First Impressions

Smart Money, Smart Women: What Successful Women Say About The Possibilities

Sarah Rudolph, JLN

Women have come a long way in the financial sphere. As recently as 1989, when Illyce Glink, the founder and president of Think Glink Media, went with her husband to a bank to apply for a mortgage, the banker they spoke with – a woman – told her there was no need for her to put her own income on the form. “Oh honey, your income doesn’t really matter. We’ll use your husband’s,” the banker said. Glink was then – and is now – a self-employed woman who bought shares of Intel and “a small company called Microsoft” in 1987. Last week, she spoke at an event called “Smart Money, Smart Women, Smart Options” held at the Chicago Board Options Exchange as part of Chicago’s Money Smart Week. The event was dedicated to women’s advancement both in the finance industry and with their own personal finances.

As far as women have come, many feel there are still big roadblocks, including social biases against women taking the reins of finance. A top issue on the agenda is equal pay. April 12 was this year’s Equal Pay Day, the symbolic day when women’s earnings “catch up” to men’s earnings from the previous year. Women need to make it their goal to achieve pay equity by 2020, said Dorri McWhorter, who introduced the event. As CEO of YWCA Chicago, she works on programs to provide girls with STEM awareness and adult women with web and mobile application training, among other things. “We don’t need a woman on the $20 bill,” she said. “We need more Benjamins in our pockets.”

Read more HERE

Quote of the Day

“Supposedly sophisticated people, generally richer people, hire consultants, and no consultant in the world is going to tell you ‘just buy an S&P index fund and sit for the next 50 years.’ You don’t get to be a consultant that way. And you certainly don’t get an annual fee that way. So the consultant has every motivation in the world to tell you, ‘this year I think we should concentrate more on international stocks,’ or ‘this manager is particularly good on the short side,’ and so they come in and they talk for hours, and you pay them a large fee, and they always suggest something other than just sitting on your rear end and participating in the American business without cost. And then those consultants, after they get their fees, they in turn recommend to you other people who charge fees, which… cumulatively eat up capital like crazy.”

Warren Buffett in the story, “Warren Buffett’s Epic Rant Against Wall Street”

Lead Stories

Warren Buffett’s Epic Rant Against Wall Street
MoneyBeat – WSJ
The “Oracle of Omaha” went on an epic rant against Wall Street this weekend.
Just before lunch at the Berkshire Hathaway annual meeting on Saturday, Warren Buffett unloaded what he called a “sermon” about hedge funds and investment consultants, arguing that they are usually a “huge minus” for anyone who follows their advice.

The European Union would suffer from Brexit—which is why it could not be kind to Britain afterwards
The Economist
MOST of the Brexit debate has been about its effect on Britain. But a British departure would also have a profound impact on the European Union. And that would affect how others approach negotiations with a post-Brexit Britain.

Can a $24 Billion Hedge Fund Blow the Whistle? Citadel Thinks So
Matthew Leising, Janan Hanna – Bloomberg
Bounties range from 10% to 30% of the recovered amount; Citadel says it helped identify Igor Oystacher as a spoofer. A whistleblower typically brings to mind the image of a back-office worker or disgruntled former employee, not a titan of finance.

Investors may have profited from leaked U.S. data: ECB research paper
Investors earned millions of dollars in profits from correctly betting on market moves ahead of sensitive U.S. economic data, suggesting leaks of key indicators, a European Central Bank research paper said on Monday.
Studying moves in the case of 21 market-moving indicators between 2008 and 2014, 11 showed some pre-announcement price drift consistent with the announcement surprise, with seven of them indicating substantial moves, the authors said in the paper, which does not necessarily represent the ECB’s opinion.

FCA sees issues in Deutsche Bank controls over financial crimes, FT reports
Deutsche Bank (DBKGn.DE) has “serious” and “systemic” failings in its controls against money laundering, terrorist financing and sanctions, according to a confidential letter by the UK’s financial regulatory agency, the Financial Times reported.

Hackers’ $81 Million Sneak Attack on World Banking
Tens of millions of dollars siphoned from the Federal Reserve Bank of New York. A shadowy set of casinos in the Philippines. A large bank in Bangladesh with creaky technology. An unknown — and perhaps uncatchable — group of anonymous thieves with sophisticated hacking skills.

World’s Longest Negative Rate Experiment Shows Perversions Ahead
Peter Levring, Frances Schwartzkopff – Bloomberg
After almost 4 years of negative rates, Danes invest less; Pension funds say policy is distorting markets, asset prices are high, people borrow less and save more. When they’re low, savings go down and borrowing goes up. But what happens when rates stay negative?

Banks told to stop pushing own funds
Madison Marriage – FT
Brussels has moved to stamp out the practice of large banks funnelling clients towards poorly performing in-house asset management products under new rules designed to improve investor protection across Europe.

Norway’s oil fund to target high executive pay votes
Richard Milne in Oslo – FT
The world’s biggest sovereign wealth fund is launching a crackdown on executive pay, targeting high salaries at companies around the globe in an attempt to exert its influence in a debate that has been gathering pace in recent months.

Goldman targets ‘mass affluent’ borrowers with unusual lending plan
Goldman Sachs Group Inc (GS.N), the banking gold standard for the world’s elite, sees a future in less prosperous investors.
A creative strategy taking shape inside the bank calls for it to partner with small brokerages and wealth management firms to lend money to their clients, many of whom have far less wealth than what’s in the typical Goldman private bank account.

JPMorgan, Ahead of BoFa, Wells Fargo On The Richest Banks List
“Too big to fail.” It’s been the battle cry of activists and politicians across the United States following the near collapse of the nation’s financial sector in 2008. But how big are banks really?

Puerto Rico to Miss Largest Payment to Date
NY Times
Gov. Alejandro García Padilla of Puerto Rico said Sunday that he had ordered a debt moratorium, blocking a $422 million payment due on Monday.

Central Banks

Why central banks are talking about throwing money from helicopters
The Economist
CENTRAL banks have gone to extraordinary lengths to get their slumping economies moving again: cutting interest rates to zero (and beyond) and buying vast amounts of government debt. Yet as the rich world continues to stumble along in a world of low inflation and weak growth, despite rock-bottom interest rates, a new policy proposal is entering the discussion: “helicopter money”, shorthand for printing money to fund government spending or to give people cash.

JPMorgan Sees Draghi as Buyer of Last Resort for Equities
Roxana Zega, Sofia Horta E Costa – Bloomberg
ECB purchases have helped European bonds beat stocks; Investors are losing faith ECB stimulus can spur equity gains
For equity investors, Mario Draghi’s adventures in the credit market have been something less than a boon.

No alternative to low rates for now, ECB’s Draghi says
Low interest rates are not harmless but they are only the symptom, not the cause of an underlying problem across major economies, European Central Bank President Mario Draghi said on Monday, arguing that there was no alternative for now.

Warren Buffett says more likely to buy IBM shares than sell: CNBC
Warren Buffett, chairman and chief executive of conglomerate Berkshire Hathaway, said Monday he would be more likely to buy than sell IBM shares over the next two years, and that he did not seek to profit from global central bank actions.

BOJ sees little reason to act when households aren’t listening
Bank of Japan Governor Haruhiko Kuroda has a big problem. His radical monetary policy experiment has always been aimed at convincing the public that an end to deflation is near – and right now the public aren’t listening.

BoJ’s monetary policy could be harming Japan
The Financial Express
Two major central bank monetary policy meetings were scheduled last week, US Fed and then the Bank of Japan. Though Fed proved to be non-eventful but the Bank of Japan monetary policy meeting had all the fireworks. Interestingly the outcome in both the meetings were status-quo decision but the effect on the currency markets, commodity markets, bond markets and stock markets were very different.


CME Group and Crypto Facilities Announce Launch of Bitcoin Reference Rate and Real-Time Index
Press Release
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will collaborate with Crypto Facilities Ltd., a digital assets trading platform, to develop two new products planned to launch in the fourth quarter of 2016: CME CF Bitcoin Reference Rate (BRR), which will provide a final settlement price in U.S. dollars at 4 pm London time on each trading day, and CME CF Bitcoin Real Time Index (RTI), which will allow users real-time access to bitcoin prices.

Euro Breaks Above $1.15 For First Time Since August Turmoil
Shared currency extends gains after U.S. ISM report
The euro broke above $1.15 on Monday for the first time since late August as the view that the Federal Reserve could leave interest rates on hold for the rest of this year was seen gaining traction.
Higher interest rates would, in theory, lead to a stronger dollar by increasing the return on dollar-denominated assets.

Craig Wright’s claims to be Satoshi Nakamoto come under fire
The Economist
HAS another Satoshi bitten the dust? Only 90 minutes after Craig Wright, an Australian businessman and computer scientist, had posted online what he claimed to be proof that he is Satoshi Nakamoto, the mysterious creator of bitcoin, a cryptocurrency, it was debunked as fake on Reddit, a website.

Why Currency Markets Seem Erratic
Financial Advisor
Last year, a few influential voices urged the Federal Reserve not to raise interest rates out of concern that it would slow global growth and fuel financial disruptions. Fed officials listened politely, then hiked rates in December and subsequently paused. Given recent developments in the foreign-exchange markets, some of these voices may now be wondering if the Fed should resume its rate increases.

Japan Officially Recognizes Bitcoin and Digital Currencies as Money
Japanese banks are set for embracing Bitcoin after proposed new laws. Has Bitcoin finally come of age in the land of the rising sun?
On March 4, 2016, The Japan Times reported that the Cabinet in Japan had approved a series of bills which would help the banking sector expand their reach when it comes to Information Technology businesses. This intertwining of banking and IT are called ‘FinTech’ in emerging parlance.

Russia to ban bitcoin, all digital currencies
Arkansas Online
Russia is planning to punish users of cryptocurrencies such as bitcoin, saying anonymous, difficult-to-trace transactions help kidnappers and money launderers.
The Finance Ministry in Moscow plans to submit legislation this month that would punish those who use digital currencies with fines as high as $38,000 and jail sentences of up to seven years. As opponents criticize such regulations as futile in the face of the growing popularity of bitcoin, Russia joins countries including Bolivia, Iceland and Vietnam in taking steps to criminalize it.

Indexes & Index Products

One Commodity Conundrum Despite 2nd Best April Ever
Seeking Alpha
The Dow Jones Commodity Index and S&P GSCI total return indices gained 9.1% and 10.1%, respectively, in April. For the S&P GSCI, it was the best month in a year, and the second best April ever in history since 1970, only after last year’s April, when it gained 11.1%.

Why MOAT Is An ETF For The Long Run
Most smart-beta ETFs strive to outperform the broad market. But in many cases, that outperformance can only be captured if the investor is willing to think long term.
The Market Vectors Morningstar Wide Moat ETF (MOAT | A-66) is a perfect example of that. The stock-picking fund that looks for outperformance by focusing on only 20 high-quality companies was designed to outperform the S&P 500.

If The S&P 500 Index Were A Stock, Would You Buy It Now?
Seeking Alpha
I want to own index funds. I really do. I yearn for the day when I can pour my cash reserve into index funds with conviction and not feel that I have to cross-examine dozens of facts about things I own on almost a daily basis. I’m not sure what I would do with my time, but I’m confident I would find something. So I want to own the indexes. Right now I just can’t.

Nigeria: MSCI Retains Nigeria in Benchmark Frontier Index
The Morgan Stanley Capital International (MSCI) has said that it will keep Nigeria in its benchmark frontier-market index after saying earlier this month that it might exclude the country because of the government’s capital controls.


Here’s Why Gold Just Hit a 15-Month High
Gold rose to a fresh 15-month high on Monday, closing in on the $1,300 resistance level as fresh weakness in the dollar lent support, but moves were muted in holiday-thinned trade.

Gold’s surge is making it feel a lot like late 2007
Gold is enjoying an incredible year, surging 22 percent as the S&P 500 is barely positive. What’s rare is for the yellow metal to outperform the market so dramatically in a year when stocks are up.

What to Know About the Gold Coin Sales Tax
With the global economy experiencing troubling times recently, and gold prices being on the low end and steadily rising, now may be as good a time as ever to hedge your capital with this precious metal. But beware, you may be subject to a gold coin sales tax.

Why Betting On An Economic Meltdown Is Enriching Gold Investors | Marc Davis
Huffington Post
Something wicked this way comes!
So say many leading stock market forecasters, who worry that a bubbling witches’ cauldron of global economic woes is in danger of boiling over.
Consequently, the threat of a renewed global recession looms large, they warn.


Why We Need Zero Hedge
Joshua M Brown – The Reformed Broker
Bloomberg reporters Tracy Alloway and Luke Kawa managed to get one of Zero Hedge’s ex-employees to tell them some inside stuff about what it’s like to write for the site. It’s a big story on the financial web today. Zero Hedge clapped back with a deeper look at the disgruntled ex-employee’s background and possible motives for wanting to trash his former employer.

Many Grouchy, Error-Prone Workers Just Need More Sleep
Hey! Wake up! Need another cup of coffee?
Join the club. Apparently about a third of Americans are sleep-deprived. And their employers are probably paying for it, in the form of mistakes, productivity loss, accidents and increased health insurance costs.

****JB: Siesta time is a great idea.

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