7 November 2018 FT — Articles to Read

7 November 2018

 

Question: What was/is the percentage of homebuyers in 2018 that had a student loan?

 

Abe fuels debate on migration taboos – Pg. 4

–        At the heart of the controversy are two elements of Mr Abe’s plan that have been taboo in Japan.  First, it will create a path – however long and difficult – for guest workers to become permanent residents.  Second, it will allow some guest workers to bring their families

–        The population of foreign workers in Japan has soared in recent years – up 18% in 2017 alone to 1.28m – but majority are students or “trainees” whose visas make it impossible to stay for the long term

–        The two fastest-growing nationalities in Japan are Vietnamese and Nepalis

 

US Foreign Policy – Pg. 7

–        The results of the 2018 midterms will be seen all over the world as a crucial test of whether Donald Trump has permanently changed America.  The stakes have not been higher in a generation

–        If Republicans do well, then many will conclude that “Trumpism” is here to stay.  The rest of the world would have to make a long-term adjustment to an America that is highly protectionist and suspicious of treaties on principle – whether they deal with climate change, arms control, refugees or migration

–        …if Democrats prosper in the election, then the US president’s foreign critics will cling on to the hope that the Trump years may yet turn out to be an aberration – and that the old American is waiting in the wings to return

–        …Mr Trump is the first ever US president who seems hostile to the very idea of European unity.  In part, this is because Mr Trump objects to the trade surplus of more than $100bn that the EU enjoys with the US

–        The US president likes to denounce “globalism” – a term that he and his aides use to describe the encroachment of supranational institutions on national sovereignty

–        …the EU is the world’s most successful “globalist” organization, since its organizing principle is the creation of international law that limit the sovereignty of national governments

–        Canadians were stung that their country was labelled as a “national security threat” to the US, to justify the imposition of sanctions on steel and aluminium

–        …India, Saudi Arabia and Israel – and each of these governments have their own reasons for looking favourably on the Trump administration

–        Losing control of Congress has a significant impact on a president’s ability to pass domestic legislation.  But it may not change foreign policy all that much

–        The main impact of Congress in this area comes through its power to approve or reject trade deals and treaties.  But since Mr Trump sees both trade and treaties as manifestations of “globalism” – he is unlikely to be pushing hard in that direction

 

Answer: 25%

6 November 2018 FT — Articles to Read

6 November 2018

 

Question: What are 10 cities where your retirement rent is under $1,000 a month?

 

Italy pressed to redraft budget in line with Brussels’ rules – Pg. 2

–        Under EU rules, Italy has until November 13 to submit revised proposals but figures such as Matteo Salvini, deputy prime minister, have pledged to fight for the existing plans even though they would raise the budget deficit to 2.4% of GDP in 2019

 

BoJ governor hints at shift to period of monetary tightening – Pg. 4

–        …clearest signal yet that the years of massive monetary stimulus are over and his next move will be towards tighter fiscal policy

–        Consumer prices, excluding volatile fresh food and energy, were up by 0.4% compared with a year ago in September

–        Japan’s economy has enjoyed several years of above trend growth, except for a stumble in 2014-15 when consumption tax rose from 5 to 8%.  However, inflation has remained sluggish

–        He reiterated his pledge to keep interest rates extremely low for “an extended period of time”

 

Greece probes Chinese housebuyers – Pg. 4

–        Greece’s central bank is investigating a series of unusual transactions by Chinese citizens who used their credit cards to buy property in Athens and join the EU country’s flourishing “golden visa” scheme

–        The golden visa scheme was introduced in 2013 at the height of Greece’s financial crisis in a bid to increase tax revenues and stem a dramatic fall in property prices

–        The probe comes as the cash-strapped Syriza government debates whether to extend the scheme to other investments such Greek sovereign bonds and companies listed on the Athens stock exchange

 

Answer: (1) Mesa, AZ ($880); (2) Pensacola, FL ($813); (3) Lincoln, Neb ($810); (4) Rochester, NY ($775); (5) Detroit, MI ($650); (6) El Paso, TX ($634); (7) Tucson, AZ ($620); (8) Tulsa, OK ($599); (9) Fort Wayne, Ind ($500); (10) Toledo, OH ($475)

5 November 2018 FT — Articles to Read

5 November 2018

 

Question: According to MSN: Money, how do you plan financially for the holidays .. and after?

 

General Electric finance division calls time on commercial paper borrowing – Pg. 1

–        GE’s financial services division is giving up on using commercial paper, in a landmark moment for a business that was once the largest borrowing in the market

–        GE Capital’s move away from commercial paper – debt with a  maturity of up to 270 days – is likely to increase its cost of financing, which is also under pressure from credit rating downgrades

–        Before the 2008 crisis, GE Capital boasted of being the largest borrowing in global commercial paper markets, using them to support operations such as consumer credit, mortgages and industrial lending.  At the end of 2008 it accounted for about 4% of all commercial paper outstanding in the US

–        The company is instead becoming more reliant on bank lending

–        GE’s financing costs have also been hit by its worsening credit rating

 

Buffett’s $1bn buyback points to dearth of attractive deals – Pg. 13

–        The buyback, it’s the first in six years, represents a tiny fraction of the conglomerate’s $104bn cash pile and comes as Berkshire’s takeover drought stretches to nearly a third full year

–        Some $3.5tn of acquisitions have been agreed this year, up more than 30% from a year earlier,…

–        If nothing less, the value at which Berkshire repurchased its shares indicates what Mr Buffett and vice-chairman Charlie Munger believe the company’s stock is worth.  In the third quarter, the average price it paid for its class A shares was $312,807, …

 

Answer: (1) Slow down – Remember that doing less is an option (Prof Note: Is there anything really better than being toasty in front of a roaring fire, with the house decorated for the holidays?!); (2) Budget – Start early (Prof Note: Think Origami!  Who does not love origami?!); (3) Adjust spending – Don’t go overboard on gifts (Prof Note: It is truly the thought that counts.  I love my $20 Stanley Thermos from my Aunt.  I look like a real construction person!); (4) Kids’ gifts – Remember that little ones aren’t brand snobs; (5) Suggest a family gift exchange; (6) Plan meals well in advance; (7) Artisnanal gift – Make things at home (Prof Note: See #2 Prof Note); (8) Use points – Credit card rewards can be used for gifts; (9) Travel cheap – Book flights early; (10) Beware of temptations – Shop for gift, not yourself; (11) Potluck – Cook as a team; (12) Organize group volunteering instead of holiday parties (Prof Note: I remember working at one company and they literally made us repaint a homeless shelter for a day.  My fellow analyst and I did the math.  We begged to donate our salary to painters (which were 18% of our cost, i.e. they could have two real painters for a week rather than us two chuckleheads for a day) rather than go ourselves.  We actually liked our jobs and quantified the benefit of monetary philanthropy!  We lost, ended up painting for the day, complained the entire time, and our collective boss said, “Never AGAIN!”); (13) e-cards – Save on postage by using MailChimp (Prof Note: Ohhh…puuullleeezzzzz…this is cheap even for me.  Splurge on the car and postage.  Tell me how much you love me, as I love all of you!); (14) AliExpress – Buy from China; (15) Plan for next year – Open a holiday savings account

3 November 2018 FT — Articles to Read

3 November 2018

 

Question: According to MSN: Money, what are 12 signs you are financially ready to quit your job?  (Prof Note: Look at this better as what 12 requirements must you have to ensure you are ok with a termination/reduction in force, etc)

 

Jobs data offer poll boost for Trump – Pg. 1

–        Non-farm payrolls rose by 250,000 in October, eclipsing economists’ estimates for a gain of 190,000, …

–        Average hourly earnings rose 3.1% year on year, the highest rate since April 2009

–        Yesterday’s data are likely to strengthen the Federal Reserve’s determination to continue lifting interest rates, a policy vociferously opposed by the president.  The US central bank is widely expected to raise rates by another quarter-point in December, with further upward moves possible in 2019

 

US exempts eight countries from Iran sanctions to keep oil prices in check – Pg. 1

–        The US will allow eight countries to import limited amounts of Iranian oil even after it reimposes sanctions on Monday, damping fears about a supply shortage and sending crude to its lowest price in three months

 

Bond funds hit by biggest monthly withdrawals in almost three years – 13

–        Bond ETFs have become popular with investors on the lookout for cheap, simple ways to get exposure to fixed income markets.  But the deepening bond reversal led to the first monthly outflow in two years, …

–        Bond funds around the world saw $36bn pulled out in the month to Wednesday, the biggest withdrawal since December 2015,…

–        Within the broad bond fund category, US bond funds suffered net outflows of more than $13bn while political and economic uncertainty helped to drive $9bn from Europe-focused funds

–        The fixed income ETF has now lost amost 8% of its value this year and is on track for its worst year since its inception in 2002

 

Answer: (1) You have a plan once you quit your job (Prof Note: You should always have a plan for a job loss); (2) You understand the fine print in your job contract (Prof Note: This should have occurred prior to signature); (3) You’ve prepared your resignation and resume (Prof Note: Resume should be up-to-date ALWAYS); (4) You know the details of your last paycheck (Prof Note: You should know the details of EVERY paycheck); (5) You’ve saved money for future business endeavors; (6) You’re able to travel (Prof Note: The best holidays are those between jobs as least responsibility); (7) Your debt is manageable (Prof Note: Your debt should ALWAYS be manageable); (8) You’ve addressed issues with your credit score (Prof Note: Negotiate credit lines; mortgages, etc while you have a job (if possible)); (9) You know your monthly expenses (Prof Note: You should ALWAYS know your monthly expenses); (10) You’ve accounted for costs covered by employer; (11) You have a robust savings (Prof Note: I am not a fan of spending principal.  Do the hustle!); (12) You’ve locked in another source of income (Prof Note: You should always have other income sources unless precluded by corporate policy.  And, then, if precluded, the parachute must be substantial enough to accept the risk.  Do the hustle!)