Tag: Prof Note

14 March 2019

 

Question: According to MSN: Lifestyle, what is the single most important question you should always ask in an interview?

 

Financiers and actors accused of using bribery to get children into Ivey League – Pg. 1 (this article is from 13 March 2019)

• Wealthy parents collectively paid tens of millions of dollars to buy places for their children at elite universities…
• The company coached students to claim medical disabilities, allowing them extra time to take entrance tests, … (Prof Note: This disgusts me beyond words! I have worked with many students over the decades that had medical disabilities requiring them to need more time.  All, to my knowledge, were legitimate.  One was an Iraqi war veteran with use of only one arm taking a timed computer examination in my class and was heart broken when he had to ask me to allow him more time.  How the parents and the students could do this sickens me!)
• It charged up to $75,000 for such services and advised parents to claim their children were travelling for weddings or bar mitzvahs so they could sit exams in its facilities (Prof Note: I had one student that was always “traveling” and needed exceptions to take examinations by themselves. When the final came they were allegedly in California and asked if they could take it in the office of a University of Phoenix professor.  I was about to grant the request when an administrator caught the tag line on the email where the “professor” has misspelled “Phoenix”.  That was the end of that accommodation!  I required the student to fly back and take the examination or earn an “F”.  Suddenly the student had wings and could fly!)
• Another ploy involved bribing university coaches and administrators to designate applicants as athletes, improving their chances of admission

 

UK clearing houses face threat of pressure to move to EU – Pg. 1

• The EU has given itself powers that could ultimately press one of the City of London’s flagship businesses to move to the bloc as part of efforts to ensure financial stability after Brexit
• Regulators see clearing houses as a critical part of the financial infrastructure, since they act as central counter-parties between sellers and buyers of shares or derivatives
• London dominates the market for clearing euro-denominated trades, handling the vast majority of interest rate, commodity and credit contracts with a notional value of 660tn (euro)
• The measures agreed in Brussels would require clearing houses to stick closely to EU capital requirements and other core regulations if they wanted to continue handing large volumes of euro-denominated trades for EU customers
• Clearning houses would also have to co-operate closely with European supervisors and central banks, including the European Securities and Markets Authority, an EU agency based in Paris
• The new rules are a response to the prospect of the City falling out of the EU’s regulatory orbit after Brexit, and reflect complaints that LCH aggravated the eurozone’s sovereign debt crisis in 2011 by raising its margin requirements – the amount of capital that its users had to set aside to cover potential failed trades – on debt for Spain and Italy

 

Spotlight falls on wealthy US parents who pay to ‘get their kids into school’ – Pg. 5

• US college admissions are supposed to be merit-based, but it has always had its set-aside places for children of alumni and those willing to pay via donations
• Colleges and universities involved included Yale University, Stanford University, University of Texas, University of Southern California, University of California Los Angeles, Georgetown, and Wake Forest
• He [Daniel Golden] claimed that President Donald Trump’s son-in-law Jared Kushner was accepted by Harvard after his father Charles donated $2.5m to the university

 

China’s women spurn call to have more children – Pg. 6

• The number of births in China fell by 2m last year to 15.2m – the second consecutive year of decline since China repealed its controversial “one child” policy in 2015
• The nation’s population expanded by 0.38% last year – a rate comparable with western European countries
• …Beijing estimates it will peak in 2029 at about 1.44bn, before declining
• The number of people aged over 60 will reach 479m, or about one-third of the population in 2050, up from about 16% today, …
• An ageing population has been associated with falling growth rates in most countries, notably Japan and western Europe, and means that a greater portion of economic activity will be devoted to elderly care compared with productivity-enhancing investment
• China also has room to boost output by raising the retirement age from the current years for men and 55 for women
• Fertility rates were falling even before the one-child policy was imposed, demographers say, as women became better educated and more entered the workforce

 

Central banks – Pg. 9

• As a result of last week’s U-turn, the ECB is now committed to keeping its record-low interest rates on hold “at least” until the end of 2019. It also expects to continue reinvesting the proceeds of the 2.6tn (euro) of bonds bought under QE as they mature “for an extended period of time” and has made a fresh offer of cheaper longer-term loans

 

Wall Street strives to clean up credit default swaps industry – Pg. 21

• …CDS market, which at its peak in 2007 had more than $60tn of contracts outstanding…
• …unusual step taken by the CFTC last year of criticizing manufactured defaults…

 

Answer: “Do you mind telling me why this position is open?” (Prof Note: I do not agree with this at all and just went through this discussion with a former student and now peer.  My advice was to ask about reduction, if any, numbers due to the 2007-09 recession.  How the reduced individuals were treated and the type of exit package.)

12 March 2019

 

Question: According to Business Insider on MSN: Money, what are five (5) status symbols the rich are investing in?

 

Industrial output fall fuels Berlin woes – Pg. 3

–          A sharp drop in German industrial production has added to fears that the country’s manufacturing slowdown has extended into 2019 and will weight on the Eurozone economy

–          Industrial output fell 0.8% in January, ….

–          Germany, the eurozone’s largest economy, avoided recession during the second half of last year by the slimmest of margins.  It registered zero growth in the fourth quarter after shrinking 0.2% over the previous three-month period.

–          The Eurozone economy weakened sharply in the second half of 2018 and a stream of disappointing data led the ECB last eek to commit to a fresh round of cheap funding for the region’s banks

 

At 30, the web has fallen under the influence of a bad crowd – Pg. 9

–          …over the past decade the web has increasingly fallen under the influence of a bad crowd as authoritarian states, giant companies and criminals have colonized vast tracts of digital space.  Cyber crime, electoral hacking and behavioural manipulation have exploded on the web, degrading our societies and democracies.

–          …we desperately need to devote more effort to understand better the myriad ways in which the web is affecting our lives (Prof Note: Over the past two weeks I have had guests.  Both from academia.  We spent the evenings drinking high-end hooch by the fireplace never once looking at our phones.  It was WONDERFUL!)

–          …improving our watchfulness

 

London commercial property starts to feel Brexit chill – Pg. 18

–          Investment into real estate in the City of London, the capital’s historical financial centre, was down 17% year-on-year in the last quarter of 2018, ….

–          Many recent deals have involved Asian capital…

–          The possibility of the UK leaving the EU without a deal is also a worry

 

Answer: (1) Education (Prof Note: I once worked with a former student that was using an admission consultant, cost: $3,000 – $5,000 ten years ago, for admission to an Ivy.  I was blown away at how much that consultant improved my recommendation letter.  It helps when you can afford the best!  Of course, if you want to go to Georgetown, bribe a coach! (Is it too early discuss this?! J)); (2) Health and wellness; (3) Travel; (4) Security and privacy; (5) Exclusivity and customization

11 March 2019

 

Question: According to MSN: Money, what are 30 money mistakes you are probably making and how to avoid them?

 

UK lenders told to triple liquid asset levels as buffer against Brexit turmoil – Pg. 1

–          Some lenders much now hold enough liquid assets to withstand a severe stress – when banks stop lending to each other – of 100 days rather than the normal 30, under rules brought in late last year by the BoE’s Prudential Regulation Authority, …

–          Banks are also being forced to model their balance sheets on the assumption that they will not be able to swap sterling for dollars, on the basis that some were shut out of being able to exchange currencies for several days during the financial crisis

–          Experts predicted that the tough PRA requirements intended to force banks to hoard easy-to-sell assets will be eased nearer March 29 if the likelihood of a no-deal Brexit increases so lenders can draw upon reserves they have amassed

 

Norway’s investment cull leaves oil majors shaken but not yet stirred – Pg. 8

–          With $1tn under management, the Norwegian oil fund is the world’s biggest sovereign investor, owning equity stakes between 1 and 2.5% in all the supermajors

–          On Friday it said it would divest from smaller exploration and production companies as a means of diversifying Norway’s oil-rich economy’s exposure to the economy

–          …while the largest integrated companies were granted a reprieve, justified by vast refining and trading capabilities that could insulate them should the long-term future of oil demand growth threaten crude prices, Norway has also made clear it expects them to do more

 

Answer: (1) Dining out too much (Prof Note: I had lunch with my good mate Anton S. yesterday, Saturday, and the bill was $64 with no alcohol including tip); (2) Not returning or exchanging unwanted purchases (Prof Not: I am headed to Lowes this afternoon to return unused product for a renovation); (3) Taking a vacation you cannot afford (Prof Note: I hear so many stories of angry people at the Four Seasons Nevis.  Most I attribute to the cost and their inability to easily afford the pricetag); (4) Paying too much in banking fees (Prof Note: Ask my bank…my favourite quote: “Fees are theft, interest is a cost of doing business!”); (5) Paying for subscriptions you do not use (Prof Note: I am considering reducing my credit cards to address this very issue); (6) Making ill-timed splurges; (7) Overspending in general; (8) Overspending on gifts; (9) Going house poor (Prof Note:Nearly 12m US households spend more than half their income on rent); (10) Carrying a credit card balance; (11) Neglecting retirement; (12) Playing it too safe in the long term; (13) Letting emotion undermine investment decisions; (14) Not having a Will (Prof Note: My entire family was murdered due to their poor estate planning!  Having a Will and a proper estate plan is literally a matter of life or death); (15) Lacking insurance, or lacking enough; (16) Not having an emergency fund; (17) Over-reliance on benefit programmes; (18) Not paying down debt (Prof Note: Remember there is good and bad debt); (19) Not taking required minimum distributions; (20) spending for rewards; (21) Not haggling (Prof Note: Never hurts to ask!); (22) Having only one job (Prof Note: The side hustle is critical!  At least always have the ability to hustle on the side!); (23) Falling behind on payments; (24) Using credit cards for everyday expenses (Prof Note: I actually do not agree with this at all.  Rack up the most reward points possible but always be fiscally disciplined); (25) Borrow money from friends and family (Prof Note: First source of funding for first-time deal-makers is F&F money); (26) Quitting your job without a plan (Prof Note: Mental health is important.  I am a believer that if you are that miserable…QUIT!); (27) Stay at a dead end job; (28) Not setting a budget; (29) Never setting financial goals; (30) Neglecting to set up a financial plan

8 March 2019

 

Question: According to MSN: Money, what is the age when most people claim social security – and when does one receive the most/year from social security?

 

ECB performs stimulus U-Turn to head off economic headwinds – Pg. 1

–          The decision to make a fresh offer of cheap loans to eurozone banks, which was coupled with a signal it would keep interest rates at historic lows until next year, put the ECB in the camp of central banks that have made U-turns in recent weeks in the face of mounting risks to the global economy

–          …severely downgraded projections for Eurozone GDP growth this year to 1.1% from a forecast of 1.7% just three months ago

–          Rather than buoy markets, however, the promise of more cheap funding appeared to spook investors, who pointed particularly to ECB President Mario Drahi’s warning that the Eurozone was “in a period of continued weakness and pervasive uncertainty”

–          The Cheap loans to banks, dubbed Targeted Longer-Term Refinancing Operations, would see the ECB hold a series of auctions of multiyear loans at low rates to stave off a collapse in lending – the first time it has reopened the programme in nearly three years

 

Watchdog turns up heat on leveraged loan industry as high risk debt soars – Pg. 1

–          Scrutiny of the $1.4tn leveraged loan market has intensified after an international watchdog launched an examination into potential problems caused by growing levels of higher risk corporate debt

 

China economy 12% smaller than claimed, report alleges – Pg. 4

–          Even on official data, China’s economy last year grew at its slowest since 1990, at 6.6%

–          For years, the sum of China’s provincial GDP has exceeded the national figure, a clear sign of inflation at the local level

–          The research concluded that official data overstated growth of nominal GDP by an average of 1.7% per year between 2008 and 2016, which made the economy 12% smaller in 2016 than official figures indicated

–          In real terms, GDP growth was overstated by 2% in the same period

 

Answer: 62 is the most popular age for claiming social security (Prof Note: Read the Marshmallow Test!).  70 (While full retirement age is 66/67, birth age dependent, waiting until 70 provides a “delayed retirement credit” bringing the amount to 124% of what would have been received at full retirement.)