If you know exactly what you want to buy, is there any better way than to pull it up on the internet, and have it shipped directly to your home in as little as a day? Sometimes you can even get your products in hours. It's hard to beat that type of transaction. But what if you're looking to try new things, and want to experience a variety of products before choosing which is right for you? The internet is not so well adapted for that sort of shopping. That's where a number of smaller companies are working to beat Amazon and other e-commerce companies. Creating a better buying experience is … [Read more...]
Have You Cut the Cord Yet with Cable?
If you have cut the cord from cable, you are one of a rapidly growing number of Americans. In 2019, the number of American households that will have made the switch will reach 22 million. Anna Nicolaou reports that costs and the annoyance of commercial breaks are driving Americans to get rid of traditional cable and to instead watch streaming television. She writes at The Financial Times: More and more Americans are rejecting cable’s hefty monthly costs and commercial breaks as they decide on-demand streaming services such as Netflix, YouTube and Amazon Prime can satisfy their viewing … [Read more...]
Incumbents Fight Back Against Amazon’s Rx Inroads
Amazon is trying to disrupt the pharmacy business, but the industry's incumbents aren't willing to simply assist Amazon in killing them off. Now a minor war has broken out over the ability to share information on patients across prescription providers. Joseph Walker reports for The Wall Street Journal: Amazon.com Inc. AMZN -1.25% ’s foray into the pharmacy business is causing the company to clash with entrenched industry incumbents that are putting roadblocks in front of the company’s growth plans. Last week, Surescripts LLC, a provider of the technology widely used to route electronic … [Read more...]
Is China Set for a Crisis Four Times Worse than the Great Recession?
According to J. Kyle Bass of Hayman Capital Management, China could be in line for an economic downturn four times worse than America's "Great Recession." Bass makes some predictions in an interview with Yahoo Finance, saying that China could be in line to lose $3 to $4 trillion. Julia La Roche reports: In an interview with Yahoo Finance, Bass drew comparisons between the 2008 crisis, and what might happen if world’s second-largest economy hits a rough patch — which may happen as the U.S-China trade war escalates. "In our crisis, we had $17 trillion worth of assets on balance sheet in our … [Read more...]
Could This Be the End for the Mortgage Interest Deduction?
For decades the mortgage interest tax deduction has rewarded homeowners at the expense of other taxpayers, but with the 2017 tax reform, much of the benefit for homeowners was eliminated. Most middle class homeowners achieved better tax results by taking the standard deduction, bringing the percentage of taxpayers using the mortgage interest tax deduction down from 21% in 2017 to only 8% in 2018. At Bloomberg, Karl W. Smith suggests the deduction should be eliminated entirely. He writes: After 1986, when Congress eliminated the deductibility of interest on personal loans and increased the … [Read more...]
Automation is Making Markets more Volatile
Analysts say using computers to automate the selling of stocks in volatile markets is making them even more volatile reports Richard Henderson in the Financial Times. He writes: So-called “volatility-targeting” funds that manage about $400bn in assets have bought up stocks this year as markets have calmed since markets’ dramatic end to 2018. But the renewed turmoil means they were pegged to sell $50bn by the end of Wednesday, according to Wells Fargo estimates. “When volatility jumps, systematic funds rebalance portfolios away from risky assets like equities,” said Pravit Chintawongvanich, … [Read more...]
Who’s Really Moving the Market?
After a recent spate of losses in stock markets, a wave of buying began, but it wasn't retail investors stepping in to take advantage of lower prices. Instead, the publicly traded companies themselves were propping up markets by buying back shares. Bloomberg's Lu Wang reports: As the S&P 500 slumped 6% over six days through Monday, companies boosted share buybacks to almost $10 billion a day from $3 billion previously, the firm [JPMorgan Chase & Co.] estimates. With stocks sinking and bonds rallying, the big gap in performance spurred a rotation to equities among funds that need to go … [Read more...]
Post-Financial Crisis Regulation Could Worsen the Next Crisis
At the Financial Times, Amin Rajan explains that a lack of liquidity, which was strangled by post-2008 Financial Crisis regulation, could deepen any future financial crisis. Put simply, traditional market makers for fixed-income products cannot now warehouse risk because of the effect of the regulation to enhance global financial resilience introduced after the 2008 crisis. This is best shown by US investment grade credit. It grew by 43 per cent between 2007 and 2018, while dealer inventories were just 6 per cent of what they were in 2007, according to JPMorgan Asset Management. The new … [Read more...]
This Has Never Happened to German Bonds Before Now
For the first time ever, Germany's yield curve is completely negative. Bunds from 2 year to 30 year are all yielding negative rates. Bloomberg's John Ainger reports: German 30-year bonds rallied to send yields across the whole of its debt market below 0% for the first time after President Donald Trump ratcheted up the U.S. trade war with China. The euro area’s biggest economy joined Denmark and Switzerland in the region in offering negative returns to investors should the notes be held to maturity, taking the total stock of investment-grade debt yielding less than 0% to $14 trillion … [Read more...]
Has Amazon Been Caught in an Anti-Trust Trap?
Regulators are looking hard at all of the major tech companies with an eye toward anti-trust violations. At Bloomberg, Spencer Soper reports that one particular Amazon practice may fall into that category. He writes: Amazon.com Inc.’s determination to offer shoppers the best deals is prompting merchants selling products on its marketplace to raise their prices on competing websites, a testament to the company’s growing influence over the e-commerce market. Amazon constantly scans rivals’ prices to see if they’re lower. When it discovers a product is cheaper on, say, Walmart.com, Amazon … [Read more...]
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