Author: Roger Staiger

1 October 2018

 

Question: According to MSN: Money, what are 7 costly problems a home inspection probably won’t catch?

 

Italy pledges debt cut despite spending rise – Pg. 2

–          Italy’s government bond yields jumped last week as investors took fright at the fiscal plans of the coalition…

–          Italy has the second largest debt as a percentage of GDP in the Eurozone

 

Fall in demand for MBAs driven by US decline – Pg. 3

–          Global demand for business masters degrees has fallen for the first time since the financial crises…

–          Global applications for places on courses that started last month were down just 0.02% year-on-year.  But this was driven by a fall of nearly 7% in the US, birthplace of the MBA

–          Demand for business school courses in the US has been falling for five years.  But previously this had been offset by strong growth in the fast growing Asia Pacific region and Europe, where courses are generally shorter and less expensive

–          Degree courses in Asia Pacific had an 8.9% increase in applications, demand in Europe rose 3.2% and in Canada growth was 7.7%, ..

 

US business schools lose their lustre as overseas applicants fall away – Pg. 10

–          Nearly 60% of US programmes reported a decline in applications

–          Decline in the US market is blamed by schools on a combination of an improving jobs market at home that raises the opportunity cost of returning to college, and increased competition from cheaper overseas institutions, many of which have risen in global rankings

–          Many US course heads are most worried by a decline in overseas applications

–          The lack of overseas students is not a problem in Asia because domestic demand is booming

 

ICE closes in on $15tn US mortgage market – Pg. 14

–          …99% of mortgage documents are still on paper, …

–          The arrival of ICE into the mortgage industry has parked intrigue as to its plans.  Founded in 2000 as an energy trading platform, it is now the world’s second-most valuable exchange group

–          What ICE intends to do is make it faster and easier to track who has issued home loans and who has purchased them.  Improved technology could hasten the adoption of digital mortgages and facilitate the process of securitization, in which home loans are bundled for sale to big investors

 

Answer: (1) The previous owner was a smoker (Prof Note: Rent to smokers and charge a premium); (2) The ground beneath your home is unstable; (3) The roof is in rough shape (Prof Note: Just put a new room on a Falls Church townhome.  Total Cost: $3,000); (4) The swimming pool needs repair; (5) There’s an issue with the septic system; (6) The chimney is a safety hazard (Prof Note: I just put in a new cast iron insert in my chimney.  Total cost: $5,300); (7) The walls are full of toxins (Prof Note: Cat Ghaut was infested with wood lice and termites.  Total home renovation!)

29 September 2018

 

Question: According to MSN:Money, what are 8 creative ways to shrink your credit card debt?

 

Tesla tumbles as SEC accuses Musk of fraud – Pg. 1

–          More than $6bn was wiped off the value of Tesla after US regulators accused Elon Musk of lying to investors, sparking fears on Wall Street that the electric car maker’s maverick chief executive will be forced to step down

–          …Mr Musk made “false and misleading statements” when he said he had “funding secured” to take the company private at $420/share in August

–          ….cost of insuring against a default in its debt rising to a record high yesterday

 

Global M&A tally topples pre-crisis record – Pg. 14

–          Global merger and acquisition activity in the first nine months of 2018 set a record, eclipsing a previous high reached on the eve of the financial crisis more than a decade ago

–          Deals worth nearly $3.3tn have been agreed so far this year, a 39% jump from 2017, as companies race to remake themselves in the face of sweeping technological change

–          The total has been bolstered by a string of mega-deals, defined as takeovers worth more than $5bn

–          The blitz of energy takeovers was accelerated by an investor revolt against complex corporate structures and by changes to the US tax code

–          Only twice before has M&A exceeded the $4tn mark

 

Answer: (1) Look for rebates and rewards; (2) Put your extra space to work for you!; (3) Negotiate everything; (4) Sell your stuff; (5) Consolidate your debt; (6) Automate your payments (and savings) (Prof Note:  I do not agree with this.  I do not automate any of my payments.  This way I stay on top of everything every month.  Savings…yes!); (7) Watch your credit closely; (8) Get a side gig (Prof Note: Do the hustle…the side hustle!!!)

28 September 2018

 

Question: According to MSN:Money, what are 6 things other governments provide that Americans still have to pay for?

 

Kavanaugh’s accuser stands by her allegations in gripping testimony – Pg. 1

–          …recounted a 36-year-old ordeal…

–          (Prof Note: How does one prove/disprove an event that occurred 36 years in the past without documentation?!  Contemporaneous notes!!!)

 

Chinese household debt rise compounds fears for growth – Pg. 2

–          The country’s ratio of household debt to GDP hit a high of 49.1% in 2017, marking an increase of nearly 20% over the past five years…

–          The report comes amid concern over the extraordinary rise in Chinese debt since the 2008 global financial crisis

–          …steep rises in house prices have led to an increase in mortgage debt, which, combined with the rapid rise of online consumer lending – which barely existed four years ago – have caused a sharp rise in household debt in the past two years

–          Household consumption as a share of GDP remains low by international standards at 39.1%.  In the US and EU, the same ratio is 68.4 and 55.6%, respectively

–          Rising debt and slower growth of household income are causing concern at the impact on consumption and growth

 

Fed faces questions on whether gentle tightening is at odds with booming economy – Pg. 4

–          The latest quarter-point increase leaves policy closer to neutral settings, but, as Mr Powell stressed, rates are still low enough to support growth

–          …the Fed envisages an expansion running above 3% this year, as strong household spending and fiscal stimulus more than outweigh an drag from Mr Trump’s trade wars

–          The Fed’s median forecast sees rates plateauing at 3.4% in 2020 and 2021, which is above its forecast for longer-run levels

–          That suggests policy will become restrictive the year after next, but only marginally…

–          Inflation is forecast to stick obediently close to the Fed’s 2% target – even as unemployment tumbles to just 3.5% – far below the Fed’s best guess of its sustainable rate

 

Answer: (1) College; (2) Healthcare; (3) Vacation; (4) Parental Leave; (5) Baby items; (6) Daycare

27 September 2018

 

Question: According to MSN:Lifestyle, what are habits of extremely likeable people?

 

US Fed raises interest rates and remains bullish despite trade war – Pg. 1

–          The Federal Reserve has raised short-term interest rates for the third time this year and signaled it would forge ahead with plans to tighten policy even as central bankers face White House pressure to keep down borrowing costs

–          The FOMC boosted the target range for its key rate by another quarter point to 2% – 2.25%, in the eighth increase of the current cycle, while teeing up another increase in December

–          Median forecasts released by the Fed’s policymakers pointed to one more rate rise this year, followed by three in 2019 and another in 2020 – in line with expectations

–          …bullish update on the economy, which it expects to grow more than 3% this year, …

–          The median of the latest forecasts suggest the middle of the Fed’s target range for interest rates would peak at 3.5$ in 2020, remaining at that level in 2021

 

Arab women face backlash over inheritance reform – Pg. 4

–          The Koran spells out in detail how legacies are to be divided, dictating that brothers receive twice the share of sisters

–          It has underlined the difficulty of upending a centuries-old status quo that shapes the contours of power and wealth across the Arab world

–          Equalizing inheritance rules would mark an epochal change

–          Inheritance laws are part of a broader web of legal and social barriers that perpetuate gender inequality in the Arab world.  The proportion of women who earn a salary is held down by a combination of early marriage, traditions that require women to be homemakers, and laws designed to protect females in the workplace that restrict the kinds of jobs and hours they can work

–          Only one in four women in the Middle East and north Africa is employed or looking for work, …

–          Only 27% of women in the Arab world have a bank or mobile money account…

–          Inheritance is often about land.  The proportion of real estate in the Arab world registered in the name of women is probably much lower than 10%,…

–          Egypt passed legislation earlier this year that imposes jail terms and fines on anyone who deprives another of inheritance rights (Prof Note: In the U.S. some states have a Tort: Intentional Interference with Inheritance.  In 1999 this Tort was introduced to Maryland, Geduldig v. Posner, but the courts refused to recognize it.  However, in their opinion they stated that a case having a series of defined attributes, and they listed these attributes, would require reconsideration of introduction of the Tort.  Go Egypt, GOOOOO!!!)

 

After the Crisis – Pg. 8-9

–          (Prof Note: Read entire two pages…)

 

Record US valuation gap prompts hunt for opportunity overseas – Pg. 21

–          A record-breaking divergence between US equities and the rest of the world has spurred some investors to tiptoe away from Wall Street in search of bargains in Europe and the developing world

–          While the S&P 500 has bounded from one all-time high to the next, and is now up 9% this year, international stocks remain in the doldrums

–          On book value, the S&P 500 now trades at a historic two-times premium versus the rest of the world, and on a price/earnings ratio, the US equity benchmark trades around a record premium to the MSCI World once the US is excluded

–          US consumer confidence is at a 17-year high, manufacturing activity rose to the highest level in 14 years in August and the economy grew at an annualized pace of 4% last quarter

–          …consumer confidence in the Eurozone tumbled to its lowest level in more than a year in September, and economic growth in emerging markets is near a seven-month low…

 

Answer: (1) They greet the world with a smile on their face; (2) They ask questions; (3) They are consistent; (4) They put the phone away; (5) They keep an open mind and don’t pass judgement; (6) They are authentic; (7) They are kind and generous; (8) They’re accountable for their mistakes; (9) They send thank you notes