Author: Roger Staiger

1 August 2018

 

Nevis News: Crime continues to increase on the island.  17 total murders to date this year: 5 on Nevis, 12 on St. Kitts.  This year three expat couples were robbed at Paradise Estates and the island is full of activists.  Apparently the crime has caught the attention of authorities.

 

All beautiful days on Nevis with few rain drops.  It is dry as it is July and the grass is a slight brown but all is well.  A night photograph is attached with the full moon.

 

The humourous story thus far is arrival at St. Kitts.  In Miami I was trying to arrange fresh pastries at the house for George M., developer from states redeveloping Cat Ghaut.  I told Atahlia, Jeffers daughter, “I will die if they are not there.  Nothing else is acceptable.”  Well, when I arrived on St. Kitts several people came up to me asking, “What is it you must have or you will die?”  I said, “The raison scones and coconut cookies from Good Taste bakery.”

 

This is the third trip for George M to Nevis.  It is interesting seeing and hearing him experience the island.  The first trip he enjoyed the island.  The second trip he fell in love with the island (I was not with him for this trip).  This third trip, each time we go anywhere someone says, “George!!!” J  It is just that kind of island.  I think the third trip makes it “home”.  The restaurants for this trip have been Yachtsman Grille (Ehhhhhh…forgettable); Turtle Time (Highly recommended for the Millennials looking to meet other Millennials…that’s all I am saying….food….ehhhhh); and Indian Summer (unexpected hit for Indian food…excellent.  Local hang out and we bumped into owner of Bananas and Jeffer’s daughter.  P.S. Going back to George: Trip 1: new clothing and Four Seasons Worthy; Trip 2: was not here; Trip 3: Old clothing, fits right in! J

 

Question: According to MSN:Money, what are the two factors that determine the amount necessary to retire early?  (Prof Note: In actuality, to retire at all)

 

BoJ bucks central bank trend to stick with ‘extremely low’ rates – Pg. 1

–          The BoJ announce yesterday it would maintain “extremely low” interest rates for an extended period, making clear it would not join other big central banks in rolling back crisis-era stimulus policies

–          …strengthening the framework for “continuous powerful monetary easing”

 

Eurozone grows at weakeast rate in two years – Pg. 2

–          Concerns over a slowdown in the eurozoe rose yesterday after quarterly figures showed growth in the bloc hit its weakest rate in two years in the second quarter

–          GDP expanded 0.3% from the first to second quarter, …

–          The news comes amid fears that the bloc is in the midst a soft patch after a blockbuster 2017 and supports the view held by the region’s senior monetary policymakers that the central bank must be patient in easing its crisis-era support

–          Higher oil prices have weighed on businesses in the region this year, but the fear is that growing tensions between the US and the rest of the world on trade barriers will unsettle businesses, leading to sluggish investment and fewer exports

–          …unemployment remained at 8.3% in June, its lowest level since December 2008

 

Jury selection starts in Manafort fraud case – Pg. 3

–          …accused of tax and bank fraud in the eastern district of Virginia

–          A conviction would complete the downfall of Mr Manafort…

–          If he is acquitted, it would deal a blow to the credibility of Mr Mueller’s investigation, which is under daily attack from the president as part of a public relations campaign designed to sow doubt among voters about the Russia probe (Prof Note: I still remain unclear what Manafort has to do with the Russian probe!)

–          Mr Manafort is accused of hiding at least $30m of that money from US tax authorities in offshore bank accounts in Cyprus, Saint Vincent and the Grenadines and the Seychelles

–          The US government claimed that the misrepresented his income and that his consulting company, and failed to disclose existing loans on his properties when seeking additional mortgages

 

British universities face a crisis of over-ambitious expansion – Pg. 9

–          For most graduates, the economic return on their investment of time and money is good, but it gets harder and harder to make a beneficial choice; there is now an enormous range of places and courses to study

–          Higher education is ow a mess.  Two-thirds of UK students will never pay off their loan debt

 

Answer: (1) Your cost of living (Prof Note: Basically your monthly active expense in your retirement years); (2) The potential for investment growth and passive income (Prof Note: Basically your monthly passive income)

31 July 2018

 

Question: According to MSN:Money, what are three things you should do if in your 40s without any savings?

 

Fall in Chinese home sales signals growth slowdown – Pg. 3

–          China’s housing sales suffered a broad-based decline in July in a further sign that growth in the second-largest economy is ebbing just as the US-China trade war appears set to escalate

–          Real estate is a driver of the Chinese economy, so slackening property sales can have broader implications for GDP growth

–          China’s GDP grew by 6.8% in the first half of this year, but signs of a mild slowdown are spreading as the US-China trade war bites and Beijing gets tough on the unruly shadow finance sector

–          Investment in residential and commercial real estate rose 8.4% in June, down from a 9.8% rise a month earlier, …

 

Designers drive trend for sharing on home front – Pg. 4

–          A new frontier for Space10 is “co-living”.  Such housing shared by two or more people who are not related is seeing a revamp, driven by young urban professionals, who may be more digitally linked yet feel lonelier than ever

–          You get shorter, flexible leases and the flat monthly fee includes rent, utility bills and cleaning, access to fully-furnished smaller private bedrooms and shared kitchens, office and recreational spaces

–          Grasping these issues is vital not only as millennials dictate consumer trends, but also as the global population swells, house prices rise and incomes fail to keep up

–          Collective living has been practices across cultures throughout history, but the modern concept of co-living was pioneered in Denmark in the 1960s.  Denmark has since become home to more realistic models (Prof Note: No less than three construction crews were on Cat Ghaut today.  Many brought their families including young children to golf, swim, run, and play.  It was amazing how vibrant everything was with the laughter of children, backhoe digging, stone being chiseled and boards cut.  I understand the attraction but also know I was in my A/C office watching everything and smiling.)

 

Lending to the limit – Pg. 7

–          Over the past 18 months, regulators have unleashed a “windstorm” against Chinese banks, with rules to prevent out-of-control lending growth and risky funding practices that are especially prevalent among regional players

–          Several regional banks have already gone bankrupt in all but name before being  bailed out and restructured by local authorities.  Others have become piggy banks for local governments or politically-connected tycoons with an outsized influence over local banks

–          Problems at small banks matter because their role in China’s financial system is growing.  The country last year surpassed the Eurozone to become the world’s largest banking system by assets.  Meanwhile, small and mid-sized banks have more than doubled their share of total Chinese banking assets to 43% in the past decade

–          In china, regional banks struggle to attract deposits because regulators rarely allow them to open branches outside their home provinces

–          With modest deposit growth unable to satisfy their appetites for balance-sheet expansion, small banks turned to volatile, wholesale borrowing from other banks

 

Answer: (1) Lower some major living costs; (2) Get a side job (Prof Note: I was so honoured when a younger person called me on a recommendation from another saying, “I understand you are an expert in side hustles.”  I said, “Not quite but I am an advocate!” J); (3) Take steps to advance your career

30 July 2018

 

Question: What are the seven types of financial misconduct?

 

Asset Management – Pg. 7

–          Asset managers play a critical role in the global economy, such as investing the retirement savings of hundreds of millions of workers.  But while their influence has grown, the industry is undergoing profound changes that threaten the way they do business

–          Fees are under pressure as customers move to cheaper products and costs are rising because of new regulatory burdens.

–          ..unlike the largest US managers, which invested heavily in developing passive funds over the past two decades, Europe’s managers have tended to focus on more traditional pricier products such as actively managed funds

–          European asset managers are being forced to pull out of markets and lay off staff

–          M&A strategies have become less about market domination and more about survival

–          One of the main drags has been the continual downward pressure on fees that began in the US and has spared to Europe

–          Over the past two years, the amount of new investor money flowing into passive funds increased their total assets by 19%, while active funds grew by just 1%…

–          Since the financial crisis, the fund industry has been hit by an avanlanche of regulation resulting in increased operational spending

–          Lower fees and higher costs result in squeezed profits

 

Seven sins of financial world stuck on repeat, study finds – Pg. 16

–          The seven broad types of financial misconduct it identified were: price manipulation, inside information, circular trading, reference price influence, collusion and information sharing, improper order handling and misleading customers

–          In the field of price manipulation, the research found that the media by which false information was published had changed, but the techniques remained the same

 

US lenders face M&A skepticism – Pg. 16

–          Us regional bankers face rising shareholder disapproval over dealmaking in the sector, clouding the prospects for further consolidation between the country’s 5,600 lenders

–          US bank deals worth $21bn have been announced so far this year….compared with $26bn for the whole of 2017

 

Answer: (1) Price manipulation, (2) Inside information, (3) Circular Trading, (4) Reference price influence, (5) Collusion and information sharing, (6) Improper ordering handling, and (7) Misleading customers

28 July 2018

 

Question: According to CNBC what are the 5 things to do if you hit the $512m Mega Millions jackpot?

 

Twitter figures rattle Wall Street – Pg. 1

–          The social networks have been dented by concerns over the limits of their users’ attention and the fallout from cleaning up their acts after scandals

–          Twitter’s stock dropped 19%, a day after Facebook’s shares shed 19% in the biggest one-day loss of value in US stock market history (Prof Note: I have never sent nor received a “Tweet” nor do I have a FaceBook page.  However, Cat Ghaut has one and we have five friends! J)

 

Statistics review shows Americans saving more than thought – Pg. 4

–          The data show the average savings rate at 7% between 2013 and 2017, up from the previous figure of 5%

–          The bureau also revised down GDP growth for 2017 from 2.3 to 2.2%, with much of the reduction falling in the second half of the year

–          The personal savings rate in the US has been on a long decline since the 1970s, a trend that began to reverse after the financial crisis.  The figure is calculated by comparing the difference between disposable incomes and personal expenditures

 

BoJ steps in for second time this week after benchmark bond yield hits 18-month high – Pg. 13

–          Japan’s central bank has made its second intervention in a week to support the domestic bond market after the yield on 10-year government debt hit its highest in 18 months

–          The BoJ yesterday launched a special bond-buying operation to suppress yield, which moves inversely to price, back below 0.1%

–          In a rare move, the BoJ offered to buy unlimited amounts of the 10-year notes at a yield of 0.1%, 1 bp lower than its operation on Monday at 0.11%.  The yield on the 10-year note closed a basis point higher at 0.09%

–          Japan’s central bank faces pressure to rein in its ultra-loose monetary policy, which has failed to boost inflation to tis targeted level, while weighing heavily on bank profits

–          The yield curve control policy was introduced in late 2016 in part as a measure to offset some of the pain of the negative interest rate policy that it introduced earlier that year

 

Answer: (1) Chill (Prof Note: I have some clients with whom that I work that go through a business and/or entity sale.  My first piece of advice is to take things slowly and calmly.  Find the team and hire them.  Also, depending upon the size of the sale, consider two teams for opposing advice…..yes, I do this with attorneys all the time); (2) Protect your ticket; (3) Keep quiet (Prof Note: When the world believes you have money, it is like having a giant target on your back.  Remain anonymous.); (4) Weight the payment options (Prof Note: Lump sum or payment over time.  Review options with tax accounting AND financial advisor.  You may not want to be a creditor if the entity paying you does not work out); (5) Take a deep breath (Prof Note: I generally advise one (1) toy!  Right now I am working with a person and the toy is a watch!)