Author: Roger Staiger

26 September 2018

 

Question: According to MSN:Lifestyle, how do you repair a broken relationship with your parents?

 

Argentina crisis deepens as bank chief quits after 3 months in post – Pg. 1

–          Argentina has been at the centre of a broadening sell-off in emerging markets, with investors becoming worried that governments and companies in the developing world will be unable to pay billions in dollar-denominated debts as the US currency rallies

–          Argentina has been the most aggressive emerging market in seeking to stop a run on its currency, which has lost half its value this year,…

–          Although the IMF provides emergency support for countries facing market attacks, it frowns on using reserves to shore up currencies, which can quickly burn through bailout cash

–          The yield on Argentina’s benchmark century bond, a measure of risk, rose more than 20bps to 9.33% yesterday…

 

Finance – Pg. 9

–          Secondary deals can often be more vulnerable when conditions change, either because they have higher debt levels or because more money has already been taken out of the business by previous owners

–          Secondary deals often increase the incentives for private equity owners to load more debt on to a business

 

Banks and insurers slow to switch on as nightfall approaches for Libor – Pg. 21

–          UK financial authorities have given a clear message to banks and insurers: we are not kidding about the death of Libor, and you must be ready (Prof Note: When I was pursuing my MS Finance I considered a Ph.D.  I remember thinking, “What would I do my dissertation on?  It has all be written.”  I could not have been more WRONG!)

–          About $170tn of derivative contracts depend on the benchmark rate….

–          Authorities appear to have run out of patience with these unco-ordinated approaches

–          Regulators’ urgency has been driven not just by the manipulation scandal that has landed traders in prison, but also by the evolution of markets after the financial crisis

–          Libor measures the cost of unsecured borrowing between banks for a specific period, usually over one, three or six months.  It remains embedded in everything from mortgages to banks’ regulatory capital, with more than $370tn of deals tied to it, …

–          To aid the daily calculation of Libor, banks have to submit estimates that rely on “expert judgment” rather than real activity

–          The amount of contracts that reference Libor, but mature after 2021, meanwhile, continues to grow (Prof Note: ???)

–          Without Libor, thousands of contracts lose the reference rate that forms the basis of their value

–          For all its faults, Libor allowed borrowers to know their cost of fund for a period of their choice.  As banks transition, they may have two books – one for Libor business, one for alternative rates

 

Answer: (1) Try to start the dialogue with warmth; (2) Avoid hot button issues – at first; (3) Don’t be afraid to seek professional help

25 September 2018

 

Question: According to MSN:Money, what are 15 ways your life is better when you have good credit?

 

Buoyant American groups drive $50bn global dealmaking spree – Pg. 1

–          Boardroom confidence, cheap debt and record stock prices have spurred a wave of activity that left global dealmaking at a record high of $3.2tn in 2018

–          Global mergers and acquisitions totaled $3.24tn so far this year, 40% higher than the same time a year ago and ahead of the record pace set in 2007,

–          A rally in global stock indices has assuaged concerns that the intensifying trade dispute between the US and China would dent economic activity and, in turn, dealmaking.  The S&P 500 has climbed 16.5% over the past 12 months, while the DJIA rose by 19%, and both sat near record territory yesterday

 

Machines are coming for property valuers now – Pg. 9

–          The pioneers of big data are promising to revolutionise the property valuation business, nudging it further along the spectrum from art towards science.

–          At present, about 82,000 appraisers are employed in the US property valuation business, which is worth about $12bn a year

–          Commercial properties are inherently harder to value because of the lack of transparency over lease terms and income streams.  A property owner’s own financial condition and access to capital can also be critical determinants of price

 

Investors buckle up for longer Fed tightening cycle – Pg. 19

–          The US central bank is set to raise rates for a third time this year tomorrow, with another increase in December widely expected. But investors are also beginning to gird themselves for the possibility that Fed policymakers will not sit still in 2019 either, as many had until recently expected.  And that reappraisal has rattled the market

–          This month the10-year Treasury yield rose cleanly above the 3% market for the first time since May, and at 3.07% it is currently within a whistker of hitting a new seven-year high.  The 30-year Treasury yield, known as the long bond, has also climbed sharply this month, to a four-month high of 3.22%

–          Should the 10-year and 30-year Treasury yields both close above 3% and 3.25%, it will signal a “game changer” for markets

 

Answer: (1) You can more easily qualify for loans; (2) You pay lower interest rates on your loans; (3) You can access better credit card rewards; (4) You can live where you want to; (5) You can get better auto insurance rates; (6) You are often pre-qualified for credit offers; (7) You might get more job offers; (8) You are less likely to need security deposits; (9) You have more negotiation power; (10) You can refinance your mortgage; (11) You can access low-cost cash in an emergency; (12) You have higher loan limits; (13) You are not beholden to others; (14) You may have a better love life; (15) You feel more in control of your finances

24 September 2018

 

Question: According to MSN:Lifestyle, what four (4) major signs, according to Wedding Planners, reveal a marriage won’t last?

 

Peking University’s Marxism society faces closure as students back workers – Pg. 1

–          China’s most prestigious university has threatened to close its student Marxist society amid a police crackdown on students supporting workers in a trade union dispute

–          Under China’s Communist party, Marxism has been part of the compulsory university curriculum for decades.  But universities are under pressure to embrace “Xi Jinping thought” as to the president strengthens his ideological control over the nation

–          The threat to close the society follows a summer of student and worker unrest in the Chinese manufacturing hub of Shenzhen

 

Global Economy – Pg. 7

–          After overtaking Germany as the world’s top exporter of goods in 2009, Chinese exports have grown at an average of 5% a year to $2.26tn in 2017, compared with annual global export growth below 2%

–          China’s share of manufacturing exports expanded from 12 to 18% during the past decade – adding to gains made after China’s 2001 entry to the WTO which accelerated the decline of manufacturing employment in developed countries

–          China is the dominant producer in medium high-tech industries, with global share nearly tripling in the past decade to 32%, …

–          Most of that growth has come from privately owned Chinese companies…

–          China’s share of the global capital goods market rose from 5% to 20% between 2007 and 2016, …

–          Average wages in China’s manufacturing sector have more than tripled in the past decade, putting them above Brazil and Mexico and forcing companies to increase productivity

–          There has also been technology transfer by developed-world companies and technology theft

–          In the past, one of the consolations of China’s export machine was the huge volume of components made in developed economies that it required.  China was a final-assembly point for components made elsewhere, known as the “processing” trade

–          Probably the most threatened by China’s move into mid-tech sectors are China’s east Asian neighbours

 

Women are missing form MBA case studies – Pg. 11

–          …Insead ….the cohort was an almost equal split between male and female students

–          The case method of teaching originated at law school – hence the name – but has been used by leading MBA programmes for decades

–          Leading business schools are under pressure to improve their performance in terms of providing teaching relevant to a more diverse student audience

–          …gender balance among MBA student intakes is already measured by rankings such as those compiled by the Financial Times.  The average percentage of women on MBA courses run by members of the Forte Foundation has grown from 28% to 38% in the 14 years since the non-profit body was founded

 

Answer: (1) The couple gets hammered at the wedding; (2) One partner embarrasses the other; (3) They don’t take their spouse’s needs or wants into account; (4) An ex is still hanging around