In 2019, 1,016 new laws will take effect in California. How are businesses supposed to navigate such rapid fire law creation? With the nation's second highest minimum wage (tied with Massachusetts at $11.00/hour), its highest income tax rates at 13.3%, and a dead last ranking in the Small Business Policy Index for the least friendly laws for business, California is already a tough place to pursue the American dream. Now businesses and citizens of the Golden State will have an even greater regulatory burden to navigate. At The Hill, Timothy Snowball writes: The California Legislature’s … [Read more...]
Archives for February 2019
Bank Bulk Up: BB&T Buys SunTrust
In a move to compete with the larger tier of banks, BB&T will acquire SunTrust Bank in the largest banking merger in a decade. In the press release discussing the deal, management was focused on cutting costs by closing brick and mortar locations, while putting increased funding into the combined bank's digital operations. Bloomberg's Hannah Levitt reports: Industry executives have long predicted a wave of bank mergers that until Thursday had played out only in smaller or midsize deals. Brian Moynihan, chief executive officer of Bank of America Corp., said last month he could envision the … [Read more...]
Mall Space: From Retail to Logistics
With American shopping malls suffering from growing use of e-commerce by shoppers, store space that has been vacated by bankrupt retailers is being converted to space for other types of tenants. Among those new lessees are the logistics operations of the very e-commerce companies beating brick and mortar retailers into submission. CNBC's Lauren Thomas reports: An old Toys R Us store in Milwaukee is now home to Engine & Transmission Exchange, a remanufacturer for car parts. Meanwhile, six dead malls across the U.S. are either in the process of being turned into or have been revamped as … [Read more...]
Where Did all the Investors Go?
Volatility speculation (and hedging) seems to be in fashion. Take the ProShares Ultra Short-term VIX ETF for example. The fund seeks to deliver 1.5X the performance of the short-term VIX futures contract. The fund isn’t terribly large with only $300 million in assets, but consider these volume figures. In 2016, the ETF traded 51 million shares. In 2017, volume increased to 814 million shares. Then last year, volume soared to over 2 billion shares. At an average price of about $60 per share, the dollar volume of the ETF was about $120 billion, or 400X the assets in the fund. You read that … [Read more...]
Canadian Crypto-currency Debacle
“A Canadian cryptocurrency exchange says about $140 million worth of customers’ holdings are stuck in an electronic vault because the company’s founder, and sole employee, died without sharing the password,” reports Paul Vigna at the WSJ. On Jan. 15, the company announced on its website that Mr. Cotten had died on Dec. 9 from complications related to Crohn’s disease while building an orphanage in India. He was 30 years old. Two weeks later, the exchange filed for bankruptcy protection in a Nova Scotia court. Quadriga said its customers have accounts with a total balance of about C$250 … [Read more...]
Green Dreams and Gas Nightmares in the Northeast
There's an ocean of natural gas in Pennsylvania's Marcellus Shale formation, but you wouldn't know it based on the paltry natural gas infrastructure running from the area into the nearby population centers of the Northeast. Despite troves of cheap natural gas only a short way away over land, 20% of New England's natural gas is delivered via expensive liquefied natural gas (LNG) shipments to Boston's Everett LNG terminal. Freight Waves, an industry journal, reports that in Westchester County, New York, nearly on top of the Marcellus Shale play itself: Con Edison (ED: NYSE), a New York utility … [Read more...]
How High Can Cloud Computing Soar?
Despite predictions of difficulty for cloud computing, the business continues to perform well. Bloomberg reports that despite uncertainty over the market for cloud computing solutions, investors have been rewarded for their faith in the business. Matt Day and Jeran Wittenstein write: Earnings reports from the biggest providers of internet-based computing services – Amazon.com Inc., Microsoft Corp., and Alphabet Inc.’s Google – showed that these companies are grabbing a larger share of business technology spending, defying warnings from some of their suppliers that a hot corner of the industry … [Read more...]
What’s Happening at Deutsche Bank?
German banking giant, Deutsche Bank, has been circling the drain for some time. (Read here and here). Now, Germany is planning to back a merger between Deutsche Bank and its smaller rival Commerzbank (which is also hurting) if the two can't fix their businesses. The Wall Street Journal's Jenny Strasburg reports: Deutsche Bank AG posted a steeper-than-expected fourth-quarter loss and vowed to cut costs more aggressively as the embattled bank struggles to quell persistent speculation about its future. Friday’s results showed continued revenue declines and other signs of vulnerability, … [Read more...]
Did Crypto-currency or Bad Governance Beat These Investors?
Buyers using the QuadrigaCX exchange to invest in crypto-currencies are waking up to the possibility that their money may be gone forever. What happened, you ask? The system, like all crypto-currency systems presumably, was encrypted, but in the case of QuadrigaCX, only one man knew the password, and he's dead. Gerry Cotten, founder of QuadrigaCX took the password used to access customers' $145 million in digital assets with him to the grave. Without the password, it appears there is little the company can do to access customers' assets. Medium reports: The exchange only has … [Read more...]
After Storied Career, Bill Gross Retires
Bill Gross, manager of the Janus Henderson Global Unconstrained Bond Fund, best known for his time managing the Pacific Investment Management Co.’s Total Return Fund, has decided to retire. Gross has spent over forty years changing the way people invest in bonds. Bloomberg reports: Gross, who announced his retirement Monday, struggled in the last four years as head of the Janus Henderson Global Unconstrained Bond Fund. His performance failed to match the stellar track record he achieved while building Pacific Investment Management Co.’s Total Return Fund into a bond giant. “I look back … [Read more...]
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