7 June 2019 FT — Articles to Read

7 June 2019


Question: In the U.S., how many individuals are either confined, on probation or parole?


Changing weather patters leave Midwest farmers stuck in the mud – Pg. 3

–          …only two-thirds of corn acreage has ben planted and less than half of soyabean acreage, the lowest amounts on record for this late in the season

–          Heavier rainfall between April and June has been the “most impactful climate trend” in the Midwest agriculture over the past three decades…

–          The trend will increase until at least mid-century, leading farmers to “further reduce planting-season workdays due to waterlogged soil”

–          Thunderstorms will become more intense, more frequent and longer-lasting as springtime warms over the central US, …

–          …World Bank and other institutions, yesterday cut its world corn production estimate by 38m tonnes due to US planting problems

–          By early this week just 67% of the nation’s intended corn acreage had been sown, while a normal year planting would be 96% complete, …

–          About 39% of soyabeans were in the ground compared with 79% on average

–          Eligible farmers are also able to file insurance claims on acres they were unable to plant.  Bigger farm operators have tried to adapt to wetter weather by investing in field drainage systems and planting equipment able to seed dozens of rows in the hours that fields are dry


India cuts interest rate as growth slows – Pg. 4

–          India’s central bank has cut its benchmark interest rate for the third time this year as it seeks to reverse the country’s sharp economic slowdown and also signal the possibility of further easing

–          ….lower the benchmark repo rate by 25bps to 5.75%, bringing it to its lowest level since late 2010

–          …India’s GDP grew at its slowest pace for five years, expanding 6.8% for the full year ending March 30 compared with 7.2% the previous year

–          …the RBI also lowered its GDP growth forecast for the current April-to-March financial year to 7%, down from its previous forecast of 7.2%, with bellwether indicators, such as car sales, pointing to continuing weakness in April and May


Legal Services – Pg. 7

–          Fueled by explosive growth in private equity, aggressive poaching of talent and most of all, a business model that resembles a free-wheeling investment bank, Kirkland has become the highest-grossing law firm in the world.  At the end of 2018 revenues stood at $3.7bn, up nearly 20% on the previous year and more than 130% higher than when Mr Hammes took control

–          In the process it elbowed aside its nearest rival, the us FIRM Latham & Watkins, which posted revenues of $3.4bn last year.  After that, the gap widens: the largest global firms, such as Baker McKenzie ($2.9bn) or DLA Piper ($2.8bn), generate big revenues but are far less profitable, while annual turnover at the UK’s “magic circle” elite firms such as Clifford Chance is closer to $2bn

–          The rise reflects the shift in the financial world’s balance of power since the financial crisis.  Investment banks, the dominant force before 2008, have been eclipsed by private equity firms, which now sit on hundreds of billions of dollars of investment funds

–          “Dry powder” in private capital – money raised but not yet spent or committed to deals – hit $2tn at the end of 2018

–          Some find Kirkland’s culture difficult to handle.  Lawyers with proven intellect but who stay inside their offices instead of hustling for new clients are not tolerated, nor is anyone who arrives thinking the new and improved pay is a licence to coast towards retirement


Investors are counting on Powell to save them – Pg. 9

–          Wall Street, in other words, thinks the interest rate cycle has turned – with a vengeance

–          American industrial output and capital expenditure, for example, has weakened markedly in recent months, almost certainly as a result of trade wars


Investors are mispricing Fed’s next moves on rates, says Goldman and UBS – Pg. 19

–          UBS and Goldman Sachs have warned that expectations for a series of US interest rate cuts this year are overblown,….

–          “Markets now imply that the Fed will cut rates by around 70bps this year and 35bp next year.  We find this excessive,” ….

–          The bank said that, despite a deteriorating outlook, US growth should still track at above 2% this year.  It sees inflation rising to 2% in the coming months


Answer: 6.7m