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Bloomberg Businessweek

Bloomberg Businessweek 10/30/2017

Each issue of Businessweek features in-depth perspectives on the financial markets, industries, trends, technology and people guiding the economy. Get the digital magazine subscription today and draw upon Businessweek's timely incisive analysis to help you make better decisions about your career, your business, and your personal investments.

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United States
Bloomberg Finance LP
50 Issues

in this issue

4 min
mexico’s irresistible $12.43-an-hour pay gap

It wasn’t supposed to be like this, but the companies that specialize in helping U.S. businesses set up production in Mexico say they’re having a solid year. Tecma Group says this is the busiest it’s been in three decades. The relocation specialist, which has offices on both sides of the U.S.-Mexico border, helped a maker of cleaning equipment and a packaging company move south in the past few weeks. Chicago-based México Consulting Associates has three new prospects interested in the country. Keith Patridge, president and chief executive officer of McAllen Economic Development Corp., expects at least 12 companies to set up shop in Reynosa this year alone. And Tacna Services Inc. has assisted two businesses that recently relocated to Baja California. While President Donald Trump’s vow to scrap or revamp the North…

4 min
unconstrained (and underwhelming) funds

Leon LaBreque, a financial adviser from Troy, Mich., was wowed back in 2011 when he heard the pitch for the Goldman Sachs Strategic Income Fund. It was a new kind of fixed-income portfolio whose managers had the freedom to buy just about anything. Along with bonds, they might bet on emerging-markets currencies or lend U.S. dollars to Japanese investors—and they could draw on the global expertise of Goldman Sachs. “The story was so compelling, and the people were so smart,” LaBreque says. “I thought, how could it not work?” He wasn’t the only person looking for this kind of fund, and Goldman Sachs wouldn’t be the only company to offer one. By the early 2010s, bonds had been in a decades-long bull market, and the Federal Reserve’s benchmark interest rate was…

5 min
the future price of investing: zilch

Could fees for investing ever fall all the way to zero? For investors in exchange-traded funds, that prospect is just three-hundredths of a percentage point away. On Oct. 16, State Street Global Advisors slashed the cost of several funds, dropping the annual management fee of the SPDR Portfolio Total Stock Market and SPDR Portfolio Large Cap ETFs to 0.03 percent of assets per year. The funds join similar ETFs from BlackRock Inc. and Charles Schwab Corp. at that price. But it may not be the last move: ETF makers have been cutting costs wherever they can, most recently by creating their own market benchmarks to track so that they don’t have to pay licensing fees to index companies such as MSCI Inc. and S&P Global Inc. “My guess is that we’ll…

4 min
ge turns the lights out on the immelt era

For much of the past century, General Electric Co.— whose history stretches back to Thomas Edison’s lightbulb—had been a symbol of the by-the-numbers management credo that ruled American business before the digital age. But GE’s eyesore of an earnings report on Oct. 20 leaves little doubt that the 125-year-old company, with a market value of $186 billion, is facing a financial and cultural senior moment. This icon of American industry has been forced to cut its earnings and cash flow outlook so drastically that investors are now preparing for a once-unthinkable cut to its dividend. A rapid-fire series of high-level departures over the past few months, beginning with longtime Chief Executive Officer Jeff Immelt, represents a jarring transition for the company. There’s even speculation that GE, the only member of the…

5 min
another pipeline of russian influence

Four days after his inauguration, Donald Trump signed a handful of executive memos to advance the Keystone XL pipeline and revive the U.S. steel industry. He invited builder TransCanada Corp. to reapply for a permit denied by Barack Obama and ordered up fast-track rules forcing not only Keystone but also all new U.S. pipelines to be made from American steel. “From now on, we’re going to be making pipeline in the United States,” he said. Made-in-America Keystone was a stunt. Most of its pipes had already been manufactured, a fact the White House grudgingly admitted when it exempted the project from any new Buy American rules a few months later. While some of Keystone’s pipes were made in the U.S., at least a quarter of them came from a Russian steel…

4 min
using online counseling to fight jihad

Hannah, a British woman of Indian descent, joined a militant Muslim group when she was 18. Raised Hindu, she began studying Islam during her first year at a London university. On the suggestion of a fellow student named Rashad Ali, Hannah attended a campus meeting of Hizb ut-Tahrir, a group that espouses nonviolence in establishing a unified Islamic state but has been linked to murder and praises jihad. She fell hard for the rhetoric: She converted to Islam, quit a student job at International Business Machines Corp. to become a housekeeper for a woman who belonged to Hizb ut-Tahrir, and stopped wearing Western clothes. “Basically, I was going through a brainwashing,” says Hannah, now in her 30s, who spoke on condition of anonymity. Over the next decade, she rose through the…