Archive - May 18, 2014

Yesterday we provided a detailed breakdown of the cost aspect of a college education, particularly for young people who have no choice but to fund their education with student debt, a key part of the equation that the San Fran Fed in its particular cost-benefit "analysis" of college education avoided. There is much information in the post, but one particular aspect of the Pew analysis that the article was based on bears repeating and highlighting for all those less than "1%" young Americans debating whether a college education is worth the tens if not hundreds of thousands of dollars in student loans: the median net worth of "young" households, those where the head is younger than 40 years old, is $8,700, or 20% less than not college educated households with no student debt.

Dispassionate discussion of the investment climate.  

The mainstream media may have long forgotten about the Fukushima tragedy (as it certainly goes against the far more popular and palatable meme of a Japan "recovery" courtesy of Abenomics) but that does not mean it is fixed or even contained. Quite the contrary. As a rare update from Japan's Jiji news agency reminds us, on Friday radiation at five monitoring points in waters adjacent to the crippled Fukushima No. 1 power station spiked to all-time highs according to the semi-nationalized TEPCO.

Just out from Bloomberg:

• Deutsche Bank preparing a capital increase, aims to raise EU8 billion through new shares by end of June, Handelsblatt says, citing unidentified people in the finance industry.
• Deutsche Bank likely to get new single investor
• Deutsche Bank new investor may hold 5%-8% of shares
• Deutsche Bank declined to comment: Handelsblatt

And the punchline: Bank’s new shares may be sold with 25%-30% discount. In other words, it is liquidity scramble time, and the bank is willing to give anyone with deep enough pockets a 30% discount to market price just to get some additional short-term funding.

One glance at the following chart prepared by the Economist, showcasing the world's largest importers of weapons, and more importantly, exporters, and one could almost imagine why both the US and Russia have an interest in a "contained" (or not so much) regional war...

Rogers tells us he's buying Chinese financials, remains long the yen and thinks gold could be going much lower.

Six months ago, it was this same Switzerland that, contrary to the prerogatives of the pervasive "fairness doctrine" taking the new socialist world by storm, rejected imposing limits on executive pay. Then mere hours ago, in a move that would give president Obama wealth redistribution nightmares for months, a whopping 77% of Swiss voters rejected an initiative for a national minimum wage of 22 francs, or just under $25, per hour, according to projection by Swiss television SRF. And confirming that when it comes to anti-socialism, Switzerland may well be the last bastion, not a single canton supported the measure.