Author: Roger Staiger

29 August 2019

 

Question: According to MSN: Money, what percentage of married couples in Washington DC earn over $100k and what is there monthly disposable income?

 

Uproar as Johnson shuts down parliament to protect Brexit plan – Pg. 1

• Boris Johnson plunged Britain in to a constitutional uproar yesterday when he announced plans to shut down the UK parliament for five weeks, daring opponents of his Brexit strategy to vote down his government in a sharp escalation of tensions in Westminster
• The prime minister asked the Queen to prorogue parliament between the second week of September and October 14 – the longest suspension since 1945
• Mr Johnson has insisted that the UK will exit the EU on October 31, with or without a deal
• …Mr Johnson hopes that it will focus minds in Brussels on delivering a new Brexit deal without the Irish border backstop – an insurance policy to avoid a hard border with Ireland through a temporary customs union

 

DeBeers diamonds in a rough patch as oversupply and artificial gems hit sales – Pg. 1

• DeBeers, the world’s largest diamond miner by value, said yesterday that sales of rough diamonds plummeted 44% at its auction last week in Botswana, down to $280m compared with $503m in the same period a year ago
• Macroeconomic uncertainty and, in particular, the trade war between the US and China, the world’s two largest diamond-consuming countries, has fueled nervousness among wholesalers and retailers
• Diamond buyers, who polish and cut diamonds for retailers, are struggling to make money this year because of lower prices and tighter credit, prompting them to delay purchases
• Shares in Signet, the world’s largest retailer of diamond jewellery, have fallen more than 60% this year

 

China considers corporate ‘social credit’ system – Pg. 12

• Foreign companies operating in China are unprepared for tougher sanctions under a corporate “social credit” system imposed by Beijing,…
• Sanctions that can be imposed by regulators depending on compliance include fines, targeted audits, restricted issuance of government approvals and exclusion from preferential policies and public procurement contracts,…
• The system aims primarily to improve the enforcement of existing regulations, and in many foreign companies could benefit as they often have better compliance in areas such as environmental pollution…
• The measure could give Beijing more leverage over companies perceived to have violated China’s stance on politically sensitive issues…

 

Norway oil fund eyes unlisted holdings – Pg. 14

• Norway’s $1tn oil fund should be able to take stakes in large unlisted companies, the investor’s manager has proposed, as it seeks greater exposure to private technology groups
• …recommended yesterday that it be allowed to hold up to 1% of its equity portfolio in unlisted companies, equivalent to about $7bn
• Norway’s central bank yesterday proposed getting rid of the requirement for “an intention” to float and instead allow the fund to own “large companies that are not yet listed”
• …the fund has record holdings in equities, with 69.3% of its assets in shares. It began in 1996 only investing in bonds

 

Outlook for S&P 500 profits dim as trade war bites – Pg. 17

• Companies in the S&P 500 index will increase profits 2.4% on a per-share basis this year, down from the 7.7% growth expected at the start of the year…
• The 5.3%-point drop in full-year earnings expectations marks the largest decline on a year-to-date basis since 2016
• Trade tension between the US and China escalated last week when Beijing said it was preparing to slap tariffs on $75bn of US imports and President Donald Trump responded with a plan to increase levies on Chinese goods and what he called an order for US companies to “immediately” find alternatives to China
• The lower profit outlook follows anaemic growth in US capital spending this year after a surge in 2018 when lower corporate taxes came into force

 

Answer: 66.7% and -$700/mo (Prof Note: That is a negative $700/mo, i.e. lose money per month)

28 August 2019

 

Question: According to MSN: Money, what percentage of married couples in Baltimore earn over $100k and what is there monthly disposable income?

 

Ex-Fed chief asks central bank to think about Trump ‘threat’ – Pg. 3

• The Federal Reserve was forced to reassert that “political considerations play absolutely no role” in policymaking after the former head of the New York Fed urged the central bank to consider Donald Trump’s re-election prospects in setting rates
• Mr Dudley also wrote that they should “refuse” to dole out stimulus to cushion the damaging effects of Mr Trump’s trade war
• “The Federal Reserve’s policy decisions are guided solely by its congressional mandate to maintain price stability and maximum employment,” the spokesman said. “Political considerations play absolutely no role.”
• He also urged officials to consider how their decisions could affected the outcome of next year’s presidential election
• “Trump’s re-election arguably presents a threat to the US and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives,” Mr Dudley wrote in his column. “If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020,” he concluded (Prof Note: This is important to note, i.e. questions about independence regarding the U.S. Central Bank)
• Traders are currently pricing in a 93% chance the Fed will cut its benchmark interest rate by 25bps in September, with the odds of a more aggressive 50bps cut much smaller, at 6%

 

Greek yields it record low after capital controls move – Pg. 17

• Investors are flocking to Greece as the former financial pariah emerges from a decade of economic crisis, sending stock prices soaring and borrowing costs tumbling
• …capital controls imposed following a 2015 bank run will be fully lifted on September 1, meaning Greek households and companies will no longer face restrictions on transferring money abroad
• Ten-year government bond yields dropped as much as 14bps yesterday to 1.826%, their lowest level on record, bringing total falls for the year to 250bp
• The sharp moves are part of a broader rally in Eurozone debt which has pushed yields on a large part of the eurozone’s sovereign debt market below zero
• Greek stocks are also surging. The Athex composite index has risen 35% this year, leaving it on track for its best year since 1999 and outgunning the 10% gain of Europe’s benchmark

 

Answer: 58.6% and $174/mo