15 November 2018 FT — Articles to Read

15 November 2018


Question: According to MSN: Money, what are six (6) things you should do to prepare for the next recession?


Germany’s contracting economy sets puzzle for ECB policymakers – Pg. 1

–          Germany’s economy has shrunk for the first time in more than three years, contracting 0.2% between the second and third quarter on the back of a fall in exports

–          Growth in the eurozone’s economic powerhouse, which has consistently outperformed the region’s other nations, was expected to be weak on the back of delays in German carmakers’ compliance with new EU emissions standards

–          ……Germany’s economy, which provides almost a third of all Eurozone output, is being badly hit by the global trade war between the US and China


Flurry of new social benchmarks sees market-tracking indices swell to 3.7m – Pg. 1

–          The number of indices measuring markets has ballooned by nearly half a million to more than 3.7m in the past year as providers produce a blizzard of bond market, environmental, social and governance benchmarks

–          …the number of indices globally climbed by 438,000, or 12%, to 3.73m in the year to June 2018, …

–          Despite the number of stock market indices dipping 3% to just more than 3m for the year, the bond benchmarking business raced ahead to account for about 16% of all indices

–          Fixed income is a focus for many passive investment fund providers such as BlackRock and StateStreet

–          The fastest growing corner of the indexing industry is benchmarks that track and weight companies according to their environmental, social and governance (ESG) standards

–          ESG has become one of the biggest trends in the global asset management industry, with institutional investors such as pension funds seeking to end or lessen their exposure to companies in controversial fields such as gun-making


Ford to pilot driverless grocery delivery – Pg. 12

–          The carmaker announced yesterday that it would set up a pilot programme with Walmart and Postmates, the delivery start-up, to “explore how self-driving vehicles can deliver many everyday goods such as groceries, diapers, pet food and personal care items”

–          Ford is using a fleet of what it calls “simulated autonomous vehicles” to deliver pizzas in Miami.  The cars are driven by a human shows presence is disguised to make the vehicle appear driverless.  The goal is to gather information about how consumers and retail staff interact with the vehicles of the future that lack a human operator


Lagarde urges central banks to address decline of cash by issuing digital money – Pg. 19

–          Central banks are split on a response to the rise of electronic payments, which calls into question their status as the monopoly issuers of official currency

–          Some, including Sweden’s Riksbank, the Bank of Canada and the People’s Bank of China, are already considering issuing digital currency to the public

–          At present, central banks issue electronic currency only to banks.  When consumers swipe a card or pay bills online, they are using money provided by commercial institutions.  The BIS warned in March that making such a change would challenge banks’ business model and allow for “digital runs” on a central bank of “unprecendented speed and scale”

–          A state-backed digital currency could boost competition and offer back-up if private payment fell victim to a cyber attack, bankruptcy or a company’s withdrawal from a local market


Answer: (1) Know your investment goals and stay the course; (2) Keep saving for retirement; (3) Get out of debt; (4) Do not base your home-buying decision on the next recession; (5) Save at least 6 months’ worth of living expenses; (6) If you cannot save a lot, save a little – it adds up over time