Tag: Prof Note

1 March 2019

 

Question: According to MSN: Lifestyle, what are eleven (11) ways to tell if a wine is actually really good?

 

Cohen decides it’s open season against old boss – Pg. 3

–          Mr Cohen provided documents to back his claims, pointed to possible corroborating witnesses and hinted about a hitherto unknown investigation by federal prosecutors in Manhattan (Prof Note: My comments are apolitical…the larger issue here, for me, is attorney/client privilege.  Cohen taped conversations; is providing documents; etc.  I fear the greater issue is the breakdown of attorney/client privilege.)

 

US growth begins to weaken in fourth quarter – Pg. 3

–          The US economic rebound lost some of its vigour in the final months of 2018 after consumers reined in spending growth and residential investment shrank for the fourth quarter in a row

–          GDP rose at an annualized pace of 2.6% in the fourth quarter – a solid reading but slower than the 3.4% and 4.2% clocked in the previous two.  The full-year growth rate of 2.9% undershot the 3% target touted…

–          Consumer spending, accounting for about two-thirds of the economy, grew at an annual rate of 2.8% in the fourth quarter, compared with 3.5% in the third and the 3% analyst had forecast

–          Residential investment shrank at a 3.5% pace in the final quarter of 2018

–          The housing market..was held being held back by affordability problems and the impact of past interest rate increases

 

Leveraged loan managers cut fees to pep up business – Pg. 19

–          Managers of leveraged loan vehicles are cutting fees in an attempt to get new deals over the line, as the market struggles to rebound from a sharp selloff at the end of last year

–          Some of the largest managers of so-called collateralized loan obligations, which bundle leveraged loans together that are backed by slices of debt and equity, said they had found raising investor capital more challenging, even if they had not had to offer discounts

–          The market for leveraged loans – issued to low-rated or heavily indebted companies across the US – has struggled to regain its footing after a downturn in prices in December when investors began to fret about the outlook for the global economy

–          CLOs work by passing repayment on risky loans through to bond and equity investors.  Equity investors, who stand first in line to take losses if the underlying loans default, receive any cash left over after paying bondholders.  They are also responsible for paying management fees to CLO structurers such as Barings

 

Answer: (1) What does the bottle look like?; (2) Where does the wine come from?; (3) How does the cork smell?; (4) How does the wine look in the glass?; (5) Does it smell bad?; (6) Does it smell good?; (7) How’s the mouthfeel?; (8) How does it taste?; (9) Is it well balanced?; (10) How much does it cost?; (11) Do you like it? (Prof Note: I cannot stand being given a wine “book” at a restaurant. I do not know what is good, I can barely tell the differences between the different types AND I prefer to spend my $$$ on other things, e.g. travel, than understanding wine.  If that is your thing, great, but I am so thankful for age now and the ability to say, “I will have Scotch.  Gets me where I want to go more quickly and efficiently and effectively!”  Also, Scotch does not change from year-to-year…)

28 February 2019

 

Question: According to MSN: Money, what 18 things should you do if you want to retire early?

 

Cohen declares Trump a racist, cheat and conman in testimony – Pg. 1

–          (Prof Note: Am I the only one that sees the real crime here, in my opinion?!  That one’s lawyer is turning on his/her client publically?  Personally, I have always considered attorney/client privilege sacrosanct.  Has the U.S. Congress completely obliterated attorney/client privilege?  Personally, I considered this more important than HIPAA, religious law, etc.  How is this even happening?  How is Congress allowing it to happen?  What is next, public display of medical records???)

 

Eurozone slowdown helps keep Draghi’s dissenters in line – Pg. 1

–          The bank’s guidance so far has been that it will keep interest rates on hold “at least” through the summer – but officials, including the hawks, are sounding increasingly comfortable with market expectations that rates will stay on hold until the middle of 2020

–          What first appeared to be a temporary blip in growth risks becoming more prolonged.  The Eurozone expanded in the fourth quarter by just 0.2%, its lowest level in four years, and signs so far this year are that the economy will remain sluggish

 

China – Pg. 9

–          Chinese consumers spent $4.7tn in 2017 on everything from pet care to cinema tickes and cars….

–          Consumption levels have risen since the 1970s as the economy expanded

–          …share of consumption in China’s GDP increasing to 54% in 2017 – from less than half in 2011

–          Consumption growth has outpaced exports and investment for the first time since the 1980s, with consumption of goods and services accounting for 76% of new economic activity in China last year, up from 47% in 2013

–          With its housing and industrial sectors mired by overcapacity, greater production of consumer goods and services should provide a more sustainable basis for economic growth in China

–          Median individual disposable income grew more than 9% annually between 2011 and 2017, …

–          As of 2015, the top 10% of Chinese owned more than 65% of household wealth, with the bottom 50% owning less than 10%

–          The IMF has warned about the shortfall between household income and consumption, seeing room for growth

 

Libor’s death is a ‘Defcon 1’ litigation bonanza for lawyers – Pg. 22

–          At issue is Libor, the benchmark borrowing rate that is embedded in everything from floating rate debt to derivatives and mortgages.  The rate touches the most sophisticated hedge funds and the average homeowner.  But the order has come down from on high: Libor must die

–          …likely replacements for Libor, a so-called “term” instrument that locks in prices for three or six months at a time, are generally overnight rates.  This is an effort to cram square pegs into round holes

 

Answer: (1) Define what retirement means to you; (2)  Increase your current career worth; (3) Live below your means; (4) Start a side hustle and invest the money; (5) Understand the numbers (Prof Note: you need to know what it will take to support the lifestyle desired); (6) Start cutting expenses now; (7) Start building passive income streams; (8) Buy rental properties; (9) Pay off your mortgage early; (10) Get rid of debt; (11) Enroll in an employee-sponsored 401(k) plan; (12) Enroll in a DRIP; (13) Move somewhere cheaper; (14) Reduce transportation costs; (15) Eat right and exercise; (16) See new money as found money; (17) save, Save, SAVE; (18) Follow FIRE blogs

27 February 2019

 

Question: According to MSN: Lifestyle, what are three (3) times it is OK to quit your job without another one lined up?

 

Powell flags up Fed’s concerns on slowing growth and Brexit – Pg. 2

–          Slowing growth in Europe and China and “elevated” uncertainty over Brexit and trade are continuing to weight on the Federal Reserve’s policy outlook, …even as he gave a broadly favourable health check to the US economy

–          ….central bank’s “patient” approach to interest rate changes, …

–          “Financial markets became more volatile towards year-end, and financial conditions are now less supportive of growth than they were earlier last year”

–          Mr Powell said some economic data had “softened” in the past two months, on the same morning that data showed a sharp decline in residential housing starts in December, as well as a deceleration in home-price growth (Prof Note: Can you say, “Fourth Quarter 2006”?)

 

Push to change brings uptick in female CEOs – Pg. 17

–          A lack of portfolio management expertise is sometimes blamed as a factor in holding women back from rising too high within investment companies.  Less than 5% of investment funds are run by female managers (Prof Note: I find it difficult to comprehend that so few women lack the management expertise.)

 

Short sellers betting on more Amazon pain for US retail – Pg. 21

–          …some of the biggest companies in the sector such as Walmart are reporting their healthiest metrics in years

–          Fears that the relentless growth of Amazon would obliterate much of the sector reached fever pitch in the summer of 2017…

–          Traditional chains are also trying to take on Amazon by improving their online offerings and making their stores more enticing.  Both require hefty investment…

–          (Prof Note: My personal experience with Amazon is getting to be frustration.  I cannot find what I want as there is so much.  I can go on Target’s website, find what I want, place in my cart, and pay for it with my Target card.  I strategically place the order when I know I will be driving by so there is no “shipping”.)

 

Answer: (1) Do you have no autonomy over your schedule?; (2) Is everyone going to know you are job hunting anyway?; (3) Is your current gig so soul-sucking it is killing your motivation?

23 February 2019

 

Question: According to MSN: Money, what are six (6) unexpected tax breaks you can claim on your tax return?

 

Weak inflation haunts Fed policies – Pg. 1

–          Risks posed by chronically low inflation rates that have dogged developed economies since the financial crisis need to be confronted by central bankers,…

–          …soft inflation could damage the Fed’s ability to convince the general public it will hit its 2% goal and keep the economy on a solid path

–          The failure of the world’s largest economies to see a rise in prices in rcent years has befuddled economists and policymakers

–          The Fed’s favoured inflation  measures have averaged just 1.5% during the current expansion

–          With the US recovery 10 years old and unemployment near half-century lows, traditional models suggest that inflation should be surging

 

Billionaire owner of Super Bowl winners charged with soliciting prostitutes – Pg. 1

–          Mr Kraft was charged along with two dozen other men as part of a months-long investigation by the Jupiter, Florida police department into prostitution and human trafficking in the area

–          Mr Kraft, 77, is a pillar of Boston’s business and philanthropic communities and a longtime friend of Mr Trump, whom he credited with helping him through the loss of his wife to cancer

–          The owner of the Patriots, the most successful American football franchise of the past 20 years, also has an unlikely connection to Vladimir Putin, Russia’s president: during a meeting in 2005, Mr Kraft showed the Russian leader his $25,000 Super Bowl ring.  Mr Putin then pocketed it as a “gift”, creating an award diplomatic situation

–          (Prof Note: While this is, most likely, an unpopular view, I say legalize prostitution.  Regulate and tax the industry.  Just like drugs, take human behavior from the shadows and make it safer through regulation and tax the industry.)

 

Fed ways it will hold larger balance sheet in long term – Pg. 13

–          The report underlines the more dovish stance taken recently by the Fed, which last month decided to keep interest rates on hold and signaled an end to its efforts to reduce its balance sheet

–          “The longer run size of the Federal Reserve’s balance sheet will be considerably larger than before the crisis”

–          It added that the Fed’s liabilities remain low as a proportion of GDP when compared with those of other central banks, such as the ECB, the BoE and the BoJ

–          The balance sheet rose from $900bn at the end of 2006 – 6% of GDP – to about $4.5tn at the end of 2014 – 25% of GDP

–          Since October 2017, the central bank has been attempting to “normalize” its balance sheet by reducing its holdings of Treasury securities and mortgage backed securities – a process that has triggered sell-offs in global stock markets

–          The Fed also warned yesterday that, while employment in US towns and cities had rebounded above pre-crisis levels, employment in rural areas lagged behind, suggesting the jobs recovery might still have room to run

 

Answer: (1) Charity work deduction; (2) Gambling losses deduction; (3) Jury duty pay deduction; (4) Guard dog deduction; (5) College tuition and fees deduction; (6) Retirement account savings credit