15 October 2018 FT — Articles to Read

15 October 2018


Question: According to MSN: Money, what are five (5) reasons you won’t retire on time?


US growth near turning point as tighter policy kicks in, warns Bridgewater chief – Pg. 1

–        The US economy faces a looming deceleration as tighter monetary policy starts to weigh on activity and ratchets up pressure on financial markets, …

–        Treasury yields started climbing sharply this month, as a string of healthy US economic data and hawkish comments by Federal Reserve officials forced investors to reassess their sanguine view of how far and how fast the central bank would raise interest rates

–        Tax cuts have invigorated the US economy, pushing the jobless rate to its lowest since 1969.  The Fed predicts growth to surpass 3% in 2018, leading it to pencil in a fourth rate rise of the year in December, and another three in 2019


Trump shifts blame to Fed as stocks tumble – Pg. 3

–        …Trump described the policies pursued by chairman Jay Powell as “crazy” and “loco”, suggesting misguided rate rises are puncturing equity values

–        While just over half of Americans have direct or indirect stock market holdings, more than 90% of those in the top 10% of earners are exposed, …

–        The central bank and its chairmen have been caught in political crossfire before.  Officials in the George H W Bush administration put intense pressure on Alan Greenspan to loosen policy in the early 1990s, and the president subsequently argued the Fed was responsible for his defeat to Bill Clinton in 1992.  Ben Bernanke came under criticism from both sides in the financial crisis


The new flexible: why employers are rethinking part-time hours – Pg. 10

–        In an article this year for Harvard Business Review, the researchers set out the findings of the experiment, which gave employees notice of their timetable two weeks in advance with start and finishing times that stayed the same throughout the fortnight.  An app allowed workers to swap shifts without waiting for a supervisor’s approval.  Sales increased by 7%, and labour productivity by 5% (Prof Note: Even Universities do not have set schedules.  It is difficult for professionals and families to schedule around the unknown.)


Answer: (1) Underestimating how much money you’ll need (Prof Note: I always stress that identifying one’s desired lifestyle is critical.  The determining if it is realistic.  The reassessment (if necessary)); (2) High living expenses (Prof Note: Determine what is important to one’s family); (3) Overspending on housing (Prof Note: Housing is a huge area where one can generally save.  Downsizing); (4) Investing too aggressively or not at all (Prof Note: You have to get in the game and get in early!!!); (5) Not having a plan (Prof Note: One of my many criticisms of higher education is they focus on corporate plans and focus very little, if at all, on personal plans)