• Mike V.

March Synopsis


Three In Four Americans Remain Afraid Of Autonomous


Although there are no autonomous vehicles for sale to the public at the moment, the American people remain skeptical of these Silicon Valley cars that are currently being tested across the country. The survey revealed that only 19% of respondents said they were comfortable with self-driving cars. AAA believes there is much work to be done to improve consumers' perception of self-driving vehicles. “Automated vehicle technology is evolving on a very public stage and, as a result, it is affecting how consumers feel about it,” said Greg Brannon, AAA’s director of Automotive Engineering and Industry Relations. “Having the opportunity to interact with partially or fully automated vehicle technology will help remove some of the mystery for consumers and open the door for greater acceptance.” “Despite fears still running high, AAA’s study also shows that Americans are willing to take baby steps toward incorporating this type of technology into their lives." “Hands-on exposure in more controlled, low-risk environments coupled with stronger education will play a key role in easing fears about self-driving cars.”


Bloomberg: Consumers Sideswiped At Banks


Three years after the Federal Reserve started raising interest rates in the U.S., what the country’s biggest banks pay depositors is shockingly low. Like next-to-zero low. At Citigroup, it’s 0.04%. At JPMorgan, it’s even lower 0.01%. How is that possible? There was no pressure on these banks to push up rates and be fair to customers. The average rate on a checking account is still a measly 0.29%, up from just 0.24% a year ago, according to Informa Research Services. “It went from really, really bad rates to just really bad rates,” said Ray Montague, Informa. Wall Street banks have been the biggest beneficiaries the Fed’s rate hikes, which lets them charge more for loans while the amount they parcel out in interest on checking and savings accounts stays very low. At regional banks, rates have looked a lot like they do at the very top. On average, savings accounts at the 50 biggest banks pay just 0.05 percent. Contact VIMA to learn how to earn 2.5% guaranteed principal.


EU Parliament Signs Off On New Internet Law



In a stunning rejection of the will five million online petitioners, and over 100,000 protestors, the European Parliament approved the Copyright in the Digital Single Market Directive in its entirety. The Directive comprises of a whole host of legislation aimed at updating copyright law for the digital age. Article 13 forces social media platforms, such as Facebook, Google and YouTube, to have responsibility over unlicensed user-uploaded copyrighted material. Article 13 of the proposed European Union Directive on Copyright in the Digital Single Market, which would expand legal liability for websites. Any law mandating filters could be challenged to settle this inconsistency. Big Tech has some of the motive and the millions to do it, but after this heavy defeat, those increasingly defensive giants may well decide that it will be better to settle out of court.


Europe Can't Handle 0% Interest Rates


Europe’s leading economic policy makers have officially thrown in the towel. Europe has negative interest rates. And the European economy is weak (it grew 0.2% in Q4), it can’t handle ZERO percent interest rates. Last week the ECB announced it would keep interest rates negative. And it’s starting its third round of cheap loans to banks. The bank also cut its growth forecast from 1.7% to 1.1%. It can’t keep the machine running unless interest rates are negative and it continues to deliver cash to banks. It’s the clearest sign yet of what’s to come. Ten years into this monetary experiment, central banks did create growth. US Gross Domestic Product (GDP) was $15 trillion in 2008. Current GDP is about $22 trillion. That’s $7 trillion of economic growth. Impressive until you figure the cost of that growth. Over the same period, the US national debt increased from $10 trillion to $22 trillion. It took $12 trillion of debt to create $7 trillion of economic growth. The US economy is now dependent on cheap money.


A Win for Parents, Michigan's new cyberbullying law about to take effect


A new law takes effect in Michigan this week that takes aim at cyberbullying, including hefty fines and jail time for violators convicted of online harassment. Per the new law, it is illegal to cyberbully another person and someone found guilty of the misdemeanor could face a maximum of 93 days in jail, a max fine of $500 or both. But if a violator has a prior conviction, they could face up to a year in jail, and/or a max $1,000 fine. Someone who violates the new law and displays "a continued pattern of harassing or intimidating behavior" that causes serious injury to the victim could face a felony that carries a maximum 5-year sentence and/or a $5,000 fine.


SEC says 79 firms will return $125 million to clients


The Securities and Exchange Commission announced Monday that 79 investment firms agreed to return $125 million to clients to whom they had sold inappropriate high-fee mutual funds. The restitution is the result of an SEC initiative to crack down on firms that failed to disclose to clients that they had received kickbacks for selling funds. Over the last year, the agency has offered advisers incentives to turn themselves in. The SEC found that the advisers had failed to disclose to clients that they were receiving kickbacks, or revenue-sharing payments, for the funds they recommended when a less expensive fund was available. The 79 firms settled with the SEC. Among those at fault: Cambridge Investment, D.A. Davidson, LPL Financial, Oppenheimer & Co, Provise Management, Raymond James, RBC Capital Markets, Robert W. Baird and Wells Fargo. SEC Chairman Jay Clayton said advisers' duties of care and loyalty require them to disclose conflicts of interest, including financial incentives. "Most of the advisory clients harmed by the disclosure practices were retail investors.”


iPhone Trends


Apple continues to struggle with iPhone demand. “Without iPhone demand acceleration on the horizon, we currently do not see any catalysts near term to drive significant EPS upside,” wrote analyst Shawn Harrison. Longbow’s comments were echoed by UBS, which wrote that an analysis of government smartphone sell-through data from China suggested demand there was “still weak.” “The annual rate of decline for Apple iPhones in the month of February (down 67%) is similar to the weakness in January and December months,” the firm wrote to clients. However, this data is “neutral” for the stock, “as weak China smartphone is well understood as are iPhone struggles in China.” Much of Apple’s weakness over the past few months has been related to weakening demand prospects for the iPhone, particularly in China. In January, the company cut its revenue outlook for the first time in almost two decades due to this factor. According to data compiled by Bloomberg, almost 20 percent of Apple’s fiscal 2018 revenue was derived from China, and the iPhone accounted for 62 percent of revenue. “Multiple iPhone price cuts did not stop China iPhone search trends from weakening further while February supplier sales were abysmal, decelerating on a year over year basis vs. January,” Harrison wrote in a research note Tuesday. Of 42 Apple suppliers, he wrote, 37 of them “reported worse than seasonal sales” in February. Harrison added that there was “weaker interest year over year” for iPhones, citing search data for both Google and China’s Baidu. In February, Baidu iPhone searches were down 47 percent from the prior year, per his data.


Two Whistleblowers Awarded $50 Million Against JPMorgan


The SEC today announced awards totaling $50 million to "two whistleblowers whose high-quality information assisted the agency in bringing a successful enforcement action." The whistleblowers provided information that helped the agency win a $267 million settlement with JPMorgan failed to inform clients of conflicts of interest when selling house products for high commissions. “Blowing the whistle is rarely easy, and it certainly hasn’t been for my client, but this historic SEC whistleblower award and related enforcement action reaffirms that doing the right thing pays,” said Mr. Thomas, himself pocketing several million of the SEC award.

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