Tag: Health / Medicine

October 12, 2017

Perspective

Business Insider – Trump’s net approval rating has dropped dramatically in every state – Allan Smith 10/10

Brookings – White, still: The American upper middle class – Richard Reeves and Nathan Joo 10/4

Economist – A new study details the wealth hidden in tax havens 10/7

  • “…A new study by Annette Alstadsaeter, Niels Johannesen and Gabriel Zucman, three economists, (using Bank for International Settlements data) concludes that tax havens hoard wealth equivalent to about 10% of global GDP. This average masks big variations. Russian assets worth 50% of GDP are held offshore; countries such as Venezuela, Saudi Arabia and the United Arab Emirates climb into the 60-70% range. Britain and continental Europe come in at 15%, but Scandinavia at only a few per cent.”
  • “One conclusion is that high tax rates, like those in Denmark or Sweden, do not drive people offshore. Rather, higher offshore wealth is correlated with factors such as political and economic instability and an abundance of natural resources.”
  • “Accounting for offshore holdings suggests wealth inequality is even greater than was thought. In Britain, France, and Spain the top 0.01% of households stash 30-40% of their wealth in tax havens. In Russia, most of it goes there. In America, the share of wealth held by the richest 0.01% is as high today as in early 20th-century Europe. Including offshore data increases the wealth share of the super-rich.”
  • “Yet plenty of data are still missing. A few big centers, including Panama and Singapore, still do not disclose these statistics. The BIS data also cover only bank deposits, not the securities in which most offshore wealth is held. Researchers made estimates to plug the gap, but their figures are likely to be conservative.”

Worthy Insights / Opinion Pieces / Advice

NYT – How Israel Caught Russian Hackers Scouring the World for U.S. Secrets – Nicole Perlroth and Scott Shane 10/10

Economist – The bull market in everything – Leaders 10/7

Economist – A deathly silence: After the massacre in Las Vegas, nothing is set to change – Leaders 10/5

Economist – Politicians choosing voters: The Supreme Court ponders whether gerrymandering has gone too far 10/7

Economist – Chiang Kai-shek’s former homes are open to tourists 10/5

Markets / Economy

Economist – From Uber to kinder 10/7

Economist – American public pensions suffer from a gaping hole 10/5

  • “Schools in Pennsylvania ought to be celebrating. The state gave them a $125m budget increase for 2017-18—enough for plenty of extra books and equipment. But John Callahan of the Pennsylvania School Boards Association says all the increase and more will be eaten up by pension costs, which will rise by $164m this year. The same happened in each of the previous five years; cumulatively the shortfall adds up to $586m. The pupil-teacher ratio is higher than in 2010. Nearly 85% of the state’s school boards said pensions were their biggest source of budget pressure.”
  • “A similar squeeze is happening all over America. Sarah Anzia, at the University of California, Berkeley, examined 219 cities between 2005 and 2014 and found that the mean increase in their real pension costs was 69%; higher pension costs in those cities were associated with falls in public-sector employment and capital spending.”
  • “The problem is likely to get worse. Moody’s, a rating agency, puts the total shortfall of American public-sector pension plans at around $4trn. That gap does not have to be closed at once, but it does mean that contributions by employers (and hence taxpayers) will increase even more than they already have (see chart).”
  • “Higher costs are the result of improved longevity, poor investment returns and inadequate past contributions.”
  • As to making plans…
  • “Experts can differ, it seems. But small changes in assumptions can make a huge difference to the amount employers need to contribute. According to the National Association of State Retirement Administrators, cutting the return assumption by a quarter of a percentage point increases the required contribution rate (as a proportion of payroll) by two to three points.”
  • “In consequence, it is in no one’s interest to make more realistic assumptions about future returns. Workers (and their unions) fear it might generate calls for their benefits to be cut; states worry it would require them to raise taxes. Don Boyd, the director of fiscal studies at the Rockefeller Institute of Government, a think-tank, reckons that with a 5% assumed rate of return, states would have to stump up an extra $120bn a year just to tread water—i.e., to fund their pensions without making any progress on closing the deficit. So the game of ‘extend and pretend’ continues.”
  • “As years go by, voters and legislators across the country will have to make a trade-off. They can pay more taxes and cut services; or they can reduce the benefits they pay people who teach their children, police their streets and rescue them from fires. There will be no easy answers.”

Real Estate

WSJ – Daily Shot: John Burns RE Consulting – Home Refinancing 10/11

Health / Medicine

FT – Global childhood obesity rises 10-fold in 40 years – Clive Cookson 10/10

  • “The number of obese children and teenagers across the world has increased 10-fold over the past four decades and is about to overtake the number who are underweight, according to the most extensive analysis of body weight ever undertaken.”
  • “The study, led by Imperial College London and the World Health Organization, used data on 31.5m children and adolescents worldwide to estimate trends in body mass index (BMI) from 1975 to 2016. The results are published in the Lancet.” 
  • “Over this period the number of obese girls, aged 5 to 19, rose from 5m to 50m, while the total for boys increased from 6m to 74m.”
  • “The world’s highest childhood obesity levels are in the Pacific islands of Polynesia and Micronesia. Nauru has the highest prevalence for girls and the Cook Islands for boys: both above 33%.”
  • “Among wealthy countries, the US has the highest obesity rates for girls and boys of about 20%. Levels in most of western Europe are in the 7% to 10% range.” 
  • “A further 213m children are overweight but not sufficiently so to meet the WHO’s obesity criteria, which vary by age. Forty years ago, 0.8% of the world’s children were obese; now the prevalence is close to 7%.” 
  • “The study also looked at adult obesity, which increased from 100m people in 1975 to 671m in 2016. A further 1.3bn adults were overweight (with a BMI above 25) but below the threshold for obesity (BMI above 30).” 
  • “But the authors are most concerned about the findings about childhood obesity, because of their implications for public health many decades into the future.”

Construction

WSJ – Daily Shot: NFIB Labor Quality 10/10

  • “Anecdotal evidence suggests that in some areas of the country, finding workers who can pass a drug test has been challenging.”

WSJ – Daily Shot: John Burns RE Consulting – Builder Labor Shortages 10/11

  • “Skilled (and drug-free) worker shortages in construction are especially acute.”

  • This will only get tighter in the continental U.S. as natural disasters continue to rack up, resulting in acute demand for labor in the affected areas. Harvey, Irma, Maria, Nate, and now wildfires in Northern California. Of course, this will have effects on the neighboring regional labor pools.

Shipping

Economist – How protectionism sank America’s entire merchant fleet 10/5

  • “In April 1956 the world’s first container ship—the Ideal X—set sail from New Jersey. A year later in Seattle the world’s first commercially successful airliner, Boeing’s 707, made its maiden flight. Both developments slashed the cost of moving cargo and people. Boeing still makes half the world’s airliners. But America’s shipping fleet, 17% of the global total in 1960, accounts for just 0.4% today.”
  • “Blame a 1920 law known as the Jones Act, which decrees that trade between domestic ports be carried by American-flagged and -built ships, at least 75% owned and crewed by American citizens. After Hurricane Irma, a shortage of Jones-Act ships led President Donald Trump on September 28th to waive the rules for ten days to resupply Puerto Rico. This fueled calls to repeal the law completely.”
  • Like most forms of protectionism, the Jones Act hits consumers hard. A lack of foreign competition drives up the cost of coastal transport. Building a cargo ship in America can cost five times as much as in China or Korea, says Basil Karatzas, a shipping consultant. And the cost of operating an American-flagged and -crewed vessel is double that of foreign ones, reckons America’s Department of Transportation.”
  • “Inflated sea-freight rates push most cargo onto lorries, trains and aircraft, even though these are pricier and produce up to 145 times as many carbon emissions. So whereas 40% of Europe’s domestic freight goes by sea, just 2% does in America. Lacking overland routes, Alaska, Guam, Hawaii and Puerto Rico are hardest hit. Hawaiian cattle ranchers, for instance, regularly fly their animals to mainland America. A recent report by the Government Development Bank for Puerto Rico found that the Jones Act inflated transport costs for imports to twice the level of nearby islands.”
  • “Jones-Act shipowners retort that the rules are to help producers, not consumers. Rail firms lobbied for the 1920 law, out of fear that an excess of foreign ships from the first world war was flooding the market. National security was also cited. German submarine warfare, it was argued, showed the need for a merchant fleet built and crewed by Americans. But the law has virtually wiped out American shipping. Between 2000 and 2016 the fleet of private-sector Jones-Act ships fell from 193 to 91. Britain binned its Jones-Act equivalent in 1849. Its fleet today has over three times the tonnage of America’s. Marc Levinson, an economic historian (and former journalist at The Economist ) notes that the laws also made American container lines less able to compete on international routes. Drawn by profits at home they underinvested in their foreign operations, and fell behind their foreign rivals because they lacked the same scale.”
  • “Recognizing the harm to their domestic fleets, countries from Australia to China are loosening the rules protecting their fleets. Not America.”

Africa

Economist – The birthplaces of African leaders receive an awful lot of aid 10/7

  • “Scholars have long had a hunch that Chinese aid could be more easily manipulated than the Western sort, which often comes with strings attached. A Chinese white paper in 2014 stated that the government would not impose any ‘political conditions’ on countries asking for help. The commerce ministry, China’s lead aid agency, says most projects are initiated by recipient states. This approach makes aid more vulnerable to misuse by local leaders, say critics.”
  • “In a working paper, the pundits show that China’s official transfers to a leader’s birth region nearly triple after he or she assumes power. Even when using a stricter definition of aid provided by the OECD, a club of mostly rich countries, an increase of 75% was found. They got similar results when looking at the birthplaces of presidential spouses. Crucially, they found no such effect with aid doled out by the World Bank, their benchmark for Western assistance. ‘We believe Chinese aid is special,’ says Andreas Fuchs, a co-author of the study.”
  • “China’s approach to aid has other side-effects. In a paper released earlier this year, Diego Hernandez, an economist, showed that China’s rise as a development financier has increased competition between donors. This, in turn, has strengthened recipients’ bargaining power, says Mr Hernandez. Traditional donors have responded by lowering conditionality, or the number of strings attached to aid. Using data from 1980 to 2013, he finds that African countries have received 15% fewer conditions from the World Bank for every 1% increase in Chinese aid.”

October 9, 2017

Perspective

NYT – Nothing Divides Voters Like Owning a Gun – Nate Cohn and Kevin Quealy 10/5

Worthy Insights / Opinion Pieces / Advice

NYT – For Many on Puerto Rico, the Most Coveted Item is a Plane Ticket Out – Jack Healy and Luis Ferre-Sadurni 10/5

A Wealth of Common Sense – Good Advice vs. Effective Advice – Ben Carlson 10/5

WP – The troubling case of the young Japanese reporter who worked herself to death – Eli Rosenberg 10/5

WSJ – Income Investors: It’s OK to Be Sad, But Don’t Get Desperate – Jason Zweig 10/6

  • “Old bull markets don’t produce new ideas. They just produce new ways for investors to hurt themselves with old ideas.”
  • “With stocks at record highs and the income on bonds not far from record lows, circumstantial evidence suggests investors are getting restless — if not desperate.”
  • “Chasing ‘yield,’ or trying to get higher investment income, is one form of desperation. Last month, $1.6 billion in new money poured into exchange-traded funds holding high-yield corporate bonds, according to FactSet.”
  • “A recent survey of 750 individual investors by Natixis Global Asset Management found that they ‘need’ returns of 8.9%, after inflation, to reach their financial goals. In the same survey last year, investors said they needed a mere 8.5%. Since 1926, the return on U.S. stocks after inflation has averaged about 7% annually, according to Morningstar.”
  • “Such hankering for unrealistic returns can prompt investors to take imprudent risks. Just about any get-rich-quick story can look tempting.”
  • “This past week, an obscure Nasdaq-listed company called Bioptix, which had been licensing fertility hormones for cows, horses and pigs, announced that it was getting into the cryptocurrency business and changing its name to Riot Blockchain. The stock nearly doubled over its levels a week earlier.”
  • “This reminds market veterans of the dozens of companies that changed their names to include ‘Internet’ or ‘.com’ in 1998 and 1999. They outperformed comparable firms by an average of 53 percentage points in the five days surrounding the announcement of a name change, a study found in 2001.”
  • “Consider, too, Strategic Student & Senior Housing Trust, Inc., a firm in Ladera Ranch, Calif., looking to raise $1.1 billion to buy properties that serve college students and the elderly around the U.S.”
  • “Strategic’s prospectus for the offering, filed with the Securities and Exchange Commission on Sept. 26, says the firm will seek to ‘provide regular cash distributions to our investors’ and to sell out, merge with another company or go public within three to five years.”
  • “In the meantime, public investors are being asked to pay up to $10.33 for shares that the company has been selling to a select group of private investors for $8.50. Commissions and fees can exceed 10%, depending on the class of shares.”
  • “Strategic, which commenced operations only on June 28, is a ‘blind pool,’ meaning that the firm hasn’t yet determined what it will invest the proceeds of the offering in. Investors thus can’t ascertain the quality of the assets their money will buy. Strategic’s prospectus also says: ‘There is currently no public market for our shares and there may never be one’.”
  • “At times like these, reaching for yield and taking bigger risks might pay off for a few speculators in the short run. Investors, however, should hoard their cash and remember that in the long run it doesn’t pay to chase returns greater than the markets can realistically provide.”

Bloomberg View – A Volatility Trap Is Inflating Market Bubbles – Alberto Gallo 10/5

FT – Puerto Rico’s recovery depends on debt forgiveness – Gillian Tett 10/5

  • “Either way, the saga should be a wake-up call to investors. Yes, hurricanes may be rare. But Puerto Rico is not the only arena in which asset managers have chased after high yields with scant regard for risk. Just look at emerging markets and the high yield corporate bond world. If the tragedy in Puerto Rico shakes investors out of their complacency, that would be a thoroughly good thing — and long overdue.”

Markets / Economy

Yahoo Finance – U.S. economy loses jobs in September for first time 2010 – Myles Udland 10/6

Bloomberg Businessweek – Warren Buffett and Truck Stops Are a Perfect Match – Tara Lachapelle 10/3

Energy

Bloomberg – Solar Grew Faster Than All Other Forms of Power for the First Time – Anna Hirtenstein 10/4

  • “Solar power grew faster than any other source of fuel for the first time in 2016, the International Energy Agency said in a report suggesting the technology will dominate renewables in the years ahead.”
  • “The institution established after the first major oil crisis in 1973 said 165 gigawatts of renewables were completed last year, which was two-thirds of the net expansion in electricity supply. Solar powered by photovoltaics, or PVs, grew by 50%, with almost half of new plants built in China.”
  • “The IEA expects about 1,000 gigawatts of renewables will be installed in the next five years, a milestone that coal only accomplished after 80 years. That quantity of electricity surpasses what’s consumed in China, India and Germany combined.”
  • “The surge of photovoltaics in China is largely due to government support for renewables, which are being demanded by a population concerned about air pollution and environmental degradation that has led to deadly smogs. The country is seeking to reduce its reliance on coal and has become the world’s largest market for renewables, particularly solar.”
  • “’The solar PV story is a Chinese story,’ said Paolo Frankl, head of the IEA’s renewable energy division. ‘China has been for a long time the leader in manufacturing. What’s new is the share in the market. This year, it was equivalent to the total installed capacity of PV in Germany.’”
  • “The U.S. and India are among other nations pushing renewables. They along with China are projected to make up two-thirds of the clean-energy expansion worldwide. Despite President Donald Trump’s vow to bolster coal’s position in the power market, the U.S. is expected to be the second-largest market for renewables.”

Finance

WSJ – Daily Shot: Evercore ISI – US Corporate Debt as Percentage of GDP 10/6

VC – The Trillion Dollar Club of Asset Managers – Jeff Desjardins 10/6

Health / Medicine

NYT – As Overdose Deaths Pile Up, a Medical Examiner Quits the Morgue – Katharine Q. Seeyle 10/7

Other Links

VC – U.S. Interstate Highways, as a Transit Map – Jeff Desjardins 10/6

October 6, 2017

If you were to read only one thing…

NYT – Payday Lending Faces Tough New Restrictions by Consumer Agency 10/5

  • “A federal agency on Thursday imposed tough new restrictions on the so-called payday-lending industry, which churns out billions of dollars a year in high-interest loans to working-class and poor Americans.”
  • “The rules announced by the agency, the Consumer Financial Protection Bureau, clamp down on, and could largely eliminate, loans that are currently regulated by states and that critics say prey on the vulnerable by charging usurious fees and interest rates. The lenders argue that they provide financial lifelines to those in desperate need of short-term cash infusions.”
  • “The terms of a typical payday loan of $400 require that $460 be repaid two weeks later — the equivalent of an annual interest rate of more than 300%, far higher than what banks and credit cards charge for loans. Because most borrowers cannot repay their debts quickly, the loans are often rolled over, incurring more fees in the process.”
  • “Some 12 million people, many of whom lack other access to credit, take out the short-term loans each year, researchers estimate. Payday loans — so called because they are typically used to tide people over until their next paychecks — often entangle borrowers in hard-to-escape spirals of ever-growing debt, according to the consumer bureau.”
  • “The new rules limit how often, and how much, customers can borrow. The restrictions, which have been under development for more than three years, are fiercely opposed by those in the industry, who say the rules will force many of the nation’s nearly 18,000 payday lenders out of business.”
  • “Until now, payday lending has been regulated by states, with 15 already having made the loans effectively illegal. In more than 30 other states, though, the short-term loan market is thriving. The United States now has more payday loan stores than McDonald’s outlets. They make around $46 billion a year in loans, collecting $7 billion in fees.”
  • “The payday-lending rules do not require congressional approval. Congress could overturn the rules using the Congressional Review Act, which gives lawmakers 60 legislative days to nullify new regulations, but political analysts think that Republicans will struggle to get the votes needed to strike down the regulations.”
  • “Under the new rules, lenders will be allowed to make a single loan of up to $500 with few restrictions, but only to borrowers with no other outstanding payday loans. For larger or more frequent loans, lenders will have to follow a complex set of underwriting rules intended to ensure that customers have the means to repay what they borrow.”
  • “The restrictions would radically alter the short-term lending market. The number of loans made would likely fall at least 55%, according to the consumer agency’s projections.”
  • “That would push many small lending operations out of business, lenders say. The $37,000 annual profit generated by the average storefront lender would instead become a $28,000 loss, according to an economic study paid for by an industry trade association.”

Worthy Insights / Opinion Pieces / Advice

Bloomberg Businessweek – Fighting the Toxic Nightmare Next Door – Susan Berfield 9/28

  • “A radiation-riddled landfill in St. Louis, Trump’s EPA, and two moms who won’t let it go.”

NYT – Thoughts and Prayers and N.R.A. Funding – David Leonhardt, Ian Prasad Philbrick, and Stuart A. Thompson 10/4

FT – The price of paid news may not stay high – John Gapper 10/3

  • “Google could soon bundle information like a cable television company.”

FT – Lloyds and the HBOS time bomb – Jonathan Ford 10/4

  • “When Lloyds took over its rival bank in 2009, it also inherited the legacy of massive fraud. Its response? To dismiss the victims and any evidence of wrongdoing.”

Markets / Economy

Bloomberg Businessweek – Springsteen Tickets Hit $10,000, and Wall Street Gets Scalped – Laura J Keller, Eben Novy-Williams, Bob Van Voris, and Katherine Burton 9/25

Health / Medicine

Vox – I was skeptical that the anti-vaccine movement was gaining traction. Not anymore. – Julia Belluz 10/3

  • Texas K-12 nonmedical exemptions.

Entertainment

Bloomberg Businessweek – Hollywood Is Scrambling to Replace Chinese Funding – Anousha Sakoui 9/26

  • “In the past six months, Hollywood has seen film financing deals worth more than $1 billion unravel as Chinese investors and some hedge funds move away from funding movies.”

China

Bloomberg Businessweek – China Unleashes Its Farmers – Kevin Hamlin, Dexter Roberts, and Pi Xiaoqing 9/26

  • “To boost the earnings of China’s 230 million rural households, Beijing is rolling out reforms that allows farmers to profit from their land, even while barring private ownership.”

Europe

FT – Spain courts suspend planned Catalonia parliament session – Michael Stothard 10/5

  • “The Spanish courts have ordered the temporary suspension of a special session of Catalonia’s parliament scheduled for next Monday where regional officials were expected to vote on making a unilateral declaration of independence.”
  • “While the session may still happen in defiance of the courts, the move highlights how Madrid is doing everything in its power to prevent the region from making formal its promises to break away from Spain following Sunday’s referendum.”
  • “If independence is declared on Monday, Spanish prime minster Mariano Rajoy will likely be forced to resort to the so called ‘nuclear option’ of using article 155 of the constitution, which allows them to suspend the region’s autonomy and remove officials from office.”
  • “Mr Rajoy has so far been reluctant to use this powerful device, despite pressure by hawkish members of his own party. On Thursday, however, he promised ‘greater evils’ on the Catalan government if they go ahead with declaring independence.”

Japan

WSJ – Daily Shot: Deutsche Bank Bank of Japan Ownership of Japanese ETF Market 10/5

October 2, 2017

If you were to read only one thing…

Reuters – Chaos and hackers stalk investors on cryptocurrency exchanges – Steve Stecklow, Alexandra Harney, Anna Irrera and Jemima Kelly 9/29

  • “Online exchanges for trading bitcoins and other virtual currencies can make fortunes for their owners. But they are largely unregulated, besieged by hackers and thieves, and fraught with risk for consumers.”
  • “Cryptocurrencies were supposed to offer a secure, digital way to conduct financial transactions, but they have been dogged by doubts. Concerns have largely focused on their astronomical gains in value and the likelihood of painful price crashes. Equally perilous, though, are the exchanges where virtual currencies are bought, sold and stored. These exchanges, which match buyers and sellers and sometimes hold traders’ funds, have become magnets for fraud and mires of technological dysfunction, a Reuters examination shows, posing an underappreciated risk to anyone who trades digital coins.”
  • “Huge sums are at stake. As the prices of bitcoin and other virtual currencies have soared this year – bitcoin has quadrupled – legions of investors and speculators have turned to online exchanges. Billions of dollars’ worth of bitcoins and other cryptocurrencies – which aren’t backed by any governments or central banks – are now traded on exchanges every day.”
  • “’These are new assets. No one really knows what to make of them,’ said David L. Yermack, chairman of the finance department at New York University’s Stern School of Business. ‘If you’re a consumer, there’s nothing to protect you.’”
  • There have been at least three dozen heists of cryptocurrency exchanges since 2011; many of the hacked exchanges later shut down. More than 980,000 bitcoins have been stolen, which today would be worth about $4 billion. Few have been recovered. Burned investors have been left at the mercy of exchanges as to whether they will receive any compensation.”
  • “Nearly 25,000 customers of Mt. Gox, once the world’s largest bitcoin exchange, are still waiting for compensation more than three years after its collapse into bankruptcy in Japan. The exchange said it lost about 650,000 bitcoins. Claims approved by the bankruptcy trustee total more than $400 million.”
  • “So-called ‘flash crashes’ – when cryptocurrencies suddenly plummet in value – are also a threat. Unlike regulated U.S. stock exchanges, cryptocurrency exchanges aren’t required to have circuit breakers in place to halt trading during wild price swings. Digital coin exchanges are also frequently under assault by hackers, resulting in down times that can sideline traders at critical moments.”
  • Caveat emptor.

Perspective

Vox – What every American needs to know about Puerto Rico’s hurricane disaster – Brian Resnick and Eliza Barclay 9/29

  • “3.4 million US citizens live in Puerto Rico, and they are entitled to the same government response as any state. But half of Americans don’t even know that.”
  • “Puerto Ricans have been citizens of the United States since 1917, when President Woodrow Wilson signed the Jones-Shafroth Act. Citizens mean citizens. Puerto Ricans can travel freely to and from the continental United States without a passport. They’re protected by the same Bill of Rights as anyone else born in the United States. They vote in presidential primaries.”
  • “The island does not get electoral votes in general presidential elections. It also does not have voting representatives in Congress. Jenniffer González-Colón serves as resident commissioner of Puerto Rico, a non-voting member of the US House of Representatives.”
  • “If Puerto Rico were a state, it would be the 30th most populated — with more people than Wyoming, Vermont, and Alaska combined.”
  • “This hurricane season has been punishing for Puerto Rico. First, it got clipped by Hurricane Irma, a huge Category 5 storm whose eye passed just north of the island. That storm — which had ravaged several Caribbean islands — left 1 million people without power on Puerto Rico. By the time Maria hit, 60,000 people were still without electricity. That means there are many people on the island who haven’t had power for 20 days (Irma passed by on September 7).”
  • “Maria was a slightly smaller storm, but it was far, far more devastating. That’s because it charted a course directly over Puerto Rico, hit near its peak intensity, and passed around 25 miles away from San Juan, the capital, which is home to about 400,000 people. No nation or territory could suffer such a direct hit without some damage.”
  • “’It was as if a 50- to 60-mile-wide tornado raged across Puerto Rico, like a buzz saw,’ Jeff Weber, a meteorologist with the National Center for Atmospheric Research, says. ‘It’s almost as strong as a hurricane can get in a direct hit.’”
  • “By the record books, it was the fifth-strongest storm ever to hit the US, and the strongest storm to hit the island in 80 years.”
  • “Exact figures on the extent of the damage and the costs of repairs on the island are not yet known. This is partly due to the fact that communications on the island are strained. But it’s also because many roads are damaged and it’s hard to get around. AIR Worldwide, a catastrophe risk consultancy, estimates the storm caused $40 billion to $85 billion in insurance claims throughout the Caribbean, with 85% of those losses in Puerto Rico.”
  • “It could be four to six months before power is fully restored on the island. That’s half a year with Puerto Rico’s 3.4 million residents relying on generators, half a year without air conditioning in the tropical climate, half a year that electric pumps can’t bring running water into homes, half a year when even the most basic tasks of modern life are made difficult.”
  • “PREPA, the electric company on the island, has a massive $9 billion debt, as Vox’s Alexia Fernández Campbell has explained, and in July it defaulted on an interest payment. For years, it hasn’t had the money to invest in modernizing Puerto Rico’s electrical systems. Even without hurricanes, power outages are frequent on the island. Making things worse: There aren’t enough workers to fix the infrastructure. Young people have been leaving the island in droves as the economy has tightened, and older workers have been retiring en masse, securing their pensions.”
  • “No electricity means no power to pump water into homes, no water to bathe or flush toilets. FEMA said Saturday that 55% of people on the island still are without potable water.”
  • “The storm knocked out 1,360 out of 1,600 cellphone towers on the island. Many communities have been isolated from the outside world for days, relying only on radios for news.”
  • It’s bad. And of course, Puerto Rico is not alone. “The island of Barbuda has been completely abandoned, and residents still can’t return home. Twenty-seven people died in Dominica. And 48,000 people are still without power in the US Virgin Islands.”

Worthy Insights / Opinion Pieces / Advice

NYT – For Homeless Advocates, a Discouraging Lesson in Los Angeles: Money Is Not Enough – Adam Nagourney 9/29

Markets / Economy

FT – Value of private equity dealmaking at highest level since 2007 – Javier Espinoza, Robert Smith, and Arash Massoudi 9/28

Real Estate

WSJ – Daily Shot: UBS Global Real Estate Bubble Index 9/29

Finance

FT – South Korea joins global backlash against initial coin offerings – Bryan Harris and Edward White 9/29

  • “Country is latest to ban the fundraising platform involving digital currencies.”

Health / Medicine

Bloomberg – This State Has the Best Health Care in America – Vincent Del Giudice and Wei Lu 9/28

  • Hint, according to Bloomberg, it’s Hawaii.

Sovereign Wealth Funds

FT – SWFs pull money from asset managers for 12th consecutive quarter – Jennifer Thompson 9/29

  • “Sovereign wealth funds have withdrawn billions of dollars from asset managers for a 12th consecutive quarter as low oil prices continue to take their toll. The net amount repatriated in the past three years has reached $182bn.”
  • “The state-backed funds, which many oil-rich nations use to save for a rainy day or to provide money for future generations, withdrew a net $6bn in the three months to the end of June, according to eVestment, the data provider.”
  • “Redemptions by SWFs began in the latter half of 2014, shortly after a glut in oil supply, due to increased US shale production, triggered a sharp drop in the oil price.”
  • “However, disenchantment with high fees charged by fund managers as well as a desire by some state-backed vehicles to put cash to work themselves are additional inducements for SWFs to take back control.”
  • “There are signs of moderation. The net outflow in the second quarter of 2017 was below the quarterly average of the past three years, which has been around $15.1bn every three months.”

September 13, 2017

Perspective

WSJ – Irma Leaves 6.7 Million Florida Utility Customers in the Dark – Erin Ailworth 9/11

NYT – Houston’s Floodwaters Are Tainted With Toxins, Testing Shows – Sheila Kaplan and Jack Healy 9/11

  • “It is not clear how far the toxic waters have spread. But Fire Chief Samuel Peña of Houston said over the weekend that there had been breaches at numerous waste treatment plants. The Environmental Protection Agency said on Monday that 40 of 1,219 such plants in the area were not working.”
  • “The results of The Times’s testing were troubling. Water flowing down Briarhills Parkway in the Houston Energy Corridor contained Escherichia coli, a measure of fecal contamination, at a level more than four times that considered safe.”

NYT – In Houston After the Storm, a City Split in Two – Jack Healy 9/8

  • “Life in Houston now comes with a twinge of survivor’s guilt for those in dry neighborhoods, and envy among those still dealing with floodwater.”

Worthy Insights / Opinion Pieces / Advice

WSJ – Why the Markets Keeps Going Up and What Would Bring It Down – Justin Lahart 9/12

  • “Big, fast-growing companies have led the recent rally, and that should continue-but when it ends, get out fast.”

WEF & Business Insider – A neuroscientist who studies decision-making reveals the most important choice you can make – Chris Weller 8/4

  • Spoiler alert, it’s who you surround yourself with.

Markets / Economy

FT – US companies transformed into 800lb gorilla in bond market – Eric Platt, Nicole Bullock, and Alexandra Scaggs 9/12

  • “Thirty US companies together have more than $800bn of fixed-income investments, according to a Financial Times analysis of their most recent filings with the US Securities and Exchange Commission.”
  • “Their holdings of Treasuries, corporate, agency and municipal debt, as well as asset- and mortgage-backed securities, means they collectively have more firepower in debt and credit markets than high-profile asset managers including AllianceBernstein, Invesco and Franklin Templeton.”
  • “’They are asset managers in their own right,’ Ramaswamy Variankaval, head of JPMorgan’s corporate finance advisory group, said of the companies.”
  • “A reluctance by American multi-nationals to repatriate profits generated overseas has pushed the size of the US corporate cash piles to more than $2tn, a rise of 50% over the past decade and more than double the levels at the turn of the century, according to the Federal Reserve.”
  • “In total, the 30 companies, which include venerable household names like Ford, Coca-Cola and Boeing, have more than $1.2tn in cash, cash equivalents, marketable securities and investments, according to the FT analysis.”
  • “The 30 companies have amassed a portfolio of more than $400bn of US corporate bonds, representing nearly 5% of the outstanding market.”
  • “They compete for such debt alongside pension funds, sovereign wealth funds and other investors, helping to drive down borrowing costs for corporate America.”
  • Seems self-serving to an extent…

Finance

WSJ – China to Shut Bitcoin Exchanges – Chao Deng and Paul Vigna 9/11

  • “The policy shift in the world’s No. 2 economy shows how nations are wrestling with bitcoin and its place in the financial system. In China, specifically, the government’s attack on bitcoin comes amid a focus on preventing capital from fleeing to digital currencies.”
  • “After a Chinese news organization Friday reported on China’s commercial-trading ban, Bitcoin slid around 10% to $4,186, from levels above $4,600 on Thursday, according to research site CoinDesk. It has hovered around that level since, closing Monday at $4,211.”
  • “China has long been a major hub for bitcoin, which was created by an anonymous programmer during the depths of the 2008 financial crisis as an alternative to official currencies. Much of the world’s bitcoin is mined—created through powerful algorithms—in China. As recently as this past January, before new rules damped trading in the country, more than 80% of global bitcoin activity took place in yuan.”
  • “The stakes for Beijing grew as prices of virtual currencies like bitcoin soared, adding to the risk that Chinese investors would continue to speculate and expose themselves to big losses. Analysts and investors attribute the sharp rise in bitcoin last year to Chinese investors, who began buying it up while at the same time selling the yuan amid worries that the Chinese currency would weaken.”
  • “While China in the past accounted for the bulk of global bitcoin trading activity, the country’s share has dropped dramatically since the government started making moves to cool the market.”
  • “In April, Japan’s Financial Services Agency implemented rules that recognized bitcoin as a payment method. Since then, Japan has become the top market for bitcoin trading, accounting for almost half of global volumes. The U.S. share of trading has jumped to above 25% from 5% over the past year.”

Health / Medicine

NYT – New Gene-Therapy Treatments Will Carry Whopping Price Tags – Gina Kolata 9/11

  • “The first gene therapy treatment in the United States was approved recently by the Food and Drug Administration, heralding a new era in medicine that is coming faster than most realize — and that perhaps few can afford.”
  • “The treatment, Kymriah, made by Novartis, is spectacularly effective against a rare form of leukemia, bringing remissions when all conventional options have failed. It will cost $475,000.”
  • “With gene therapy, scientists seek to treat or prevent disease by modifying cellular DNA. Many such treatments are in the wings: There are 34 in the final stages of testing necessary for F.D.A. approval, and another 470 in initial clinical trials, according to the Alliance for Regenerative Medicine, an advocacy group.”
  • “The therapies are aimed at extremely rare diseases with few patients; most are meant to cure with a single injection or procedure. But the costs, like that of Kymriah, are expected to be astronomical, alarming medical researchers and economists.”
  • “One drug, to prevent blindness in those with a rare genetic disease, for example, is expected to cost between $700,000 and $900,000 per patient on average, noted Dr. Aaron Kesselheim, director of the program on regulation, therapeutics and law at Brigham and Women’s Hospital.”
  • “Drug makers argue that the prices ought to reflect the value of a curative treatment to the patient. Dr. Kesselheim and other experts are far from convinced.”
  • “Elizabeth Pingpank, a spokeswoman for Bluebird Bio, which is developing several gene therapies, said the company realizes its prices will be a challenge.”
  • “Bluebird and several other companies have set up a consortium with academics to try to figure out novel ways to enable insurers to pay the expected high prices.”
  • “’We recognize that most payers in the U.S. are not currently set up to support one-time therapies that generate long-term transformative benefits,’ Ms. Pingpank said.”
  • “Indeed, health care executives already are rushing to develop new payment models.”
  • “’It’s amazing how many think this is in the future,’ said Dr. Steve Miller, chief medical officer at Express Scripts, said of the looming payment problem. ‘This is right now.’”
  • “The idea favored by Dr. Miller and others is to pay for these novel drugs as you might a mortgage on a house.”
  • “An insurer would pay a large fraction up front, when the patient is treated, and then make regular payments until the entire bill is paid — or the disease returns.”
  • “That would require an unprecedented type of cooperation among insurers. Patients often change insurers, and there is no benefit to a new insurer in continuing payments for an injection that a patient had long ago — even if it was curative.”

China

WSJ – Daily Shot: Natixis – Cross Border M&A Deals by Chinese Corporates 9-12

FT – China’s biggest banks ban new North Korean accounts – Yuan Yang and Xinning Liu 9/11

  • “China’s biggest banks have banned North Koreans from opening new accounts in an unprecedented move to clamp down on financial flows with the country’s unruly neighbor.”
  • “Multiple bank branches, including those of the country’s top four lenders, told the Financial Times they had imposed a freeze on new accounts for North Korean people and companies. Some are going even further, saying they are ‘cleaning out’ existing accounts held by North Koreans by forbidding new deposits.”
  • “The moves give weight to the theory that since Pyongyang’s sixth and most powerful nuclear test this month, policy hawks in Beijing have gained the upper hand in an internal debate over whether to toughen sanctions against the Kim Jong Un regime.”
  • “The measures go further even than what has been agreed internationally.”

Europe

WSJ – Daily Shot: Europace German House Price Index 9-11

August 3, 2017

If you were to read only one thing…

WSJ – Indexers Push Back Against Wall Street – Ken Brown 8/1

  • “Give a small cheer to the index nerds at S&P. Their decision to ban companies that have different classes of stock is a rare instance of Wall Street protecting investors.”
  • “S&P said Monday that it would no longer consider companies with multiple share classes for its main U.S. stock indexes. The one that matters is the S&P 500, which is tracked by about $2.2 trillion worth of assets and which serves as a benchmark for more than $7.8 trillion of investments. The share structures S&P is targeting usually grant insiders control of the company by giving their shares far more votes than shares held by outside investors.”
  • “FTSE Russell, another big index provider, issued a proposal last month that requires a minimum amount of shares be in public hands, a step in the same direction as S&P.”
  • “The shift mainly targets Silicon Valley, where companies from Facebook to Google and, most recently, Snap , have sold shares while giving investors virtually no say in how the companies are run. Snap, now down more than 20% from its IPO price, was seen as the tipping point because it gave investors no say at all. Companies already in the index will be allowed to stay.”

Perspective

Knoema – World’s Most Visited Cities – 7/24

NYT – Debt-Ridden Chinese Giant Now a Shadow of Its Former Size – Keith Bradsher 8/1

  • Basically, at some point businesses and real estate development need to make money on their own accord… Ordinarily, lenders and investors don’t fund on the strategy of ‘if you build it, they will come.’

Worthy Insights / Opinion Pieces / Advice

Forbes – The Good Times For The Bulls May Be Coming To A Close, Here’s Why – Bert Dohmen 8/1

Markets / Economy

WSJ – Daily Shot: FRED – US Total Construction Spending YoY Change 8/2

WSJ – Daily Shot: FRED – US Total Nonresidential Construction Spending YoY Change 8/2

Real Estate

WSJ – Luxury Condos on ‘Billionaire’s Row’ Are Slow to Sell Out – Josh Barbanel 8/2

Finance

Economist – Bitcoin divides to rule – 8/2

  • “On August 1st, without much agonizing or awkward negotiation, a group of Bitcoin activists and entrepreneurs managed to create a second version of the crypto-currency. It immediately gained a following: in less than a day of existence, the value of a unit of ‘Bitcoin Cash’ jumped to over $600, and tokens worth more than $10bn were in circulation (although that is still much smaller than Bitcoin classic, which stood at about $2,700 and nearly $45bn).”
  • “This ‘fork’, as such events are called, came earlier than foreseen. But it is broadly how insiders had expected a two-year-old conflict over the future of Bitcoin to end. At the heart of this ‘civil war’ was the question of how to increase the capacity of the system, which can only handle up to seven transactions per second. The new version is able to process 56 per second, but otherwise works much like the original one.”
  • “This week’s fork has made bitcoin holders richer: they get an amount of the new version equal to their holdings of the old sort; and at least for now, both together are worth more than the old one alone. For this reason only, expect another split in November when an upgrade of the old Bitcoin system will kick in.”  

Environment / Science

NYT – Blistering Heat Wave Threatens Seattle, Where Only a Third Have Air-Conditioning – Maggie Astor 8/1

Health / Medicine

NYT – In Breakthrough, Scientists Edit a Dangerous Mutation From Genes in Human Embryos – Pam Belluck 8/2

South America

WSJ – Venezuelan Officials Tampered With Election, Voting-Software Firm Says – Kejal Vyas 8/2

  • “Based on the robustness of our system, we know, without any doubt, that the turnout of the recent election for a National constituent assembly was manipulated.” – Antonio Mugica, Smarmatic’s CEO

May 11, 2017

Worthy Insights / Opinion Pieces / Advice

Bloomberg View – After Comey, Justice Must Be Served – Michael Bloomberg 5/10

  • “Congress needs to get serious about holding the president accountable.”

NYT – The Princeling in the West Wing – Jill Abramson 5/10

Economist – Schumpeter: Harvard Business School risks going from great to good – A confidential memorandum of warning to its senior faculty 5/4

Markets / Economy

Economist – The world’s most valuable resource is no longer oil, but data 5/6

Real Estate

WSJ – Labor Shortage Squeezes Builders – Peter Grant 5/6

  • “Construction labor costs are rising an average of 4% to 5% annually, outpacing inflation, according to Anirban Basu, chief economist of the Associated Builders and Contractors. ‘The situation is going to get worse,’ he said.”
  • “Overall, the association said the industry needs 500,000 more workers. The trade group estimates 600,000 additional workers would be needed for the $1 trillion in infrastructure building and improvement for which President Donald Trump has said he would seek funding.”

Health / Medicine

Economist – Fatal attraction: The link between pollution and heart disease 5/4

  • “An experiment suggests pollutants build up in arterial plaques.”

Britain

FT – Cash is king in homes market but leaves many unable to buy – Chris Giles 5/9

China

WSJ – Rich, Young Chinese Are Buying Overseas Properties on Their Smartphones – Dominique Fong 5/9

  • “Millennials acquire real estate in other countries as hedge against a weakening currency, homes for their own children when they study abroad.”

NYT – A Chinese Giant Is on a Global Buying Spree. Who’s Behind It? – David Barboza 5/9

  • “According to corporate filings, state-backed banks have given HNA a $60 billion line of credit, a level of lending usually reserved for state-owned enterprises charged with carrying out the government’s policies.”
  • Seriously? We’ll if you’re going to give me money to place, I’ll place it.
  • For reference, “when the company was founded in 1993, China had just begun experimenting with private ownership, opening new economic zones and allowing companies to sell shares to the public. The Hainan provincial government asked Mr. Chen, a former pilot with the People’s Liberation Army, to help develop a regional carrier, one that would be partly owned by the state and partly owned by private investors.”
  • It has since become a private company and part of the HNA Group.
  • “In 1993, the company had just $17 million in revenue. Today, it has about $90 billion in annual revenue, most coming from companies acquired outside China.”
  • “HNA, of late, has embraced the government’s push to ‘go global’ and invest overseas, focusing on shipping, hotels, logistics and retail, amassing a $145 billion portfolio. Over the past three years, it has spent more than $30 billion, according to Dealogic.”

Russia

Economist – A new kind of revolution: Russians rebel against plans to tear down their homes 5/4

  • Earlier this year Moscow city authorities unveiled plans to demolish as many as 8,000 buildings and move up to 1.6m residents from ageing low-rise apartment blocks known as khrushchevki. The ambitious urban makeover could touch some 25m square meters of housing, cost at least 3.5 trillion roubles ($61bn), and run for more than 20 years. The plan is the brainchild of Moscow’s mayor, Sergei Sobyanin, and comes with the blessing of President Vladimir Putin. For some residents, it means a chance to ditch dilapidated housing. Others fear being thrown out of their homes, and are furious at the prospect.”