The job market is booming. There is now a job opening for almost every unemployed American. Regulatory reform and a massive corporate tax cut have no doubt helped bigly 😉. This is the best job market in two decades, and the highest number of job openings to the number of unemployed since the Labor Department started keeping track on a regular basis. Based on the historical relationship, it shouldn’t be long before wage growth starts accelerating. … [Read more...]
The Profound Power of Patience & Compound Interest
Patience and the awesome power of compound interest are the heart and soul of investing. The NY Times reports that Sylvia Bloom, a legal secretary from Brooklyn amassed a fortune of over $9 million dollars on a modest salary. What was the key to Mrs. Bloom’s success? Mrs. Bloom saved and invested and allowed the power of compounding to work for over six decades. Since Ms. Bloom never talked about this, even to those closest to her, the fact that she had carefully cultivated more than $9 million among three brokerage houses and 11 banks, emerged only at the end of her life — “an oh my God … [Read more...]
Emerging Markets Currencies have Worst Week Since 2016
The FT reports that last week emerging market currencies had their worst week since 2016 and they are down again this morning. The Turkish lira faced the heaviest fall on Monday, sliding 0.85 per cent on the buck, with a dollar buying 4.2624 lira. South Africa’s rand was the second biggest faller, down 0.44 per cent on the greenback, while the Philippine peso, Russian rouble and Indian rupee were each off roughly 0.4 per cent. Trading in the Argentine peso, which tumbled 6.2 per cent last week and sparked a series of three rate rises from the central bank, opens at roughly 2pm London … [Read more...]
America Takes a Hard Line with China at Summit
A U.S. delegation to China, led by Treasury Secretary Steve Mnuchin has demanded China take steps to narrow the trade deficit with America to $200 billion by 2020. Also targeted by the team were China's state subsidies for strategic industries. Gabriel Wildau reports: The target represents a doubling of a previous White House demand that China cut the bilateral deficit by $100bn. The negotiators also asked that Beijing cut import tariffs to levels at or below those imposed by the US on the same goods from China. The proposal further calls on Beijing to eliminate all subsidies linked to … [Read more...]
Is Musk Losing Wall Street?
Fore years Wall Street has ceaselessly promoted Elon Musk and Tesla. But last night, on a quarterly earnings conference call the already strained bond between analysts and the Tesla CEO may have been broken beyond repair. After being asked some questions he didn't like, Musk said "Next. Next. Next. Boring bonehead questions are not cool. Next." The FT reports what happened next. The next 20 minutes of the call was devoted to questions from Galileo Russell, who hosts a YouTube channel called HyperChange TV and had campaigned via Twitter beforehand to be able to field questions to “give … [Read more...]
These Cities will Pay you to Move There
Desperate times call for desperate measures. With unemployment rates so low, towns and cities are competing for the workers they need to fill their factories and service jobs. Some have gotten creative, offering new residents cash to relocate within their borders. David Harrison and Shayndi Raice report: Jobs at the paper mills and safe manufacturers on this stretch of the Great Miami River mostly dried up by the early 2000s, leaving behind closed factories and an abandoned downtown. Today, a spruced-up waterfront, loft apartments and help-wanted signs give the appearance of economic … [Read more...]
Is China’s Recovery Fizzling Out?
The FT's Confidential Research team has been tracking Chinese business activity, and the country's economic recovery looks to be slowing down. The team reports: China’s economy lost a little more steam in April, deepening a slowdown seen at the end of the first quarter. The latest data from FT Confidential Research showed fresh weakness in the freight and export industries, and a household sector less confident in the domestic economy. The all-important property sector lent support, with the FTCR Real Estate Index showing a second successive month of improving conditions. That helped … [Read more...]
Is Regulation Facebook’s Biggest Risk?
Scrutiny over Facebook continues to gain steam. The EU is implementing a new data protection regulation in May that may become a global standard, but the bigger risk to Facebook and other members of the FAANGs are of the antitrust variety. As the Roger McNamee writes in the FT today, Facebook, Google, and Amazon have built near monopolies by limiting choice. Facebook, Google and Amazon have built monopolies that are limiting consumer choice, while also creating a chilling effect on innovation and entrepreneurship. They have snapped up potential competitors, including YouTube, Instagram … [Read more...]
Bonds Break Through 3%
10-year Treasury yields cracked through 3% for the first time since 2013. With short-term yields on the rise, and now long-term yields starting to follow suit, the yield drought appears to be coming to an end. … [Read more...]
The Rise of the Robot Bond Trader?
For years PIMCO was driven by the investing acumen of Bill Gross and Mohamed El-Erian. After an acrimonious split with El-Erian in 2014, and unceremoniously dumping Gross the same year, PIMCO's plan is to replace these titans of the bond industry with some algorithmic software and an office in trendy Austin, Texas. The Wall Street Journal's Justin Baer writes: Pimco’s mutual funds had $33 billion in net inflows in 2017, reversing a four-year stretch of client withdrawals, Morningstar said. While Pimco remains one of the world’s biggest investors, with about $1.7 trillion in assets, the firm … [Read more...]
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