Tag: Prof Note

3 January 2019

 

Question: According to MSN: Money, what are ten (10) frugal resolutions for the new year?

 

Tesla tumbles as sales figures suggest tough year ahead – Pg. 1

–          Tesla’s charmed run amid recent carnage on Wall Street ended abruptly yesterday, as sales figures and a price cut suggested 2019 was shaping up to be a tougher year for the electric car maker

–          The company’s shares fell sharply after the news, falling more than 7% in NY morning trade, reflecting concerns about the prospects for the Model 3, designed to be the first mass-market electric vehicle

–          Some of that enthusiasm evaporated on the first trading day of the new year as Tesla said it had delivered fewer vehicles in the final three months of 2018 than most analysts expected.  At 90,700, deliveries were more than three times the same period in the year before

–          …ahead of an end-of-year reduction in the tax credit US buyers could claim on their purchases

–          The tax credit was halved to $3,750 from the start of this year

 

Hackers steal 9/11 insurance and legal data – Pg. 13

–          The FBI is investigating the theft of 18,000 insurance and legal documents relating to the September 11 attacks on the World Trade Center by a hacker with a long record of holding companies to ransom…

–          Posting under the name “The Dark Overloard”, the hacker or hackers claimed on New Year’s Eve that they had taken emails and non-disclosure agreements relating to the 9/11 attacks that were sent and received by the insurers Hiscox and Lloyd’s of London and the law firm Blackwell Sanders Pepper Martin, now called Husch Blackwell

–          The Dark Overlord said they would sell the documents for bitcoin, inviting Isis, al-Qaeda and nation states to bid for them online

–          The September 11 attacks cost the insurance industry the equivalent of $45bn in 2017 terms,…

–          Lloyd’s said it had no evidence its systems had been compromised

 

Deal surge in local US television stations raises diversity concern – Pg. 14

–          More than $13bn of local US television networks have changed hands in the past two years as a loosening of Obama-era regulations on station ownership has fueled a frenzy in dealmaking in the sector that controls how most Americans watch their news

–          While social media sites and online news sources have become more popular, television is still the prime source of news for Americans and they prefer local stations to cable channels

–          About 50% of Americans said they consume their news through television, compared with 43% who said they often get news online,… (Prof Note: I am in the 43% category…)

–          Some observers are concerned that as a handful of large players consolidate the local television market, there will be a loss in diversity of the voices reaching US households

–          The buying spree has been hastened by changing US regulations.  The FCC, …in 2017 reinstated arcane channel ownership rules that has been scrapped by the Obama administration – a move that in effect lifted a barrier to companies owning more television stations

 

Answer: (1) Stop impulse buying (Prof Note: One way to do this is to purchase online and pick up at store.  I do this with Target and never truly enter the store.); (2) Put $10 a week toward retirement (Prof Note: You can transfer the money effortlessly online); (3) Pay credit card bills in full; (4) Take your budget seriously (Prof Note: I spent half a day developing the 2019 budget); (5) Commit to living within your means; (6) Take the ‘Uber frugal month’ challenge; (7) Surround yourself with frugal people (Prof Note: I was on the phone, literally for 45 minutes last night and 30 minutes today with a fellow frugaler, i.e. Chander D.  We regularly phone each other complaining about the expenses of life for which we cannot escape!  Find support!); (8) Build an emergency fund (Prof Note: While I agree with this I also believe an emergency needs to be an EMERGENCY.  Better to build other sources of income); (9) Consult your partner and family; (10) Take stock of where your money is going (Prof Note: Kill the autopayments.  You can lose control.  Hand write checks (or do online).  Know where the bleed is located and cauterize!)

2 January 2019

 

Question: According to MSN: Money, what are ten (10) guaranteed ways to retire rich?

 

Central banks’ embrace of blockchain remains too timid – Pg. 9

–          Whatever happens to bitcoin, its underlying technology, called blockchain, could transform the worlds of finance and central banking

–          Unofficial cryptocurrencies are not about to displace central bank currencies.  Moreover, the Fed arguably has little to worry about given the dominance of US financial markets and the dollar in global finance

–          Blockchain is an electronic distributed ledger that can record transactions between two parties efficiently and in verifiable and permanent way.  Each transaction is recorded on multiple electronic ledgers, is visible to anyone with a computer, and cannot be manipulated by any one party

–          Rather than having transactions verified by a central bank or commercial bank, blockchain does so through people power.  Trust comes from the public verification by multiple agents in a network, who must all agree

–          Adopting distributed ledger technology could transform modern financial systems, which are rife with inefficiencies.  Making payments, verifying different stages of a transaction, and ensuring the finality of such transactions remains time-consuming and costly.  Banks charge steep fees to process domestic payments.  International transactions are even worse, with the process taking days and involving a stiff fee

–          Some central banks, such as those of Singapore and Sweden, plan to issue digital versions of their currencies to retain their key role in domestic payment systems

–          The Fed is undertaking a major effort to improve retail and interbank payment systems in the US.  But it remains skeptical about whether digital currencies can contribute to this effort

–          Unlike paper currency, digital cash is potentially cheaper and easier to use, and makes it harder to evade taxes or fuel illicit activities.  Central banks could also use the technology to improve the speed and efficiency of payment systems, rendering it easier to make and verify payments across people, businesses and financial institutions

–          Central banks will need to innovate and adapt to changing financial technologies.  But their biggest asset is the trust that households and businesses have in them.  In finance, people power may go a long way but will not be a substitute for that trust

 

Global investors get ahead of Indian bankruptcy code with financial lifeline – Pg. 12

–          Once a company enters into bankruptcy, it kicks off a tight, 270-day process in which the shareholders are replaced with an external restructuring team.  Creditors and investors must agree on terms for the restructuring by the deadline or the group is liquidated

 

Volatility of 2018 leads to changeable outlook – Pg. 18

–          The 10-year US government bond yield is arguably the most influential interest rate in the world, and the turbulence of 2018 shows that investors are acutely sensitive to its movements….$14tn market….

–          Despite the sharp move down in yields in November and December, which sent the 10-year yield as low as 2.72%, Wall Street analysts on average expect the yield to end 2019 at 3.44%…

–          Equity strategists at Barclays say they see two scenarios.  Their base case is a “last hurrah [for equities] followed by an eventual sell-off as recession hits after two years”, but there is “an alternative scenario where equities have already peaked and will continue drifting down as they have done historically a year before recession starts”

–          The macro risks are multiple and well-known: the Fed stalls the economy by raising rates too high, Beijing and Washington’s temporary trade truce unravels or cooler growth outside the US saps corporate profits

 

Answer: (1) Spend less than earn (Prof Note: Just yesterday I completed my 2019 forecast of revenue less expense, i.e. identifying lifestyle for 2019 and allowable expenditures); (2) Start saving early (Prof Note: the earlier one starts the more “free” money provided through compounding); (3) If you start late, make up for lost time; (4) Don’t leave free money on the table; (5) Minimize your taxes (Prof Note: I discuss this in all my classes, form businesses and maximize expenses and deductions (legally)); (6) Take a little risk; (7) Stay informed about your investments; (8) Break free from the herd; (9) Work longer (Prof Note: Choose work that is rewarding and it will not be “work”); (10) Maximize your income potential

31 December 2018

 

Question: According to MSN: Lifestyle, what are thirty one (31) Good habits you should start on New Year’s Day?

 

China to end the year as world’s worst performing stock market – Pg. 1

–          A trade dispute with the US and a crackdown on shadow banking made China the world’s worst-performing major stock market in 2018, shedding some $2.3tn in value

–          China’s benchmark CSI 300 index will finish the year close to 3,000, down more than 25% form where it started 2018…

–          The staggering drop outpaced other poor performers: Japan’s Nikkei 225 dropped 14%, the US S&P 500 was down 8% and the UK’s FTSE 100 fell 13%

–          Liquidity in the Chinese market tightened this year, following a regulatory crackdown aimed at combating a years-long build-up in leverage in the financial system.  Those reforms have focused largely on so-called shadow banking, which before the clampdown saw lenders channel a significant sum of money to fund managers which then invested it in Chinese stocks

–          China’s slowing economy is also worrying markets – it grew 6.5% in the third quarter, its slowest quarterly figure in almost a decade

 

Fed optimistic despite investor fears for global expansion – Pg. 3

–          World output growth for this year was projected at a healthy 3.7% by the IMF in October…

–          Five advanced economies – Japan, Germany, Italy, Sweden and Switzerland – all experienced contractions in the third quarter of this year…economies affected represent a hefty 15% of the world GDP, …

–          Leading indicators have turned downwards, with the OECD club of mostly rich nations this month noting “easing momentum” across Europe, Canada and now the US.  Growth could be set to slow simultaneously in the US, China, Europe and Japan next year compared with this year

–          …global trade has slowed sharply, down to 2.25% growth compared with a long-term average of 4.5%

–          The Fed has lifted rates nine times in three years and is set on a balance sheet reduction programme that will contract its asset holdings by hundreds of billions of dollars next year.  This will combine with a waning US fiscal stimulus in the second half of next year

–          ….US inflation is quiescent, despite unemployment hovering at half-century lows, meaning the Fed can afford to be patient with policy – and that is a message the central bank is likely to hammer home in the coming weeks

–          While Fed policymakers are projecting slower growth in 2019 than this year, their latest median projection is for 2.3% next year – stronger than the economy’s longer-term trend.  Unemployment could carry on falling, if they are right, to bottom out at just 3.5%, down from 3.7% now and the lowest in half a century

 

Making sense of divisive trends – Pg. 5

–          Conventional wisdom holds that internet speeds in rural areas are much slower than in towns and cities (Prof Note: Why can I get an internet connection on Nevis and NOT southern Maryland, USA?!  Why is internet, at this point, not considered a utility as is electricity with requirements to service everyone?!)

 

Central bankers refocus on Main Street – Pg. 7

–          Several regional Fed governors – including those in Boston, Dallas and Kansas City – are prioritizing another, less well known, function of the central bank: community development

–          While the Ed has a mandate to keep unemployment low and inflation stable, it is also empowered to bolster growth in local communities.  This includes everything from industrial policy initiatives in the rust belt, to helping immigrants in depressed areas start businesses, pushing educational reforms and encouraging efforts to bring broadband to rural areas

–          The past 10 years at the Fed have been all about bolstering markets.  In fact, you could argue that the past 40 years have been too, beginning with Alan Greenspan era of lower rates and supply-side thinking.  But, regardless of whether the Fed decides to halt rate increases in the next few months, it’s clear that the power of monetary policy to support the real economy has diminished.

 

Answer: (1) Plan your day (Prof Note: I actually do this the night before.  This way when I wake I have an idea of how the day will unfold and what will be (or won’t) accomplished); (2) Make lists (Prof Note: If you could see my desk it is covered with large-size index cards full of lists.); (3) Read more (Prof Note: There is so much knowledge and pleasure in reading.  Also, the luxury of time to actually spend enriching oneself.  I am re-reading high school required books as a baseline of societal experience to improve my own writing and relating to people.  How many times have classes heard me say, “I have the conch!”); (4) Save your coins; (5) Expand you vocabulary (Prof Note: See note on “Read More”); (6) Recycle; (7) Reuse those bags; (8) Commit to a cause (Prof Note: Be careful with Philanthropy and causes.  2018 was my year to be philanthropic and it turned out to be the year I truly learned about philanthropy.  I am finding that direct giving, e.g. scholarships and grants, is a superior method of giving.  Organizations want cash without strings but when one provides capital it is for the purpose of a believed and committed agenda.  If one gives capital for an event, e.g. highest score on a national examination, one feels good about that forever.  If one provides capital to a cause and the cause misuses the gift, one feels, at best, slighted and, at worst, fleeced.  The P(Gain) Foundation will focus mostly on directly giving to individual students for accomplishments.); (9) Clean up as you go (Prof Note: In the Caribbean, if you do not clean up immediately, i.e. kitchen, ants will be everywhere); (10) Incorporate exercise (Prof Note: I do feel better after exercising); (11) Eat Healthier (Prof Note: I wish I had read this prior to purchasing the two large bags of BBQ chips on sale); (12) Take a positive approach (Prof Note: In the classroom I work very hard at never using the word “wrong”.  Instead I use, “Not right” or “Not correct”); (13) Be nicer (Prof Note: Try talking to random people.  The experiences are often rewarding.  Everyone has a story.); (14) Offer compliments (Prof Note: I will be truthful, societal has become so divisive that pull back from providing compliments in the U.S. other than positive accolades for work product.  I do not comment on outfits or physical appearance (as the article suggests)); (15) Follow the news (Prof Note: If you are reading this…CHECK!); (16) Get outside (Prof Note: Feeling the sun on one’s face and breathing fresh air is a joy!); (17) Finish projects (Prof Note: When you plan your day, plan one tangible accomplishment for the day.  It can be laundry, just have something done at the conclusion of each day); (18) Take care (Prof Note: This is relating to personal appearance.  One does feel better groomed but also take care to not feel the need for 100.0% conforming!); (19) Build a spiritual focus; (20) Live your life (Prof Note: We only get so many sunsets in life.  Enjoy more of them! Also, determine what is really important in life and pursue important items.); (21) Do research, for fun; (22) Learn a skill; (23) Job training; (24) Nix the gossip (Prof Note: I have spent far too much of my life in litigation.  While I was successful, it taught me that until you know ALL the facts, you have opinions based on known information (“known” can be unsubstantiated).  Always think, “Do you want to be someone associated with positive comments or negative comments?”); (25) Clip coupons (Prof Note: Cannot stand coupons.  I wish retailers would make it easier and have one low price); (26) Encourage unity (Prof Note: Quality people are wealth!  Spend more time with quality people.  Yes, Mike C if you are reading this we will be spending more time trading options in 2019!); (27) Incorporate fun (Prof Note: Life is a cycle.  We are born children with passive income sources called “parents”.  We grow through childhood resenting constraints placed by parents for the passive income providing.  We then spend the next 40 years working our collective tails off to fiscally recreate what our “resented” parents provided only so we can revert back to childhood which is now called “retirement”.  I still ride my quads like a teenager only with the permission of a middle-aged male….have fun in 2019!); (28) Laugh more; (29) Be more mindful; (30) Listen closely (Prof Note: You learn most through listening and NOT talking!); (31) Revisit goals (Prof Note: I am going to make progress on the third book this year!  Goal is to have it in draft form and to a ghost writer/editor by year’s conclusion)

29 December 2018

 

Question: According to MSN: Lifestyle, what are five (5) ways to actually enjoy a party when you have social anxiety?

 

Down and out…Wild ride ends turbulent year – Pg. 1

–          Global stocks were set for their worst year in a decade after the last full day of trading in 2018, capping a final quarter when global trade fears, political turmoil and the end of economic stimulus had roiled markets and sent shares tumbling

 

Falling vaccination rates pose a global health risk – Pg. 6

–          Anti-vaccination campaigns defy decades of evidence of the indisputable global benefits of immunization.  Vaccines have eradicated or brought under control seven major human diseases – smallpox, diphtheria, tetanus, yellow fever, whooping cough, polio, and measles

–          If future generations are to be spared the scourges of their ancestors, public health officials, scientists and doctors must sharpen communications.  They need to learn to navigate the awkward terrain of social media, to engage with critics and give more weight to credible scientific evidence.  Public health urgently needs better defences; the common good needs better advocates

 

Forecasting the world in 2019 – Pg. 7

–          Will the Democrats attempt to impeach President Donald Trump?  Yes.  Mr Trump will be impeached by a simple majority in the Democratic House.  But the Senate, needing a two-thirds majority to convict, will exonerate him.  The scene will be set for a “rule of law” presidential election in 2020

–          Will there be a new financial crisis?  No, if we define a financial crisis as one in which policymakers need to rescue, or resolve, more than one globally significant financial institution at the same time

o   A reason for optimism is that global financial institutions’ balance sheets have strengthened substantially since the 2008 crisis

o   Reasons for pessimism are that interest rates remain low, debt levels exceptional and many asset prices high.  Vulnerabilities include several emerging markets, China, Brexit-hit Britain, Italian sovereign debt and US stocks

–          Will the S&P 500 finish 2019 above 3,000?  No.  Analysts’ median estimates are for a close above that level, despite turbulence.  But the positive factors behind one of the longest Wall Street runs are fading.  Earnings growth will be slower and margins compressed.  A pause in rate-tightening by the Federal Reserve, capping the dollar’s strength, and stimulus from China should help sentiment.  But the cycle is long in the tooth and corporate credit stress is rising.  No sector has partied as hard as credit during the era of easy money.  As the music fades, the equity market will discover balance sheets matter (Prof Note: Balance Sheets ALWAYS matter in the long-run!)

–          Will Brent Crude end 2019 below $60 a barrel?  Yes.

–          Will Mark Zuckerberg step down as chairman of Facebook?  No.

–          Will the US yield curve invert?  Yes.  The slope formed by Treasury yields of various maturities has inverted – with short-term bond rates higher than longer-term ones – ahead of most recessions, and is now perilously close to another inflection point.  The 10-year Treasury yield is unlikely to climb much above 3%, pinned down by forces such as disinflationary demographics and demand for safe assets, while the Fed is still likely to lift rates a few times in 2019.  That should, barely, invert the curve – hinting at trouble later on

 

Answer: (1) Resist the urge to cancel (Prof Note: I ALWAYS have this urge.  Yet, every time I go I have a wonderful time.  Now I have set “dates” with close friends and make a point of making the time!  Quality people are wealth!); (2) Come with conversation starters (Prof Note: I generally start with “Hello”.  Also, when I am in Target I will “practice” on those in line.  I will say hello and start a conversation.  Sometimes it works, sometimes it tanks.  But I try and it has gotten easier.); (3) Vow to speak to three new people (Prof Note: Play the numbers game.  You can leave after trying to speak with “X” number of people and failing.  Hint: You probably won’t fail but the knowledge that you have the out will provide confidence.); (4) Don’t drink too much (Prof Note: “Loose Lips Sink Ships”.  There is such a thing as liquid courage.  Perhaps focus on the “too much” and always be aware if you are driving home.); (5) Wait for the anxiety to pass (Prof Note: if you are shut down in a conversation, they are a “jerk”.  NEXT!!!)