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jerryking : low-interest   6

Pimco’s Strategy for Life After Gross: Go Beyond ‘Bonds and Burgers’ - WSJ
By JUSTIN BAER
Updated Nov. 7, 2016

The 53-year-old Frenchman, who joined Pimco in the past week, intends to push it deeper into hedge funds, real-estate assets and other alternative investments, people familiar with the matter said. With interest rates in much of the developed world near zero, those kinds of investments are in demand from pensions, endowments and other clients. They are also among the types of funds that command higher fees.

Investing in bonds, loans and other forms of debt securities will remain Pimco’s focus, but Mr. Roman will aim to build out capabilities in areas ranging from private credit to quantitative investments based on computer models, the people said.....Pimco, a subsidiary of German insurer Allianz SE, believes the gradual shift into alternatives is its best bet to ride out what many industry executives expect will be a brutal shakeout for asset managers. Tepid returns and the surging popularity of cheaper investment options, including exchange-traded funds, have pressured managers to lower fees.
Pimco  CEOs  alternative_investments  asset_management  capabilities  money_management  ETFs  shakeouts  interest_rates  developed_countries  low-interest  developing_countries 
november 2016 by jerryking
Infrastructure spending is no miracle cure - The Globe and Mail
KONRAD YAKABUSKI
The Globe and Mail
Published Thursday, Apr. 23 2015

In some circles, infrastructure spending is seen as a miracle cure to lift the economy, if not political fortunes. With rock bottom interest rates, proponents say now is the perfect time to ramp up spending on trains and subways in order to stimulate growth, relieve congestion and boost long-term productivity.

As with most economic strategies, however, the devil is in the execution....You can always find studies to buttress your claims that new infrastructure pays for itself by stimulating the economy and generating jobs during the construction phase while boosting productivity thereafter. But this is hardly true across the board. Does anyone believe the Sheppard subway line has made Toronto’s economy more productive? It’s a sinkhole whose operating costs are a drain on the rest of the transit system.

And what about Pearson Airport’s Terminal 1? It’s a cavernous monster that adds to passenger stress levels while subtracting from their productivity. Speaking of poorly conceived projects, the soon-to-open rail link between Pearson and downtown Toronto appears to rely on overly optimistic ridership projections.

In our infrastructure envy, we decry our subways, roads and commuter trains as second-rate. But proper scale and functionality are far more important than fancy architecture or expensive materials.
Konrad_Yakabuski  infrastructure  politics  debt  second-rate  Keynesian  scaling  functionality  UPX  interest_rates  sinkholes  low-interest  overoptimism 
april 2015 by jerryking
Technology will hurt the banks, not kill them
October 15, 2014 | FT.com |John Gapper

Does Silicon Valley really want to blow up retail banking and create an entirely new financial system, or would it prefer to ride on the existing one?...Mr Andreessen, a partner of the venture fund Andreessen Horowitz, added in an interview with Bloomberg Markets magazine last week: “To me, it’s all about unbundling the banks. There are regulatory arbitrage opportunities every step of the way. If the regulators are going to regulate banks, then you’ll have non-bank entities that spring up to do the things that banks can’t do.”...There is no doubt that the infrastructure of retail banks is antiquated, and is built in a way that invites competition from peer-to-peer networks. Nor is there a doubt that banks make themselves vulnerable by how they price – offering core deposit services cheaply or free while squeezing customers on ancillary products such as overdrafts and currency exchange....what is the best way to compete with an industry that makes little from a capital-intensive, regulated service with formidable barriers to entry, and a lot from less protected add-ons? The question answers itself, which is why Silicon Valley focuses on payments while talking about disrupting lending....US laws made it impossible to establish a national credit union open to any customer....One growth area in UK finance has been online payday lending by companies such as Wonga, which promised to extend banking to the underserved. ... tech companies can improve on credit scoring by scanning search histories and social network data...The biggest barrier to competition is that the core business of taking in deposits and keeping them safe is not very profitable in a low-interest world....A start-up bank that has no branches and spends less on patching up legacy software might do this more efficiently – and good luck to those that penetrate the regulatory thicket and try. But it is much less risky to attach a new service to the existing banking infrastructure, and it absorbs less capital....Technology may eventually change the infrastructure of banking but it will not happen soon....“is a long-term threat that will play out over decades, not months or years”...Silicon Valley will compete at the edges, where banks make their best profits.
banks  Silicon_Valley  Marc_Andreessen  Andreessen_Horowitz  disruption  fin-tech  start_ups  Bitcoin  financial_services  underserved  unbanked  regulators  P2P  payday_lending  credit_scoring  low-interest  branchless  capital-intensity  legacy_tech  regulatory_arbitrage  financial_system 
october 2014 by jerryking
The Francis Bacon indicator? Art world soaks up excess cash
Nov. 19 2013 | The Globe and Mail The Globe and Mail | BRIAN MILNER.

Investors, collectors and dealers forked out nearly $1.2-billion (U.S.) last week – far above industry expectations – for a handful of illustrious names at the fall contemporary art auctions in New York. ...Art market experts, just like their counterparts in commodities, real estate, stocks and bonds, insist this is no bubble: The market is healthy, demand is growing and supply is limited....But the rich are eagerly parting with their money for art for a variety of personal and financial reasons. As a rising asset in a low-interest rate world, it’s viewed as a potential hedge against future financial storms. After all, demand remained relatively stable in the aftermath of the Great Meltdown. Also, owning a famous piece of art offers a heck of a lot more prestige than buying another commercial property. And it’s a lot cheaper than trying to compete with the Russian oligarchs (who are also big art buyers) for sports franchises.
art  bubbles  collectors  auctions  high_net_worth  contemporary_art  Francis_Bacon  prestige  hedging  low-interest  art_finance  alternative_investments  art_market 
november 2013 by jerryking
Taking One for the Country - NYTimes.com
By THOMAS L. FRIEDMAN
Published: June 30, 2012

"I found myself applauding for Chief Justice Roberts the same way I did for Al Gore when he gracefully bowed to the will of the Supreme Court in the 2000 election and the same way I do for those wounded warriors — and for the same reason: They each, in their own way, took one for the country.

To put it another way, Roberts undertook an act of statesmanship for the national good by being willing to anger his own “constituency” on a very big question. But he also did what judges should do: leave the big political questions to the politicians. The equivalent act of statesmanship on the part of our politicians now would be doing what Roberts deferred to them as their responsibility: decide the big, hard questions, with compromises, for the national good. Otherwise, we’re doomed to a tug of war on the deck of the Titanic, no matter what health care plan we have. "...Our newfound natural gas bounty can give us long-term access to cheap, cleaner energy and, combined with advances in robotics and software, is already bringing blue-collar manufacturing back to America. Web-enabled cellphones and tablets are creating vast new possibilities to bring high-quality, low-cost education to every community college and public school so people can afford to acquire the skills to learn 21st-century jobs. Cloud computing is giving anyone with a creative spark cheap, powerful tools to start a company with very little money. And dramatically low interest rates mean we can borrow to build new infrastructure — and make money.
Tom_Friedman  John_Roberts  U.S._Supreme_Court  judges  statesmanship  hydraulic_fracturing  natural_gas  cloud_computing  smartphones  robotics  software  interest_rates  infrastructure  automation  constituencies  low-interest  compromise  blue-collar  manufacturers  politicians  hard_questions  high-quality 
july 2012 by jerryking
UNPRECEDENTED VOLATILITY A HALLMARK OF AGRICULTURE’S NEW AGE
* Have a plan for the future – perhaps a surprise to some, but many farmers don’t have a plan in place that paints a vision for where they want to take their operation over the next 2, 5 and 10 years.
• Have credit in place before it is actually required – it is human nature to leave things to the last minute.
• Implement a sound hedging strategy – in addition to the system of crop insurance in place in this country, there are many ways that Canadian farmers can take actions to manage their risk. Diversifying into new businesses is one example.
• Well-managed risk can pay off – at the same time, taking on some risk that is prudent and ts the risk pro le of the farming operation can pay off handsomely for farmers. In such a volatile and fast paced environment, there are bound to be some buying and selling opportunities that open up. Knowing when to take advantage of them can separate successful farms with those that muddle along.
• Know your costs – many producers have a good sense of how their top line is performing. But it is just as impor-tant to have a good understanding of the cost side of the equation.
• Maintain adequate liquidity and reasonable leverage – in order to mitigate the risks associated with increasing asset prices, it would be prudent for farmers to ensure that they have sufficient liquidity and manageable leverage if they are expanding.
• Use reasonable interest rate assumptions in assessing investment opportunities – even though borrowing costs are unusually low, farmers must be mindful of the fact that this low-rate environment won’t last forever.
agriculture  uncertainty  volatility  farming  liquidity  leverage  hedging  futures_contracts  diversification  new_businesses  risks  risk-management  risk-taking  OPMA  WaudWare  interest_rates  vision  long-term  never_forever  business_planning  credit  costs  anticipating  risk-mitigation  low-interest  cost-consciousness 
may 2012 by jerryking

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