Author: Roger Staiger

28 November 2018

 

Question: In 2018, how much in student debt did people owe over 50 in the U.S.?

 

Fed’s Clarida cautious on rates rises – Pg. 3

–          The Federal Reserve will need to be especially attuned to fluctuations in economic data as it gauges how much further to lift short-term interest rates, ….

–          Since this summer, the Fed has been stressing how unsure it is about central banking lodestars such as the neutral rate of interest – the rate that keeps the economy on an even keel

 

Student debt sales make little economic sense – Pg. 8

–          Student loans were introduced in the UK in 1990.  Unlike regular borrowing, the most recent student loans are income-contingent: graduates pay 9% of earnings above 25,000 (sterling); those earning less do not have to pay until they reach that threshold.  After 30 years, any remaining debt is written off

–          The average graduate from a three-year degree carries over 50,000 (sterling) of debt and faces high interest rates

–          When student loans are sold, net government debt falls by the sale price.  The Treasury claims this enables more borrowing, owing to limits on how much debt can be carried by the government.  Moreover, despite the substantial amounts of money lost in selling low, no write-offs are recorded

–          There are several problems, the most obvious that selling assets to private investors at below face value makes no economic sense.  No investor could find the loan book more valuable than the government, since investors cannot borrow at the low rates the government can.  Given the income-contingent nature of student loans, the private sector would struggle to run such a scheme effectively.  Loans, after all, do not become more “efficient” when sold to private investors

–          A second problem is that the accounting rules create a considerable incentive to sell, which weakens the public finances in the long run by depriving the Treasury of billions in future repayments

 

Microsoft on cusp of seizing top spot from rival Apple – Pg. 13

–          The last time Microsoft was the world’s most valuable company, in 1998, Bill Clinton had yet to be impeached, Boris Yeltsin was still president of Russia, and Google was less than a month old

–          Apple has been in the top spot for seven years but has faltered in recent weeks on worries the smartphone market has run out of growth

–          Apple has lost 25% of its market value from the peak at the start of October…

–          Overtaking Apple would cap a five-year run that has seen Microsoft’s share price rise nearly three-fold

 

Answer: $260.0bn

27 November 2018

 

Question: How many people over 60 in the U.S. have student loan debt?

 

Bitcoin loses three-quarters of value this year as investors face crisis of faith – Pg. 1

–          Less than a year after it surged close to $20,000, bitcoin was down 12% at $3,720 by the end of the European day, after dropping below the $4,000 mark on Saturday…

–          The fall comes in the wake of a broad cryptocurrency sell-off sparked by disagreements within the coin developer community, persistent concerns over regulatory scrutiny and growing doubts on whether cryptocurrencies will become a secure means of exchange

–          Bitcoin is close to a “capitulation moment” when investors lose confidence and bail out,…

–          The most recent collapse was sparked by a “hard fork” in bitcoin cash, as bitcoin developers argued over the direction of the cryptocurrency.  That prompted a split this month into two separate coins, one called Cash and one called SV

 

ECB’s corporate exit leaves bond traders on edge – Pg. 19

–          The ECB is widely expected to stop making additional purchases under its so-called corporate sector purchase programme, or CSPP, next year – instead, replacing only existing bonds when they mature

–          The BoE bought small amounts of corporate bonds in the wake of the financial crisis and briefly resumed the scheme after the Brexit vote.  But these purchases paled in comparison to the ECB’s quantitative easing programme, in which the central bank has snapped up a fifth of all eligible euro corporate bonds

–          While the BoE steered completely clear of buying in the primary market – when companies are initially raising money – the ECB has actively supported new bond sales

–          When placing orders for new bond sales, the ECB explicitly chose not to evaluate the credit quality of a given company, instead simply assessing whether the bond met its technical criteria – including a need to be rated investment grade

–          While it tried not to set the price on a sale, the fact the central bank would match the tightest offers in a deal’s order book meant it naturally helped bankers limit the cost of debt for their corporate clients

–          A lot of anxiety in the US has focused on the ballooning amount of triple B rated bonds, the lowest rung of the investment grade world

 

Answer: 2.8m

26 November 2018

 

Question: According to MSN: Lifestyle, what are ten (10) signs you are about to fall for a bad Airbnb listing?

 

Bloomberg’s gift opens doors to a top education – Pg. 11

–          When the business Johns Hopkins set aside $7m in the late 19^th century to fund the creation of a hospital and a university in his native Baltimore, it was the biggest known philanthropic gift in US history

–          Last week…Michael Bloomberg…$1.8bn donation to Johns Hopkins University far outstrips the original benefactor’s grant, worth an estimated $140m at today’s prices

–          …already given $1.5bn ahead of his latest contribution

–          …Mr Bloomberg’s donation reflects a focus not on physical assets but instead a significant practical concern at the heart of contemporary US education debates: the unequal level of access and future opportunities for potential students, in part driven by the high costs – which run to $72,000/year for undergraduates at Johns Hopkins

–          His $1.8bn donation will be invested alongside the university’s existing endowment, which the income generated designed to make applications “needblind” in perpetuity by offering scholarships to encourage more low and middle-income students to apply

 

Black Friday sets record but store sales drop further – Pg. 13

–          Sales in stores during Thanksgiving and Black Friday dropped between 4 and 7% compared with last year, …

–          Footfall was estimated to have declined even more, between 5 and 9%.  But those consumers who did show up spent more, driving average transaction values up about 3%

–          It was at least the fourth consecutive year of declines in both traffic and sales recorded…

–          Black Friday online spending leapt 24% from a year ago to $6.22bn, …

–          For the first time, online prices on Thanksgiving were as low as they were on Black Friday

–          In another threat to stores, consumers are more comfortable buying more expensive items online

 

Answer: (1) Photos that leave you with more questions than answers; (2) You cannot find any reviews; (3) You are finding only negative reviews; (4) You are not finding photos that match the description; (5) You cannot believe the price; (6) You are finding errors; (7) You are not sure whether it is legal; (8) You booked the first place you found; (9) Your host is taking forever to respond; (10) You feel like it is too good to be true

24 November 2018

 

Question: According to MSN: Money, what are seven (7) ways retirees can profit from downsizing?

 

Bank of Italy warns higher bond yields will cost an extra 9bn (euro) a year by 2020 – Pg. 1

–          …could threaten the stability of banks and insurers

–          Banks have seen a deterioration in “liquidity and capital adequacy indicators”, ….while a further sell-off could have “significant effects on the solvency position of insurers” and “heighten the risk to stability”

–          Sovereign debt yields hit their highest levels since 2014 last month as the EU threatened sanctions over Italy’s draft budget, reflecting worries over lending to a government with the second-largest debt as a proportion of GDP in the Eurozone after Greece

 

Eurozone economy set to slow further – Pg. 2

–          The so-called PMI data, which ECB officials view as the best indicator of what will happen to growth, are the last before the bank’s crucial December vote, when Mario Draghi, president, is set to confirm new plans to rein in its 2.6tn (euro) crisis-era programme of bond purchases, known as quantitative easing

–          Eurozone growth has been unexpectedly weak throughout 2018, yet ECB policymakers have held fast to the view that poor data are a blip and should not divert them from plans to halt the expansion of QE at the end of the year

–          Italy, the region’s third-largest economy, looks likely to enter recession soon

–          If an extension of QE is ruled out, the central bank may need to ease monetary policy by making a stronger commitment to carry on reinvesting the proceeds of bonds that have now matured

 

Global tornado deposits investors in Land of Oz – Pg. 13

–          A market tornado that began in the US technology sector broadened into a global stock sell-off this week, transporting investors to an environment that looks very different from the benign and predictable one they have enjoyed since the recovery from the financial crisis

–          With rising interest rates and intensifying debate about a tipping point in the global economy, cash is now on track to beat the returns of global stocks, bonds and commodities this year.

–          …another sharp 3.5% decline in the S&P 500 this week…

–          The benchmark is now heading for its worst quarter in seven years

–          …other aberrations, such as how highly rated bonds are failing to provide their usual safety

 

Answer: (1) Unlock equity in your home; (2) Lower your utility bills; (3) Avoid health/safety emergencies; (4) Reduce property taxes; (5) Save on routine travel; (6) Cut down on repairs/maintenance; (7) Pay for fewer services