Financial Markets and Economy
No One Knows How Messy the Fed Increase Could Get (Bloomberg)
The greatest monetary-easing cycle in the history of the U.S. has left a mind-boggling amount of cash floating around in the economy. Banks hold $2.5 trillion in excess reserves — money they essentially don’t know what to do with — at the Federal Reserve.
So as the Fed prepares to raise interest rates from near zero as soon as next week, bond investors are on edge.
Jos. A. Bank sales are down 35% (Business Insider)
Men's Wearhouse is booking a $90.1 million charge for its failed investment in Jos. A. Bank.
Shares are down 13% in after-hours trading.
Kiva Turns to Another Economy in Need of Investment: America’s (The Atlantic)
Budding small-business owners have always turned to family and friends for loans. This system has its perks: Money from friends and family can mean fast, interest-free cash, and the social ties mean borrowers might be more incentivized to pay back their loans. For entrepreneurs without the credit histories to qualify for a loan from a bank, this is often the only option—but it’s limited by how wealthy friends and family are.
Asia Stock Outlook Mixed as Yen Holds Surge; Kiwi Jumps on Rates (Bloomberg)
Asian stocks extended declines into a third day as a resurgent yen weighed on Japanese exporters and oil meandered around a six-year low. Australia’s dollar surged on an unexpected increase in employment, while New Zealand’s currency jumped after the central bank indicated it may be done with cutting interest rates.
There are a few things to consider before investing in a sports team (Business Insider)
Sports fans dream of owning their own team, but very few can do so. Not only does demand outpace supply, but sky-high valuations make sports teams unaffordable for almost everyone. John Goldman, a partner at Herrick, Feinstein LLP, told Wealth Management, ownership is "partly objective and partly subjective." While you can predict cash flow, you cannot predict how the team will perform. Most likely you will become part of an ownership group, and your investment's performance will be determined by the performance of a general partner.
Handguns, not AR-15s, are driving gun market (CNN)
But the majority of weapons that Americans are stocking up on are handguns, not rifles.
Gun sales are surging — Smith & Wesson posted a quarterly sales jump of 32% on Tuesday, and CEO James Debney said handguns account for three quarters of the company's sales.
Bitcoin Hits Highs on (Possible) Unmasking of Creator (Bloomberg)
Bitcoin climbed on Wednesday to hit its highest levels since early November, amid fresh speculation that the identity of Satoshi Nakamoto—the virtual currency's creator—may have finally been revealed.
The kiwi is going bananas (Business Insider)
The New Zealand dollar, known as the kiwi, surged against the dollar after the central bank cut its key interest rate.
Treasury yields fall as stocks, oil turn lower (Market Watch)
Treasury yields finished lower Wednesday as investors grew cautious, seeking the perceived safety of government bonds amid selling in stocks and crude-oil futures.
“Long-ended bonds are responding to oil prices hitting new lows and as investors adjusting their outlook on inflation. A drop in oil prices immediately impacts headline inflation and there is no upward pressure on core inflation,” said Ian Lyngen, senior government bond strategist at CRT Capital.
Wall Street Is Pricing Pipeline MLPs Like Half Will Cut Payouts (Bloomberg)
Investors expect half the partnerships that control most U.S. oil and gas infrastructure to reduce distributions after Americas largest pipeline company cut its dividend by 74 percent.
South Africa just fired its finance minister, and now its currency is crashing (Business Insider)
South Africa's rand fell to a record low against the dollar on Wednesday.
Full-Time Traders, Overtime Refs (Bloomberg)
During the workweek, Hugh Campbell can be found in the Park Avenue offices of the Bank of New York Mellon, where he’s a managing director. He focuses on high-net-worth families, with about 300 individual clients and four BNY Mellon offices under his watch. His work wardrobe consists of classic navy suits and crisp white shirts.
Yahoo wants to spin out its core business — here's how that business is doing (Business Insider)
Yahoo announced today that it's no longer going to try and spin out its stake in Alibaba, citing tax concerns. Instead, it's exploring a way to spin out its core Internet businesses, essentially turning Yahoo into a holding company for Alibaba.
Surprisingly, to some, the economic news continues to show a marked lack of vitality.
In particular, wholesale inventories showed an actual decline, with the prior figure being revised sharply downwards as well. This does not bode well for 4Q GDP.
South Africa’s currency just plummeted to an all-time low (Market Watch)
The South African rand fell to a record low Wednesday after the government removed Finance Minister Nhlanhla Nene, who was well-respected by the international financial community, from his position, market strategists said.
Wall Street Lending Standards Remind Regulators of Crisis Run-Up (Bloomberg)
The biggest U.S. banks continue to weaken standards for some of the highest-risk lending in a trend similar to what their examiners saw before the 2008 financial crisis, according to a regulator’s report.
A 20-year-old perversion in the stock market is coming to an end (Business Insider)
For 2016, Bank of America Merrill Lynch's Savita Subramanian likes "liquidity over leverage." Specifically, she's recommending to clients that they seek stocks of companies that are financially robust, not in financial distress.
Visa Gives Bond Market Fourth-Biggest Deal as Record Year Wraps (Bloomberg)
Visa Inc. raised $16 billion in its first bond sale to finance the payment network’s 21.2 billion euro ($23.3 billion) takeover of Visa Europe Ltd.
Even without a blockbuster Dow-DuPont deal, this was a huge year in American merger history (Quartz)
Another day, another gigantic merger between titans of corporate America.
France is the best and America is the worst (Business Insider)
When it comes to wages, France is the best and America is the worst.
The World's Smartest Bad Investors (Bloomberg View)
In 1996, Jay Ritter, a finance professor at the University of Florida’s Warrington College of Business, published a rueful essay in the journal Financial Management, recounting a story of how he lost money in the markets. It started with a victory: Thinking he had detected a pattern in the futures market, he and some other professors bet some money on it and won. Encouraged, they doubled down, only to find that the pattern had disappeared. Eventually, Ritter learned that the legendary Fischer Black of Goldman Sachs had figured out what he and others like him were doing and had traded against him, thus taking his money.
Politics
Hillary Clinton's Very Good Year (Bloomberg View)
I'm a fan of the Washington Post's Chris Cillizza, but when he gets one wrong, it's often a doozy. And saying that Hillary Clinton had the "worst year in Washington" is about as wrong as you can get.
Yes, Clinton did, as Cillizza remembers, suffer through a scandal, and she emerged with bruised polling numbers, at least when it came to perceptions of her honesty. If the award was "worst summer in Washington," I could see Clinton as a contestant, although Scott Walker and Matt Williams would be stronger choices.
Senate Republicans Introduce Bill for Puerto Rico Relief (NY Times)
Under pressure to help Puerto Rico avoid a bond default on Jan. 1, Senate Republicans introduced a bill Wednesday to extend several forms of assistance to the island. But the measure stopped well short of embracing proposals from the Obama administration, which include giving Puerto Rico access to bankruptcy court.
Technology
The Air Force Wants A Universal Translator (Popular Science)
It’s hard for a military to win hearts and minds if none of its members speak the local language. Humans who grew up speaking a language and joined the military are the best solution, followed closely by interpreters recruited locally. But that’s not always possible, as there's sometimes a rarity of language speakers or a lack of safety guarantees for the interpreters. For this reason, the military wants a technology that can work as an interpreter in real time–a universal translator, if you will. Or perhaps a less-squirmy version of Douglas Adam’s Babelfish. Last week, the Air Force Research Laboratory put out a solicitation for such a device. They’re calling it, simply “Human Language Technologies.”
Powered Exoskeletons Could Replace Wheelchairs One Day (Wired)
When you hear the word exoskeleton, you probably think of an insect’s hard carapace or Iron Man’s suit—a sort of body-sheath that lends its wearer superhuman powers. But for years, Ekso Bionics has crafted their own exoskeletons, wrap-around metal braces with motors and a CPU backpack that allow paraplegics to walk again. (Their other suits, designed for construction, help skinny journalists heft 40-pound tools with ease.)
Health and Life Sciences
Oxytocin might raise, not lower, anxiety in women (Futurity)
Oxytocin, a hormone that plays a role in intimacy and social bonding, is being investigated as a treatment for anxiety, depression, and PTSD. But a new study with mice raises important questions about the differing effects the hormone has on men and women.
Life on the Home Planet
Middle-class families, pillar of the American dream, are no longer in the majority, study finds (LA Times)
The nation's middle class, long a pillar of the U.S. economy and foundation of the American dream, has shrunk to the point where it no longer constitutes the majority of the adult population, according to a new major study.
The Pew Research Center report released Wednesday put in sharp relief the nation's increasing income divide, which is certain to be a central issue in the 2016 presidential race. It also highlights how various economic and demographic forces have eroded long-held ideals about maintaining a strong, majority middle class.
The World's First In Vitro Puppies Are Here, And We're In Love (The Huffington Post)
The first litter of puppies born via in vitro fertilization has arrived, and they are downright adorable.
"Since the mid-1970s, people have been trying to do this in a dog and have been unsuccessful,” Alex Travis, associate professor of reproductive biology at Cornell's College of Veterinary Medicine, said in a Wednesday press release.
