Tag: Prof Note

15 April 2019

 

Question: According to MSN: Lifestyle, what are 40 career mistakes no one over 40 should make?

 

Tax rejig raises fears of New York wealth drain – Pg. 3

–          …expects more to follow after the April 15 tax deadline makes clear the full impact on New Yorkers of the 2017 Trump tax reform

–          …law…setting a $10,000 limit on the amount of state and local taxes that households could deduct from their federal taxes.  That cap on so-called Salt deductions threatens a hefty bill for many wealthy New Yorkers, who pay as much as 12.7% in state and local taxes.  Florida, by contrast, has no personal income tax

–          Real estate executives see Salt as a factor behind the city’s sagging luxury property market

–          The fact that so many of the high-tax states, including California, are Democratic leaning has prompted Mr Cuomo to blast Mr Trump’s tax plan as a “declaration of an economic civil war”

 

Trump attacks on Fed stir global concerns for central banks’ independence – Pg. 4

–          The Fed is not alone in facing a threat on its independence: the Turkish and Indian central banks have also been pressured to loosen policy

–          Economists fear that given sluggish growth rates and an absence of inflation, central banks are likely to face increasing political demands for looser policy

–          The independence of big central banks seemed assured after they tamed the scourge of inflation and helped lead efforts to fight and mitigate the financial crisis a decade ago

 

If you could only rescue one book from your shelves, which would it be? – Pg. 12

–          (Prof Note: What a crazy question!  The answer, of course, is simple: Foundations of Real Estate Financial Modelling, Routledge, 2^nd edition, 2019 by Roger Staiger)

 

Can you be a mother and a senior law firm partner? – Pg. 13

–          Last year, just over half of entrants to law school, in the US were women; in Britain, it was two-thirds

–          The generally accepted issue is the choice many women face between partnership – on call 24/7 and under pressure to generate business – or starting a family

–          While overt sexual discrimination is often challenged, unconscious bias and lazy assumptions are also holding women back…

–          For example, partners looking to build a team to work on a deal may assume a mother will not want a demanding client calling at 2am, or to travel frequently for work.  These assumptions are not made about fathers

–          The problem is exacerbated by pressure to bring work into the firm…

–          More fundamentally, …questions the idea that partners need to be permanently on call (Prof Note: I completely disagree with this question and/or the postulate associated with this question!  When you, the client, are paying $1,000+/hour that person BETTER pick up the phone (or call back in 15 minutes to allow for bathroom breaks) at any time of the day/night.  Remember, the globe has 24 time zones.  The lawyer, man or woman, that does not want this lifestyle, can work for a significantly reduced rate and pick their schedules.  My personal opinion!  P.S. K&L Gates, our outside counsel, picks up the phone 24 hours a day!)

–          (Prof further Note: P(Gain)’s lead outside counsel is a woman!)

 

Answer: (1) Pursuing full-time higher education (Prof Note: Completely disagree.  I now view a Ph.D. as a retirement programme.  Now, the decision to leave one’s career for a number of years and generate no income, well, that is questionable); (2) Keeping your nose to the grindstone (Prof Note: Most evenings I spend watching the sunset.  A pleasure that never gets old); (3) Hiring the wrong people (Prof Note: Call those references!!!); (4) Leaving vacation days on the table (Prof Note: Now this is just insanity!); (5) Complaining about millennials (Prof Note: Laughing…it is the millennials that will bath me in my elder years…best be nice to them!); (6) Labeling yourself as inexperienced; (7) Barely clearing the bar; (8) Starting a business (Prof Note: Completely disagree.  It is not easy to start a business, I can attest.  But best to do after 40 when one is well capitalized and know the players!); (9) Quitting without a fallback (Prof Note: Completely disagree.  Your “fallback” is your resume and experience and expertise.  If miserable in a position and not needing the position to support a family, just quit!); (10) Shopping around a splashy resume; (11) Flopping in interviews; (12) Letting your old skills get rusty (Prof Note: I spent most of the weekend relearning VGA code for a client database project.  25+ years of dust had to be removed from grey matter); (13) Neglecting to learn new skills; (14) Expecting a major change to be lateral; (15) Staying in one lane; (16) neglecting creative expansion; (17) Dressing down (Prof Note: Shoes?  What shoes?!); (18) Fumbling to raise question; (19) Losing your cool (Prof Note: Completely disagree but it should not occur often.  There are times to become unhinged.  Just do not lose control of your temper, when exerting your temper.  Also, be careful to note, “I am angry at the situation.”  Be careful to not personalize anger.); (20) Sticking with a soul-sucking job; (21) Constantly multi-tasking; (22) Eating sad desk lunches; (23) Refusing to delegate (Prof Note: I remain weak at this but am getting better!); (24) Delegating everything ; (25) Getting stuck in your “story”; (26) Taking jobs just for the money (Prof Note: I find personal fulfillment to be the most important); (27) Sticking with one income stream (Prof Note: Love the “hustle”…the side “hustle”); (28) Succumbing to procrastination; (29) Backstabbing; (30) Spending decades in an office chair; (31) Sleeping at the office; (32) Showing up late (Prof Note: My late father told me, “If you are going to steal time from an employer, do it in the middle of the day.  Never show up late or leave early!”); (33) Showering with warm water; (34) Acting like you are a decade younger (Prof Note: Most comment that I act like decade(s) older); (35) Saying “yes” to everything; (36) Saying “no” to everything; (37) Firing people on a whim; (38) Wasting time on fruitless projects; (39) Blowing through your budget; (40) Using corporate funds for personal expenses; (41) NOT focusing on passive income streams needed in retirement!!!

13 April 2019

 

Question: According to MSN: Money, what % of Americans live paycheck to paycheck?

 

Japan population set to lose equivalent of a small city every year until 2013 – Pg. 1

–          The natural population fell by more than 430,000 people last year, ….

–          …partly offset by a record net inflow of more than 161,000 migrants but the overall pace of decline still hit a new high of minus 0.21%.  That has left the population at 126.4m, down from a peak of 128m in 2010

–          Population decline is hitting especially hard in rural and regional Japan, due to a high pace of migration to Japan’s cities, as well as rapid ageing

–          (Prof Note: Rural America suffers its own issue.  In Southern, MD the economy is dominated by Pax River.  Young individuals can, apparently, earn $19/hr washing airplanes.  This leaves little the labour pool for construction in the area sparse.)

 

China to extend credit-score system for public to business – Pg. 5

–          China’s attempt to build a credit-scoring system for its population based on behavior and past misdemeanors is being extended to business

–          This database will be shared with commercial banks “to improve information asymmetry of banks and to improve the credit scores and loan availability of small and medium-sized enterprises with good credit scores”…

 

Technology – Pg. 6

–          One of the key questions is whether advertisers will continue to stay loyal to services such as YouTube and Facebook.  In 2017, some advertisers turned off their YouTube advertising spending over fears they might be placed next to extremist or inappropriate content.  YouTube responded by announcing policy changes, algorithm updates and content takedowns, and most of the advertising dollars have flooded back

–          (Prof Note: My largest fear is censorship.  What is the cost of “Free Speech”?  In a recent presentation I stated the cost of “Free Speech” was individual net worth of eight figures.  One must have sufficient assets and passive income, free of public influence, to suffer the onslaught of public decry over non-conforming speech.)

 

The private equity bubble is bound to burst – Pg. 9

–          The average London home at the end of last month was worth 5% less than it was two years ago…

–          The global private equity market, worth more than $5tn at the last count, has been on a tear since soon after the 2008 crisis.  Its business model of buying up companies, cutting costs, adding debt and selling five or six years later has delivered juicy returns.

–          The sector has received a twin boost from the ultra-low interest rates of the post-crisis years: they made debt cheap and lured investors desperate for higher returns than are available from listed securities.  It recent years, it has generated an average return of 17%, compared with last year’s negative 4.4% for the S&P 500 and a negative 8.7% for the FTSE 100

 

US petrol at risk of hitting $3 a gallon this summer – Pg. 13

–          …backdrop of rising crude prices and strong fuel demand, ….

–          Petrol at $3 a gallon would reflect a spike of at least 20 cents from the current national average….prices at the pump average $2.784 a gallon, or 30 cents ore compared with a month ago

 

Asian bonds issued at record pace as Fed pulls back on raising interest rates – Pg. 13

–          Asian bond issuances in dollars and other major currencies are at a record pace this year, as companies rush to make the most of dovish signals on interest rates from the US Federal Reserve and a greater willingness by Chinese regulators to approve the allotment of offshore debt

–          The majority of new issuance has not been licensed for sale to US investors.  However, the value of dollar bond sales that unregistered foreign companies are permitted to raise from US institutional investors has also reached a record high for the year to day, amounting to $25bn across 25 deals

 

Answer: 31%

5 April 2019

 

Question: According to MSN: Money, what is the top savings goal for Americans?

 

Prime Time – Pg. 1

–          MacKenzie Bezos…yesterday revealed her divorce settlement with Amazon’s founder and the world’s richest man.  She will keep stock worth more than $35bn in the online retailer, in what has been billed as the biggest divorce settlement ever

 

Fragile banking system spurs ECB rethink on negative rates – Pg. 2

–          Five years after the ECB broke ground by cutting interest rates below zero, its officials are considering a redesign of the contentious policy as they face up to an economy and banking system that could remain fragile for a lot longer

–          …ECB president, pushed the world’s leading central banks into uncharted territory in 2014 when the Eurozone deposit rate – what commercial banks pay to hold money at the ECB – went negative.  Further cuts have pushed the rate to minus 0.4% since 2016, part of a policy to spur banks to lend money rather than sit on it

–          One consideration is a three-tiered system, with part of each bank’s deposits at the ECB paying zero interest, and another portion paying a positive rate

–          ….two elements are now in place that were not when the ECB last seriously considered a switch to a tiered system, in 2016.  One is the diminished risk of deflation, which counters an argument for the policy: that it benefits banks by reducing the chances of falling prices sparking a wave of defaults by debt-laden borrowers

–          Another is that the outlook has become sluggish enough to raise the prospect of interest rates remaining on hold for years to come

 

India cuts rates on eve of election – Pg. 4

–          India’s central bank has carried out a second consecutive interest rate cut to 6%, giving a fillup to credit growth ahead of this month’s general election

–          The bank’s monetary policy committee also cut rates by 25bps at its last meeting in February

–          Retail inflation stood at 2.57% in February, higher than the previous three months but still towards the bottom of the RBI’s target range of 2 to 6%

 

Wobbles over the yield curve? – Pg. 7

–          The yield curve is Wall Street’s original “fear gauge”, notching up a perfect predictive record before pretenders such as the Vix index were even glimmers in the eyes of financial engineers.

–          Typically countries pay less to borrow for three months than five years, and less for five years than for a decade – after all, investors want some compensation for the gradual erosion of inflation, or the risk, albeit faint, that a government could renege on its debt

–          …sometimes short-term yields rise above longer-term ones, an “inversion” of the usual curve that has been an uncannily accurate harbinger of recessions, preceding every downturn since the end of the second world war.

–          For instance, when Mr Greenspan in 2005 read the last rites for the yield cuve’s predictive powers, the three-month Treasury bill yield was still 0.9% below the 10-year Treasury yield.  A year later the curve inverted and 18 months after that the US entered its worst recession since the 1930s

–          …the US yield curve has now inverted once again, with the 10-year Treasury yield on March 22 dipping below the three-month T-bill yield for the first time since 2007

–          In essence, the yield curve distils the wisdom of millions of investors, and their views of the current and future health of the economy.  Individual fund managers may be wrong from time to time, but the overall judgment of a lot of smart people tends to be fairly accurate

–          Longer-term bond yields are influenced by interest rates set by central banks, but mostly by the economic outlook.

–          Post-crisis regulation encouraged banks to keep more money in ultra-safe assets, and it is hard to find anything safer than US Treasuries (Prof Note: Paying off one’s home mortgage, which typically has a greater rate than US Treasuries is a MORE ultra-safe asset investment, i.e. an investment in one’s self and family financial security!)

–          …fund managers prefer to use the two- and 10-year Treasury yields as a cleaner measure of the curve’s shape.  This “spread” has remained positive, bouncing around between 0.1 and 0.2% since last year.  The two and 30-year Treasury spread has actually steepened this year, muddying the yield curve’s signal

–          The US stock market took a beating on the day of the inversion, but has still enjoyed its best start to a year since 1998, and junk bonds have notched up their best quarter of returns in a decade

 

Answer: Retirement

3 April 2019

 

Question: According to MSN: Money, what is the biggest concern about personal finances in America?

 

Walgreens slashes earnings forecast and lifts cost-cutting target to $1.5bn – Pg. 1

–          Like other US drugstore chains, Walgreens’ margins are being hit by pressure to cut prescription drug prices and cheaper generic drugs.  While prescription sales in its US stores rose 9.8% in the second quarter, gross profit fell 3.2%

–          Sales of general products such as toothbrushes and make-up are also under pressure from online rivals such as Amazon

 

IMF Lagarde highlights risks to global economy – Pg. 2

–          …most countries would be unable to offset a downturn with lower interest rates and would instead need to make “smarter use” of fiscal policies in future

–          …high public debt and low interest rates have left limited room to act when the next downturn comes….

–          The fiscal policy response the IMIF is recommending is to fix deficits and debt now so that governments have the ability to take a more active approach to tax cuts or public spending increases to combat recessionary forces

 

WTO warns of ‘strong headwinds’ amid trade tensions – Pg. 2

–          …”strong headwinds” over the next two years as it reported that commercial tensions, a slowdown in major economies and financial volatility triggered a sharp drop in trade growth last year

–          …global trade grew 3% in 2018 – compared with a forecast of 3.9% last September

–          The pace of growth of world trade was as high as 4.6% in 2017 – but that may have been the high-water mark

 

Pelosi gives guarded support to Biden over touching claims – Pg. 3

–          The Speaker also gave a veiled critique of Mr Biden’s apologies, suggesting he should say sorry for invading any accuser’s personal space rather than the fact that his accuser took offence (Prof Note: That is just idiot!  Never blame the alleged victim when guilt of the act is NOT in question!)

–          The reaction to the new allegations against him has exposed a generational divide within the party.  Many older Democrats have come to Mr Biden’s defence, even as others called out his behavior as inappropriate, a sign of the new standard for male behavior after the advent of the #MeToo movement (Prof Note: Why is there a need to touch people in professional settings?!  I cannot stand when salespeople touch me in, what I consider, a “leading” way to make a sale or curry favour.  Touching, in a professional setting, in any form, breaks a seal and greys the line of forward acceptance.)

 

Manhattan apartment sales fall while average price rises – Pg. 3

–          The number of sales was down 11%….

–          The median price of apartments in Manhattan, depending on the report, ranged from down 2% to up 3.2% from a year earlier

–          The number of sales of apartments in new developments fell 39.4%, …

–          The average sales price of new developers rose 89.4% to $7.6m, but that reflected Mr Griffin’s purchase of an apartment overlooking Central Park, adding to this extensive portfolio of prime properties in the US and Europe

–          President Donald Trump’s tax reform law, which reduced the amount of mortgage interest buyers could deduct, also had a negative effect on property sales

–          A new mansion tax, which introduces a one-time levy on purchases of New York City apartments that sell for at least $1m, could stymie the market further

 

Curve Ball Yield projections are losing their predictive power – Pg. 11

–          The US yield curve has long been seen as a reliable indicator of trouble ahead.  If long-term government bond yields fall to the point where they are below much shorter-term instruments – the classic “inverted curve” – people reason that growth is grinding to a halt and a recession must be around the corner

 

US shopping centre vacancies at eight-year high – Pg. 12

–          Vacancies at US shopping centres have hit the highest level in eight years as the ecommerce revolution and recent collapse of debt-laden private equity-backed chains begin to ripple through the commercial property market

–          …9.3% of units in shopping malls lay empty at the end of March – …

–          Landlords are still demanding 8% higher rents in regional malls than they were five years ago

–          US retailers have set out plans to close 5,480 stores…almost as many as the 5,730 announced in all of 2018

 

Answer: Not having enough $$$ to get by