You have seen what Governor Andrew Cuomo and Mayor Bill DeBlasio have done to New York State and New York City. Cuomo's COVID response, lauded early on, was exposed as a complete debacle. And DeBlasio has allowed crime to skyrocket in the Big Apple. Despite such terrible performance from public officials, New Yorkers are asked to pay some of the nation's highest taxes. Now Governor Cuomo is asking businesses to return to the state. Fox Business reports: New York Gov. Andrew Cuomo is calling for companies to end remote work and bring staff back to the office by Labor Day in order to support … [Read more...]
Archives for July 2021
We Three Kingmakers: These Firms Control Almost Everything
Three firms are gathering enough control over the stock market that if they are aligned on a corporate board decision, there's almost no way to stop them. BlackRock, Vanguard, and State Street now control such a large part of the U.S. stock market, that when voting together they can control nearly any issue. John Rekenthaler explains at Morningstar: In aggregate, the Big Three of Vanguard, BlackRock, and State Street now hold 43% of the fund industry's U.S. equity assets. In addition, each of those companies serves institutional clients through separate accounts and collective investment … [Read more...]
Big Businesses Consolidating Amazon Retailers Leads to Uncertainty
There's a group of big businesses known as "aggregators," that are buying up small Amazon.com stores, and consolidating them. The bigger these aggregators become, the more power they have both in the market for future acquisitions, but also with respect to Amazon itself. Dave Lee explains in the Financial Times (abridged): Reaching the top of Amazon’s listings, even for the most innocuous of products, can translate to millions of dollars of sales. So in the past 18 months, at least 69 start-ups have raised some $7bn to begin buying up successful Amazon sellers, in the hope of building a … [Read more...]
COAL STRIKES: BlackRock the New Kingmaker?
You know that BlackRock's Larry Fink has taken on the role of arbiter of corporate ethics. He's feeding his own EGO. His push to use investor money to sway board decisions on so-called environmental, social, and governance issues (ESG), has had major effects on how corporations are being run. Instead of focusing on returning value to shareholders, CEOs, whose pay is often tied to the company's short-term stock price (not long-term performance), are focused on making sure company stock ends up in BlackRock's latest ESG index fund offering. If it's included, the CEOs can expect a major bump in … [Read more...]
China Eradicates Tutoring Industry to Boost Birth Rate
Chinese authorities are forcing the country's tutoring industry to go non-profit, effectively killing it off. One motivation for doing so is the drive to raise birth rates in the demographically imperiled nation. Bloomberg News reports: China is considering asking companies that offer tutoring on the school curriculum to go non-profit, according to people familiar with the matter, as part of a sweeping set of constraints that could decimate the country’s $100 billion education tech industry. Shares sank. In rules currently being mulled, the platforms will likely no longer be allowed to … [Read more...]
An Inflation Warning from an Unlikely Place
Throughout its history, the IMF has not been known as an institution of inflation hawks. But just recently, the organization has issued an alert on the risk of inflation that could be more than just transitory. Silvia Amaro reports at CNBC: The International Monetary Fund warned Tuesday that there’s a risk inflation will prove to be more than just transitory, pushing central banks to take pre-emptive action. The issue is currently dividing the investment community, which has been busy contemplating whether a recent surge in consumer prices is here to stay. In the U.S., the consumer price … [Read more...]
Last Year’s Big Government Mandates Are Driving Up Prices Today
Gubernatorial mandates to shut down restaurants last year are taking their toll this year too. Government dictats to close down restaurants sent suppliers' orders crashing. Those wholesalers and producers laid off workers, and now don't have the talented pool of employees necessary to get the markets running again. Bloomberg reports: Prices went “crazy,” says Mike Price, who co-owns the Greenwich Village restaurant, and so he yanked them off the menu. Over in Napa Valley, Phil Tessier, the executive chef at a popular spot called PRESS, did the same. And in Atlanta, at the tapas joint the … [Read more...]
Bogle Warned: 800 lb. Gorillas & Greener Pastures
UPDATE: The numbers are in. BlackRock is pushing around boardrooms to focus on everything BUT profits and shareholder return. Politico reports: At companies across the globe, BlackRock supported 64 percent of environmental proposals and about a third of social and governance resolutions put forth by shareholders in a year when workforce diversity and climate risk rose to the top of investor concerns. With $9 trillion in assets under management and ownership of more than 7 percent of shares on the S&P 500, BlackRock voted against corporate management at 42 percent of shareholder … [Read more...]
Foroohar: “Technology Has Made Markets Faster, but Not Better”
Has technology helped or hurt markets? That's the question Rana Foroohar examines in The Financial Times. She writes: First, consider the asymmetry of power. We have no idea of the true value of the personal data that is sold by platform giants like Facebook or YouTube to advertisers as the hidden charge for the supposedly “free” services we enjoy online. In the same way, the users of Robinhood have no idea that the reason that they and their fellow retail bros can trade “free” online is that their order flows are being shared with bigger, richer fish. They are, meanwhile, being induced to … [Read more...]
Why Mutual Funds No Longer Work for Your Retirement
My recent study covers four of the most widely owned equity-based mutual funds. Vanguard Equity Income Vanguard Dividend Growth T. Rowe Price Dividend Growth Fidelity Dividend Growth Here’s the 10-year compounded growth rate for each: T. Rowe Price Dividend Growth 12.0% Vanguard Dividend Growth 12.0%, Vanguard Equity Income 11.7% Fidelity Dividend Growth 10.0%. Today, each of these four multi-billion dollar funds has become far too big to allow crafting a portfolio with a suitable number of stocks that would meet my criteria. There are simply not enough … [Read more...]
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