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Bloomberg Markets Magazine

Bloomberg Markets Magazine December/January 2020

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United States
Bloomberg Finance LP
Back issues only

in this issue

1 min.
the risk issue

For Bloomberg Markets’ readers, taking risks is a daily occupation. As we embark on a new decade, we’ve devoted this issue to a few perils—and opportunities—that we find worthy of special consideration. In “The Year in Risk” (page 52), we illustrate some of the risks that made an impact in 2019, whether populist upheavals and negative interest rates or imploding unicorns and the surge in leveraged debt. Guo Shuqing has one of the toughest jobs in global finance: trying to tame the hazards in China’s vast banking (and shadow banking) system without stifling growth. In “Walking a $40 Trillion Tightrope” (page 56), Bloomberg News reporters tell the story of his perilous path. After a series of leaders failed to revive Deutsche Bank’s fortunes, Chief Executive Officer Christian Sewing embarked on aggressive cost cutting…

1 min.
markets almanac

Dec 12 U.K. election Snap vote will be the nation’s third general election in four and a half years 29 Type {NKY <GO>} for a menu of data on the Nikkei 225; {COUN JP <GO>} for a country guide to Japan; {WEI <GO>} for major world equity indexes. 30th anniversary of Nikkei 225 peak Tokyo The Japanese benchmark remains about 40% below the 38,915.87 record set in 1989 Jan 3–5 American Economic Association annual meeting San Diego Economists network in the Southern California sun 21–24 Try {TV <GO>} or {LIVE <GO>} for video and radio, or get the latest headlines at {NI DAVOS <GO>}. {BE <GO>} is the home of Bloomberg Economics. World Economic Forum annual meeting Davos, Switzerland VIPs connect in the icy Alps 25–30 Lunar New Year holiday China, Hong Kong, Singapore, South Korea The year of the rat begins 31 Brexit? U.K.-European Union Latest deadline for the controversial divorce Feb 1–2 Australian Open singles finals Melbourne Park 2019…

6 min.
what is the biggest riskin 2020—and how are you preparing?

NO ONE MAKES IT TO the top of a major financial company without a keen understanding of risk. So we asked leaders of investment banks, asset managers, insurers, and private equity firms for their assessments of the perils that await in 2020. As they see it, there’s plenty to worry about—but there are also ways to be ready. “I don’t think the biggest risks are related to the economy. There is a lot of uncertainty around the political landscape, which can cause businesses to hesitate on investment decisions. I wouldn’t say we’re going to talk ourselves into a recession, but uncertainty around the political landscape isn’t helping the economy or markets. “As we look out over the next several years, monetary policy will continue to be a big focus, and I believe…

4 min.
the vision of the founder is often a company’s most crucial nontransferable asset

MOST OF THE CRITICISM of a wealth tax, an idea that is quickly becoming mainstream within the Democratic Party, revolves around its feasibility. The more compelling argument, however, is against it on principle: It would allow the federal government to undermine a central animating idea of American capitalism. Set aside the questions of whether a wealth tax would be constitutional or how much revenue it would raise. Instead, focus on whether it could be made to work—and what it would mean if the answer is yes. The U.S. probably could design a wealth tax that works. As economists Emmanuel Saez and Gabriel Zucman point out, European attempts at a wealth tax suffered because the tax started at too low a level and because too little was done to prevent tax competition. Until 2018,…

4 min.
progressive taxes may encourage a sense that the world is more fair and promote social trust and cohesion

WHEN A STUDY released in October showed the wealthiest Americans paying a lower tax rate than any other group, Democratic presidential candidates embraced it as proof that they were on the right track. While their tax-the-rich proposals vow to create a better economic balance, the candidates often pivot to what they would pay for with the proceeds: “Medicare for All,” student loan relief, infrastructure repair, and other expensive programs. Those equations have raised serious doubts, and for good reason. Turning tax revenue into a massive health-care system—or measurable economic growth—is incredibly complicated. But raising taxes on the wealthy could deliver something meaningful that millions of Americans would feel rather quickly: happiness. Recent research found that progressive taxes may make the average citizen happier and more content. In the course of their study,…

2 min.
the fire this time

FOR DECADES, California has built ever deeper into its hills, canyons, and valleys to provide cheaper housing for residents priced out of the cities. That growth increasingly poses existential risk. Rising temperatures and more frequent droughts are creating ideal conditions for wildfires, just as more people move into harm’s way. Jamie Castiel, shown here in his backyard, is one of them. The 66-year-old accountant moved three decades ago to Porter Ranch, a development at the north end of the San Fernando Valley, and loved the views over Aliso Canyon. In October the Saddle Ridge Fire threatened his home in the middle of the night, lighting up a palm tree and raining embers on his roof. Rather than evacuate, he grabbed a hose to hold back destruction. His house is standing…