Posts by Rick Newman

  • The good and bad of Donald Trump, the businessman

    Rick Newman at Rick Newman 2 mths ago

    He’s a billionaire whose companies have gone bust an unusual number of times. What should we make of Donald Trump’s business record now that he’s the official Republican nominee for president?

    Trump’s mercurial, polarizing and contradictory temperament has obviously roiled this year’s presidential race. He equates himself with class and luxury, while slamming opponents with crude and bawdy putdowns. He orchestrates vast amounts of media coverage, while using it to alienate more people than he inspires. And the five-star reputation he cultivates for his real-estate empire is marred largely by Trump’s own failings and diversions into tawdry ventures he would have been better off avoiding.

    THE GOOD

    THE BAD

    SO WHAT’S THE TAKEAWAY? 

    Rick Newman is the author of Rebounders and Liberty for All . Follow him on Twitter: @rickjnewman .

     

  • Global elites need to fix what they broke

    Rick Newman at Yahoo Finance 3 mths ago

    This much seems clear: Global elites are the new public enemy. What’s totally unclear, however, is how to fix the problems the anti-elites are rebelling against.

    The proximate cause of the British vote to leave the European Union – Brexit, as everybody in the world knows by now -- was an influx of immigrants many Brits felt were overwhelming the public welfare system and diverting benefits and jobs away from natives. But the real problem is more basic: fading prosperity. Voters don’t tear up the status quo when good jobs are plentiful and life is good. This only happens when too many people fall too far behind for too long.

    That is happening in much of the western world, as globalism lifts countries like China and India but punishes workers whose jobs can be done more cheaply someplace else—or by machines. The broad trends in Europe are the same as in the United States: People in technology, finance and other knowledge fields – the global elite – are doing fine. Many blue-collar workers and small-business owners dependent on their local economies are not.

    And here's income inequality for 32 developed nations, with the US and UK among the worst:

  • Here’s everything you need to know about 'Brexit'

    Rick Newman at Yahoo Finance 3 mths ago

    The UK is gone.

    British voters surprised the world on Thursday by voting to leave the European Union, setting in motion an unpredictable sequence of events that have already destabilized financial markets and could cause years of uncertainty. How did this happen? Why now? And what next?

    British citizens essentially voted on one basic question: Should the United Kingdom remain in the European Union, or leave?

    If they had voted to stay, global markets would have breathed a sigh of relief and gone back to business as usual. But instead, BR its voted 51.8% to 48.2% to EXIT the EU — Brexit, get it? — causing the kind of uncertainty that makes markets manic.

    Rising immigration levels

    While the outlook for European stocks is dreary, US stocks could rebound.

    Other EU nations, which have their own anti-immigration political factions to contend with, will probably make Brexit painful for the UK.

  • Trump’s economic plan would 'create a pretty noxious economic environment'

    Rick Newman at Yahoo Finance 3 mths ago

    Republican presidential candidate Donald Trump has been sparring with economists recently, taking issue with a report by Moody’s Analytics that predicted his economic plan would cause a lengthy recession if fully enacted.

    Trump responded by pointing out that Mark Zandi, chief economist at Moody’s Analytics and lead author on the study, is a registered Democrat who has donated money to the campaigns of Hillary Clinton and other Democratic politicians. Trump didn’t rebut the findings of the report, but implied that Zandi’s political leanings may have led to a biased analysis.

    “I’ve worked on both sides of the aisle,” Zandi tells Yahoo Finance in the video above, pointing out that he advised Republican John McCain during the 2008 presidential race. “The study was done by a team of economists, with folks from both sides of the aisle, some of whom have contributed to Republican candidates.”

    Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman .

  • Record stock buybacks are likely to continue

    Rick Newman at Yahoo Finance 3 mths ago

    The stock market bottomed for the year on Feb. 11, with a nifty 15% uptick in the S&P 500 index since then. Investors have credited more stable markets in China, a genial Federal Reserve that has delayed planned interest rate hikes, and resilient consumer spending.

    Another factor has been at work, however: Stock buybacks, which hit a new record high during the last 12 months, according to the latest numbers from S&P Dow Jones Indices. For the last four quarters, ending in March, big companies spent $589.4 billion buying back their own stock, the most ever for any 12-month period. Buybacks in the first quarter of 2016 alone totaled $161.4 billion, the second-highest quarterly total since 2007, when the market peaked right before a punishing recession began. Increased demand for stocks created by buybacks would explain at least some of the buying action that helped stocks recover after Feb. 11.

    Companies can afford the buying spree. S&P 500 firms now have $1.3 trillion in cash on their books, also a new record high. Since the average return on cash is around 1.3% annualized, companies may feel their money is well spent buying back shares.

  • Microsoft’s purchase of LinkedIn looks a lot better than its failed Nokia deal

    Rick Newman at Yahoo Finance 3 mths ago

    When Microsoft (MSFT) announced plans to buy the Finnish phone maker Nokia in 2013, then CEO Steve Ballmer called it a “bold step into the future.” It was more like a step off the plank. Microsoft never got traction in the smartphone market and wrote down the $7.9 billion deal barely a year later – laying off roughly 80% of the Nokia employees it had brought on board.

    Microsoft’s just-announced purchase of LinkedIn(LNKD), under new CEO Satya Nadella, looks like a smarter deal. Microsoft is paying $26.2 billion to fully acquire the social network for professionals, a 49% premium to LinkedIn's stock price prior to the deal. It’s the first big acquisition for Nadella, who took over from Ballmer in 2014.

  • The Federal Reserve has good news for Hillary Clinton

    Rick Newman at Yahoo Finance 3 mths ago

    Maybe America is great again, after all.

    New data from the Federal Reserve shows that Americans’ net worth hit a new record high this year, suggesting the economy continues to improve, despite worrying signs. Total net worth of all U.S. households and nonprofit institutions (which is mostly households) hit $88.1 trillion in the first quarter, up $900 billion, or 1%, from the end of 2015.

    A strengthening economy is likely to benefit Democratic presidential candidate Hillary Clinton, since good economic news tends to boost approval ratings of the incumbent president and other politicians of the same party. Many of Clinton’s economic policies are similar to those ofPresident Obama, who can plausibly claim that the economy has improved during most of his tenure in the White House. Not by enough—but at least improved.

    This chart shows the trend since 2000:

    Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman .

  • 5 campaign promises that would hurt the economy

    Rick Newman at Yahoo Finance 3 mths ago

    It’s a two-person presidential race now, which means voters will start hearing more about the candidates’ actual proposals—along with attacks on those proposals from the other side. Coming soon: Hillary Clinton’s planned takedown of Donald Trump’s ideas on business and the economy.

    Yahoo Finance will be deconstructing the candidates’ campaign promises all the way through November. Here’s a starting primer on five economic ideas from the candidates that would probably do more harm than good.

    The good news about dramatic campaign proposals is they often go far beyond what may be possible in the real world of rough-elbow politics, and maybe even go beyond what the candidates themselves actually favor. So wild campaign ideas might evolve into nothing more than stalled legislation. Presidents tend to get less done once they're actually in office than they say they'll do while campaigning for it.

    Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman .

  • Hillary Clinton starts to rake in the cash

    Rick Newman at Yahoo Finance 3 mths ago

    It took a year, but Hillary Clinton finally seems to be building momentum as the Democratic nominee for president. That includes a gusher of money starting to flow her way.

    Victories in the final week of state primary elections finally gave Clinton enough delegates to make her the de facto Democratic nominee, facing off against Republican counterpart Donald Trump. And almost immediately, Clinton won one of the most coveted endorsements in politics: Billionaire hedge-fund manager Tom Steyer, the most prolific Democratic donor of recent times.

    Clinton already has a sizable funding advantage over Trump. Between her campaign and various super PACs supporting her, Clinton had more than $80 million on hand at the end of April. Trump had just a couple million. Trump has self-financed about 75% of his campaign up till now, but even billionaire Trump has nowhere near the liquid assets to fund a battle with a candidate who could easily raise $1 billion, when super PACs and other sources are combined.

  • Startups aim to disrupt the auto club

    Rick Newman at Yahoo Finance 3 mths ago

    Your father may have lectured you about the importance of joining AAA. Now you can let him know about some trendier alternatives.

    A Boston startup called Openbay is launching roadside assistance, with users paying only for services they use. A tow, for instance, starts at around $80. The service is available through a free smartphone app for Apple's iOS devices, with a corresponding Android app on the way. The new service is an affront to the venerable American Automobile Association, which charges members an annual fee ranging from $48 to $96, then provides jump starts, short-range towing and other services free, when needed.

    It’s also a test of the competitive chops of AAA, which boasts 56 million members in North America but may strike some consumers as more of an analog brand than a digital one. AAA offers a smartphone app, as does Openbay, but it also markets services that may seem outdated to younger consumers, such as maps and pharmacy discounts. Plus, younger consumers accustomed to Uber and Zipcar may wonder why they should pay an annual fee for a service the may not need this year, or next.