19 January 2019 FT — Articles to Read

19 January 2019


Question: According to MSN: Money, what are four (4) things that are pushing retirees into bankruptcy?


Fed warns shutdown hitting growth – Pg. 1

–        Banks and other financial institutions are beginning to become more cautious with their lending and Fed policymakers were seeing more “geopolitical uncertainties” as well as “some emerging headwinds to growth from the partial government shutdown”…

–        ….economists forecast suggest quarterly growth could be cut by between 0.5% and 1% depending on how long the impasse lasts, ….

–        ….shutdown, which started on December 22


IMF urges developing nations to prepare bailout plans – Pg. 4

–        A growing risk of debt distress in low-income nations has made it crucial that countries agree how any bailout burden should be shared, ….

–        The Chinese lending has made it difficult for the IMF to judge whether a country’s debt is sustainable, and even harder to win creditor countries’ backing for a bailout, since there is no mechanism for Beijing to play its part

–        Talks between the IMF and Pakistan, which is struggling to avert a balance of payments crisis, stalled last year partly because it was impossible to gauge the scale of hidden liabilities to China

–        The US administration has made it clear it will not support any IMF rescue that simply helps a recipient pay off debts to Beijing – which is not a member of the Paris Club, the group of creditor countries that co-ordinates debt relief

–        The IMF has been warning for some time of the risks of a new debt crisis.  In advanced economies, public debt has hit its highest level since the second world war, while in emerging markets it is at levels not seen since the debt crises of the 1980s

–        …biggest challenges lay in low-income countries, which have increasingly turned to new bilateral lenders, and more costly shorter term bond issues and commercial credits

–        Holding governments to higher standards of transparency has become a priority for the IMF, as Chinese lending for infrastructure projects is notoriously hard to track, with project details withheld and loans often issued on commercial terms by state-owned banks or other actors

–        A third of low-income countries do not report on guarantees extended by the public sector…


Washington staff turn to handouts as shutdown drags on – Pg. 4

–        The effect is not just being felt by federal employees.  Government contractors are not getting paid either, and unlike civil servants, they cannot expect to recoup lost wages in the future


Hedge funds contract for first time since 2008 crisis – Pg. 10

–        It is only the second year in more than two decades that hedge funds’ assets under management have declined

–        Part of the decline was due to investors pulling money from funds amid market jitters and poor performance

–        Investor redemptions, which forced hedge funds to sell investments to raise cash, were a major contributor to the turmoil that wracked markets in December,…


Divorce brings charitable choices for world’s richest woman – Pg. 10

–        The divorce of Amazon founder Jeff Bezos has put a spotlight on his wife, the author MacKenzie Bezos, who will go from being half the world’s richest couple to the world’s wealthiest woman

–        The division of the couple’s estimated $137bn fortune stands to affect people outside their family, from Amazon shareholders to the recipients of their charitable contributions – ….

–        Nearly all of the Bezos wealth derives from Amazon, the company Mr Bezos founded in 1994 and in which Ms Bezos played a number of significant roles, including accountant in its early years.  Mr Bezos is the company’s largest shareholder, with a 16% holding valued at more than $130bn

–        If they file for divorce in Washington state, where their family home and Amazon’s headquarters are located, they could be subject to the state’s community property law, which treats income and property earned by each spouse during the marriage as belonging to both spouses

–        LLCs do not offer the tax benefits of private foundations in the US, but they are subject to fewer rules.  LLCs also have greater ability to back political causes and for-profit businesses

–        Lawyers and philanthropy advisers say the Bezoses have probably already put much of their wealth in charitable trusts


Answer: (1) The stress of dealing with debt collectors; (2) Financial struggles, primarily a decline in income; (3) Medical expenses; (4) Missing work for medical reasons