1) Peloton, the exercise machine maker, has recalled pedals on 27,000 of their bikes which have caused some injuries. The 27,000 bikes were manufactured between July 2013 and May 2016. The company has received 120 reports of the pedals breaking resulting in 16 injuries to users, with 5 people requiring medical care including stitches. Peloton is one of the few companies who have benefitted from the coronavirus crisis because with people staying at home for long periods, they are purchasing home exercise machines. Their stock is up 380% a year to date, while their fitness subscribers is up 113% from a year ago.
2) The investment firm BlackRock considers China’s domestic bond market to be a good investment, offering a level of returns that may be difficult to find elsewhere in the current world economy. Economic data and continued monetary policy support, point to a sustained economic recovery, with foreign investors remaining under-invested in Chinese bonds. These investors account for only about 2% of the $16 trillion dollar market. Using diversified and resilient portfolio allows investors to avoid being exposed to risk specific for a company or sector. While there are some troubling signs, such as China Evergrande Group seeking government help in meeting its debt, looking across the whole spectrum, a fairly diversified portfolio can be built to yield a reasonable income.
3) General Motors will start operating robot cars in San Francisco without any human backups in the cars by the end of this year. The company Cruise has received a permit from California’s Department of Motor Vehicles to allow them to operate robot cars, without humans, on public highways. Other companies have gotten permits for autonomous automobile operation without humans, including Waymo, but none have set a date for autonomous ride-hailing services. Cruise will start ride-hailing service first in the surround neighborhoods, one at a time, slowly working their way into the heart of San Francisco with it’s dense traffic challenges. Progress towards fully autonomous ride-hailing services was retarded in 2018 when an Uber autonomous test car ran down a pedestrian in Temple Arizona.
4) Stock market closings for – 15 OCT 20:
Dow 28,494.20 down 19.80
Nasdaq 11,713.87 down 54.86
S&P 500 3,483.34 down 5.33
10 Year Yield: up at 0.73%
Oil: down at $40.89
1) Sales of homes in the U.S. have dropped their biggest drop in nearly 10 years, because of the coronavirus crisis in April. The upending of the labor market and the broader economy has undercut demand for housing. Sales of existing homes have plunged 17.8% with existing home sales making up about 90% of U.S. home sales. In addition, April showed a record collapse in homebuilding and permits. With unemployment up past 38 million people and still climbing, it’s expected the home sale market will remain depressed for long after the pandemic crisis is over. The problem is further exasperated by a four month inventory of homes where a six to seven month supply is considered a healthy balance between supply and demand.
2) More contraction of consumerism with more retailers announcing closing of stores. The retailers Victoria’s Secret and Bath & Body Works will be permanently closing about 300 stores in America and Canada. With the young people of America having fewer good job opportunities and less disposable income, the hyper-consumerism economy born in the seventies is finding it harder to sustain itself, raising questions of what economic model might replace the present one . . . and what the job future would be for the young.
3) Companies have been borrowing at a rampant pace to shore up their liquidity during the pandemic. The wireless carrier AT&T is joining in with a new bond sale of $12.5 billion dollars of unsecured bonds in five parts. The intent is to take advantage of a global rally in credit to refinance their outstanding debt. Their 40 year security has a yield 250 basic points over the Treasuries. In the last few years, AT&T has been reducing its debt of nearly $200 billion dollars now down to $164 billion dollars, most of the debt coming from its acquisitions of Time Warner Inc and DirectTV.
4) Stock market closings for – 22 MAY 20:
Dow 24,465.16 down 8.96
Nasdaq 9,324.59 up 39.71
S&P 500 2,955.45 up 6.94
10 Year Yield: down at 0.66%
Oil: down at $33.56
By: Economic & Finance Report
Over 3.3 million Americans have claimed unemployment benefits because of the coronavirus, the U.S. Labor Dept has indicated this past week. The virus has taken a toll on businesses, income wages and society’s everyday way of living.
These numbers reflect a growing number of Americans who are currently unemployed and are seeking financial relief; because of what the COVID-19 virus has done to their working wages. Many people have insisted that the impact has burdened them into massive financial debt.
It also has to be noted, that the United States has now surpassed all other countries with the most infected individuals who have tested positive for COVID-19. Over 85,000 people in the USA have the coronavirus, as presented by data by John Hopkins University on March 26, 2020 (US infections 85,840). SB
Sources: US Labor Dept; John Hopkins University Covid-19 Data
1) J. P. Morgan Chase posted profit and revenue far in excess to analysts’ expectation at the end of 2019. Fourth quarter profit was up 21% to $2.57 a share compared with $2.35 estimates of analysts. The investment bank produced record revenue for the fourth quarter. Citigroup also beat estimates for profit and revenue, their fixed income trading revenue gaining 49%.
2) Consumer prices rose at the fastest pace in eight years, in 2019. The increase was driven by higher gasoline, health care and rent prices in addition to the biggest annual advance in inflation since 2011. The consumer price index rose 0.2% in December, while economist had forecast 0.3%. The cost of living in 2019 rose 2.3% from 2.1%. Price increase for food was mild, while prices fell for used vehicles and airline fares.
3) Three of China’s automakers are considering expanding into Mexico with factories. Car makers Changan, BYD (electric cars) and Anhui Jianghuai or JAC, who already has manufacturing facilities in Mexico, but is considering expanding. The companies are considering expansion sometime this next year. No comments on if and where cars will be exported to.
4) Stock market closings for – 14 JAN 20:
Dow 28,939.67 up 32.62
Nasdaq 9,251.33 down 22.60
S&P 500 3,283.15 down 4.98
10 Year Yield: down at 1.82%
Oil: up at $58.14
By: Economic & Finance Report
EFR.TV is back in full effect, closing out 2016 and soon to ring in the new year for 2017……
Lookout for a break out year for EFR.TV (Economic & Finance Report Television) as we gear to give you more productive content on the economy and financial management….
SEEK & YOU SHALL FIND… Check out the latest episode below with host and creator Sammy BE aka Bizman Bassey…. U Remember ME!!!!!! -SB
Why An Engineer Supports A $15 Minimum Wage And Why
Millenniums Should Worry!
By: James Lyman BSAE, BSEE, MSSM
Economic & Finance Report
The latest hot button topic of the social activists and now the sixteen election, is to make the world a better place for humanity by nearly doubling the minimum wage. As an engineer and technologies, I say YEA!!, because it will mean more work for my brethren. As so often the case of social activist, they look at the world in a very simplistic way, almost with the innocence of a child, considering that if they can raise the amount the bottom strata of workers are earning, then with more money to live on, their lives will be much improved.
But with just the threat, employers of minimum wagers are already looking for new technologies, with the new industrial robot Baxter by Rethink Robotics being a prime example. Introduced in 2012 and costing just $25,000 to buy, it’s unlike conventional industrial robots with its ease of use, with Baxter not needing computer programmers. A worker can pull the robot’s arm through the desired motions to program it without any need for technical skills or knowledge. For the present minimum wage of $7.25 per hour plus say 30% burden (workman’s comp, insurance, etc.), this makes for $9.43 an hour. For the $25,000 cost of a Baxter robot that calculates out to 2,651 hours of minimum wage work, which is about one and a quarter years of work. After that, it’s essentially free labor. Double the minimum wage, and you half that “break-even point” to about nine months.
Doubling the minimum wage will only increase the demand for more machines like Baxter, to replace those more expensive humans. And that demand means more work for engineers, computer programmers, electronic and mechanical technicians … which means more money for my brethren. But technology isn’t waiting for the minimum wage to be raised, for businesses are already looking for and experimenting with new technologies to reduce their labor needs. Already, there are kiosks for freshly made foods such as pizzas. Fast food restaurants such as
Taco Bell are experimenting with using smart phones and the internet for people to make their orders thereby reducing the need for people to man the front counter. The big box stores are experimenting with using arrays of video screens to display merchandise instead of stocking shelves. The customer will use their smart phones to put merchandise into their “carts” which is in the back storage area where semi-automated warehouse technology is used to actually fill that cart. Using their smart phone, their purchases are already paid for when the cart is brought out to them. Over the years, ATMs have replace the number of bank tellers needed, and now personal computers and smart phone apps are further reducing the need for tellers.
But there is a second major dimension to this proposal, which as you might expect, isn’t considered by any of the advocates for doubling the minimum wage. What happens to the skilled and educated workers already make $15 an hour? Will their pay stay the same? Will they be satisfied making the same amount as those with very little to no education or skills? Of course not, they will want more. Supply and demand, and our labor (commodity) is something we are trying to sell. When there is a large supply of a commodity, then the price is low. That’s the real problem with those working at minimum wage … there’s lots of them … a large supply of commodity (labor) so a low price (wage). For those already making $15 an hour, they make that because of the education and skills they have, and there are fewer of them (smaller supply) so the price (wage) is higher. We see the same thing with each higher tier of pay scales— shrinking supply, so therefore increasing pay. As you might expect, if the minimum-wagers move up to the pay of those already making $15 an hour, they in turn will move up for more money, which causes the next tier to also move up … and so on, and so on, and so on. Pay scales just shift upwards until the pay strata is equal again. This is called inflation resulting in the devaluation of the dollar.
Net result: the minimum-wagers are right back where they started. No real gains and fewer jobs.
Now why should this be any concern for the millenniums? Well, this is all about the problem of obsolete people and how they are falling further and further behind. It’s a concern for the millenniums because this is the environment they are coming into as evident by the 20% to 25% new college graduates finding themselves either unemployed or under-employed. Increasing pressure to raise the minimum wage, while a benefit for the people of technology, puts pressure for further advances in automation and therefore technology displacement. Increasing minimum wage increases obsolete people. This is another sign of how millennium’s future is slipping away. The world of their parents and grandparents continues to slip away leaving millenniums in a desert of job opportunity because the automation and technology displacement doesn’t just center on the low strata of jobs, it’s all up and down the labor strata. The driving force in this new economy is the basic axiom of automation:
Any time you can reduce the intellectual or skill level of a job, you reduce your labor cost.
This applies equally for the lowest minimal pay manual labor job to the highest levels of skill such as medicine or law. The minimum wage is a simple form of a cartel, and cartels are dynamically unstable systems, it’s very hard to maintain control over a segment of the economy. Just look at OPEC and how their members continually act in their own self interest, nullifying much of the power and control of OPEC. However, the real revelation is how ill prepared those
who govern us are, those who seriously propose doubling the minimum wage, who have so little understanding of the twenty-first century world. This is the real reason why the millenniums are falling out of the social-economic system— so many of those who are charged with governing us are themselves so very far behind and ill prepared to lead us into the twenty-first century. They have so very little understanding of how their world really works as typified by proposing doubling the minimum wage as the way to close the wage gap and expecting no repercussions.
And the millenniums are the ones who are paying the price for these leader’s deficiencies.
Economic & Finance Report has great podcast check it out today……..Podcast: https://soundcloud.com/economic-financereport
By: Economic & Finance Report
Approx. 77 million American citizens do not pay federal taxes. This has been indicated from policy think tank, Tax Policy Center. Americans can’t pay taxes if close to the majority, does not have taxable income, or make enough income to pay federal taxes.
The bottom later of citizens who make under the threshold of disposable income, get aid and assistance from the govt, which allows them to use it for sustainable purposes. It is an interesting point to consider, when filing this tax season; that if you are not making enough, you may not be susceptible to pay federal taxes. -SB