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CEO Daily: Friday, 9th December

Good morning.

Fortune’s Chris Matthews unpacks the latest Fed data showing mortgage debt is growing 1.9%, its fastest rate since the Great Recession. Add that to Census Bureau data showing sales of newly constructed homes are up 17.8% year-over-year, and data from the National Association of Realtors showing home sales were up 6% in October from a year earlier, and you have what looks like the beginning of a boom.

To be sure, this isn’t anything like the frenetic pace that preceded the recession, when mortgage debt was growing more than 10% a year. We may not see those growth rates again, given that population growth and household formation have slowed. But if you are looking to sell a house before the next recession, now may be the time to start cleaning the attic.

Also this morning, we are releasing Roger Lowenstein’s smart piece, written for our annual Investor’s Guide, on why colleges are getting a “C” – if not an “F” – in investing. Yale’s stunning success with alternative investments has spawned a bevy of imitators in recent years, and created a boon for hedge funds. But the results are now in, and they are pretty dismal. The average college endowment hasn’t beaten the market over the past decade. Time for the folks in the ivory tower to rethink their investment strategies. Click here to read Roger’s story.

More news below.

Alan Murray

Top News

Dollar Surges On ECB’s Dovish ‘Taper’

The dollar surged by nearly two cents against the euro after the European Central Bank extended its quantitative easing program until the end of next year (albeit slightly trimming its monthly bond purchases to 60 billion euros from 80 billion. Stocks also surged on the prospect of at least one major central bank keeping the monetary spigots wide open next year.  The ECB expects another year of weak growth in 2017 overshadowed by “dominant political uncertainty”, due to the Brexit issue and elections in both France and Germany–and now maybe Italy too. Fortune

Casino Stocks Meltdown Highlights China Capital Controls Nerves

Shares in Macau casino operators tumbled then recovered after another episode underlining how jittery China–and investors in China–are getting about the issue of capital controls. The South China Morning Post reported that the daily withdrawal limit at ATMs in the offshore outpost, China’s answer to Las Vegas, would be halved in an effort to stop money leaving the mainland. Macau authorities later denied that, but said the withdrawal limit for individual transactions with mainland-issued cards would indeed be cut. Obviously European businesses, which complained through their chamber of commerce that they couldn’t even repatriate dividends any more because of new regulations, have been missing a trick or two. China said earlier this week its foreign reserves fell by $70 billion in October, the sharpest drop in over half a year. Fortune

Portland Vs Ohio

The fight for the soul of the U.S. economy in the wake of Donald Trump’s election victory is captured in microcosm by two eye-catching initiatives far from Washington DC. In Portland, Oregon, the City Council voted on Wednesday to impose a tax surcharge on companies whose CEOs earn more than 100 times the median employee. The move, which the city styles as a ‘tax on inequality’, has been dismissed as a publicity stunt but could affect over 500 publicly-traded businesses that operate there. Meanwhile in Ohio, the state legislature has passed a law banning municipalities from raising minimum wages in their cities above the state minimum of $8.10/hour. Cleveland was set to decide on raising the local minimum wage to $15 next May. Fortune

Trump Taps Burger Chain CEO Puzder for Labor

One person who may take a particular interest in developments in Ohio is Andy Puzder, the CEO of burger chain group CKE Restaurants (owners of the Carl’s Jr. and Hardee’s chains). Donald Trump has tapped Puzder to be his Labor Secretary. Puzder, whom The Wall Street Journal styles as a “vocal advocate for cutting back regulations”, is on record as saying that the minimum wage should be no higher than $9. One of Puzder’s first decisions may be to drop the Labor Department’s appeal against the injunction stopping President Obama’s overtime rule from coming into effect. The rule would result in some costly adjustments for companies, not least in Puzder’s fast-food sector. WSJ, subscription required

Around the Water Cooler

Regulators May Allow In-Flight Phone Calls

Farewell to the last remaining oasis of calm in today’s world. Airplane cabins could soon be alive to the sound of phone conversations. The Wall Street Journal reported that the Department of Transport’s aviation regulators have suggested they’re open to allowing in-flight calls from passengers. It said there will be two big caveats: airlines will be able to decide whether they provide the service, and they will have to inform passengers about their decision well in advance of the relevant flight. The good news? A final decision is still probably years away. WSJ, subscription required

Samsung May Supply Chips to Tesla

Samsung could be on the verge of a big break. South Korea’s Electronic Times reported it is in line for a contract to supply chips for self-driving features in Tesla vehicles, citing unnamed sources. Neither company has yet confirmed such a deal. If it happens, it would be a major coup for the Korean company, which has been looking to chips and to the automotive sector to provide a new source of growth as smartphone-related sales plateau (it would also be a welcome distraction from political scandal around President Park Geun-hye, who was formally impeached by lawmakers earlier Friday). Samsung spent $8 billion in November on Harman International Industries in a bid to grow quickly in automotive.   Fortune

McDonald’s Says Goodbye to Luxemburgers

An intriguing development in the ongoing saga over the foreign profits of U.S. companies. McDonald’s said it will move its international headquarters to London from Luxembourg, creating a new company that will receive the bulk of its non-U.S. licensing revenue. McDonald’s could be facing a back tax bill of up to $500 million on profits generated at its Luxembourg holding company, according to reports earlier this year. The company’s decision appears to be a vindication of Westminster’s efforts to anchor international companies in the U.K. in the wake of Brexit by cutting corporate income tax. The British rate is currently 20%, and PM Theresa May plans to cut it to 17% by 2020, the lowest in the G20. Fortune

CEO Hokey-Pokey at Tinder

In-out-in-out and shake it all about – that seems to be the distilled essence of leadership at Tinder and its parent company, Match Group. Sean Rad, Tinder’s co-founder, is to switch jobs with its current chairman (and Match CEO) Greg Blatt. The idea is that Rad will focus more on Swipe Ventures, an acquisition vehicle within Match Group. Rad’s first spell as CEO of Tinder had led to him being ejected in late 2014, but he returned to the job in August last year. Match’s shares have returned a respectable 35% this year but the company has to run fast to stay ahead of a fast-evolving sector. Fortune

Summaries by Geoffrey Smith;