Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘WSJ’

AI Comes to the Tax Code

Posted by hkarner - 28. Februar 2020

Date: 27‑02‑2020

Source: The Wall Street Journal

Governments turn to machine learning to boost revenue as taxpayers seek to reduce their bills

IRS Commissioner Charles Rettig spoke at an agency event in Washington, D.C., in July.

IRVINE, Calif.—Tax cheats, beware: The machines are watching.

Governments are increasingly relying on machine learning and data analytics to analyze troves of data as they seek to detect tax evasion, respond to taxpayers’ questions and make themselves more efficient.

In Brazil, the customs agency’s system for detecting anomalies now prompts more than 30% of inspections. Canada next month will launch Charlie the Chatbot, an automated system that will respond to inquiries about tax filing.

The Internal Revenue Service is designing machine‑built graphs to plot the relationships among participants in business deals, giving auditors a new tool to analyze transactions and detect tax avoidance. The agency is using artificial intelligence to study notes that agency employees take when fielding questions from taxpayers and testing which combinations of formal notices and contacts are most likely to get a taxpayer who owes money to send a check. Den Rest des Beitrags lesen »

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Jeff Bezos Pledges $10 Billion to Tackle Climate Change

Posted by hkarner - 19. Februar 2020

Date: 18‑02‑2020

Source: The Wall Street Journal

Amazon CEO says fund will aid scientists, others to fight ‘biggest threat to our planet’

Jeff Bezos’s $10 billion Bezos Earth Fund aims to provide financial backing to scientists, activists, non‑government organizations and others trying to counter effects of climate change on the natural world.

Amazon.com Inc. Chief Executive Jeff Bezos says he is committing $10 billion to start a new fund to fight climate change, the biggest philanthropic move to date for the world’s richest man.

Mr. Bezos, who announced the new fund on his Instagram account on Monday, said the Bezos Earth Fund would help back scientists, activists, non‑government organizations and any other effort that “offers a real possibility to help preserve and protect the natural world.”

Mr. Bezos, who provided few details about the fund, said he would start issuing grants this summer.

“Climate change is the biggest threat to our planet,” Mr. Bezos wrote. “I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share.”

Mr. Bezos didn’t specify whether he plans to set up a philanthropic foundation or seek to provide grant funding through another entity. A spokesman for Amazon confirmed that the pledge is genuine but declined to provide any additional details on Mr. Bezos’s plans. Den Rest des Beitrags lesen »

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How High Should Government Debt Go? Economists Can’t Agree

Posted by hkarner - 18. Februar 2020

Date: 17‑02‑2020

Source: The Wall Street Journal

Economists warned a decade ago that pushing public debt above about 90% of GDP could hurt the economy. Now some aren’t so sure.

U.K. Prime Minister Boris Johnson, visiting a construction site for the High Speed 2 project in Birmingham Feb. 11, has promised to spend billions on infrastructure.

FRANKFURT—Governments around the world are loading up on debt, taking advantage of record‑low borrowing costs to extend a long economic expansion and invest for future challenges.

Economists warned a decade ago that pushing public debt above about 90% of gross domestic product could hurt growth and increase the risk of crises.

Now they aren’t so sure.

In a world of ultralow interest rates, some say higher public debt levels are feasible, even desirable. If sovereign‑bond yields remain below economic growth rates, governments should be able to issue debt without having to pay for it later, argue economists including Olivier Blanchard, former chief economist of the International Monetary Fund. Den Rest des Beitrags lesen »

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Trump: “screw Amazon” out of the JEDI contract – backfires

Posted by hkarner - 16. Februar 2020

Date: 15‑02‑2020

Source: The Wall Street Journal

Subject: Federal Judge Halts Pentagon Cloud Contract

Decision is a win for Amazon and a blow for Microsoft

WASHINGTON—In a win for Amazon.com Inc., a federal judge ordered the Pentagon on Thursday to halt work on the massive JEDI cloud‑computing contract awarded to rival Microsoft Corp.

Judge Patricia Campbell‑Smith of the U.S. Court of Federal Claims issued a preliminary injunction to block the Pentagon from proceeding in response to a lawsuit from Amazon contending improper influence from President Trump.

Mr. Trump, a Republican, has blamed Amazon founder Jeff Bezos for unfavorable coverage of his administration in the Washington Post, which Mr. Bezos bought in 2013. The Post says its editorial decisions are independent. Den Rest des Beitrags lesen »

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Trump’s Worst Enemy

Posted by hkarner - 15. Februar 2020

Date: 14‑02‑2020

Source: The Wall Street Journal By The Editorial Board

He needs to stop tweeting about cases and let Barr do his job.

After his Senate impeachment acquittal, we wrote that President Trump’s history is that he can’t stand prosperity. Well, that was fast. The President’s relentless popping off this week about the sentencing of supporter Roger Stone has hurt himself, his Justice Department, and the proper understanding of executive power. That’s a notable trifecta of self‑destructive behavior even by his standards.

Mr. Trump handed another sword to his opponents when he fulminated on Twitter about the initial recommendation of a seven‑to‑nine year prison sentence for Mr. Stone. He is right that such a sentence would be excessive. Mr. Stone was convicted of lying to Congress, which often receives minimal jail time. His conviction for witness tampering was more serious but involved a faux‑macho threat (“prepare to die”) that even the witness said he didn’t take literally.

*** Den Rest des Beitrags lesen »

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The ‘Stakeholders’ vs. the People

Posted by hkarner - 14. Februar 2020

Date: 13‑02‑2020

Source: The Wall Street Journal By Vivek Ramaswamy

Liberals claim they’re troubled by corporate power. So why are they working to expand it?

‘Stakeholder capitalism” is officially here. That’s the fashionable notion that companies should serve not only their shareholders, but also other interests and society at large. Last month Airbnb’s leaders announced a new mandate that the company “benefit all our stakeholders over the long term,” including through tying executive compensation to the company’s social goals. The same week, BlackRock chief Larry Fink issued an open letter to CEOs explaining that companies his massive firm invests with will soon have to abide by the rules of a Sustainability Accounting Standards Board regarding climate change, labor practices and other issues. CEOs at the World Economic Forum in Davos touted similar ideas, as have presidential candidates.

Stakeholder capitalism runs contrary to the demands of U.S. corporate law, which holds that directors and executives have a duty to one master: shareholders. Milton Friedman worried that a shift from shareholder primacy would cause companies to operate less efficiently and be less profitable, leaving investors, workers and consumers worse off. Den Rest des Beitrags lesen »

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Trump Wants to Double Spending on AI, Quantum Computing

Posted by hkarner - 13. Februar 2020

Date: 12‑02‑2020

Source: The Wall Street Journal

White House budget calls for annual spending of $2 billion on AI and $860 million on quantum within two years

U.S. Chief Technology Officer Michael Kratsios says the country faces a ‘global power competition’ for AI, quantum computing and other critical technologies.

The White House on Monday proposed roughly doubling nondefense research‑and‑development spending on artificial intelligence and quantum information sciences, citing fierce global competition, while cutting overall funding for R&D.

The proposal is part of President Trump’s $4.8 trillion federal budget for the fiscal year ending in September 2021. A White House budget isn’t binding; it signals an administration’s areas of focus for congressional budget negotiations in the year ahead.

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Amazon Seeks to Question Trump Over Pentagon Contract

Posted by hkarner - 12. Februar 2020

Date: 11‑02‑2020

Source: The Wall Street Journal

E‑commerce and technology giant says president steered huge cloud‑computing contract away from Amazon

The Defense Department said there were no external influences in awarding the pact, which is valued at as much as $10 billion over the next decade.

WASHINGTON— Amazon.com Inc. asked a judge to allow it to depose President Trump in the company’s legal battle to overturn a Pentagon decision awarding a huge cloud‑computing contract to rival Microsoft Corp.

The Amazon motion, made public Monday, says that Mr. Trump’s bias against Amazon founder and CEO Jeff Bezos “is a matter of public record. Even before taking office, President Trump campaigned on a promise that Amazon would ‘have problems’ if he became President.”

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China’s Businesses Struggle to Resume Work

Posted by hkarner - 12. Februar 2020

Date: 11‑02‑2020

Source: The Wall Street Journal

Operations are slow to restart, with many workers unable to reach factories or offices and supply chains disrupted

Machines were disinfected Sunday before workers were to return to work Monday at a factory in Lianyungang, in China’s eastern Jiangsu province.

Business was slow to restart in China, even after some local governments stopped calling for people to stay away from the workplace during a coronavirus outbreak that has killed more than 1,000 people in the country and dented economic growth.

Workers remained stranded on Monday, unable to reach their factories. Office towers stayed dark as companies asked employees to work from home. In the few open stores in deserted malls, bored clerks played smartphone games. Den Rest des Beitrags lesen »

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Which Way to Buy Gold: The Metal or the Companies?

Posted by hkarner - 11. Februar 2020

Date: 10‑02‑2020

Source: The Wall Street Journal

Bullion has many advantages for long‑term investors, experts say. But for those who want to bet on the current rally, gold‑mining stocks may be preferable

Gold is a store of value. But one downside of bullion is that it pays no dividend.

After years stuck in the doldrums, gold is back in fashion. A common question from individual investors is, should they put their money into the precious metal itself or gold‑mining stocks?

“It boils down to what you are trying to achieve” says Rohit Savant, vice president of research at New York commodities consulting firm CPM Group.

For those seeking a strategic, long‑term investment, Mr. Savant and other experts advise buying bullion—that is, bars or coins of the metal or funds that focus on such. For those seeking to make a tactical bet on the gold rally, shares of gold miners might be preferable in that they offer the potential for bigger gains over a shorter period. Either way, investors should brace for a wild ride.

 For much of the past decade, gold and gold‑company shares weren’t great investments. The price of the precious metal briefly peaked above $1,900 a troy ounce in September 2011. By late 2015, it had fallen to $1,060 an ounce, a low for the decade.

“If you look at the price of gold over that time, it was in purgatory,” says Art Hogan, chief market strategist at National Securities.

Gold stocks fared even worse. For much of the same period, VanEck Vectors Gold Miners (GDX) exchange‑traded fund, which tracks a basket of gold‑mining stocks, traded at less than half the value it was in late August 2011, according to data from Yahoo Finance.

Then suddenly, gold caught the interest of investors, as the U.S.‑China trade war dimmed the outlook for stocks and the some feared the White House wanted a weaker U.S. dollar. Bullion prices have rallied around 30% from September 2018, and the metal was recently trading at around $1,600 an ounce. Gold‑mining stocks have jumped almost 60% over a similar period. Wolfe Research now sees gold prices breaching the record highs of 2011, perhaps this year.

Pros, cons of bullion

For long‑term investors, investing in gold bullion has many advantages. It is a diversifier of risk when held as part of a broader portfolio. That’s because gold has virtually no correlation to movements in stocks most of the time, according to a research paper published in the Journal of Managerial Finance in 2015.

“The maximum correlation was less than 0.3, and that’s not a lot of correlation compared with other securities and their relationship to the S&P 500,” says Allen Michel, professor of finance at Boston University Questrom School of Business, one of the authors of the paper.

Another reason investors might want to hold a portion of their wealth in gold is as a store of value over the long term, Mr. Savant says. In other words, over long periods, gold prices move up as costs of living rise. That was certainly true during the double‑digit inflation of the 1970s, when bullion prices jumped more than 20‑fold to a then‑record $850 in 1980 from $35 in 1971. “The 1970s was a great decade for gold and terrible for stocks,” Mr. Hogan says.

Some experts also say bullion could help investors if there is a financial crisis and deflation. When a financial crisis hits, central banks may have no choice but to lower the cost of borrowing far below zero, says Don Coxe, chairman of Chicago‑based Coxe Advisors. That will make gold bullion even more attractive relative to negative‑yielding bonds because of its long history of maintaining its purchasing power.

The downside of bullion is that it never pays a dividend, and there are generally charges for insurance and storage in vaults, which can bite into profits. ETFs have helped reduced that burden, making small investments viable. “The storage costs have been mitigated by ETFs, which somewhat distribute the cost among the investor pool,” Mr. Savant says.

There are plenty of bullion ETFs from which to choose, including SPDR Gold Shares (GLD), the largest, with more than $45 billion in assets. Others include GraniteShares Gold Trust (BAR) and VanEck Merk Gold Trust (OUNZ).

Pros, cons of gold stocks

As the past decade shows, gold‑mining stocks are far more volatile than gold prices. From 2011 to 2018, gold‑mining stocks fell around twice as much as gold stocks on a percentage basis. On the way back up over the past year or so, gold miners outperformed bullion handsomely.

“Investing in the miners is a bet you will have a sustained rally in the gold price,” says Mr. Hogan. If bullion continues to rally, then gold‑mining stocks should continue to do even better. But if the rally in bullion stalls even temporarily or reverses, then miners might not be such a good risk compared with bullion.

Nevertheless, gold stocks and ETFs that focus on them—such as VanEck Vectors Gold Miners, as well as iShares MSCI Global Gold Miners (RING) and Sprott Gold Miners (SGDM)—do seem to offer diversification in the same way as bullion.

“There’s good reason to believe that gold‑mining stocks follow a similar pattern to gold” in that way, says Prof. Michel.

That said, “there are a lot of additional risks you take on when you buy the miners,” Mr. Savant says.

Notably, when gold‑industry assets are cheap, financing might not be easily available. All mining companies must continually replenish their resources by finding new mineral deposits. And worst of all, mining CEOs can get overly optimistic when the industry booms.

 “You always have that history of gold miners spending too much money at the wrong time,” says Mr. Hogan.

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