Financial Times Blog

18 February 2019

 

Question: According to MSN: Money, what are three reasons you are not saving money?

 

Economists led by Yellen back carbon tax over Green New Deal –Pg. 4

–          …Greed New Deal was costly, whereas the carbon tax, which would plough proceeds back into the public in dividend payments, would be the most efficient way to reduce emissions

–          Under the terms, the revenue from a carbon tax would be redistributed to Americans on a per capita basis, which would disproportionately benefit the poorest households more.  The proposal also envisages a carbon border tax that would impose a levy on carbon-intensive goods entering the US

–          The changes of passing a carbon tax and dividend under the current administration are viewed as slim…

–          The proposed tax has been criticized by environmentalists because it does not set a cap on total carbon emissions

 

Answer: (1) You do not have a budget; (2) You are not paying yourself first; (3) You have never experienced a financial emergency

16 February 2019

 

Question: According to MSN: Money, what are three (3) retiree havens where you can stretch your dollar the most?

 

Fare cutting puts the brakes on Uber’s revenue growth as public listing nears – Pg. 1

–          Uber’s revenue growth has slowed sharply in markets around the world after the ride-hailing company cut prices in countries from France to Brazil and invested in new businesses before a planned initial public offering this year

–          Slowing revenue growth reflected a lower “take rate” – the amount the company keeps from fares after paying drivers – as the company cut prices in markets including Brazil, France, India and the Middle East but continued to pay the same amount

 

Walled in Law gives Trump sweeping powers to define ‘emergency’ – Pg. 2

–          Donald Trump declared a national emergency yesterday after Congress refused to give him the funds he requested for the construction of a wall on the US-Mexico border

–          As a general matter, the constitution places sole authority for appropriating funds in the hands of Congress, which decides how much to spend and what to spend it on when it passes budgets.  The National Emergencies Act gives the president some powers to divert funds for other purposes

–          The act allows Mr Trump to declare a national emergency and puts no restrictions on what an “emergency” means

–          The act gives powers to the president in an emergency under more than 100 statutes, including the ability to repurpose certain funds

–          It also gives him the power to shift funds intended for army civil works projects

–          A Supreme Court ruling from 1983, however, means that in practice Congress can do little more than express its disapproval

–          The ruling required any resolution under the National Emergencies Act to either be signed by the president or be passed with a vetoproof supermajority in Congress to have legal effect

–          Property owners along the US-Mexico border on whose land a wall would be built are the most likely individuals to have standing to bring a lawsuit

 

China roars back after US Fed’s dovish U-turn – Pg. 15

–          Chinese stocks have staged a resurgence this year, stoked by stimulus unleashed by China’s central bank and a dovish US Federal Reserve, in a sharp reversal of its performance last year as the world’s worst equity market

–          The CSI 300 index of companies listed in Shanghai and Shenzhen crashed firmly into bear territory in 2018, tumbling 26%….jumping 10.9% year-to-date

–          The switch in tone came against a backdrop of global geopolitical tension, with uncertainty hanging over Brexit and the US-China trade war

–          Investor sentiment has also been buoyed by recent stimulus measures unveiled by the People’s Bank of China, and expectations that Beijing will step up momentum in the next few months.  Chinese authorities have cut taxes and the central bank last year took action to improve liquidity and lending to private enterprises, lowering the amount of cash reserves banks must hold

 

Answer: (1) Panama; (2) Mexico; (3) Ecuador

15 February 2019

 

Question: According to MSN: Money, what are the things one needs to do before retiring?

 

German recession avoided while Japan stages recovery – Pg. 3

–          Germany has avoided a recession by the narrowest of margins, with growth grinding to a standstill in the final quarter of 2018

–          While the economy avoided a technical recession – defined as two successive quarters of contraction – the figures for the third and fourth quarters highlight the exposure of Europe’s largest economy to a downturn

–          In contrast, Japan returned to growth in the fourth quarter as the economy recovered from a series of natural disasters, despite pressure on exports from the slowing Chinese economy and the US-China trade war

 

Link found between depression and dementia – Pg. 4

–          Depression accelerates the ageing of the brain and inflicts serious damage on cognitive function and memory that could lead to dementia…

–          Dementia and depression are priority targets for global health campaigns

 

US retail sales slump to 10-year low – Pg. 11

–          Retail sales plunged in the US in December, falling by the sharpest amount in almost a decade and sending a worrying signal on a critical month for consumer spending

 

Answer: (1) Budgeting; (2) Social Security; (3) Withdrawing from assets; (4) Health Care; (5) Relationship; (6) Lifestyle

14 February 2019

 

Question: Which U.S. State has the highest median home value and what is that value?

 

Fed policymaker warns on limiting growth – Pg. 4

–          The Federal Reserve needs to avoid inadvertently crimping US growth given rising nervousness among businesses about the outlook at home and abroad…

–          …marked change in corporations’ mood since a year ago, as executives digested hazards including trade tensions and slowing growth in Europe and china

–          The consumer price index has risen 1.6% in the past 12 months, …

–          The core rate of inflation, which excludes food and fuel, held at 2.2%

–          The balance sheet was boosted to $4.5tn during the Fed’s financial crisis interventions, but it has since reduced to about $4tn

–          …the Fed has already made “considerable progress” in normalizing the size of the balance sheet.  Reserves were now about $1.6tn, down 40% from their peak levels…

 

Concern grows over consumer credit as 7m Americans fall behind on car loans – Pg. 19

–          The number of borrowers in the US who are seriously behind on their car loans rose to the highest level on record in 2018, raising concern about the deterioration of consumer credit despite strength in the broader economy

–          More than 7m Americans are 90 days behind and considered “seriously delinquent” on car loan payments, more than 1m above the previous peak in 2010, …

–          Close to 8.2% of so-called subprime borrowers – those with credit scores below 620 – became seriously delinquent last year, the highest level since 2010

–          Potentially more concerning for some economists, the transition into serious delinquency also rose for slightly higher quality borrowers – those with credit scores between 620 and 720

–          Overall, the percentage of borrowers that became seriously delinquent in 2018 was 2.4%, up from 2.3% the year before

–          Car loans are seen as a barometer of the health of consumer credit because for people living in much of America a car is needed to get to work, meaning payments are prioritized above other consumer borrowing

–          In part, the growth in unpaid loans reflects the sheer growth of borrowing.  The auto loan market is now worth $1.3tn.  Although the 7.02m people who are seriously delinquent is a record, the percentage of total borrowers – 4.5% – has not eclipsed the level set during the financial crisis.  Last year marked the highest origination volume on record with $584m in new auto loans and leases appearing on credit reports

–          Analysts and investors attribute the rise in delinquencies in part to the growth of more aggressive non-bank lenders willing to extend credit to lower-quality borrowers

 

Answer: The Aloha State: Hawaii ($617,400)