17 August 2018 FT — Articles to Read

17 August 2018


Question: According to MSN:Money, what are 50 mindless ways you’re burning through your paycheck?


Walmart basks in US economic glow – Pg. 11

–          Walmart unveils its strongest US sales growth in more than a decade yesterday as the number of visitors to its stores climbed and ecommerce accelerated

–          …Walmart shares up almost 10%, established the company as one of the winners from a US economy characterized this year by low unemployment and robust consumer spending

–          The retailer said comparable store sales in the US rose 4.5% in the quarter that ended in July, driven by groceries, clothing and seasonal items like air conditioners and paddling pools

–          DIY retailer Home Depot, a housing market bellwether, said low employment, rising home prices and wages pushed consumer confidence to record highs, supporting its business

–          …US consumer spending has accelerated

–          (Prof Note: Last week after my flight from Nevis I stopped in a Walmart for groceries around 2am.  I saw one of the ugliest scenes in a retail store.  Two young girls, 20s, were berating the cashier for not offering a price they saw but the cashier was holding to the price as marked.  I still remember them saying, “That is why you work at Walmart.”  (they said other things but I will spare everyone the ugliness)  I remember thinking at the moment, as both parties looked to me in line to support their position, “Just do not drag me into this.  I am too tired for a battle.  I do not want to be involved.”  The young women stormed out and I settled my transaction and departed telling the cashier, “There is honour in working at Walmart!”.  However, I still wonder if I should have engaged on behalf of the cashier.  I remember thinking, “There is honour is working at Walmart at 2:00am.”  However, I just felt exhausted.  I wonder if I did the right thing.  Perhaps I should have risen…only so many battles one can fight in life.  However, my point, there is honour in working all jobs!)


Rising rates and China slowdown imperil Hong Kong property sector – Pg. 17

–          As a revitalized US dollar hits the highest level in more than a year, it is not simply emerging markets that are grappling with the fallout.  A booming Hong Kong  property market is at risk

–          The Hong Kong Monetary Authority was forced to intervene and buy the local currency this week for the first time since May to prevent the breaking of a peg with the US dollar that has been in place since the 1980s

–          …spaces as small as 117 sf have been sold for $290,000 this year ….

–          Shares in large Hong Kong-focused developers have fallen this year, ….


Growing cost of US companies’ junk debt raises doubts about length of expansion – Pg. 17

–          Companies with speculative grade credit ratings are spending a growing portion of profits on interest payments as debt costs rise, causing concern as investors and economists debate the durability of the US expansion

–          The deterioration in riskier company balance sheets comes after a surge in borrowing by groups, boosting their reliance on floating rate debt as they take advantage of low funding costs and a hefty appetite for their obligations by lenders

–          …nearly $3tn of loans are outstanding from junk-rated groups.  Most are pegged to a floating rate such as Libor.  Three-month Libor has risen more than 60bps this year to 2.3%, lifting floating rate loans higher alongside it

–          Coverage ratios on all new loans tracked by S&P Global Market Intelligence’s LCD this year have fallen to the lowest levels since 2008 but have yet to collapse to the troughs seen during the dotcom boom and bust and financial crisis


Answer: (1) Paying too much on housing (Prof Note: Yes, a commute is generally not pleasant but you are actually paying yourself during that time if traveling to less expensive housing option(s)); (2) Pending too much on car costs (Prof Note: Compare car insurance rates); (3) Wasting Energy (Prof Note: Motion sensors and timers); (4) Buying movie theater popcorn (Prof Note: Can you say, “Monopolistic pricing?!”); (5) Not planning meals ahead of time (Prof Note: Planning does save $$$); (6) Grocery shopping without a list (Prof Note: Just this AM I was purchasing a gallon of milk, ONLY a gallon of milk, when the man behind me in line was there with two containers of bleach.  As he was waiting he grabbed a box of donuts…clearly an impulse purchase); (7) Buying coffee (Prof Note: we all know my views of Starbucks and the associated costs!); (8) Paying for cable (Prof Note: I cut the cord over a year ago, if not longer); (9) Buying brand-name products; (10) Not changing the thermostat (Prof Note: I have actually gone to window units and A/C smaller spaces); (11) Ignoring your phone bill (Prof Note: Read EVERY bill carefully); (12) Drinking bottled water (Prof Note: Those silver things against walls actually dispense free water….amazing); (13) Using regular lightbulbs (Prof Note: Daylight LEDs); (14) Smoking cigarettes (Prof Note: Do people even still do this?!); (15) Buying lunch at work (Prof Note: Do the math…brown bag it!); (16) Eating out for dinner (Prof Note Do the math…AGAIN!); (17) Grabbing fast food; (18) Ordering Appetizers (Prof Note: Hands off my Nachos!); (19) Shopping online (Prof Note: What??? Pay attention in class?  Blasphemous!); (20) Requesting faster shipping; (21) Paying ATM fees; (22) Withdrawing Money at the ATM (Prof Note: Do people still use money?); (23) Putting your money in a high-fee checking account (Prof Note: Now this is just silly!); (24) Paying unnecessary bank fees (Prof Note: I am not joking when I tell you I told my bank, “You must FEAR me if I get a fee!”); (25) Putting your paycheck in a regular bank account; (26) Carrying credit card debt (Prof Note: Unless for emergencies…true emergencies); (27) Using a credit card with a high annual fee (Prof Note: This actually reminds me that I need to check this); (28) Paying unnecessary fees, in general; (29) Collecting stuff you don’t need (Prof Note: I NEED the original Buddy L Steam Shovel!); (30) Spending too much on snacks; (31) Signing up for a gym membership (Prof Note: I did not develop my washboard abs by going to a gym!); (32) Throwing your child a huge birthday party; (33) Shopping impulsively; (34) Buying books (Prof Note: But for Foundations of Real Estate Financial Modelling, Second Edition, Routledge, 2018.  In fact, purchase extras for gifts to family and friends); (35) Not using coupons (Prof Note: I have walked out, more than once, from a Bed, Bath and Beyond, over a manager not providing me the 20% coupon!); (36) Buying new instead of used; (37) Skipping breakfast; (38) Paying multiple student loans; (39) Ignoring your credit reports (Prof Note: Again…silliness!); (40) Not using your benefits package; (41) Driving around with flat tires; (42) Manually paying your bills (Prof Note: I 100.0% do NOT agree with this at ALL!!!!  Manually pay ALL your bills.  Set a scheduled and review and pay everything manually.  It takes me about 8 – 10 hours a month to pay everything but I know where every penny goes!); (43) Hitting the bars (Prof Note: At least take a shot or two prior to entering!  Also, take Uber home!); (44) Throwing out leftovers; (45) Buying basic items at the grocery store; (46) Paying too much for car insurance; (47) Gambling (Prof Note: I actually think gambling, in moderation, is a great business tool to just judge other’s risk tolerances.  Plus, the drinks are free.); (48) Paying too much in 401(k) fees; (49) Shopping at the wrong retailers (Prof Note: In southern, Maryland there are only two stores open 24 hours, i.e. Walmart and Harris Teeter.  There is $1 difference in a single bag of lettuce and the Walmart lettuce is bigger!); (50) Paying too much in taxes (Prof Note: Hire the experts BUT they must know they are being watched and scrutinized.  Two years ago my accountants and I had a blowout of biblical proportion over losses, i.e. passive or active.  Classification matters and knowledge is power and CASH in your pocket!)