The two biggest ways the Trump family could benefit from his tax plan

This article talks about the two ways that Trump and his family could benefit from his tax plan. The first way is decreasing the business tax rate on pass-through entities from 39.6% to 15 %. A pass-through entity is a special business structure that is used to reduce the impact of double taxation. Pass-through entities don't pay income taxes at the corporate level. Instead, corporate income is allocated among the owners, and income taxes are only levied at the individual owners' level. The pass-through entities happen to include almost every entity in the Trump family's financial portfolio. There is no doubt that Trump's tax plan would save him and his family a huge chunk of money. Then the article went to talk about how it is reasonable to assume that the tax that Trump pays at the top rate on his business income would fall by a lot. For every $1 million in taxable income, he would pay $150,000 under his new tax plan instead of $396,000. However, depending on what tax breaks the administration would support, any savings that Trump might have under his own plans could be undercut.
The second tax break that would benefit the Trump's family a lot is a repeal of the federal estate tax. Right now, only the portion of an estate over $5.49 million is subject to the estate tax, at a top rate of 40%. Trump's net worth is likely way more than $5.49 million, the repeal of the estate means the Trump's family gets to enjoy a lot of tax-free money unless Trump decides to give all his wealth to charity.

Link to article: http://money.cnn.com/2017/04/28/news/economy/trump-tax-plan-trump-benefit/index.html

In Trumps's White House, CEOs Are Shaping Economic Policy

So far, Trump has surrounded himself with business leaders such as Stephen Schwarzman, chairman and CEO of private-equity firm Blackstone Group or Gary Cohn and Steven Mnuchin, two former Goldman Sachs executives. In addition, Trump has regularly met with CEOs to help shape his view on economic policy during his first hundred days. Trump has especially focused on specific industries such as steel and aluminum while rethinking existing legislation such as Dodd-Frank. While some business leaders fell like they are getting heard by the new president, others do not. For example,Bill Brown, the president of the National Association of Realtors opposes President Trump's directive to reverse a cut on some mortgage premiums that would make it more expensive to buy a home. The American Petroleum Institute believe that the building of new pipeline will ultimately make gas and oil ultimately more expensive. Overall, business leaders are satisfied with Trump and his promises of deregulation, they believe it will just be a matter of time before his promises take effect. 

Source: http://money.cnn.com/2017/04/29/news/economy/trump-100-days-chief-executives/index.html?iid=hp-toplead-dom

A first look at Elon Musk's next grand idea

http://money.cnn.com/2017/04/28/technology/elon-musk-boring-company/index.html?iid=hp-stack-dom

Tesla and SpaceX CEO Elon Musk unveiled a new idea named The Boring Company, which he called his latest "venture."A mockup drawing unveiled a network of underground tunnels that vehicles can access through elevators built near roadsides. Futuristic silver platforms will carry cars to their destinations and the idea was created last December after Musk got stuck in one of Las Angeles's infamous traffic jams. Shortly after, Musk took to Twitter to blog about how he wants to fix the problem. This is something that Musk is notorious for doing, but many did not believe that the idea would actually come to life.

Musk claims that he has already made significant progress and drilling for the tunnels will start within a couple of months. The tunnel digging machine with the new Boring Company logo was unveiled yesterday receiving many skeptics. Many ideas proposed by Musk have received criticism for their complexity but he often delivers on his promises.

It will be interesting to see how this project plays out and whether or not he can actually make a difference. With an increasing number of cars on the road, this idea can potentially solve a problem that affects millions of drivers. It will also be interesting to see who gets behind the project especially politicians and other members of government. Infrastructure in the U.S. is due for an upgrade and this might just be the spark of ingenuity and creativity we need.

Paying for public transport in Los Angeles

Paying for public transport in Los Angeles


This article from The Economist discusses the expansion of the rail system in L.A.  This city has some of the worst traffic in the world and this would be a very cost effective solution.  Other cities like Atlanta and Seattle are looking to follow the trend and expand their railways.  This appears to be long over due and this would be a nice trend to take hold in other parts of the country.  However, some economists argue that a bus system is a lot more cost effective and efficient strategy for handling the traffic density problems,  because many cities are not really dense in specific areas, but rather more spread out, especially like L.A.  I will be curious to see how this pans our in L.A. and what the future of public transportation looks like the in the United States.  To read full article visit the link below.



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Trump's 1st economic report card: Slowest growth in 3 years

I thought that this article was a interesting read. There are many people out there that are saying that trump is doing so great for the United States economy and we are growing faster then any other president in the past years, well as this article talks about that isn't true. The U.S economy only grew at an annual pace of 0.7% in the first three months of the year, according to the Commerce Department's report on gross domestic product, the broadest measure of economic activity. It was the slowest quarter of growth since the first quarter of 2014. Weak consumer spending was the main culprit for the anemic growth, which has become routine for the US economy since the Great Recession ended in 2009. Since then, the US has averaged about 2% annual growth. It will be interesting to see if and how trump will turn his performance around to make sure that the next quarters growth is better and closer to the 3% he is aiming for.  

link: http://money.cnn.com/2017/04/28/news/economy/us-gdp-q1-2017/

Why America has a trust problem

http://www.economist.com/blogs/democracyinamerica/2017/04/verify-then-trust

This article discusses the low levels of trust Americans have for government and politicians in general. Ignoring the spike in public approval following the 9/11 terrorist attacks, we've been experiencing a drop in approval since the 1970s. There's been a lot of focus on globalization as a result of this drop. However, this article tries to debunk this theory. In fact, this article points almost exclusively to the fact that people are paying attention to politicians now and they aren't satisfied with what they're seeing. We need not look further than the blatant truth that politicians just aren't acting in our best interest a lot of the time.

Reports of Populism's Death are Premature

         

                   Following the first round of voting in France's presidential, Emmanuel Marcon looks to be on his way to a victory in a runoff against far-right candidate Marine Le Pen. While this is reassuring news for many investors not to mention voters, the appeal of populism certainly remains. One interesting point this article raises is that even if a candidate like Marine Le Pen were to lose, populists would find themselves in the advantageous position of being an opposition force. In other words, they could claim that "every subsequent economic setback, every terrorist incident" was due to the lack of populist policies. Additionally, although Marcon is considered to be a Centrist candidate recent history has shown mainstream politicians being willing to adopt stances that are, at times, more in line with the Conservative parties they compete against (e.g. the Labour party in Britain putting forth a Brexit policy of accepting freedom of movement so as to attain access to the single market and customs union.).

              Similar to the United States in this previous presidential election, the French vote was also importantly divided between the more cosmopolitan voters in larger cities and individuals living in more rural towns and the countryside. As globalization continues and immigration remains a key issue, it seems likely that France will face more populist candidacies with its future path very much undetermined at the current moment. Which route is France most likely to take in the coming years? 

http://www.economist.com/blogs/buttonwood/2017/04/politics-and-markets

Millennials need to move out and get a life!

This article talked about one of the most terrifying economic indicators in America, which is that the Census Bureau stating that an increasing number of 18-34-year-old individuals are living in in their parent’s house along with their spouse(s).

It should also be noted that these millennial have a large accumulated student loan debt. The article states the US student loan debt to be $1.4 trillion today. This large accumulation of student debt can affect the economy in many ways. More specifically, student loan debt decreases spending because student loan borrowers choose to spend less as they can not afford to spend on items they would otherwise generally feel ready to purchase. Even during the holiday season when spending and consumption reaches its optimal level, those individuals who have accumulated student debt are less likely to spend even during this season.

Accumulation of student also negatively affects entrepreneurship. This in turn effects the growth of an economy. Many individuals who are victims to a high student loan debt, are unable to start their own business which in turn prevents innovation and affects economic growth negatively. Those individuals who want to start a business with a high student loan debt are unlikely to get approval to start it.

The article also mentions how “swallowing massive debt obligations still isn’t enough of a deterrent to the market. “The result is we have millions of young Americans straddled with such massive student loan debt that paying the rent or the mortgage is impossible for too many of them.” The article also mentions how even the housing market and rent has become higher.

Link: http://www.cnbc.com/2017/04/20/scariest-economic-indicator-more-millennials-living-home-commentary.html

Japanese Fast Food Chains Feel a Squeeze

Japan has always had a thriving fast food market and it has continued to grow. The Economist states, "since 2008 the market has grown from $35 billion to $45 billion". However, this market is starting to feel a squeeze in which, foreign competition and higher wages are making it harder to have these vibrant restaurants around.

In 2019 there is an expected value added tax that could hurt these restaurant chains. This tax will not apply to konbinis which are convenience stores that account for one third of the fast food market alone.

To combat this change, restaurants are focusing on the service side of restaurants. Changes in the production of food and doing made to order food in unlikely areas like train stations and outlets is giving restaurants a fighting chance to bounce back and increase the consumption of their products.

With local restaurants changing the way they produce food and changing the service of restaurants, foreign competition is making changes as well. McDonalds-Japan is adding new burgers that are more appealing to Japanese consumers and foreign firms have seen an increase in profits. However, foreign competition is still lagging behind local/domestic restaurants since local restaurants are transparent in where their food comes from and farm to plate style restaurants are keeping freshness a priority.












"Japanese Fast-food Chains Feel a Squeeze." The Economist. The Economist Newspaper, 22 Apr. 2017. Web. 24 Apr. 2017.

Retail stores are closing at an epic rate

http://money.cnn.com/2017/04/22/news/credit-suisse-retail/index.html

Ever since the creation of Amazon and similar websites, brick-and-mortar retail stores have been closing at an all time high. According to Credit Suisse, it is possible that 8600 brick-and-mortar close can close this year, more than any year before. If this prediction does come true, America will lose more than 147 million square feet of retail space.

The internet has been the worst enemy to retail stores like Sears, Macy's, and J.C. Penny, with a trend towards online shopping making it quicker and easier to compare prices side by side and have more of a personalized shopping experience. In the future I wouldn't expect this trend to stop.

France's historic presidential election results, explained

Far-right candidate Marine Le Pen and center-left candidate Emmanuel Macron have won the first round and will move on to the final round of voting on May 7. According to French polling firm IPSOS, exit polls show Macron with 23.7 percent followed by Le Pen with 21.7 percent of the vote. Far-left candidate Jean-Luc Mélenchon and conservative candidate Francois Fillon tied for third place with about 19.5 percent each.

The results also reveal a divided over the future of France and its place in Europe as a key member of the union, as the two victors in this round have polar opposite visions of the future. Quite simply: one vision is closed, one is open. One is nativist, one is worldly.

Le Pen heads the far-right National Front party, which in the past were known for characteristics such as xenophobia, anti-Semitism, and what’s called “soft-core” Holocaust denialism. Le Pen has tried hard to reform the party’s image, instead presenting a modern populist vision of France that is avowedly anti-globalization, anti-EU, and anti-immigrant.

Macron, a political neophyte who will be gunning to hold office for the first time, represents En Marche!, a brand-new center-left party. His vision for the future is of a more open, more tolerant, and more inclusive France at the center of a strong European Union.

In her victory speech Sunday evening, Le Pen called herself the “candidate of the people.” “You have allowed me to take part in the second round of the presidential campaign and it is an honor for me. And I accept it with humility and appreciation,” Le Pen said.

Macron, in his victory speech, said “I will gather people together...to reconcile our France.”

He promised to be a “president of all the French people, the president of patriots faced with the threat of nationalists. A president who will protect and transform and build. A president who will allow those who want to create, innovate, enterprise and work to do so more easily and more speedily. a president who helps those who have less.”

Now that were are in the final round we might get a more detailed dossier from both candidates on issues such as France’s future in the EU, immigration, etc.  

Asia Trades as if North Korea Wasn't a Problem

“Asia Trades as if North Korea Wasn’t a Problem’: How Top Bankers Think About the Hermit Kingdom” by Elena Holodny outlines the tumultuous nature of North Korea and possible impacts to the global economy.  North Korea isn’t a country that investors generally look at, but given its recent actions on the geopolitical stage, an assessment of the North Korean economy is extremely interesting.  One major question, is how do markets assess risks of countries like North Korea without overreacting in the short term or refusing to invest completely?  Any turbulence in North Korea would inevitably spill over into emerging and developed markets like China and South Korea.  Especially now that North Korea has nuclear weapons, investors are trying to model and predict the likelihood and potential impacts of a shock event, like a military conflict.  This type of event has not occurred for a long time, and would have catastrophic consequences for the global economy.  The article argues that there is no real way to predict what exactly would happen should North Korea be involved in a military conflict.  The nation is not directly connected to global markets, but reverberations would be felt in many other markets. It is also to take into account the overall macro situation, but also the institutions of markets.  The article mentions governance, an independent judiciary, freedom of press, and problems of corruption as institutions to take into account specifically when analyzing North Korea.  For many investors, the fact that the country and the economy are controlled by a single person results in a risk premium so high they simply won’t risk getting involved.  Unfortunately, this can translate a complete lack of acknowledgment of North Korea as a threat to the global economy. Regardless, the future of North Korea is tenuous; bankers and politicians alike should prepare for the worst and hope for the best.

Holodny, Elena. "'Asia Trades as If North Korea Wasn't a Problem': How Top Bankers Think about the Hermit Kingdom." Business Insider. Business Insider, 15 Apr. 2017. Web. 23 Apr. 2017. <http://www.businessinsider.com/how-top-bankers-asses-risk-of-north-korea-hermit-kingdom-2017-4>.