December 19, 2017

Perspective

WSJ – Daily Shot: Credit Suisse – US Household Net worth by quantile 12/15

WSJ – Daily Shot: Credit Suisse – US Household Ownership of Equities by quantile 12/15

Bloomberg – He Stole $100 Million From His Clients. Now He’s Living in Luxury on the Cote d’Azur – Liam Vaughan 12/17

Worthy Insights / Opinion Pieces / Advice

A Wealth of Common Sense – Seeing Both Sides – Ben Carlson 12/17

Economist – Why is America more tolerant of inequality than many rich countries? – C.K. 12/18

  • “Ignorance about the scale of the problem is part of the answer.”

Huffpost – Why millennials are facing the scariest financial future of any generation since the Great Depression – Michael Hobbes 12/14

  • A summary of the numbers provided by Erica Pandey of Axios on 12/17:
  • “300% more student debt than their parents, on average.”
  • “1/2 as likely to own a home as young people — ages 25–34 — were in 1975.”
  • “One in five of young adults live in poverty.”
  • “2.9% average annual returns on 401(k) plans, compared to 6.3% returns for baby boomers.”
  • “Many millennials will have to work until the age of 75, based on an analysis of federal data.”
  • “A typical 2009 college graduate could earn up to $58,600 less than a typical 2007 college graduate over a decade, based on current trends.”
  • “The American racial wealth gap is widening, with the median white household projected to have 86 times more wealth than the median black household by 2020.”

NYT – World’s Most Expensive Home? Another Bauble for a Saudi Prince – Nicholas Kulish and Michael Forsythe 12/16

NYT – What Is Bitcoin Really Worth? Don’t Even Ask. – Robert Shiller 12/15

Project Syndicate – Complacency Will Be Tested in 2018 – Stephen S. Roach 12/14

  • “Alas, there is an important twist today that wasn’t in play back then –central banks’ swollen balance sheets. From 2008 to 2017, the combined asset holdings of central banks in the major advanced economies (the United States, the eurozone, and Japan) expanded by $8.3 trillion, according to the Bank for International Settlements. With nominal GDP in these same economies increasing by just $2.1 trillion over the same period, the remaining $6.2 trillion of excess liquidity has distorted asset prices around the world.”
  • “Therein lies the crux of the problem. Real economies have been artificially propped up by these distorted asset prices, and glacial normalization will only prolong this dependency. Yet when central banks’ balance sheets finally start to shrink, asset-dependent economies will once again be in peril. And the risks are likely to be far more serious today than a decade ago, owing not only to the overhang of swollen central bank balance sheets, but also to the overvaluation of assets.”

The Reformed Broker – Sometimes it’s not complicated – Joshua M. Brown 12/15

Vanity Fair – Of the 1%, By the 1%, For the 1% – Joseph Stiglitz, May 2011

Markets / Economy

FT – Wildfires in California add to ‘horrific year’ of disaster losses – Alistair Gray and Oliver Ralph 12/17

  • “String of catastrophes expected to drive insurance prices higher.”

Real Estate

MarketWatch – We’re still building the wrong kind of homes for renters – Andrea Riquier 12/14

  • “11 million Americans spend more than 50% of their income on rent.”

NYT – The Next Crisis for Puerto Rico: A Crush of Foreclosures – Matthew Goldstein 12/16

  • “About one-third of the island’s 425,000 homeowners are behind on their mortgage payments to banks and Wall Street firms that previously bought up distressed mortgages. Tens of thousands have not made payments for months. Some 90,000 borrowers became delinquent as a consequence of Hurricane Maria, according to Black Knight Inc., a data firm formerly known as Black Knight Financial Services.”
  • “Puerto Rico’s 35% foreclosure and delinquency rate is more than double the 14.4% national rate during the depths of the housing implosion in January 2010. And there is no prospect of the problem’s solving itself or quickly.”
  • “At the moment, dealing with a mortgage lender about a missed payment may be a distant concern for many of the 3.4 million people in Puerto Rico. They are literally still picking up the pieces, struggling to live without electricity or trying to get insurance companies to pay claims to repair their homes. More than 100,000 people are believed to have left to go live with friends and family on the mainland.”
  • “Residents won a reprieve when the federal government imposed a temporary moratorium on foreclosures, which stops banks and investors that bought mortgages at cut-rate prices from evicting delinquent borrowers or starting new foreclosures. Many lenders also have agreed to waive missed payments during the moratorium.”
  • “But that moratorium is scheduled to expire in early 2018, and lawyers and housing counselors expect that to trigger a surge in foreclosures.”

Finance

WSJ – Daily Shot: Investing.com – Bitcoin 12/18

  • “The cryptocurrency is gunning for $20k as it hit another record high over the weekend.”

Health / Medicine

WP – ‘We feel like our system was hijacked’: DEA agents say a huge opioid case ended in a whimper – Lenny Bernstein and Scott Higham 12/17

South America

NYT – As Venezuela Collapses, Children Are Dying of Hunger – Meridith Kohut and Isayen Herrera 12/17

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