AYA Analytica financial health memo October 2017
As of October 2017, this regular podcast is available on our Andy Yeh Alpha fintech network platform.
Tech titans from Apple and Amazon to Microsoft and Google can benefit from the G.O.P. tax reform.
Large multinational tech firms such as Facebook, Apple, Microsoft, Google, and Amazon can benefit much from the G.O.P. tax reform.
A recent stock research report assumes the effective U.S. corporate income tax rate declines from 35% to 21%-22% in January 2018 with no subsequent changes in international taxes and all other aspects of the U.S. tax legislation.
Specifically, Google will receive tax benefits of more than $2 billion in 2018, Facebook expects to attain tax cost reductions of $1.5 billion, and Amazon will enjoy about $1 billion in tax credits.
Also, these tech firms plan to expand their capital expenditures with preferential tax provisions in the Trump administration's current tax reform.
Overall, these tech firms can expect to achieve hefty tax benefits in the range of $4.5 billion to $5 billion in the 5-year period from 2018 to 2022.
Harvard macrofinance professor Greg Mankiw entertains a key policy question.
How much would the average real wage rise for each $1 decrease in the typical firm tax outlay ceteris paribus?
The answer is likely to be $1.5 to $2 in real wage terms for each $1 tax cut, or equivalently $4,000 to $ 9,000 per capita per year.
Several eminent economists such as Brad DeLong, Larry Summers, and John Cochrane suggest that if we take into account positive externalities and positive returns to the scale of capital usage, the resultant real wage increase can turn out to be higher.
An open controversy clouds the fundamental view of whether these massive tax cuts may exacerbate fiscal inequality in America. ?
Public sentiment turns quite a bit against Facebook in light of the public issues around fake news.
Sean Parker, Napster founder and a former investor in Facebook, has become a "conscientious objector" on Facebook.
Parker says Facebook exploits human psychological vulnerabilities through positive validation that induces its users to constantly post to get more likes and more comments.
This instant gratification is quick and easy but offers very few substantive insights and deep relationships.
Chamath Palihapitiya, a former vice president for Facebook user growth, points out that the short-term "dopamine-driven feedback loops" may destroy how our modern society works in practice.
When millennials push the iconic "like" button, comment on specific posts, and share them on Facebook, these users reinforce their own views and opinions in virtual echo chambers.
Palihapitiya says Face-book may erode "the core foundations of how people behave" in reality.
He feels "tremendous guilt" about helping create social network tools and programs that may be "ripping apart the social fabric".
Public sentiment turns quite a bit against Facebook in light of the public issues around fake news and pervasive Russian posts on the U.S. presidential election in 2016.
However, Mark Zuckerberg has refined the social mission of Facebook in order to give its active users the power to build interdependent communities so that the world becomes closer together.
On this brighter side, social media networks such as Facebook, Twitter, LinkedIn, and so on play an important role in connecting all global citizens to better serve the key valuable purpose of life.
Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence, smart data analysis, and robotic automation.
With prior IT careers at Apple, Microsoft, and Google, Dr Kai-Fu Lee discusses economic inequality as the primary threat of artificial intelligence in the modern era of digital technology.
In a recent issue of New York Times, his op-ed article suggests that the key to success for most algorithmic machine learners is the sheer volume of smart data.
Computational strength begets better smart data analysis, which then attracts more talents and funds that flow into the subsequent smarter data analysis with a larger network of active users and hot spots.
This virtuous cycle amplifies the computational strength of artificial intelligence.
As both income and wealth gravitate toward the most productive use of human capital and computer equipment, economic inequality concentrates both power and money in the hands of a few elites and oligopolies such as Facebook, Apple, Microsoft, Google, and Amazon (FAMGA) in America and Baidu, Alibaba, and Tencent (BAT) in China.
For this reason, we need to rethink economic inequality on a global scale.
Carl Icahn mulls over steps to shake up the board of SandRidge Energy after it adopts a counter poison pill.
The octogenarian billionaire and activist investor Carl Icahn mulls over steps to shake up the board of SandRidge Energy after the oil-and-gas company adopts a poison pill that aims to prevent him from scooping up more shares.
Icahn became the company's largest shareholder after he personally disclosed a 13.5% equity stake in SandRidge in November 2017.
He has taken issue with the board's strategic plan to buy Bonanza Creek Energy for $750 million in cash and stock.
From Icahn's perspective, this irrational deal demonstrates executive exuberance and overvaluation that would ultimately erode shareholder value.
In response, SandRidge introduces the poison pill in order to stop blockholders such as Carl Icahn and Fir Tree Partners from buying more equity stakes above the 10% threshold.
Fir Tree has complained that the Bonanza deal would depart substantially from SandRidge's 2016 exit from bankruptcy because the current bid is way too high and so makes little business sense. In addition to this highly controversial poison pill, SandRidge's directors may or may not have breached any triads of fiduciary duty (good faith, loyalty, and due care) in a way that would be commensurate with the business judgment rule.
Although it is difficult to anticipate how the poison pill and its concomitant board fight will unravel over time, Icahn's race toward the top can be long and arduous.
Time will tell whether his board battle proves worthy and enhances sustainable shareholder wealth creation.
It may be illegal for institutional investors to buy-and-hold large equity stakes in a less competitive industry with high market concentration.
Is it anti-competitive and illegal for passive indexers and mutual funds to place large stock bets in specific industries with high market concentration?
Harvard law professor Einer Elhauge suggests that it is illegal for a passive institutional investor to buy-and-hold large equity stakes in a less competitive industry with high concentration, such as the U.S. airlines industry with 4 or fewer key players.
In contrast, passive indexers would be safe from antitrust concerns if most other institutional investors stop buying multiple public companies in a specific sector with high market concentration.
The basic rationale relates to the fact that if institutional investors such as index funds and mutual funds hold shares of multiple companies in a specific industry, these oligopolistic firms would tend to compete less vigorously with one another.
When senior executives make business decisions in the best interests of their institutional investors, this logic suggests less fierce product market competition and greater price discrimination for consumers in addition to the private benefits of portfolio diversification.
The net result would be more stable share prices and more favorable rents and returns to these passive indexers and mutual funds.
Although key critics may disagree with this novel thesis, it is quite controversial to judge whether it is legal for institutional investors to retain major equity stakes in oligopolistic firms in a given industry with high market concentration.
Mario Draghi declares the ECB agreement on a thorny set of revisions to Basel 3.
Mario Draghi, President of the European Central Bank, heads the international committee of financial supervisors and has declared their landmark agreement on a thorny set of revisions to Basel 3.
Many bankers and pundits refer to these revisions as Basel 4.
While many banks prefer to standardize their equity capital calculations under Basel 3, several multinational banks apply their own internal risk models to gauge appropriate common equity capital ratios.
Now the primary concern relates to the unfortunate outcome that the minimum regulatory capital results would become lower for a given large bank if one chose to apply another bank's internal risk models.
This discrepancy might arise from the fact that each bank exhibits different exposure to specific risk types such as commercial real estate default risk and operational risk.
Due to this concern, Basel 4 revisions can fill the gap between fact and fiction to help circumvent regulatory arbitrage.
Large banks would need to incorporate loan-to-value ratios into the internal risk models of residential mortgage default risk.
On balance, the overall capital floor is 72.5%, which reaches a healthy middle ground between the U.S. preference for 75% and the European tendency toward 70%.
Proponents of U.S. financial deregulation suggest that substantially lifting the average capital ratio from 7% to 12%-15% would likely increase the prohibitively high cost of capital for banks, insurance companies, credit unions, and other financial institutions.
Is Bitcoin a legitimate (crypto)currency or a new bubble waiting to implode?
Is Bitcoin a legitimate cryptocurrency or a new bubble waiting to implode?
As its prices skyrocket, bankers, pundits, and investors increasingly take sides. In accordance with Warren Buffett's intrinsic value philosophy, Bitcoin should not be viewed as a valuable asset because Bitcoin cannot yield future cash flows.
Further, several bankers and experts such as Brian Moynihan (Bank of America CEO), Jamie Dimon (JPMorgan Chase CEO), Bill Dudley (New York Fed CEO), and Joseph Stiglitz (Nobel Laureate) emphasize that Bitcoin cannot be a stable store of value in light of its volatile price movements and technical impediments for Bitcoin to be a long-term viable legal tender.
Nobel Laureate Robert Shiller regards Bitcoin as the modern epitome of a speculative asset bubble.
In contrast to this rather pessimistic view, many other proponents suggest that Bitcoin can serve as an alternative virtual currency in addition to legal tender in the current global payments system (especially for many emerging economies with weak legal rules, institutions, and unstable currencies).
These proponents include Christine Lagarde (IMF Executive Director), Mark Cuban (VC billionaire), Peter Thiel (PayPal co-founder and VC billionaire), Bill Gates (Microsoft founder and philanthropist), Eric Schmidt (Alphabet chairman), Richard Branson (Virgin Group founder), Mark Carney (Governor of Bank of England), and so forth.
Time will tell whether Bitcoin will become a successful cryptocurrency!!
Jim Cramer provides 5 key reasons against the purchase and use of cryptocurrencies such as Bitcoin, Ethereum, and Ripple.
As the TV host of Mad Money, Jim Cramer provides 5 key reasons against the purchase and use of cryptocurrencies such as Bitcoin.
First, no one knows the anonymous inventor of Bitcoin.
Second, no one knows how much the creator has reserved for himself or herself.
There are several other cryptocurrencies such as Ethereum, Ripple, Litecoin, Dash, and NEM as well.
Third, there is no transparency in the virtual system for Bitcoin.
Fourth, there no explicit or implicit government guarantee or lender of last resort to back up the virtual system for cryptocurrencies such as Bitcoin and Litecoin.
Despite the virtual protection of Blockchain for secure Bitcoin transactions, it is possible for aggressive hackers to game this software technology.
This latter rationale suggests substantial risk that each Bitcoin investor inevitably needs to address.
Although many investors are now abuzz about Blockchain and Bitcoin etc, it is important for each rational investor to acknowledge the hard and solid fact that U.S. stocks continue to offer the highest average excess return than non-equity securities such as bonds, futures, commodities, currencies, and so on over the long run.
For this reason, it is safer to earn an annual 6%-8% average excess return on U.S. stocks with a canonical buy-and-hold passive portfolio strategy.
More aggressive active asset management may help boost this average excess return to double digits at the margin.
Elizabeth Warren warns of Trump financial reforms that shake up the 5 key pillars of bank regulation.
In 2000, a former law professor at Harvard proposed establishing the Financial Product Safety Commission in order to protect consumer rights in the provision of financial products and services.
A decade later, that law professor, Elizabeth Warren, witnessed the congressional approval of the 2010 Dodd-Frank Act and the resultant new regulatory agency, the Consumer Financial Protection Bureau, which aims to restore trust in financial institutions with 5 major pillars of financial regulation: capital adequacy rules, leverage limitations, liquidity requirements, macroprudential stress tests, and deposit insurance constraints.
"It is impossible to buy a toaster that has a 1-in-5 chance of bursting into flames and burning down a house, but it is possible to refinance a current home with a mortgage that has the same 1-in-5 chance of putting the family out on the street," Warren wrote in the first paragraph in her influential Democracy article.
Maybe a toaster or a financial product or service is so defective that consumers should not be thrown back on themselves to avoid it.
Conversely, consumers with more confidence in financial products or services are more likely to purchase them.
These paternalistic considerations offer insights into the Trump administration's plan to dismantle much of the Dodd-Frank Act, especially the bank capital rules and stress tests.
The law of inadvertent consequences counsels caution.
Trump garners support from Senate and House of Representatives to pass the $1.5 trillion tax overhaul.
The Trump administration garners congressional support from both Senate and the House of Representatives to pass the $1.5 trillion tax overhaul (Tax Cuts & Jobs Act of 2017).
With Republican majority in both congressional chambers, this current fiscal reform represents President Trump's first landmark economic policy legislation.
The typical supply-side macroeconomist welcomes this fiscal overhaul and expects tax relief to trickle down to most U.S. households as well as corporations.
Each American household will expect to benefit from this fiscal legislation in the form of tax cuts from $4,000 to $9,000 per annum.
Also, most U.S. corporations face a substantial decrease in the effective corporate income tax rate from 35% to 21%.
Furthermore, large U.S. multinational corporations can enjoy tangible tax credits for offshore cash repatriation during the indefinite Trump tax holiday.
The Trump administration suggests that this tax overhaul is likely to help boost wage growth, job creation, and labor and capital productivity.
However, some market observers fear that the resultant tax cuts offer key U.S. corporations such as Cisco, Pfizer, and Coca-Cola etc to distribute cash to their shareholders in the form of near-term dividend payout and share buyback.
Andy Yeh Alpha (AYA) AYA Analytica financial health memo (FHM)
AYA Analytica is our online regular podcast and newsletter about key financial news, market insights, economic issues, and stock investment strategies on our Andy Yeh Alpha (AYA) fintech network platform. With both American focus and international reach, our primary and ultimate corporate mission aims to help enhance financial literacy, inclusion, and freedom of the open and diverse global general public. We apply our unique dynamic conditional alpha investment model as the first aid for every investor with profitable asset investment signals and portfolio strategies. In fact, our AYA freemium fintech network platform curates, orchestrates, and provides proprietary software technology and algorithmic cloud service to most members who can interact with one another on our AYA fintech network platform. Multiple blogs, posts, ebooks, analytical reports, stock alpha signals, and asset omega estimates offer proprietary solutions and substantive benefits to empower each financial market investor through technology, education, and social integration. Please feel free to sign up or login to enjoy our new and unique cloud software services on AYA fintech network platform now!!
Please feel free to follow our AYA Analytica financial health memo (FHM) podcast channel on YouTube: https://www.youtube.com/channel/UCvntmnacYyCmVyQ-c_qjyyQ
Please feel free to follow our Brass Ring Facebook to learn more about the latest financial news and stock investment ideas: https://www.facebook.com/brassring2013
Free signup for stock signals: https://ayafintech.network
Mission on profitable signals: https://ayafintech.network/mission.php
Model technical descriptions: https://ayafintech.network/model.php
Blog on stock alpha signals: https://ayafintech.network/blog.php
Freemium base pricing plans: https://ayafintech.network/freemium.php
Signup for periodic updates: https://ayafintech.network/signup.php
Login for freemium benefits: https://ayafintech.network/login.php
We create each free finbuzz (or free financial buzz) as a blog post on the latest financial news and asset investment ideas. Our finbuzz collection demonstrates our unique American focus with global reach. Each free finbuzz provides deep insights into numerous topical issues in global finance, stock market investment, portfolio optimization, and dynamic asset management. We strive to help enrich the economic lives of most investors who would otherwise engage in financial data analysis with inordinate time commitment.
Please feel free to forward our finbuzz to family and friends, peers, colleagues, classmates, and others who might be keen and abuzz to learn more about asset investment strategies and modern policy reforms with macroeconomic insights.
Do you find it difficult to beat the long-term average 11% stock market return?
It took us 20+ years to design a new profitable algorithmic asset investment model and its attendant proprietary software technology with fintech patent protection in 2+ years. AYA fintech network platform serves as everyone’s first aid for his or her personal stock investment portfolio. Our proprietary software technology allows each investor to leverage fintech intelligence and information without exorbitant time commitment. Our dynamic conditional alpha analysis boosts the typical win rate from 70% to 90%+.
Our new alpha model empowers members to be a wiser stock market investor with profitable alpha signals!! This proprietary quantitative analysis applies the collective wisdom of Warren Buffett, George Soros, Carl Icahn, Mark Cuban, Tony Robbins, and Nobel Laureates in finance such as Robert Engle, Eugene Fama, Lars Hansen, Robert Lucas, Robert Merton, Edward Prescott, Thomas Sargent, William Sharpe, Robert Shiller, and Christopher Sims.
Andy Yeh Alpha (AYA) fintech network platform serves as each investor's social toolkit for profitable investment management. AYA fintech network platform helps promote better financial literacy, inclusion, and freedom of the global general public. We empower investors through technology, education, and social integration.
Andy Yeh
AYA fintech network platform founder
Brass Ring International Density Enterprise (BRIDE)
Tech titans from Apple and Amazon to Microsoft and Google can benefit from the G.O.P. tax reform.
Large multinational tech firms such as Facebook, Apple, Microsoft, Google, and Amazon can benefit much from the G.O.P. tax reform.
A recent stock research report assumes the effective U.S. corporate income tax rate declines from 35% to 21%-22% in January 2018 with no subsequent changes in international taxes and all other aspects of the U.S. tax legislation.
Specifically, Google will receive tax benefits of more than $2 billion in 2018, Facebook expects to attain tax cost reductions of $1.5 billion, and Amazon will enjoy about $1 billion in tax credits.
Also, these tech firms plan to expand their capital expenditures with preferential tax provisions in the Trump administration's current tax reform.
Overall, these tech firms can expect to achieve hefty tax benefits in the range of $4.5 billion to $5 billion in the 5-year period from 2018 to 2022.
Harvard macrofinance professor Greg Mankiw entertains a key policy question.
How much would the average real wage rise for each $1 decrease in the typical firm tax outlay ceteris paribus?
The answer is likely to be $1.5 to $2 in real wage terms for each $1 tax cut, or equivalently $4,000 to $ 9,000 per capita per year.
Several eminent economists such as Brad DeLong, Larry Summers, and John Cochrane suggest that if we take into account positive externalities and positive returns to the scale of capital usage, the resultant real wage increase can turn out to be higher.
An open controversy clouds the fundamental view of whether these massive tax cuts may exacerbate fiscal inequality in America. ?
Public sentiment turns quite a bit against Facebook in light of the public issues around fake news.
Sean Parker, Napster founder and a former investor in Facebook, has become a "conscientious objector" on Facebook.
Parker says Facebook exploits human psychological vulnerabilities through positive validation that induces its users to constantly post to get more likes and more comments.
This instant gratification is quick and easy but offers very few substantive insights and deep relationships.
Chamath Palihapitiya, a former vice president for Facebook user growth, points out that the short-term "dopamine-driven feedback loops" may destroy how our modern society works in practice.
When millennials push the iconic "like" button, comment on specific posts, and share them on Facebook, these users reinforce their own views and opinions in virtual echo chambers.
Palihapitiya says Face-book may erode "the core foundations of how people behave" in reality.
He feels "tremendous guilt" about helping create social network tools and programs that may be "ripping apart the social fabric".
Public sentiment turns quite a bit against Facebook in light of the public issues around fake news and pervasive Russian posts on the U.S. presidential election in 2016.
However, Mark Zuckerberg has refined the social mission of Facebook in order to give its active users the power to build interdependent communities so that the world becomes closer together.
On this brighter side, social media networks such as Facebook, Twitter, LinkedIn, and so on play an important role in connecting all global citizens to better serve the key valuable purpose of life.
Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence, smart data analysis, and robotic automation.
With prior IT careers at Apple, Microsoft, and Google, Dr Kai-Fu Lee discusses economic inequality as the primary threat of artificial intelligence in the modern era of digital technology.
In a recent issue of New York Times, his op-ed article suggests that the key to success for most algorithmic machine learners is the sheer volume of smart data.
Computational strength begets better smart data analysis, which then attracts more talents and funds that flow into the subsequent smarter data analysis with a larger network of active users and hot spots.
This virtuous cycle amplifies the computational strength of artificial intelligence.
As both income and wealth gravitate toward the most productive use of human capital and computer equipment, economic inequality concentrates both power and money in the hands of a few elites and oligopolies such as Facebook, Apple, Microsoft, Google, and Amazon (FAMGA) in America and Baidu, Alibaba, and Tencent (BAT) in China.
For this reason, we need to rethink economic inequality on a global scale.
Carl Icahn mulls over steps to shake up the board of SandRidge Energy after it adopts a counter poison pill.
The octogenarian billionaire and activist investor Carl Icahn mulls over steps to shake up the board of SandRidge Energy after the oil-and-gas company adopts a poison pill that aims to prevent him from scooping up more shares.
Icahn became the company's largest shareholder after he personally disclosed a 13.5% equity stake in SandRidge in November 2017.
He has taken issue with the board's strategic plan to buy Bonanza Creek Energy for $750 million in cash and stock.
From Icahn's perspective, this irrational deal demonstrates executive exuberance and overvaluation that would ultimately erode shareholder value.
In response, SandRidge introduces the poison pill in order to stop blockholders such as Carl Icahn and Fir Tree Partners from buying more equity stakes above the 10% threshold.
Fir Tree has complained that the Bonanza deal would depart substantially from SandRidge's 2016 exit from bankruptcy because the current bid is way too high and so makes little business sense. In addition to this highly controversial poison pill, SandRidge's directors may or may not have breached any triads of fiduciary duty (good faith, loyalty, and due care) in a way that would be commensurate with the business judgment rule.
Although it is difficult to anticipate how the poison pill and its concomitant board fight will unravel over time, Icahn's race toward the top can be long and arduous.
Time will tell whether his board battle proves worthy and enhances sustainable shareholder wealth creation.
It may be illegal for institutional investors to buy-and-hold large equity stakes in a less competitive industry with high market concentration.
Is it anti-competitive and illegal for passive indexers and mutual funds to place large stock bets in specific industries with high market concentration?
Harvard law professor Einer Elhauge suggests that it is illegal for a passive institutional investor to buy-and-hold large equity stakes in a less competitive industry with high concentration, such as the U.S. airlines industry with 4 or fewer key players.
In contrast, passive indexers would be safe from antitrust concerns if most other institutional investors stop buying multiple public companies in a specific sector with high market concentration.
The basic rationale relates to the fact that if institutional investors such as index funds and mutual funds hold shares of multiple companies in a specific industry, these oligopolistic firms would tend to compete less vigorously with one another.
When senior executives make business decisions in the best interests of their institutional investors, this logic suggests less fierce product market competition and greater price discrimination for consumers in addition to the private benefits of portfolio diversification.
The net result would be more stable share prices and more favorable rents and returns to these passive indexers and mutual funds.
Although key critics may disagree with this novel thesis, it is quite controversial to judge whether it is legal for institutional investors to retain major equity stakes in oligopolistic firms in a given industry with high market concentration.
Mario Draghi declares the ECB agreement on a thorny set of revisions to Basel 3.
Mario Draghi, President of the European Central Bank, heads the international committee of financial supervisors and has declared their landmark agreement on a thorny set of revisions to Basel 3.
Many bankers and pundits refer to these revisions as Basel 4.
While many banks prefer to standardize their equity capital calculations under Basel 3, several multinational banks apply their own internal risk models to gauge appropriate common equity capital ratios.
Now the primary concern relates to the unfortunate outcome that the minimum regulatory capital results would become lower for a given large bank if one chose to apply another bank's internal risk models.
This discrepancy might arise from the fact that each bank exhibits different exposure to specific risk types such as commercial real estate default risk and operational risk.
Due to this concern, Basel 4 revisions can fill the gap between fact and fiction to help circumvent regulatory arbitrage.
Large banks would need to incorporate loan-to-value ratios into the internal risk models of residential mortgage default risk.
On balance, the overall capital floor is 72.5%, which reaches a healthy middle ground between the U.S. preference for 75% and the European tendency toward 70%.
Proponents of U.S. financial deregulation suggest that substantially lifting the average capital ratio from 7% to 12%-15% would likely increase the prohibitively high cost of capital for banks, insurance companies, credit unions, and other financial institutions.
Is Bitcoin a legitimate (crypto)currency or a new bubble waiting to implode?
Is Bitcoin a legitimate cryptocurrency or a new bubble waiting to implode?
As its prices skyrocket, bankers, pundits, and investors increasingly take sides. In accordance with Warren Buffett's intrinsic value philosophy, Bitcoin should not be viewed as a valuable asset because Bitcoin cannot yield future cash flows.
Further, several bankers and experts such as Brian Moynihan (Bank of America CEO), Jamie Dimon (JPMorgan Chase CEO), Bill Dudley (New York Fed CEO), and Joseph Stiglitz (Nobel Laureate) emphasize that Bitcoin cannot be a stable store of value in light of its volatile price movements and technical impediments for Bitcoin to be a long-term viable legal tender.
Nobel Laureate Robert Shiller regards Bitcoin as the modern epitome of a speculative asset bubble.
In contrast to this rather pessimistic view, many other proponents suggest that Bitcoin can serve as an alternative virtual currency in addition to legal tender in the current global payments system (especially for many emerging economies with weak legal rules, institutions, and unstable currencies).
These proponents include Christine Lagarde (IMF Executive Director), Mark Cuban (VC billionaire), Peter Thiel (PayPal co-founder and VC billionaire), Bill Gates (Microsoft founder and philanthropist), Eric Schmidt (Alphabet chairman), Richard Branson (Virgin Group founder), Mark Carney (Governor of Bank of England), and so forth.
Time will tell whether Bitcoin will become a successful cryptocurrency!!
Jim Cramer provides 5 key reasons against the purchase and use of cryptocurrencies such as Bitcoin, Ethereum, and Ripple.
As the TV host of Mad Money, Jim Cramer provides 5 key reasons against the purchase and use of cryptocurrencies such as Bitcoin.
First, no one knows the anonymous inventor of Bitcoin.
Second, no one knows how much the creator has reserved for himself or herself.
There are several other cryptocurrencies such as Ethereum, Ripple, Litecoin, Dash, and NEM as well.
Third, there is no transparency in the virtual system for Bitcoin.
Fourth, there no explicit or implicit government guarantee or lender of last resort to back up the virtual system for cryptocurrencies such as Bitcoin and Litecoin.
Despite the virtual protection of Blockchain for secure Bitcoin transactions, it is possible for aggressive hackers to game this software technology.
This latter rationale suggests substantial risk that each Bitcoin investor inevitably needs to address.
Although many investors are now abuzz about Blockchain and Bitcoin etc, it is important for each rational investor to acknowledge the hard and solid fact that U.S. stocks continue to offer the highest average excess return than non-equity securities such as bonds, futures, commodities, currencies, and so on over the long run.
For this reason, it is safer to earn an annual 6%-8% average excess return on U.S. stocks with a canonical buy-and-hold passive portfolio strategy.
More aggressive active asset management may help boost this average excess return to double digits at the margin.
Elizabeth Warren warns of Trump financial reforms that shake up the 5 key pillars of bank regulation.
In 2000, a former law professor at Harvard proposed establishing the Financial Product Safety Commission in order to protect consumer rights in the provision of financial products and services.
A decade later, that law professor, Elizabeth Warren, witnessed the congressional approval of the 2010 Dodd-Frank Act and the resultant new regulatory agency, the Consumer Financial Protection Bureau, which aims to restore trust in financial institutions with 5 major pillars of financial regulation: capital adequacy rules, leverage limitations, liquidity requirements, macroprudential stress tests, and deposit insurance constraints.
"It is impossible to buy a toaster that has a 1-in-5 chance of bursting into flames and burning down a house, but it is possible to refinance a current home with a mortgage that has the same 1-in-5 chance of putting the family out on the street," Warren wrote in the first paragraph in her influential Democracy article.
Maybe a toaster or a financial product or service is so defective that consumers should not be thrown back on themselves to avoid it.
Conversely, consumers with more confidence in financial products or services are more likely to purchase them.
These paternalistic considerations offer insights into the Trump administration's plan to dismantle much of the Dodd-Frank Act, especially the bank capital rules and stress tests.
The law of inadvertent consequences counsels caution.
Trump garners support from Senate and House of Representatives to pass the $1.5 trillion tax overhaul.
The Trump administration garners congressional support from both Senate and the House of Representatives to pass the $1.5 trillion tax overhaul (Tax Cuts & Jobs Act of 2017).
With Republican majority in both congressional chambers, this current fiscal reform represents President Trump's first landmark economic policy legislation.
The typical supply-side macroeconomist welcomes this fiscal overhaul and expects tax relief to trickle down to most U.S. households as well as corporations.
Each American household will expect to benefit from this fiscal legislation in the form of tax cuts from $4,000 to $9,000 per annum.
Also, most U.S. corporations face a substantial decrease in the effective corporate income tax rate from 35% to 21%.
Furthermore, large U.S. multinational corporations can enjoy tangible tax credits for offshore cash repatriation during the indefinite Trump tax holiday.
The Trump administration suggests that this tax overhaul is likely to help boost wage growth, job creation, and labor and capital productivity.
However, some market observers fear that the resultant tax cuts offer key U.S. corporations such as Cisco, Pfizer, and Coca-Cola etc to distribute cash to their shareholders in the form of near-term dividend payout and share buyback.
Andy Yeh Alpha (AYA) AYA Analytica financial health memo (FHM)
AYA Analytica is our online regular podcast and newsletter about key financial news, market insights, economic issues, and stock investment strategies on our Andy Yeh Alpha (AYA) fintech network platform. With both American focus and international reach, our primary and ultimate corporate mission aims to help enhance financial literacy, inclusion, and freedom of the open and diverse global general public. We apply our unique dynamic conditional alpha investment model as the first aid for every investor with profitable asset investment signals and portfolio strategies. In fact, our AYA freemium fintech network platform curates, orchestrates, and provides proprietary software technology and algorithmic cloud service to most members who can interact with one another on our AYA fintech network platform. Multiple blogs, posts, ebooks, analytical reports, stock alpha signals, and asset omega estimates offer proprietary solutions and substantive benefits to empower each financial market investor through technology, education, and social integration. Please feel free to sign up or login to enjoy our new and unique cloud software services on AYA fintech network platform now!!
Please feel free to follow our AYA Analytica financial health memo (FHM) podcast channel on YouTube: https://www.youtube.com/channel/UCvntmnacYyCmVyQ-c_qjyyQ
Please feel free to follow our Brass Ring Facebook to learn more about the latest financial news and stock investment ideas: https://www.facebook.com/brassring2013
Free signup for stock signals: https://ayafintech.network
Mission on profitable signals: https://ayafintech.network/mission.php
Model technical descriptions: https://ayafintech.network/model.php
Blog on stock alpha signals: https://ayafintech.network/blog.php
Freemium base pricing plans: https://ayafintech.network/freemium.php
Signup for periodic updates: https://ayafintech.network/signup.php
Login for freemium benefits: https://ayafintech.network/login.php
We create each free finbuzz (or free financial buzz) as a blog post on the latest financial news and asset investment ideas. Our finbuzz collection demonstrates our unique American focus with global reach. Each free finbuzz provides deep insights into numerous topical issues in global finance, stock market investment, portfolio optimization, and dynamic asset management. We strive to help enrich the economic lives of most investors who would otherwise engage in financial data analysis with inordinate time commitment.
Please feel free to forward our finbuzz to family and friends, peers, colleagues, classmates, and others who might be keen and abuzz to learn more about asset investment strategies and modern policy reforms with macroeconomic insights.
Do you find it difficult to beat the long-term average 11% stock market return?
It took us 20+ years to design a new profitable algorithmic asset investment model and its attendant proprietary software technology with fintech patent protection in 2+ years. AYA fintech network platform serves as everyone’s first aid for his or her personal stock investment portfolio. Our proprietary software technology allows each investor to leverage fintech intelligence and information without exorbitant time commitment. Our dynamic conditional alpha analysis boosts the typical win rate from 70% to 90%+.
Our new alpha model empowers members to be a wiser stock market investor with profitable alpha signals!! This proprietary quantitative analysis applies the collective wisdom of Warren Buffett, George Soros, Carl Icahn, Mark Cuban, Tony Robbins, and Nobel Laureates in finance such as Robert Engle, Eugene Fama, Lars Hansen, Robert Lucas, Robert Merton, Edward Prescott, Thomas Sargent, William Sharpe, Robert Shiller, and Christopher Sims.
Andy Yeh Alpha (AYA) fintech network platform serves as each investor's social toolkit for profitable investment management. AYA fintech network platform helps promote better financial literacy, inclusion, and freedom of the global general public. We empower investors through technology, education, and social integration.
Andy Yeh
AYA fintech network platform founder
Brass Ring International Density Enterprise (BRIDE)
We should not conform to this world, but we should allow the renewal of our minds to transform us, so that we can prove what is the good, acceptable, and perfect will of God.
Romans 12: 2
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