Despite what seems to be relentless drive toward cloud computing by most of the major tech companies, including most importantly Microsoft and Amazon.com, there appears to be a backlash coming. The backlash is broken down into two parts: The first part is a backlash against the large cloud computing providers. Smaller firms working on what has become known as "edge" computing, are making their mark in the industry. The second part of the backlash to big cloud computing is a focus on local computing, being pushed most notably by Apple. Richard Waters explains the trend in the … [Read more...]
Archives for February 2018
No Forgiveness for UPS from Wall St.’s Short-term Crowd
UPS has been racing to keep up with demand for home delivery that has exploded with the revolution in e-commerce. Despite the positive attitude given to Amazon.com for its low profit, fast growth strategy, the Wall St. crowd has looked askance at UPS for daring to spend money on investing in its business. UPS is working hard to keep up with the major secular shift in demand, but investing money in expanding its facilities has eaten into earnings. The short-term focused Wall St. crowd is upset. Paul Ziobro writes: United Parcel Service Inc. UPS -2.54% will spend up to $7 billion this year … [Read more...]
Illinois’ Answer to Saving too Little? Borrow More and Hope
After years of under-funding its state pension programs, Illinois has come up with an idea that can be described as risky at best. Illinois plans to borrow money, and then invest that money, in the hopes of earning more than it must pay back in interest. If you don't see the danger in using money invested in volatile markets to pay fairly predictable pension payments, you're probably an elected official in Illinois. The Wall Street Journal's editorial board highlights something that I have been discussing for years here on YourSurvivalGuy.com (see here, here, here, and here). The … [Read more...]
The Healthcare Battle Heads to the States
After federal legislators removed the individual mandate to buy health insurance last year as part of their tax reform plan, some states are looking to implement their own mandates. What would America look like with half the states demanding the purchase of health insurance and the other half not requiring it? The Wall Street Journal reports that Americans may find out. Maryland lawmakers are pursuing a plan to replace the ACA mandate, which requires most people to pay a penalty if they don’t have coverage. States including California, Connecticut, Hawaii, Rhode Island, Washington, Minnesota, … [Read more...]
Dow Loses 665 Points
The Dow Jones Industrial Average plunged over 665 points today. That equates to a loss of 2.54%. Today’s sell-off ends the longest streak on record without a three percent correction. The drop was sharp, and broad-based. Every sector in the S&P 500 was down today, with about 95% of stocks in the index falling. Energy and tech took the biggest hits. Market pundits attributed the losses to rising bond yields, which were up again today as employment and wage gains exceeded expectations. So, what was good for the economy was apparently not good for the stock market. The TINA market … [Read more...]
Quality Always Rises to the Top
Back in November of 1990 many investors were nervous about their portfolios. Iraq had invaded Kuwait and war seemed inevitable. That month, the UN Security Council passed Resolution 678. The resolution gave UN members the go-ahead to use force to remove Iraq’s military from Kuwait if it remained there after January 15, 1991. It seemed only a matter of time before a big war would break out. Aerial bombardment of Iraqi positions began January 16. Despite the fear that pervaded markets, I was very confident then in my investment portfolio, as I am today. I had built a portfolio conditioned to … [Read more...]
Bond Bear Market Picking Up Steam
The bear market in bonds appears to be picking up steam. Strong employment and wage numbers this morning have pushed long-term Treasury yields past 2.8%—their highest level since 2013. Since the start of the year, 10-year Treasury rates have increased by 43 basis points or 0.43 percentage points. From a charting perspective, there isn’t much support for bonds until rates hit 3%. A welcome development in our view, but a not so pleasant development if you are among the investors who have reached for income by taking duration risk in the bond market. As of this morning, the Vanguard Long-term … [Read more...]
Media Finally Acknowledges the Best Part of Tax Reform
After months of negative press over the prophesied ill effects of tax reform, the liberal media has come to admit the greatest benefit of all from tax reform: rising wages. The AP wrote today that despite the tax bill being "contentious," workers are starting to take home more pay. Big corporations across America have announced wage increases and bonuses as a direct result of the cut in their corporate tax rates. While some have called these benefits for employees "crumbs," the numbers are really beginning to add up. The AP writes: Treasury Secretary Steven Mnuchin has estimated that the new … [Read more...]
Bitcoin Plunge
The price of bitcoin is plunging as regulators begin to recognize the real threat alternative currencies pose to their fiat currencies and begin to fire back with restrictions. Between new regulatory scrutiny, and the threat of hacking, bitcoin investors are beginning to find better places for their money elsewhere. The neck-snapping volatility of bitcoin prices must be shocking to some of the late investors who bought when prices were heading up by 20% a day. Steven Russolillo and Kenan Machado report: The digital currency has now fallen by nearly 60% from a record high of close to $20,000 … [Read more...]
Is My Bezos Law About to Hit Healthcare?
I've discussed my Bezos Law before. It's my theory that any industry Jeff Bezos enters will see lower prices. Now, Bezos' Amazon.com and consortium of investors including JPMorgan Chase and Berkshire Hathaway is about to enter the employee health care market. What does this mean for the future of health care? David Marino-Nachison writes in Barron's Next: When Amazon.com takes concrete, public steps into huge industries—which it did Tuesday, announcing a joint venture to tackle employee health care with JPMorgan Chase and Berkshire Hathaway—it should make investors blink. But what else … [Read more...]
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