Tag: Prof Note

8 October 2018

 

Question: According to MSN:Money, what 6 things should one stop doing if they hope to be rich?

 

China eases rules on banks’ reserves to unlock cash and lifting slowing economy – Pg. 1

–          China’s central bank has moved to inject more cash into the financial system by cutting reserve requirement ratios for most commercial banks…

–          The easing measure…follows weak investment and manufacturing data, and comes as a deepening trade war with the US raises pressure on the world’s second-largest economy

–          Christine Lagarde, managing director of the IMF, warned last week that the global economic outlook was turning for the worse…

–          China’s foreign exchange reserves fell $22.7bn in September from the previous month to $3.09tn…

–          Growth in China’s manufacturing sector stalled in September after more than a year of expansion, …

–          China’s economy expanded by an annualized 6.7% in the second quarter, its slowest pace since 2016…

 

US to open more funding for the IMF as expiry dates loom – Pg. 2

–          …some of the IMF’s funding would expire between 2020 and 2022 – ….

–          The IMF….is hoping to convince its members to increase the fund’s permanent reserves – in tandem with an upgrade in governance – next year, with initial conversations to gather pace among officials this week on the margins of the meetings

–          The IMF has about $11tn in available reserves for lending, but more than half of that is due to expire in 2022

–          The experience has down US officials that the IMF can be helpful in stabilizing countries in the western hemisphere that have friendly relations with Washington, ….

–          For now, the US is suggesting it would not support any new IMF interventions in advanced economies, particularly in Europe, where Eurozone countries have set up a separate bailout fund to deal with crises in the single currency

 

Strong global growth fragility in emerging markets – Pg. 3

–          Momentum in the global economy remains strong, if weaker than hoped at the start of the year, but severe strains have already been seen in Argentina and Turkey and these are starting to ripple out to other emerging economies

–          The Tiger index, which tracks a wide range of official economic data, financial market prices and confidence indicators and compares them with historical values for the largest economies, suggests global growth has come a little off the boil

–          With the US economy notably strong, pushing unemployment to its lowest level in almost 50 years, and other advanced economies still growing faster than long-term sustainable rates, the short-term concern in the global economy is centred on emerging economies

–          In advanced economies, the long upswing has been welcome in lowering unemployment to pre-crisis levels in most economies, but that has not repaired all the damage of the crisis, leaving them vulnerable to a new shock

 

Dark clouds gather over US housing – Pg. 9

–          Nationwide, sales and building permits are down.  Several once soaring markets, including New York City, the San Francisco area, and Denver, have been softening.  Construction activity has been slowing too, which is a concern given the disproportionate role that home building plans in the US economic growth

–          The problem is, ironically, the growth of the housing market itself, which has been bifurcated and has outpaced the ability of most consumers to pay for shelter

–          A wider fall in house prices is not expected to cause a 2008-style systemic collapse, because most mortgages are now lent at fixed rates and borrowers are required to show more evidence they can repay their lenders

–          That has reduced the risk of mass foreclosures, but it has also meant that much of the investment gains from housing in the past decade have flowed to the oldest, richest buyers.  Younger people have an average of $30,000 in student loans and have come of age in a weak employment market

–          Asset growth, rather than income, has driven so much of the US economy in recent years

–          Four decades ago, a 20% decline in house prices would have created negative home equity equivalent to about 1% of the aggregate income.  Today, the same drop would amount to 5%, or roughly $600bn in negative equity

 

Answer: (1) Blowing through a budget (Prof Note: When you make the budget, one must be true to one’s self (note…there are times, e.g. medical issues, where budget be damned!); (2) Waking up too late (Prof Note: One of the blessings I give myself is non-use of alarms.  I still am at my desk by 8:00am.  Of course my commute is about 10’ J); (3) Ignoring that book on your side table (Prof Note: Reading is such a joy.  As I age I realize it is an ultimate luxury as one must have the time); (4) Hating a job (Prof Note: If you are looking at the holiday calendar to learn when your boss is on holiday as you do not want to coincide holidays AS when you boss is out it is a HOLIDAY….you need to change jobs! J); (5) Shying away from investment opportunities (Prof Note: Get in the game.  You cannot win if you are not playing!); (6) Neglecting body and mind (Prof Note: Exercise and travel…better body and mind)

6 October 2018

 

Question: According to MSN:Money, what are 6 silly tidbits of Money Advice that will make you poorer?

 

US jobless rate at lowest since 1969 – Pg. 1

–          The US unemployment rate has fallen to its lowest level since 1969, underscoring the strength of the country’s economic growth and giving fresh fuel to a week-long bond-market sell-off

–          US Treasury yields hit multiyear highs yesterday as investors predicted a hardening of the Federal Reserve’s determination to push through further rises in short-term rates after another quarter-point increase last month, with the next move widely expected in December

–          The 10-year Treasury yield, which had been climbing earlier this week, rose nearly 5bps to 3.24% – the highest since 2011

–          The jobless rate dropped to 3.7% in September, slightly lower than forecasts of a 3.8% rate.  Non-farm payrolls rose by 134,000 in September…

 

US business – Pg. 8

–          …GE’s only strategic mis-step….emblematic of two of the company’s flaws: a weakness for dealmaking, and an inability to respond effectively to a changing market

–          …original member of the DJIA at its creation in 1896, has lost more than 80% of its market capitalizations since 2000

 

Italy’s deficit plans push sovereign yields higher – Pg. 15

–          The government’s plan targets a budget deficit of 2.4% of GDP in 2019, to be gradually reduced to 2.1% in 2020 and 1.8% in 2021, …

 

Answer: (1) Credit cards are evil (Prof Note: Used responsibly they can provide rewards, e.g. flights); (2) Following a rigid spending plan will set you free (Prof Note: You have to live….a little!); (3) sign up for life insurance – or else (Prof Note: you are more likely to be disabled during your career than to die!); (4) 10% is the sweet spot for retirement contributions (Prof Note: 10% is a good target but must be focused); (5) You should buy a house because it is a good investment (Prof Note: What I do like about traditional mortgages is that they are forced savings vehicles); (6) Home equity loans are a great way to get out of a hole (Prof Note: Be smart and understand what one is doing!  I am a huge proponent of home equity line usage but ONLY AFTER paying off the house.  Then, using the HELOC’s for capital improvements, etc.  Remember: $1.00 must produce $1.00+ or you are going backwards!)

5 October 2018

 

Question: According to MSN:Money, what are 6 things other governments provide that Americans still have to pay for?

 

Sovereign bond sell-off fans out across world as belief in US economy builds – Pg. 1

–          A US economy turbo-charged by fiscal stimulus has strengthened the conviction of some investors that 2018 will mark the end of a 30-year bond bull run

–          …economists forecast will show the economy added 185,000 jobs last month and delivered workers wage growth of close to 3%

–          …the yield on the 10-year Treasury touched as high as 3.23%, ….

–          …US economy, which expanded 4.1% in the second quarter, has been one of the defining features of markets this year and helped suck money from emerging markets

 

Republican women back Kavanaugh as gender politics shape midterms – Pg. 3

–          While several women said they believed something had happened 36 years ago to Christine Blasey Ford, Mr Kavanaugh’s accuser, they were not sure just what – only that it did not rise to the level of rape.  At the same time, they seemed convinced that a man with an impeccable record had been wronged, and that the men in their own lives might also be at risk

–          (Prof Note: The world is changing.  Statements (note: I am not saying “True/False” statements, only “Statements”), are extremely difficult to prove/disprove without FACT.  In my family’s estate case, the forger and witnesses LIED!  This was proven by a jury, i.e. the finder of fact in the U.S. judicial system.  How was I able to prove this?  First, it took hundreds of thousands of dollars for experts.  Second, I had the dream team for estate litigation from the local attorneys to K&L Gates driving ALL legal strategy and research (up to five law firms at once).  Third, I had the seven figures required to finance this injustice and the resolve to see this to the end.  It is important to note that when asked if I would have pursued had I had a family to support I worry the answer would have been “no” as it was such a huge financial undertaking and I probably would not have placed family finances at such risk.  Fourth, I was able to identify and hire the BEST experts in forensic documentation analysis, meteorology, and computer forensics (thank you K&L Gates!).  YES, the forger and witnesses were proven to have lied.  For example, in deposition testimony they noted a beautiful day of happiness and family BBQ when, in fact, it had been a hurricane.  Hello Doppler Radar!!!  I mention this as I worry individuals are convicted in today’s society on statements rather than a jury (or court) verdict.  I worry today that most individuals lack the resources to prove truths and facts.  (This is NO statement on Ford and/or her statements being truthful or not, only that the statements have not been proven in a court of law by a jury and/or judge.)  In my case, I was labeled the ungrateful and angry son that could not accept his father’s decisions until the jury verdict.  I do not know what happened 36 years ago with Ford, I only feel that Kavanaugh has been convicted without the benefit of a trial.)

–          While Republican women worry about sexual assault, for example, many worry about the danger of it being unfairly “weaponized” by their political opponents.  (Prof Note: That is my fear, i.e. that Statements are now weapons.  What happened to “Innocent until proven guilty.”?)

 

Listed companies are less short-termist than was thought – Pg. 11

–          ….listings are often unpopular: “short-termism”

–          …IRS data, which covered 2.7m “firm-years”, suggest that listed groups actually invested 48.1% more – not less – than private ones, after adjusting for sector and size

–          …when the Fed team analyzed what happened when privately held companies went public, their R&D-to-physical-asset ratios increased by 34.5%, and their “R&D-to-total investment shares by 17.1%”

–          When publicly listed companies went private, however, there was “a reduction in R&D investments”

–          The research notes that listed companies from “industries that are more sensitive to earnings announcements pull back their investments in long-term physical assets and innovation” when share prices swing too wildly, investing in short-term projects instead

 

Answer: (1) College; (2) Healthcare; (3) Vacation; (4) Parental Leave; (5) Baby items; (6) Daycare

4 October 2018

 

Question: According to MSN:Lifestyle, what are 12 little things you’re doing when traveling that could be putting you in danger?

 

US services and jobs growth points to strong final quarter – Pg. 2

–          A record level of expansion in the services sector and a spurt in private sector job creation drove a sell-off in bonds and set the US economy on course for a strong final quarter of the year

–          …services sector, which makes up about 80% of US GDP, ….

 

Greek banks riled by bad debt worries – Pg. 15

–          Some of Greece’s biggest banks suffered steep share price falls yesterday as investors worried they may not have enough capital to meet fresh targets on reducing their large portfolios of bad debts

–          Investors have also been spooked by plans the Greek banks have submitted in the past week to the ECB for reducing their non-performing exposures, which currently make up almost 40% of their loan books

–          If the banks sell bad debts below their book value it could trigger losses that eat into their equity buffers and require fresh capital raisings

 

Eurozone investors reduce US debt holdings for first time since late 2013 – Pg. 21

–          ….move which suggests the ECB’s winding down of its quantitative easing programme has begun to ripple through to other markets

–          Investors in the Eurozone have been steady buyers of US debt securities since the ECB embarked on QE, which analysts said was in part due to capital being displaced from European markets as the central bank has hoovered up assets

–          Net purchases of US equities also dipped slightly

–          The ECB has bought 2.5tn (euro) of Eurozone debt securities under a QE programme that is set to stop at the end of this year.

–          The US credit market has boomed in recent years with corporate debt levels reaching a record

–          …the quality of the US investment grade debt market has deteriorated sharply, fueling fears that any weakening in the economic outlook could trigger a swath of downgrades, leaving investors holding junk-rated paper

 

Answer: (1) You post your vacation photos before getting home; (2) You don’t have someone pick up your mail; (3) You get very drunk; (4) You leave your drink unattended; (5) You don’t dress like the locals; (6) You carry your passport with you everywhere; (7) You’re not aware of your surroundings; (8) You ask directions from strangers; (9) You have oversized luggage or too many bags; (10) You don’t check the weather report; (11) You try to bribe officials (Prof Note: I have no idea what the 12^th is…only 11 were listed)