US Economic News

I did the same. Max my SSB, Bought Astrea/SIA bonds, FD, and most important stable Reits. Big Win 2019 for Reits.

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(24-08-2019, 01:15 AM)Big Toe Wrote: As expected

1. Chinese imposes tariffs in response.

2. Peter Navarro cited sticking points before a deal can be reached. (Issues that could never be solved. Can be interpreted as they have no intention of a trade deal in the first place) He wanted 43% on all chinese goods for the longest time. Chances are increasing he will get his way if trump agrees to his plan.

3. Trump now calls president Xi "enemy" and wants companies to shift out of China.

4. How many times have Trump & his team assured that a deal is almost complete and talks are "going well"
My updated take is that it is not going well and it wont go well as far as the eye can see... Even a superficial one wont take place so soon.

5. It would just take just another negative to take down the dow to single day >1000pts loss, ie Fed holding rates instead of cutting. Right now things are still humming along in the US. Reflected in the indices that are not very far from all time highs.

An economic recession, in the US and globally, and higher consumer prices in the US, may be deemed a small and temporary price for US to pay, to retain its long-term position as a global leader. 

Besides, the supply chain has started to shift, and in time to come, consumer prices in the US will moderate.

South China Sea conflicts with Vietnam and Philippines, civil disobedience in Hong Kong, and US tariffs on Chinese goods. With everyone coming in on them, Beijing might be just turn violent.

(24-08-2019, 10:03 AM)corydorus Wrote: I did the same. Max my SSB, Bought Astrea/SIA bonds, FD, and most important stable Reits. Big Win 2019 for Reits.

With so much money moving into safe assets, resulting in lower/negative yields on bonds and cash, while yields on stocks remain unchanged (if not higher), the falling REIT yields seem to suggest that the market perceives REITs to be a high-yielding safe/stable haven.

I am not so sure about whether REITs should be considered a safe haven.

Because of its lower yields, and smaller spread against safer assets (FD, SGS, GLC bonds), REITs are offering a disproportionate amount of risks for its rewards.

Even though physical properties are evergreen in the long-term, asset values and unit price may be subject to incredible downward market forces. Who knows what might cause a stampede for the exit. If one is a long-term investor, certainly, this should not be their concern. Junction 8 will likely still be around 10-20 years from now, and many retailers will likely still be leasing space from them. But many (retail) investors get frightful when seeing sudden and large paper losses, which may cause them to turn those paper losses into realised losses.

Of course, the market is capable of all sorts of things. If interest rates can go negative in some countries, maybe some of our REITs may even be yielding 2% in the near future.

2 % is Still O. K. if FD goes negative like in Europe?

Accountable capitalism .....

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Corporate bosses soften shareholder value focus amid calls for accountable capitalism
Ben Paul 6/09/2019, 7:00am

SINGAPORE (Sept 9): Jamie Dimon, chairman and CEO of JPMorgan Chase, found himself in a difficult position during a hearing with the US House Financial Services Committee in April. Freshman Representative Katie Porter told him that a single mother who lives in her California congressional district and works as a teller at JPMorgan simply could not make ends meet......

This was a marked shift from the guiding philosophy of Milton Friedman that “the social responsibility of business is to increase its profits”. That was the headline of a landmark article he wrote for The New York Times in 1970 that helped enshrine the primacy of shareholder interests in the decades that followed. In the article, Friedman rubbished the idea of a business having a social conscience and “[taking] seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers”.

Yet, times are changing and wealthy corporate bosses of Dimon’s ilk evidently feel they must change too. In 2016, Donald Trump rode to the White House with the support of disgruntled white working class voters sidelined by companies that have turned to automation and global supply chains to boost their profitability over the last few decades..........

Making capitalism accountable?

.............Among the provisions of the act is that US companies with annual revenues of more than US$1 billion must obtain a federal charter that obliges its directors to consider the interests of all corporate stakeholders. In addition, no fewer than 40% of its directors must be selected by employees. Directors and officers of these companies are also barred from selling shares within five years of receiving them, or within three years of a company stock buyback. These companies must also receive the approval of at least 75% of their shareholders and 75% of their directors before engaging in political expenditures. Finally, companies that engage in “repeated and egregious” illegal conduct may have their charters revoked.

“For decades, American workers have helped create record corporate profits but have seen their wages hardly budge,” said Warren last year. “My bill will help the American economy return to the era when American companies and American workers did well together.”

Pity workers, small investors

As a small investor, I have some insight into the plight of the middle-class workers who are reshaping US politics. The sad fact is that promising new companies do not really need us. A generation ago, small investors were the proud and strong blue-collar workers of the stock market. They didn’t individually own much stock, but their sheer numbers and inclination to trade helped promising companies garner lofty valuations, raise capital and grow fast. It was an era when companies and small investors did well together.

With a growing abundance of capital in the private market, companies such as Alibaba Group Holding, Spotify Technology and Uber Technologies have been able to gain massive scale and disrupt entire industries well before even contemplating going public. Small public investors like me are no longer a source of growth capital but an exit strategy for big players in the private market.

Similarly, struggling workers in the US have seen their bargaining power wane as US companies turned to automation and moved their labour-intensive processes to other countries. These workers are no longer a source of competitiveness but a cost that needs to be managed. Even if companies genuinely want to now focus on more than just shareholder value — as Warren is demanding and Dimon says he is actually doing — it won’t change their basic need to remain competitive.

In my view, Warren’s pledge to make big companies work for all their stakeholders isn’t any more realistic than Trump’s promises to bring obsolete jobs back to the Rust Belt. I am not saying that workers cannot have a larger piece of the pie, but that it shouldn’t be left to the companies to decide how large that piece ought to be. A company’s board and managers have a legal duty to act in the best interests of the company and its shareholders — nobody else..............

Read more :  http://www.theedgesingapore.com/views/capital-markets/corporate-bosses-soften-shareholder-value-focus-amid-calls-accountable

It used to be compassionate capitalism. Then US ended up with Super-PAC and money politics.
https://www.wbur.org/cognoscenti/2013/03...paleologos

Capitalism in raw form is self-destructive. As OPMI we should know and experienced it.

公股大買拚大選行情 外資逃台股有疑慮 留意外資大力調節│主播丁士芬│【iStock盤前解析】20191004│三立iNEWS
https://m.youtube.com/watch?v=L2QB6qPLxR0

Beware of Funny Financials
https://www.bloomberg.com/opinion/articl...emium-asia

U.S. stock market is overvalued, IMF says
https://www.marketwatch.com/story/us-sto...ck_seemore

Snippets from BOA & JPM 3Q2019 earnings transcript below. Interestingly, two leading banks reported that the US economy is still going stong, perhaps that cld explain why President Trump has not been urgently finalizing a deal with China.

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"...... These are tangible examples that the U.S. economy is still in solid shape, despite the worries and concerns about trade wars, capital investment slowdowns, or other global macro conditions....."

https://seekingalpha.com/article/4296896...transcript

"....So to wrap up, the U.S. economy is on solid footing. And while global growth is slowing, the U.S. consumer remains healthy...."

https://seekingalpha.com/article/4296691...transcript