Tag: Prof Note

28 August 2019

 

Question: According to MSN: Money, what percentage of married couples in Baltimore earn over $100k and what is there monthly disposable income?

 

Ex-Fed chief asks central bank to think about Trump ‘threat’ – Pg. 3

• The Federal Reserve was forced to reassert that “political considerations play absolutely no role” in policymaking after the former head of the New York Fed urged the central bank to consider Donald Trump’s re-election prospects in setting rates
• Mr Dudley also wrote that they should “refuse” to dole out stimulus to cushion the damaging effects of Mr Trump’s trade war
• “The Federal Reserve’s policy decisions are guided solely by its congressional mandate to maintain price stability and maximum employment,” the spokesman said. “Political considerations play absolutely no role.”
• He also urged officials to consider how their decisions could affected the outcome of next year’s presidential election
• “Trump’s re-election arguably presents a threat to the US and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives,” Mr Dudley wrote in his column. “If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020,” he concluded (Prof Note: This is important to note, i.e. questions about independence regarding the U.S. Central Bank)
• Traders are currently pricing in a 93% chance the Fed will cut its benchmark interest rate by 25bps in September, with the odds of a more aggressive 50bps cut much smaller, at 6%

 

Greek yields it record low after capital controls move – Pg. 17

• Investors are flocking to Greece as the former financial pariah emerges from a decade of economic crisis, sending stock prices soaring and borrowing costs tumbling
• …capital controls imposed following a 2015 bank run will be fully lifted on September 1, meaning Greek households and companies will no longer face restrictions on transferring money abroad
• Ten-year government bond yields dropped as much as 14bps yesterday to 1.826%, their lowest level on record, bringing total falls for the year to 250bp
• The sharp moves are part of a broader rally in Eurozone debt which has pushed yields on a large part of the eurozone’s sovereign debt market below zero
• Greek stocks are also surging. The Athex composite index has risen 35% this year, leaving it on track for its best year since 1999 and outgunning the 10% gain of Europe’s benchmark

 

Answer: 58.6% and $174/mo

6 August 2019

 

Question: According to MSN: Money, what are forty (40) things you should know about a home by age 40?

 

China allows currency to weaken in escalation of trade war with US – Pg. 1

• Global equities took another battering yesterday after China allowed its currency to weaken below a key threshold, in a marked escalation of its trade war with the US that also triggered in a rally in bonds as investors fled for safety
• The S&P 500 was down 2.7%….
• The demand for US government bonds, where investors typically flee in times of trouble, saw the difference between the yields on 3-month and 10-year Treasuries fall to their most negative since April 2007. The inversion of this so-called yield curve has preceded every US recession of the past 50 years (Prof Note: Take Note!!!)

 

China deals blow to US farmers and halts purchase – Pg. 2

• Beijing has told its state-owned enterprises to halt US agricultural goods purchases in a fresh blow to US farmers and traders….
• Agricultural products, especially soyabeans, have been at the centre of the escalating US-China trade war, with the US insisting China must make substantial purchases of the crop as part of any trade deal
• The US delivered just 5.3m tonnes of soyabeans to China in the first five month of this year, against 15.2m tonnes in the first five months of 2018
• Beijing’s new measures are in addition to the 25% tariffs on soyabeans and many other US agricultural goods it imposes in July last year. Since the tariffs were implemented, US soyabean prices, which were trading at around $10 a bushel in early 2018, have fallen 15% to $8.50
• As a substitute for soyabeans from the US, the Chinese commerce ministry last week said it would seek to “expand soyabean imports from Russia”

 

Can a genderless language change the way we think about equality? – Pg. 8

• …Turkish: the absence of grammatical gender (Prof Note: Did not know this! Go Turkey!)
• Turkish has just one word – the simple “O” – to mean he, she or it. Verbs are not gendered.  Nor are nouns such as “teacher” or “actor”.
• When someone talks about an unnamed friend, it is possible to listen to an extended discussion without knowing if they are female or male
• …Turkey has the lowest rate of female workforce participation in the OECD, and patriarchal structures run deep
• There seems little evidence to show that removing bias from language has a meaningful impact (Prof Note: I have been fascinated by language and association. Should we call a per”son” a “perper”?  A “Chairman” a “ChairChair”?  Then there is the issue of names.  Should we go to random number selection, especially for resumes?)

 

Baht’s ascent flies in the face of slowing Thai economy – Pg. 17

• Thailand’s economy is slowing, arrivals for its core tourism industry have hit a plateau, and a draught is hurting a farming sector that employs millions – but the baht is buoyant
• Foreign portfolio money is flowing into Thailand, …because of the kingdom’s healthy current account surplus, an election in March that laid to rest investors’ worst fears about political risk and the Bank of Thailand’s hawkish stance on interest rates
• Thai assets are yielding healthy returns relative to the rate at which investors can borrow money elsewhere, at a time when many central banks are easing, with the most recent example being the US Federal Reserve, which cut rates last week
• The soaring baht is a paradox and a burden for an economy not performing at its best. The resultant drag on competitiveness could further fuel the slowdown in south-east Asia’s second-largest economy
• The BoT’s single rate rise in December gave it far less leeway to ease than the US Fed, which before last week’s cut had tightened nine times since 2015

 

Answer: (1) How to flush the toilet when the power’s out (Prof Note: I have a 3.5 gallon tank.  I have 12 gallons of water on hand for just such an emergency!); (2) Deal with drainage (Prof Note: Drainage is no joke and not doing it correctly may be a crime!); (3) Understanding electrical (Prof Note: Be certain you know the location of the breaker box and that it is accessible); (4) Test the sump pump (Prof Note: Avoid, if possible, houses with sump pumps); (5) Clean dryer vents (Prof Note: Careful as these can cause a fire); (6) How to stop under-the-door air leaks; (7) How to fix a loose doorknob; (8) How to sharpen lawnmower blades; (9) Touch-up without clean up; (10) Suck out drain clogs (Prof Note: Love my Dewalt cleaner); (11) Sizing a ceiling fan (Prof Note: No idea!); (12) Tennis Ball parking guide; (13) How to seal outlets and ceiling boxes; (14) How to fix leaks and drips (Prof Note: Hello YouTube!); (15) How to change locks; (16) Paint like a pro; (17) How to fix a running toilet; (18) How to fix squeaky floors; (19) How to fix a crack in drywall; (20) How to fix cracked grout; (21) How to fix an unbalanced washing machine (Prof Note: Hello YouTube); (22) How to fix common refrigerator problems; (23) How to fix a water heater pilot light; (24) HVAC (Prof Note: Replace those filters); (25) Garbage Disposal (Prof Note: Stop using it!); (26) Light switches; (27) Decks; (28) Fix windows; (29) How to replace a toilet; (30) Foam a loose showerhead; (31) Solution for a small leak; (32) Lubricate a lock with a pencil; (33) Fix a broken light fixture; (34) Fix a shutoff valve; (35) Air filter; (36) Clothes Dryer repair guide; (37) Restore free flow to a faucet; (38) How to adjust oven temperatures; (39) Electric stove repair; (40) How to remove carpet yourself

3 August 2019

 

Question: According to MSN: Money, what are thirty (30) truths retirees wish they had known beforehand?

 

Trump’s escalation of trade war drives investors to seek safety – Pg. 1

• ….sell-off in equities and a flight to government debt, even as jobs data offered reassurance about the US labour market
• The swoon in leading financial indices was driven by the US president’s announcement on Thursday that he would impose 10% tariffs on a further $300bn of Chinese goods in early September. Beijing vowed to retaliate with “necessary countermeasures”
• The yield on 30-year German government bonds plummeted into negative territory for the first time in history, briefly pushing the country’s entire government bond market below 0%, meaning investors seeking safety were prepared to face a guaranteed loss when holding the debt to maturity

 

Europe faces ‘hair-trigger instability’ after US quits Russia nuclear arms pact – Pg. 1

• The US has withdrawn from a 1987 nuclear arms control treaty with Russia after Moscow refused to destroy an intermediate-range missile that Washington and its Nato allies said violated the cold war-era pact
• The US spent six years urging Russia to return to compliance with the INF…

 

State Assets: Italy cashes in on historic properties – Pg. 3

• Rome is cashing in on its portfolio of state-owned assets by holding a fire sale of historic properties, from disused army barracks to forts, monasteries and lighthouses
• In addition to the revenues, the sales will reduce maintenance costs and prevent beautiful but redundant properties from slipping into decay….

 

Trump duties pile pressures on Fed over rates – Pg. 4

• For Mr Powell, the tariff threat by the White House could serve as validation of the Fed’s rationale for pursuing interest rate cuts in the first place, which is primarily based on neutralizing the risks from trade unrest and global economic weakness
• It will also raise the possibility of the US central bank getting dragged into a much deeper monetary easing cycle because of the economic damage looking from Mr Trump’s trade policies, rather than the milder, preventive “mid-cycle adjustment” to interest rates it is intending
• The Fed Chairman warned there had already been some impact on the US economy, which has posted weaker manufacturing and investment data

 

Central banks should consider giving people money – Pg. 7

• With interest rates currently positive, the US looks like an anomaly. In the Eurozone Switzerland, Japan and Scandinavia, official interest rates are negative.  Considering the fact that in past recession the Fed has reduced interest rates by four to five percentage points, this prospect may not be far away from the US, too
• Forward guidance aims to keep interest rates low for longer, and QE is an attempt to use assets purchases to reduce the interest rate on government debt, which is a reference point for long-term borrowing by the private sector. Either way the problem is the same.  When interest rates are already this low, further reductions are ineffective
• So where next for monetary policy? One option is to pass the baton to the fiscal authorities
• Three novel proposals are gaining support, all of which involve giving people money
• The first, which literally involves central banks posting cheques to households
• The Australian government sent households money during the financial crisis, and Australia avoided recession
• Another policy, already being practiced by the BoJ…is that central banks consider giving money to the owners of the stock market by buying equities
• The most intriquing and practically viable idea of all is emerging from the least likely sources, the ECB: so-called targeted long-term refinancing operations. In straightforward terms, that is the policy of dual interest rates which involves giving money to both borrowers and savers (Prof Note: Sounds a bit like a bid-ask spread)
• In contrast to the other monetary innovations adopted since the crisis, dual interest rates are almost certain to raise spending and economic activity. How do they work?  In any economy, there are two interest rates that really matter to households: the interest rate at which they borrow and the rate they are paid on savings.  One of the problems with reducing interest rates, and with negative interest rates in particular, is that households suffer a decline in interest income on savings

 

One child families are becoming the norm – Pg. 7

• In 1964 the average woman had just over 5 children; by 2015 she had only 2.5. There are now 83 countries, home to nearly half the world’s population, with fertility rates below replacement rate (roughly 2.1 births per woman)
• ….the birth rate in England and Wales in 2018 fell to 11.1 live births per 1,000 members of the population, the lowest rate since records began in 1938
• There is also the tragic problem that some women who really want children can’t find anyone who will commit
• As we live longer, our desire to study for longer, pay off debt and settle down later is coming up against the hard deadline of the biological clock – with painful consequences
• Worries about affordability also play a big role

 

Answer: (1) There are no guarantees for your retirement investments; (2) You may not have saved enough as a young person; (3) It costs more to live longer; (4) You will make more from social security if you wait; (5) Tax planning is complicated; (6) You need to consider health care costs; (7) You will probably need long-term care; (8) inflation will eat your savings; (9) You cannot borrow for retirement; (10) You should he contributed to your employer-sponsored plan; (11) Your house is too big; (12) You should have bought property; (13) You might have to work part-time; (14) Your children might not be financially independent; (15) Your parents might still require your assistance; (16) You will have to think about what comes after death; (17) It is hard to pay off debt in retirement; (18) You might not be able to afford the retirement you want; (19) Staying healthy will save you money in retirement; (20) You should have diversified your investments; (21) You might have to follow your family at some point; (22) You should have looked at fees; (23) You could have used catch-up contributions; (24) It gets boring; (25) Unexpected costs can be quite a burden; (26) You will probably only be able to spend a portion of what you spent before retirement; (27) Divorce is becoming more common among retirees; (28) You could be forced into early retirement; (29) Dividends are not a reliable source of income; (30) It can get lonely

26 July 2019

 

Question: According to MSN: Money, what are fourteen (14) first-time homebuyers mistakes to avoid?

 

Puerto Ricans welcome resignation of governor – Pg. 2

• The scandal broke two weeks ago when the island’s Center for Investigative Journalism released thousands of messages between Mr Roseello and close aids that were sent on Telegram the instant message service
• The texts included misogynistic and anti-gay language and joes about the devastation wrought by Hurricane Maria in 2017
• (Prof Note: Several of my closest mates have told me their children have chosen “alternate lifestyles”. Each time I think they have had trepidation telling me not knowing my reaction.  When I think after the absence in my life of not having these friends in my life it saddens me.  While I pride myself on being very open minded, I encourage others to consider their opinions and the costs associated with those opinions.  Personally, a persons’ choices in life are their business and I hope it makes them, and those around them. happy.  Even if one has opinions regarding lifestyles, consider the effects of expressing them on others.  Just because an individual chooses a path that may not be one’s own chosen path does not make them “bad”, it makes them different.  There is a reason there are 31 flavours at Baskin Robbins.  Funny story, many individuals here may be unaware that that in college and graduate school I was a dancer.  I was actually collegiate champion (Go UMD Bam Jam!).  While my life is traditional, my life would have been less fulfilling without all the coaches that had chosen alternate paths that helped me along the way.  Another fun fact: My latin coach insisted I learn to follow as well as lead.  I spent as much time dancing the “femail role” in practice as I did the male.  His logic, and I agree, was that it would make me a better leader.  I can still remember one man coming into the studio with his two young daughers.  It appeared he wanted to find them a coach (mine was a former Olympic choreographer) an when he saw the two of us dancing, he stood, pondered and left.  I still chuckle.   Think before you express!  Is it really worth having an opinion that can cause pain to so many and can exclude high-quality people from one’s own life?!)

 

Turkey’s new central bank chief oversees biggest rate cut since 2002 – Pg. 3

• Turkey’s central bank slashed its benchmark interest rate yesterday, marking a shift in direction after the sacking of its former governor by President Recep Tayyip Erdogan
• The bank’s monetary policy committee reduced the one-week repo rate from 24% to 19.75%, slicing 4.25% off the cost of funding, the biggest rate cut since the bank shifted to a policy of inflation targeting in 2002
• The lira fell soon after the announcement, then rallied as much as 0.8% against the dollar before reversing most of the gains

 

Junk bond issuers seize chance to stretch out debt – Pg. 19

• Longer term debt and lower borrowing costs. That was the promise made to shareholders by Brazilian meat processing JBS on its first-quarter earnings call a few months ago
• The latest move downwards in global bond yields – fanned by expectations of the first cut in interest rates from the US Federal Reserve for more than a decade – is raising concerns among some investors who fear that monetary policy easing will encourage companies to take on more debt than they can handle
• The consensus among invertors is overwhelming: almost everyone expects the Fed to cut rates next week

 

Answer: (1) Looking for a home before applying for a mortgage (Prof Note: remember to shop for mortgages); (2) Talking to only one lender; (3) Buying more house than you can afford (Prof Note: Decide on paper what you can afford PRIOR to looking.  Yes, something that costs $50,000 more will always be more lovely); (4) Moving too fast (Prof Note: Slow down….you get this wrong and the results can be catastrophic); (5) Draining your savings (Prof Note: You will need cash for the unexpected and there WILL BE the unexpected; (6) Being careless; (7) Fixating on the house over the neighbourhood; (8) Making decisions based on emotion (Prof Note: Now this is just silly); (9) Assuming you need 20% down payment (Prof Note: While there can be lifestyle requirements, 20% is a recommended number to put down); (10) Waiting for the unicorn; (11) Overlooking FHA, VA and USDA loans (Prof Note: Know all your options); (12)  Miscalculating the hidden costs of homeownership (Prof Note: I just decided to redo a porch.  Total estimated price: $15,000.  Mold discovered throughout the house as a result.  Remediation: $5,000+.  Last week A/C central unit literally blew up.  Multizone system: $10,000.  Total estimated price of new porch: $30,000+); (13) Not lining up gift money; (14) Not negotiating a homebuyer rebate (Prof Note: “You miss 100.0% of the shots that are not taken.”)