Posts by Rick Newman
- Rick Newman at Yahoo Finance1 day ago
Arab Spring? Or Occupy Wall Street?
Global investors are searching for the best analogy to help understand protests in Hong Kong that have been simmering since summer but recently burst into a chaotic spectacle of blocked roads, riot police and tear gas.
A movement known as Occupy Central has been clogging Hong Kong’s most prominent streets to protest a recent decision by the Chinese government in Beijing regarding the province’s 2017 elections. The government’s ruling will allow universal voting, for the first time, in the 2017 election — a reform promised as part of Hong Kong’s handover from the U.K. to China in 1997. Candidates, however, must be nominated by a government committee, a provision democracy advocates regard as a sham that will produce a ballot larded with the Communist Party’s hand-picked operatives.
With protests intensifying, Hong Kong’s Hang Seng stock index fell 2% on Monday, and it’s down 4.5% over the past week. Markets in Europe and the United States have fallen by less, as investors gauge what will happen next — mindful that political disruptions in Ukraine, Iraq, Syria and Libya barely bothered the markets during recent years.
Peter out or intensify?
- Rick Newman at Yahoo Finance4 days ago
Everybody’s used to hearing how crony capitalists use the public purse for their personal enrichment. This is a rare turnabout tale in which taxpayers ended up winning at the expense of moneyed interests.
An important highway known as the Indiana Toll Road— running for 157 miles in the northern part of the state — declared bankruptcy this week. The toll road, which includes portions of I-80 and I-90, is the sort of public-private partnership many analysts feel will be the most effective and maybe only way to fund big infrastructure projects in the future, since governments are generally short on cash. So the toll road’s bankruptcy — not something you hear about every day — seems to raise troubling questions about funding methods for roads and bridges that even President Obama has endorsed.
- Rick Newman at Yahoo Finance7 days ago
My healthcare plan is fine. But yours is probably lousy.
That seems to be the way Americans evaluate the convoluted U.S. healthcare system these days, according to new data published by the Employee Benefit Research Institute. In its annual survey of workers, EBRI found a majority consider the healthcare system overall to be poor or fair, a notable deterioration compared with the numbers from 2013. There was a corresponding drop in the portion saying the system is good, very good or excellent.
Yet the number of Americans satisfied with their own healthcare plan has been going up, the opposite of what you’d expect if the broader system were actually getting worse. The percentage of Americans rating overall healthcare as fair or poor has risen from 49% in 1998 to 61% in 2014. Yet the portion saying they're satisfied with their own plan has ticked up from 87% to 88% during the same time. Here’s a chart showing the trends:
So why, when it seems the vast majority of Americans are satisfied with their own health plan, would they also feel the overall healthcare system is getting worse?
- Rick Newman at Yahoo Finance8 days ago
The Occupy movement shook things up for a few weeks when it stormed into New York City and a few other metropolises in 2011. Then it faded away.
There appears to be an Occupy-style uprising on climate change at the moment, with the largest march ever on the issue hitting Manhattan on the eve of a big United Nations confab on the topic and residual protesters continuing to demonstrate. But hope for a meaningful reduction in global carbon emissions is premature, because most of the world is thoroughly addicted to fossil fuels. It could take hundreds of marches over decades to change that.
- Rick Newman at Yahoo Finance8 days ago
To the list of worriers who feel financial markets are getting overheated, add 20 more.
Finance ministers from the Group of 20, which includes the United States, the U.K, the European Union and China, warned at their latest meeting that financial markets may be headed for a slump. “Downside risks persist, including in financial markets,” the group said in a statement from Cairns, Australia. “We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low asset price volatility.”
It’s unusual for government finance ministers to comment on the direction of financial markets, yet concern about inflated stock prices is now mainstream, as Aaron Task and I discuss in the video above. Since the market bottom in 2009, the S&P 500 has risen by about 200%, while overall U.S. economic output has only risen by about 20%. Stock prices relative to earnings are above historical averages. Many top investors have been predicting a market correction for months.
- Rick Newman at Yahoo Finance11 days ago
For everybody wondering why the economic recovery feels like a recession, here’s the answer: We’re still at least five years away from regaining everything lost during the 2007-2009 downturn.
Forecasting firm IHS Global Insight predicts that real median household income — perhaps the best proxy for middle-class living standards — won’t reach the prior peak from 2007 until 2019. Since the numbers are adjusted for inflation, that means the typical family will wait 12 years until their purchasing power is as strong as it was before the recession. That would be the longest period of stagnation, by far, since the Great Depression of the 1930s.
Even though the recession officially ended in 2009, median household income declined until 2012 (which suggests maybe we ought to reconsider the way we define recessions). The total decline from the peak in 2007 to the bottom in 2012 was 8.3%. For a family earning $50,000, that means they would have been getting by on $4,150 less per year.
- Rick Newman at Yahoo Finance13 days ago
American investors will clamor for a piece of the action this week when Chinese e-commerce giant Alibaba (BABA) holds its highly anticipated initial public offering. Yet even though the firm will be listed on the New York Stock Exchange, Alibaba is unknown to most Americans, and a huge splash in financial markets won’t necessarily raise the company’s profile on Main Street.
[Yahoo Finance's parent company, Yahoo, has a 22.6% ownership stake in Alibaba and stands to profit from the IPO.]
- Rick Newman at Yahoo Finance15 days ago
Imagine a well-known, publicly traded company suddenly ceased operating, and the CEO couldn’t explain why. Picture shareholders losing everything, with zero warning.
This might sound like Soviet-style intrigue or Ayn Randian dystopia. But this bizarre scenario could have unfolded in the United States in 2008, when the government tried to force Yahoo (YHOO), the corporate parent of Yahoo Finance, to turn over data on select users as part of the National Security Agency’s PRISM electronic surveillance program. Yahoo fought the government’s request and appealed a secret court order to turn over the data, which led the government to threaten an escalating series of fines that could have overwhelmed Yahoo within weeks.
- Rick Newman at Yahoo Finance18 days ago
It sucks getting laid off -- even for those who keep their jobs.
There’s no mystery about the toll paid by workers who get laid off. Income plummets, self-esteem suffers and some unlucky people never regain their economic standing. Now, newly published research quantifies the cost of rising unemployment on those who remain employed. When some people lose their jobs, it turns out, we all lose.
Economists John F. Helliwell and Haifang Huang found that, when the unemployment rate rises by 1 percentage point, it affects the “subjective well-being” of those who remain employed the same as if their income had been cut by 4%. Subjective well-being basically means overall life satisfaction, as measured in surveys administered by Gallup and the Centers for Disease Control and Prevention. That includes the way people rate their quality of life in various categories and describe their emotions from day to day.
- Rick Newman at Yahoo Finance19 days ago
He swindled more than 1,500 people and spent 22 months in prison for his crimes. So you might not consider Jordan Belfort a go-to guy for advice on protecting your money.
Yet the former stockbroker — made infamous in last year’s Martin Scorsese film, The Wolf of Wall Street — has intimate knowledge of how to scam investors and persuade even prudent people to part with their cash. “People are in denial of their own pains,” Belfort told a rapt audience recently at the 92nd Street Y, a cultural center in New York City. “Salespeople amplify that pain to get them to make a decision and feel better.”