Perspectives Blog

Interest rates in a highly indebted economy

Zach Pandl, Portfolio Manager and Strategist | October 13, 2014

…fixed cap on the level of interest rates. Any increase in interest rates must be consistent with tolerable debt service ratios, the existing stock of debt and private sector savings. It’s in this context where Fed officials’ delicate approach to the exit process looks most understandable. The deleveraging constraint Last week the Federal Reserve reported that U.S. households’ mortgage debt service ratio—the share of disposable income dedicated…

Specialty pharmaceuticals – The fastest growing category of healthcare spending

Harlan Sonderling, CFA, Senior Healthcare Analyst | January 27, 2014

A complex industry has developed to manage the delivery and costs of the therapeutic innovations in specialty pharma Healthcare payers are focused on managing specialty pharma spending, their most rapidly growing medical cost The accelerating pace of change and disruptive therapeutic advances create significant opportunities across healthcare delivery Pharmaceuticals are central to the effort to improve medical outcomes and control medical cos…

Detroit bankruptcy — One year later

Ty Schoback, Senior Municipal Analyst | August 18, 2014

…dated to carry through with the bond indenture pledge to “levy ad valorem property taxes sufficient to meet debt service, without limit as to rate or amount.” There is no question Detroit’s tax base has suffered significant erosion. However, that argument remains an open question when considering the full terms of the settlement. While 100% of the voter-approved property tax levy for UTGO debt service payments will remain in force, post-bankruptc…

Death, taxes and Medicaid expansion

Harlan Sonderling, CFA, Senior Healthcare Analyst | September 8, 2014

…the expensive new hepatitis C medicine. A small minority of Medicaid managed care simply provides administrative services and healthcare provider network access to the state, which assumes all the risk. About 60% of Medicaid enrollees are in managed healthcare plans, with as many as 70% of new enrollees in such plans, both non-profit and for profit. No matter their coverage, newly-insured individuals tend to consume more healthcare services and g…

Every day is an Amazon delivery day

Paul DiGiacomo, Senior Analyst | December 19, 2013

…other large shippers will follow. Recently, Amazon announced that it will partner with the United States Postal Service to deliver goods to its Prime subscribers on Sundays. The company will launch the program in cities to minimize operating losses, but the spread of Amazon’s warehouses across the country ensures that more and more customers will have Sunday delivery as an option. As Dave Clark, Amazon’s president of customer service, stated, “W…

Labor markets in the new digital age

Columbia Management, Investment Team | April 14, 2014

…certain industries that are less vulnerable (Exhibit 1). It is noteworthy that impacts will be felt across many service industries going forward. McKinsey & Company consultants believe future productivity gains will significantly disrupt clerical and professional service jobs. Exhibit 1 Source: The Future of Employment: How Susceptible Are Jobs to Computerisation?, Carl Frey and Michael Osborne, September 2013 The rewards of this innovation…

Data breaches — What they mean for retailers, consumers and investors

Stephanie Schneider, Equity Research Analyst | September 15, 2014

More than 1,000 retailers have been affected by the same malware that caused Target and Home Depot data breaches. The number of data breaches will continue to increase and cost retailers millions in IT spending and damage control. The cost of a mandated transition to a more secure “chip and pin” payment method has already been included in capital expenditure guidance. Data breaches There have been data breaches at multiple retailers over the l…