Why Student Debt May Not Affect the US Economy Like Sub-Prime
According to the White House Council of Economic Advisers, “Student debt is less likely to make a recession more severe or slow an expansion in the way that mortgage debt may have.”
Financials
Why investors should follow shifts and twists in the yield curve
Yields on bonds don’t remain constant. When they change by the same magnitude across maturities, we call the change a “parallel shift.”Financials Key takeaways: Why is the yield curve normally upward-sloping?
In normal conditions, the yield curve is upward-sloping. As bonds pay only interest (the coupon) until maturity and pay face value at maturity, investors take longer to recover their principal.
Japan’s GDP back to peak levels: Auto sales and Toyota benefit
This article considers the prospects for further real GDP growth acceleration and the implications for Japanese exporters like Toyota.
Investors Beware: Duration Risk Has Risen across the Bond Market
If you’re a bond (BSV) (AGG) investor or fund manager, fluctuation in interest rates is one of the key risk drivers for the returns you get from your portfolio.
Gundlach Says This Chart Is ‘Early Warning Indicator’ of Recession
Jeffrey Gundlach seems quite bearish in his views about the US economy (IWM) (QQQ).
China’s manufacturing wages: Why 2012 was a banner year for Baidu
The sharp rise in wages in China prompted some fairly aggressive forward-looking estimates regarding China’s wages in manufacturing and its ability to compete as a low-cost manufacturer in the future.
China’s manufacturing wages rise to $7,000 per year: Baidu benefits
This article considers the growing wage level in China and its effect on Baidu and other Asian equities.
Ray Dalio: ‘Risks Are Asymmetric on the Downside’
“Risks are asymmetric on the downside” On the economy, Ray Dalio stated that “the risks are asymmetric on the downside, because asset prices are comparatively high at the same time there’s not an ability to ease.” Courtesy of the current global monetary policy’s low interest rates, asset prices are artificially inflated—so much so that they’ve […]
The ‘Three Big Forces’ That Drive All Economies
The “three big forces” Ray Dalio believes that “three big forces” drive all economies. These are: productivity growth the short-term debt cycle the long-term debt cycle An economy has to go through upturns and downturns Central bankers need to study the determinants of productivity for their economy. The determinants could include the costs of education, […]Financials Fixed income ETFs: The longer the duration, the higher the loss
The higher the expense ratio, the deeper the decline in an investment’s value. Also, the higher the period of investment, the greater the impact of expense ratios due to the compounding effect.
Must-know: Important costs involved in owning an ETF
Owning an ETF comes with some fees. These fees are called “expense ratios” because they’re expressed as a percentage of a fund’s assets.Financials Why bid-ask spread costs are so important to ETF investors
Other than the operating costs of an ETF, the other hidden cost that affects the return for investors is the bid-ask spread.Financials Why expense ratios affect ETF investors’ returns
To see how expense ratios can affect investments over time, let’s compare the returns of several fixed income ETFs that differ only in expense ratio.Financials Must-know: Why expense ratios have affected TLT and MUB
We note that net or effective returns (that is, returns after expenses) fall to 7.95% versus perceived returns of 8.44% for TLT for the past three years.
Emerging Markets Have Been Leading Stock Returns in 2016
While developed markets have been caught in a lull, we’ve seen emerging markets grab the spotlight. Emerging markets have been leading stock market returns so far in 2016.
Gundlach: Invest in Industrials, Materials, Financial Sectors
“Industrials, materials, and financials are the sectors. . .you want to be invested in,” said Jeffrey Gundlach recently in a CNBC interview.
Paul Krugman to the Fed: Don’t Raise Rates
Inflation is moving up towards its target, but it still has a ways to go before it gets there. Paul Krugman believes raising rates could keep inflation from reaching that target.
Why Krugman Doesn’t Understand the Focus on Trade All of a Sudden
Trade has been a key focus with respect to the US elections lately.
Knowing the Treasury discount rate and yields before investing
Investors can take an informed decision by knowing the rate of return on their investment.Consumer Why tight bidding for bonds favored issuers and refinancing
Most of the deals last week were in the tight ends of the talk, indicating higher demand for high yield bonds (JNK). The higher demand in turn pushes yields down.
Boardwalk Pipeline Partners: An investor’s must-know overview
Boardwalk Pipeline Partners (BWP) is a master limited partnership that provides transportation, storage, gathering, and processing services for natural gas and natural gas liquids.
Must-know: Minimizing ETF losses by observing max drawdowns
In practice, asset owners (both retail and institutional) want to avoid significant portfolio drawdowns even if the benchmark index declines.Financials How to measure your portfolio’s interest rate risk with convexity
Portfolio durations differ from key rate durations, as even though the durations of two portfolios may match, both portfolios may differ in the maturity profiles of the bonds they comprise, which will result in differing key rate durations.Financials Must-know variants in developed market international bond funds
International bond funds like the Vanguard Total International Bond Index ETF (BNDX) can have various investment styles determined by their stated choice of bond investments.
Show it: How mutual funds make money
In return for investing a client’s money, mutual funds charge a fee, generally an annual fee set as a percentage of the client’s assets. This fee is the only source of income for a mutual fund-focused asset manager.Energy & Utilities What are the advantages of technical analysis?
Entry and exit strategy is recommended for short and long-term trading in technical analysis. Fundamental analysis is used for the long-term entry and exit point.
Get Real: Is Unrest Sweeping the Markets?
In today’s Get Real, we took a closer look at Uber’s trouble and an unexpected boost for Canopy Growth while markets react to more unrest.
The Bullish And Bearish Abandoned Baby Candlestick Pattern
The Bullish Abandoned Baby candlestick pattern is a reversal pattern. The pattern has three candles. It forms at the bottom of a trend. In this pattern, the first candle is any long and bearish candle.Financials Why do floating rate notes, or FRNs, differ from leveraged loans?
FRNs are usually issued in capital markets, whereas leveraged loans are arranged by commercial and investment banks. While FRNs are typically unsecured and investment-grade, leveraged loans are secured.
U.S. Bank’s non-performing assets declined in 4Q14
U.S. Bank’s (USB) non-performing assets were $1,808 million at the end of 4Q14. The ratio declined by 11.24%—compared to 4Q13.
What are the disadvantages of technical analysis?
Technical analysis is used to forecast stocks. All of the technical indicators give possible entry and exit points. The forecasting accuracy isn’t 100%. This is one of disadvantages of technical analysis.
How insurers manage their capital requirements
A company managing higher risk products must maintain a higher level of minimum capital compared to a company with a relatively lower level of risk.
Private equity, hedge funds, and other alternative assets
Private equity is capital invested in companies that aren’t listed on stock exchanges. These alternative assets include venture capital.
The many players in alternative asset management
Some players are present across the spectrum of alternative assets, but most alternative asset managers are present only in a particular asset area.
The relative share of the alternative asset management space
Alternative assets account for about 10% of the total global asset management industry that’s valued at $63.9 trillion. Private equity contributes most.
How the strengthening US dollar is impacting crude oil prices
The US dollar plays a major role in the price movements of commodities such as gold and crude oil. A strengthening US dollar is often seen as negative.
Why the Swiss National Bank removed the cap against the euro
A cap was put in place to stop the currency’s appreciation. An appreciating local currency is detrimental to exporters.
How does Bank of America make money?
Net interest income contributes about half of Bank of America’s total income. Investment and brokerage services contribute the most to noninterest income.
Bank of America’s six operating segments
Bank of America operates through five major segments. Its Consumer and Business Banking segment contributes a third of the bank’s total revenues.
Bank of America: The second-largest US banking operation
Bank of America Corporation’s (BAC) banking operations are the second-largest in the United States by assets.
Why consumer banking is important for Bank of America
Consumer and Business Banking is Bank of America Corporation’s (BAC) largest segment. It contributes about a third of the bank’s total revenues.
Card loans rule Bank of America’s consumer loan portfolio
Credit card loans account for more than half of Bank of America’s total consumer loan portfolio.
Why Bank of America’s commercial loan portfolio is diversified
In addition to assessing the credit profile of the borrower, Bank of America ensures that loans aren’t too concentrated by industry, geography, or customer.
Bank of America’s Global Markets operations
Bank of America’s (BAC) Global Markets segment offers sales and trading services across asset classes to institutional clients.
A brief overview of Six Flags’ management
Six Flags’ management plays a vital role in shaping the company and leading it in the desired direction. This article reviews three management positions.
A brief overview of U.S. Bank
We’ll provide an overview of U.S. Bank. It’s the fifth largest retail bank in the US—by deposits and assets. At the end of September 2014, it held $391 billion in assets.
Why U.S. Bank’s loan growth showed interesting trends
You need to understand loan categories better in order to see some very interesting trends in U.S. Bank’s loan growth. Its loans are divided into five main categories.
Ford, Daimler, and BMW employ high financial leverage
Ford (F) uses a high amount of financial leverage. Its debt-to-capital ratio is 81.1%. This is significantly above the industry average of 53.1%.
Intense competition leads to low profit margins for automakers
The auto industry has lower margins primarily because of intense competition. It makes it difficult for companies to pass on increases in raw material prices to the customer.