14 March 2019 FT — Articles to Read

14 March 2019


Question: According to MSN: Lifestyle, what is the single most important question you should always ask in an interview?


Financiers and actors accused of using bribery to get children into Ivey League – Pg. 1 (this article is from 13 March 2019)

  • Wealthy parents collectively paid tens of millions of dollars to buy places for their children at elite universities…
  • The company coached students to claim medical disabilities, allowing them extra time to take entrance tests, … (Prof Note: This disgusts me beyond words! I have worked with many students over the decades that had medical disabilities requiring them to need more time.  All, to my knowledge, were legitimate.  One was an Iraqi war veteran with use of only one arm taking a timed computer examination in my class and was heart broken when he had to ask me to allow him more time.  How the parents and the students could do this sickens me!)
  • It charged up to $75,000 for such services and advised parents to claim their children were travelling for weddings or bar mitzvahs so they could sit exams in its facilities (Prof Note: I had one student that was always “traveling” and needed exceptions to take examinations by themselves. When the final came they were allegedly in California and asked if they could take it in the office of a University of Phoenix professor.  I was about to grant the request when an administrator caught the tag line on the email where the “professor” has misspelled “Phoenix”.  That was the end of that accommodation!  I required the student to fly back and take the examination or earn an “F”.  Suddenly the student had wings and could fly!)
  • Another ploy involved bribing university coaches and administrators to designate applicants as athletes, improving their chances of admission


UK clearing houses face threat of pressure to move to EU – Pg. 1

  • The EU has given itself powers that could ultimately press one of the City of London’s flagship businesses to move to the bloc as part of efforts to ensure financial stability after Brexit
  • Regulators see clearing houses as a critical part of the financial infrastructure, since they act as central counter-parties between sellers and buyers of shares or derivatives
  • London dominates the market for clearing euro-denominated trades, handling the vast majority of interest rate, commodity and credit contracts with a notional value of 660tn (euro)
  • The measures agreed in Brussels would require clearing houses to stick closely to EU capital requirements and other core regulations if they wanted to continue handing large volumes of euro-denominated trades for EU customers
  • Clearning houses would also have to co-operate closely with European supervisors and central banks, including the European Securities and Markets Authority, an EU agency based in Paris
  • The new rules are a response to the prospect of the City falling out of the EU’s regulatory orbit after Brexit, and reflect complaints that LCH aggravated the eurozone’s sovereign debt crisis in 2011 by raising its margin requirements – the amount of capital that its users had to set aside to cover potential failed trades – on debt for Spain and Italy


Spotlight falls on wealthy US parents who pay to ‘get their kids into school’ – Pg. 5

  • US college admissions are supposed to be merit-based, but it has always had its set-aside places for children of alumni and those willing to pay via donations
  • Colleges and universities involved included Yale University, Stanford University, University of Texas, University of Southern California, University of California Los Angeles, Georgetown, and Wake Forest
  • He [Daniel Golden] claimed that President Donald Trump’s son-in-law Jared Kushner was accepted by Harvard after his father Charles donated $2.5m to the university


China’s women spurn call to have more children – Pg. 6

  • The number of births in China fell by 2m last year to 15.2m – the second consecutive year of decline since China repealed its controversial “one child” policy in 2015
  • The nation’s population expanded by 0.38% last year – a rate comparable with western European countries
  • …Beijing estimates it will peak in 2029 at about 1.44bn, before declining
  • The number of people aged over 60 will reach 479m, or about one-third of the population in 2050, up from about 16% today, …
  • An ageing population has been associated with falling growth rates in most countries, notably Japan and western Europe, and means that a greater portion of economic activity will be devoted to elderly care compared with productivity-enhancing investment
  • China also has room to boost output by raising the retirement age from the current years for men and 55 for women
  • Fertility rates were falling even before the one-child policy was imposed, demographers say, as women became better educated and more entered the workforce


Central banks – Pg. 9

  • As a result of last week’s U-turn, the ECB is now committed to keeping its record-low interest rates on hold “at least” until the end of 2019. It also expects to continue reinvesting the proceeds of the 2.6tn (euro) of bonds bought under QE as they mature “for an extended period of time” and has made a fresh offer of cheaper longer-term loans


Wall Street strives to clean up credit default swaps industry – Pg. 21

  • …CDS market, which at its peak in 2007 had more than $60tn of contracts outstanding…
  • …unusual step taken by the CFTC last year of criticizing manufactured defaults…


Answer: “Do you mind telling me why this position is open?” (Prof Note: I do not agree with this at all and just went through this discussion with a former student and now peer.  My advice was to ask about reduction, if any, numbers due to the 2007-09 recession.  How the reduced individuals were treated and the type of exit package.)