Business & Finance
Bloomberg Markets Magazine

Bloomberg Markets Magazine April/May 2018

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United States
Bloomberg Finance LP
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6 Issues

In this issue

2 min.

California, famous for Silicon Valley technology and Hollywood entertainment, also fostered an empire of financial innovation. John Gittelsohn, a Bloomberg News investing reporter based in Los Angeles, chronicles the fixed-income industry’s Southern California origins in “Surfin’ the Yield Curve” (p. 70). It’s a saga that stretches from Michael Milken’s and Bill Gross’s early years to today’s $3 trillion realm of bond kings. “It’s surprising how many colorful characters gravitated to what’s been considered the boring bond business,” Gittelsohn says. “Time will tell how the next generation keeps it going.” Janet Lorin covers college endowments at Bloomberg News in New York. In “When Should a College Divest? Michigan State Is Working Out an Answer” (p. 24), she writes about how some U.S. universities are grappling with divestment campaigns. With the value of…

6 min.
what opportunities come with synchronized growth?

MANY THINGS ARE GOING WELL for the global economy right now—all at the same time. The past decade featured the global financial crisis, severe weakness in the euro area, a commodity meltdown, and concerns about China. Now, although a chill has settled over Russia’s relations with the West, there don’t seem to be too many worries on the horizon for markets. The U.S. appears headed for growth this year in the mid-2 percent area, if not 3 percent, as corporate earnings stay robust. Europe’s profits are finding their footing, and the European Central Bank is pulling back on ultraloose economic policy. China isn’t growing as much as it was some years ago, but fears of a severe downturn for the country haven’t taken hold. Even Japan, once the poster child for…

7 min.
private equity wants you to feel good about investing

AT LESS THAN 3 inches long from head to tail, the dunes sagebrush lizard is in the running for meekest creature on earth. The tiny reptile lives on land in West Texas where Vista Proppants & Logistics Ltd. was looking to build a sand mine. Vista is owned by a private equity firm, First Reserve Corp., based in Greenwich, Conn., and a casual observer of last year’s stare-down between the masters of the universe and the lowly lizard might have figured the next step would be bulldozers. The sand was of the highest quality, and the lizard, even though it’s been found in only 11 counties in Texas and New Mexico, was prolific enough to stay off any endangered or threatened lists. What Vista did next may be surprising. The…

1 min.
blooming nuts!

AFTER A FOUR-YEAR drought that cut production of California almonds and brought criticism of farmers’ water usage, one of the state’s biggest exports is back. Almond production in the season that ended last year topped the predrought record set in 2012. The almond trees are indeed blooming here at Warner Hills Orchard, near the Modesto Reservoir in Waterford, Calif. Amid all this budding new life, employees of Paul Arnold Apiaries of Michigan are checking the health of beehives—an important supplier of pollinators. The nearby wind pump powers a drip irrigation system for the almonds. The crisis made farmers more mindful of potential spikes in water prices that could kill profits, leading to more efficient timing of irrigation and improved management of groundwater, says Daniel Sumner, an agricultural economist at the University of…

7 min.
when should a college divest? michigan state is working out an answer

POLITICAL ACTIVISTS SET their sights on Michigan State University last fall. Their objective: Push the school and a handful of other institutional investors to divest from a Renaissance Technologies fund. The reason: The firm’s then co-chief executive officer, Robert Mercer, provided funding to “several white supremacist organizations like Breitbart,” according to an online petition. The pressure was more intense than usual but still … manageable. MSU Chief Investment Officer Philip Zecher says he received a few dozen emails urging the $2.7 billion endowment to pull its $50 million investment from the quantitative fund. Students, alumni, and others posted on social media and started a petition at Change.org. On Nov. 2, Mercer announced he would step down from his leadership role at Renaissance, saying in a letter to staff that he considered discrimination on…

2 min.
how to compare climate risk across the biggest oil companies

ENERGY COMPANIES COULD WASTE a massive $1.6 trillion by ignoring climate risk, according to a study by London-based nonprofit Carbon Tracker Initiative. To find out which oil and gas producers are most exposed to these risks, use a new app on the Bloomberg terminal that compares companies across the relevant metrics. The 2D Scenario Analysis Tool looks at 68 companies in the S&P Global Oil Index through a climate change lens. It starts with a hypothetical: Let’s say the world manages to act to limit the rise in average global temperature to 2 degrees Celsius (hence the 2D). To do that, demand for fossil fuels will need to fall. It then asks: How would that affect the oil companies? The analysis divides each company’s assets into two categories: those that may…