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 +