Category: Financial Times Summaries

28 May 2019

Question: According to MSN: News: Which country has the highest incarceration rate per 100,000 residents?  What is number 2 and 3?

China’s record subsidies add to strain on talks with US – Pg. 4

–          China increased its subsidies to domestically listed companies to a record level last year to help them weather a slowdown in the world’s second-largest economy, in a move likely to further strain trade talks with Washington

–          China’s economy expanded at 6.6% last year – its slowest rate in almost three decades – because of weak credit growth and the worsening trade war with Washington

–          China typically hands subsidies to companies that participate in national infrastructure projects or help meet targets in technology research and development

–          The US also subsidises domestic companies, with Fortune 100 companies receiving $3.2bn in federal grants between 2014 and 2017…

–          Local governments in the US have also competed to offer multibillion-dollar tax-breaks to attract investment by groups such as Amazon

Walmart faces heat over chief’s pay – Pg. 11

–          Walmart, which employs about 2.2m people globally, gave the average worker a pay rise last year of less than 3% to $21,952, while chief executive Doug McMillon’s total pay package last year rose 3.6% to $23.6m

–          …total shareholder returns last year fell 8% (Prof Note: What is wrong with these CEOs?  I get the outsized pay, i.e. maximize one’s value.  However, when shareholder value goes down, something must be done.  Also, what is unknown, was the payrise pre-negotiated?  If so, good for Doug for negotiating well!)

Overseas MBA students see little gain from US visa rule changes – Pg. 14

–          Changes to US immigration rules aimed at helping overseas MBA students gain employment have failed to improve their chances of finding work in the country after graduation this year….

–          International students have felt shut out of the US jobs market by the tightening of the rules governing H-1B visas, which are given to specialist workers.  This in turn has discouraged overseas students from applying to American MBA programmes, even at some of the most prestigious business schools

–          Seventy per cent of US schools have reported declining applications to the two-year full-time course (Prof Note: …and how much of this is attributable to cost, value-proposition, and the European one-year model?!)

–          The median annual base salary of $115,000 that employers plan to offer new MBA hires is up from $105,000 in 2018,…

Answer: USA (698/100,000); El Salvador and Cuba are #2, and #3, respectively

27 May 2019

Question: Which state in the U.S. has the highest incarceration rate?  Which states are numbers 2 and 3?

Trump tax relief boosts second-hand jet prices – Pg. 7

–          …taxpayers to immediately deduct 100% of the cost of new and second-hand aircraft bought between 2017 and 2027

–          …average prices in the broader second-hand jet market are still below the levels they were a decade ago

Growth concerns make many investors skeptical over Fed’s ability to lift inflation – Pg. 8

–          Some measures of US inflation remain stubbornly low, despite low unemployment, tariff pressures on prices and the central bank halting interest rate rises

–          The 10-year break-even rate – a measure of the market’s inflation expectations – has now sunk to just 1.8%, from a peak of 1.98% earlier this year

–          India’s benchmark indices hit record highs last week after Prime Minister Narendra Modi secured a thumping victory in the country’s general election

Goldman taps United Capital in assault on wealth market – Pg. 8

–          Goldman Sachs will use newly acquired United Capital to speed up its assault on middle America’s wealth management market, deploying an army of investment advisers to target the employees of corporate clients

–          Goldman manages about $40bn of the estimated $28tn in assets held in the US by the “mass affluent”, a term that describes individuals or households with between $500,000 and $10m in investable assets

–          The expansion into this market puts the bank in direct competition with brokerages such as Charles Schwab, as well as its traditional trading house rival Morgan Stanley

Answer: Oklahoma (1,079/100,000 residents); Louisiana and Mississippi are numbers 2 and 3, respectfully

25 May 2019

Question: According to MSN: Money, what thirteen (13) things should be considered if you are buying a house after 50?

Traders test Beijing resolve as renminbi threshold looms – Pg. 15

–          International currency traders are facing off against the country’s central bank over a decision that is as much psychological as it is strategic as China considers the weapons that are at its disposal in the growing trade war with the US

–          China’s central bank exercises firm control over the value of the renminbi.  The onshore renminbi exchange rate…is allowed to move only within a trading band of 2% either side of a daily midpoint fixed by the bank

–          …a depreciation of about 8% since June has mostly offset the impact of tariffs….prompting traders to speculate that the bank will allow a further slide

–          China pegged its renminbi at 8.28 to the dollar from the mid-1990s until July 2005, when it began a managed appreciation against the dollar

BoE blog post underscores corporate bond dangers – Pg. 15

–          The BoE has warned of the potential for “dysfunction, disorderly price moves and losses for investors” in the corporate bond market, as it flagged a sharp rise in the volume of securities clinging to investment-grade ratings

–          …the market value of the triple B market is now four times what it was in 2008 and eight times what it was in 2002

–          It is feared this dip in quality has left capital markets vulnerable.  If the credit cycle turns and the rate of downgrades rises, the volume of “fallen angels” – bonds that drop from investment-grade ratings to junk levels – would be much larger than in previous credit busts, …

–          When securities drop out of the investment-grade category, many investors are forced under the terms of their mandates to sell

Answer: (1) Your ‘Real Estate Footprint’; (2) Your living arrangement; (3) Indoor vs. Outdoor space; (4) Condos vs. Larger Homes; (5) Walkability; (6) One-Story Homes; (7) The Passive Income Effect; (8) How much mortgage you can afford; (9) Location, Location, Location; (10) Children Moving – or Staying – Home; (11) Best Places to Retire; (12) Health Care Access; (13) A good investment at any age