Institutional Investor (November 8)
Are we approaching “the end of research as we know it?” The portion of fees that goes to research (equity or bonds) is a mystery, but the veil will soon be lifted. On January 3, 2018, the Markets in Financial Instruments Directive II will require “that asset managers break out the costs of research from their own management fees and pay for them separately.” The result will probably be “that less research is spewed.” This could bring “potentially wrenching consequences for the research industry and its core users among active asset managers.”
Bloomberg (June 6)
Guandong province, “China’s factory to the world,” is now caught in “a race to survive” as rising costs shift production to cheaper countries. Automation is also taking a toll. “With the new robot-staffed factories, and startups that employ hundreds rather than thousands, many of the millions who came to make Guangdong an industrial superpower may have little choice but to return home.”
Tags: Automation, China, Costs, Factories, Guandong, Industry, Production, Robots
The Economist (January 23)
Oil price slumps usually do “the world a power of good. The rule of thumb is that a 10% fall in oil prices boosts growth by 0.1-0.5 percentage points.” This time, however, the abrupt 75% drop in the price of oil is testing the old paradigm. “Producers are suffering grievously. The effects are spilling into financial markets, and could yet depress consumer confidence. Perhaps the benefits of such ultra-cheap oil still outweigh the costs, but markets have fallen so far so fast that even this is no longer clear.”
Tags: Benefits, Consumer confidence, Costs, Growth, Markets, Oil, Price slumps, Producers, Suffering, Ultra cheap
LA Times (November 8)
“So are we better off with or without the TPP? If Congress ratifies it, that won’t turbocharge the U.S. economy. If Congress blocks the deal, that won’t stop globalization. And like any trade agreement, it creates winners and losers.” The strongest argument for the agreement may be its geopolitical role, but the costs to many Americans have become “clearer than their benefits…. The president still has a lot of persuading to do.”
Tags: Benefits, Congress, Costs, Economy, Geopolitical, Globalization, Ratify, TPP, U.S.
Institutional Investor (September 24)
In the U.S., mounting unfunded liabilities of state retirement systems now total $1 trillion. The states desperately need to “find ways to slash costs,” but the “figure is expected to keep growing as states continue to put off pension and liability payments, and investment returns from capital markets sit in the low single digits.”
Tags: Costs, Investment returns, Markets, Pensions, Retirement systems, States, U.S., Unfunded liabilities
Bloomberg (July 29)
We need to treat climate change like fire. “You insure your house against fire not because you are certain it will burn down but to guard against the risk that it might. Yes, climate change involves various costs known with reasonable confidence—but it also creates big risks. It’s only rational to insure against them.
Tags: Climate change, Confidence, Costs, Fire, Insurance, Rational, Risk
Wall Street Journal (July 23)
“Vladimir Putin’s war on Ukraine continues as usual.” Except for instilling outlandish hopes, the shoot-down of Malaysia Airlines Flight 17 changed nothing. “The world’s media hang on any hint of conciliation from President Putin, as if he will suddenly turn into Vlad the Peacemaker. He won’t change until he concludes that the cost of his aggression is too high to sustain. So far the costs have been minuscule, and Mr. Putin is reacting with predictable contempt.”
Tags: Aggression, Costs, Flight 17, Malaysia Airlines, Media, Putin, Shoot-down, Ukraine, Vladimir Putin, War
Los Angeles Times (June 17)
Despite the politicians who still deny climate change, major insurers are taking steps to manage the potentially costly reality created by climate change. “As insurers begin to shift the costs of that reality through rate increases, exclusions, lawsuits and market retreat, consumers can ask such politicians, ‘Why, if climate change is a hoax, are we paying for it?’”
Tags: Climate change, Consumers, Costs, Exclusions, Hoax, Insurers, Lawsuits, Market retreat, Politicians, Rate increases
The Economist (May 3)
“After years in the doldrums, big mergers and acquisitions (M&A) are making a comeback. Optimists hope this is a sign of bosses daring to be bold because of improving economic prospects. Sceptics wonder if the managers are in fact doing deals to conceal a worrying lack of growth opportunities—or just cutting costs by merging with companies in kinder tax jurisdictions.”
Tags: Bold, Bosses, Comeback, Costs, Doldrums, Economic prospects, Growth, Jurisdictions, M&A, Managers, Opportunities, Tax
Euromoney (February Issue)
Asia “is seen as the growth engine for private banks, but it is not without its trials.” As regulation increases, costs rise and competition heats up, industry “consolidation among private banks in the region is inevitable.”
Tags: Asia, Banks, Competition, Consolidation, Costs, Growth engine, Industry, Private banks, Regulation
