The Milken Institute's blog, Currency of Ideas, is increasingly attracting savvy surfers on the lookout for fresh ideas that reflect the eclectic reach of the Milken Institute and its staff. Check it out at: http://www.milkeninstitute.org/blog. Here's an abridged sampling.

Banking On/With The Millennials

They've outlasted floppy disks, 20-pound laptops and "The Oregon Trail." Now, with most receiving steady paychecks, the millennial generation is ready to adopt financial technology. … Millennial small business owners are five times more likely to receive funding from peer-to-peer lenders than Gen-Xers (the 35-49 crowd), a Bank of America survey suggests, with fewer than half indicating that they would rely on banks for first-time financing needs. As the report further points out, millennials' use of alternative lenders such as OnDeck, Lending Club, Sofi, Funding Circle and Prosper far surpasses that of boomers and Xers.

Along with entrepreneurship, millennials are changing the way we invest and manage money. … Only 14 percent say they would consult with an advisor when making a financial decision. Couple this with their cost sensitivity, interest in passive investment strategies such as exchange-traded funds and comfort with digital technology, and you can see why millennials are drawn to new players such as Wealthfront, Betterment, Personal Capital and Future Advisor. And while these so-called "robo-advisors" have only a small sliver of the $5 trillion managed by registered investment advisors, their expected growth trajectory is astonishing.…
—Jackson Mueller

What's Inside Yellen's Head?

If remaining doubting Thomases needed additional confirmation of the underlying strength in U.S. labor markets and the broader economy, they received it in the Job Openings and Labor Turnover Survey (JOLTS) for December. … The five-million tally of companies' open positions was up 28.5 percent from December 2013 and the highest since January 2001. New hires in December were 5.1 million – the most since November 2007. … It is sure to weigh heavily in discussions inside the Federal Reserve on when to raise interest rates. …

The other side of the tally, separations, totaled 4.9 million in December, virtually unchanged from November, but represented the highest number since October 2008. This indicator would seem to contradict my thesis, but it actually supports it. … While it may seem counterintuitive to herald a rise in people leaving their jobs, it is a confirmation that they are confident enough to jump ship. …
—Ross DeVol

And the Grammys Shall Show Them the Way

The 57th Annual Grammy Awards delivered in every way that fans expected – a star-studded red carpet, designer wardrobes and memorable performances. What might not have been expected was a new identity for music, with the business leading us to a fresh outlook on aging and new opportunities for adults, both old and young.

The same industry that years ago gave us the Rolling Stones' "Mother's Little Helper" and its refrain, "What a drag it is getting old," or The Who's "My Generation" – "I hope I die before I get old" – celebrated artists across the age spectrum at the 2015 Grammy show. …

And the Grammys didn't stop with recognition of performers from a wide age range. Like a handful of leading companies in the U.S. and aging societies that realize the potential of intergenerational teams, the Grammys featured intergenerational artist matchups: Tony Bennett and Lady Gaga; Herbie Hancock, John Mayer, Questlove and Ed Sheeran; Jessie J and Tom Jones, and Paul McCartney, Rihanna and Kanye West. When 24-year-old millennial, Hozier, and 60-year-old powerhouse Eurythmics veteran Annie Lennox took the stage, the crowd — and the Internet — went wild. If intergenerational models can work so well in the music industry, they can certainly work in technology, manufacturing, healthcare, education and in many other domains. …

—Paul H. Irving

Hate to See You Go

[After] nearly six years at the helm of the U.S. Food and Drug Administration, Commissioner Margaret Hamburg, … the long-time public health official, champion of patients and friend of FasterCures, will be stepping down. …

Under Hamburg's leadership, the FDA has evolved into a more transparent, communicative agency that brings external stakeholders to the table earlier and more often. Among her many contributions are the launch of the FDA's Advancing Regulatory Science initiative in 2010 (which developed better tools and standards for assessing safety and efficacy), the increased communication and collaboration between FDA and NIH, the launch of the PDUFA V-initiated Patient-Focused Drug Development Initiative (which invites patients to share their feedback on benefits and risks with the FDA) and multiple measures to speed the development and review of new drugs and devices. … Last year the FDA approved 41 new therapies, the most in almost 20 years, a testament to the impact of these efforts.…

—Margaret Anderson

Rate Squeeze

Fed Fund futures markets and Fedspeak soothsayers agree that the Federal Reserve will, more likely than not, finally raise short-term interest rates by October. … U.S. banks have been preparing for the Fed's move for some time. The question of whether higher interest rates are good for the banking sector depends on a couple of more specific inquiries: which rates are rising and why?

The distinction is important because banks rely on borrowing at cheap, short-term rates and lending money for longer periods at higher interest rates, generating a nice net interest margin (NIM). But troublingly, while short-term rates have risen in anticipation of Fed tightening, longer-term yields have reversed course and fallen in recent months. … This relative flattening of the yield curve bodes poorly for bank NIMs, which already registered record lows in the fourth quarter of 2014. Since 2010, net interest margins have come down substantially for U.S. banks, especially among the largest. Wells Fargo's 12-month trailing NIM dropped from 4.2 percent at the end of 2010 to its lowest-ever recorded, 3 percent, at the end of 2014. In the same period, JPMorgan's fell from 3.1 percent to 2.1 percent…

—Donald Markwardt

Plus Ça Change

The elevation of 79-year-old Crown Prince Salman as the new regent of Saudi Arabia, following the death of King Abdullah last week, has raised questions in the world's corridors of power. Will policy changes be forthcoming and, if so, when?…

In contrast to past episodes of price weakness when the Saudis expressed a commitment to reduce production, this time their decision has been to maintain market share, at least so far. While there has been much speculation about the Saudis' motivation … they see limited options to reverse market dynamics until marginal producers face the squeeze of rapidly declining prices.

One crucial question is whether Saudi Arabia has the wherewithal to meet its current and future spending obligations. … Although Saudi Arabia is one of the lowest-cost oil producers in the world, spending to ease social pressures has pushed the breakeven price for the fiscal budget to slightly more than $100 per barrel, according to RBC Capital. The recently released government budget for 2015 projects a deficit of just under $40 billion.… However, since the Arab Spring in 2011, Saudi yearly spending has averaged 22 percent more than budgeted.… [But with] more than $740 billion in foreign assets with the Saudi Arabian Monetary Agency, the kingdom is well positioned to maintain its current oil production policy for several years and even into the next decade if needed.…

—Keith Savard