8 September 2018 FT — Articles to Read

8 September 2018


List-Serve Question: Does anyone know where to find a schedule showing, for new construction, what is useful life broken out by cost category, e.g. HVAC, painting, hardware, etc.  Underwriting depreciation on a residential apartment new construction deal.  All I can find is a general summary put out by the IRS.


Question: What percentage of persons have tattoos, i.e. are “inked”, between the ages of 18 and 35?


Surge in US wage growth keeps Fed on track for two more rate rises this year – Pg. 1

–          US wages have risen at their quickest pace in nine years as employers boosted pay to attract and retain workers in a tightening labour market

–          Average hourly earnings rose 2.9% in August from a year ago, the fastest rate since June 2009…

–          The data also further strengthened the dollar, which jumped 0.3% after the figures were released

–          The strengthening US currency has been one of the leading causes of the rising jitters in emerging markets, which have seen sharp sell-offs as investors question whether they can pay back billions in dollar-denominated debt (Prof Note: Can we all say, “Tesobonos”?)

–          Yesterday’s figures showed the labour market added 201,000 jobs last month, from a revised 147,000 in July, adding a record-breaking streak of uninterrupted job growth


Emerging Markets – Pg. 5

–          Argentina’s extreme market stress raises multiple issues.  The first is financial: does it represent the beginning of an emerging market collapse of a like not seen since a series of crises rolled from Russia to Asia to South America at the end of last century?

–          The second is philosophical: if Mr Macri’s technocratic government, which heads the G20 and has followed economic orthodoxy while also enjoying full international support, cannot ride out fickle markets, who can?

–          The BI, the central bank’s central bank, warned in June of “financial vulnerabilities [that] have been building up, in their usual gradual and persistent way”

–          The most obvious symptom is the doubling since 2008 of dollar loans to emerging markets to $3.6tn

–          …as US interest rates rise and the dollar strengthens, those easy-money debts have become harder to service, especially for countries with large current account deficits – notably Argentina, Turkey and South Africa

–          US protectionism has hurt Asian countries, whose current account surpluses might otherwise protect them from rising rates.  But the US threat of $200bn – worth of tariffs against China has sent them into a tailspin too

–          The worst drought in three decades shrank Argentina’s key agricultural sector by half this year.  Tensions in the Middle East have also pushed up oil prices, making Argentine energy imports more expensive

–          Scarred by eight debt defaults, two bouts of hyperinflation, 20 IMF-supported programmes in 60 years and multiple currency crises, they no longer have faith in the peso, which has lost more than half its value this year


Corporate debt funds hit by jolt of outflows – Pg. 11

–          Investors yanked more money out of corporate debt last week, withdrawing the most out of investment grade bond funds in nearly three months and extending this year’s outflows from junk bond vehicles….

–          After years of steady returns and roaring inflows, US corporate debt has lost 2.1% this year, ….


Answer: 47% (Aye Caramba!)