Financial Floyd Blogspot

Good Morning, Summer is here, but should we follow the old phrase of "sell in May and go away?" If you have been following my post, that is not something I preach, but it looks like we might finally receive some relief from the recent political developments. Yesterday MarketWatch posted an article from the Associated Press providing a recent update on the US/China trade war. In case you might not know, there is a summit going on with numerous countries participating (called the G20 Summit), and one of the most anticipated meetings was between the United States and China. The article from MarketWatch highlighted a couple of outcomes from the meeting: 1. US companies will be allowed to sell to Huawei 2. No new tariffs at this time 3. The administration sees Saudia Arabia as a key ally in the Middle East From my viewpoint, the first two points have the ability to impact the markets while the third point reaffirms our usual stance in the Middle East. To be fair, US compa...

Good Morning This week Facebook announced a plan to launch a digital coin next year. This comes on the heels of Bitcoin rising out of the ashes after it had a disastrous crash last year. There has been a lot of chatter about the new venture and earlier this week CNBC published an article about their new digital coin called Libra. A couple of takeaways from the article were: 1. Facebook has teamed up with 28 different firms for this venture and created a subsidiary called Calibra to be a digital wallet for the currency 2. Libra is intended to help those who are unbanked (they have no banking account) have a place to store capital 3. Privacy concerns are a headwind for Facebook after data breaches, questionable usage of data, and them selling individuals data This move is very interesting because Facebook is nearly double the population of China and this announcement adds to the legitimacy of cryptocurrencies (thank you Planet Money -Facebucks episode). What I like about this ...

Over the past two weeks, our news has been inundated with trade wars, whether it is related to China or Mexico. As a layman, it is tough to understand why this matters but the impact of these trade wars have a negative impact on your wallet and investment outlook. Various articles have been written about the trade wars and its impact on individuals and the economy, but I'll reference information primarily from two articles written in Bloomberg and Financial Advisor Magazine . These two articles were really great at putting things in perspective in relation to the trade war and economy, but the points worth mentioning are: 1. The initial rounds of tariffs on Chinese goods had minimal impact on consumers, but new tariffs initiated have negatively impacted consumers and businesses by increasing input cost, hence negating the tax cut most received. Most prices either will or have started gradually increasing for everyday products. 2. While the Mexican tariff th...

Good Morning, Last weekend the Venture Capitalist/Billionaire Robert Smith set the world on fire by paying off the debt of the 2019 graduating class of Morehouse. During an online conversation with Rendel Solomon, we vaguely discussed the economic impact of this move, but outside of the financial impact he also changes the thought process for how people will view this action. Usually, I highlight a couple of main points from an article, but this entry will be slightly different. I will touch upon the financial and behavioral impact that this move has on the masses. 1. The economic impact is easy to assess which is where I will start. Based on the approximate average monthly loan payment of $300 a month (based on a study produced by Studentloanhero.com on 2/4/2019), Mr. Smith puts that money back into the graduate’s pocket, but it gets more complex. If these students contribute these savings to their company 401-k or a basic IRA/Roth IRA account, they receive the following benefi...

**Note I talk about two different articles and a podcast within this blog post** Good Afternoon, Everyone has known that inequality exists, but over the past couple of years, new studies have been done highlighting the impact it has on societies. A couple of weeks ago the Milikin Institute in conjunction with JP Morgan released the results of a business case they are presenting for closing the wealth gap between ethnicities. From the article, a couple of stark points stood out: 1. 20% of African American Households are unbanked 2. In 2016 the Federal Reserve released a report showing that the average African American family had a net worth of 17k, while the average white household had a net worth of $171k 3. If People of Color owned business at the same rate as white entrepreneurs it would result in 9 Million more jobs and $300 Billion (yes, Billion) in worker income The net worth gap is significant, but it is partially a derivative of homeownership being a bulk of the average Am...

Good Morning, Last Friday CNBC(link below) reported that Consumer Financial Protection Bureau filed a lawsuit against two companies(Lexington Law and Creditrepair.com). The government agency claims that these companies are using fraudulent activities to gain clients. From the article two points that stood out were: 1. The government agency wants to end the upfront fee and deceptive marketing techniques (bait and switch) 2. Some credit repair companies charge hefty fees of $79.95 to $129.96 per a month I have noticed that there are more sites and advertisement for credit repair, and with low rates it is advantageous to have the best credit rate possible. Unfortunately, I’m not familiar with who or what are the best programs, so I would consider gathering a couple of different options then decide which option is best for your situation. The cost does matter because the prices mentioned in the article equate to $1,000+ a year which could be used for paying down debt. Doing some ...

This week GDP numbers for the first quarter came out and the numbers came out higher than expected ( Annualized rate of 3.2 versus an expectation of 2.5%). MarketWatch published an article on Friday and a couple of good takeaways worth mentioning are: 1. GDP Growth was driven by inventory building and trade 2. State and Local Government spending jumped 3.9% 3. Fed rate cut might be in question This growth rate hasn't been seen since 2015, but despite the rosy headline, the devil was in the details. Because of the pending trade sanctions, companies pulled forward future purchases in 2018 to ensure that they had enough product coming into 2019, hence muting our typical trade deficit.  The Government shutdown also played a significant part because of the compensatory payments that needed to be made to Government employees.  The economy has been doing well this year (S&P500 up over 10% YTD), and with other countries turning the corner (China in particular) in t...