Tag: Tax Reform

January 17, 2018

Perspective

A Wealth of Common Sense – Updating My Favorite Performance Chart For 2017 – Ben Carlson 1/14

Worthy Insights / Opinion Pieces / Advice

A Teachable Moment – The Power of Fee Shaming – Anthony Isola 1/15

Yahoo Finance – Business Insider: China is heading toward a debt crisis that will throw into question everything we think we know about its economy – Pedro Nicolaci da Costa 1/15

Markets / Economy

Bloomberg – The Stock Market Never Goes Down Anymore – Elena Popina 1/12

  • “Up eight times in the first nine days of 2018, the S&P 500 has broken away from a trend line, its 200-day moving average, with a velocity unseen since 2013, the best year for equities in a generation. The benchmark now sits more than 11% above the level, putting it in the 92nd percentile of momentum, data going back 20 years show.”
  • “Something has changed in equities. If 2017 was a slow but steady slog, 2018 has been off to the races, with shares rising at four times last year’s daily rate on the back of Donald Trump’s tax package and gathering signs of economic strength. Forty seven companies in the S&P 500 are already up at least 10% this year, compared with just two down as much.”
  • “Fear of missing out is rampant not just on Wall Street but worldwide. Globally, stock funds saw a $24 billion inflow in the five days through Thursday, the sixth largest weekly total ever.”
  • “The average of 23 strategists predictions is for the S&P 500 to reach 2,914 at year-end. If stocks were to maintain the same upward trajectory they’ve exhibited in the last nine days, it would take roughly two more weeks to reach the strategists’ target.”
  • “At 3.4 times its book value, the S&P 500 trades at the most expensive level since 2002, while its 14-day relative strength index reached a level unseen since 1996. The S&P 500 rose 1.6% to 2,786 this week, pushing the spread between the gauge and its 200-day moving average to 11.5%, the widest in five years.”
  • “To Walter Todd, Greenwood Capital chief investment officer, the optimism over earnings growth could continue to propel the stocks even higher.”
  • “’The fundamentals for the rally are strong, though the higher it goes, the higher the risk of a correction, and the higher the risk that the correction will be steep,’ Todd said by phone. ‘For now, fear of missing out is prompting investors who’ve stayed on the sidelines to jump in, as people say, ‘we missed the rally last year, we’re not going to miss on it again’’.”

NYT – BlackRock’s Message: Contribute to Society, or Risk Losing Our Support – Andrew Ross Sorkin 1/15

  • “Laurence D. Fink, founder and chief executive of the investment firm BlackRock, is going to inform business leaders that their companies need to do more than make profits — they need to contribute to society as well if they want to receive the support of BlackRock.”
  • “Mr. Fink has the clout to make this kind of demand: His firm manages more than $6 trillion in investments through 401(k) plans, exchange-traded funds and mutual funds, making it the largest investor in the world, and he has an outsize influence on whether directors are voted on and off boards.”

Real Estate

WSJ – Daily Shot: Vanguard REIT ETF 1/12

  • “REITs broke out to the downside on higher bond yields.”

Energy

FT – Gas and oil producers among hardest hit by US tax reforms – Ed Crooks 1/15

  • “US oil and gas producers are among companies hit hardest by new restrictions on tax relief for interest payments, an analysis of the impact of the reforms has shown.”
  • “The sweeping overhaul of the US tax system signed into law by President Donald Trump just before Christmas cut the main rate for corporations sharply, but will still mean higher bills for some businesses because it sets limits on deductions for interest payments.”
  • “The new law will put pressure on heavily indebted companies to reduce their borrowings, and could push over-burdened companies into steeper decline if their earnings fall.”
  • “Companies in industries including oil and gas, coal mining, casinos and trucking are among those likely to be most affected, according to Greensill Capital, a trade finance firm.”

WSJ – Daily Shot: Brent Crude 1/15

Finance

WSJ – Trouble Ahead for the Treasury Market – Justin Lahart 1/15

  • “Inflation, less central bank bond buying, an increase in supply – there are plenty of reasons for Treasury yields to go a lot higher this year.”

Cryptocurrency

Bloomberg Gadfly – Can Hedge Funds Handle a Bitcoin Bust? – Lionel Laurent 1/16

MarketWatch – Bitcoin tumbles to 6-week low as top cryptocurrencies all sell off – Victor Reklaitis 1/16

TechCrunch – Researchers find that one person likely drove Bitcoin from $150 to $1,000 – John Biggs 1/15

  • “Researchers Neil Gandal, JT Hamrick, Tyler Moore, and Tali Oberman have written a fascinating paper on Bitcoin price manipulation. Entitled ‘Price Manipulation in the Bitcoin Ecosystem’ and appearing in the recent issue of the Journal of Monetary Economics the paper describes to what degree the Bitcoin ecosystem is controlled by bad actors.”
  • “The manipulation happened primarily via two bots, Markus and Willy, that seemed to be performing valid trades but did not actually own the bitcoin they were using. During the Mt. Gox hack a number of these bots were able to create fake trades and make off with millions while manipulating the price of BTC.”
  • “’As mainstream finance invests in cryptocurrency assets and as countries take steps toward legalizing bitcoin as a payment system (as Japan did in April 2017), it is important to understand how susceptible cryptocurrency markets are to manipulation. Our study provides a first examination,’ write the researchers.”

Environment / Science

South China Morning Post – China builds ‘world’s biggest air purifier’ (and it seems to be working) – Stephen Chen 1/16

  • “A 100-meter (328-foot) high air purification tower in Xian in Shaanxi province has helped reduce smog levels in the city, preliminary results suggest.”
  • “The head of the research, Cao Junji, said improvements in air quality had been observed over an area of 10 square kilometers (3.86 square miles) in the city over the past few months and the tower has managed to produce more than 10 million cubic meters (353 million cubic feet) of clean air a day since its launch. Cao added that on severely polluted days the tower was able to reduce smog close to moderate levels.”
  • “The experimental facility in Xian is a scaled-down version of a much bigger smog tower that Cao and his colleagues hope to build in other cities in China in the future.”
  • “A full-sized tower would reach 500 meters (1,640 feet) high with a diameter of 200 meters (656 feet), according to a patent application they filed in 2014.”
  • “The size of the greenhouses could cover nearly 30 square kilometers (11.6 square miles) and the plant would be powerful enough to purify the air for a small sized city.”

China

FT – China disrupts global companies’ web access as censorship bites – Yuan Yang and Lucy Hornby 1/16

  • “China is plugging the last holes in its ‘Great Firewall’ internet censorship apparatus, hampering global groups’ ability to operate in the country.”
  • “China aggressively censors the internet, cutting off locals’ access to Facebook, Google, YouTube and much more, to control what news and facts reach its population. A study by Freedom House, a US state-funded non-profit organization, in November ranked China last in the world for internet freedoms, for the third year in a row.”
  • “Multinationals have historically used software known as virtual private networks (VPNs) to bypass censorship and protect their communications from hacking and government surveillance. But in recent months, the companies said, they have had difficulty using their custom-built VPNs.”
  • “At the same time, regulators have been pushing multinationals to buy and use state-approved VPNs. The state-approved versions can cost tens of thousands of dollars a month and expose users’ communications to Beijing’s scrutiny.” 
  • “’This is a significant ramp-up from previous measures,’ said Carly Ramsey, associate director of consultancy Control Risks in Shanghai. ‘The Xi administration has prioritized control over all information flows within China, and in and out of its borders’.”
  • “’This is not just about tightening access, but also giving the government more visibility and control over cross-border connections. The government now has many new tools to make cyber space ‘secure and controllable’ on their terms,’ said Samm Sacks, senior fellow at the Center for Strategic and International Studies, a think-tank.”
  • “’In a society where the government wants to control the flow of communications and information, secure communications and encryption are certainly an ‘enemy’,’ said Sunday Yokubaitis, chief executive of VPN provider Golden Frog.”

FT – China reprimands companies calling Tibet and Taiwan independent – Emily Feng and Edward White 1/15

  • “Chinese regulators have publicly reprimanded a string of foreign corporations, including Qantas, Zara and Marriott, for labelling Tibet and Taiwan as independent countries, in online drop-down menus.” 
  • “’We welcome foreign corporations’ investment and operation in China,’ said Lu Kang, a spokesperson for the ministry of foreign affairs, at a regular press briefing last week. ‘Meanwhile, they should respect China’s sovereignty and territorial integrity, abide by China’s laws and respect Chinese people’s national feelings.’ Officials in Taipei said that China’s actions did not help Beijing earn the trust of Taiwanese people.”
  • “’Taiwan is undoubtedly a country,’ a spokesperson for President Tsai Ing-wen told the Financial Times. ‘Wiping out the name of Taiwan off the internet will not wipe out our existence in the world.’”

WSJ – China’s Hot Housing Market Begins to Cool – Dominique Fong 1/16

  • “While China has seen brief property downturns before, the high debt levels that fueled the boom makes this slump a particular risk for China’s economy and the policy makers trying to manage it.”
  • “Home prices fell 0.3% in November from a year earlier In Beijing and Shanghai, the most recent official data show. It was a small drop but a striking reversal from double-digit price surges that lasted more than a year.”
  • “Prices of advertised new Shanghai homes decreased 8% from October through mid-December, according to Brandon Emmerich at Granite Peak Advisory, a New York research firm that analyzed over 20,000 daily listings from Anjuke, a Chinese property-listing platform.”
  • “Though China’s Housing Ministry has said that property controls won’t be relaxed, the dangers of the downturn are lessened by the government’s ability to reboot demand by lifting restrictions—and Beijing has held off on introducing an anticipated property tax that could curb speculation but damp prices.”

 

December 22, 2017

Perspective

WEF – In 2020 Bitcoin will consume more power than the world does today – Adam Jezard 12/15

  • “Can the world afford Bitcoin? The cryptocurrency is enjoying something of a resurgence as investment and central banks weighed its benefits and caused its value to balloon.”
  • “But generating Bitcoin requires a truly staggering amount of energy. The electricity used in a single Bitcoin transaction, for instance, could power a house for a month.”
  • “And bitcoin mining (the process of generating a bitcoin) now consumes the same amount of electricity every year as Denmark – 33TWh, according to one recent report.”
  • “Bitcoin mining’s energy use is reportedly growing at a rate of 25% per month. At that rate of growth, it will consume as much electricity as the US in 2019.”
  • “And by 2020, bitcoin mining could be consuming the same amount of electricity every year as is currently used by the entire world.“
  • “A new chain is created every 10 minutes or so and, according to a Business Insider article, the use of complicated and energy-intensive algorithms are part of a deliberate ploy to guarantee a degree of exclusivity.”
  • “The article quotes ING economist Teunis Brosens as saying a single Bitcoin transaction uses 200 kilowatt hours. ‘This number needs some context,’ he says, ‘200 kWh is enough to run over 200 washing cycles. In fact, it’s enough to run my entire home over four weeks, which consumes about 45 kWh per week costing €39 of electricity (at current Dutch consumer prices)’.”
  • “Bitcoin also uses a lot more power when compared with other transaction systems. A typical Visa card payment, for example, requires 0.01 kWh while another cryptocurrency, Ethereum, uses 37 kWh.”
  • “However, although Bitcoin is one of the worst examples of our profligate use of fossil fuels to create wealth, it is not alone. The whole digital world relies on power generation to run the data centers at the heart of the modern economy.”
  • “According to 2013 statistics, Google’s data centers used enough electricity to consistently power 200,000 homes, while the amount of power needed to run a large data center would run a small US town. And as we move to driverless cars and other data-intensive ‘internet of things’ technologies, the demand for energy will only increase.”
  • “It seems that businesses around the world are looking to a digital future while governments are talking of a more sustainable one: how to achieve both goals at the same time needs to be the subject of urgent discussion.”

US Census Bureau – Idaho is Nation’s Fastest-Growing State 12/20

WSJ – Daily Shot: CRFB.org – Largest US Tax cuts as percentage of GDP 12/21

Worthy Insights / Opinion Pieces / Advice

Economist – Free Exchange: A decade after it hit, what was learnt from the Great Recession? 12/16

Economist – Leaders: Bitcoin is a speculative asset but not yet a systemic risk 12/16

Economist – Leaders: America’s long-running economic expansion 12/16

NYT – Congress Refuses to Do Right by Children’s Health Care – Editorial Board 12/20

Markets / Economy

Bloomberg – U.S. Treasury Sales Are About to Double 2018. Who’s Buying? – Liz McCormick and Katherine Greifeld 12/19

  • “With the U.S. about to sell the most debt in eight years, Treasury Secretary Steven Mnuchin may find himself relying on a buyer base that needs to see higher yields before loading up.”
  • “Government debt sales are set to more than double in 2018, lifting net issuance to $1.3 trillion, the most since 2010, according to JPMorgan Chase & Co. estimates. With the Federal Reserve shrinking its bond holdings and deficits poised to swell even before taking into account the tax overhaul, all signs point to higher financing costs.”
  • “The challenge for Mnuchin is that some analysts predict buying by central banks — a pillar of support this year — may fade, in part as international-reserve growth stabilizes. In the view of Credit Suisse Group AG, that will put the onus on more price-sensitive buyers, particularly a group that the Fed classifies as including households, hedge funds, private-equity firms and trusts for wealthy individuals.”
  • “By Credit Suisse’s calculation, with the Fed pulling back and issuance surging, the slice of debt sales available for price-elastic buyers to absorb will rise to about 60% by the end of 2019, from 54% now. It would be their biggest share since the early 2000s.”
  • “The Treasury said last month that it expects to unveil bigger coupon auctions in February for the first time since 2009, and dealers see issuance rising for years to come. With entitlement costs heading higher, the U.S. debt burden was already projected to increase by $10 trillion in the next decade. Now the tax overhaul could boost the deficit by $1 trillion in the period.”
  • “JPMorgan’s 2018 net issuance tally of $1.3 trillion includes $847 billion of coupon debt, ballooning from an estimated $409 billion this year amid a darkening fiscal backdrop. The federal deficit may exceed $1 trillion by fiscal 2020, from about $666 billion in 2017, according to the most dire estimates by primary dealers. Meanwhile, the Fed could roll off about $250 billion of Treasuries in 2018.”
  • “The catch is that demand from China, which with almost $1.2 trillion of U.S. government debt is America’s biggest foreign creditor, may be about to ebb. The bulk of China’s buildup came as it boosted foreign-exchange reserves to help offset a strengthening yuan. But some forecasters see yuan stability in 2018, meaning limited need for currency intervention.”
  • “The wave of supply and the questions about demand come amid expectations for higher yields with the prospect of quicker U.S. growth and inflation. The Fed projects three more rate hikes in 2018, and firms including Goldman Sachs Group Inc. predict 10-year yields will rise to 3% in a year, from 2.46% now.”
  • “’There should be some overall repricing of yields higher, albeit modestly, on the back of the rising supply picture,’ said Subadra Rajappa, head of U.S. rates strategy at Societe Generale. ‘The amount of the supply increase will be quite large, and it’s not clear how much support is going to come from overseas’.’’

Finance

WSJ – Daily Shot: Bitcoin 12/20

  • “The Bitcoin rally has stalled for now, with prices falling to pre-futures launch levels.”

WSJ – Daily Shot: Fintech Startups Seek to Shake Up Money-Transfer Industry – Corinne Abrams 12/19

Construction

The Atlantic – The Weird, Wooden Future of Skyscrapers – Amanda Kolson Hurley – Dec. 2017

Asia – excluding China and Japan

NYT – Jakarta Is Sinking So Fast, It Could End Up Underwater – Michael Kimmelman 12/21

  • “Experts say Jakarta has only a decade to halt its sinking.”

India

Bloomberg Quint – Deepest India Bond Rout in 17 Years Shows No Sign of Abating – Kartik Goyal 12/21

South America

WSJ – Venezuela’s Brutal Crime Crackdown: Executions, Machetes and 8,292 Dead – Juan Forero and Maolis Castro 12/21

  • I imagine it will take two generations to recoup what they’ve lost from bad politics – if ever.

December 8, 2017

Perspective

Economist – America’s flat-Earth movement appears to be growing 11/28

  • “I am constantly forced to remind myself that while we may one day hope to conquer ignorance, there will never be a cure for stupid.” – Barry Ritholtz

WSJ – Daily Shot: Moody’s – US States that challenged the Clean Power Plan 12/5

WSJ – Daily Shot: Natixis Investment Management – Global Portfolio Risks 12/7

Worthy Insights / Opinion Pieces / Advice

FT – Lawsuit shows China losing patience with Venezuela – Jonathan Wheatley 12/6

  • “Subsidiary of state-owned Sinopec files case against PDVSA over unpaid debt.”

FT – US tax reform will benefit shareholders more than workers – Michael Moritz 12/5

  • “During the past year the nation’s 20 largest technology companies have gained $900bn in value in a favorable business climate. As a group, at the end of September, they had about $90bn more cash than they did one year earlier — the bulk being accumulated at Apple, Alphabet, Microsoft, Oracle, Qualcomm and Priceline. “
  • “But the increase in their cash balances tells less than half the story. There is nothing to suggest in the rest of the data that, if their taxes were cut, they would build more factories, hire more employees or buy more equipment. Quite the contrary.”
  • “Crunch through the data, available through sources such as Bloomberg, and you will gain some remarkable insights on the financials of the giants of the tech sector. Through the first nine months of 2017 these 20 companies paid just over $27bn in taxes. At the same time, they invested almost $55bn in what the accountants label ‘capital expenditures’ — buildings and equipment. But the real message lies elsewhere.”
  • “They generated so much cash that, over and above increasing the cash they held on their balance sheets, they distributed almost $39bn in dividends to shareholders and spent almost $52bn on stock buybacks. That is about $190bn of cash, dividends and stock buybacks compared to $55bn of investment in the sort of areas that might result in more jobs and increased productivity. Even Intel, which operates in the semiconductor industry — an activity which sucks up more cash than internet and software businesses — spent $7.1bn on dividends and stock buybacks during the first three quarters compared to $7.7bn on capital expenditures.”
  • “If someone makes the argument that the corporate tax cuts are likely to change the spending habits of start-ups or emerging companies, forget about it. Investors from around the world are standing in line waiting to invest in young companies, which have all the cash they need. In addition, since most of these companies are losing money, tax payments are irrelevant.”

WP – The world produces more than 3.5 million tons of waste a day – and that figure is growing – Kadir van Lohuizen 11/21

Markets / Economy

Real Estate

NAR – In Which States Do REALTORS Expect Highest Home Price Growth in the Next 12 Months? 12/5

WSJ – Daily Shot: Moody’s – Changes in US Property Values 2007 – 2016 12/7

Energy

WSJ – Daily Shot: US Crude Oil Production 12/6

WSJ – Wall Street Tells Frackers to Stop Counting Barrels, Start Making Profits – Bradley Olson and Lynn Cook 12/7

Finance

WSJ – Daily Shot: Bitcoin 12/6

  • “The cryptocurrency blasted past, $12k, $13k, and $14k in 24 hours.”

WSJ – Daily Shot: Meritocracy Capital – CAPME Chart 12/7

  • “Cyclically adjusted price to median earnings (CAPME) and the percentile rank.”

China

Economist – Chinese cities should stop expelling Chinese migrants – Leaders 11/30

India

Economist – India’s new bankruptcy code takes aim at delinquent tycoons 11/30

  • “Defaulters will no longer be able to cling on to ‘their’ companies.”

Middle East

Economist – How-and why-to end the war in Yemen – Leaders 11/30

  • “A pointless conflict has caused the worst humanitarian crisis in the world.”

November 14, 2017

Perspective

NYT – China Spreads Propaganda to U.S. on Facebook, a Platform It Bans at Home – Paul Mozur 11/8

  • Another example of how easy it is to manipulate people. Seemingly the spread of the internet was meant to give people access to factual information to make better decisions and to be better informed. Rather it seems that while more information is available, the habit of selection bias has only amplified.

Worthy Insights / Opinion Pieces / Advice

FT – Does the oil market expect a new Mideast war? – Nick Butler 11/12

  • “The oil price has risen by almost 20% over the last four weeks. Does anything in the market justify such an increase, or is the change driven simply by speculation about the dangers of a direct conflict between Saudi Arabia and Iran?”
  • “The real explanation for the rise in prices clearly lies not in the physical balance of supply and demand but in speculation. Once again traders have been bidding up prices on the basis of fears about what could happen next.”
  • “An open conflict between Saudi Arabia and Iran would expose numerous oil fields and installations on both sides of the Gulf to attack. The Straits of Hormuz are still a potential choke point for the global flow of oil. Some 17m barrels a day – almost a quarter of world traded oil – goes through the straits.”
  • “War would be an illogical step, but since when has logic been the ruling force in the Middle East? If the risk of conflict recedes so will the oil price – there is nothing in the fundamentals to justify a price much over $50 or $55 a barrel. But if open war between the two major Gulf powers did break out the price rise we have seen so far would look trivial.”

FT – The tax reform the US really needs – Rana Foroohar 11/12

  • “America’s taxation system is fundamentally unsuited to the digital economy.”

FT – Saudi Arabia confronts legacy of corruption – Ahmed Al Omran and Simeon Kerr 11/12

  • “When Saudi Crown Prince Mohammed bin Salman spoke to his nation six months ago, he pledged to crack down on corruption. ‘I assure you that nobody who is involved in corruption will escape, regardless if he was minister or a prince or anyone,’ he said.”
  • “But few people could have expected the sudden storm this month when a new anti-graft committee ordered the arrest of more than 200 suspects, including princes, prominent businessmen and former senior officials, on allegations related to at least $100bn in corruption.”
  • “The arrest of so many big names has been hailed within the country as proof ‘no one is above the law’. But others have raised questions about the motivations behind a probe that also targeted a member of the royal family once seen as a contender for the throne.”
  • “Executives estimate that anywhere between 10% and 25% of the value of government contracts is routinely skimmed, with the proceeds used to fund lavish regal lifestyles, channel money to loyal tribes and grease the palms of favored functionaries. ‘This is how the kingdom of Saudi Arabia has balanced power historically,’ said one executive.”
  • “While fully eliminating corruption is unlikely, experts say limiting the presence of princes in government could help. King Salman has significantly decreased the number of family members in cabinet — today only the ministers of defense, the interior and the national guard are royals.”
  • “Some suggest that, even if corruption by the royals continues, the crackdown could still bring important dividends.”
  • “’Centralized corruption is better because you have one rent-seeker on top.’ said Steffen Hertog, an expert on Saudi political economy at the London School of Economics. ‘That actor has an interest in keeping the whole system efficient and stable, and keeping it from collapsing.’”

WSJ – SoftBank’s Uber Deal Shows Doubts About Ride-Hailing – Jacky Wong 11/13

Markets / Economy

Bloomberg Quint – Bitcoin’s Roller-Coaster Ride Cuts $38 Billion Before Reversal – Justina Lee and Yuji Nakamura 11/13

  • “After plunging as much as 29% from a record high following the cancellation of a technology upgrade on Nov. 8, the largest cryptocurrency came roaring back in early trading Monday before fluctuating between gains and losses.”
  • “While multiple reasons are being cited for the price volatility, one of the more viable is that some investors are switching to alternative coins. Bitcoin cash, an offshoot of bitcoin that includes many of the technical upgrades being debated by developers, has more than doubled in the same period.”
  • “The resulting volatility has been extreme even by bitcoin’s wild standards and comes amid growing interest in cryptocurrencies among regulators, banks and fund managers. While skeptics have called its rapid advance a bubble, the asset has become too big for many on Wall Street to ignore. Even after shrinking as much as $38 billion since Nov. 8, bitcoin boasts a market value of about $110 billion.”

Real Estate

WSJ – Daily Shot: Homeownership and Apartment Vacancy Rates by US Region 11/12

Finance

WSJ – ETF Heyday Is No Bonanza for Wall Street – Asjylyn Loder 11/6

Environment / Science

FT – China recovery pushes greenhouse emissions to global record – Tobias Buck and Lucy Hornby 11/13

  • “Stronger Chinese economic growth will push global greenhouse gas emissions to a record high in 2017 after remaining flat for three years, dashing tentative hopes of a turning point in the world’s efforts to curb climate change.”
  • “A new report by the Global Carbon Project, an international research consortium, predicts that carbon dioxide emissions from fossil fuels and industry will rise 2% this year. The report was released at the UN climate change meeting in Bonn on Monday.”
  • “The increase — which is largely caused by China and developing countries — suggests the world is straying further from the course set at the landmark UN conference in Paris two years ago.”
  • “This year’s rise is especially disappointing as it follows three years of almost no growth in emissions despite a world economy expanding at a steady clip. In 2016, emissions were flat even though the world economy grew 3.2%. One explanation for the uptick is that China’s economic slowdown in the middle part of this decade was more pronounced than official figures suggested.”
  • “The GPC report concludes: ‘The world has not reached peak emissions yet.’”
  • “It finds that carbon dioxide emissions decreased in 22 countries accounting for 20% of global emissions, but rose in 101 countries that together represent 50% of pollution. China is predicted to see a 3.5% jump in emissions in 2017. As the biggest producer of carbon dioxide in the world, China plays a crucial role in shifting the global trend.”

Europe

FT – Italian emigration continues despite strong economic recovery – Valentina Romei 11/12

  • “Italy’s economy is doing its best for years, but Italians are still pouring out of the country.
  • Gross domestic product is growing faster than at any point since 2010, employment is back to pre-crisis levels and the labor inactivity rate is close to an all-time low.”
  • “So why has the number of Italians living outside the country reached 5.4m — a figure that represents almost 10% of the population and which grew 3.5% last year?”
  • “The data highlight a story of a dysfunctional labor market, a society in which young, ambitious people often feel unfairly treated, and an economic recovery from which, in large part, they have yet to benefit.”
  • “Overall, the official figures show that 1.5m people have moved abroad since the crisis broke in 2008.“
  • “Nor is that the end of it. Foreigners are also leaving: 45,000 non-Italians left the country in 2015, more than three times as many as the figure for 2007.”
  • “The consequences of the phenomenon could be grave, despite Italy’s recent economic good news.”
  • “Since the country has long contended with low fertility rates, emigration is a particular threat to Italy’s workforce. Italy is second only to Japan in terms of the proportion of the population accounted for by people aged 65 and over, and in the 25 years to 2015 the working age population as a share of the total population dropped 5 percentage points.”
  • “In the past five years alone, the number of those aged between 18 and 44 contracted 6%, while the overall population rose 2%.”
  • “Both the Italian and the British data also show that young people account for the bulk of Italian emigration. The UK National Insurance statistics show that since 2002 more than 90% of Italians registering to work in Britain were under 44 years old. Some 77% were aged between 18 and 34 years old.”
  • “Italian emigrants are also more highly educated than the overall Italian population and university trained people are leaving in increasing numbers. Graduates make up about 30% of emigrants from Italy, up from 12% in 2002, according to official statistics.”
  • “The causes of this brain drain are deep-set, writes Guido Tintori, Research Associate at Fieri — International and European Forum on Migration Research, in a forthcoming academic paper on the issue.”
  • “He argues that skilled young Italian graduates ‘not only are underemployed and underpaid, but constantly frustrated by a society and a labor market that hinge on relationships and seniority over competence’.”
  • “Furthermore, the economic recovery has yet to touch them. The proportion of young people who are unemployed in Italy is a daunting 35% and has barely changed over the past year.”
  • “The share of under-34s who are neither in employment nor in education is the highest in the EU and more than half of under-25s in employment are working under temporary contracts. Nearly one in four is working part time because of the unavailability of a full-time job — a higher proportion than in any other high-income economy.”

November 10, 2017

Perspective

Pew – How U.S. refugee resettlement in each state has shifted since 2002 – Jynnah Radford 11/2

  • Animation

WSJ – Daily Shot: Convoy Investments – Rise and Fall of Some Famous Asset Bubbles 11/9

Worthy Insights / Opinion Pieces / Advice

NYT – How to Reduce Shootings – Nicholas Kristof and Bill Marsh 11/6

NYT – Want Kids, a Degree or a Home? The Tax Bill Would Cost You – The Editorial Board

  • “An immense tax giveaway to the rich will hurt everyone else. Here’s how.”

Markets / Economy

WSJ – Daily Shot: Yardeni Research – Investor Bulls vs Bears 11/7

Real Estate

Business Insider – Zillow: America’s red-hot housing market is a bit of a problem – Akin Oyedele 11/8

  • “The recovery in US house prices since the recession has created a so-called seller’s market.” 
  • “In this part of the cycle, housing inventory is tight, especially in big cities where there’s plenty of demand. But buyers in these markets are getting stretched as prices climb above their prerecession highs and choices remain limited.”  

Energy

WSJ – Daily Shot: OPEC – Growth in energy demand by fuel type and region 11/9

WSJ – Daily Shot: OPEC – Energy demand next five years 11/9

Finance

WSJ – Daily Shot: LCD – Cov-Lite European Leveraged Loans 11/9

China

WSJ – Daily Shot: BMI Research – China Wealth Management Products 11/9

  • “Beijing’s deleveraging drive is having an impact on wealth management products (WMPs).”

Europe

FT – Germany creates third gender in ruling hailed as ‘revolution’ – Tobias Buck 11/8

  • “Germans will in future be able to register officially as neither male or female, after the country’s constitutional court issued a ruling establishing a third gender option that was hailed by intersex campaigners as a ‘revolution’.”

South America

FT – Venezuela inches closer to a formal default – Robin Wigglesworth 11/9

  • “Venezuela is closer to a formal default on its debts, with a global derivatives body set to rule on whether credit insurance should be paid out after a crucial payment deadline missed by state-backed oil company PDVSA.”
  • “Venezuela and PDVSA are legally separate entities, so PDVSA’s default would not trigger Venezuelan CDS or a Venezuelan sovereign default. But there are myriad other overdue interest payments by both borrowers, and unless the money appears soon then Venezuela will be in formal default on all its international bonds.”
  • “Venezuela has summoned bondholders for negotiations in Caracas on November 13, but the talks are expected to yield little. Indeed, US investors will be wary of even attending, given that the person leading the Venezuelan side of the talks, vice-president Tareck El Aissami, has been sanctioned by the US Treasury as an alleged drug smuggler.”
  • “None of the big rating agencies have formally declared a default yet, but S&P Global Ratings on Monday lowered the country’s rating to CC, the second-lowest rung possible, and said there was a 50% chance of a default within three months.”