Obviously, with T-bills in the sub 1% range, it’s not mathematically impossible to earn double digit yields on cash balances in US dollars.
As I was reading a Financial Times article tonight about the Chinese economy, the following chart made me stop and wonder if maybe the Chinese Yuan wasn’t as fixed to the dollar as I thought:
The Chinese Yuan is generally fixed vs. the dollar. It was fixed against the dollar for the first half of the decade. And it has been fixed for the last year. But between mid ‘05 and mid ‘08, the dollar slid by 21% against Yuan. At least that’s what Google says:
Chinese interest rates are considerably higher too, averaging 6.3% over this time period for overnight rates, according to the site that published the below data.
Which made me wonder how much one would have earned buying Yuan with US Dollars in mid 05, and selling in mid 08, investing the balance at the above Chinese rates. My simple calculations below work to 13.3%. Pretty good for holding cash in a strong balance sheet country. One big caveat: I don’t know how hard it is to actually convert the gains back to dollars.
An editable version of the above spreadhseet is available here.
Tonight I came across the above map posted at a site called Weathersealed.com, and I was relieved to find out that within the continental US, I’ll never be more than 107 miles from a McDonalds, a point that he calls, “Mc Farthest Spot”.
Though the author doesn’t explain a lot about how the above map was created, he offered:
So, I set out to determine the farthest point from a Micky Dee’s – in the lower 48 states, at least. This endeavor required information, and the nice folks at AggData were kind enough to provide it to me: a complete list of all 13,000-or-so U.S. restaurants, in CSV format, geolocated for maximum convenience. From there, a bit of software engineering gymnastics, and…
Behold, a visualization of the contiguous United States, colored by distance to the nearest domestic McDonald’s!
Even more beautiful is that AggData the company mentioned above makes a business of selling the locations of all the fast food restaurants in America, for just a few bucks.
This may be the first time that I’ve seen a “powerpoint” deck put out by a major consulting firm in an interactive format.
Although the presentation is only interactive in terms of navigation, not calculations or data presentation, the mark of a McKinsey presentation is clearly evident: very dense slides with lots of detailed charts and far more text than the 6-8 bullet guidelines I’ve been told to use on many occasions. I guess I would categorize this as more of an interactive presentation than a visual model.
The crowd sourced questions don’t necessarily result in better questions, but it did make for an interesting interview. The interviewer is The Wall Street Journal’s Deputy Managing Editor, Alan Murray, who asked the most popular questions selected from the Digg Community.
Question: #2) # Goldman Sachs is a large, profit seeking company which you were/are a part of. Isn’t it a conflict of interest to funnel tax dollars into this private company using your new power as Secretary of the Treasury, keeping in mind that you and your old buddies benefit monetarily? Maybe I’m mistaken, but isn’t this a textbook example of political corruption? (+729 diggs, submitted by larryjr88)
What he said: I didn’t work for Goldman
What he should have said: That was my predecessor.
#7) Why is the government only supporting aging and increasingly obsolete car makers? You’ve given an extraordinary amount of money to GM, but the government has failed to encourage new, innovative, and cleaner forms of personal transportation such as produced by Tesla Motors. Why has TARP money not been invested in companies such as Tesla, and will the government support similar companies in the future? (+439 diggs, submitted by danielrh9)
What he said: We’re giving lots of money to green causes
What he should have said: We just gave Tesla $400+ million.
Actually, the story of the day is that Microsoft has been restricted from selling Microsoft Word in the US, by I4i. I had to read it to believe it.
According to CNET, I4I, which has about 30 employees, filed the relevant patent in 1994, and it was granted in 1998.
Apparently, the Judge upheld a $200 million award, and barred Microsoft from selling Word in its current form, though that ruling would not go into effect in 60 days.
Microsoft is likely to appeal, but in the mean time, I would love to see how the $200 million figure was arrived at.
Case 6:07-cv-00113-LED Document 413 Filed 08/11/2009
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
i4i LIMITED PARTNERSHIP and
INFRASTRUCTURES FOR
INFORMATION, INC.,
Plaintiffs
vs.
MICROSOFT CORPORATION,
Defendant
CASE NO. 6:07CV113
§ PATENT CASE
PERMANENT INJUNCTION
In accordance with the Court’s contemporaneously issued memorandum opinion and order
in this case, Microsoft Corporation is hereby permanently enjoined from performing the following actions with Microsoft Word 2003, Microsoft Word 2007, and Microsoft Word products not more than colorably different from Microsoft Word 2003 or Microsoft Word 2007 (collectively “Infringing and Future Word Products”) during the term of U.S. Patent No. 5,787,449:
1. selling, offering to sell, and/or importing in or into the United States any Infringing and Future Word Products that have the capability of opening a .XML, .DOCX, or .DOCM file (“an XML file”) containing custom XML;
2. using any Infringing and Future Word Products to open an XML file containing custom XML;
3. instructing or encouraging anyone to use any Infringing and Future Word Products to open an XML file containing custom XML;
4. providing support or assistance to anyone that describes how to use any infringing and Future Word Products to open an XML file containing custom XML; and
5. testing, demonstrating, or marketing the ability of the Infringing and Future Word Products to open an XML file containing custom XML.
This injunction does not apply to any of the above actions wherein the Infringing and Future
Word Products open an XML file as plain text.
This injunction also does not apply to any of the above actions wherein any of the Infringing
and Future Word Products, upon opening an XML file, applies a custom tranform that removes all custom XML elements.
This injunction further does not apply to Microsoft providing support or assistance to anyone
that describes how to use any of the infringing products to open an XML file containing custom XML if that product was licensed or sold before the date this injunction takes effect.
This injunction becomes effective 60 days from the date of this order.
LEONARD DAVIS
UNITED STATES DISTRICT JUDGE
So ORDERED and SIGNED this 11th day of August, 2009.
Courtesy of the New York Times, this graphic confirms that the music industry has shrunk each year for the last ten. The industry did $16 billion of CD sales in 1999, but only about a third of that ten years later. That statistic says alot about how long it takes people’s habits to change. On average, that works out to about 6 or 7 percent per year.
Right now, I’m earning, count it, 0.01% on US Treasury money market balances from Schwab.
Thanks Chuck!
This is particularly lousy considering that US Tbills currently pay 14 times as much. Still, thats only 14 basis points, so in absolute terms Chuck isn’t really all that greedy.
Funny thing is that Schwab offers savings accounts that offer yields in excess of 1%. I wonder what those savings accounts are invested in. Maybe it’s just longer term treasuries.
At the current rates, I’m not particularly interested in being a short term or long term creditor of the US government. So, I was curious if I could find a better deal on money market rates outside the US.
I went looking for gloabal money market rates and found the following from Wisdom Tree:
And I came upon a nice table from EverBank, which I hadn’t heard of previously, but is apparently an online US bank that specializes in foreign currency investors.
which can be found here
When I look at these numbers, I can’t help but think it’s a better time to be a borrower than a lender… But then where to invest?
The below graphic, courtesy of the New Scientist, shows the growth of the internet over the last six years. Notice how, as the US has added 53 million users, China has added over 200 million users. It’s also amazing that 25% of all internet traffic is P2P, which is 4x that of email. Both observations carry with them huge implications.
It’s amazing to me that as bad as our economy has been doing over the last year, there are a whole lot of countries whose currency has fallen relative to the dollar. The below graphic, courtesy of Mint.com, shows the performance of various currencies against the dollar for the two year time period from July 30, 2007 to June 30, 2009. Notice, however, that the performance lines up with what Ill call the US sphere of influence. The currencies of America’s closest trading partners and allies (UK, Canada, & Mexico) have performed poorly against the dollar. By contrast, the currencies of the biggest dollar rivals, notably the EU, China, and Japan have risen sharply. The dollar floats freely against the Euro and the Yen, but not against the Chinese Yuan. It’s as if, to paraphrase Churchill, from Tokyo in the Pacific to Singapore on the Malay Peninsula, a monetary curtain has fallen.
