Author: Roger Staiger

8 March 2019

Question: According to MSN: Money, what is the age when most people claim social security – and when does one receive the most/year from social security?

ECB performs stimulus U-Turn to head off economic headwinds – Pg. 1

–          The decision to make a fresh offer of cheap loans to eurozone banks, which was coupled with a signal it would keep interest rates at historic lows until next year, put the ECB in the camp of central banks that have made U-turns in recent weeks in the face of mounting risks to the global economy

–          …severely downgraded projections for Eurozone GDP growth this year to 1.1% from a forecast of 1.7% just three months ago

–          Rather than buoy markets, however, the promise of more cheap funding appeared to spook investors, who pointed particularly to ECB President Mario Drahi’s warning that the Eurozone was “in a period of continued weakness and pervasive uncertainty”

–          The Cheap loans to banks, dubbed Targeted Longer-Term Refinancing Operations, would see the ECB hold a series of auctions of multiyear loans at low rates to stave off a collapse in lending – the first time it has reopened the programme in nearly three years

Watchdog turns up heat on leveraged loan industry as high risk debt soars – Pg. 1

–          Scrutiny of the $1.4tn leveraged loan market has intensified after an international watchdog launched an examination into potential problems caused by growing levels of higher risk corporate debt

China economy 12% smaller than claimed, report alleges – Pg. 4

–          Even on official data, China’s economy last year grew at its slowest since 1990, at 6.6%

–          For years, the sum of China’s provincial GDP has exceeded the national figure, a clear sign of inflation at the local level

–          The research concluded that official data overstated growth of nominal GDP by an average of 1.7% per year between 2008 and 2016, which made the economy 12% smaller in 2016 than official figures indicated

–          In real terms, GDP growth was overstated by 2% in the same period

Answer: 62 is the most popular age for claiming social security (Prof Note: Read the Marshmallow Test!).  70 (While full retirement age is 66/67, birth age dependent, waiting until 70 provides a “delayed retirement credit” bringing the amount to 124% of what would have been received at full retirement.)

6 March 2019

Question: According to MSN: Money, what are 20 ways to improve your chances of getting a job?

China lifts defence spending as costs rise – Pg. 4

–          China will increase its defence budget by 7.5% …this year…

–          The rise to $179bn continues 25 years of increases that have made China the biggest military spender after the US, which will spend $686bn on defence this year.  Last year the Chinese budget rose 8.1%

–          As part of the overhaul, Beijing is downsizing its ground forces, upgrading the rocket and missile forces and creating an electronic warfare branch known as the Strategic Support Force

–          This year’s budget increase is in line with single-digit annual increases since 2016, but contrasts with average jumps of more than 12% a year during the preceding decade

Fears over forex trading going bump in the night – Pg. 21

–          Flash crashes are becoming a fact of life in late-night currency trading, and while regulators are poring over what lies beneath them, bankers say the changing structure of the industry means further slip-ups are inevitable

–          Sterling’s sudden 10% slump over just 40 seconds in October 2016, meanwhile, prompted close examination from the BoE

–          The problem is that the exchange rates struck in these incidents are not scrubbed from trading systems

–          They stand, which means companies’ and investors’ hedging contracts or orders can be triggered, sometimes to their detriment.  In a worst-case scenario, such violent moves could threaten financial stability.  But few are proposing any sort of fix

–          The world’s foreign exchange markets do not open or close through the working days of the week.  Instead, they operate continuously from Monday to Friday.  Over that long stretch, the start of the global trading day has always been very quiet

–          The slow overnight trading period is reflected in the cost of trading

–          It is becoming increasingly clear, however, that as machines have started to take over from humans, this sleepy period has become a perilous time

–          Lower numbers of human traders trained at spotting and defusing unnecessary market shake-ups clearly play a role but the nature of their replacement also matters

–          Computer-driven algorithmic trading firms tended to pull out of the market when volatility unexpectedly spikes…

Answer: (1) Dress the part (Prof Note: True but also be yourself); (2) Research the company and role (Prof Note: When I was interviewing, i.e. 90s, 90% of the interview was HR telling me about the job.  Of course this was really pre-internet); (3) Prepare insightful interview questions; (4) Show up on time (Prof Note: I recommend showing up 10 minutes early.  If you show up to early it can stress the interviewer.  I use to get so angry when people would stop by my office telling me someone was waiting in reception for me and they were an hour early.  I had calls and meetings!); (5) Know your interviews (Prof Note: With Linked-in and online profiles there is no reason not to know your interviewer  but do NOT stalk); (6) Smile and be courteous; (7) Be careful of what you say and do while waiting (Prof Note: I always received an email/call from reception about candidates.  Were they hitting on the receptionist?  Were they wearing goofy socks?  Were they inapproporiate?); (8) Ask for the job; (9) Prepare for the ‘Weakness’ Question (Prof Note: I tire of this question.  Here is the answer, “My writing must be more succinct.  While I have been told it is excellent, the more I can communicate in business with the least amount of words we all are!”  ‘nough said, say that!); (10) Talk about the value you’ll add to the company; (11) Stay focused; (12) Sound confident; (13) Do not fidget or bite your nails (Prof Note: Do not look at your phone.  Do not wear a watch and look at it); (14) Pay attention to your voice and tone; (15) Explain why you are switching jobs in a positive manner (Prof Note: While it may be accurate it is perhaps best not to say, “I have decided to let the light from the burning bridges guide my way!”  (gosh I wish this was my quote!)); (16) Prove that you fit the company culture; (17) Connect with the interviewer; (18) Be interested in the interviewer; (19) Thank your interviewers; (20) Follow up (Prof Note: Also, do NOT give references that could/may have a fiduciary duty to indicate you are looking for a job.  This, as a person doing references, put me in a tight spot when a person I called for a reference mentioned this could be an issue.  It was awkward and uncomfortable for me.)

5 March 2019

Question: According to seven (7) dumb mistakes that cost homebuyers tons of money?

Investors urge debt-bloated US companies to shape up – Pg. 19

–          Growing debt piles have fed fears among investors that if companies do not start to get a grip on their borrowing, worsening economic conditions could imperil their ability to fund themselves.  That could potentially send credit ratings even lower, into the junkyard of “high yield”

–          With borrowing costs low, companies have used debt to buy back stock and pay higher dividends.  But as attention turns to reducing leverage on balance sheets, analysts warned that some of the equity-friendly activity could slow

–          …some companies rated triple B- the lowest rung of investment grade – …

–          High-yield bond investors are also mindful of the risks of these companies failing to reduce their debt and potentially being downgraded further, especially if the economy begins to slow more quickly than expected

Chinese stocks rally as congress pledges stimulus measures to combat slowdown – Pg. 19

–          Chinese stocks surged to a nine-month high yesterday as the country’s annual legislative session got under way and investors anticipated more measures from Beijing to combat a slowdown in growth for the world’s second-largest economy

–          The latest leg higher for Chinese equities also follows on the heels of MSCI’s decision to quadruple its Emerging Markets index’s exposure to companies that are listed in mainland China.  The decision will compel passive investors to increase their exposure to reflect the benchmark, which is tracked by some $1.9tn of assets globally

Answer: (1) Ignoring your credit score; (2) Not getting preapproved for a home loan; (3) Falling for the wrong type of loan; (4) Going without an agent (Prof Note: One of the lessons I have learned in life, when negotiating contracts, always place an expert, that you are paying, between you and the counter party.  It makes life so much easier and more pleasant.  Also, when the right expert is hired, they will pay for themselves in lower transaction costs); (5) Buying based on emotion; (6) Skipping an inspection; (7) Forgetting to have backup plan