreme diversification.

Hypothetically a fund owning everything would not only have produced an excess return over cash of 0.3 per cent per month between 1970 and 2022, but a Sharpe ratio above each of the component assets too. A genuine free lunch.

It wouldn’t have my portfolio in seven figures by 60, however. So while I don’t want to put the lot on black, I know I need to take more risk in order to retire early. And that probably means the US government bond ETF has to go.

As an aside I may return to before November 5, if you think a razor-close US election may result in chaos or worse — and some experts fear as much — adding risk makes no sense at all. Indeed, 100 per cash is the way to go.

Either way, America is the second question I need a clever answer to. In summary, one of my first columns urged readers to always own US equities, but in a rush of blood last year I sold the lot when valuations got ridiculous. It was a mistake — as it usually is.

What do I do now? As my children know, I’m fine with losing face and would buy in again. Yet for me, the S&P 500’s forward price-to-earnings ratio of 24 times is still bonkers. Nvidia’s market cap is above 50 times its book value. I’ve seen this tech movie before.

US medium-cap stocks offer a better storyline, perhaps, being 25 per cent cheaper relative to forward earnings than the S&P 500. Margins have held up OK too, as me old mucker Robert Armstrong pointed out this week.

But I worry about the index’s preponderance of banks. Sure, their real estate loans are less likely to implode as rates fall, as Robert argues. But if the US economy stays robust, lenders prefer higher rates as they mean wider spreads.

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Can Stuart Kirk double his money in eight years? Claer Barrett talks to Stuart Kirk at the FT Weekend Festival

Still, I noticed recently that large US companies are investing more again, with the S&P 500’s capex-to-sales ratio back to pre-Covid levels. AI spending within the Big Tech sector has a lot to do with it, but this money will eventually flow to mid-caps too.

My third mega-question is China, the topic of a whole column soon. The word “Japanification” is now being whispered among professional investors. Will China repeat Japan’s lost decades, with low growth, a falling population, high debts and real estate woes?

I need three mega-answers soon. Should have taken a summer break after all.

The author is a former portfolio manager. Email: stuart.kirk@ft.com; Twitter: @stuartkirk__

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Project Censored Welcomes Our Summer Interns

Project Censored is delighted to welcome our student interns for Summer 2024.

Da’Taeveyon Daniels, a dedicated student activist from Fort Worth, Texas, currently studying at Lonestar Virtual, is a leading voice in youth advocacy and civic engagement. He fosters collaboration among youth advocates and policymakers, driving tangible policy reforms.

Lamees Hijazi is a San Francisco State University senior majoring in history, with minors in Middle East and Islamic Studies, and Arab and Muslim Ethnicities and Diasporas. Her interests include multiculturalism, social justice, anti-imperialism, internally displaced peoples, Indigenous studies, and global anti-colonial solidarity.

Leo Koulish is a senior at New York University Gallatin, where he studies narratives of resistance through art and writing and minoring in disability studies. Leo is currently working on a photo essay and oral history series about Colombian Transgender people in an attempt to understand the impacts of diasporic culture on gender.

Nicole Mendez-Villarubia is a senior at North Central College studying journalism, gender studies, and sociology. Some of her favorite things to talk about are disability justice, queer media, and her cat, Tina.

Olivia Rosenberg is a senior at North Central College studying communication and sociology. She has experience in institutional communication and public relations as well as research for the Encyclopedia of Domestic Violence.

Summer interns will be engaged in the Project’s daily work, which includes identifying and vetting independent news stories, researching current news topics and issues in press freedom, communicating with partner organizations, and promoting the Project’s work through its website, social media channels, radio program, and public events.

We at Project Censored are thrilled by the opportunity to work with Da’Taeveyon, Lamees, Leo, Nicole, and Olivia this summer.

New Video Series Addresses Critical Media Literacy, Independent Journalism, and Civic Engagement

Our newest video series, Decoding Democracy: Exploring Critical Media Literacy Education, Independent Journalism, and Civic Engagement, features expert scholars, journalists, and media activists discussing how an informed public can protect democracy from corporate interests, social media manipulation, press distractions, and censorship.

Overall, the goal of the Decoding  Democracy video series is to empower individuals to navigate the media landscape and political climate as engaged community members and citizens. Each of the videos, which average 20–30 minutes in length, addresses a particular topic:

The series was produced with help from the Union for Democratic Communications (UDC). Most of these recordings took place at UDC’s “Left Undone” conference, a collaboration between the University of Pennsylvania’s Annenberg School for Communication and Rutgers University School of Communication and Information, held in Philadelphia in October 2023.

The full Decoding Democracy series is available directly from the Project Censored website and via Project Censored’s YouTube channel.

Project Receives Reynolds Journalism Institute Fellowship to Promote Algorithmic Literacy for Journalists

The Donald W. Reynolds Journalism Institute (RJI) at the Missouri School of Journalism has awarded Andy Lee Roth and Project Censored a fellowship to promote algorithmic literacy for journalists. The Project’s proposal, one of seven funded proposals out of some 200 submitted to RJI, will support a collaboration between Project Censored and MintPress News, an award-winning digital news outlet based in Minneapolis.

Working with the staff of MintPress News, Roth and Project Censored will develop an interactive “toolkit” of web-based resources to equip journalists with a comprehensive understanding of how artificial intelligence (AI) influences the creation and reach of their work, and to encourage them to report more informatively about the impact of algorithms (and AI more generally) on journalism.

More specifically, the fellowship project will focus on “helping independent journalists and newsrooms whose digital content has been subject to shadowbanning, demonetization, and other forms of online speech filtering that restrict them from reaching a wider audience.”

“Most working reporters and editorial staff lack the time or the training to fully appreciate the impacts of artificial intelligence on their daily work routines,” Roth said. “Every journalist, regardless of specialty, can benefit from enhanced algorithmic literacy.”

Censored Press Happenings

Just in time for its “book birthday,” Going Remote: A Teacher’s Journey, written by Adam Bessie and illustrated by Peter Glanting, has been shortlisted for two prestigious honors. The New York Public Library recognized Going Remote as one of the Best New Comics of 2023 for Adults. It also scored a place on the Graphic Medicine International Collective’s shortlist for outstanding health-related comic projects of 2023.

Mischa Geracoulis published Making Curricular Space for Critical Media Literacy and Human Rights Education in the United States in the International Journal of Human Rights Education.

Andy Lee Roth published Pro-Israel Legislators Have Concocted a Dangerous Ruse to Shut Down Nonprofits at Truthout. See the May 13 episode of The Project Censored Show, noted below, for more about the topic of Roth’s article.

Mickey Huff was the featured guest on Jill Cody’s Be Bold America! on KSQD community radio out of Santa Cruz, CA. Huff and Cody discussed Project Censored’s State of the Free Press 2024.

Dispatches on Media and Politics and Other Publications

In conjunction with World Press Freedom Day, observed on May 3rd, Mickey Huff and Nolan Higdon published The Press Freedom Clock Is TikToking. From the persecution of WikiLeaks publisher Julian Assange, to ​​establishment media propaganda that denies Israel’s genocidal violence against Palestinians in Gaza, and growing agitation over control of the social media platform TikTok, Huff and Higdon warn that “efforts to control freedom of information will undoubtedly create chilling effects.” These flashpoints in the battle for press freedom highlight the necessity of truly independent journalism and the importance of defending the principles of World Press Freedom Day, not just once a year but every day. See the May 13 episode of The Project Censored Show, noted below, for more about the topic of Huff and Higdon’s article.

Nancy Kranich—who coordinates the Library and Information Science concentration at the Rutgers University School of Communication and Information and also serves as one of Project Censored’s esteemed judges—published Free People Read Freely. Her Dispatch details the growing resistance to book bans, as evidenced by new state laws, innovative library programs, the emergence of grassroots advocacy groups, and polls demonstrating high levels of public trust in librarians. Noting that “the freedom to read remains fragile,” Kranich, a past president of the American Library Association (ALA), calls for a “broad coalition of advocates” to join those already on the frontlines of its defense. Note: Project Censored is a proud member of the Banned Books Week Coalition.

Twice per month, the Project’s Dispatches series offers a cogent analysis of the latest media industry news, the state of the free press, and the intersection of media and politics. Find the complete Dispatches on Media and Politics series here.

The Project Censored Show

Follow the links for each episode to learn more about the Show’s featured guests and content. Find the comprehensive archive of Project Censored Show episodes here.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Private equity firms are aggressively pushing to include language in loan documents that could give them room to pay themselves larger dividends from the companies they have bought, drawing a sharp rebuke from lenders.

In the past, loan documents usually capped exactly how much money a private equity firm could extract from one of its portfolio companies. Over time, those fixed amounts became malleable and were based on a percentage of a company’s earnings.

But in recent weeks, private equity firms have been attempting to take things one step further with the so-called high-water ebitda provision, which allows a company to use the highest earnings it generates over any 12-month period for critical tests that govern how much debt the company can borrow or the size of dividends it can pay to its owner, even if the business’s earnings have slid since reaching that high point.

KKR, Brookfield, Clayton, Dubilier & Rice and BDT & MSD Partners have all attempted to work the clause into loan documents, according to people briefed on the matter. All four firms declined to comment.

The terms have received intense pushback from would-be lenders, and in almost every case the language has ultimately been stripped out of the loan documents. But the fact that private equity-backed companies continue to push for the inclusion of the language has lenders on edge, with some fearful rival creditors will buckle and accept the provision.

According to lenders who saw drafts of the loan agreements, the terms were included in provisional loan documents backing KKR’s buyouts of asset manager Janney Montgomery Scott, valued at roughly $3bn in the deal, and $4.8bn purchase of education technology company Instructure, as well as Brookfield’s $1.7bn acquisition of a unit of nVent Electric. The clause was also put in provisional documents for refinancings by Wesco, which is owned by BDT & MSD Partners, and CD&R’s Focus Financial.

“It’s a really aggressive term,” one creditor said. “It’s a tough time to say, ‘I’m going to push the envelope further.’”

In one deal, RBC, which was lead underwriter on the $900mn term loan Brookfield was raising for its investment in nVent, told an investor that the bank had strong demand and if the language was an issue they should “vote with [their] feet”.

When enough investors passed, the high-water language got pulled from the loan document.

RBC did not immediately respond to a request for comment.

The fact the language is being tested is one sign of a potential imbalance in the loan market, a critical source of funding for private equity buyouts. With buyout volumes still down from the 2021 peak, investors have had fewer new deals to spread their funds across, leading to heightened competition around some loans.

“When you’re in a strong market, it’s usually harder to push back against” these terms, one banker involved in the Instructure financing said. But, he added, “they’re not surviving.”

The language has made it into at least one deal, a $2.1bn term loan for a commercial laundry operation known as Alliance Laundry, according to two people briefed on the matter. The company planned to use the proceeds to refinance debt and pay a $890mn dividend to its owner, BDT & MSD, according to S&P Global and Moody’s.

The provision reads that “the borrower may deem Ebitda to be the highest amount of Ebitda achieved for any test period after the closing date . . . regardless of any subsequent decrease in Ebitda after the date of such highest amount”, text seen by the Financial Times showed.

“If you didn’t ask for those terms in a negotiation you didn’t do your job,” one private equity executive said. “You always want to give maximum flexibility to your businesses.”

The high-water concept is not foreign to creditors; it is far more prevalent in European leveraged finance markets. And some bankers and lawyers argue the idea is rooted in common sense.

In certain loans, the amount of future debt a company can borrow or the sums it can dividend out to its owner is set as a percentage of earnings. Companies like that flexibility, because if they are growing they do not have to keep amending their loan documents if they would like to borrow or distribute more cash. Investors said savvy lawyers decided to push that concept one step further.

The high-water provision creates a threat for would-be investors, particularly if a business begins to slow before a loan matures.

“Over time the protections that were built into credit agreements by commercial banks have deteriorated,” said Tom Shandell, Investcorp Credit Management’s head of US CLOs and broadly syndicated loans. “Private equity [firms], which can afford the best and brightest attorneys, have little by little put terms into credit agreements that weaken the protections.”