18 September 2018 FT — Articles to Read

18 September 2018


Question: According to MSN:Money, what are 15 signs your employer wants you to retire?


Fed official eyes rate rise to balance jobs market risk – Pg. 4

–          US financial stability could be threatened if the Federal Reserve keeps borrowing costs too low and allows an overheating jobs market to encourage excessive risk-taking…

–          Concerns that America’s economic boom could lead to hazardous risk-taking in financial markets have begun to feature more prominently in Fed discussions, as the US experiences above-trend growth at a time when tax cuts and public spending rises are fueling the economy

–          The Fed is gearing up for a further rise in short-term interest rates from the current range of 1.75-2.00% in its September 25-26 meeting, with more tightening possible in December and next year as unemployment hovers well below Fed estimates of sustainable levels

–          Trade tension could add to those inflation pressures,…

–          Among the areas in the Fed’s spotlight are commercial real estate and sections of corporate debt


USA Inc faces growing threat from activist debt investors – Pg. 13

–          US companies are facing an escalating threat from activist debt investors, who want to push them into default to make a profit from bearish bets on their bonds

–          The corporate defence law firm Wachtell Lipton has labelled the practice “net-short debt activism”.  In such cases, a hedge fund buys a meaningful enough position in a company’s bonds to agitate for the company to be declared in default – and an even larger position in a company’s credit default swaps, which pay compensation when that default is confirmed

–          The practice of so-called “manufactured” defaults has sparked controversy, thanks to the case of Hovnanian, a US builder, which agreed to default on some of its bonds in return for new low-cost financing from a hedge fund, Blackstone’s GSO.  Blackstone stood to gain from the subsequent CDS payout

–          Lawyers and analysts say that the benign US economy and low corporate default rate means distressed debt funds, which normally invest in troubled companies, are looking at otherwise healthy companies to generate trading opportunities


Answer: (1) They stop assigning long-term projects; (2) You’re given projects that don’t require strategizing; (3) They stop investing in you; (4) Your salary and career growth has halted; (5) They try and make your role redundant; (6) Rude comments about your age; (7) Your supervisor becomes more hands-on; (8) You’re treated differently than younger colleagues; (9) Disciplinary Action is taken for no reason; (10) Your retirement becomes a topic of conversation; (11) A lot of talk about cost-cutting measures; (12) An incentive is thrown your way; (13) Your work hours are reduced; (14) You’re isolated from the group; (15) You’re not given the proper resources (Prof Note: I have seen all of these utilized to push someone out, i.e. not just for retirement)