Author: Roger Staiger

Published by Roger Staiger

13 March 2019 FT — Articles to Read

13 March 2019

 

Question: According to MSN: Money, what is the amount of money that Americans consider life-changing?

 

Japan’s rising consumer prices fail to lift inflation – Pg. 3

–          Spring has brought the biggest outbreak of consumer price rises in decades.  The increases are clearly linked to intense labour shortages, raising the prospect of an escape from decades of on-and-off deflation

–          The implication for the BoJ is that even signs of a red-hot economy may not suffice to push inflation towards its 2% objective

–          Consumer companies cite two reasons for price rises: distribution and input costs

–          The unemployment rate in Japan is 2.5%

 

UK Banking – Pg. 7

–          Data about the incident….showed unauthorized lending and evidence of possible money laundering and theft

–          …claims that Lloyds frustrated a police investigation, flouting its duty to report wrongdoing to the authorities

–          …lloyds spent years denying publicly that anything untoward had taken place

–          The convictions have not only forced Lloyds to admit it had been cheated and promise to compensate the affected customers, many of whom were left destitute for years.  They have also raised questions about Lloyds’ compliance with the law and regulations

–          (Prof Note: Read the entire article…WOW!)

 

Monetary policy has run its course – Pg. 9

–          First, a dramatic and progressive decline in real interest rates on safe assets has occurred, from over 4% in the 1980s to around zero now.

–          Second, this secular fall in real interest rates implies a roughly equivalent fall in the (unobservable) “neutral” or “equilibrium” rate – the rate at which demand matches potentially supply

–          Third, governmetns are not generating this structural weakness in demand.  On the contrary, by expanding social spending, deficits and debt, governments have raised equilibrium long-term real interest rates, other things being equal

–          Finally, changes in the private sector would, on their own, have generated a fall of more than seven percentage points in the equilibrium real rate of interest

–          This analysis has big implications now.  When recession hit, real short-term interest rates need to fall sharply and the yield curve (which shows the rates on bonds of varying maturities_ needs to become strongly upward slowing if monetary policy is to stabilize the economy

 

Answer: $19,800

Published by Roger Staiger

12 March 2019 FT — Articles to Read

12 March 2019

 

Question: According to Business Insider on MSN: Money, what are five (5) status symbols the rich are investing in?

 

Industrial output fall fuels Berlin woes – Pg. 3

–          A sharp drop in German industrial production has added to fears that the country’s manufacturing slowdown has extended into 2019 and will weight on the Eurozone economy

–          Industrial output fell 0.8% in January, ….

–          Germany, the eurozone’s largest economy, avoided recession during the second half of last year by the slimmest of margins.  It registered zero growth in the fourth quarter after shrinking 0.2% over the previous three-month period.

–          The Eurozone economy weakened sharply in the second half of 2018 and a stream of disappointing data led the ECB last eek to commit to a fresh round of cheap funding for the region’s banks

 

At 30, the web has fallen under the influence of a bad crowd – Pg. 9

–          …over the past decade the web has increasingly fallen under the influence of a bad crowd as authoritarian states, giant companies and criminals have colonized vast tracts of digital space.  Cyber crime, electoral hacking and behavioural manipulation have exploded on the web, degrading our societies and democracies.

–          …we desperately need to devote more effort to understand better the myriad ways in which the web is affecting our lives (Prof Note: Over the past two weeks I have had guests.  Both from academia.  We spent the evenings drinking high-end hooch by the fireplace never once looking at our phones.  It was WONDERFUL!)

–          …improving our watchfulness

 

London commercial property starts to feel Brexit chill – Pg. 18

–          Investment into real estate in the City of London, the capital’s historical financial centre, was down 17% year-on-year in the last quarter of 2018, ….

–          Many recent deals have involved Asian capital…

–          The possibility of the UK leaving the EU without a deal is also a worry

 

Answer: (1) Education (Prof Note: I once worked with a former student that was using an admission consultant, cost: $3,000 – $5,000 ten years ago, for admission to an Ivy.  I was blown away at how much that consultant improved my recommendation letter.  It helps when you can afford the best!  Of course, if you want to go to Georgetown, bribe a coach! (Is it too early discuss this?! J)); (2) Health and wellness; (3) Travel; (4) Security and privacy; (5) Exclusivity and customization

Published by Roger Staiger

11 March 2019 FT — Articles to Read

11 March 2019

 

Question: According to MSN: Money, what are 30 money mistakes you are probably making and how to avoid them?

 

UK lenders told to triple liquid asset levels as buffer against Brexit turmoil – Pg. 1

–          Some lenders much now hold enough liquid assets to withstand a severe stress – when banks stop lending to each other – of 100 days rather than the normal 30, under rules brought in late last year by the BoE’s Prudential Regulation Authority, …

–          Banks are also being forced to model their balance sheets on the assumption that they will not be able to swap sterling for dollars, on the basis that some were shut out of being able to exchange currencies for several days during the financial crisis

–          Experts predicted that the tough PRA requirements intended to force banks to hoard easy-to-sell assets will be eased nearer March 29 if the likelihood of a no-deal Brexit increases so lenders can draw upon reserves they have amassed

 

Norway’s investment cull leaves oil majors shaken but not yet stirred – Pg. 8

–          With $1tn under management, the Norwegian oil fund is the world’s biggest sovereign investor, owning equity stakes between 1 and 2.5% in all the supermajors

–          On Friday it said it would divest from smaller exploration and production companies as a means of diversifying Norway’s oil-rich economy’s exposure to the economy

–          …while the largest integrated companies were granted a reprieve, justified by vast refining and trading capabilities that could insulate them should the long-term future of oil demand growth threaten crude prices, Norway has also made clear it expects them to do more

 

Answer: (1) Dining out too much (Prof Note: I had lunch with my good mate Anton S. yesterday, Saturday, and the bill was $64 with no alcohol including tip); (2) Not returning or exchanging unwanted purchases (Prof Not: I am headed to Lowes this afternoon to return unused product for a renovation); (3) Taking a vacation you cannot afford (Prof Note: I hear so many stories of angry people at the Four Seasons Nevis.  Most I attribute to the cost and their inability to easily afford the pricetag); (4) Paying too much in banking fees (Prof Note: Ask my bank…my favourite quote: “Fees are theft, interest is a cost of doing business!”); (5) Paying for subscriptions you do not use (Prof Note: I am considering reducing my credit cards to address this very issue); (6) Making ill-timed splurges; (7) Overspending in general; (8) Overspending on gifts; (9) Going house poor (Prof Note:Nearly 12m US households spend more than half their income on rent); (10) Carrying a credit card balance; (11) Neglecting retirement; (12) Playing it too safe in the long term; (13) Letting emotion undermine investment decisions; (14) Not having a Will (Prof Note: My entire family was murdered due to their poor estate planning!  Having a Will and a proper estate plan is literally a matter of life or death); (15) Lacking insurance, or lacking enough; (16) Not having an emergency fund; (17) Over-reliance on benefit programmes; (18) Not paying down debt (Prof Note: Remember there is good and bad debt); (19) Not taking required minimum distributions; (20) spending for rewards; (21) Not haggling (Prof Note: Never hurts to ask!); (22) Having only one job (Prof Note: The side hustle is critical!  At least always have the ability to hustle on the side!); (23) Falling behind on payments; (24) Using credit cards for everyday expenses (Prof Note: I actually do not agree with this at all.  Rack up the most reward points possible but always be fiscally disciplined); (25) Borrow money from friends and family (Prof Note: First source of funding for first-time deal-makers is F&F money); (26) Quitting your job without a plan (Prof Note: Mental health is important.  I am a believer that if you are that miserable…QUIT!); (27) Stay at a dead end job; (28) Not setting a budget; (29) Never setting financial goals; (30) Neglecting to set up a financial plan

Published by Roger Staiger

9 March 2019 FT — Articles to Read

9 March 2019

 

Question: What is the major milestone for “Barbie” this year?

 

Frail US jobs growth spreads gloom – Pg. 1

–          The 20,000 jobs added to non-farm payrolls was the weakest gain in 17 months and marked a sharp drop from the blockbuster 311,000 jobs added in January

–          The meagre increase in the US workforce comes at the end of a week in which the ECB sharply downgraded prospects for growth in the eurozone, while the White House signaled that its trade war with China, which has rattled international markets for months, might not be resolved as quickly as they had hoped

–          Wages rose 3.4% over the past year, the fastest pace of growth since April 2009; unemployment in the US dipped to 3.8% from 4%

 

ECB completes central banks’ dovish tilt – Pg. 3

–          …global monetary policy has gone into reverse, with the Federal Reserve putting rate rises on hold and peers – from the BoE to the Revers Bank of Australia – following its dovish lead

–          Central banks are doing their best to respond to a rapidly worsening outlook for global growth.

–          The dovish tilt by the Fed, in particular, has had a big effect on financial markets, with investors paring back their expectations of rate rises and share prices recovering from the sharp falls they suffered towards the end of last year – although bond markets tell a slightly different story

–          The ECB’s downgrade for 2019 was largely due to the fall in German and Italian output, and staff expected growth to pick up this year, with the outlook for 2020 almost unchanged

 

China exports plunge as trade war bites – Pg. 4

–          China has reported its steepest year-on-year decline in exports in three years, with no clear end in sight to its trade dispute with the US that has been hurting the world’s second-largest economy

–          China’s exports sank 20.7% in US dollar terms last month compared with February 2018, the biggest monthly fall since February 2016 and four times steeper than the 4.8% decline forecast by economists.  Imports fell 5.2%, resulting in the smallest trade surplus for China in 11 months

–          Mr Trump’s decision to walk out on North Korean leader Kim Jong Un without an agreement at last month’s summit in Vietnam “just totally spooked” the Chinese side…

 

Aids – Pg. 6

–          Scientists announced this week a breakthrough that could lead to a cure for HIV.  But the real reason that the virus no longer provokes so much fear is the spectacular success of treatment over the past decade

–          The disease remains a potent threat.  According to the most recent figures from UNAids, 36.9m people worldwide were living with HIV in 2017; 1.8m were newly infected with the virus and almost 1m died of Aids-related illnesses

–          …drastic radiotherapy or chemotherapy is required to wipe out the patient’s own immune system, killing all white blood cells, before rebuilding it with transplants from a donor with a rare protein variant called CCR5.  HIV uses CCR5 as a gateway into cells, which is closed in a small minority of people who are naturally resistant to Aids

 

China stocks tumble on ECB and local growth fears – Pg. 13

–          Major Chinese stocks say out the week with their biggest one-day fall since October after a policy pivot from the ECB set off concerns about global growth while China itself reported some muted trade numbers

–          The CSI 300 index of Shanghai and Shenzhen-listed stocks finished the day down 4% after official data from Beijing showed China’s exports had slumped almost 21% in February compared with a year ago

 

Answer: She turns 60!