News – Page 2 – Bianco Foster Group, LLC

April 18, 2017

Uncertainty Ahead of French Election

Polls show a small gap between the front runners with National Front leader Marie Le Pen tied with François Fillon. A populist win would be a threat bigger than Brexit to the Euro and the EU. Frexit is a possibility along with dropping the Euro and moving to a “nouveau franc” to make exports competitive. National debt would convert to the new currency which would likely be a default. There is high anxiety about the election since polls were wrong about the US Presidential election and Brexit.

The Euro has been on a one month slide against the Japanese Yen. This indicates that Japan is a safer economy than Europe. The Euro recently recovered against the Yen, but is facing resistance. This may change if Marie Le Pen begins to slip in the polls.

There has also been as safe flight to the US Dollar over the past month.

Along with increased demand in the 10-year Treasury Note.

US companies doing business in France have FX exposure the Euro and potentially high impact exposure to introduction of a devalued currency. US companies may wish to insure accounts receivable against further erosion through forward contracts, futures, or options.

April 17, 2017

Delta Increases Compensation for Overbooked Flights

A Delta Airlines (NYSE: DAL) spokesperson informed CNN Money that supervisors will now offer up to $9,950, up from $,1350, for passengers who are bumped from overbooked flights. Gate agents may now offer up to $2,000, up from $800. The changes will benefit business and leisure travelers. More flyers will consider Delta as an option among the big carriers. This will contribute to seat shortages where travelers can cash in. If you’re a small business traveler and can score a quick $2000 on a return flight, do it! That is free money for future business travel or for vacation.

United has not announced any changes to compensation for travelers on overbooked flights. American Airlines (NYSE: AAL) spokesperson, Ross Feinstein, said American will work “to ensure we set compensation amounts properly … to obtain the correct number of volunteers.”

Delta’s quick response to the PR nightmare that United (NYSE: UAL) is suffering shows that management is in a clear position to manage upside risk. Some Wall Street analysts have upgraded Delta to “Strong Buy” because of Delta’s aggressive action.

April 11, 2017

Won Continues Slide as Warships Deploy to Korean Peninsula

The US Dollar and Japanese Yen continue their week long bullish run against the Korean Won. On April 3, US President Donald Trump stated that the US would act unilaterally if necessary. The statements and deployment of US warships to the region are worrying markets.

China and South Korea agreed to place sanctions on North Korea of it tests a nuclear or long range missile. US Secretary of state Rex Tillerson said a response is likely if other countries pose a danger. A Japanese defense ministry source said it is probably not realistic for the US attack. Per Japanese reports no coordination with US forces for military action has taken place.

We see the situation as headline worthy, but not disruptive to trade and business in the region. Barring any unusual activities by the Federal Reserve we also expect the Won to gain strength after the showdown is over.

April 10, 2017April 11, 2017

Samsung Galaxy S8 Face Unlock Defeated by Photo

MARCIANOTECH uploaded a video showing a Samsung Galaxy S8 unlock using a photo of himself. Google introduced the Face Unlock feature in Android 4.0 and is aware that photos can unlock the screen. The feature is a convenience, not a security enhancement.

In a statement to Ars Technica Samsung Electronics Ltd. ( KS:005930) spokesperson provided the following:

The Galaxy S8 provides various levels of biometric authentication, with the highest level of authentication from the iris scanner and fingerprint reader. In addition, the Galaxy S8 provides users with multiple options to unlock their phones through both biometric security options, and convenient options such as swipe and facial recognition. It is important to reiterate that facial recognition, while convenient, can only be used for opening your Galaxy S8 and currently cannot be used to authenticate access to Samsung Pay or Secure Folder.

This is a reminder that businesses should consider the convenience vs. security tradeoff. A fingerprint is more secure, but may introduce other security issues. Government agents can compel you or your employees to unlock a phone using a fingerprint or an iris scan. A PIN is the best choice if confidentiality of your company data is the highest priority.

March 16, 2017

FRB Philadelphia survey beats expectations

The Federal Reserve Bank of Philadelphia announces results from the March Manufacturing Business Outlook Survey. The survey suggests manufacturing activity continued to expand. Delivery times and unfilled order indexes were positive. This suggests longer delivery times and an increase in unfilled orders.

Diffusion index 32.8 for March down from 43.3 in February
44% of firms reported increases in manufacturing activity
11% of firms reported decreases in manufacturing activity
25% of firms reported increase in employment
8% of firms reported decrease in employment
60% of firms reported a labor shortage
68% of firms reported skills mismatch between available workers and requirements
47% of firms report positions open for more than 90 days

FRB Philadelphia suggests growth for the manufacturing sector on the region. Broad indicators read positive with most up from February.

March 15, 2017March 15, 2017

Natural Gas Prices Drop After Winter Storm Stella Misses NYC

Natural Gas (CME: NG) futures closed the day at $2.948. Winter storm Stella did not dump more snow on NYC as expected. Instead it shifted inland causing demand to drop.

Heating Oil/Diesel (CME: HO) futures closed the day higher due to increased demand.

Heating Oil Futures — Heating Oil/Diesel Futures Intraday 2017-03-14

Preparing for storms and natural disasters is important to the success of your business. The ISO 22301 framework is a good starting point for your Business Continuity Program. Section 6 of ISO 22301 states that organizations need to address risks and opportunities to prevent, or reduce, undesired effects.

Having an inclement weather plan and topping off your backup generators with fuel is just one component of preparedness. Prices for emergency fuel always spike before a weather event or immediately following a natural disaster. By refueling or negotiating guaranteed pricing while demand is low your business can save a lot of money. Immediately after a disaster market prices are very high. It may not be possible to receive delivery of fuel due to the event. Planning and executing is one way weather the storm.

If you are new to Business Continuity Planning and would like to learn more about developing your program or how to become certified in ISO 22301 please contact us for a free over the phone or Skype consultation.

March 13, 2017March 13, 2017

Economic Risk Assessment With FRB Mobility Data

The St. Louis Fed published a new study on Economic Mobility in the US. The study leads to a simple statistic: “the probability that a child born to parents in the bottom fifth of the income distribution makes the leap all the way to the top fifth of the income distribution”

Children born to parents in the bottom fifth of the income distribution chance of reaching the top fifth:

7.5% USA
9.0% UK
11.7% Denmark
13.5% Canada

There is a high degree of variation between regions in the US. The most optimistic and pessimistic numbers are:

16.8% Top decile USA
4.8% Bottom decile USA

People growing up in San Jose, California are three times as likely to move up the income ladder compared to Charlotte, Atlanta, Indianapolis.

Upward mobility national — Source: St. Louis Fed

The high degree of variation is not only regional. It is visible at the county level.

Average upward mobility rate:

11% DC Metro Average
3.5% Baltimore
4.7% DC
9.2% Prince Georges County
14.2% Charles County

Upward mobility DC Metro — Source: St. Louis Fed

Factors affecting mobility during childhood in the more mobile areas include:

moving to low poverty census tracts improves long-term success
moving to a mobile area increases earnings in adulthood by 30%
higher likelihood of attending college
lower instances of teen pregnancy

General factors contributing to upward mobility:

mixed income communities produce a better outcome for kids from disadvantaged backgrounds
areas with less income inequality have higher rates of upward mobility
areas with fewer single parents have substantially higher rates of upward mobility
areas that are more socially cohesive have higher rates of social mobility

Risk assessments are important for international and local ventures. Finding a high-performing economy and a suitable workforce lowers the risk of failure. This information from the St. Louis Fed is an essential source for performing a risk assessment for US domestic businesses and for foreign businesses seeking to enter the US market.

March 13, 2017

Societe Generale updates black swan report

Societe Generale has release their latest black swan risk report. The risks are still the same as the post election report last November.

The key downside risks in order of probability are:

Political uncertainty drag (30%)
Sharp increase in bond yields (25%)
China hard landing (20%)
Isolationism and trade wars (15%)

The key upside risks in order of probability are:

More capex (10%)
Significant fiscal accommodation & fast track reform (5%)

March 13, 2017March 13, 2017

These Apps Are Safe From The CIA

No definitive proof CIA has bypassed encryption
CIA can bypass security of apps by hacking phone
Signal & WhatsApp not found in leaks

A new release from Wikileaks has journalists sifting through the details to bring you the story. The initial reports were not correct that the CIA broke encryption in popular apps. Researchers have had time to look through the information and initial reports were based on assumptions. The good news is there is no mention of Signal or WhatsApp in any of the reported documents. For now, this shows the encryption strength in these apps. The real risk is the installation of key loggers or screen capturing software on a phone. Bypassing encryption would not be necessary to gain access to information if any government agency installed these tools. Business owners should be wary of any links received by email if they do not know the person sending them. Airport and border searches are also areas where someone may try to install monitoring software on your company’s equipment. If you are careful to avoid malware, then the risk of someone intercepting your Signal or WhatsApp conversations are relatively low for now.

March 1, 2017

Oklahoma has same earthquake risk as California

The United States Geological Survey (USGS) forecast for 2017 says Oklahoma will face earthquake damage risk equal to California. The report is close to last year’s forecast which indicates a trend that is changing the region. The 2017 hazard model is the same as the 2016 report but includes an updated earthquake catalog. The 2016 forecast indicated a high hazard (greater than 1%) for Oklahoma-Kansas, the Raton basin (Colorado/New Mexico border) north Texas, north Arkansas, and the New Madrid seismic zone.

Experts believe hydraulic fracturing or fracking is responsible. Fracking involves injecting water and other chemicals at high pressure into the Earth to extract hydrocarbon resources.

The changes in the area are a reminder to risk managers that tornado is not the only major hazard. A Business Impact Analysis (BIA) is the first step in developing a complete Business Continuity Plan (BCP) that will prepare your small business for natural and manmade disasters. Our services team can provide BCP training and implementation to your company. Contact us today for a consultation.