30 January 2019 FT — Articles to Read

30 January 2019


Question: What is the size of the Federal Reserve’s Balance Sheet?


Mind-reading step closer to reality after breakthrough in artificial voice research – Pg. 1

–        Researchers have for the first time constructed clear speech using computer processing of human brain activity, in a significant step towards creating technology that can read people’s thoughts

–        The development would give an artificial voice to people deprived of speech due to disease or injury by reading their thoughts rather than relying on input from a keyboard or facial movements


Five factors will decide if investors still like Facebook – Pg. 13

–        Will revenue growth decelerate further?

–        Will margins beat Facebook’s forecasts?

–        Has Facebook maxed out in mature markets?

–        Can Facebook make money from WhatsApp?

–        How quickly can Instagram grow?


Big drop in US homebuilders’ shares is a sign of potential trouble ahead – Pg. 19

–        The US housing market was at the heart of the financial crisis that rippled through the global economy a decade ago.  Today, emerging cracks in a property recovery are darkening the outlook for housing-related stocks – and possibly further afield

–        US house prices kept deflating until 2012, but since then they have climbed more than 50%, propelled by a slowly healing economy, falling unemployment and interest rates at record lows

–        But the bloom came off last year, as the index fell more than 40% from peak to trough.  While homebuilder stocks have enjoyed a welcome bounce over the past couple of months, they are still down 32% from the top

–        The Federal Reserve lifted rates four times last year, nudging the cost of new mortgages higher, keeping would-be buyers at bay (Prof Note: this 100bp increase roughly increases the cost of financing, over 30-years, by $100,000)

–        Yet long-term prospects for the sector remain more challenging.  In addition to interest rates, more structural headwinds – including affordability after the dramatic rise in prices, unexpected demographic changes and the rising cost of construction – have dimmed the outlook for homebuilders.  High prices have deterred younger buyers while older owners are staying in family homes, bucking expectations they will sell up for a smaller place


Answer: $4tn +