Financial Floyd Blogspot

Good Morning, Last week had tons of news with the impeachment trial, various economic news coming out, and the new Tesla truck following the heels of the unveiling of the electric Mustang SUV. Late in the week, Wall Street Journal published an article detailing that Bridgewater (one of the biggest hedge funds in the world) placed a trade which would signal that the US economy is going to crash in the first quarter of 2020. MarketWatch picked up the story because of Ray Dalio (founder of Bridgewater) tweeting that the story misconstrued their strategy. While this article was short on details, it brings up a great point. This year, Nobel award-winning economist Robert Shiller recently pointed out the danger of Narrative Economics. This occurs when a story creates the action instead of the opposite way around. The danger is that these stories create unneeded panic, which could've happened with this Wall Street Journal piece. The misunderstood part of the story is that Bridgewater...

Good Morning, Earlier this week, Google announced that it was entering the world of banking. While they aren't the first domestic tech firm to dive into the finance business they are bringing to light of a current trend that has been going on in front of our eyes. BBC posted an article earlier this week highlighting this recent move by Google and pointed out a couple of interesting points: Google and Apple are both offering credit cards, but now Google is targeting bank accounts Google teamed up with JP Morgan for this recent move Google pay doesn't seem to have been as successful as Apple pay might be The article breezed over three things that should stand out. First, despite our tech companies being considered leaders, they are copying some of the tactics that some of the Asian tech companies have done entering the area of finance. The second topic glazed over is how valuable our data truly is. Think about how a company that has access to your payment, income, a...

Good Morning, It seems that the markets have shrugged off some immediate risk as stocks have done well so far this quarter. But, according to a recent publication by the Chief Economist of Deutsche Bank 2020 will see some longer-term concerns still linger. Yesterday CNBC published an article highlighting 20 risks and I'll highlight a couple of risks worth paying attention to: The continuing growth of inequality Slow growth across seas Negative yielding debt While I only highlighted three, I would push you to read the article as more risks are intertwined that I did not mention here. From my view, the writer is more concerned about slowdowns impacting corporate profits and balance sheets which would force them to be more conservative with their decisions. I chose to focus on the three above because these themes are the most interesting as their impacts will weigh on societies and decisions for years. The continuing growth of inequality stems from individuals havin...

Good Afternoon, This past week has been all about the Federal Reserve. This week they announced a 25 bps (.25%) decrease to interest rates. Along with this decision, critical data about job growth and unemployment came out. FA Magazine republished an article in Bloomberg that highlighted one of the Federal Reserve Vice Chairman who provided additional insight on the US economy during a speech in Japan. Key points from the article were: The slowdown in global growth and trade policy “appears to be headwinds for manufacturing activity and investment spending in the United States and abroad.” Brexit (the UK leaving the European Union) continues to poise headwinds based on the uncertainty it creates The Federal Reserve is paying close attention to consumers The Federal Reserve President (currently Jerome Powell) has stated that the group is paying attention to all of the data points coming out. What most people might not be aware of is that our Federal Reserve is cognizant...