Financial Markets and Economy
Why Economists Took So Long to Focus on Inequality (Bloomberg View)
In the early 1980s, the share of earnings going to those at the very top of the income distribution in the U.S. — the 1 percent — began to rise a lot. For two decades, the economics profession barely noticed.
Then, in the early 2000s, Thomas Piketty of the Paris School of Economics and Emanuel Saez of the University of California-Berkeley began releasing evidence, gleaned from Internal Revenue Service data, that top earners’ share had doubled since 1980, and was higher than at any time since the Great Depression.
A stock-market crash of 50%+ would not be a surprise — or the worst-case scenario (Business Insider)
No one likes to be the bearer of bad news, especially when it comes to stock prices.
S&P 500, Nasdaq mark worst start to a year since 2001 (Market Watch)
This isn’t exactly how Wall Street was hoping to kick off 2016: The Dow Jones Industrial Average plummeted more than 450 points at one point Monday on reignited fears about China’s economy.
The blue-chips gauge DJIA, -1.58% ultimately ended the session off nearly 280 points, or 1.6%, lower, after paring the worst of Monday’s stock in a harrowing day of trading. But the Dow still managed to post its worst start to a year since 2008, when stocks fell 1.7%, according to FactSet data.
Strategist: The Alliance At The Core Of The Global Economic Order Has Deteriorated (Bloomberg)
Divergence between the U.S. and Europe goes far deeper than currency values or interest rates, according to Eurasia Group.
"We've never seen the relationship between the United States and Europe—the most important and foundational alliance for the world's economic system—so weak since the end of World War II," said President Ian Bremmer during an interview onBloombergTV. "This is not a relationship that we've seen, and it's so critical to maintain stability not only for global markets but also for the hot spots that we're looking at."
Doing More By Doing Less (Trader Feed)
Jeff Davis has recently posted on goals for 2016 and the importance of focus. The idea is that we can often achieve more by eliminating the clutter from our lives and from our trading routines.
When we process data too broadly, we process nothing deeply.
When we process too much data, we actually lose information.
These 5 private-equity stars are running massive deals while in their twenties (Business Insider)
This year's Forbes' 30 Under 30 for Finance list features a number of top private equity pros.
They've quickly risen up the corporate ladder at the largest investment firms on Wall Street.
The list includes alumni of Duke University, Yale, and the graduate business programs of the University of Pennsylvania, Michigan and New York University.
In Cohen and I.B.M. Insider Trading Cases, Challenges for the S.E.C. (NY Times)
The government files insider trading charges with much fanfare, declaring that the traders will be brought to justice and investors protected. But it is often years before the cases ever reach a courtroom, and a change in the law in December 2014 is making it more difficult for the Securities and Exchange Commission to prove violations in two cases that will start in the new year.
Chipotle’s stock leads the decline on the first trading day of 2016 (Market Watch)
A brutal selloff in China punished U.S. stocks to start 2016, with the benchmark S&P 500 Index down as much as 2.7% on Monday. Stocks recovered from lows earlier in the day, with the S&P 500 ending with a decline of 1.5%.
Asian Futures Signal More Muted Losses After U.S. Pares Selloff (Bloomberg)
Asian index futures foreshadowed a less dramatic day after U.S. stocks trimmed losses amid the worst inaugural session for equities globally in at least three decades. The yen held near a two-month high as resurgent concern over China and global growth underpinned demand for haven investments.
Smith & Wesson says gun sales are booming, and the stock is going bonkers (Business Insider)
Business at gunmaker Smith & Wesson is going gangbusters.
Management just announced it was raising its guidance because sales have been unexpectedly strong.
For the three months ending January 31, it estimates it had $175 million to $180 million in sales, up from its earlier guidance of $150 million to $155 million. This new guidance is much higher than the $155 million expected by analysts.
Surging yen is bad omen for stock-market bulls (Market Watch)
The Japanese yen might just be the overall winner of the haven sweepstakes that accompanied the China-led global stock-market rout on Monday.
The dollar slumped 0.8% versus the Japanese yen USDJPY, -0.04% Monday, while the euro EURJPY, -0.08% lost more than 1% versus its Japanese rival.
China's Big Banks in 2016: Another Challenging Year on Bad Loans
Lower interest rates, rising bad loans and a growing challenge from Internet finance companies will add up to another tough year for China’s biggest banks in 2016, with their profit growth set to pick up only marginally from the slowest pace in more than a decade in 2015. Here are five snapshots.
2 Wall Street banks dominated deal making in 2015 (Business Insider)
There were two clear winners on Wall Street in last year's deal-making bonanza.
JPMorgan ranked as the top investment bank globally by fees for 2015, according to data provider Dealogic, with Goldman Sachs a close second.
JPMorgan made $6 billion in fees for work on equity and debt deals, mergers and acquisitions, and syndicated loans, according to the data. Goldman raked in more than $5.1 billion.
Fed's Mester Shrugs Off Stocks Drop and Says U.S. Economy Sound (Bloomberg)
Two regional Federal Reserve bank presidents, Loretta Mester of Cleveland and John Williams of San Francisco, dismissed concerns over stumbling stocks on the first trading day of the year and said the U.S. economy’s expansion was on solid ground.
“Underlying fundamentals of the U.S. economy remain very sound,” Mester said Monday in an interview on Bloomberg Television. “There’s going to be volatility in the markets, that’s kind of the nature of financial markets.”
The incredible rise of the $4 trillion equity index fund business in 1 chart (Business Insider)
Stop me if you've heard this before: investing in broad, low-cost index funds is the best way to save for retirement.
A bear market in stocks became more likely today (Market Watch)
The stock market’s plunge on this first trading day of the year markedly increases the odds of a bear market in 2016.
5 Expert Predictions for the Global Economy in 2016 (The Atlantic)
The world will face economic challenges on multiple fronts in 2016. As the U.S. Federal Reserve begins its monetary tightening, Europe is struggling to manage migrant and debt crises, China’s financial stability is in doubt, and emerging economies are increasingly fragile.
The global economy “could be doing much worse,” writes the Harvard economist Kenneth Rogoff, who is a senior fellow at the Council on Foreign Relations (CFR). Low oil prices and weak currencies are keeping the European and Japanese economies afloat, but Rogoff warns of “a slowing Chinese economy, collapsing commodity prices, and the beginning of the U.S. Federal Reserve’s rate-hiking cycle.”
Intel Buys Ascending Technologies in Further Drone Push (Bloomberg)
Intel Corp. has signed a definitive agreement to acquire Krailling, Germany-based drone company Ascending Technologies GmbH, as the semiconductor manufacturer tries to spur the development of new products that use its chips.
Apple shares off but weather U.S. market selloff (Business Insider)
Shares of Apple Inc <AAPL.O> fell to their lowest since August on Monday following recent worries about potentially soft iPhone sales but fared better than a 2 percent drop in major indexes.
At one point Apple was down 3 percent and weighed more than any other stock on U.S. indices in the first trading day of 2016 after weak Chinese economic data reignited fears of a global slowdown.
Here's Some Bright Economic News on a Grim Day in Global Markets (Bloomberg)
The abysmal equity market performance to open 2016 belies a round of largely solid global economic data in recent days.
The plunge in Chinese equities overnight, which triggered the newly installed circuit breakers, set the tone for what has been a massive selloff in global equities in the first trading day of 2016. But two-thirds of December's closely watched, monthly Purchasing Managers' Index (or PMI) reports, spanning from China's to the U.S.'s pair of releases, showed manufacturing improving in December. Numbers above 50 point to expansion in the manufacturing sector; prints below 50 imply contraction.
Gold Daily and Silver Weekly Charts – Bad Day at the OK Cartel (Jesse's Cafe Americain)
Gold definitely had a flight to safety rally this morning on a plunge in Asian equities. It was held around the key 1080ish level in New York, and was whittled back a bit in the same late day trading that saw the US stock market indices come off their lows, that at one point were the worst opening day of stock trading since 1932.
Here's what happens after stocks get walloped on day 1 (Business Insider)
Stocks are getting destroyed to start 2016.
Politics
Hillary Clinton Really Wants You To Think She's Tough On Wall Street (The Huffington Post)
Hillary Clinton's campaign still doesn't know what to do about Wall Street. Big financial firms, including Goldman Sachs, Morgan Stanley and UBS, have collectively paid her millions of dollars for speeches in recent years. She has rebuffed calls from Sen. Elizabeth Warren (D-Mass.) and Democratic presidential contender Sen. Bernie Sanders (I-Vt.) to break up the biggest banks, and awkwardly cited 9/11 during a debate to explain her campaign's popularity with financiers.
Here Come the 2016 Elections (Not Just the Big One) (Bloomberg View)
It's 2016, when the election will finally get to the voters. Yes, the presidential cycle is already more than three years old. Republican candidates started competing for this year’s nomination the day after the November 2012 election, and Hillary Clinton probably started planning for 2016 at some point in 2009. But now it's time to start watching other races, too.
Technology
A New Wearable Lets You Control Sphero's BB-8 Using the Force (Gizmodo)
So how do you make the coolest Star Wars toy ever even cooler? Having finally given everyone an interactive droid they can call their own, later this year Sphero will also be giving Star Wars fans the ability to control BB-8 using the Force—or at least motion-tracked gestures that will make you feel like a Jedi.
Earlier today at CES, Sphero demonstrated the prototype hardware of its upcoming motion-tracking wearable that’s designed to pair with and control the company’s insanely popular rolling BB-8 toy. The production version of the wearable will look completely different when it ships later in the year, the company assures us, but functionality will be very similar to what was demonstrated for Gizmodo today in Las Vegas.
German Researchers Are Developing A Bomb Squad Robot That Sees Inside Suitcases (Popular Science)
The best possible distance between a person and a bomb is “as far away as possible.” That’s not a choice bomb squads always get to make, as their very work puts them in harm’s way to protect everyone else. It’s no surprise, then, that bomb disposal is one of the best fields for robots, who can do some of the job a human can, with far less tragic consequences in the event of a failure. To further improve these bomb squad robots, researchers at the Fraunhofer Institute in Germany have made a sensor for robots that can provide a 3D scan of the interior of a suspicious package.
Health and Life Sciences
Is it a big mistake to ignore minor flu strains? (Futurity)
Minor variants of flu strains, which are not typically targeted in vaccines, carry a bigger viral punch than previously realized, according to a new study that examined samples from the 2009 pandemic in Hong Kong.
The findings show that minor strains can be transmitted along with major ones and can replicate and elude immunizations.
Life on the Home Planet
Architects and Nonprofits Rebuild the Nepal Education System from Ground Up (PSFK)
In April of this year, Nepal’s 7.8 magnitude earthquake killed over 8,000 people and destroyed more than 25,000 classrooms in about 8,000 schools. In an effort to rebuild the country’s most devastated regions, SHoP Architects is partnering with two nonprofits to rebuild 50 public schools and lift Nepal education standards to new heights. While the government plays some role in the overall process, this venture displays how private organizations can help initiate progressive change in communities.
