We have run this chart before, but a recent update from the Federal Reserve shows that the ratio of household net worth to income is now at a record high. On the surface, higher net worth would seem to be a plus for the economy. Consumers don’t have to save as much which should boost growth and there is an equity cushion to soften the blow of a recession. But increasing net worth is only a positive when it is supported by greater underlying cash flows. The record high in the ratio of net worth to income is an indication that the underlying cash flows of financial assets aren’t keeping pace … [Read more...]
Could a Startup Beat Tesla to the Semi Market?
Crash!
I have been investing since the spring of 1964, and I do not remember being as uncomfortable with the health of the financial markets as I am today. Given that unpleasant prelude, I also want to advise all investors that my own investing position has not changed since I began investing 53 years ago. I do not market time, i.g., moving in and out of the markets. I pay zero attention to daily, weekly or monthly price movements and have never made an earnings projection in my life. I do not keep tabs on the exact value of my own account. My assets are spread around with custodial friends … [Read more...]
Can Apple Ever Catch Up in Streaming Music?
Spinning Christmas tunes last night through our Sonos made me wonder how Apple missed this huge opportunity. Looks like they’re trying to pick up their game with the acquisition of Shazam. Too little too late? Spotify, a small company that seemingly came out of nowhere has been able to amass 60 million streaming subscribers. Meanwhile, Apple, creator of the iPod and the unrivaled master of MP3s sat on its hands while streaming music proliferated. Now it's playing catch up, with 30 million subscribers, Apple is well behind. Tripp Mickle writes that Apple may be able to use Shazam to close the … [Read more...]
Is the GOP Tax Plan as bad as You’ve Heard?
If you listen to the mainstream media, you might get the impression that the GOP tax plan is a disaster. Yes, there are some problems with the bill, but none outweigh the awesome benefit of slashing the corporate tax rate to 20% and lowering the rate on pass-through businesses. Small businesses seem to be ecstatic about the GOP tax plan. The NFIB Small-Business Optimism Survey just hit its highest level in over three decades, and only once in the survey’s 44-year history has it been this high. The hiring plans sub-component of the survey also hit a record high. A net 24% of small … [Read more...]
Are Futures a Good or Bad Evolution for Bitcoin?
Bitcoin futures began trading on Sunday. In a maniacal market like the one for bitcoin has become, no one is sure what to expect. On the first day, the contract's trading became so volatile that its trading was halted twice. Web traffic was so heavy that the CBOE website was slow or unavailable at times. While many are cheering the potential of these futures contracts, others are worried about threats to bitcoin and the cryptocurrency's market stability. Alexander Osipovich and Gabriel T. Rubin report: The launch of the bitcoin futures represents a milestone for the digital currency. But the … [Read more...]
China’s Coal Problem is Really a Debt Problem
Like most subsidies, China's subsidy for electric power has generated a wave of misallocation. Chinese power producers, taking advantage of high subsidized electric prices, have borrowed $1.2 trillion, mostly for building dirty coal power plants. Those power plants now need to produce in order to pay back their debts. Meanwhile, the Chinese government would like to move toward cleaner forms of energy, but its own subsidies have built a dirty power infrastructure system that can't be undone so easily. Nathaniel Taplin reports: In the West, bad children get coal in their Christmas stockings. In … [Read more...]
Warehousing Employments Soars to Support E-Commerce Explosion
The number of employees working in the warehousing and storage industry in America has reached a new all-time high of 974,000. Last month alone employers added 8,100 new hires in the business. That's up 0.8% in one month. Since 2014 the industry has been averaging annualized hiring growth of 7.83%. The demand for employees who support e-commerce is ramping up, with hiring for warehouse workers, truckers, and delivery drivers all expanding. Jennifer Smith writes at The Wall Street Journal: November marked the eighth straight month of expansion in a sector that has boomed as more … [Read more...]
Do the Best Managed Companies Make the Best Investments?
The Wall Street Journal released the inaugural ranking of the 250 most effectively managed U.S. companies. The rankings are based on the work of the late business management guru, Peter Drucker. The rankings are based on a score of 37 specific metrics that fall under five dimensions of performance: customer satisfaction employee engagement and development innovation social responsibility and financial strength Factors include everything from market-share and patent applications to employee ratings. To qualify for the rankings, a company must be a member of the Fortune … [Read more...]
$70 Million in Bitcoin was Stolen, Did Anyone Notice?
Judging by the seemingly unstoppable rise in the cost of bitcoin, it would appear no one even noticed that $70 million worth of the digital currency was stolen by hackers. The victim was the crypto-currency mining operation known as NiceHash. Steven Russolillo reports: Andrej P. Škraba, head of marketing at NiceHash, said to The Wall Street Journal that approximately 4,700 bitcoin had been stolen from a bitcoin wallet, an online account that stores the digital currency. Bitcoin wallets, like other online bank accounts, have been targets of hackers in the past. “It was a professional … [Read more...]
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