Financial Markets and Economy
Income Inequality (Bloomberg View)
The pope deplored it. U.S. Federal Reserve Chair Janet Yellen said she’s “greatly concerned” about it. The World Economic Forum holds panels about its threat to the global economy at its annual Davos conclave of the wealthy and powerful. It’s fueled voter anger in the U.S. presidential election. And a 700-page book about it by a French economist was a surprise best seller. It is inequality, a gap between rich and poor that has been widening in the U.S. and many other countries for a generation. The term is often used imprecisely as a catch-all description of various related ills including poverty, job stagnation, class division and social disorder. Yet there’s much debate among economists about the impact of inequality itself and its relationship to prosperity.
Bonus Pools for Wall Street Workers Seen Falling in 2016: Chart (Bloomberg)
The belt tightening continues in financial services. Bonus pools are expected to declineby as much as 20 percent for some Wall Street workers this year, with incentive pay falling at almost every type of financial-services firm, according to compensation consultant Johnson Associates Inc. The sharpest drop probably will be in fixed-income sales and trading, as well as investment-bank underwriting.
U.S. dollar up on hawkish Fed view; banks boost stock indices (Reuters)
The U.S. dollar rose to a three-week high on Wednesday on heightened expectations that the Federal Reserve will raise rates earlier or more times than anticipated this year, while stocks on Wall Street rose led by financial shares.
Oil Prices Waver on Dollar Strength (Wall Street Journal)
Oil prices fluctuated on Wednesday as investors awaited key U.S. supply data.
Fed’s Williams, Lockhart See at Least Two Rate Hikes in 2016 (Bloomberg)
Two regional Federal Reserve bank presidents said at least two interest-rate increases may be warranted this year because the economy continues to expand and inflation is picking up, pushing back against expectations the central bank will delay action next month.
Here's how Goldman Sachs sees asset classes performing in the period ahead (Business Insider)
Following a whirlwind start to 2016, something that saw risk assets cascade lower before staging an equally remarkable recovery, investors worldwide are now pondering what could possibly arrive next.
Will the central bank-induced recovery persist, or is the carnage seen earlier in the year likely to return?
The Sustaining Innovation March, Or What A Defend And Extend Strategy Looks Like (Forbes)
My last column focused on growth, and the risks inherent in a Growth stall. As I mentioned then, Apple will enter a Growth Stall if its revenue declines year-over-year in the current quarter. This forecasts Apple has only a 7% probability of consistently growing just 2% per year in the future.
Yen Intervention Could Hit U.S.-Japan Relations, Abe Adviser Warns (Wall Street Journal)
Direct intervention by Japan to stem the yen’s rise against the U.S. dollar would risk a strong backlash from the U.S., an adviser to Prime Minister Shinzo Abe said, citing objections from U.S. central bank and White House officials.
Nasdaq Bears at 5-Year High Just as Berkshire Sees Apple Bargain (Bloomberg)
Berkshire Hathaway Inc.’s newfound love for Apple Inc. comes as the rest of Wall Street is souring on the technology stocks.
Elephant in the Room at This Week’s G-7 Is Sure to Be the Yen (Bloomberg)
When finance chiefs and central bankers from the Group of Seven countries gather this week at a hot springs resort in northern Japan, the official agenda has them focusing on ways to revitalize global growth and crack down on cross-border tax evasion.
16 Months and Counting (Wall Street Examiner)
In his 2016 State of the Union Address, President Barack Obama accused those claiming the American economy is in decline of “peddling fiction”.
Another Year of Anger for Deutsche Bank's Investors (Bloomberg)
Deutsche Bank AG investors expressed their frustration with management at the company’s annual meeting a year ago. Weeks later, co-Chief Executive Officer Anshu Jain was gone.
Are Property Taxes a "Wealth Tax" on the (Mostly) Non-Wealthy? (Of Two Minds)
The fallacy in this assumption is that homeowners' incomes do not automatically rise along with housing valuations.
It’s expensive to be poor (Economist)
When Ken Martin, a hat-seller, pays his monthly child-support bill, he uses a money order rather than writing a cheque. Money orders, he says, carry no risk of going overdrawn, which would incur a $40 bank fee. They cost $7 at the bank. At the post office they are only $1.25 but getting there is inconvenient. Despite this, while he was recently homeless, Mr Martin preferred to sleep on the streets with hundreds of dollars in cash—the result of missing closing time at the post office—rather than risk incurring the overdraft fee. The hefty charge, he says, “would kill me”.
I.M.F. Takes Firmer Stand Favoring Relief for Greek Debt (NY Times)
The International Monetary Fund is increasing demands for Greek debt relief, setting up another potential standoff with creditors over the country’s bailout, and threatening to create more political and economic uncertainty at an already tumultuous time for Europe.
The World’s Safest Bonds Are Actually Wild Risks (Wall Street Journal)
Desperate for yield, investors are buying government bonds that come due further and further in the future. If you lend your money to the government, you expect to get it back. It’s not for nothing that British government bonds are ‘gilt-edged,’ and the U.S. Treasury yield is considered ‘risk-free’ in financial models. What could possibly go wrong?
The Kochs are brainwashing us: Inside the billionaire industrialists’ chilling economics curriculum (Salon)
Charles Koch is known for being CEO of industrial giant Koch Industries and a chief financier of the massive conservative political operation he runs with his brother David. In recent years, student activists and investigative journalists have exposed another of Koch’s hats: mega-donor to hundreds of colleges and universities, often funding free-market-focused academic centers housed at public and private schools alike. One Koch-funded program is advocating cutthroat economics to grade school students, even sacrificing lives for profits.
As Brexit, Trump Multiply Global Risks, Gold Seen at $1,400 (Bloomberg)
Gold has soared in the opening months of 2016 as investors second-guess a wary Federal Reserve. A thicket of risks from the U.K.’s Brexit vote next month to the U.S. presidential election may lift prices even further by year-end, according to Denmark’s Saxo Bank A/S.
Bank of America Misled Trading Partners, Lawsuit Alleges (Wall Street Journal)
A Bank of America Corp. executive accused her employer of misleading trading clients, in a lawsuit in which she called the bank a “bros club” and said it discriminated against her for being a woman.
Goldman Downgrades Stocks Over Next 12 Months Due To Risk Of Sharp Market Drop (Zero Hedge)
Having pointed out the gathering storm in VIX ETPs, raised concerns of a "reasonably high probability" of a large drop in stocks, and explained how complacently short-term risk is being priced, Goldman's portfolio strategy team have unleashed a dramatic warning. Shifting to an oveweight cash position for the next 3 months, Goldman warns"we downgrade equities to Neutral over 12 months on growth and valuation concerns. Until we see sustained earnings growth, equities do not look attractive, especially on a risk-adjusted basis."
Superforecasters See 24% Chance of Brexit as Economy Wins Out (Bloomberg)
As he wrestled with whether to push for Britain to abandon the European Union earlier this year, Michael Gove dedicated some time to reading a bestselling book on how to parse the future.
Politics
Sanders message to Dem leaders: Let us in (The Hill)
Democratic presidential candidate Bernie Sanders closed out a long day of nasty fights with party leaders by warning that it risks losing his supporters if they continue to feel shunned.
Speaking at a rally in Southern California after splitting primary contests with rival Hillary Clinton in Oregon and Kentucky, Sanders declined to weigh in on the nasty rift that has opened between him and Democratic leaders over an outbreak of protests at the Nevada convention over the weekend.
Bernie Sanders takes home a win in Oregon, and Hillary Clinton claims razor-thin victory in Kentucky (Business Insider)
Hillary Clinton and Bernie Sanders battled to a neck-and-neck outcome in Kentucky's presidential primary Tuesday, as Clinton declared victory and sought to blunt the momentum of her Democratic rival ahead of a likely general-election matchup against Republican Donald Trump. Sanders won Oregon and vowed to soldier on.
What the hell just happened in Nevada? Sanders supporters are fed up — and rightfully so (Salon)
Chaos erupted at the Nevada Democratic convention on Saturday as supporters of Hillary Clinton and Bernie Sanders clashed over the awarding of the state’s 35 pledged delegates. Clinton edged Sanders in the Nevada caucus on Feb. 20th (52.6 percent to 47.3 percent). On April 2, however, the state party held its Clark County convention and Sanders mobilized more delegates than the Clinton campaign (1,613 to 1,298), which swung the delegate count in his favor.
Technology
Saab's Underwater Drone Will Hunt For Aquatic Explosives (Popular Science)
Landmines are a bad day waiting to happen. The classic explosives, used in war for centuries, hide in plain sight, waiting for someone unfortunate enough to set them off. Sea mines are a similar peril, only threatening whole boats at a time. And while there are plenty of robots that can find the bombs on land, there aren’t that many which can do the trick in water, especially close to shore. The Sea WASP stands for “Waterborne Anti-IED Security Platform.” Made by Sweden defense and auto giant Saab, the Sea WASP is an underwater drone made to find Improvised Explosive Devices under the water’s surface.
Health and Life Sciences
Genetically Engineered Crops Are Safe, Analysis Finds (NY Times)
Genetically engineered crops appear to be safe to eat and do not harm the environment, according to a comprehensive new analysis by the advisory group the National Academies of Sciences, Engineering and Medicine.
Is The Cure For Obesity Written In Our Genes? (Forbes)
Nancy Gallo, 48, had been battling her weight since high school and consistently failing well-proven diet plans such as Weight Watchers. Then her employer offered help from an unexpected source: her own genetic code. Gallo is a senior consultant for insurance giant Aetna AET +0.58%, which in 2014 began pilot testing a program that combines genetic testing with coaching to develop highly personalized weight-loss programs.
Life on the Home Planet
Agricultural emissions 'reality check' (BBC)
A new report says that global agricultural emissions must be slashed to prevent the planet warming by more than 2C over the next century.
The U.S. Can’t Afford To Keep Losing Honeybees Like This? (Think Progress)
It’s been another rough year for honeybees.
On Tuesday, the Bee Informed Partnership released its annual report on total losses of managed honeybees — those kept by beekeepers — across the country. The survey, which asked beekeepers about bee losses between April 2015 and April 2016, showed that U.S. beekeepers lost 44 percent of their colonies in that timeframe. That means that total losses worsened compared to last year’s survey, which reported losses of 42.1 percent.
