24 July 2018 FT — Articles to Read

24 July 2018


Question: According to MSN:Money, Cutting what 10 costs can make you rich?


Beijing’s $74bn banking boost increases risk of currency war – Pg. 1

          China’s central bank injected $74bn into its financial system yesterday to help fortify a weakening domestic economy against the impact of an escalating trade war with the US and growing friction with Washington over its falling currency

          It follows a renewed threat by Donald Trump, the US president, late last week to impose tariffs on all of China’s $500bn in exports to the US

          Raising the risk that the US-China trade war could turn into a currency war, Mr Trump has accused Beijing of manipulating the renminbi, which on Friday reached its lowest point for a year against the US dollar and has fallen 5% since the start of last month

          The injection was the People’s Bank of China’s biggest ever using its Medium-term Lending Facility, a policy tool crated in 2014 to provide loans to commercial banks for three to 12 months

          The loans come on top of other recent PBoC easing moves, including a cash injection of about Rmb700bn in late June, when it cut the share of deposits that banks must hold on reserve at the central bank, where they are unavailable for lending and investment

          The extra liquidity shows that Beijing is moving to support growth as a slowdown in housing and infrastructure adds to pressure from the US trade war.  China’s economy grew at 6.7% in the second quarter, ….

          Financial stress is rising among cash-strapped borrowers: 150 peer-to-peer lending platforms have collapsed since the start of June amid a wave of defaults


ECB decision to end easing faces first statistical verdict – Pg. 2

          After a surprisingly strong 2017, the eurozone’s economy has begun to stagger

          The question hanging over the ECB is whether the eurozone’s rocky first quarter was a blip or a harbinger of a more serious downturn

          If growth remains lackluster the ECB will face questions on whether it was wise to declare an end to a policy widely credited with reviving the region’s economic fortunes, before being able to make a proper call on how sever the slowdown will be


Sales of US homes fall again as ‘severe’ shortage lifts prices – Pg. 4

          Sales of previously owned US homes fell for the third consecutive month in June and prices struck a record high amid a “severe housing shortage”…

          Existing home sales fell 0.6% last month to an annualized rate of 5.38m units…the key gauge of the US housing market was down 2.2% form the same month in 2017

          The lack of supply and robust demand sent the median price of an existing home to $276,900 in June, up 5.2% year-on-year, setting a new high

          It forecast a 2.5% rise this year in total home sales, which includes existing homes and newly built ones, with prices rising 6.7%

          Demand in the sector has been lifted by a labour market and broader economy tha tare firing on all cylinders.  The jobless rate was 4% in June, close to an 18-year low…


Technology and society – Pg. 7

          Digital distraction has been blamed for a range of ills, from ruining dinnertable conversation and disrupting sleep patterns, to interfering with children’s education and contributing to an increase in anxiety and depression – even putting young people at higher risk of suicide

          In June the WHO created a new classification of “gaming disorder”, to describe people whose personal or professional lives have seen “significant impairment” due to excessive video gaming (Prof Note: This has been around since the late 90s.  I still remember a very good friend of mine in trouble at college as he played too much Nintendo.)

          Serious legal threats or class action lawsuits have not yet emerged around smartphone addiction

          (Prof Note: The way I lecture has changed. I use to ride the students to pay attention.  Now, I simply say, “It is in your best interest to pay attention.  Please note I get paid the same regardless of if you pay attention.”  I found that if I tried to reach the students by engaging them in class my evaluations were harmed.  “No good deed goes unpunished.”)

          Faced with this onslaught of new technology, parents are struggling even to answer questions about how much time on technology is “too much” and at what age it should be limited (Prof Note: I am finding I am putting technology down around 8pm at night.  On Nevis I see the families chowing down on a $300 lunch with all four people on smart devices not talking to each other.  When families come to play the course, the children all have their smart devices and their heads are down.  It makes my heart heavy for what they are missing.  The message(s) will still be there in the evening.)


Trump’s Fed broadside puts investors on notice – Pg. 17

          Two more quarter-point increases this year are still largely expected, bringing the interest rate corridor to 2.25-2.5%

          Whle the bond market expects the Fed will stop tightening later next year, the US current stands out among leading economies regarding growth and interest rate expectations.  That has helped boost the dollar and short-term borrowing rates


Answer: (1) Checking account Fees (Prof Note: Literally, my bank FEARS giving me a fee.  I will absolutely pay interest, when appropriate, but fees send me into orbit, i.e. I start letter writing campaigns); (2) Landline phone service (Prof Note: What is a landline?): (3) Cable TV (Prof Note: Cut the cord over a year ago); (4) Restaurant meals (Prof Note: I had local crab cakes and local first-of-season corn last night for dinner…spectacular!); (5) Soda (Prof Note: Guilty!  There are three 2-litre bottles in my fridge currently BUT purchased at Dollar General for $1.50/2-litre); (6) Bottled Water; (7) Subscription Boxes (Prof Note: Had to learn what these are when I read the article); (8) Alcohol (Prof Note: I did purchase hard ice tea to have with my lemon vodka at dinner last night.  Very refreshing!); (9) Tobacco; (10) Daily Latte (Prof Note: Stop making Starbucks wealthy!)