Tag: Mexico

April 23, 2018

If you were only to read one thing…

FT – Spanish now richer than Italians, IMF data show – Valentina Romei 4/19

  • “Spaniards have become richer than Italians — a heartening indication of Spain’s economic revival but a worrying sign for Italy, the eurozone’s third-largest economy, which is stuck in political gridlock.”
  • “Spain’s per capita gross domestic product exceeded that of Italy in 2017, according to IMF data published this week that compare countries on a so-called ‘purchasing power parity’ basis. The IMF also forecast that Spain would become 7% richer than Italy over the next five years. A decade ago Italy was 10% richer on the same basis.”
  • “By 2023 some former Soviet bloc countries, including Slovakia and the Czech Republic, are also expected to become richer than Italy on a per capita basis, the IMF forecasts show.”
  • “Italy’s stagnation is one of the main causes of the country’s increasingly bitter political divisions, with the electorate losing faith in the ability of its traditional parties to create jobs and restore growth. Anti-establishment and protest parties emerged as the big winners of Italy’s inconclusive general election last month, where voters deserted more moderate center-left and center-right forces.”
  • “Italy’s underperformance — and in particular any threat to its ability to service its debt, the largest in the eurozone after Greece’s relative to the size of the economy — is also seen as one of the biggest risks for the single-currency area.”
  • “The fact that Spain has overtaken Italy owes more to Italy’s problems than Spain’s economic progress, which has only recently gathered pace.”
  • “At the end of the 1990s, Italy — which now has almost 15m more people than Spain — had an economy twice as large as that of Spain. It is now only 50% larger and the difference is expected to shrink even further in the next five years.”
  • “Back in 1997, Italy was the 18th richest economy on a per capita basis among the countries for which the IMF has a complete data set. After 10 years, its ranking dropped 10 positions — and it has now slipped five more positions in the decade to 2017.”
  • “By 2023 Italy is expected to be only the 37th richest country on a per capita basis.”

Perspective

FT – Young buyers are being priced out of global city property – George Hammond 4/18

Worthy Insights / Opinion Pieces / Advice

Bloomberg View – Mexico Didn’t Hit the Jackpot With Nafta – Justin Fox 4/18

FT – The quiet revolution: China’s millennial backlash – Yuan Yang 4/17

WSJ – Chines Banks Find Another Funding Wheeze – Andrew Peaple 4/20

  • “Pressure from regulators means it’s been getting harder for the country’s banks to get enough money.”

WP – Trump lied to me about his wealth to get onto the Forbes 400. Here are the tapes. – Jonathan Greenberg 4/20

WP – The staggering environmental footprint of all the food that we just throw in the trash – Chris Mooney 4/18

Markets / Economy

WSJ – Daily Shot: Morgan Stanley Research – Country Inflation Targets and Actuals 4/20

WSJ – Daily Shot: @Not_Jim_Cramer – Major Central Bank Balance Sheets 4/20

WSJ – Daily Shot: IMF – Global Debt to GDP 4/20

Real Estate

John Burns RE Consulting – Challenges Mount for First-Time Buyers – Devyn Bachman 4/20

WSJ – Rising Sea Levels Reshape Miami’s Housing Market – Laura Kusisto and Arian Campo-Flores 4/20

Energy

FT – Major dilemma: oil companies hedge bets on low-carbon future – Andrew Ward and Leslie Hook 4/17

  • For the world to attain lower carbon dioxide emissions, the oil majors will need to be leaders in this initiative. They’ve taken on the charge to some degree committing larger sums to renewable energy sources; however, it’s hard when they’re so good at making money with carbon dioxide emitting sources.

Finance

FT – Sovereign wealth fund assets ‘could reach $15tn in two years’ – Chris Flood 4/20

  • “Assets managed by SWFs globally reached $7.45tn spread across 78 funds as at March 2018, an increase of $866bn, or 13%, over the past 12 months, according to data provider Preqin.”  
  • “A recovery in oil prices and strong gains for equity markets drove the increase in assets, which will come as welcome news to investment managers as SWFs are among their most prestigious clients. SWFs pulled about $85bn from asset managers over the 24 months ending on December 16 as low oil prices forced governments in the Middle East to raid these rainy-day funds to prop up public spending.”

Environment / Science

Visual Capitalist – Visualizing the Prolific Plastic Problem in Our Oceans – Nick Routley 4/21

China

FT – Tencent and JD.com lead $437m investment in LeEco unit – Emily Feng 4/18

India

Hindustan Times – Cash crunch at ATMs could be the after-effects of demonetization – Roshan Kishore 4/18

  • “Analysis suggests shortage of cash in ATMs could be a result of persistence of tightness in overall money supply after demonetization.”

NYT – India’s A.T.M.s Are Running Out of Cash. Again. – Hari Kumar and Vindu Goel 4/20

January 29, 2018

Perspective

BLS – TED: The Economics Daily – Union Membership Rates in each State, 2017 1/25

  • “New York continued to have the highest union membership rate (23.8%), while South Carolina continued to have the lowest (2.6%).”

statista – The Countries Most Optimistic About 2018 – Niall McCarthy 1/22

Visual Capitalist – Visualizing a Global Shift in Wealth Over 10 Years – Jeff Desjardins 1/26

WSJ – Daily Shot: US Upward Mobility 1/26

Worthy Insights / Opinion Pieces / Advice

A Wealth of Common Sense – Some Lessons For Living From Older Generations – Ben Carlson 1/25

Project Syndicate – Blockchain’s Broken Promises – Nouriel Roubini 1/26

WSJ – My 10-Year Odyssey Through America’s Housing Crisis – Ryan Dezember 1/26

Markets / Economy

Bloomberg – Worthless Auto Trade-Ins Signal Riskier Loans – Claire Boston 1/25

  • “A growing share of the trade-ins that U.S. auto dealers and lenders accept for car-purchase financing are worthless on paper, a sign that banks and finance companies are making riskier loans to keep up revenue as vehicle sales slow.”
  • “Almost a third of cars traded in last year were worth less than the loans that had been financing them, according to car-shopping website Edmunds. That’s up from about a quarter a decade earlier, said Edmunds, which looked at cars traded in as part of financing packages for new auto purchases in the U.S.”
  • “Underwater trade-ins are just one example of the greater risks that lenders are taking now. New vehicle sales fell 1.8% to 17.2 million in 2017, but lending volume for new and used car purchases was on track to be higher than ever, according to data from the Federal Reserve Bank of New York and consumer credit bureau Experian. The growth in the average amount financed for a new car outpaced median income growth between 2013 and 2016, Moody’s said, suggesting borrowers are getting more strained.”
  • “Any pain from car-loan trouble will likely be just a shadow of the housing bubble collapse, because the auto debt market is much smaller. There were around $9 trillion of mortgages outstanding at the end of the third quarter, compared with $1.2 trillion of auto debt, the New York Fed said. And so far, many of the bonds backed by subprime auto loans are performing well thanks to built-in protections for investors. Wells Fargo analysts said in a note Wednesday that bonds issued by two of the biggest subprime auto lenders — Santander Consumer USA Holdings Inc. and General Motors Co.’s finance arm — have room to reach prices not seen since before the financial crisis.”
  • “The higher percentage of underwater loans on trade-ins may be a sign that car owners are trading in their vehicles sooner than they had previously. A consumer is often the most underwater on his or her auto loan in the first few years of ownership, because the value of the vehicle drops fastest over that time.”
  • “For borrowers who do trade in their underwater cars, lenders are essentially giving them the money to pay down their loan. The dealer sells the used car, and whatever balance remains on the old loan is folded into the new loan. The borrower might get a longer-term loan than he or she had before to help keep monthly payments manageable.”

Real Estate

Commercial Property Executive – REIT Gets SEC OK for St. Regis Aspen Resort IPO – Gail Kalinoski 1/26

  • “Aspen REIT Inc. has been given approval by the Securities and Exchange Commission for a $33.5 million initial public offering allowing investors to buy shares in the luxury St. Regis Aspen Resort in Colorado.”
  • “Upon closing of the IPO, Aspen REIT will be the first single-asset REIT to list on a national securities exchange in the U.S., according to the company.”
  • “Aspen REIT is offering 1,675,000 shares at $20 per share in the Regulation A+ IPO. The REIT applied to list its common stock on the NYSE American stock exchange under the ticker symbol AJAX. Aspen REIT intends to use substantially all of the net proceeds from the IPO, together with equity in Aspen REIT’s subsidiary operating partnership, to acquire the St. Regis Aspen Resort, a full-service, 179-key luxury hotel at the base of Aspen Mountain in the Rocky Mountains.”
  • Well that’s another way to ‘crowd source’ / syndicate funds.

Finance

Topdown Charts – ChartBrief 182 – Bond Yield Outlook – Callum Thomas 1/24

  • “There has been a lot of talk lately about trendlines, key levels and breakouts by some of the big names… Ray Dalio, Jeffrey Gundlach, Bill Gross.  But anyway, you don’t need to be a famous hedge fund manager to see the writing slowly showing up on the wall here across the major global sovereign bond markets.  The charts below show US and German 10-year bond yields have already broken out, and Japan/UK are getting close.”

WSJ – Daily Shot: US 3 Month LIBOR Rate 1/24

Cryptocurrency

Bloomberg – Coincheck Says It Lost Crypto Coins Valued at About $400 Million – Yuji Nakamura and Andrea Tan 1/26

Environment / Science

Yale News – 2018 Environmental Performance Index: Air quality top public health threat 1/23

Mexico

Reuters – Mexico’s drug cartels, now hooked on fuel, cripple the country’s refineries – Gabriel Stargardter 1/24

Puerto Rico

NYT – Hurricane-Torn Puerto Rico Says It Can’t Pay Any of Its Debts for 5 Years – Patricia Mazzei and Mary Williams Walsh 1/24

  • “The devastation wrought by Hurricane Maria has made Puerto Rico’s already dire financial situation even worse: The island’s leaders acknowledged late Wednesday that they will not be able to pay down any portion of their more than $70 billion debt for the next five years because of the damage.”
  • “Just before the hurricane, Puerto Rico had made plans to pay creditors a total of $3.6 billion through 2022. That was a fraction of the amount due, had the island, a United States territory, not gone into default.”
  • “Now, Puerto Rico expects its budget to be $3.4 billion in the red this year — a deficit that will take five years to close — because of the storm’s toll.”
  • “Nearly a third of customers remain without electricity, more than four months after the storm.”
  • “The government projects its population will shrink by 19.4% over the next five years, with a total exodus of over 600,000 people.”

 

December 13, 2017

Perspective

Bloomberg Businessweek – The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market – Olga Kharif 12/8

  • “Among the coins people invest in, bitcoin has the least concentrated ownership, says Spencer Bogart, managing director and head of research at Blockchain Capital. The top 100 bitcoin addresses control 17.3% of all the issued currency, according to Alex Sunnarborg, co-founder of crypto hedge fund Tetras Capital. With ether, a rival to bitcoin, the top 100 addresses control 40% of the supply, and with coins such as Gnosis, Qtum, and Storj, top holders control more than 90%. Many large owners are part of the teams running these projects.”

WEF – This is every US state’s biggest trading partner – Andy Kiersz 11/16

Worthy Insights / Opinion Pieces / Advice

Bloomberg Businessweek – What Happens When the Government Uses Facebook as a Weapon? – Lauren Etter 12/7

  • “Internet.org was just one part of a decade-long campaign of global expansion for Facebook. In countries such as the Philippines, the efforts have been so successful that the company is able to tout to its advertisers that its network is, for many people, the only version of the internet they know. Repressive governments originally treated Facebook, and all social media, with suspicion—they saw how it could serve as a locus for dissidents, as it had in the Arab Spring in 2011. But authoritarian regimes are now embracing social media, shaping the platforms into a tool to wage war against a wide range of opponents—opposition parties, human-rights activists, minority populations, journalists.”
  • Maria Ressa, co-founder of the country’s leading online news site “recalled that she started as a journalist in the Philippines in 1986, the year of the People Power Revolution, an uprising that ultimately led to the departure of Ferdinand Marcos and the move from authoritarian rule to democracy. Now she’s worried that the pendulum is swinging back and that Facebook is hastening the trend. ‘They haven’t done anything to deal with the fundamental problem, which is they’re allowing lies to be treated the same way as truth and spreading it,’ she says. ‘Either they’re negligent or they’re complicit in state-sponsored hate’.”

Bloomberg Businessweek – Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back, With a Vengeance – Zeke Faux 12/6

  • “The concept is centuries old: Inmates of a New York debtors’ prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope. But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.”
  • “Americans are currently late on more than $600 billion in bills, according to Federal Reserve research, and almost one person in 10 has a debt in collectors’ hands. The agencies recoup what they can and sell the rest down-market, so that iffier and iffier debt is bought by shadier and shadier individuals. Deception is common. Scammers often sell the same portfolios of debt, called ‘paper,’ to several collection agencies at once, so a legitimate IOU gains illegitimate clones. Some inflate balances, a practice known as ‘overbiffing.’ Others create ‘redo’ lists—people who’ve settled their debt, but will be harassed again anyway. These rosters are actually more valuable, because the targets have proved willing to part with money over the phone. And then there are those who invent debts out of whole cloth.”

The Guardian – Former Facebook executive: social media is ripping society apart – Julia Carrie Wong 12/11

Markets / Economy

WSJ – Daily Shot: Bloomberg – Prime-age male labor-force participation 12/11

Real Estate

FT – New Zealand looks to ban foreigners from buying houses – Jamie Smyth 12/9

FT – Unibail-Rodamco sees €100m annual synergies in $24.7bn Westfield takeover – Jamie Smyth 12/11

FT – Hong Kong investors go defensive in $3bn property auction – Henny Sender 12/11

Finance

WSJ – Daily Shot: Bitcoin 12/11

  • “Bitcoin’s volatility is on the rise as the cryptocurrency hit new highs.”

Health / Medicine

NYT – A Nasty, Nafta-Related Surprise: Mexico’s Soaring Obesity – Andrew Jacobs and Matt Richtel 12/11

  • “Mexico began lifting tariffs and allowing more foreign investment in the 1980s, a transition to free trade given an exclamation point in 1994, when Mexico, the United States and Canada enacted the North American Free Trade Agreement. Opponents in Mexico warned that the country would lose its cultural and economic independence.”
  • “But few critics predicted it would transform the Mexican diet and food ecosystem to increasingly mirror those of the United States. In 1980, 7% of Mexicans were obese, a figure that tripled to 20.3% by 2016, according to the Institute for Health Metrics and Evaluation at the University of Washington. Diabetes is now Mexico’s top killer, claiming 80,000 lives a year, the World Health Organization has reported.”

China

WSJ – China’s Clean Energy Future Has a $1.2 Trillion Problem – Nathaniel Taplin 12/11

  • “China’s enormous coal-power debt overhang limits its ability to shift rapidly to cleaner fuels.”

Europe

WEF – Which countries feel they’ve benefitted from the EU? – Niall McCarthy 11/6

Other Interesting Links

Bloomberg Businessweek – This Crowdfunding Site Runs on Hate – Adam Popescu 12/4

October 11, 2017

Perspective

WSJ – Daily Shot: Spanish Empire at its Peak 10/10

  • “Since Monday was Columbus day, here is the size of the Spanish Empire at its peak (in 1790).”

WSJ – America’s Retailers Have a New Target Customer: The 26-Year-Old Millennial – Ellen Byron 10/9

VC – How Americans Differ by Age – Jeff Desjardins 10/10

Worthy Insights / Opinion Pieces / Advice

A Teachable Moment – How To Make $5,300 In Commissions on a $43,000 Retirement Account – Anthony Isola 10/9

  • If you are a teacher or have family or friends that are teachers, you should read this. Make sure you’re or they’re not getting fleeced.

NYT – The N.F.L Draft: A Study in Cockeyed Overconfidence – David Leonhardt 4/25/05

  • A worthwhile look at the research that Richard Thaler and Cade Massey did regarding overconfidence.

The Irrelevant Investor – The Price of Progress – Michael Batnick 10/10

  • “The economic machine that we’ve built in the United States has done extraordinary things and I can’t wait to see what we come up with in the future. But what do we do when progress leaves so many behind?”

Markets / Economy

NYT – China Hastens the World Toward an Electric-Car Future – Keith Bradsher 10/9

Economist – American entrepreneurs have not lost their mojo 10/10

  • “Business formation is down, but fast-growing startups are in high gear.”

Energy

FT – Saudi Arabia curbs oil exports to combat glut – Anjli Raval 10/9

  • “Saudi Arabia is allocating fewer barrels of crude for export next month and at a level below current demand, emphasizing the effort by global producers to reduce surplus inventories.”
  • “In a rare statement, the Ministry of Energy on Monday said contracted demand for Saudi crude for November was 7.7m barrels a day, but the kingdom has assigned just 7.2m b/d for export.”
  • “The disclosure of Saudi Arabia’s monthly allocations emphasizes a new focus on foreign sales, alongside production, that Riyadh deems vital to the effort by global producers to reduce surplus inventories.”
  • “’It is very interesting they are now trying to communicate to the market about exports,’ said Olivier Jakob at consultancy Petromatrix. ‘They have gone the extra step of putting out numbers on this, which is the first I’ve ever seen.’”

Finance

WSJ – Daily Shot: Hedge Fund Research – Hedge Fund Fees 10/10

WSJ – Daily Shot: Bitcoin 10/9

  • Bitcoin is rallying again.

WSJ – Daily Shot: Investing.com – Bitcoin Cash 10/10

  • “On the other hand, Bitcoin’s less fortunate twin called Bitcoin Cash has collapsed.”

India

FT – Modi’s pursuit of black money proves drag on India’s economy – Amy Kazmin 10/9

  • “For many Indians the powerful appeal of Narendra Modi, the prime minister, stemmed from his vows to tackle two issues of fierce public concern: the sluggish economy and entrenched corruption.”
  • “But India’s economy has faltered, with growth falling steadily since early 2016 to a three-year low of 5.7% in the second quarter of this year.”
  • “Now, some economists are suggesting Mr Modi’s two big goals are at odds, and that New Delhi’s zealous anti-corruption drive — which reached its apogee with a draconian cash ban — is sapping India’s economic momentum.”
  • “Though disruptive, demonetization failed to purge black money from the economy, because nearly 99 per cent of the cancelled bank notes were deposited or exchanged, rather than being furtively destroyed as forecast.”
  • “Now New Delhi is toughening its stance, with tax officials probing 1.8m individuals or businesses whose cash deposits after demonetization were out of sync with their past tax returns.”
  • “While the quest to unearth Indians’ illicit wealth remains politically popular, economists say it has come at a cost, souring business and consumer sentiment. It is considered one reason why private investment — which has driven past Indian booms — remains stubbornly flat.” 
  • “‘If you’ve got income tax authorities charged up and told to after black money, who is going to invest in a big way?’ said one economist who asked not to be identified given the issue’s sensitivity.”
  • “’The Chinese call this ‘the original sin’ problem,’ he added. ‘Every company has something buried in the past — a sin it has committed. If the government really wants to go after people, it can always find something.’”
  • “Demonetization severely disrupted the property market, previously a favorite parking place for black money and a big growth engine. Real estate prices and sales plunged and, though sales are picking up, there is a huge overhang of unsold inventory.”

Japan

NYT – Kobe Steel’s Falsified Data Is Another Blow to Japan’s Reputation – Jonathan Soble 10/10

  • “For decades, Japanese manufacturers of cars, aircraft and bullet trains have relied on Kobe Steel to provide raw materials for their products, making the steel maker a crucial, if largely invisible, pillar of the economy.”
  • “Now, Kobe Steel has acknowledged falsifying data about the quality of aluminum and copper it sold, setting off a scandal that is reverberating through Japan and beyond, and casting a new shadow over the country’s reputation for precision manufacturing, a mainstay of its economy.”
  • “Companies ranging from the automakers Toyota Motor and Honda Motor to aircraft companies like Boeing and Mitsubishi Heavy Industry said they were investigating the use of rolled aluminum and other materials from Kobe in their products. They also said they were trying to determine if substandard materials had been used in their products and, if so, whether they presented safety hazards.”
  • “Kobe Steel said on Sunday that employees at four of its factories had altered inspection certificates on aluminum and copper products from September 2016 to August this year. The changes, it said, made it look as if the products met manufacturing specifications required by customers — including for vital qualities like tensile strength — when they did not.”
  • “Kobe Steel added that it was examining other possible episodes of data falsification going back 10 years. It did not provide details about the size of the discrepancies it had discovered, making it difficult to immediately determine if they posed a safety threat.”
  • “Kobe Steel’s problem points to ‘a common organization issue,’ said Shin Ushijima, a lawyer who serves as president of the Japan Corporate Governance Network. He drew parallels between Kobe Steel and Takata and Mitsubishi, as well as with financial-reporting improprieties at Toshiba, which admitted to overstating profit in 2015.”
  • “’Boards aren’t doing their jobs,’ he said. ‘This isn’t an issue that can be solved by the president resigning. There needs to be wholesale change.’”
  • “He continued, ‘The Kobe Steel case is a test of whether we’ve learned anything from Toshiba and these other issues.’”

Mexico

FT – Mexicans hope earthquake will shake up corrupt system – Jude Webber 10/9

  • “There are disasters waiting to happen, says Eduardo Reinoso, a civil engineer who has studied compliance with building codes introduced after 1985. He blames not only corruption and incompetence but also a culture of impunity that has encouraged people to build or modify their homes without planning permission because of a belief they can get away with it.”
  • “As Gabriel Guerra, a former diplomat and government official, put it: ‘Our collective negligence and corruption is coming back to bite us where it hurts.’”

August 2, 2017

Worthy Insights / Opinion Pieces / Advice

Politico – My Party Is in Denial About Donald Trump – Jeff Flake 7/31

  • “We created him, and now we’re rationalizing him. When will it stop?”

Markets / Economy

WSJ – Late Credit-Card Payments Stoke Fears for Banks – AnnaMaria Andriotis 7/31

Health / Medicine

Bloomberg Businessweek – Here’s Why Yellen’s Fed Cares About America’s Opioid Epidemic – Jeanna Smialek 7/19

  • “An estimated 2.7 million adults over the age of 26 were misusing painkillers as of 2015, while another 236,000 currently used heroin, based on test Substance Abuse and Mental Health Administration data. While opioid abusers account for a tiny sliver in a workforce of 160 million, they probably make up a greater share of the 7 million who are unemployed.”

Mexico

Bloomberg Businessweek – Dead Bodies Start Piling Up as Fuel Theft Booms in Mexico – Amy Stillman 7/25

  • “Gasoline theft costs Mexico’s state-owned oil company more than $1 billion a year. And the country stands to lose a lot more if investors are spooked by the growing violence.”