Cramer’s lightning round: I’m not a fan of Netflix’s stock as an end-of-year buy

Netflix Inc.: “Candidly, I’m not a fan of Netflix. I’m not a fan of Netflix because I think that a lot of it depends on the content and I just don’t find the content as compelling as it once was. I think it’s a good story, but not a great story, because it’s up so much for the year and that’s been a real big determinant about how stocks are doing right now.”

Cytokinetics Inc.: “Very speculative, but I’ll endorse it as long as you understand that that thing is literally one of the most speculative stocks out there.”

Yeti Holdings Inc.: “Yeah, I think [its post-earnings dip is a buying opportunity]. I actually liked the quarter. I mean, far be it from me to disagree with the market’s view, but I liked the quarter. I think it’s OK. The market liked the PepsiCos and the Gileads this week, and the Celgenes.”

The Kraft Heinz Co.: “[What’s not to love?] Well, the fact that it has no growth whatsoever. But I’ll do this for you: I’ll say that if you want to hope that they somehow manage to get some growth, then you can buy it. But if I want no growth, I want safety and I want a bond.”

Chico’s FAS Inc.: “No. Don’t ask me about Chico’s. That was a horrible quarter, frankly. I mean, that may have been the worst of the mall-based stores. No, well, obviously there’s Sears and J.C. Penney, but it was a bad call. I don’t want you in that, OK?”

LyondellBasell Industries NV: “People feel that we’re going into a big slowdown and you don’t want to own a chemical company into a slowdown, but I agree with you. I think it represents good value with a 4 percent yield, but I do prefer DowDuPont.”


This credit card mistake can cost you a lot of money

I see it all the time.

People want to help a partner, adult child or friend in financial trouble. Or they want to assist someone in building a good credit history so he or she can rent an apartment or buy a home. So they lend someone their credit card.

Nearly half of current or former credit cardholders say they have let someone else use their credit card, according to a new survey by

And it doesn’t end well for a lot of these folks. In fact, 35 percent of survey participants suffered negative consequences. People overspent on their card (19 percent), they weren’t repaid (14 percent) or their card was lost, stolen or never returned (10 percent).

“You really are playing with fire when you let someone else use your credit card, so proceed with caution,” said senior industry analyst Matt Schulz for “Whether they spend more than you anticipated, don’t pay you back or you never see the card again, ultimately, you are the one who is responsible.”

Why would people hand over their credit cards?

Brad Klontz, founder of the Financial Psychology Institute told “My guess is that a large segment of those individuals are financial enablers. “In an attempt to help somebody, they either loan them money or support them in some way that ends up hurting themselves. And it’s probably feeding some financial dependence or money disorder on the other side.”

Ever hear about credit card “piggybacking?”

This is a credit building strategy that involves letting someone become an authorized user on your credit card. People with no credit or bad credit are sometimes advised that one way to rebuild their credit is to get somebody — their mama, daddy, grandparent or friend — to add them on a credit card as an authorized user.

Piggybacking can be a good deal for the person trying to establish credit or get a boost to a badly bruised credit history. The authorized user benefits from the positive credit history of the primary cardholder.

But here’s the problem: The person piggybacking on your good name isn’t liable for paying any of the charges he or she makes on the card. You may have an agreement, but that’s just between you and the person who has the card. If he doesn’t pay, the creditor comes after you. I’ve seen plenty of parents and grandparents, who allowed an adult child to become an authorized user, get stuck with the debt. It’s ruin relationships.

In one case, a reader emailed that she added a friend to her credit card as an authorized user. The friend transferred $3,500 in debt from a credit card she owned to take advantage of a zero percent interest offer for a year. The year went by and the woman only managed to pay down $700. And then the piggybacking friend filed for bankruptcy.

The primary cardholder ended up having to pay off the balance of $2,800.

There is a negative side to this strategy. The primary cardholder could fall into financial trouble and start making late payments and that negative information can end up on the credit record of the person piggybacking.

I’m not a fan of piggybacking. People mean well but things happen. Don’t lend your credit card to someone because it may end up ruining your good name.

From read: The good and the bad of credit account ‘piggybacking’

Color of Money question of the week
Have you been burned after lending your credit card to someone? Send your comments to Considering that I’m asking you to out yourself, this week you can respond by using just your first name and I still would like to know your city and state. In the subject line put “Credit Card”

Live chat today
What’s on your mind about your money? Please join me today at noon (ET). I’ll be available to answer your personal finance questions.

Here’s the link to join the conversation.

When is it okay to lie to save money?

Last week for the Color of Money Question I asked: Have you lied to save money?

Lois from Boston wrote, “I share my Amazon video and music accounts with my son and his family. They share their Netflix account with me. Though we’re close relatives, we don’t live in the same household. Frankly, I don’t consider this lying. Providers of streaming services price their products, and limit the number of devices that can use them simultaneously, with this type of “unauthorized” sharing in mind. Given that practice, I feel justified in declining to subsidize a very disingenuous business model.”

“I did I used my cousin’s military discount to buy an oven,” Na in Clinton, Md., wrote.

“When I was 20, I listened to a graduation keynote speaker whose main message was to convey to the graduates the benefits of living a life of honesty and playing by the rules,” wrote Tom Wingfield of Las Cruces, N.M. “Life is so much simpler and more fulfilling if you don’t have to worry about getting caught or have to try to remember what you said to whom, wrote on an application, etc. You can always fall back on the truth. Before you realize it, you’ve lived a life where you’ve inadvertently become a good example for your children and grandchildren. Don’t worry about what some other people may think they are getting away with because, over a lifetime, honesty is the best policy economically.”

Color of Money columns this week
Knowledge isn’t power. The right knowledge is power.

Stay informed about your money.

In addition to this newsletter, read and share my weekly personal finance columns.

— When a $4,000 dress is a symbol of frugality

— It’s not fun to do a ‘paycheck checkup’ – but do it anyway

Newsletter comments policy
Please note it is my personal policy to identify readers who respond to questions I ask in my newsletters. I find it encourages thoughtful and civil conversation. I want my newsletters to be a safe place to express your opinion. On sensitive matters or upon request, I’m happy to include just your first name and/or last initial. But I prefer not to post anonymous comments (I do make exceptions when I’m asking questions that might reveal sensitive information or cause conflict.)

Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read more Color of Money columns, go here.


Top Personal Finance Tips You Should Make A Priority On Your Work Anniversary

Clint Haynes

I am a Certified Financial Planner® and founder of NextGen Wealth. We help our client’s on their journey to financial freedom.


Congratulations, you’ve made it another year. Another one in the books and just that much closer to retirement. While taking a deep sigh, reflect on what you accomplished the last 12 months at your job. Did you get a promotion? Did you get a raise? Did you get a new boss?

Whatever happened, I hope it was a great year and you made some positive strides in your professional life. This anniversary serves as a great reminder for some personal financial to-dos. Let’s take a look at my best personal finance tips that you can accomplish on your work anniversary.

Review Your 401(k)

Take a look at how your 401(k) has performed over the last 12 months. Is it what you expected? Was the return commensurate with the risk? Did it perform in a manner that will get you closer to retirement? Once you’ve answered these questions, it might be time to reassess how your 401(k) is invested. If you’re invested in a good target date fund (not all are created equal) based on the date of your retirement, you may not need to do anything at all.

Target date funds are automatically rebalanced for you. However, if something has changed with your retirement picture, then you may need to change your target date fund to another year. If you’re invested in individual funds, you’ll want to examine the performance of each of those, as well as all individual funds in your 401(k), and make the appropriate fund changes and allocation updates. Regardless, if you are in individual funds, you will want to rebalance your portfolio. This could mean going back to the allocation you set 12 months ago. Or it could mean going to a slightly more conservative allocation since you’re one year closer to retirement.

What To Do With A Salary Increase

Did you get a salary increase recently or sometime over the last year? What did you do with that money? Hopefully, you set some aside and it didn’t all go to spending.

My rule of thumb when it comes to salary increases is to put at least 50% of it toward savings and take the remainder home with you. This still means your take-home pay will increase.

As for where the savings should go, the easiest place is your 401(k) if you’re not currently maxing it out. If you already contribute the maximum, then maybe it should go toward an IRA (Backdoor Roth IRA), your children’s college savings or an additional savings account earmarked for a financial goal like a big trip, second home, new car, etc.

If you are saving this money for one of those latter goals, then I would highly recommend automating it. This means that once that money hits your checking account, it is automatically transferred out to the appropriate account the next day. Remember, pay yourself first.

Live By The Rule Of Thirds

Since we’re talking about saving, now is a good time to bring up the rule of thirds. If you’re not familiar, it’s a plan for having a third of your paycheck go to taxes, a third to savings and a third to living. It’s a simple but very effective strategy. If you don’t have to save a third for taxes because you’re in a lower tax bracket, that just means more can go to savings and living.

If you’re able to save a third of your salary, then I can almost guarantee you’re going to be way ahead of all your friends — and that much closer to financial freedom and retirement. Granted, saving a third might seem like a daunting task if you’ve never done it before. If that’s the case, then start slowly and work your way up. If you’re at 15%, then bump it up to 20% this year and put the majority — if not all — of your salary increases and raises towards savings. You will be there before you know it.

Review Your Stock Options/Restricted Stock Units

Your work anniversary serves as a great reminder to review how your stock options and/or restricted stock units are performing. This also means reviewing how many are now vested and what the tax consequences of liquidation look like. I would recommend working with a CPA or Certified Financial Planner® if you’re not well-versed in this area.

Stock options and restricted stock units can pose some tricky tax situations, so you want to ensure that you’re making the right decision so that you don’t get hit with a tax bill you weren’t expecting.

Negotiate A Raise

Don’t think it’s possible to negotiate a raise with your boss? Think again. It’s the 21st century, and things have become much more fluid and open to negotiation in the workforce. Employers want to maintain their top-tier talent. If that’s you, then they want to make sure they’re keeping you happy.

With that being the case, I’m not talking about your annual review. I’m talking about a conversation outside of your annual review. If you’re not a stellar employee and you’re not able to make your case, then there’s no sense in having the conversation. If, on the other hand, you can prove your worth by what you’ve accomplished over the last year and how you’re consistently getting contacted by other employers and recruiters, then you can make a much better case for a salary increase. It’s much easier for your employer to pay you more than to find a replacement if you’ve made yourself irreplaceable.

You would be surprised at how much more apt they are to having the conversation if you fit the mold of irreplaceable. If you’re not quite there yet, then make it your goal over the next 12 months to become viewed that way. I can assure you it’s worth it.

So, there you have it: The five must-dos for this work anniversary and every one after. Put a reminder on your calendar so you’re ready for next year.


Coal India stock fails to impress, but government made a cool Rs 74,000 crore

The BSE Sensex has climbed 231 per cent during the same period.
  • Centre to offer 99 lakh Coal India shares to staff at 5% discount
  • Institutional buyers offer bids worth Rs 4,300 crore for Coal India shares
  • Coal India OFS fully subscribed
Coal India, which made a smashing market debut eight years ago, has failed to live up to investor expectations till now.

The stock is down nearly 7 per cent at Rs 268.20 against its listing price of Rs 287.75. However, it’s up 9 per cent from the issue price of Rs 245.

Retail investors, who got around 5 per cent discount on the IPO, have gained around 15 per cent since the listing of the coal major.

The BSE Sensex has climbed 231 per cent during the same period.

But the underperformance of Coal IndiaNSE 0.63 % on Dalal Street has not stopped it from announcing a hefty dividend year after year since listing. The central government, the biggest shareholder in the PSU firm, has made Rs 74,267 crore by way of dividend during 2010-11 to 2017-18. Overall, the company announced a dividend of Rs 88,916.80 crore during the past eight years, according to data available with Ace Equity.

Total number of shares at the end of each financial year is considered for the calculation of dividend.

Coal India handed out a minimum of 39 per cent of dividend over its face value of Rs 10 in FY11 and a maximum of 290 per cent in FY14. It did not announce any stock split or bonus during these years.

The government held 78.32 per cent stake, or 4,86,16,80,228 shares, in the company as of September 2018.

The Centre on Friday announced an offer for sale of 99 lakh shares of Coal India reserved for its employees at Rs 252.7 per share. It is expected to fetch the government Rs 250 crore.

The current offer for employees is part of the divestment tranche that concluded last week in which the Centre divested 3.19 per cent of its stake at a final price of Rs 266 per share to financial institutions and retail investors.

The Centre is likely to raise Rs 5,267 crore through sale of 19.8 crore equity shares of the company from the recently concluded offer for sale. After last week’s sale, the government will continue to hold a majority stake of 75.13 per cent in the coal behemoth.

The state-owned firm is slated to announce its financial results for the quarter to September on Monday.

For 2018-19, the company posted 24 per cent year-on-year fall in consolidated net profit at Rs 7,019 crore against Rs 7,281.50 crore last year. It posted a net profit of Rs 14,267.90 crore, Rs 13726.60 crore and Rs 15111.60 crore in FY16, FY15 and FY14, respectively.

Last year, Coal India announced 165 per cent dividend on the face value. The figure was 199 per cent in FY17.

A report issued by CIMB Investment Bank Berhad, or CIMB, on November 2 assigned ‘Reduce’ rating to Coal India with a target price of Rs 245. However, it showed that the consensus has 26 ‘Buy’, 5 ‘Hold’ and 1 ‘Sell’ on Coal India.


4 Tips to Build a Strong In-House Marketing Team

ou have to make plenty of difficult decisions when designating an in-house team. Today we are going to learn what you need to do to build a strong marketing team.

Due to the complex work environment of many companies, they like to use outside agencies to get work done for them. These agencies have great skills, there’s no doubt about it. However, nothing compares to having a high-quality in-house marketing team.

You have to make plenty of difficult decisions when designating an in-house team. Today we are going to learn what you need to do to build a strong marketing team. It’s your job to make sure that everything runs smoothly, and the best way to do that is by making smart business decisions about who you hire and how you use them within the company.

Here are four tips to think about when you start to build your in-house marketing group.

1. Consider workload.

Your in-house team is there because you trust them. No one knows the business like they do. But you can’t put all of the work on them at once. If you’re using outside agencies in conjunction with your in-house team, you have to consider the workload. Where is your team going to thrive, and what can an outside agency do to make their jobs easier? The problem that often occurs is that business owners will get an in-house team and fire all their agencies. The new team can’t handle the workload, and the marketing quality suffers.

ou have to make plenty of difficult decisions when designating an in-house team. Today we are going to learn what you need to do to build a strong marketing team.

Due to the complex work environment of many companies, they like to use outside agencies to get work done for them. These agencies have great skills, there’s no doubt about it. However, nothing compares to having a high-quality in-house marketing team.

You have to make plenty of difficult decisions when designating an in-house team. Today we are going to learn what you need to do to build a strong marketing team. It’s your job to make sure that everything runs smoothly, and the best way to do that is by making smart business decisions about who you hire and how you use them within the company.

Here are four tips to think about when you start to build your in-house marketing group.

1. Consider workload.

Your in-house team is there because you trust them. No one knows the business like they do. But you can’t put all of the work on them at once. If you’re using outside agencies in conjunction with your in-house team, you have to consider the workload. Where is your team going to thrive, and what can an outside agency do to make their jobs easier? The problem that often occurs is that business owners will get an in-house team and fire all their agencies. The new team can’t handle the workload, and the marketing quality suffers.



Does a mutual fund’s size matter while investing?


People seem to instinctively believe that a big shop, or a big retail chain or a big newspaper will provide better goods or services. Presumably, the underlying logic is that a business becomes big only if its customers are happy. This may or may not be true.

However, it’s certainly far from the truth as far as mutual funds are concerned. A lot of investors believe that the size of a mutual fund is important. In this context, size means the amount of money that a fund manages. This belief has no real basis. There’s no inherent reason that a larger fund is better than a smaller one. If a smaller fund has a better track record than a larger fund of the same type, then by all means investors should choose the smaller one.

Investors hold this belief not just because of the ‘big is good’ presumption, but because it is actively promoted by the sellers of larger funds as it gives them an additional handle to promote their fund against some other that may be doing better.

Does this idea have any actual validity? As it happens, Value Research data show that compared to smaller funds, a relatively greater proportion of larger funds display good performance. However, that’s a small and very diffuse trend. There are many lousy large funds and there are many great small funds.

As an investor, you must not fall into the trap of confusing cause with effect. Funds that have a long track record of good performance tend to get large as more and more investor money flows into them, and this money gets a long time to grow. They were good, so they eventually became large.

Is the opposite true from the point of view of an individual investors choosing a fund? You can’t pick a random large fund and say that just because it’s large it must be good. Equally, you can’t pick up a smaller fund with good performance and say that its performance does not matter and you must not invest in it because it’s small. Apart from good performance, there are many variables that can make a fund large or keep it small.

In fact, the marketing prowess of a big fund company or the reach and clout of its parent among fund distributors are the biggest reasons. There can be other factors too. For example, there are a number of equity funds that started out large on Day One because they had hugely hyped NFOs at the peak of the markets. Some of these have turned out be very poor performers but they are still large.

More importantly, it is also the case that there are a number of relatively small equity funds in the fund industry that have displayed good long-term performance and are definitely worth a look. Whenever an investor wants to invest in such a fund, or when an analyst like me praises them, those selling larger funds dismiss the idea contemptuously.

“But you can’t compare a Rs 5,000 crore fund with a Rs 500 crore one!” they protest. This is a red herring. To the investor, it is irrelevant that a fund is small or a fund company does not measure up in the fund industry’s pecking order. If a fund has a good track record and a high rating from Value Research, then size doesn’t matter.

Does that mean that there are no circumstances under which fund size matters? There are, and interestingly enough, size is actually a disadvantage for some types of large equity funds. For example, large funds focussing on small and mid-cap stocks may not be able to find enough stocks that they can invest in. During negative phases of the stock markets, these larger funds may suffer a double whammy of rapidly declining values as well as poor liquidity.

The bottomline is that if you think (or if someone is telling you) that one fund should be preferred over another on the basis of size alone, then that could lead you to make some poor investing decisions


ADNOC CEO says oil and gas industry a critical enabler of economic growth in 4th industrial age in ADIPEC keynote address


Abu Dhabi — The global oil and gas will be a critical enabler of economic growth in the 4th Industrial Age, according to His Excellency Dr. Sultan Ahmed Al Jaber, UAE minister of state and group CEO of the Abu Dhabi National Oil Company (ADNOC).

Delivering the opening keynote address, today, at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), one of the world’s leading oil and gas conferences and exhibitions, H.E. Dr. Al Jaber said the world is on the verge of an era of unprecedented prosperity. This will be driven, he said, by rapid advances in technology and a global middle class, which will grow to five billion people by 2030, creating greater demand for energy and products derived from oil and gas.

“We are at the cusp of a new age of opportunity for our industry, an era in which digital innovation is delivering unprecedented levels of progress,” H.E. Dr. Al Jaber told the audience of government ministers, industry CEOs, policymakers and decision makers. “This era, known as the 4th Industrial Age, is creating a paradigm shift in global growth and driving demand for our products. Our industry must step up to enable this massive step-change in global development.

“In short,” H.E. Dr. Al Jaber added, “this mission can be given a simple name: Oil and Gas 4.0.”

H.E. Dr. Al Jaber said ADNOC recognizes that to fulfill the mission of Oil and Gas 4.0, it must leverage all its resources, its partnerships and, in particular, the latest technologies, if it is to continue to thrive and deliver on the ambitious strategic objectives of its 2030 smart growth strategy.

“All this is only the start of a new era at ADNOC,” he said, adding that ADNOC is continuing to put in place the building blocks that would allow it to seize the opportunities created by Oil and Gas 4.0, emphasizing the strategic oil and gas announcements, made recently by Abu Dhabi’s Supreme Petroleum Council (SPC), which will see ADNOC increase its oil production capacity to 4 MMbpd by 2020 – and to 5 MMbpd by 2030 – to meet growing global demand. In addition, ADNOC will develop its vast untapped gas resources.

“As we set out to meet these ambitious goals, we will access our undeveloped reservoirs, tap into our gas caps and further capitalize on our sour gas. Today, we are able to make this happen by thinking outside the box, leveraging technology and reframing our business model. This has finally unlocked the commercial formula that will enable the UAE to attain self-sufficiency and transition to becoming a potential net exporter of natural gas.” H.E. Dr. Al Jaber said. “We are also taking steps, never taken before, to realize our comprehensive gas strategy.

“For the first time, we will jointly develop our unconventional fields in a concession partnership with Total. In addition, our strategy will ensure we remain a reliable supplier of LNG well into the future.”

H.E. Dr. Sultan added, “While advances in technology are impacting every industry, it is time for us to focus our attention on how it can advance our industry,” H.E. Dr. Al Jaber said.  “At ADNOC, we believe technology can enhance our operational efficiency, drive performance, maximize profitability and empower our people.”

ADNOC, he said, is applying artificial intelligence and the science of predictive analytics to significantly reduce maintenance costs and building out its state-of-the-art Panorama Digital Command Center to mine for, monitor and measure terabytes of information across its operations. And yet, ADNOC is only scratching the surface of how technology can transform its potential, he declared.

“Our ambition is to extend technology’s power across our entire value chain from drilling platforms to trading platforms,” H.E. Dr. Al Jaber said. “By embedding innovation into every aspect of our business, we are determined to make ADNOC the destination of choice for a highly skilled, digitally native workforce and a home for the best and the brightest of our young people.”

H.E. Dr. Al Jaber also emphasized the importance of ADNOC’s downstream expansion. “This expansion capitalizes on our high-grade feedstock, proximity to growth markets and best-in-class logistics to create an integrated plug and play ecosystem, an ecosystem where I invite partners to invest and grow alongside ADNOC as we continue on our journey to diversify the UAE’s economy, enable in-country value and support GDP growth,” he said.

Following H.E Dr. Sultan Al Jaber’s speech, a special ministerial panel discussion took place – entitled, ‘Reshaping Markets: Continuing the Global Energy Discussion, with the participation of H.E. Suhail Al Mazrouie, minister of energy, United Arab Emirates; H.E. Khalid Al Falih, minister of energy, industry and mineral resources, Kingdom of Saudi Arabia; and H.E. Mohammad Barkindo, secretary general of the Organization of Petroleum Exporting Countries (OPEC).

Hosting more than 80 ministers, CEOs, and global oil and gas business leaders as speakers, ADIPEC has convened the companies, decision- and policy-makers who shape the future of oil and gas supply, for four days of focused business, dialogue and knowledge-transfer that addresses today’s energy challenges and defines tomorrow’s hydrocarbon landscape.

ADIPEC’s international technical and strategic conference spans 200 sessions, with 980 expert speakers and over 10,400 delegates. The technical conference program, organized in collaboration with the Society of Petroleum Engineers (SPE), sets the international standard for the exchange of best-practice and operational excellence in the world of energy, with all technical abstract submissions put through a rigorous evaluation process by the technical program committee. Sessions cover upstream, midstream and downstream sectors, including specialized program such as offshore and marine.

Alongside the conference are the landmark ADIPEC exhibition areas, underpinning the event’s status as a premier showcase for suppliers and customers across the oil and gas industry. For 2018, ADIPEC has attracted more than 2,200 exhibiting companies, including 38 National Oil Companies and International Oil Companies, and 30 international country pavilions.


A US pivot to Europe would boost the economy and national security

French President Emmanuel Macron welcomes U.S. President Donald Trump for bilateral talks at the Elysee Palace in Paris on Nov. 10, 2018.

The sales of American goods to Europe — nearly a quarter of the total — are three times larger than sales to China. That’s shown by the U.S. trade numbers for the first nine months of this year.

Over that period, American exports to Europe were soaring at an annual rate of 13 percent, while sales to China were marking a mere 3.2 percent increase from the nine months of last year.

But the most important difference is this: The U.S. trade deficit with China was more than double the American trade gap with Europe.

One could take that a bit further. U.S. export sales to Europe in the first three quarters of this year were growing twice as fast as those to the entire Pacific Rim.

Not bad for that oft-derided “sclerotic” Europe holding its own — and then some — with the Pacific Rim tigers free-riding on their huge, and growing, U.S. trade surpluses. In fact, the Pacific Rim countries accounted for 60 percent of America’s total trade deficit in this year’s January-to-September interval.

Europe is open

Those numbers may surprise some as an entirely counter-intuitive outcome because one would normally expect the U.S. exports to China, and the rest of the Pacific Rim, to grow much faster than American sales to Europe.

Why? Simply because the Pacific Rim economies are growing at a rate of 5 percent — with China marking a 6.7 percent growth in the first three quarters of this year — while Europe is barely eking out 2 percent GDP growth.

In spite of that, the U.S. is doing much better in the slow-growing European markets than in the strongly expanding markets routinely called by raving observers as the “future of the world economy.”

What’s the problem? Why is the U.S. taking a beating in markets where it should be making a mint?

Here is a thought: Isn’t that part of what U.S. President Donald Trump never tires of calling a “rip-off” of the U.S. economy? A decades-old outrage neglected and tolerated by Washington?

And does that strike you like something Trump is trying to stop and reverse with his “free, fair and reciprocal trade” amid a chorus of catcalls — led by official international organizations richly funded by Washington — that he is killing the so-called “free and multilateral” trading system?

The answer seems clear. The U.S. is selling more to the lackluster European economies than to the Pacific Rim — those “dynamic” Asian economies — because the European markets are much more open and accessible to American companies.

So, the trade policy conclusion for Washington should be a proverbial “no brainer.” Just tweak a few things with Europeans to even out the playing field. The Pacific Rim, however, is an entirely different story.

That’s where the U.S. needs a root and branch review of tariff and non-tariff trade barriers, trade practices, comity and basic rules of reciprocity.

Germany should not destabilize Italy

Hopefully, there is enough bipartisanship left in Washington to support such vitally important trade policy changes initiated by the present administration.

Meanwhile, there are things the White House can do on its own.

For example, Washington should stop Germany from repeating a Greek tragedy in Italy. Unless that is done forthwith, there is no sense for the U.S. to foot three quarters of a bill for the largest military and political alliance the world has ever known.

The U.S. economic and financial authorities know everything they need to know about the Italian budget for 2019 — an entirely appropriate counter-cyclical fiscal policy well within the euro area budget rules. But Germany, with France in tow, seems hellbent on using its own reading of that budget as a pretext for destroying the Italian economy and its democratically elected government. That is a pathetic example of how far the sinking governing elites are ready to go to fight their opponents in the elections to the European Parliament scheduled for May 2019.

Washington has been there before. In July 2015, the U.S. helped France keep Greece in the euro area, saving that long-suffering country from economic and political destruction. Working together, Washington and Paris squashed the German plan for throwing Greece out of the monetary union.

One can now see how important it was to keep Greece functioning. The Greeks are hosting huge assets of a U.S.-led alliance controlling the Eastern Mediterranean and battlefield operations in the Middle East.

Italy is equally central to U.S. national security. The country has many allied military installations, with command headquarters in Naples and a new hub in Sicily covering the Mediterranean, North Africa, Middle East and most of the Balkans. None of that is compromised by Italy’s right-of-center government. On the contrary, Italy remains an unquestionably loyal alliance member.

Apart from the urgent task of shielding the military alliance from German mischief, the U.S. should also nudge Berlin toward a more balanced economic growth that would benefit its euro area partners and expand European markets for American goods and services.

Investment thoughts

“Don’t neglect Europe” could have been an echo of history that Trump was hearing while visiting the American Military Cemetery and Memorial on Mont Valérien in one of the western suburbs of the French capital on Sunday.

But the “strong Europe” he says he wants needs some work. Arguably, trade problems should be the easiest part. Their solution can be readily found in the family of nations sharing the same values and social foundations.

On economic policies, it is essential to ween Germany off its selfish and excessive export gravy train. Living so grandly off its closest friends and partners should finally give a pause for thought to German leaders — an injunction repeatedly proffered by Germany’s former go-to Chancellor Helmut Schmidt.

A significant adjustment to Germany’s traditional export-led growth would give Washington better balanced trade accounts, it would strengthen America’s presence in Europe, and it would pave the way for a deeper trans-Atlantic economic and political integration.

The Pacific Rim is a much more complicated story. After the last week’s conference with China’s high-level emissaries, Washington should have no illusions about any meaningful breakthroughs in diametrically opposed U.S.-China economic, political and security relations.


One part store, one part lab: Mall owner debuts Brandbox, a new way to fill vacant space

The inside of Macerich's Tysons Corner Center in Virginia. 

One of the biggest mall owners in the U.S. has come up with a way to fill empty storefronts, and it’s offering young brands plenty of perks to move in.

Macerich this weekend is launching a concept known as “Brandbox” at Tysons Corner Center just outside Washington, D.C., one of the most valuable shopping malls in the U.S. There, it will house six brands, including apparel retailer Naadam and makeup company Winky Lux, to start, for a period of six to 12 months. Each brand will have its own mini store inside a roughly 11,000-square-foot space, with new retailers funneling in and out each year. The mall owner says it will provide fixtures like shelving, data on foot traffic, RFID tagging for inventory, marketing and even help finding staffing — the retailers simply need to show up and pay rent.

The rollout of Brandbox comes as more than 140 million square feet of retail space has been shuttered across the U.S. in malls and shopping centers already this year, according to real estate research group CoStar. That’s easily more than the 105 million square feet of space that closed in 2017. Closures by Sears and Toys R Us are leaving a blank canvas at many malls for new uses like these so-called pint-sized and modern-day department stores.

Macerich plans to take Brandbox to its malls in Santa Monica, California, Philadelphia and Scottsdale, Arizona, next.

The idea could eventually end up, in some form or fashion, at all of its malls across the U.S. It also says it envisions adding multiple Brandbox locations inside some shopping centers, where there’s more demand for shopping smaller retailers over department stores.

“I think what we’re learning as an industry is that we need to have modular space that can be reconfigured,” Macerich Chief Digital Officer Kevin McKenzie told CNBC. The physical walls within each Brandbox will be movable, he said. Sometimes two companies might fill the space, sometimes seven.

DKNY, an already established fashion brand, will also be inside Brandbox at Tysons Corner Center at launch to test a new concept. McKenzie said the space can be a way for even traditional retailers to try out a new market before investing in establishing a permanent presence there.

The space also can help retailers born online come to life. This is a key goal, according to McKenzie, who said it is not only about how to fill empty space at the mall left behind from Claire’s, Gap and others closing stores.

“These companies don’t have the real estate groups like Lululemon has, Tesla has or Apple has,” he said. “Traditionally you get a broker, a store designer and a lawyer. You figure out what technology you want to put in. There’s a lot of things that can go wrong that these companies can’t afford.”

Brands are appreciative of the real estate and the perks.

“We view Brandbox as a safe environment to test our brand in a mall environment,” said Matt Scanlan, the co-founder and CEO of Naadam, which will be in Tysons Corner Center. The technology Macerich is offering is a “major perk,” he said. “They have set us up with retail technologies and subscription software that are normally inefficient to install for a pop-up but can be transformative in terms of learnings.”

In addition to what Macerich is doing, there are plenty other examples of this trend popping up across the country.

A concept called “The Gathering Shops” opened earlier this month at Westfield Garden State Plaza in New Jersey, the largest mall in the state. There, it houses about 15 brands — many of them local to the area and just starting to raise awareness — within a 4,800-square-foot space at the mall. Similar to Macerich, The Gathering Shops is offering point-of-sale systems, staff, security and marketing to the tenants in the space, which are expected to rotate every few months.

A company called Fourpost just opened spaces for brands at Mall of America in Minnesota and West Edmonton Mall in Alberta, Canada — both of which are run by Triple Five Group.

Fourpost founder Mark Ghermezian said he plans to roll out a handful of additional locations in 2019. Similar to The Gathering Shops, Fourpost will offer its tenants fixtures, Wi-Fi and point-of-sale hardware to make the move from the web to bricks-and-mortar retail as painless as possible. Fourpost’s investors include Warby Parker co-founder Dave Gilboa and Parachute founder Ariel Kaye, putting the concept in good hands with already well-established e-commerce brands.

“This is disrupting the department store model,” Ghermezian said. “I want it to be like you are walking through story by story, getting that individual experience on a per-brand basis.”

Another company that bills itself as “a new type of department store” — Neighborhood Goods — opens in a shopping center in Plano, Texas this month. At launch, the space will include born-online sneaker brand Stadium Goods, Walmart’s new bedding brand Allswell and men’s wellness brand Hims.

“We want to encourage these brands to be playful, somewhere they haven’t opened yet, where they don’t have so many pressures on the economics side,” Neighborhood Goods founder Matt Alexander said.

Macerich is uniquely the first major mall operator to announce plans to roll out a concept like this at a large scale, and one that’s been incubated from within the company. Rival Simon has been testing a rotating pop-up exhibit called “The Edit” at Roosevelt Field mall in New York, but has yet to open other locations.


Prudential already has a large footprint in China — the challenge is to grow that, says its CEO

Jason Alden | Bloomberg via Getty Images

China is committed to opening up its insurance sector just as it’s indicated, but it will be on its own time, said Mike Wells, Prudential Group CEO on Tuesday.

“Beijing is saying they have a plan for greater opening, and I think like everything in China the time frame is misaligned with U.S. time frames,” Wells told CNBC at the Singapore FinTech Festival.

“You’re not going to succeed across Asia if you’re not successful in China,” Wells said.

Prudential, Britain’s largest insurer, has been expanding into China for years. Prudential has a 50-50 joint venture with Chinese conglomerate Citic.

“We have licenses in about 70 percent of the economic footprint now with China, so our biggest challenge is growing into that footprint quickly,” Wells said.

China said this year it would accelerate a plan to lift the foreign ownership restriction in life insurance companies to 51 percent and eventually fully scrap the restriction.

“I think China’s not looking for a flood of foreign models, insurers and management teams in the market but they are saying ‘We want the expertise, the products, the capabilities,'” he said.

Since August, there have been media reports that China’s most valuable insurer Ping An Insurance Group is looking to buy Prudential’s Asian business.

Last month, Prudential’s Asia chief executive, Nic Nicandrou, said the insurer had not received any offer for the regional business.

Asked about the Ping An deal, Wells said he was unable to comment on mergers and acquisitions, but that Prudential now has its hands full spinning off its U.K. business.

“It’s not off the table but … our days are pretty full right now,” Wells said.