Money

FILE PHOTO: Sign is seen on the entrance to a Social Security office in New York
FILE PHOTO: A sign is seen on the entrance to a Social Security office in New York City, U.S., July 16, 2018. REUTERS/Brendan McDermid/File Photo

May 23, 2019

By Mark Miller

CHICAGO (Reuters) – Why does the word “old” come to mind for so many of us when the topic of Social Security comes up?  

    Retirement benefits are the biggest component of Social Security. But the program also is very important for disabled people of all ages, as well as surviving children and spouses of deceased beneficiaries. And perhaps most important, today’s young people will need Social Security every bit as much as today’s retirees and near-retirees – and probably more so if current economic trends persist.

Yet many young people have been conditioned to think they should not count on Social Security to be there when their time to retire rolls around. That is not surprising, considering the negative, often false propaganda uttered by politicians hostile to Social Security and the financial services industry, and misleading media coverage.

The danger here is that the current high level of worry over Social Security’s viability could become self-fulfilling if it erodes political support. That would be especially damaging for young people when they retire, argues Peter Arno, an economist at the University of Massachusetts-Amherst, and a scholar of both Social Security and health policy.

    Arno points to four trends that suggest millennials will need to rely to a much greater extent on Social Security than current retirees and those approaching retirement now. Millennials will be far less likely to receive retirement income from defined benefit pensions, and they have lower rates of home ownership than earlier generations. And, wage stagnation and crippling levels of student debt make it impossible for many to save for retirement.

    “If you add up all these factors, you have a constellation of things that will make it very difficult for young people down the road,” he said. “That’s why Social Security is crucially important for both this generation and younger people. Joining forces between older folks in the boomer generation and the millennial generation offers a tremendous strategic opportunity to bolster the long-term stability of Social Security.”

Politicians routinely claim that Social Security is going bankrupt and that its shortfalls drive the national deficit – neither is true. I often hear so-called experts from the financial services industry advise people to count on receiving only part of their future benefits. Good luck with that – just try running the numbers with only half of your projected Social Security benefits, and you will watch your plan collapse right there on your computer screen.

   Much of the media coverage of the annual report of the Social Security trustees also is atrocious. Just this past April, the report’s release set off the predictable wave of erroneous headlines and broadcast reports stating that Social Security is “running out of money,” describing its “depleted funds” and advising people on how to prepare for a future retirement without their expected benefits.

   Riddle me this: in what way is a program with a cumulative surplus of $2.9 trillion running out of money? The trustee report shows Social Security is fully funded until 2035, and 93 percent funded for the next 25 years. Yes, there is a funding problem: absent other changes, the combined retirement and disability trust funds will be empty in 2035.

At that point, current revenue would be sufficient to pay about 80 percent of schedule benefits. The ensuing across-the-board benefit cut would be very damaging for retirees and workers, but it seems a highly unlikely outcome from a political standpoint, considering the strong public support Social Security enjoys.

The shortfall is due to two factors: the falling ratio of workers paying into the system compared with expected retirees, and rising income inequality, which has pushed an increasing share of wages outside the payroll tax base.

A straightforward, middle-of-the-road solution is available, and making its way through the House of Representatives now. The Social Security 2100 Act puts Social Security back into balance over the next 75 years by raising payroll tax rates so gradually that few would notice – one-tenth of 1 percent per year – and by adding new payroll taxes to wages over $400,000; currently, tax collection stops at $132,900 of annual income. (https://reut.rs/2HJwldz).

WORRY ABOUT THE FUTURE

Nonetheless, the public continues to worry about Social Security’s future.

According to Gallup survey data (https://bit.ly/2HTLuIn), 73 percent of Americans aged 55 or older worry about the Social Security system “a great deal” or “a fair amount.” Among people age 35-54, the figure is 67 percent; among those 18-34, it is 59 percent.

Arno argues we now have a historic opportunity to unite boomers and millennials in support of strengthening Social Security. In a provocative article that he co-authored recently in the American Prospect (https://bit.ly/2WeWJC2), Arno takes on the root causes of the cynicism so many young people have today about Social Security and argues that Social Security should be a centerpiece policy issue for anyone interested in civil rights and social justice.

“Social Security is the most successful anti-poverty policy in the history of the United States,” Arno said. “And this is not true just for seniors, but across the entire life cycle and the entire population. It reduces more poverty for children than any other policy, more poverty for working adults and more poverty for seniors. So it’s an intergenerational antipoverty program.”

The program’s impact is especially profound for people of color and women, he adds, noting that wage disparities create economic disadvantage that persists in retirement. This is an intergenerational justice issue,” he said.  “Intergenerational in the sense that it affects all generations, not just seniors, but everyone that’s working and families and kids. That’s why I want to get folks to not see Social Security exclusively as a senior’s issue.”

You can hear a longer conversation that I had recently with Arno about Social Security on my podcast. (https://bit.ly/2YH2Htc).

(The opinions expressed here are those of the author, a columnist for Reuters)

(Reporting and writing by Mark Miller in Chicago; Editing by Matthew Lewis)

Source: OANN

FILE PHOTO: Doug Kass, founder of hedge fund Seabreeze Partners Management Inc, sits at his desk at his home in Palm Beach
FILE PHOTO: Doug Kass, founder of hedge fund Seabreeze Partners Management Inc, sits at his desk at his home in Palm Beach, Florida April 30, 2013. REUTERS/Joe Skipper/File Photo

May 21, 2019

By Jennifer Ablan

(Reuters) – Hedge fund investor Doug Kass said on Tuesday that he is shorting several investment managers, including T. Rowe Price Group Inc and Franklin Resources Inc, as they could be “the next group to feel disruption” and may be headed for large share price falls.

Kass, who runs Seabreeze Partners Management, said in a note to clients that he does not believe investors are aware of how commoditized the money management business has become. “As an example, a year ago, a boutique fund manager, Salt Financial, began to pay clients five basis points a year to manage their money!” Kass wrote.

“More and more money is going to passive products and strategies and away from active managers – who have failed to meet the returns of the indices,” Kass said. “Passive products are by definition not as energetic – it is a strategy that trades less actively – compared to active managers.”

More importantly, the fee differential between active and passive managers is wide – with passive providing an attractive low-cost fee alternative to active, Kass said.

Overall, a “toxic cocktail may loom ahead for investment managers,” he said.

Kass predicted lower stock market prices; less volume and activity as low-cost passive strategies continue to replace high cost active strategies; lower transaction pricing (commissions) provided by online services like E-Trade and Fidelity Investments; reduced investment management fees, reflecting the continued share gains of passive products and strategies over the active ones.

Even many of the larger money management firms, including Fidelity and The Vanguard Group are offering some no-fee based exchange-traded funds (ETFs), he said.

“I expect the competitive challenges to active managers like T. Rowe and Franklin to intensify in the coming years,” Kass said.

Kass warned that larger brokerages such as Morgan Stanley and Goldman Sachs Group which are moving their business mix towards the retail investor and have very high cost fee-based wrap products “are particularly vulnerable to the trends discussed.”

(Reporting By Jennifer Ablan; Editing by Nick Zieminski)

Source: OANN

FILE PHOTO: Business magnate George Soros arrives to speak at the Open Russia Club in London
FILE PHOTO: Business magnate George Soros arrives to speak at the Open Russia Club in London, Britain June 20, 2016. REUTERS/Luke MacGregor/File Photo

May 15, 2019

(Reuters) – Billionaire George Soros’ investment firm, Soros Fund Management Llc, raised its stake in Tesla Inc’s <TSLA.O> convertible bonds due in 2021 by 17.5 million convertible bonds to 37.5 million convertible bonds as of the end of the first quarter, according to a filing with the U.S. Securities and Exchange Commission late Wednesday.

Soros’ increase in the 1.250% convertible bonds follows the firm’s purchase last year of another Tesla convertible bond that came due in March. Soros also previously held some Tesla stock, but he sold off his stake in 2017.

A spokesman for Soros did not respond to a request for comment.

Convertibles are hybrid securities, either bonds or preferred stock, that can be exchanged for a predetermined number of common shares. That effectively lets an investor participate in stock-price changes but with the yield and greater security of a fixed-income instrument.

Soros Fund Management also opened a new stake of 200,000 shares in ride-sharing giant Lyft Inc <LYFT.O>, which went public in late March.

Quarterly disclosures of hedge fund managers’ stock holdings in 13F filings are one of the few public ways of tracking what managers are selling and buying. The disclosures come 45 days after the end of each quarter and may not reflect current positions.

(Reporting By Jennifer Ablan)

Source: OANN

FILE PHOTO: A woman talks on her mobile phone whilst sitting in a park in central London
FILE PHOTO: A woman talks on her mobile phone whilst sitting in a park in central London, Britain, September 13, 2018. REUTERS/Henry Nicholls/File Photo

May 15, 2019

By Beth Pinsker

NEW YORK (Reuters) – If your phone log is anything like mine, the list of incoming scam calls makes it look like you work for the State Department: Sri Lanka, Lithuania, Russia, Bosnia, Benin, Croatia and Sierra Leone. And if you are anything like me, the thought that may cross your mind is: I would pay anything to make these calls stop.

“Nothing is protecting voice and text, so all the criminals sneak in,” said Aaron Foss, founder of Nomorobo, a scam-blocking service.

Until a foolproof way is found to stop these nuisance calls, here is what you need to know.

Your cell phone carrier’s service

Telecom giants tout the billions of calls they block each year, barely mentioning that the system is far from foolproof.

“About 20% of our calls are scam,” said Greg Castle, vice president of engineering for T-Mobile. “Some get through.”

Still, Castle considers T-Mobile’s track record – with its free ScamID program – a success. A free, additional opt-in product called ScamBlock removes those calls from your view.

AT&T , Sprint , Verizon and other major carriers offer similar services. Most are free, but they usually require you to opt in.

Some carriers sell the highest level of services, like Verizon, which charges $2.99 a month for its Call Filter. Of course, considering how much typical cellphone bills run these days, most people probably think like me: that paying anything extra is not worth it unless the service truly eliminates all the unwanted calls.

Third-party apps

Companies like RoboKiller, Hiya, Truecaller and YouMail aim to block robo calls by tagging incoming calls as scams, or removing them from your view completely.

For $4.99 a month, RoboKiller hits back at scammers by answering their calls with bots which tie up the line.

“We wasted 113,000 hours” in April, said Ethan Garr, RoboKiller’s senior vice president of strategic growth. “If a telemarketer is talking to our bot, somebody else is not getting scammed.”

But some calls still get through. Garr uses the RoboKiller app a couple of times a month to identify unwanted calls so the algorithm learns from it, he said.

Nomorobo’s more straightforward approach uses an app that works in the background for $2 a month. According to Nomorobo’s Foss, the company updates its database every 15 minutes, and misses just 3% of scam calls. False positives, which mark a legitimate call as a scam, account for less than a 10th of a percent.

Foss testified before Congress earlier this month to push for technologies like Nomorobo’s to be applied when the call reaches the network, before it hits the consumer’s phone.

“It means putting more pressure on carriers to put this in natively – that will be ultimately what solves the problem,” Foss said.

Common sense

Until a foolproof solution is found, the best line of defense is your own scam radar. If you do not answer, the calls cannot cost you anything.

If you do pick up, do not engage. And never, ever, give out your Social Security or credit card information to an unsolicited caller.

“Scammers will scam,” Castle said. “Obviously, if you answer a call and it sounds too good to be true, just hang up.”

(Editing by Lauren Young and Richard Chang)

Source: OANN

FILE PHOTO: Nelson Peltz founding partner of Trian Fund Management LP. speak at the WSJD Live conference in Laguna Beach, California
FILE PHOTO: Nelson Peltz founding partner of Trian Fund Management LP. speak at the WSJD Live conference in Laguna Beach, California October 25, 2016. REUTERS/Mike Blake/File Photo

May 14, 2019

By Svea Herbst-Bayliss

NEW YORK (Reuters) – Nelson Peltzs’ Trian Fund Management LP may push Legg Mason Inc. to implement changes to boost returns, a person familiar with the matter said on Tuesday, the second time in 10 years that Trian has targeted the mutual fund company.

The two sides have discussed cutting costs, the source said, and Legg Mason chairman, president and chief executive officer Joseph Sullivan said on an earnings call on Monday that the company plans to manage costs more effectively to improve profitability.

Legg Mason’s share price has fallen 15.5 percent in the last year. Ranked as one of the country’s 30 biggest mutual fund firms, the company reported $758 billion in assets under management at the end of the fiscal year, which ended in March, up from $754.1 billion a year earlier.

Like many other mutual fund firms, Legg Mason has been hit hard by investors’ shifting tastes for less expensive index funds offered by larger firms, including Vanguard Group.

Representatives for Trian and Legg Mason could either not be reached for comment or declined to comment.

Trian’s discussions with Legg Mason were first reported by the Wall Street Journal.

It was not immediately clear whether Trian would resort to a proxy contest to push its demands or whether the two sides might find another resolution.

Peltz first set his sights on the Baltimore-based company ten years ago and ended up being offered a seat on the board, which he held until late 2014.

During Peltz’ tenure as a director, Legg Mason appointed Sullivan as CEO, replacing Mark Fetting who served for four years.

Earlier this year Trian stopped short of mounting a board challenge at PPG Industries Inc. after the U.S. paints and coatings company met some of Trian’s demands and announced new financial targets.

Trian’s largest investments are General Electric Co and Procter & Gamble, where the hedge fund has board seats.

(Reporting by Svea Herbst-Bayliss; Editing by Sonya Hepinstall)

Source: OANN

FILE PHOTO: FILE PHOTO: A couple sit on the beach and look out to sea on the August bank holiday weekend in Worthing
FILE PHOTO: FILE PHOTO: A couple sit on the beach and look out to sea on the August bank holiday weekend in Worthing, Britain, August 26, 2017. REUTERS/Russell Boyce/File Photo/File Photo

May 14, 2019

By Beth Pinsker

NEW YORK (Reuters) – Retirement savings can suffer from interest rate moves, market volatility and other financial risks, but depression can be just as damaging.

The transition to retirement itself is enough to trigger mood problems if you are emotionally unprepared, said Jamie Hopkins, director of Retirement Research at Carson Group.

“What we typically see is photos of retiree couples on the beach, and they look happy,” Hopkins said.

But others feel isolated when suddenly separated from meaningful work. “Some people don’t know what they are supposed to be doing,” Hopkins said.

Catalysts such as declining health can be depressing as life gets more limited. Caregivers often become widows or widowers, and are at high-risk without a significant other to care for them.

“Lots of widows refer to it as jello brain,” said Kathleen Rehl, author of “Moving Forward on Your Own: A Financial Guide for Widows,” and for years a financial planner primarily for widows. “You just can’t think straight, and it shuts down some of your normal functions.”

FINANCIAL IMPACTS

Depression can have a real and lasting financial impact, so mental health must be a factor in retirement planning.

“We talk about diversifying your portfolio and your life,” said Neal Van Zutphen, a certified financial planner from Tempe, Arizona, whose clients include those who wildly spend to fill a void.

Consider just healthcare costs: depression lowers immune system responses, strains the heart, limits the ability to care for yourself, and depletes energy.

A home health aide or assisted living facility costs more than $4,000 month in most parts of the country, and a shared room at a nursing home can run more than $7,000, according to Genworth’s 2018 Cost of Care survey.

“It just knocks the socks off any other expense,” said Debra Newman, a recent retiree who spent her consulting career selling long-term care insurance to reduce such risks.

Hopkins assesses clients’ happiness and finances when creating retirement projections. The key question: Where will you find your meaning? Then Hopkins prompts people to think about goal-based planning.

Retirees planning to go on a cruise or buy a second home need to do more than rely on their general savings, said Hopkins.

Phased retirement, with shorter work hours, helps clients ease into a new lifestyle. “This gives you the ability to test-drive retirement, as opposed to cold turkey,” Hopkins said.

DUE DILIGENCE

Depressed retirees are also vulnerable to scams targeting those desperate for help, experts said.

Rehl worked with one widow who handed over a chunk of her life savings to buy the Iraqi currency and lost it all. Many widows she works with fall prey because of financial illiteracy. Complicated insurance products with suspect terms can wreck retirement plans, Rehl noted.

Financial education is the best bet, but for people experiencing grief and possible depression, a thick, jargon-filled report can be daunting.

Graphics are Rehl’s answer. She divided up widow Liz’s $1.5 million into colored blocks, including for inheritance, charity and spending (to create memories with family). Each area was tied to a goal-based investment strategy.

“She’d bring this graphic to meetings,” said Rehl, and they worked together to plot out the rest of her financial life.

(Editing by Lauren Young and Richard Chang)

Source: OANN

FILE PHOTO: Hill Harper pictured at the AFI Fest 2015 in Hollywood
FILE PHOTO: Hill Harper pictured at AFI Fest 2015 in Hollywood, California, November 10, 2015. REUTERS/Kevork Djansezian/File Photo

May 13, 2019

By Beth Pinsker

NEW YORK (Reuters) – Many Hollywood stars are known for their lavish spending, but Hill Harper is far on the other end of the spectrum. He gives out sound money advice – not in character on TV, but in real life, with his knowledge gained as a Harvard-trained lawyer and serial entrepreneur.

While his first major break was in Spike Lee’s “Get on the Bus,” Harper, 52, is probably best known for his role as Sheldon Hawkes in “CSI: NY.” He currently co-stars in “The Good Doctor.”

Harper is now adding spokesman to his resume, launching a campaign for the credit bureau Experian’s new free Boost tool, which helps people with limited credit or low scores by scanning their bank accounts and factoring in things like cell phone and utility payments. Harper spoke with Reuters about how he developed his passion for helping people with their money.

Q: Who first taught you the value of a dollar growing up in Iowa?

A: What’s interesting is that most people are taught a dollar is a dollar. My father taught me this – it’s smart money versus dumb money. A dollar isn’t a dollar. There are dollars that work for you, and some that don’t.

By him teaching me that, he helped me understand how important your relationship to money is. It’s impacted my life in every way.

Q: You said in your book “The Wealth Cure: Putting Money in Its Place,” that paying credit card interest is the dumbest money of all. How did you come by that observation?

A: It’s the worst. I know it because with my foundation [Manifest Your Destiny], I work with so many people who get into debt, and they pay the minimum. If you set yourself up that far behind, it’s hard to get out.

It’s expensive to be poor. There’s a quote: The people who can least afford it are charged the most.

We have to control how we use the tool of money in general, and we can transform people’s lives. It’s sad and atrocious that we don’t teach financial literacy in school. We teach math, but we don’t teach money. It has more impact than trigonometry, without question.

Q: What is your own money management style?

A: My father told me to have an automatic savings plan. That is one of the most transformative things. I had a Vanguard S&P 500 fund, a Vanguard BRIC fund. I invested into those, with very low commissions, because the time value of money works.

Then, as you develop some savings, you can leverage that savings and you couple that with credit health.

Q: What role does that credit health play in people’s lives?

A: A high credit score helps you in almost every area of your life, no matter gender or income level.

Let’s be very clear: There are more than 100 million people who don’t have access to credit or they don’t have a credit file at all. It’s not good for them or American economy. They are forced to rely on high-interest loans, payday lenders, rent-to-own. These things are predatory and taking money from people who can least afford it. If we can improve credit scores across the board … it gives them opportunities.

Q: How do you decide what to invest in and what projects to take on?

A: I truly believe that I am a big say yes person. If you are hit with an intuitive notion, say yes. The more I can do, the more I can scale. That’s what it comes down to. I own a coffee shop in Detroit, a hotel in New Orleans. I employ people. I write books, and I do TV shows. We’re here for a reason and a season.

Q: You adopted a son three years ago. What money values do you want to pass on to him?

A: I bought him a bank – it’s like a safe. I’m just now teaching him values of different coins. When he’s old enough, I want to encourage him to do part-time jobs, and he can create income.

A: You have a master’s degree from Harvard’s Kennedy School of Government and are friends with Barack Obama from law school. Are you tempted to follow in his political footsteps?

Q: I really have to step back and look where I can have the most impact. Being a private citizen, I can do more than if I was hamstrung by politics. But it looks like all the rules are out the window, so maybe I have to rethink that.

(Editing by Lauren Young; Editing by Susan Thomas)

Source: OANN

Traders work on the floor at the NYSE in New York
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 7, 2019. REUTERS/Brendan McDermid

May 10, 2019

LONDON (Reuters) – Global equities have seen outflows of $20.5 billion in the past week as “trade deal trauma” pushed more money into bonds, Bank of America Merrill Lynch said on Friday, the latest sign of how growing global trade tensions are roiling financial markets.

The cash leaving stocks in the week to May 8 was the third biggest outflow so far this year, the bank said, and came as U.S. President Donald Trump threatened further import tariffs on Chinese goods, ratcheting up the prolonged trade spat between the world’s two largest economies.

U.S. equities had outflows of $14 billion, the biggest since Jan. 30, the bank’s strategists said, citing data from flow tracking specialist EPFR.

Investors, seeking shelter from trade dispute, kept pumping in money into bonds, which saw inflows of $7.3 billion, making it the eighteenth straight week of inflows.

(Reporting by Thyagaraju Adinarayan; editing by Josephine Mason)

Source: OANN

Traders work on the floor at the NYSE in New York
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 7, 2019. REUTERS/Brendan McDermid

May 10, 2019

LONDON (Reuters) – Global equities have seen outflows of $20.5 billion in the past week as “trade deal trauma” pushed more money into bonds, Bank of America Merrill Lynch said on Friday, the latest sign of how growing global trade tensions are roiling financial markets.

The cash leaving stocks in the week to May 8 was the third biggest outflow so far this year, the bank said, and came as U.S. President Donald Trump threatened further import tariffs on Chinese goods, ratcheting up the prolonged trade spat between the world’s two largest economies.

U.S. equities had outflows of $14 billion, the biggest since Jan. 30, the bank’s strategists said, citing data from flow tracking specialist EPFR.

Investors, seeking shelter from trade dispute, kept pumping in money into bonds, which saw inflows of $7.3 billion, making it the eighteenth straight week of inflows.

(Reporting by Thyagaraju Adinarayan; editing by Josephine Mason)

Source: OANN

FILE PHOTO: Anthony Scaramucci, managing partner of Skybridge Capital, speaks at the SALT conference in Las Vegas
FILE PHOTO: Anthony Scaramucci, managing partner of Skybridge Capital, speaks at the SALT conference in Las Vegas May 14, 2014. REUTERS/Rick Wilking/File Photo

May 9, 2019

By Svea Herbst-Bayliss

LAS VEGAS (Reuters) – After a one-year pause, the hedge fund industry schmooze fest organized by Anthony Scaramucci, the investment manager who briefly served as President Donald Trump’s communications director, returned to the Las Vegas strip this week.

But the atmosphere at the 10th annual SALT Conference was much more subdued than in past years, when celebrity hedge fund managers rubbed shoulders with former U.S. presidents at private dinners, poolside parties and late-night gambling at the Bellagio hotel.

This time, organizers and attendees said they ditched that party vibe to debate investment ideas and listen to former White House officials talk geopolitics.

“The vast majority of institutional investors would rather be sitting around and having a discussion about structured credit tranches instead of going to splashy parties,” Eric Nierenberg, chief strategy officer at the $74 billion state pension fund for Massachusetts, said in an interview at the event.

“What we are trying to do is very sober,” he added.

For the first time, investors attending SALT outnumbered hedge fund managers, said Ray Nolte, co-chief investment officer of SkyBridge Capital, the investment company Scaramucci founded and which is affiliated with the conference. There were also more panels at the expense of longer networking breaks.

The superstar managers who previously attended – including Daniel Loeb, David Tepper, William Ackman, Ken Griffin and Steven A. Cohen – did not come. Avenue Capital Group’s Marc Lasry said he opted to watch the Milwaukee Bucks, a team he co-owns, beat the Boston Celtics, instead of flying to Vegas.

And at the pool party where musical artists like the Gipsy Kings once performed, there was a disc jockey spinning tunes. In the past there were also private concerts featuring One Republic and Duran Duran.

“We want to replace the perception that this is a boondoggle with the reality of what is being offered here,” Nolte told Reuters.

The conference has taken on new importance as hedge funds are making a comeback of sorts.

After facing criticism for more than a decade over high fees and lackluster returns, some institutional investors are returning to hedge funds that pursue niche strategies, in which performance is less correlated to market moves.

Among those paying $8,000 per ticket to hear some of those ideas were representatives of the Canadian Pension Plan Investments Board, the California Public Employees Retirement System (CalPERS), the Public Employees Retirement Association of Colorado, known as Colorado PERA, the City of El Paso Employees Retirement Trust and the West Palm Beach Police Pension Fund. Many had come for the first time.

Others were Scaramucci’s friends and business associates, celebrating SALT’s relaunch after two tumultuous years.

Scaramucci joined the Trump administration in 2017 as communications director, a job that lasted only 11 days. He also tried to sell SkyBridge, which invests $10 billion, to Chinese conglomerate HNA Group, but the effort failed.

In reviving his signature event, Scaramucci was thrilled to report that he drew the second-highest attendance in its history.

“The country has to fix a lot of problems,” he said in an interview. “I don’t know if we’ll fix them here, but we will certainly talk about them.”

Panelists included President Donald Trump’s former chief of staff, General John Kelly, who fired Scaramucci, as well as former Attorney General Jeff Sessions, former New Jersey Governor Chris Christie and former U.S. ambassador to Russia Michael McFaul.

Much of the confab focused on concerns that economic growth may slow, that volatility will pick up and that the stock market boom will come to an end.

Nolte is betting that investment grade debt will lose value while assets like residential mortgages will perform well. Amy McGarrity, chief investment officer of Colorado PERA, likes multi-strategy funds focused on Asia. MassPrim’s Nierenberg is scouring emerging markets for opportunities.

On one panel, economist Nouriel Roubini described cryptocurrencies as “the mother and father of all bubbles.” On another, former Countrywide Financial Corp CEO Angelo Mozilo https://www.reuters.com/article/us-sec-mozilo-newsmaker/angelo-mozilo-from-housing-hero-to-subprime-foe-idUSTRE69E5ZU20101015 once again defended himself against accusations that he was a key architect of the 2007-2009 financial crisis. “Somehow, for some unknown reason, I got blamed for it,” he said.

Several attendees told Reuters they liked the faster-paced program and felt the subdued tone was more appropriate for the current times.

“The real test will be if there are jugglers and fire eaters at the pool party,” one hedge-fund manager joked.

There were not.

(Reporting by Svea Herbst-Bayliss; editing by Lauren Tara LaCapra AND cYNTHIA oSTERMAN)

Source: OANN

FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual shareholder meeting in Omaha
FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan/File Photo

May 8, 2019

By Jonathan Stempel

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc on Wednesday said a $377 million charge it incurred recently was tied to a solar generation company that U.S. authorities have linked to fraud.

Berkshire said in its first-quarter report on Saturday it had invested $340 million in various tax equity investment funds from 2015 to 2018, before learning that federal authorities had alleged “fraudulent income conduct” by the funds’ sponsor.

“We now believe that it is more likely than not that the income tax benefits that we recognized are not valid,” and took the charge for “uncertain tax positions” related to its investments, Berkshire said.

Buffett’s assistant Debbie Bosanek confirmed that the charge related to DC Solar. Bloomberg News earlier reported its identity.

Berkshire’s report had not identified the sponsor by name, and Buffett’s Omaha, Nebraska-based conglomerate has not been accused of wrongdoing.

Lawyers for DC Solar did not immediately respond to requests for comment.

DC Solar, whose products include solar generators as well as light towers that can be used at sports events, filed for Chapter 11 bankruptcy protection in February in Reno, Nevada.

In a Feb. 8 affidavit related to those proceedings, an FBI agent said the manner in which the Benecia, California-based company appeared to have operated reflected “evidence of a Ponzi-type investment fraud scheme.”

The U.S. Securities and Exchange Commission accused DC Solar’s owners by name of engaging in a Ponzi scheme, according to a separate court filing.

Berkshire’s charge reduced first-quarter operating profit to $5.56 billion, up 5 percent from a year earlier.

This year’s results excluded the impact of Berkshire’s 26.7 percent stake in Kraft Heinz Co, which has yet to report audited quarterly results.

Berkshire’s $340 million investment is small relative to its $738.7 billion asset base, which includes $191.8 billion of equity investments and $114.2 billion of cash. The company also has its own renewable energy projects.

(Reporting by Jonathan Stempel in New York; Additional reporting by Jennifer Ablan; Editing by Susan Thomas)

Source: OANN

FILE PHOTO: Jeffrey Gundlach, Chief Executive Officer, DoubleLine Capital, speaks at the Sohn Investment Conference in New York
FILE PHOTO: Jeffrey Gundlach, Chief Executive Officer, DoubleLine Capital LP., speaks at the Sohn Investment Conference in New York City, U.S. May 4, 2016. REUTERS/Brendan McDermid

May 7, 2019

(Reuters) – Jeffrey Gundlach, chief executive officer at DoubleLine Capital, said on CNBC on Tuesday that he sees a better than 50 percent chance that new tariffs will happen.

Asked if U.S. stocks are still in a bear market: “Of course we are,” Gundlach said. The U.S. stock market “has gone nowhere in 15 months.”

(Reporting By Jennifer Ablan)

Source: OANN

FILE PHOTO: The offices of PIMCO are shown in Newport Beach
FILE PHOTO: The offices of Pacific Investment Management Co (PIMCO) are shown in Newport Beach, California August 4, 2015. REUTERS/Mike Blake

May 7, 2019

(Reuters) – Pacific Investment Management Co has named Rene Martel, a managing director at the Newport Beach, Calif.-based firm, as its head of retirement, a new role for the firm, a spokesman said Tuesday.

Martel, who will report directly to PIMCO CEO Emmanuel Roman, will collaborate closely with PIMCO teams which play a key role in retirement strategies and services, including Client Solutions and Analytics, Defined Contribution, Product Strategy Group and Global Wealth Management, the spokesman said.

“Our ambition is to be a premier retirement provider helping clients strategically navigate existing challenges and prepare for emerging ones,” Roman said.

“Millions of Americans will need access to both low risk and income-oriented solutions in their retirement while younger investors need access to solutions focused on steady and sustainable growth – all of which we believe an active bond investor like PIMCO is well-positioned to provide.”

Pimco, which is owned by Allianz SE, has $1.76 trillion in assets under management, as of March 2019.

(Reporting By Jennifer Ablan; Editing by Phil Berlowitz)

Source: OANN

FILE PHOTO: Jeffrey Gundlach, CEO of DoubleLine Capital LP, presents during the 2018 Sohn Investment Conference in New York
FILE PHOTO: Jeffrey Gundlach, CEO of DoubleLine Capital LP, presents during the 2018 Sohn Investment Conference in New York City, U.S., April 23, 2018. REUTERS/Brendan McDermid/File Photo

May 6, 2019

(Reuters) – Jeffrey Gundlach, chief executive officer at Doubleline Capital, said on Monday at the Sohn Investment Conference that his best idea for investors is to buy interest rate volatility on long maturity U.S. Treasuries via a put-call straddle on TLT.

Gundlach said U.S. interest rates “cannot maintain the low volatility” they have experienced in the past 8 years and that it is not inconceivable interest-rate volatility could double.

(Reporting by Jennifer Ablan; Editing by Phil Berlowitz)

Source: OANN

The logo of Brazilian Bradesco bank is seen on a branch in Osasco financial centre
The logo of Brazilian Bradesco bank is seen on a branch in Osasco financial centre, Brazil, August 3, 2015. REUTERS/Paulo Whitaker

May 6, 2019

By Carolina Mandl

SAO PAULO (Reuters) – Banco Bradesco SA has embarked on its first-ever international acquisition by paying approximately $500 million to buy BAC Florida Bank, which focuses on high-net-worth individuals in a move intended to close the gap with Brazilian rivals.

Based in Coral Gables, BAC Florida is controlled by Grupo Pellas, which was founded in 1877 in Nicaragua.

After the deal closes, Bradesco said its main goal is to provide a wide range of financial services in the United States to Bradesco clients and lure new customers to BAC Florida.

Bradesco Chief Executive Officer Octavio de Lazari said on a call with journalists that the Brazilian bank’s private banking clients have increasingly demanded diversification and greater access to global products.

“This move underscores our expansion not only in the U.S., but also in Latin America as a whole, as BAC has clients all over the region,” he said. Around 20 percent of BAC Florida’s clients are Brazilian and 9 percent are American.

Still, Lazari said Bradesco is not seeking to build a retail base outside Brazil, but wants to boost its private banking business, which manages nearly $50 billion in assets.

BAC Florida will add 10,000 customers to Bradesco’s 13,000 private banking clients in Brazil.

“This acquisition is small for Bradesco (less than 1 percent of the bank’s market cap) and tends to help the bank to reduce the gap of its private banking business,” Itaú BBA said in a note to clients, estimating a 30 basis point impact on capital.

Bradesco’s footprint in private banking is smaller than rival Itaú Unibanco Holding SA, which has $120 billion in assets under management. Itaú acquired the Latin America private banking business of ABN Amro and now-defunct BankBoston nearly 12 years ago.

BAC Florida ended 2018 with total assets of $2.2 billion and net income of $29 million. One of its main business segments is real estate financing.

(Additional reporting by Ana Mano and Paula Laier; Editing by Jeffrey Benkoe)

Source: OANN

The logo of Brazilian Bradesco bank is seen on a branch in Osasco financial centre
The logo of Brazilian Bradesco bank is seen on a branch in Osasco financial centre, Brazil, August 3, 2015. REUTERS/Paulo Whitaker

May 6, 2019

By Carolina Mandl

SAO PAULO (Reuters) – Banco Bradesco SA has embarked on its first-ever international acquisition by paying approximately $500 million to buy BAC Florida Bank, which focuses on high-net-worth individuals in a move intended to close the gap with Brazilian rivals.

Based in Coral Gables, BAC Florida is controlled by Grupo Pellas, which was founded in 1877 in Nicaragua.

After the deal closes, Bradesco said its main goal is to provide a wide range of financial services in the United States to Bradesco clients and lure new customers to BAC Florida.

Bradesco Chief Executive Officer Octavio de Lazari said on a call with journalists that the Brazilian bank’s private banking clients have increasingly demanded diversification and greater access to global products.

“This move underscores our expansion not only in the U.S., but also in Latin America as a whole, as BAC has clients all over the region,” he said. Around 20 percent of BAC Florida’s clients are Brazilian and 9 percent are American.

Still, Lazari said Bradesco is not seeking to build a retail base outside Brazil, but wants to boost its private banking business, which manages nearly $50 billion in assets.

BAC Florida will add 10,000 customers to Bradesco’s 13,000 private banking clients in Brazil.

“This acquisition is small for Bradesco (less than 1 percent of the bank’s market cap) and tends to help the bank to reduce the gap of its private banking business,” Itaú BBA said in a note to clients, estimating a 30 basis point impact on capital.

Bradesco’s footprint in private banking is smaller than rival Itaú Unibanco Holding SA, which has $120 billion in assets under management. Itaú acquired the Latin America private banking business of ABN Amro and now-defunct BankBoston nearly 12 years ago.

BAC Florida ended 2018 with total assets of $2.2 billion and net income of $29 million. One of its main business segments is real estate financing.

(Additional reporting by Ana Mano and Paula Laier; Editing by Jeffrey Benkoe)

Source: OANN

FILE PHOTO: U.S. dollar notes are seen in front of a stock graph in this picture illustration
FILE PHOTO: U.S. dollar notes are seen in front of a stock graph in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration

May 1, 2019

By Svea Herbst-Bayliss

BEVERLY HILLS, Calif. (Reuters) – Traditional stock-pickers in the hedge fund world have been struggling to justify their expenses and weak returns in recent years, as low-cost algorithmic funds have done better. Now, human managers are starting to embrace the technologies employed by their robot rivals to improve results.

Prominent hedge fund managers, investors and consultants gathered at the Milken Global Conference in Beverly Hills this week said the industry is increasingly turning to big-data analysis, machine learning and other types of artificial intelligence to research investments or build on ideas.

They insisted it is not a cost-cutting strategy to replace human managers. Rather, they are trying to improve performance with the help of technology.

“There is still a role for humans to figure out regime change and to figure out disruption, but those humans tend to do better when they are aided by quantitative tools,” said John McCormick, chief executive officer of Blackstone Group LP’s alternative asset management business.

Blackstone, the world’s biggest investor in the $3.3 trillion hedge fund industry, has found that the most successful ones within the analog realm are those that compliment human talent with sophisticated technology, McCormick said.

That evolution was a key focus of hedge fund panels and a hot topic on the sidelines at the Milken event. Managers at firms including D.E. Shaw & Co and Citadel, plus big U.S. and global pension funds, said it is a watershed moment for the industry, driven by market trends that have put enormous pressure on active fund managers.

The number of publicly traded companies has declined to about 3,500 – roughly half the number from two decades ago – offering managers fewer options to find outsize returns.

Meanwhile, investors are balking at the high cost structures of hedge funds, which often charge a 2 percent fee plus 20 percent or more of gains, especially as low-cost, passive investments like index funds have produced better results.

The mood worsened last year, as stock-oriented hedge funds lost about 7 percent, compared with a 4 percent decline in the Standard & Poor’s 500 Index.

“There are fewer tradable opportunities,” said Eddie Fishman, chief operating officer at D.E. Shaw Group, a $50 billion hedge fund firm. “People are not looking to add to long risky assets and there is such a pressure for uncorrelated returns.”

It is a much different dynamic than the run-up to the 2007-2009 financial crisis, when investors were clamoring for access to exclusive funds. A host of once-prominent hedge fund firms including Eric Mindich’s Eton Park and Richard Perry’s Perry Capital are now calling it quits.

People are “looking at the hedge fund industry as a giant poker table and asking themselves who is going to lose,” said Ilana Weinstein, chief executive of the IDW Group which recruits employees for Wall Street’s top hedge funds.

Other funds that focus on picking stocks, including Daniel Loeb’s Third Point, are hoping that quantitative science can help improve performance.

But even as firms embrace new technologies, managers and investors said attracting and retaining top talent is still crucial. While compensation is a key motivator, is it no longer the only one. Younger recruits especially want to feel that they have a real career path with meaningful challenges, Milken attendees said.

The “way to reduce the risk of firm failure is to attract other people,” said Blackstone’s McCormick, “because no one has a monopoly on the right way to invest.”

(Reporting by Svea Herbst-Bayliss in Beverly Hills, California; Editing by Lauren Tara LaCapra and Lisa Shumaker)

Source: OANN


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