2,596 Trades in One Term: Inside Senator Perdue’s Stock Portfolio – The New York Times

As a member of the Senate’s cybersecurity subcommittee, David Perdue has raised alarms that hackers from overseas pose a threat to U.S. computer networks. Citing a frightening report by a California-based company called FireEye, Mr. Perdue was among the senators who asked this spring that the National Guard prepare to protect against such data breaches.

Not only was the issue important to Mr. Perdue, so was FireEye, a federal contractor that provides malware detection and threat-intelligence services. Beginning in 2016, the senator bought and sold FireEye stock 61 times, at one point owning as much as $250,000 worth of shares in the company.

Along with Senator Kelly Loeffler, a fellow Georgia Republican, Mr. Perdue faces an unusual runoff election in January. With control of the Senate at stake, and amid renewed concern about the potential for conflicts of interest in stock trading by members of Congress, Mr. Perdue’s investment activity — and especially his numerous well-timed trades — has increasingly come into the public glare.

Last week, The New York Times reported that the Justice Department had investigated the senator for possible insider trading in his sale of more than $1 million worth of stock in a financial-analysis firm, Cardlytics. Ultimately, prosecutors declined to bring charges. Other media outlets have revealed several trades in companies whose business dealings fall under the jurisdiction of Mr. Perdue’s committees.

An examination of Mr. Perdue’s stock trading during his six years in office reveals that he has been the Senate’s most prolific stock trader by far, sometimes reporting 20 or more transactions in a single day.

The Times analyzed data compiled by Senate Stock Watcher, a nonpartisan website that aggregates publicly available information on lawmakers’ trading, and found that Mr. Perdue’s transactions accounted for nearly a third of all senators’ trades reported in the past six years. His 2,596 trades, mostly in stocks but also in bonds and funds, roughly equal the combined trading volume of the next five most active traders in the Senate.”

The Black Swan: The Impact of the Highly Improbable – Nassim Nicholas Taleb – Books – Review – By Gregg Easterbrook – The New York Times

Possibly Maybe

By 

“On the eve of the 2006 hurricane season, the National Hurricane Center forecast a “hyperactive” summer and fall, with eight to 10 Atlantic cyclones; instead there were five, smack on the 20th-century average. At the beginning of 2006, The Wall Street Journal forecast a bad year for stocks; the Dow Jones Industrial Average rose 16 percent that year. (Disturbingly, The Journal has forecast a good year for 2007.) The British government recently said climate change could reduce global G.D.P. by 13.8 percent in the first year of the 23rd century. Not by 13.7 percent, not by 13.9 percent — by 13.8 percent. In response to an astronomer’s discovery, The New York Times in 2004 declared that the universe might have a “peaceful end” in “tens of billions of years,” but cautioned that it could not rule out the cosmos’s exploding in a few billion years. Writing of the same discovery, The Washington Post predicted that the demise of the cosmos would require 30 billion years, adding this vital caveat: “It remains impossible to predict the fate of the universe with certainty.” Oh, so we can’t be certain what will happen 30 billion years from now!

The hubris of predictions — and our perpetual surprise when the not-predicted happens — are themes of Nassim Nicholas Taleb’s engaging new book, “The Black Swan.” It concerns the occurrence of the improbable, the power of rare events and the author’s lament that “in spite of the empirical record we continue to project into the future as if we were good at it.” We expect all swans to be white and are shocked when a black swan swims by.

Born in Lebanon in 1960, Taleb lived through a “black swan” when his serene homeland was cast into the chaos of civil war in 1975. After emigrating to the United States, he attended Wharton, then worked on Wall Street; today he is a professor at the University of Massachusetts. Black Monday in 1987, when Wall Street suffered its worst single-day decline in modern history — in a drop that started for no clear reason — was his epiphany. Chance, he realized, has far more influence than we care to admit.

M E R E D I T H F O S T E R – Special Meetings and Consent Solicitations: How the Written-Consent Right Uniquely Empowers Shareholders

MEREDITH FOSTER
Special Meetings and Consent Solicitations:
How the Written-Consent Right Uniquely Empowers
Shareholders

“abstract. Despite a decline in companies’ takeover defenses, provisions barring shareholders
from acting by written consent remain intact. A key reason that these antitakeover provisions persist rests in the widely held view that giving shareholders the right to act by written consent would
not increase their power over the company’s management as long as shareholders already have the
right to call a special meeting. This Note argues that this view is wrong. The written-consent right
does uniquely empower shareholders. That power results not from what the right allows shareholders to do but from what it prevents boards from doing without shareholder consent.”

Opinion | Who’s Profiting From the Coronavirus Crisis? – By William D. Cohan – The New York Times

By 

Mr. Cohan is a former investment banker and the author of four books about Wall Street.

Credit…Richard Brian/Reuters

“The invisible killer is testing global capitalism as never before.

Some highfliers are getting a long overdue comeuppance. Take, for instance, the Vision Fund, the $100 billion venture capital fund created by Masayoshi Son, a Japanese billionaire whose mantra is “We only live once, so I want to think big.” On April 13, Mr. Son’s conglomerate SoftBank announced it expects to lose $16.7 billion on its Vision Fund portfolio for the year ended March 31, after a string of bad bets on dubious Silicon Valley start-ups.

The Vision Fund invested not just in WeWork, which was a debacle even before the coronavirus outbreak, but also Opendoor, a real-estate start-up; Zume, a restaurant robotics company; Compass, an online real-estate brokerage; and Oyo, an Indian budget hotel chain, all of which have fired or furloughed huge numbers of employees in recent weeks. SoftBank has already written off its $300 million investment in Wag, a dog-walking start-up, and is likely to lose its $2 billion equity investment in OneWeb, a British satellite operator, which filed for bankruptcy protection.

The Vision Fund thrived for as long as it did in part because of a decade of super-low interest rates. Investors desperate for higher yields, like the sovereign wealth funds of Saudi Arabia and the United Arab Emirates, flocked to the Vision Fund because Mr. Son promised them a 7 percent yield on most of what they invested, far higher than could be found investing in, say, Treasury securities. It was the same mentality that attracted other investors to the mountains of risky debt issued in recent years by companies with less-than-stellar credit ratings. (There were $9.6 trillion in U.S. corporate bonds outstanding at the end of 2019, nearly double the amount of a decade earlier.)

This corporate debt bubble has finally burst — another long-awaited reckoning. Companies with too much debt are in an existential struggle. On April 15, Neiman Marcus, the luxury retailer, skipped a $5.7 million interest payment on its outstanding bonds, setting the stage for its inevitable bankruptcy filing. Another large retailer, Macy’s, has hired restructuring advisers. Ford has seen its debt downgraded to junk status, as has Kraft Heinz.

The United States will soon be awash in corporate bankruptcies, which means a world of hurt for creditors, shareholders and employees of overleveraged companies or companies that have found themselves in the wrong place at the wrong time.

In fairness, no company could have anticipated the catastrophic effects of the pandemic. But the investors and employees of companies that for years gorged on cheap debt will pay the biggest price. There will be no soft landing for them.”

Financial Planning, Management, and Advice | Vanguard

TRANSPARENT PRICING

Lower than the industry average

The annual cost for Vanguard Personal Advisor Services is just 0.30% of the assets we manage for you. If we manage a substantial amount of assets for you, the cost of the services gets even lower. The yearly fee is broken into 4 payments, billed quarterly, with a $50,000 minimum.

Vanguard

0.30%

ANNUAL FEE


Industry Average
1.08% annual fee3

Annual fee schedule

FEE MANAGED ASSETS
0.30% On assets up to $5 million
0.20% On assets above $5 million and up to $10 million
0.10% On assets above $10 million and up to $25 million
0.05% On assets above $25 million

Source: Financial Planning, Management, and Advice | Vanguard

NerdWallet | Credit Cards Marketplace

Great for: Flat Rate Cash Back

Citi® Double Cash Card – 18 month BT offer

  • Earn cash back twice. Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
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  • Balance Transfers do not earn cash back.
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
  • The standard variable APR for Citi Flex Plan is 14.99% – 24.99% based on your creditworthiness. Citi Flex Plan offers are made available at Citi’s discretion.

See additional details at Citibank’s website

Source: NerdWallet | Credit Cards Marketplace

Opinion | Why We Should Fear Easy Money – The New York Times

Ruchir Sharma

By 

Mr. Sharma is a contributing opinion writer.

ImageThe Federal Reserve in Washington DC. 
CreditCreditChristopher Lee for The New York Times

To widespread applause in the markets and the news media, from conservatives and liberals alike, the Federal Reserve appears poised to cut interest rates for the first time since the global financial crisis a decade ago. Adjusted for inflation, the Fed’s benchmark rate is now just half a percent and the cost of borrowing has rarely been closer to free, but the clamor for more easy money keeps growing.

Everyone wants the recovery to last and more easy money seems like the obvious way to achieve that goal. With trade wars threatening the global economy, Federal Reserve officials say rate cuts are needed to keep the slowdown from spilling into the United States, and to prevent doggedly low inflation from sliding into outright deflation.

Few words are more dreaded among economists than “deflation.” For centuries, deflation was a common and mostly benign phenomenon, with prices falling because of technological innovations that lowered the cost of producing and distributing goods. But the widespread deflation of the 1930s and the more recent experience of Japan have given the word a uniquely bad name.

After Japan’s housing and stock market bubbles burst in the early 1990s, demand fell and prices started to decline, as heavily indebted consumers began to delay purchases of everything from TV sets to cars, waiting for prices to fall further. The economy slowed to a crawl. Hoping to jar consumers into spending again, the central bank pumped money into the economy, but to no avail. Critics said Japan took action too gradually, and so its economy remained stuck in a deflationary trap for years.

Opinion | Everyone Claims They’re Worried About Global Finance. But Only One Side Has a Plan. – The New York Times

By Quinn Slobodian and 

Mr. Slobodian is the author of “Globalists.” Mr. Kentikelenis is a sociology professor at Bocconi University in Milan.

“”Global finance has become a popular target from both the left and, more recently, the right, particularly the nationalist right. As Senator Josh Hawley, Republican of Missouri, said at the recent National Conservatism Conference, what he called the “the cosmopolitan economy” has encouraged multinational corporations to move jobs and profits overseas and then “rewarded these same corporations” for “investing their profits not in American workers, not in American development, but in financial instruments that benefit the cosmopolitan elite.”

Renationalizing finance is a pressing task for any transformative government. But so far, only the left has any tangible plans on how finance can be brought down to earth and tamed toward more humane ends.

Spin a globe and you’ll see a colorful mosaic of states snug in their national borders. But the world of finance has long ceased to work this way. There are nearly 200 sovereign countries, but globally only a few dozen banks matter. We don’t live in a world of islands but inside what has been described as a “matrix of interlocking corporate balance sheets.” Financial institutions operate across territories with little respect for borders, wreaking havoc on the ability of countries to plan for a sustainable future.

Despite recent criticism from some nationalist conservatives, the right has largely ignored the problem, distracting voters instead with fantasies about migrant workers and refugees as the true perpetrators of inequality.

President Trump tapped Goldman Sachs heavily to staff his cabinet and plans no walls for the movement of money over borders. The systematic defunding of the I.R.S. means that even routine audits are becoming rare, let alone the investigation of taxable income held offshore. Rather than extend tax surveillance outward, the 2017 Trump tax plan slashed the corporate tax at home. . . . .   . .

By contrast, on the left, ideas are crackling. Elizabeth Warren recently announced her “economic patriotism” agenda, with financial reform at its heart.

Other proposals from what The Guardian called the “new left economics” target venerable institutions of financial management. Central banks — long seen as bastions of economic orthodoxy — are being called on to help avert an environmental catastrophe. Climate change poses imminent risks to financial stability that need to be factored in to central bank models.”

As McKinsey Sells Advice- Its Hedge Fund May Have a Stake in the Outcome – The New York Times

By Michael Forsythe, Walt Bogdanich and Bridget Hickey
Feb. 19, 2019, 23 c

“The sins of Valeant Pharmaceuticals are well known. Instead of spending to develop new drugs, Valeant bought out other drugmakers, then increased prices of lifesaving medicines by as much as 5,785 percent. Patients had no choice but to pay.

Valeant’s chief executive, J. Michael Pearson, was hauled into a 2016 Senate hearing and verbally thrashed by lawmakers. “It’s using patients as hostages. It’s immoral,” said Claire McCaskill, then the Democratic senator from Missouri. One executive went to prison for fraud. The company’s share price collapsed.

It hadn’t always been that way. Before Valeant’s fall, its stock was a Wall Street darling, attracting high-profile investors who tirelessly promoted the company on financial news channels. But one investor especially avoided the spotlight — a secretive hedge fund owned by McKinsey & Company, the world’s most prestigious consulting firm. McKinsey, in fact, had deep ties to the drugmaker: Four top Valeant officials, including Mr. Pearson, were McKinsey veterans, and the firm was advising Valeant on drug prices and acquisitions.

J. Michael Pearson, left, testifying on Capitol Hill in 2016 after the pharmaceutical company he led, Valeant, raised the prices of lifesaving medicines. McKinsey had both advised and invested in Valeant.CreditDrew Angerer for The New York Times
That web of relationships underscores the unusual nature of McKinsey’s hedge fund, and the potential for undisclosed conflicts of interest between the fund’s investments and the advice the firm sells to clients.”

David Lindsay:

If McKinsey is telling the truth about a wall between their consulting and this hedge fund, why do they hide it in the island of Guernsy off the coast of England, in hidden, anonymous accounts? These two points don’t agree with each other.

What It Was Like to Finally Write My Will – The New York Times

“So! Let’s talk about writing a will.Where to startFirst, I tried going online for a do-it-yourself approach. Several products can help you write your own will and other estate documents, including financial guru Suze Orman’s “Financial Security Now” and an assortment of products from LegacyWriter.com, LegalZoom.com, BuildaWill.com and Nolo.com.

If your finances and family are all extremely straightforward, these can work, but if you do write a will on your own, hire a lawyer to check your efforts. Some of the products offer consultation with an attorney who will vet the resulting document.”