Author: Roger Staiger

1 August 2019

 

Question: According to an MSN: Money titled “Buffett: This is the biggest mistake parents make when teaching kids about money”, what did Warren Buffett say when asked what he thinks is the biggest mistake parents make when teaching their kids about money?

 

India outlaws instant divorce – Pg. 1

• India’s parliament passed a bill this week that makes “triple talaq” – a controversial custom that allows Muslim men to end marriage by saying talaq three times – a criminal offence punishable by up to three years in jail
• Triple talaq is already banned in more than 20 Muslim-majority countries, including neighbouring Pakistan

 

Fed cuts rates by a quarter point and signals more easing if needed – Pg. 1

• In its policy statement, the US central bank suggested the monetary easing was justified by “uncertainties” stemming from weakness in the global economy and simmering trade tensions
• The one-notch cut in interest rates was widely expected by investors and economists but was accompanied by a dovish decision to halt the reduction in the Fed’s balance sheet on August 1, two months earlier than planned
• The FOMC statement hinted that more monetary easing could be coming this year
• Even though unemployment remains near record lows, and consumption has been remarkably resilient, they have been worried by other data, including a second-quarter slowdown in US growth, weakness in investment, and persistently low inflation, which is running below the Fed’s 2% target

 

Slowing Eurozone raises stimulus prospects – Pg. 2

• The Eurozone economy showed further signs of a slowdown yesterday, raising the chances that the ECB will launch a big package of stimulus measures in September
• The flash growth estimate was down from 0.4% for the first three months of the eyar, and in line with the expectations…
• Slower growth is weighing on price pressures….core inflation fell from 1.1 to 0.9% in July

 

Mexico narrowly avoids slipping into recession – Pg. 4

• Mexico has reported second-quarter growth of just above zero, narrowly beating market expectations of a technical recession….
• GDP expanded 0.1% from April to June, ….
• The anaemic growth increases pressure on the Bank of Mexico to start reducing interest rates when its board meets on August 15

 

Saudi stocks attract billions of dollars following inclusion in benchmarks – Pg. 17

• Investors have flooded into Saudi stocks this year after the Kingdom’s sthare market was included in widely followed benchmarks that guide trillions of dollars in assets
• The surge in assets reflects the heft that index providers wield in guiding assets across global financial markets

 

Answer: “Sometimes parents wait until their kids are in their teens before they start talking about managing money – when they could be starting when their kids are in preschool”

31 July 2019

 

Question: According to MSN: Lifestyle, what are the fifteen (15) most popular private jet destinations for the ultra-wealthy?

 

ECB easing faces German challenge – Pg. 1

• The ECB’s quantitative easing programme, under which it has purchased 2.6tn (euro) of bonds, remains controversial in Germany, where plaintiffs claim it constitutes illegal “monetary financing”
• The European Court of Justice last year ruled in favour of the ECB, but the German court is now set to interpret the issue under domestic law.

 

Trump rattles equity markets by lashing out at Beijing and the Fed – Pg. 1

• Mr Trump suggested that officials in Beijing were not negotiating in good faith and were failing to implement the purchases of US farm goods that they have been pledging
• Mr Trump’s comments reduced expectations that even limited progress could be made in Shanghai, …..
• In a widely criticized challenge to the Fed’s independence, Mr Trump has been loudly pressing it to help the administration in the trade conflict with China by reverting to deep monetary easing

 

Powell pressed from all sides as Fed meets – Pg. 3

• The Fed will almost certainly deliver the 25bps cut in its main interest rate that it has been eyeing for some time, bringing it down to a target range between 2 and 2.25%
• The Fed chairman has been stressing many of the risks to the US outlook in recent public appearances, but if he reverts to emphasizing the central bank’s reliance on hard data, it may signal that the central bank is not convinced yet of the need for a full cycle of deeper cuts
• Mr Powell suffered the first dissent of his tenure as Fed chair last month when James Bullard, the president of the Saint Louis Fed, voted against the decision to keep rates steady, arguing that a 25bp cut had already been need at the time
• Mr Powell will probably also place a large emphasis on below-target inflation and weakness in investment, which have overshadowed consumer strength

 

Hong Kong sky-high rents start to drop – Pg. 4

• Hong Kong’s hot property market – one of the world’s most expensive for prime office space – is starting to buckle under the strain of China’s economic slowdown and global trade ructions led by lower demand from mainland Chinese companies
• …gross take-up, or new leases, to mainland Chinese companies fell almost 40% in the first half of 2019 compared with the same [period last year. Average office rents in the city are likely to fall in 2019 for the first time in six years, by 1.3%, and strata-sale office prices by 5%
• Hong Kong, a hub for east-west trade, has been buffeted by the tension with economic growth slowing markedly from 1.2% year-on-year in the fourth quarter last year to 0.6% in the first quarter
• The chill is also being felt in the city’s retail property sector

 

UK poised for rate cut despite inflation threat – Pg. 11

• Markets now see a rate cut by December as better-than-even chance – a sharp reversal from earlier in the year when the timing of a rate rise was the talk of trading floors
• Sterling weakness is also expected to drive up inflation by increasing the prices of imported goods – in a rerun of the aftermath of the Brexit referendum

 

Answer: (15) Crete; (14) Barbados (tied with Malta); (13) Malta; (12) Sint Maarten; (11) Philippines; (10) Mykonos; (9) US Virgin Islands; (8) Corsica; (7) Sicily; (6) Cayman Islands; (5) San Juan, Puerto Rico; (4) Sardinia; (3) Ibiza; (2) Mallorca; (1) The Bahamas

30 July 2019

 

Question: According to MSN: Money, what are five (5) mind-blowing statistics about the richest Americans?

 

Sterling tumbles to two-year low as market fears grow over hard Brexit – Pg. 1

• Sterling tumbled to its lowest level in two and a half years yesterday as markets became increasingly worried over the possibility of the UK crashing out of the EU without a deal in three months
• The pound dropped as much as 1.3% to $1.2230, a level not touched since mid-March 2017 when the UK triggered Article 50 and began the formal process of leaving the union

 

Japan cuts growth forecast on export worries – Pg. 4

• Japan has cut its growth forecast for the year amid mounting expectations of a slowdown in export growth, as the fallout of the US-China trade war takes its toll in Asia
• The economy is forecast to increase by 0.9% year-on-year in the 12 months to March 2020, ….that is down from the 1.3% growth forecast in January
• Export growth is expected to slow to 0.5% from the 3% increase forecast in January
• Japan’s economy grew 2.2% in the first quarter, compared with a year ago, thanks to improvements in capital spending
• But the US-China trade tensions and slowing global growth have disrupted supply chains across Asia, knocking exports. Japan’s recent restrictions on the export of materials critical to the manufacture of computer chips to South Korea – part of a diplomatic stand-off- have also compounded the uncertainty

 

Global economy – Pg. 7

• This is the future of tax administration – digital, real-time and with no tax returns
• The new system is directed more at shopkeepers than oligarchs
• …reducing tax evasion among ordinary Russians and high-lighting corrupt tax officials have helped raise revenues and clean up the system
• With an overdependence on oil and gas revenues and serious concerns over evasion and corrupt officials, Russia’s tax system was ripe for reform
• VAT was his first target. This tax has taken the world by storm since France introduced it in the 1950s.  It is now levied in more than 165 countries accounting for more than 20% of annual global tax revenue and raising more than $3tn in advanced economies alone.  VAT’s two principal advantages are in the amount of revenue it can raise for governments and its perceived robustness to fraud compared with sales taxes such as those still levied in the US
• As it is collected along the supply chain with companies able to claim a refund of tax they have paid on their inputs and charging tit on their sales, it has an inbuilt self-enforcing element
• …there are two areas where VAT has been subject to significant fraud in most countries. First, where some traders do not pay the tax they owe on their sales and then disappear, so the authorities lose the tax owed.  Second, where retail customers collude with sellers to buy goods and services – generally services – without seeking a receipt and VAT is not charged

 

US healthcare loans tumble as politicians target patients bills – Pg. 17

• The proposed law, seen as having broad bipartisan support in both houses of Congress, would prohibit providers from hitting patients with large and unexpected costs for treatment (Prof Note: I just had two implants and a bone graft. The dentist, in writing, the day prior, provided me with the EXACT cost of the treatment.  I had never experienced such professionalism from a medical professional.  I always have had to ask and then am put on hold and finally provided a price.  When I walk into medical offices, randomly, ask for pricing of a particular procedure everyone gets upset.  Why?)

 

Answer: (1) It takes an annual income of $421,926 to join the 1% in the US; (2) The richest earn 26.3 times more than the rest of us; (3) The richest hold 42.5% of nation’s wealth; (4) They earn a fifth of the nation’s income each year but pay 37% of the taxes; (5) You might be among the richest in the world (It only takes an annual income of $32,400 to join the world’s richest 1%)

29 July 2019

 

Question: According to MSN: Money, what are five (5) steps you can take now to avoid going broke in retirement?

 

Carmakers face tough choice on China as vehicle sales plummet – Pg. 1

• China’s shrinking car market is hitting foreign groups, with some companies operating at a fraction of their potential output, sparking fears that a number will be forced to quite the country
• Ford’s plants in China operated at 11% of their potential output in the first half of the year,…
• Chinese passenger vehicles sales fell 4% to 23m last year. Sales have continued to decline this year, dropping 14% in the first half compared with 2018

 

Fed poised for rates reversal with first cut in a decade – Pg. 2

• Swap contacts imply that investors have priced in more than 80% chance of a 25bps cut at the Fed’s monetary policy meeting on Wednesday, with a nearly 20% likelihood of a larger cut
• This comes despite the US economy experiencing its longest-running growth streak since at least 1854, enjoying near-record low unemployment and record-high equity markets
• …there have been some signs of a slowdown, with second-quarter GDP growth coming in at 2.1%, a big drop on the 3.1% recorded in the first quarter
• The first clear signal that Mr Powell was entertaining a rate cut came in early June, during a low point for US trade policy. Talks with China had collapsed, and Donald Trump, US president, had threatened to slap sweeping tariffs on Mexican products
• The traditional relationship between prices and joblessness has all but broken down
• A rate cut this week would be the first fruit of that shift in thinking – indicating an acceptance by the Fed that there is more slack in the jobs market than mainstream economists had believed

 

Speculation builds on depth of US rate cut against increasingly worrying global growth backdrop – Pg. 8

• Tomorrow the Federal Reserve convenes for a much-anticipated policy meeting

 

Why today’s office events are becoming a sober experience – Pg. 12

• ….while clients still like drinks-based events, they increasingly want to offer employees the opportunity to shake a mocktail too
• While there is no desire to ditch the cocktail shaker altogether, employees want more options
• Social media, which can become a public forum to shame drunken mishaps, is another factor
• The #MeToo movement has also forced many companies to review their alcohol policies

 

Answer: (1) Create a realistic retirement income plan; (2) Start saving 10% of your income immediately; (3) Consider delaying your social security benefits; (4) Invest your time in a side hustle; (5) Meet with a financial adviser