23 March 2019 FT — Articles to Read

23 March 2019


Question: According to MSN: Money, what is the average home price?


Jittery investors shed stocks and seek safety in sovereign bonds – Pg. 1

–          Fears of a deepening economic slowdown rattled global financial markets yesterday as stocks fell, German government bond yields turned negative and a widely followed US Treasury market indicator raised fears of a recession

–          In the US, three-month Treasury yields surpassed those on 10-year debt – a kink that has receded every US recession since the second world war and last occurred before the financial crisis in 2007.  The yield on the benchmark 10-year Treasury note fell by 0.09% to 2.45%, down from 3.36% in October

–          …has the central bank returned the American economy to a safe equilibrium or is it beginning to fundamentally deteriorate?


Trump picks Powell critic for Fed board – Pg. 6

–          …nominated Stephen Moore, a visiting fell at the staunchly conservative Heritage Foundation think-tank and former adviser to his 2016 campaign, for a spot on the Federal Reserve Board

–          …Mr Moore has been one of the most prominent supporters of the president’s domestic economic agenda with its focus on tax cuts and deregulation

–          Mr Moore has been a vocal critical of the Fed, particularly as the central bank las year raised interest rates


Beware the health costs of legalizing cannabis – Pg. 8

–          Few investment sectors can match the huge returns achieved by the cannabis business in recent months, propelled by the prospect that the drug will be legalized for recreational use around the world while more medical applications are developed

–          …smoking potent cannabis strongly increases the risk of psychosis

–          This “case-control” study adds weight to the growing evidence that cannabis, particularly in high-potency forms such as skunk, can trigger mental illness in vulnerable consumers

–          There are also potential benefits from a well-regulated market, including diverting revenues from criminal traders to legitimate companies and (through taxation) public authorities.  Nor should we ignore the sheer pleasure that many people derive from smoking dope.  But the risks do suggest the need for great caution by governments considering legalization (Prof Note: More and more of my peers are acknowledging they “vape” and/or smoke pot.  What is of most concern to me is the consistent statement by most, “Pot is not addictive.”  In the same conversation I hear, “I just need pot to relax.”  If one needs pot to relax, does that not make it addictive?  Full disclosure, I have never smoked pot (or anything) but am expressing my concern and fear.)


Lab-grown stones take lustre off natural diamond producers – Pg. 13

–          …$17bn diamond-mining industry

–          Sales of lab-grown diamonds make up only about 2% of the total diamond jewellery market but production is growing by 15 to 20%/year, …

–          The price of smaller diamonds dropped to their lowest level since at least 2011 in January…

–          …Indian polishers and cutters of diamonds have grown cautious about restocking natural diamonds given the rising supply of lab-grown stones

–          The ability to produce small lab-grown diamonds in a consistent quality and colour has made them more desirable for the fashion jewellery market…

–          …a new breed of lab-grown producers is targeting bigger, more valuable diamonds

–          Over 90% of the world’s natural diamonds pass through India and are polished in the city of Surat

–          Lab-grown stones are produced using high pressure, or by depositing layers of carbon on a diamond seed, a process known as Chemical Vapour Deposition

–          Last July, the US FTC expanded its definition of a diamond to include lab-grown stones

–          Such stones could account for 5% of the global diamond jewellery market by 2023…


Answer: $275,000