In the office...

By SIMON CONSTABLE

Photo credit: Greg Stone

Barron's: Steamy El Niño Could Puff Up Rice Prices

By SIMON CONSTABLE

Get ready for a rally in rice. 

A combination of low levels of usable inventory for the grain and the high likelihood of poor growing conditions could cause futures prices to rise. That would reverse a multiyear drop in prices. Agrium (ticker: AGU) and Mosaic (MOS) should benefit as demand builds for crop nutrients and protection. Read more here.

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Middle East Eye: Why it's hard times for the Middle East's petro-economies

By SIMON CONSTABLE

A major intergovernmental agency has just slashed prospects for oil-rich Middle Eastern economies. Worse still, private lenders are predicting credit downgrades. It likely means tougher times ahead for those businesses looking to borrow, as well as a weaker job market, experts say. Read more here.

Street Fight: Comcast Rolling Out a New Local Ad Service

By SIMON CONSTABLE

For local businesses looking for advertising, there’ll be a new kid in town to help this summer. Better still, ad buyers will get the help for free. The service, called Stratasphere, is a new offering from Comcast-owned Strata, which already has three decades in the business of connecting ad sellers with ad buyers.
Read more here.

Forbes: What You Should Love About Trump's Tax Proposal

By SIMON CONSTABLE

Wednesday we got a look at how the Trump Administration wants to overhaul the U.S. tax system.

While it is not perfect there are some things to love about the proposal.

First, remember that it is a wish list. That is to say, not everything on the proposal will come to pass, but some of it shall. Hopefully, what gets enacted are some of the better ideas. Read more here.

Forbes: It's The Corporate Tax Cut That Will Drive Growth

By SIMON CONSTABLE

President Trump is set to announce tax reform today. Anyone interested in economic growth should focus on what he says about corporate taxes.

While the likely proposal will likely involve changes to individual tax rates, it is the corporate tax rate that has the potential to spur economic growth more than what will likely happen to individual taxes. Read more here.

U.S. News: Does OPEC Matter Anymore?

By SIMON CONSTABLE

There was once a time when oil market traders could win or lose based on just a few words from OPEC oil ministers. These days, not so much.

For investors, there is an important question: Is OPEC even worth worrying about?

Just as with many things in investing, the answer is nuanced. Read more here.

Pensions & Investments: How institutions caught gold fever last year

By SIMON CONSTABLE

Large money managers and investors dove into gold bullion and other precious metals in a big way last year. They did so through exchange-traded funds. Read more here.

 

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Forbes: Why Slavery Wasn't Just A Monstrous Evil, It Was Also Bad Economics

By SIMON CONSTABLE

It should be clear to all right-thinking people that slavery was and is a moral abomination. Most would leave the matter at that, hoping that never again will the practice become entrenched in any society.

Not so, Robert E. Wright, chair of political economy at Augustana University and treasurer of Historians Against Slavery. He decided to delve further into the matter, looking at the economics of the situation.

The result is his recently published book, The Poverty of Slavery. Read more here.

Middle East Eye: Saudi sale of Aramco a major economic challenge

By SIMON CONSTABLE

For more than half a century, Saudi Arabia and crude oil have gone together like baseball and hotdogs. But that may be about to change.

One young prince wants to ditch the country’s dependency on oil exports, with the process starting in earnest next year when there are plans to sell the state-owned oil company, Aramco. It’s a high stakes move with the future prosperity of the kingdom depending on the success of the effort.

Few observers expect the process to be smooth. Worse still, the world will be watching closely to see if the kingdom is serious. Read more here.

U.S. News: Why You Should Learn Accounting Now

By SIMON CONSTABLE

There's no reason for the average investor to not know some basic accounting.

The reaction of most people will be something akin to "Ugh!" and "Oh no, not chopped liver again!" But smart people who want to get even smarter will learn accounting.

There's also a bonus, you can now do so for free. Here's the why and the how:

Learning the language. "Whenever you move to a new world [or country] you need to learn the language," says Stephen Wood, chief market strategist of Russell Investments in New York. If you want to do well in France then you'll need to learn French; if you want to do well in Germany, then at least an introduction to German would be helpful.

When it comes to investing you need to learn the language of business, which is accounting.

"If you aren't conversant with the language then you can't expect to do well," Wood says. Read more here.

Forbes: Public Companies Can Still Get A Free Ride With Stock Options

By SIMON CONSTABLE

Some companies can still get an (almost) free ride on stock options.

They might be able to expense a mere fraction of what an executive might receive from option grant.

Companies might also get hammered.

Both outcomes have their root in the quirks of an accounting standard that came into effect a little over a decade ago. In fact, now that 2016 annual reports are being published it's worth a look at the problems. Read more here.

U.S. News: 4 Reasons to Be Worried About the Economy

By SIMON CONSTABLE

It's time to worry about the economy, and that's not just because they call economics the dismal science.

The reason is because there is a lot to be concerned about. All is not well with the economy, despite the stock market surge since the election last November.

Credit problems lie ahead. If we learned nothing else in the financial crisis of 2008 it is that credit is what makes the business world go around. It's the grease that lubricates the wheels of capitalism. And that's one place where the stresses are starting to show. Read more here.

Middle East Eye: Dumping Dollar Would Damage Iran Without Hurting U.S.

By SIMON CONSTABLE

Recent threats from Tehran to dump the US dollar are likely to be ineffective in their aims and harmful to the Iranian economy, economists say.

The move came earlier this year in response to US President Donald Trump’s ban on people travelling to the US from Iran and six other predominantly Muslim countries.

At that time, an Iranian central bank official indicated that the country’s financial reports would abandon using the dollar as the unit of accounting. Instead the bank would adopt a different currency, or a basket of currencies, which would have a “high degree of stability,” according to the official. Read more here.

WSJ: Why Commodity-Index Investing May Be Futile

By SIMON CONSTABLE

Investments that track broad stock indexes have become the favorite of many investors and analysts for long-term returns that are hard to beat. But index tracking hasn’t done so well in the commodities market.

Stock investments that track indexes such as the S&P 500 have reliably rewarded long-term investors. For example, since January 1970, investors who held the S&P 500 for at least 12 years would always have had positive returns including dividends, says Sam Stovall, chief investment strategist at CFRA Research. Read more here.

Felled Trees

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WSJ: What Are Late-cycle Stocks?

By SIMON CONSTABLE

The term “late-cycle stocks” is being frequently used once again by investment professionals. The term refers to the types of stocks that tend to outperform later in the business cycle, when the use of resources and labor gets closer to full capacity and demand for materials such as copper, steel and energy tends to outpace supply.

Read more here.

U.S. News: What Triggering Article 50 Means for Investors

By SIMON CONSTABLE

Months after voters in the U.K. decided by referendum that their country should withdraw from the European Union, Prime Minister Theresa May has triggered Article 50 to formally depart from the economic and political partnership in 2019.

And while the die is irrevocably cast – Article 50 cannot be withdrawn without unanimous consent of the other 27 EU members – the implications for investors and global financial markets may not be as bad as once feared. And there's money to be had for those who can make the right moves. Read more here.

Forbes: How Jean-Claude Juncker's Ohio Rant Is Making A Joke of The E.U.

By SIMON CONSTABLE

Last week's outburst by the  European Union's boss is comical at best. Worst than that, it's only his latest diplomatic snafu. He's making the whole organization look desperate.

I write of course of Jean-Claude Juncker who threatened that he would help Ohio campaign for independence from the U.S. if Donald Trump didn't stop encouraging European countries to follow Britain out of the E.U.

But there's where Juncker sounds like a hick who just showed up on the world stage rather than the master of realpolitik that one would hope for from a world leader. Read more here.

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