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Amazon, Berkshire and JPMorgan Seek to Form Healthcare Giant

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With the Obamacare individual mandate repealed and U.S. tax reform initiated, in the aggregate, large listed U.S. corporations – in a majority of cases – are forecasting wider profit margins. Companies that have arbitraged control of key industries with excess capital are coming up with solutions to provide benefits for their workers.

The titan of e-commerce, the Oracle of Omaha, and America’s largest bank sent stocks across the healthcare industry tumbling on January 30, 2018 with the announcement that they would be joining forces to form an independent entity “free from profit-making incentives and constraints,” aimed at providing simple, high-quality medical care to their U.S. employees. Would these titans of industry want to follow a similar path such as Kaiser Permanente – whose origins started with Kaiser Industries? Chinese tech giants such as Tencent and Alibaba have already put capital toward the healthcare technology space with prodding from Beijing. Alibaba had success with software that can understand and interpret CT scans.

Unlike U.S. Congress, which can be lobbied by large pharmaceutical companies to keep prescriptions relatively high, this new private entity would be highly incentivized to keep costs as low as possible.

Questions Arise

While the sparsely-worded press release provided little in the way of concrete details regarding the initiative’s long-term goals, the leaders of each company – Amazon’s Jeff Bezos, Berkshire Hathaway’s Warren Buffet, and Jamie Dimon of JPMorgan Chase – seem prepared to do what it takes over the long haul to give the healthcare industry a much-needed shakeup.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable,” said Buffet, adding that, “We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”

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RDIF and Aggreko Reveal Strategic Partnership on Microgrids

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The Russian Direct Investment Fund (RDIF) and Glasgow-based Aggreko plc, a listed company that provides power, heating and cooling, signed a deal to cooperate on the development of microgrids. The parties plan to invest in the construction of facilities that will provide uninterrupted power supply and temperature control to industrial enterprises and utilities in the Russian regions. Aggreko operates one of its 6 global hubs in Tyumen, Western Siberia, through an entity called Aggreko Evraziya, OOO. In 2017, Aggreko plc acquired Younicos, a company specialized in the development of modular batteries and Microgrids control solutions.

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China and Russia Buy Up More Physical Gold

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The worst fears of the Federal Reserve may be coming true. The barbarous relic is once again offering some resistance to Fed policy as it maintains its uptrend from mid-November, and is being snapped up from central banks worldwide. Former Fed chairman Paul Volcker shared the central bank view that “Gold was the enemy.” If so, the enemy is gaining ground. China’s gold reserves quietly grew from December 2018 to February 2019. The People’s Bank of China disclosed in February 2019 that it increased its gold reserves by 10 tonnes that month, following purchases of 11.8 tonnes in January 2019, and 9.95 tonnes in December 2018. Goldman Sachs has listed central bank purchasing as the reason for the uptrend. Goldman Sachs expects to see gold at US$ 1,400 over the next six months, which would lift it well above its long-held resistance at US$ 1,350. China’s gold holdings are now US$ 79.5 billion. China, which is emphasizing diversification from the U.S. dollar, has been a fan of precious metals for years, and it has been encouraging its citizens to purchase gold and silver for a decade, when previous controls on precious metals were done away with. Now anyone in China can trade gold internationally with the swipe of a card.

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AP1 Selects Approved Managers for Emerging Market Equities Mandate

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Sweden’s AP1 chose 14 external fund managers for its 45.3 billion SEK allocation to emerging market equities. These are approved managers for AP1, but not all of them will manage money for this mandate.

The managers selected are:
Aberdeen Standard Investments
BlackRock
First State Investments
Fisher Asset Management (Fisher Investments)
GMO
GQG Partners
JP Morgan Asset Management
KBI Global Investors
Legal & General Investment Management
RBC Global Asset Management (part of Royal Bank of Canada)
Robeco
TOBAM
UBS Asset Management
Wellington Management

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