11 July 2019 FT — Articles to Read

Question: According to MSN: Money, what are four policies to mitigate risks caused by your employees?

Powell power: US stocks soar on rate hints – Pg. 1

  • The S&P 500 crossed the 3,000 threshold for the first time yesterday after Jay Powell fueled market expectations of a US interest rate cut this month
  • …global economic uncertainty had increased, despite strong jobs numbers for last month and a lull in the trade war between the US and China

Powell fuels expectations for a July interest rate cut – Pg. 2

  • …will move as early as late July to cut its main interest rate by at least 25bps from its current level of 2.25-2.5%
  • US sovereign debt yields and the dollar pulled back immediately on the release of the testimony

Fossil find advances date of humans in Europe – Pg. 4

  • Modern humans reached Europe far earlier than suspected, paleontologists said, after identifying a 210,000-year-old cranium excavated in Greece as Homo sapiens rather than Neanderthal. Until now there has been no solid evidence of modern humans in Europe before 60,000 years ago
  • …add support to the emerging view that ancient hominid populations were far more mobile than scientists had appreciated until recently, with ebbs and flows of different groups between and across continents

Global Economy – Pg. 8

  • The conference at Bretton Woods in New Hampshire that underpinned much of today’s global economic order took place three-quarters of a century ago, between July 1 and 22 1944.
  • With the General Agreement on Tariffs and Trade, which went into effect in 1948, this idea of “certain basic rules of good behavior” also covered trade
  • In terms of economic policy, Bretton Woods means a commitment to co-operation, contractual obligations among nations and effective international institutions – the IMF, the World Bank and the World Trade Organization
  • Two informal groups of countries have also been influential: the G7, which includes the seven largest high-income economies; and since 2008 the G20, which includes the leading emerging economies and the EU
  • The regime of fixed, but adjustable, exchange rates collapsed in 1971, when the Nixon administration broke the dollar’s link to gold
  • Overall, the Bretton Woods ideal of structured co-operation worked extraordinarily well. But new challenges have emerged. Perhaps the most important is the shift away from western and, above all, US dominance, with the rise of superpower status of China, which on some measures, already had the biggest economy in the world
  • Today, unlike 40 years ago, it is the citizens of high-income countries, not of the emerging world, who are most suspicious of global economic integration
  • Deglobalization has begun
  • Another shift is growing pressures on the environment, especially climate change. The world, it is now argued, has moved from the Holocene to the Anthropocene: a planet largely shaped, both for good and ill, by human activity
  • To this must be added technological change. More recently, these are undermining the comparative advantage of developing countries in labour-intensive manufacturing. They are threatening large-scale disruption to patterns of employment. They are creating new cross-border flows, notably of data. They are transforming payment systems and are likely to have even bigger effects on monetary systems
  • One traditional issue is the reliance on the US dollar in the global monetary system. This was unresolved at Bretton Woods, when John Maynard Keynes proposed a global currency

Answer: (1) Educate your staff (Prof Note: I am so exhausted by “Ethics” courses, “Leadership” courses, and “Communication” courses. Personally, ethics should be understood by this point, i.e. 2019, by all generations. It should be taught in the home. While I will admit to chuckling at Kelly Anne Conway’s comment about a “Meow” moment regarding two female congress individuals I will also admit it was grossly inappropriate and sexist. Until individuals are terminated for this type of behavior and speech, i.e. have real consequences, it will continue! My vote, if I even get a vote, let the terminations serve as the education.); (2) Tackle mental health head-on (Prof Note: Mental health is real. I have lost several peers to mental health issues, i.e. suicide, and still feel their loss in my life.); (3) Operate true openness and transparency (Prof Note: Transparency may sting initially, but the benefits far outweigh the initial sting. Post everyone’s salaries and total compensation publicly. This will, in my opinion, eliminate salary differentials.); (4) Lead by example (Prof Note: I still remember one morning as a CFO having the President’s secretary come to me telling me I had to find an attorney that had “riot” experience. I said, “WHAT????” I was then told the President had been criminally charged with causing a riot in a New Jersey gambling establishment and needed an attorney. I truly cannot make this stuff up! Or rather, I do not need to make anything up!!!