Friday, May 27, 2016
China loses No 2 creditor rank to Germany; Millennials aren't buying homes; Sports stars as tech-preneurs
1 China loses No 2 creditor rank to Germany (Straits Times) Germany edged out China as the world's second-largest supplier of external credit for the first time in at least a decade last year as the Asian giant's authorities went to great lengths to support a weakening yuan.
China's net foreign assets fell to $1.6 trillion at the end of last year, while Germany's rose to $1.62 trillion, according to calculations by Bloomberg. Japan, the top creditor since 1991, remained the biggest with $2.82 trillion.
The shift underscores the global implications of last year's turbulence in China, where almost $1 trillion of capital is estimated to have fled with the central bank burning through $513 billion of its foreign reserves to prop up its currency. Yet it's likely a bump in the road rather than a reversal in fortunes, with China set to eclipse Japan to become the world's largest net creditor in coming years, according to the Washington-based Brookings Institution.
While China has sold reserves since the hoard peaked at $4 trillion in 2014, it is still accumulating net foreign assets evident in the large current account surplus, according to a report this month from Mr David Dollar, a senior fellow at Brookings.
2 Millennials aren’t buying homes (Suzanne McGee in The Guardian) Somebody is buying houses in the US – but it sure isn’t millennials. Just ask their parents. They’ll be the ones worrying in the kitchen about whether their little darlings will ever leave.
Purchases of single-family homes posted a whopping 16.6% jump during April over March’s levels, the largest such one-month gain recorded in more than eight years, and the median price point hit a record $321,100.
Prices and sales should be rising. Mortgage rates remain close to record lows, the private sector created 160,000 new jobs in April – and the national unemployment rate is now only 5%. Even taking into account all the debate over the ways in which that unemployment figure understates the actual rate (and fails to capture underemployment by swaths of the population), that’s not to be sneezed at.
Still, there’s one demographic group that, notably, isn’t touring open houses or scouring online listings in search of their new homes. No prizes for guessing which one. Far from buying new homes, millennials increasingly aren’t even renting. The proportion of this demographic – aged around 18 to 35 – who end up living with their parents has been on the rise steadily since the Great Recession, peaking at about 36%, according to the Pew Research Center.
Now, for the first time in 130 years, living with your parents has become the most common living arrangement for young men and women aged 18 to 34, Pew reported this week. No wonder voters are turning, in their millions, to “protest candidates” such as Donald Trump and Bernie Sanders, who promise (in very, very different ways) to upend the economic system as it exists today.
Apartment List, an online rental marketplace, ran some numbers and calculated that it would take an average of a decade for millennials to come up with the required 20% down payment to buy a home in the dozen or so most in-demand urban locales.
It’s also a challenge to corporate interests. For every business that figures out a way to cater to this new way of living – millennials won’t own cars, so Uber and Zipcar will thrive; millennials won’t buy homes, so co-living projects such as those developed by WeWork might be the model of the future, not suburban developments of semi-detached houses – scores won’t.
3 Sports stars as tech-preneurs (Jaia Thomas in San Francisco Chronicle) The average National Basketball Association salary during the 2015-2016 season was a cool $4,021,836. But not all athletes are out buying big cars and bigger houses, as the stereotype goes. Instead, they're becoming busy entrepreneurs.
Indeed, as the current NBA season comes to a close, many players are using a portion of their salaries to launch and invest in tech companies for the coming off season. Professional athletes across all sports, from the NBA to the National Football League, in fact, are investing time, energy and effort into the tech space.
Golden State Warriors superstar Steph Curry is a high-profile example. Curry was perhaps best known this season for his three pointers on the court. However, many may not know that he is also the co-owner of two tech startups off the court -- Slyce and CoachUp.
Social media maven and New York Knicks center Kevin Seraphin is another athlete heavily involved in the tech space. A few years ago, he launched Thorolgraffix, a photo-editing app that allows users to add filters, masking and various effects to their social media postings. Seraphin is currently beta-testing a new social networking app called Looks.
Various associations, such as the National Football League Players Association (NFLPA), are doing their part to expose more players to the tech space. Earlier this year, the NFLPA facilitated a "Tech Tour," arranging site visits and meetings for NFL players in Silicon Valley. Players met with tech companies that focus on such areas as social media, gaming, mobile apps and wearable technology.
Rob Wilson, CEO of Wilson Insight, says he believes that more and more athletes are jumping into tech because today’s generation of professional athletes have grown up with tech as a significant part of their lives. They came up in the explosion of mobile devices and social media, so they are a much more tech-savvy generation.