Markets News 

Corporate bonds may be paying too little spread to offset fourth-quarter selloff risks

“Risks of a U.S. corporate bond selloff often run high into the final months of the year when liquidity can get pinched and credit spreads widen” writes Sunny Oh for marketwatch.com. The week also saw several additional warnings about corporate leverage, with the International Monetary Fund pointing to a potential $19 trillion corporate debt mess if the next recession is half the magnitude of the 2007-2008 crisis.Check out: Credit-rating firms raise more alarms about the weakest corporate borrowers Bank of America Merrill Lynch analysts estimate the net amount of bonds…

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Trump tax cuts rightly taxed labor more than capital

“Thanks to corporate and estate tax rate cuts enacted by the Tax Cuts and Jobs Act, the effective tax rate on labor has surpassed that on capital for the very first time” reports washingtonexaminer.com. For starters, the corporate tax rate reduction brought us to a globally competitive level, not substantially below it.Of the four factors of production — land, labor, capital, and entrepreneurship — only the latter two grow economies.The Tax Cuts and Jobs Act cut our corporate rate from 35% to 21%, almost the exact same rate as the…

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Data-labelling startups want to help improve corporate AI

“Because human data-labelling is labour-intensive, most of it happens in low-wage countries like India, Vietnam and the Philippines” writes The Economist for economist.com. Data-labelling is the sort of grunt work that corporate -users would prefer someone else to do for them.The market for data-labelling services may triple to $5bn by 2023, reckons Astasia Myers of Redpoint Ventures, a venture-capital firm.Hive has turned data-labelling into something “like playing Candy Crush”, explains its boss, Kevin Guo, referring to a hit tile-matching game.One reason for the slow uptake is the dearth of quality…

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Michigan developer pays $500K over misuse of corporate jets

“KALAMAZOO, MI — A West Michigan real estate developer paid $500,000 in a settlement with the Federal Aviation Administration for violating federal regulations in hundreds of flights with its corporate jets” writes Lmoore Mlive Com for mlive.com. The company settled the case in U.S. District Court — Western District of Michigan on Aug. 15, according to federal court records.The company was accused in the original complaint of charging twice the cost of fuel, oil and lubricant for 812 flights. Source: mlive.com

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Markets News 

Global economy faces $19tn timebomb, warns IMF

“Our conclusion is sobering: debt owed by firms unable to cover interest expenses with earnings, which we call corporate debt at risk, could rise to $19tn” writes Larry Elliott for theguardian.com. Low interest rates are encouraging companies to take on a level of debt that risks becoming a $19tn (£15tn) timebomb in the event of another global recession, the International Monetary Fund has said.That is almost 40% of total corporate debt in the economies we studied.” Regulations for banks have been tightened up since the financial crisis of 2008 but…

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News Stocks 

Dow rises closer to record on good start to corporate earnings season

“However, S&P 500 index company earnings are expected to fall 4.6% in the third quarter, according to FactSet” writes Deputy Markets Editor for marketwatch.com. JPM, +3.80%  rose after reporting revenue and earnings that rose more than expected on the back of its consumer banking division, while Wells Fargo & Co.This would be the first time that index company earnings have fallen for three straight quarters since the fourth of quarter of 2015 through the second quarter 2016, FactSet analyst John Butters said.Dow constituent Johnson & Johnson JNJ, +1.79% reported earnings…

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The Democratic candidate’s stance on getting big money out of politics is getting more aggressive.

“Beyond her own personal pledges, Warren also wants to sharply limit corporate PACs” writes Senior Political Reporter for huffpost.com. Politicians in both parties have used plum diplomatic gigs as a way to reward major campaign donors.Warren would make corporate PAC donations to candidates illegal.Many Democrats in recent years have pledged to not take money from corporate PACs, which are created by companies to bundle donations from executives and funnel them to politicians. Source: huffpost.com

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We need a corporate wealth tax, Rutgers professors say

“Admittedly, as with any proposed solution, there are some shortcomings associated with the imposition of a corporate wealth tax” writes Star-ledger Guest for nj.com. The advantages associated with the imposition of a corporate wealth tax are enormous.Notwithstanding what the corporation reflected on its tax return, Congress could impose a 5% wealth tax on this growth and collect $25 million in tax revenue.The combination of these factors has greatly eroded the corporate tax base.At the same time, corporate economic growth has been stratospheric. Source: nj.com

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A Guide to the Big Ideas and Debates in Corporate Governance

“Such a variety of sources of demand for corporate performance information means that no one definition of performance or a simple measurement system will suffice” reports hbr.org. The past few decades have seen a dramatic rise in CEO pay relative to corporate performance and to the pay of the average employee.Corporate performance measurement remains an exciting area of innovation and debate, both in terms of the appropriate measures and the appropriate horizon of measurement.We hope this distillation will be helpful to corporate directors and other readers who may be grappling…

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Corporate fears grow over U.S. and China trade war

“The stakes are raised this week for resumed U.S. and Chinese trade talks as mounting concern from the American business community paralyzes domestic investment” writes Martha C for nbcnews.com. The Conference Board’s senior director of economic indicators, Lynn Franco, cited “tariffs and trade issues” as a top fear factor for corporate leaders.American companies and investors initially were sanguine about the trade war, even as tit-for-tat tariffs cut into economic growth both in the U.S. and in China, because most viewed the administration’s protectionist stance as a negotiating ploy.In a separate…

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