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Americans think they need a six-figure income to feel financially healthy in this economy, survey suggests

Americans say they need to earn $122,000 annually to be financially healthy, per a a Personal Capital survey. It has a lot to do with inflation. Americans are anxious about the economy as inflation surges.RAMON VAN FLYMEN/Getty Images Americans say they need to earn $122,000 annually to be financially healthy, per a new survey. An unsettling year, inflation, and rising inequality have made them anxious about the economy. It explains why many are joining the Great Resignation, reshuffling into a new job with more money. Financial health is getting expensive.Americans say they need to earn $122,000 a year on average to feel that they're in good financial shape, according to a survey by Personal Capital and Harris Poll that polled more than 2,000 people in the last quarter of 2021. That's nearly twice the average annual salary of $66,665. This six-figure number is the result of a lack in confidence Americans have in both their personal finances and the economy, the report found. In the first quarter of 2021, nearly half of Americans (48%) said they felt "very financially healthy." By the fourth quarter, that had dipped to 34%. Meanwhile, their faith in the US economy is 2 percentage points lower than it was a year ago and 12 points lower than in pre-pandemic times.The report attributes the anxious slump to a variety of things: an unsettling year, the rising price of goods and services, and an "explosion of wealth" in the tech sector. The latter was part of a growing inequality gap in which the rich got richer while lower-income workers struggled with job loss and paying bills, resulting in a K-shaped recovery.The findings back up the University of Michigan's Index of Consumer Sentiment, which reported economic angst at its second lowest level in a decade in November.Such grumpiness comes on the heels of a year in which supply chain shortages have threatened the "just-in-time economy" of the 2000s and inflation continued to climb, leaping in December to the fastest pace since 1982. With Americans shelling out more for everyday items like beef and furniture as well as for big purchases like a home thanks to a housing crisis, it's no wonder they're setting the bar for financial security so high. A $100,000 salary, once the symbol of success, is now considered middle class and no longer enough to buy the American Dream.It explains why so many workers are joining the Great Resignation. Fed up with low wages, emboldened by the turnaround of the coronavirus recession, and looking to escape burnout, employees have been quitting in record numbers for various reasons. Many are merely reshuffling into a better role elsewhere. Considering that switching jobs is often the key to earning more money, the move signals the desire for greater financial security.But the survey found that even if they feel otherwise, Americans are actually financially stable. About two-thirds of respondents (67%) say  they have enough money to pay bills on time and 53% said they could manage an unforeseen $500 expense without worry. Economists also expect inflation to cool through early 2022 as supply chains heal and demand eases.Economic anxiety may have hindered 2021, but it looks like 2022 might assuage those feelings.Read the original article on Business Insider.....»»

Category: personnelSource: nytJan 14th, 2022

4 Charts That Explain the U.S.’s 2021 Economic Rollercoaster

The U.S. economy ended up in a weird place in 2021. Consumers were eager to spend money, but couldn’t get their purchases because supply chains were haywire. Wages rose as workers resigned. Prices, meanwhile, soared for everything from groceries to gas to rent and vehicles. And the global health crisis that triggered these trends is… The U.S. economy ended up in a weird place in 2021. Consumers were eager to spend money, but couldn’t get their purchases because supply chains were haywire. Wages rose as workers resigned. Prices, meanwhile, soared for everything from groceries to gas to rent and vehicles. And the global health crisis that triggered these trends is still in full force. If you are feeling a bit of whiplash from all this, you’re not alone. Americans have mixed feelings about what’s going on. A Gallup economic poll in November found that 70% of U.S. adults believe the economy is getting worse—a rate not seen since April 2020, when the country was in shut-down mode. But at the same time, 74% say now is a good time to get a job—the highest rate recorded in the survey’s 20-year history. [time-brightcove not-tgx=”true”] It’s hard to say if things will start to feel more normal in 2022. The unusual combination of economic circumstances from the last year could persist for some time, experts say, but the timeline is uncertain because so much depends on the pandemic’s severity, monetary policies and human behavior—all of which play off each other. Consider all the ingredients that were necessary to create the so-called “great resignation” of 2021. First was the fact that Americans weren’t cash-strapped thanks to federal programs such as relief checks and enhanced unemployment benefits from President Biden in 2021 and former President Trump in 2020. Even as those programs wound down, families with children received child tax credit payments on a monthly basis in the second half of the year. Those income sources, combined with the dampened consumer spending from early in the pandemic, triggered the personal savings rate to shoot up—giving Americans a financial cushion to sit on as they waited to rejoin the labor force. Americans experienced less material hardship during the pandemic than before the pandemic, according to one analysis from the Urban Institute, a left-leaning think tank. “The intentions [of the pandemic policies] might have been good, but they also provided a bit of a disincentive and lack of a need to get back on the job,” says Joel Griffith, an economics research fellow at the Heritage Foundation, a conservative think tank. “So I think we’re still experiencing some of the lagging effects of that.” Financial security aside, the decision to take a job—or stay in an existing one—became more complicated in 2021 as the pandemic continued to drag on. Some workers left customer-facing jobs due to the health risks. Others left industries like trucking that capitalize on poor working conditions. More recently, employees left jobs in defiance of vaccine mandates, as well. This confluence of factors, both tangible and psychological, created an unusual scenario where people didn’t rush into available jobs. Currently, there are 6.9 million unemployed Americans, but there are 11 million job openings, according to the Bureau of Labor Statistics. A rising number of workers quit in the second half of 2021, hitting a record 4.4 million people, or 3% of workers, in September. The upshot of the great resignation is that companies are bumping wages and benefits to lure and retain employees. Just ahead of the holiday shopping season, for instance, Macy’s announced that all workers would earn at least $15 an hour by May 2022, making the department store one of the latest national chains to boost pay, following the likes of Costco (which set a $17 base wage in October) and Starbucks ($15 by next summer). Amazon’s base wage has been $15 since 2018, but the company announced in September that its average starting pay would jump to $18. The Macy’s decision came amid “intense competition for talent,” as noted in the retailer’s latest earnings report. Although these increases are above the $7.25 federal minimum wage, researchers at the Massachusetts Institute of Technology who track the cost of living by U.S. county report that even $15 an hour is not enough for most Americans to get by. What’s most defining about 2021’s labor crunch is that so many Americans left the labor force at a time when living costs were rising. Indeed, inflation has been an increasingly worrisome issue, hitting 6.9% year-over-year in November, a 39-year high. Inflation has stemmed largely from tight supply chains (an ongoing problem since the first economic shutdowns) and high consumer demand. Labor shortages haven’t been the main cause for inflation, experts say, but they aren’t exactly helping the problem, either. Indeed, manufacturing, transport and wholesale industries are all paying more to hire and retain workers and certainly some of those costs are getting passed down the line to the consumer. Energy prices are a major reason why inflation has spiked. Consumers around the world are feeling the effects of rising energy costs in their utility bills and at the pump—and just about everywhere else considering the vast number of goods that get produced and transported with fuel. The World Bank announced in late October that energy prices are on track to be more than 80% higher in 2021 compared to 2020, and will stay high in the first half of next year, posing a significant risk to global inflation. “We were in a pandemic recession. We were in a quarantine. We were really slowing down economic activity for a long time,” says Michael Horrigan, president of the W. E. Upjohn Institute for Employment Research who previously served as an associate commissioner with the Bureau of Labor Statistics. “As we have come back—and it’s been uneven—but as we have come back, there has been a big increase in the demand for a variety of things that are related to the use of energy.” Prices for goods and services are running so high that they are wiping out wage gains. Wages and salaries for private industry workers as measured by the Employment Cost Index were rising about 3% a year prior to the pandemic. They were up 4.6% for the 12-month period ending Sept. 2021. But U.S. inflation, as measured by the Consumer Price Index, has topped 5% annual increases every month since June, which means that the price increases have eaten into the salary gains for much of the year. Researchers at Harvard’s Kennedy School calculate that inflation-adjusted wages are nearly 3% below the pre-pandemic growth trend. Inflation-adjusted wages may strengthen again if prices return to their pre-pandemic norms in 2022, says Jason Furman, an economics professor at Harvard. “If inflation is below 2.5% next year, then probably workers will start to catch up—maybe not get back all the way, but make up some of the ground they lost in the last year and a half,” he says. “If inflation is above 3%, then they’re likely to lose further ground next year.” (Furman’s personal prediction is that inflation will top 3% next year.) Economists aren’t certain how long it will take for prices to restabilize. The calculation depends on which policy interventions will kick in. The Federal Reserve, which is tasked with maintaining price stability, has signaled that it could raise interest rates in an effort to lower inflation. Higher interest rates could dampen spending and slow down the economy because consumers and businesses will find it more expensive to borrow money. The trade-off in curbing inflation with higher interest rates is that as the economy cools, businesses typically slow hiring. Should that happen, it could take longer for the U.S. unemployment rate—which was 4.2% in November— to drop back down to its pre-pandemic rate of 3.5%. “The Fed expected inflation to come back down much more rapidly,” says Narayana Kocherlakota, an economics professor at the University of Rochester who previously served as president of the Federal Reserve Bank of Minneapolis. “The forces that we’re seeing on inflation are more persistent than were expected a year ago.” Now, the clock is ticking as economists debate what normal employment should look like in an era when employees are quitting in droves. For Americans, fearing that inflation is here to stay could make inflation worse. Given enough time and exposure to higher prices, businesses and workers may start to worry that their dollars won’t cover expenses and they may try to hedge against it. For instance, labor unions could demand wage boosts that are commensurate with living costs. Businesses might opt into contracts that account for anticipated price spikes. And landlords may raise rents in their lease agreements. These reactions, in combination with the current inflation triggers like high energy prices and supply chain problems, could lock in high prices for the future, making inflation spiral higher. For much of 2021, Federal Reserve chair Jerome Powell publicly noted that inflation was transitory and driven by certain parts of the economy most impacted by the pandemic. Only recently has that outlook shifted. The Fed has acknowledged in more recent weeks that the problem is more widespread, to the point of requiring intervention. “Expectations matter tremendously,” says Kocherlakota. “You’re trying to see, as a policymaker, how permanent do people believe inflation is going to be, because the more they believe it’s going to be permanent, the more tendency there is for it to become permanent.” Managing expectations about how inflation will look in 2022 could curb the behaviors that threaten to perpetuate ever-rising prices. But at the same time, the forces that kicked off the economic problems in the first place—a hesitant workforce, supply chain holdups and a glut of consumer spending—are all rooted in a pandemic that can’t be solved with monetary policies. For the economy to feel healthy again, the world needs to pull together to overcome the human health crisis first......»»

Category: topSource: timeJan 1st, 2022

Macleod: Gold And Silver Prospects For 2022

Macleod: Gold And Silver Prospects For 2022 Authored by Alasdair Macleod via GoldMoney.com, It has been a disappointing year for profit-seeking precious metal investors, but for those few of us looking to accumulate gold and silver as the ultimate insurance against runaway inflation it has been an unexpected bonus. After reviewing the current year to gain a perspective for 2022, this article summarises the outlook for the dollar, the euro, and their financial systems. The key issue is the interest rate outlook, and how that will impact financial markets, which are wholly unprepared for the consequences of the massive expansions of currency and credit over the last two years. We look briefly at geopolitical factors and conclude that Presidents Putin and Xi have assessed President Biden and his administration to be fundamentally weak. Putin is now driving a wedge between the US and the UK on one side and the pusillanimous, disorganised EU nations on the other, using energy supplies and the massing of troops on the Ukrainian border as levers to apply pressure. Either the situation escalates to an invasion of Ukraine (unlikely) or America backs off under pressure from the EU. Meanwhile, China will continue to build its presence in the South China Sea and its global influence through its silk roads. Less appreciated is that China and Russia continue to accumulate gold and are ditching the dollar. And finally, we look at silver, which is set to become the star performer against fiat currencies, driven by a combination of poor liquidity, ESG-driven industrial demand and investor realisation that its price has much catching up to do compared with lithium, uranium, and copper. The potential for a fiat currency collapse is thrown in for nothing. 2021 — That was the year that was This year has been disappointing for precious metals investors. Figure 1 shows how gold and silver have performed since 31 December 2020. Having lost as much as 11.3%, gold is down 6.5%. And silver, which at one stage was down 19.3% is down 15%. Admittedly these returns followed strong gains in 2020, so 2021 could be described as a year of consolidation. But this outcome was counterintuitive, given the monetary background. Total assets of the five major central banks (Fed, ECB, BoJ, PBoC and BoE) rose from $20.4bn to $32.5bn between February 2020 and today, which works out at an average annualised increase of 32% for each of two years on the trot. Since 2006, total assets for these central banks have increased by 500%. Since February 2020, US M2 money supply has increased at an annualised rate of 20.2%, for nearly two successive years, and now stands at over 90% of GDP, having started the millennium at 44.4% of GDP. But as will be demonstrated later in this article, adjusted for the temporary withdrawal of liquidity through reverse repos, the true quantity of M2 money is practically 100% of GDP. Without doubt, there is a surfeit of dollars and similar excesses of all other major currencies in circulation, a global condition which has worsened considerably since March 2020. The rate of inflation of currency and credit has never been so high on a global basis, ever. Yet gold and silver hardly reflected it. Behind it all is the fatal but common mistake to fail to connect rising prices with currency debasement. No statements from any of the major central banks on monetary policy have mentioned the quantity of currency, only the consequences for prices and interest rates. And there is a broad consensus between central banks that rising interest rates are to be deployed only in the last resort. The right to issue as much currency as central banks desire will remain sacrosanct. That prices are rising above the common target level of 2% and will remain there must be denied. For now, ovine investors accept this narrative unquestioningly. Officialdom is also wrongly committed to inflationary policies to increase the GDP total. Policymakers, establishment economists, and investment strategists alike fail to understand that increases in GDP are not indicative of an improvement in economic conditions — progress is intangible and unquantifiable. GDP is only a reflection of the quantity of currency and credit in the economy. The remarkable recovery from the collapse in GDP in 2020 was not an economic recovery; it was simply a reflection of ramped-up unproductive government deficit spending. And the savings ratio which shot up was no more than a temporary reservoir of stimmy-inflated bank deposits. What should worry us all is that no one in charge of economic and monetary policy, let alone the wider public, appears to understand this basic error. It is not in their interest to do so, because take away GDP and the entire argument for state intervention collapses. For this reason, the commitment to monetary inflation must be total. We can conclude, to paraphrase Noël Coward, “Hurray-hurray-hurray, Inflation’s here to stay!” The antipathy to recognising this fundamental error is behind the confused market response to inflationary conditions — with the notable exception perhaps of cryptocurrency enthusiasts. But even for them, the inflation argument only goes so far as to recognise the difference between an open-ended facility to issue national currencies and the hard restrictions on the issue of bitcoin. No hodler has yet to come up with a convincing explanation of how bitcoin will replace failed fiat currencies as a widely accepted medium of exchange. It has been this confusion over what money truly is and the difference between money and fiat currency which in 2021 has suppressed a wider interest in physical gold and silver. To this confusion has been added structural changes in the banking system with the introduction of Basel 3’s net stable funding ratio. Most banks now must comply with the NSFR, with the notable exception of UK banks so far, until that is, the New Year. The intention is to ensure that bank liabilities are stable with respect to the funding of assets, thereby lessening the risk of financing instabilities and their systemic consequences. Under the new rules a bank that maintains principal positions in derivatives of all types must accept a financing penalty. And even if a bank finds that dealing in derivatives is so profitable that it is worth paying the penalty, its management is unlikely to freely embrace business lines that could adversely affect its reputation with the regulators. 2021 was therefore a year when banks attempted to moderate their positions in derivatives as the NSFR was introduced, actions that are likely to continue into 2022. Bullion banks will want to cut their liabilities to unallocated precious metals’ deposit accounts — that can be done simply by varying account terms. But taking the short side of regulated futures contracts cannot be negated by the stroke of a pen. They must be closed or the NSFR penalty tolerated. My guess is that bankers will initially restrict their derivative positions to regulated futures markets because they can more easily be defended from a reputational standpoint. Compared with London’s OTC forward and swaps, Comex’s regulated futures are by far the smaller market, approximately one eighth the size. And as banks reduce their derivative exposure, the withering of forward markets can be expected to unlock hidden physical demand. Physical commodities, including precious metals, are unregulated, but an unallocated bank account tied to a commodity price is. This might not trouble investors managing their own money, but any regulated investment manager holding unallocated gold deposits on behalf of clients will lose that facility. And if a manager wishes to retain price exposure, he will be forced to buy ETFs or persuade his compliance officer to sign off on an allocated physical investment instead. As London’s forwards market shrinks, the structure of Comex, whereby the Swaps category and banks operating within the Producer/Merchant/Processor/User category are classified as non-speculators, when they are in fact speculators and not genuine hedgers, should come under increased scrutiny. The trigger for such a debate is likely to be an overall loss of market liquidity as the London market diminishes, leading to greater price volatility and severe price backwardations as derivative supply dries up. And while we can point to the effects of Basel 3 on precious metals, we must not ignore the consequences for other commodities and energy contracts. Following the recent global fiat currency debasements, many commodity contracts have been in persistent backwardation. The reduction of derivative liquidity is sure to aggravate physical shortages for commodities generally and inflate their prices further. For policy planners in the central banks, these changes could hardly come at a worse time. Renewed rises in raw material and commodity prices will lead to a rational expectation of a far greater fall in state currencies’ purchasing power at the consumer level than has occurred so far. It appears therefore, that the fall in the purchasing power of the dollar and of other currencies has barely started. Inflation outlook for the US dollar First, we must define inflation: it is the increase in the quantity of money, currency, and credit, generally taken to be represented by total deposit liabilities in the banking system. It is not an increase in prices. Changes in the general price level is the consequence of a combination in changes of the quantity of deposit currency and changes in the level of the public’s retention of deposit currency relative to their possession of goods. We can record deposits statistically, but cannot quantify human behaviour. But even statistics cannot be taken at face value. Deposit liquidity is managed by central bank intervention using repurchase and reverse repurchase agreements (repos and RRPs respectively). By entering into a repo transaction, in return for collateral held as security a central bank injects liquidity into the financial system, increasing large deposits held at the banks. The liquidity crisis in September 2019 was dealt with in this way when the Fed’s overnight repos rocketed up to a record $80bn. By entering into RRPs, a central bank removes liquidity from the financial system. Both repos and RRPs are temporary in nature, mostly being overnight in duration. Being temporary, we must adjust M2 money supply by subtracting repos from it and adding in reverse repos for a truer picture. The outcome is illustrated in Figure 3. Repo balances had diminished to zero by July 2020, and RRPs only became significant last April. Together, these explain the deviation of the blue line from M2 (the red line) since December 2019. Taking the most recent RRP number of $1,748bn, the adjusted M2 level becomes approximately $23,100bn, an increase of 48.2%, or 24.1% annualised for two successive years. The excess liquidity currently hidden in RRPs is the consequence of unfunded government deficit spending. It is government spending which ends up as surplus deposits in the banking system without them being offset by public subscriptions for government debt. Quantitative easing contributes to the problem, giving deposit money to pension funds and insurance companies in return for securities that end up on the Fed’s balance sheet. The effect of this inflation on prices is still working through the US economy. It is important to appreciate that the inflation of bank deposits is the primary cause for the increase in raw material, production and consumer costs and prices, and not supply chain disruptions. Central bankers are being disingenuous when they insist that rising prices are a temporary phenomenon. The expansion of deposits and excess liquidity, particularly since last April, tells us that even without changes in the public’s level of retention of currency relative to goods, there is a considerable loss of the dollar’s purchasing power yet to come. And neo-Keynesian arguments that faltering demand will restore the balance between supply and demand for consumer goods are incorrect. We therefore enter 2022 with the prospect of further increases in the rates of production cost and consumer price increases. That interest rates will begin to rise significantly is guaraanteed. Already, with the US CPI recording an annual increase of 6.8%, establishment investors are accepting a negative real yield on the 10-year US Treasury of 5.4%. And for those who follow John Williams’ Shadowstats.com, which calculates consumer price rises “Consistent with the methodologies of pre-1980 headline CPI reporting” at 14.9%, the real yield on the 10-year bond is minus 13.5%! How far interest rates will rise in the coming months is not yet clear, but it is likely that they will rise substantially more and sooner than is currently discounted. Furthermore, the tapering of QE is planned to be accelerated, reducing in a roundabout way the support to government funding from the Fed. Without that support, markets will almost certainly demand lower negative real yields on Treasuries at the least, forcing nominal yields considerably higher. The shock of a move towards market reality could be immense and unexpected. Higher nominal yields on bonds mean significant investment losses for bond portfolios, and the basis for equity valuations will also be badly undermined. A substantial bear market in all financial assets is becoming more certain by the day. Furthermore, higher borrowing costs will threaten the zombie corporations unable to earn sufficient returns on their borrowings. It is a situation the Fed has tried to avoid, using QE to sustain low bond yields and high market values. Having decided to reduce the monthly QE stimulus, a bear market in financial assets has been made more certain. To counter the effect, the Fed will probably end up increasing QE again to support market prices, as they did in March 2020. But QE and a return to it is blatant currency printing which can only serve to undermine the dollar’s purchasing power even further and eventually require yet higher bond yield compensation: it is no more than a temporary sticking plaster on a suppurating wound. A developing slump in economic activity from higher nominal interest rates will also add to the Federal Government’s deficit by reducing tax income and increasing welfare spending. In any contemporary administration, particularly the Biden one, there is no mandate to address this problem and we must assume at this distance that it can only be resolved by further debt being issued at increasingly higher yields. The situation resembles that faced by an earlier proto-Keynesian, John Law in 1720. To sustain his Mississippi bubble, he supported the share price by freely issuing his livre currency to buy stock in the market, which he could do as controller of the currency. It was not long before the livre’s purchasing power was undermined entirely. As the current situation for the dollar unfolds, its purchasing power is set to decline similarly to the French livre of three centuries ago. But there is also an ugly systemic problem in the commercial banking network, for which to appreciate we must turn our attention to Europe. The looming collapse of the euro Like the Fed, the ECB is resisting interest rate increases despite producer and consumer prices soaring. Consumer price inflation across the Eurozone was most recently recorded at 4.9%, making the real yield on Germany’s 5-year bond minus 5.5%. But Germany’s producer prices for October rose 19.2% compared with a year ago. There can be no doubt that producer prices have yet to feed fully into consumer prices, and that rising consumer prices have much further to go, reflecting the acceleration of the ECB’s currency debasement in recent years. Therefore, in real terms, not only are negative rates already increasing, but they will go even further into record negative territory due to rising producer and consumer prices. Unless it abandons the euro to its fate on the foreign exchanges altogether, the ECB will be forced to permit its deposit rate to rise from its current —0.5% to offset the euro’s depreciation. And given the sheer scale of recent monetary expansion, euro interest rates will have to rise considerably to have any stabilising effect. The euro shares this problem with the dollar. But even if interest rates increased only into modestly positive territory, the ECB would have to quicken the pace of its monetary creation just to keep highly indebted Eurozone member governments afloat. The foreign exchanges are bound to recognise the developing situation, punishing the euro if the ECB fails to raise rates and punishing it if it does. The euro’s fall won’t be limited to exchange rates against other currencies, which to varying degrees face similar dilemmas, but it will be particularly acute measured against prices for commodities and essential products. Arguably, the euro’s derating on the foreign exchanges has already commenced. But there is an additional factor not generally appreciated, and that is the sheer size of the euro’s repo market and the danger to it that rising interest rates presents. Demand for collateral against which to obtain liquidity has led to significant monetary expansion, with the repo market acting not as a marginal liquidity management tool as is the case in other banking systems, but as an accumulating source of credit. This is illustrated in Figure 4, which is of an ICMA survey of 58 leading institutions in the euro system. The total for this form of short-term financing grew to €8.31 trillion in outstanding contracts by December 2019. The collateral includes everything from government bonds and bills to pre-packaged commercial bank debt. According to the ICMA survey, double counting, whereby repos are offset by reverse repos, is minimal. This is important when one considers that a reverse repo is the other side of a repo, so that with repos being additional to the reverse repos recorded, the sum of the two is a valid measure of the size of the repo market. The value of repos transacted with central banks as part of official monetary policy operations were not included in the survey and continue to be “very substantial”. But repos with central banks in the ordinary course of financing are included. Today, even excluding central bank repos connected with monetary policy operations, this figure almost certainly exceeds €10 trillion by a significant margin, given the accelerated monetary expansion since the ICMA survey, and when one allows for participants beyond the 58 dealers recorded. An important element of this market is interest rates, which with the ECB’s deposit rate sitting at minus 0.5% means Eurozone cash can be freely obtained by the banks at no cost. The zero cost of repo cash raises the question of the consequences if the ECB’s deposit rate is forced back into positive territory. The repo market will likely contract in size, which is tantamount to a decrease in outstanding bank credit. Banks would then be forced to liquidate balance sheet assets, which would drive all negative bond yields into positive territory, and higher, accelerating the contraction of bank credit even further as collateral values collapse. Moreover, the contraction of bank credit implied by the withdrawal of repo finance will almost certainly have the knock-on effect of rapidly triggering a liquidity crisis in a banking cohort with exceptionally high balance sheet gearing. There is a further issue to consider over collateral quality. While the US Fed only accepts very high-quality securities as repo collateral, with the Eurozone’s national banks and the ECB almost anything is accepted — it had to be when Greece and the other PIGS were bailed out. And the hidden bailouts of Italian banks by bundling dodgy loans into repo collateral was the way they were removed from national bank balance sheets and hidden in the TARGET2 system. The result is that the first repos not to be renewed by commercial counterparties are those whose collateral is bad or doubtful. We have no knowledge how much is involved. But given the incentive for national regulators in the PIGS to have deemed non-performing loans to be creditworthy so that they could act as repo collateral, the amounts will be considerable. Having accepted this bad collateral, national central banks will be unable to reject them for fear of triggering a banking crisis in their own jurisdictions. Furthermore, they are likely to be forced to accept additional repo collateral if it is rejected by commercial counterparties and bank failures are to be prevented. The numbers involved are larger than the ECB and national central banks’ combined balance sheets. The crisis from rising interest rates in the Eurozone will be different from that facing US dollar markets. With the Eurozone’s global systemically important banks (the G-SIBs) geared up to thirty times measured by assets to balance sheet equity, rising bond yields of little more than a few per cent will likely collapse the entire euro system, spreading systemic risk to Japan, where its G-SIBs are similarly geared, the UK and Switzerland and then the US and China which have the least operationally geared banking systems. It will require the major central banks to mount the largest banking system rescue ever seen, dwarfing the Lehman crisis. The required expansion of currency and credit by the central bank network is unimaginable and comes in addition to the massive monetary expansion of the last two years. The collapse in purchasing power of the entire fiat currency system is therefore in prospect, along with the values of everything that depends upon it. The only sure-fire escape for the ordinary person is to physically possess the money of history that cannot be corrupted, and to which when the state theory of money is disproved yet again, becomes the only acceptable medium of exchange. That is physical gold and silver. Geopolitical factors This millennium, Kipling’s “Great Game” moved from the Central Asia of the nineteenth century and the Middle East to become truly global, with America and its close five-eyes allies on one side, and a coalition of China and Russia on the other. It also happens that the two protagonists are on different sides in the matter of money and currencies, with China and Russia having seized control over the world’s physical gold while America insists gold has no role in modern currency systems. Elsewhere, I have reasoned that China has secretly accumulated enormous quantities of gold, likely to be at least 20,000 tonnes, possibly even more, and its citizens have also accumulated a further 17,000 tonnes. Briefly, the evidence is as follows. The Peoples’ Bank was mandated to acquire and manage the state’s gold and silver resources by regulation in 1983, an extension of its foreign exchange monopoly. Consequently, the PBOC had a clear run-in accumulating gold during the 1981-2002 bear market while China’s citizens were banned from owning both metals. In 2002, the Shanghai Gold Exchange was established and the ban on gold and silver ownership by the public was lifted. The Communist Party even advertised the benefits of owning precious gold, developing significant levels of public demand — hence public ownership estimated at 17,000 tonnes. At the same time the State invested heavily in mining and refining. Consequently, from virtually nowhere China became the largest gold mining nation by far and has maintained that position ever since. No gold was permitted to be exported, and the only Chinese refined bars ending up at the Swiss refineries have been very few and believed to have been smuggled. While we cannot be certain of the numbers, the evidence that the Communist Party has prioritised the accumulation of gold, and to a lesser extent perhaps silver, and now exercises a high degree of monopolistic control over Asian gold markets is irrefutable. Similarly, President Putin has also prioritised the accumulation of gold, though his reasoning was partly driven by American and IMF sanctions in the wake of Russia’s invasion of Ukraine in 2014. Russia’s strategic vulnerability is in the payment for her energy sales, which is overwhelmingly in dollars — the currency of her enemy. Furthermore, under the correspondent banking system, the US has source intelligence of every dollar that is held by Russia and of all her dollar transactions. Putin’s response has been to unload dollars acquired through energy and commodity exports in favour of gold and other currencies. Russia’s political strategy is to allay herself closely with China through the Shanghai Cooperation Organisation and other Asian political groupings, to jointly control the Eurasian landmass, and therefore the bulk of the world’s population. As the swing energy provider to Western Europe, Russia is driving a wedge between America and the UK on one side, and their NATO partners on the other. Currently, she is sabre-rattling on Ukraine’s eastern flank, but the intention is more likely to exploit the interests of EU member nations and remove the EU from the US’s sphere of influence. Similarly, China is rattling her sabres over Taiwan and the South China Sea. This is also designed to bring pressure to bear on America. The common factor is Russian and Chinese assessments of the Biden administration, which they appear to believe to be fundamentally weak. With respect to gold and silver, we can summarise the current geopolitical position as follows. Between them, Russia, China, and their Asian allies have gone a long way towards cornering the world’s physical gold markets. They are now testing the Biden administration, and Putin has a clear intention to isolate America from Western Europe. Meanwhile, the Fed is pursuing monetary policies which, unless reversed (for which there is no conceivable mandate) will inevitably hand economic power to China and Russia because of their gold-friendly policies. And if America and her allies cut up rough, through their joint domination of physical gold and its markets, China and Russia have the means to destroy the unbacked, fiat dollar. Silver Silver appears to be badly mispriced. There are several factors that can only lead to this conclusion. According to the Silver Institute, physical supply in 2021 increased over a depressed 2020 by 8% to 1,056 million ounces but remains below the output for 2014-2016. Meanwhile demand is up 15% this year at 1,033m oz leaving a marginal surplus of just 23m oz. The question obviously arises concerning demand patterns over the next few years at a time of accelerating investment in non-fossil fuel energy and electricity. For silver, increasing demand for electric vehicles and upgrading of mobile networks to 5G can be added to photovoltaic demand. Forecasting the balance of supply and demand is always difficult for silver because of substantial and unforeseen changes in usage (remember photography?), but it seems reasonable to assume that silver will be one of an elite group of beneficiaries from global environmental policies. The mining industry faces additional cost burdens in many countries as they adjust their operations to comply with environmental, social and governance (ESG) regulations and guidance. International miners will be hampered in fund raising if they don’t comply, even for their mines in countries which have yet to formulate their ESG policies to Western standards. Higher costs such as those imposed by ESG compliance can be expected to force mines to extract higher grades to maintain cash flow, so only higher prices rising faster than costs will impart any value to lower grade ores. The effect of ESG is therefore likely to downgrade longer term mine supply forecasts. Lithium Uranium and copper, three of the other beneficiaries of ESG, saw their prices rise in 2021. Lithium Carbonate prices are up 520% since January, Uranium rose 54%, while copper rose 25% on top of a strong post-March 2020 rise. In silver’s case, a swing factor is investment in ETFs which for the last decade has varied between 200-300m oz. By way of contrast with lithium uranium and copper, the silver price declined this year by 15%. But as a measure of total interest, physical silver demand is the tip of a far larger derivative iceberg. According to the Bank for International Settlements, outstanding forwards and swaps total roughly 3750m oz equivalent between bullion banks, and there are further liabilities between banks and their depositors with unallocated accounts. In addition, there are 715m paper ounces in the regulated Comex silver contract, which with other regulated exchanges suggests that there are at least 4,500m oz of added long positions in derivatives, which is 20 times estimated net physical investment demand for this year. And that ignores regulated and unregulated options. While it appears that industrial demand for silver is set to increase significantly, the pricing of silver in fiat currencies at one eightieth that of gold is also anomalous at a time of accelerating price inflation, more correctly understood as currency debasement. Mismanagement of monetary policies now virtually guarantees the death of fiat currencies, and the only salvation will be to replace or change them into credible gold substitutes, because most central banks have at least some gold in their reserves. That being so, physical silver will reacquire a monetary role as supporting coinage. Its abundance in the earth relative to gold is said to be less than ten times, and its historical relationship under bimetallic standards was approximately fifteen to one. The demise of fiat currencies is likely to guide the gold-silver ratio towards these ratios, so the current ratio of eighty times is a blatant anomaly. In the absence of an immediate crisis for the fiat currency regime, changes to the way banks treat derivatives for balance sheet purposes are likely to lead to a contraction of open positions. The introduction of the net stable funding ratio under Basel 3 regulations is designed to curtail derivative risk generally. The withdrawal over time of banks from trading activities because of the NSFR will reduce liquidity in both OTC and regulated derivatives, leading to greater price volatility. And the contraction of paper silver outstanding is likely to translate diminishing paper supply into increased physical demand. Anecdotal evidence is that order books for silver from the refiners currently run into the middle of 2022, with large industrial consumers scrambling to secure supplies. Any surge in monetary demand is therefore set to have a disproportionate effect on silver prices to the upside. Summary and outlook The year just ending has been a bad one for investors in precious metals, but stackers expecting the next financial crisis will be rejoicing at the unexpected windfall from bullion banks suppressing prices. Naïve investors, if they had a rudimentary understanding of monetary inflation, were directed into cryptocurrencies, leaving gold and silver to those seeking genuine protection from upcoming monetary and economic developments. Furthermore, policy planners and their epigones managing markets have demonstrated a reluctance to embrace the facts about inflation or alternatively are simply clueless. The establishment has provided a window of opportunity for ordinary folk to insure against the financial and economic events now so obviously ahead of them. Those who have a grasp of basic economics and deploy common sense understand that interest rates will now rise, and soon. And with extraordinarily high negative bond yields, financial markets are more mispriced for this eventuality than in any time in recorded history. There can be little doubt in dealing with the inevitable market shock ahead that central banks will continue to issue increasing quantities of their currencies in a vain attempt to stabilise their economies and to ensure government deficits are covered. And with the increasingly likely collapse of the Eurosystem and its commercial banks, we can expect a “whatever it takes” inflationary response from the ECB. As their world collapses around them, central bankers will act like bulls in a china shop, destroying their credibility and currencies even more as their panic increases. Against this background, buyers of physical gold and silver will do so not because they expect to profit from it, but to preserve something from the chaos in prospect, which will be triggered by rising, and then soaring interest rates as currency time preferences escalate and their purchasing power collapses. Tyler Durden Sun, 12/26/2021 - 10:30.....»»

Category: smallbizSource: nytDec 26th, 2021

1.5 Million Parents Could Drop Out Of Workforce If Biden Stimulus Passes; Analysis

1.5 Million Parents Could Drop Out Of Workforce If Biden Stimulus Passes; Analysis Submitted by Andrew Moran of The Epoch Times, As many as 1.5 million working parents could exit the labor market as more U.S. households receive the expanded Child Tax Credit (CTC) benefit, a new study predicts.   A child in Brooklyn, New York, on Sept. 13, 2021. (Brendan McDermid/Reuters) According to a recent analysis (pdf) from University of Chicago economist Bruce Meyer, approximately 2.6 percent of parents could drop out of the workforce after being given monthly entitlement checks based on family income.   Under the American Rescue Plan that was passed in March, lawmakers expanded the CTC from $2,000 to as much as 3,600 per child. Half of the CTC funds were sent to households or deposited into bank accounts in the form of monthly checks from July to December. Parents are not required to work to receive the CTC and its monthly payments. Meyer explained that some parents could choose to quit working because of the payments and if they can gather enough money from public assistance and family and friends.   “The proposed expansion would get rid of the strong work incentives under the prior CTC; it would essentially eliminate a tax credit that encouraged work and replace it with something that discourages work,” Meyer told CBS MoneyWatch. “In the end, those at the bottom may not be better off.”   He added that it would be “a good idea” to insert a work requirement. The economist endorsed Sen. Joe Manchin’s (D-W.Va.) proposal of requiring an employment prerequisite.   Parents pick up their children in Chicago, Ill., on March 1, 2021. (Scott Olson/Getty Images) As part of the previous CTC, beneficiaries needed to work to receive the full credit.   Still, Meyer anticipates that the tax credit, even if 1.5 million parents were to quit their jobs, would alleviate child poverty. He projected that child poverty could decline by 22 percent because of the payments.   Others dispute his suggestion that more than one million working parents would be submitting their letters of resignation.    Researchers at Columbia University’s Center on Poverty and Social Policy argued in a recent paper (pdf) that the data show that CTC payments have not led to a noticeable impact on payrolls or the labor force participation rate.    “Real-world data in the immediate wake of the CTC expansion do not support claims that the elimination of the phase-in portion of the CTC has discouraged work among parents in any meaningful way,” the researchers stated.   Speaking to reporters aboard Air Force One on Dec. 17, White House press secretary Jen Psaki stated that President Joe Biden could double the CTC payments in February if the $1.75 trillion social-spending and climate change plan is enacted in January.   “If we get it done in January, we’ve talked to Treasury officials and others about doing double payments in February as an option,” she told the press. “The president wants to see this move forward. It’s a priority for him as soon as Congress returns.”   While the administration and Democrats want to extend the payments as part of the legislative push, the bill is not guaranteed to pass amid hesitancy from Manchin. In addition, many congressional Democrats have conceded that they do not have a considerable backup plan to maintain the monthly payments prior to their expiration.   Ultimately, experts concede that the United States has, for many decades, refrained from offering variations of basic income similar to the CTC payments. Therefore, they aver, there are still many unknowns and uncertainties.   Child Care Costs a Financial Burden For many parents, it might be economically beneficial to resign from their positions since daycare is costly. It is no secret that the cost of child care is expensive. According to the Bureau of Labor Statistics (BLS), the price of daycare and pre-school advanced by 2.7 percent year-over-year in November. Families nationwide spend an average of $8,355 per child for year-round child care, with some estimates going as high as $16,000. “Monthly child-care costs can feel like an extra mortgage payment, especially if you live in an expensive area or have more than one kid,” said Ted Rossman, Bankrate’s senior industry analyst, in a news release. Biden’s American Families Plan possesses proposals to diminish child-care prices. For households earning less than 1.5 times their state median income levels, they would not pay for child care. Others earning above that level would pay no more than 7 percent of their income on child care. The Latest from The Great Resignation  Employers are coming across a myriad of challenges in this economy, and labor has been one of the chief obstacles in this market.   According to the BLS, about 4.2 million Americans quit their jobs in October, bringing the total number of people leaving employment to nearly 39 million in the first 10 months of 2021.   It is expected that 2021 will set a new record if workers leave their jobs at comparable levels in November and December.   The so-called quit rate for public- and private-sector workers is high for many reasons. Many people are quitting because of concerns over contracting the coronavirus, being unable to find or afford care for their children or aging parents, or they have located employment opportunities with better compensation.   A ‘now hiring’ sign outside of a business in Miami, Fla., on Oct. 08, 2021. (Joe Raedle/Getty Images) Indeed, the number of job openings in the United States increased to almost 11 million in October, with the figure concentrated in education, hotels, manufacturing, and restaurants.   Experts contend that the labor market pendulum has swung in the direction of the workers. As a result, companies have been raising wages, expanding their perks and benefits, and introducing a wide range of bonuses to attract talent.   “As companies face labor shortages, employers are making a serious effort to recruit workers by offering signing bonuses, additional benefits, and—most importantly—higher compensation across the income distribution,” Morgan Stanley recently purported in a research note.   When businesses cannot find applicants, employers are doing everything they can to retain their current staff members. This, market analysts note, is part of the reason why initial jobless claims have hovered around a five-decade low. Businesses are too frightened to terminate their employees in this environment. According to a study from the Conference Board think tank, private firms are allocating 3.9 percent of their payroll budgets to wage hikes in 2022, the biggest increase since 2008.   The report noted a unique trend as companies try to limit record turnover rates. Many of the salary hikes will be given to present employees.   Meanwhile, the Conference Board survey reported that 39 percent of businesses revealed they are hiking incomes to keep up with surging inflation.   “The rapid increase in wages and inflation are forcing businesses to make important decisions regarding their approach to salaries, recruiting, and retention,” said Conference Board chief economist Gad Levanon in the report. “In particular, companies are likely to raise wages aggressively for their current employees or they will risk even lower retention rates. After being a non-issue in wage determination for several decades, sizable cost of living adjustments may be making a comeback.” “At the same time, business leaders will have to decide how much they will pass the additional labor costs to consumers through price increases. That decision, relative to competitors’ strategies, could impact companies’ market shares.” This development could persist heading into the next calendar year. A recent CareerArc/Harris Poll survey discovered that 23 percent of employed Americans intend to quit their jobs over the next 12 months as a considerable number desire better working conditions and want higher pay.  JPMorgan Chase recently warned that this labor shortage could persist for years, citing a diverse array of factors. JPMorgan’s chief global strategist David Kelly alluded to Baby Boomers retiring, falling immigration numbers, and skills mismatch as partially to blame for the lack of workers. “All of these forces should gradually resolve the current excess demand for labor,” Kelly stated in a research note. “However, barring a recession, this process could take years.” Fed Worried About Wage Threat in 2022 This month, many experts, from Wall Street analysts to top economic policymakers, have sounded the alarm about one of the biggest threats in the economy next year: A “wages push” by workers in 2022 that could contribute to higher inflationary pressures. While he conceded his concerns over 39-year high inflation, Federal Reserve Chair Jerome Powell explained that ballooning wages are “both larger in [their] effect on inflation and more persistent.” He revealed that one of the notable factors determining a rate hike was the Employment Cost Index (ECI) that was published in October. The report discovered that hourly labor costs climbed at a “very high” pace of 5.7 percent over the last three months. Federal Reserve Chairman Jerome Powell speaks after President Joe Biden nominated him to continue as Chair of the Board of Governors of the Federal Reserve Systems during an event at the White House in Washington on Nov. 22, 2021. (Jim Watson/AFP via Getty Images) Over the last 12 months, average hourly earnings have climbed by 4.8 percent to $31.03. “If you had something where real wages were persistently above productivity growth, that puts upward pressure on firms, and they raise prices,” Powell said. “We don’t see that yet. But with the kind of hot labor market readings—wages we’re seeing, it’s something that we’re watching... You know, usually, in every other expansion, it’s that there aren’t enough jobs and people can’t find jobs,” he added. “What we need is another long expansion, like the ones we have been having over the last 40 years.” The head of the U.S. central bank acknowledged that many Americans do not want to return to the workforce because of medical concerns, the paucity of child care, and nobody to look after seniors. “The ratio of job openings, for example, to vacancies is at all-time highs, quits—the wages, all those things are even hotter,” Powell said. Tyler Durden Mon, 12/20/2021 - 20:40.....»»

Category: dealsSource: nytDec 20th, 2021

Transcript: Steve Fradkin

     The transcript from this week’s, MiB: Steve Fradkin Northern Trust, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast… Read More The post Transcript: Steve Fradkin appeared first on The Big Picture.      The transcript from this week’s, MiB: Steve Fradkin Northern Trust, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast I have a special guest. His name is Steve Fradkin, and he runs one of the larger pools of assets that you probably had no idea about. He is the President of Northern Trust Wealth Management. They run over $350 billion in client assets. They serve some of the wealthiest families in America. One in five wealthy families actually has assets with Northern Trust. They have something like 20 percent of the Forbes 400, just a very interesting perspective on how to manage through periods of uncertainty, changing tax laws, rising inflation. Also, it’s really interesting perspectives. It’s less about predicting the future, Steve tells us, then thinking in terms of planning and probabilities. And I think that was really interesting advice. He — he is about as knowledgeable as anybody is going to get in the – both wealth management business and ultra-high net worth management business. I found the conversation really intriguing, and I think you will also. So, with no further ado, my interview of Steve Fradkin of Northern Trust. VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My special guest this week is Steve Fradkin. He is the President of Northern Trust Wealth Management. Running about $355 billion in assets, they serve about one in five of the wealthiest families in America. Previously, Steve ran the Corporate and Institutional Services. He was Head of International Business for Northern Trust, as well as the firm’s Chief Financial Officer. Steve Fradkin, welcome to Bloomberg. FIRRMA Thank you, Barry. Great to be here. RITHOLTZ: So, you spent your entire career at Northern Trust having joined in — in 1985. How do you make the leap from really CFO to President which, to me, I think of President I think of someone who’s running like a CEO, running a — a division? What were the challenges of that transition? FRADKIN: Well, it’s a great question and, you know, careers are mysterious experiences. The — the bigger mystery really, Barry, was the move to CFO. So I joined Northern Trust as a youngster, didn’t know what I wanted to do, worked my way through a variety of entry-level jobs, ultimately culminating at that point in running our growing international business, and loving it, traveling the world to clients in Asia, Europe, the Middle East, Africa, South America, you know, really fun and interesting stuff, and was asked, at that point, to serve as CFO, which was the unnatural job. Was not a controller, was not a treasurer, and so serving as CFO of a large public company was — shall we say traumatic when they asked. But did that for six years, including through the global financial crisis. And it was, at that point, I went back to doing what I normally do, which is running businesses. I ran our Corporate and Institutional Services business, and then after that Wealth Management. So — so it wasn’t so much going from CFO to wealth management as it was ending up as CFO, if you will, by accident from my point of view. RITHOLTZ: Really interesting. So — so you guys had a pretty good year in 2020. How did that carry over to this year? Is it just more of the same? What were the big success stories relative to all those challenges we soar last year? Well, you know, it’s — it’s really an interesting phenomenon, and it shows you the – in some ways, the unpredictability of what can happen. You know, if you think about COVID-19 and its impact in 2020, and if I said to you, you know, look here’s what’s going to happen, we’re — we’re going to go as a society not just Northern Trust from, you know, we all come in and we work and so forth and so on. And one day, on about the same day worldwide, everyone’s going to start working from home facetiously. What — what do you think is going to happen to the markets? I think most people have said, well, first of all, it could never happen that way. It’s not going to be true that people in Sydney, and London, and New York, and Sao Paulo are all going to be, you know, as much as one can working from home. That’s just impossible. And second of all is that where to happen on a sustained basis. Well, gee, you know, the economy is going to crater because no baseball games, no concerts, no – you know, less use of restaurants, et cetera, et cetera. I don’t think people would have said, you know, the markets would do as well as they’ve done. So look, it’s been an incredible journey. Northern Trust has navigated exceptionally well through it last year and continues to perform well today. And there are a variety of factors in that. But each and every day has been a navigation because we’re still not out of the pandemic and we’re still operating in a hybrid mode. And, you know, balancing safety of our partners, our — our employees, and the needs of our clients is a — a daily — a juggling act that we’re still working through and I suspect will be working through for a while longer here. RITHOLTZ: We’re going to talk a little more about how you guys manage doing the pandemic in a bit, but I want to stay with the success of Northern Trust. You’re one of the biggest ultra-high net worth investment managers. But relative to your size, you guys kind of fly under the radar. Why is that? FRADKIN: Well, you know, it’s — it’s an interesting question, Barry. The – so in terms of size, we’re in the top 20 banks in the country as measured by our balance sheet. But really the — the better marker of our size is the assets that we manage and the assets that we administer for clients. And we’re a very quiet company. We don’t do lots of big acquisitions. We do the same thing today that we’ve been doing since 1889, serving the same clientele, and so we’re a very focused institution. A little over half our profits come from the provision of services to wealthy families in America and around the world. And the other half come from essentially providing the same services, but to large global institutional investors, serving wealth funds, pension funds and the like. And so, we’re a quiet company that has been extraordinarily successful and consistently so for many, many years. So, we’re proud of what we’ve got, but we — we — we — we fly under the radar scream — screen intentionally to just keep a low profile and stay focused on our clients. RITHOLTZ: And — and that would make sense given the nature of your clients who are less Instagram stars and more quiet wealth. Is that a — is that a fair way to describe it? FRADKIN: Yeah. Today, we serve little over 30 percent of the Forbes 400 wealthiest Americans and, obviously, many other affluent families. And interestingly, Barry, you know, sometimes people think of Northern Trust in its wealth management business as focusing on — or serving multigenerational well-healed, you know, families. And that’s true, we certainly serve many of those. But there are many entrepreneurs in Silicon Valley, in New York, in Miami, in Dallas, in — all over the country and all over the world. And if there’s one thing I’ve learned in being here is that wealth is created in a lot of mysterious ways. And so, your — your reference to Instagram and so forth, I would say our clients are definitely low profile, but where they create their wealth emanates from every segment of the economy. It’s really a — a fascinating part of the privilege of being in this — this kind of role. RITHOLTZ: Let’s stay with that because I was just involved in a conversation recently about the amount of wealth that has been created over the past couple of decades. Wherever you look, especially in the United States, it seems that people are coming up with new ideas, new technologies, new just even business processes that if you go back to the 90’s, I don’t think people could have imagined the sort of things that are generating the massive amounts of wealth that we’ve seen. And — and I’m not even talking about NFTs or things like that, I mean, businesses with clients that are just doing tens of millions of dollars of — of revenue a year. FRADKIN: Well, I think the — the fascinating thing that I think we see is that wealth can be created in a lot of different ways. And I — and I think you’re right that as the world has sped up, the wealth creation has sped up, too. You know, to caricature it, it used to be you would start a business in your garage in Louisiana and, overtime, you would, you know, build a vacuum cleaner, whatever it happened to be. And you would start selling it from a store and, you know, it would — you know, you — you’d have a second store. And — and the next thing you know, you have a — a — a big business that you never envisioned having, and you could sell that company and — and create tremendous amount of wealth. Today, that phenomenon still absolutely happens, but it also happens with the power of the Internet that the pace at which companies in some industries can grow and accelerate has — has really multiplied. So, wealth creation, in some instances, is still a slow laborious step-by-step process. But in others, I don’t want to say it’s overnight, but it happens a lot faster with digitalization in the — the pace at which the world moves today. So, we — we see both phenomena, and that’s part of the fun and excitement of the American economy. And this certainly happens elsewhere in the world as well. RITHOLTZ: Quite interesting. So, let’s talk about how you guys had to operate during the lockdown. You mentioned this earlier. What were you doing when, you know, it became clear the country was shutting down in March of 2020? FRADKIN: It’s a great question, Barry. Well, we started like many other institutions with the safety of our clients and the safety of our employees. And it all happened relatively quickly in terms of shutting down offices to the bare minimum, getting people home, and making sure that they could function effectively from home. And if you go back to — and — and, by the way, we have 20,000 employees worldwide, so we were doing the same thing in Manila, in the Philippines as we were doing in London, as we were doing in Dublin, as we were doing in Houston, as we were doing in Las Vegas. And so I want you to think about the operational, and logistical, and infrastructural needs of pretty much all at the same time trying to get people out of the office, enable them to function effectively from home, still be able to serve our clients, and all the family and other issues that people were wrestling with. So, I would say the beginning of the pandemic was stressful. You know, we were working 24/7 trying to make sure that technology worked and people could still get cash and all those things. It has gotten to a much better, you know, I’ll call it normalcy in a strange sort of way. But the early days of the pandemic were — were challenging. We navigated through well, but it’s certainly not something that anyone had anticipated. RITHOLTZ: Really quite interesting. So, I’m assuming you guys have your offices, more or less, reopened. What are you going to do going forward? Is it going to be a hybrid model or is everyone back in the office or people working from home? FRADKIN: Our offices are open and — and really to different extents in different geographies, you know, which makes sense. The — the infection rates, hospitalization rates, all the metrics that we track are very different in different cities and countries around the globe. You know, in terms of where it goes in the future, I think the future of work and how people work is forever changed. You know, we always had a pretty flexible workforce and the ability to work from home and, you know, people’s — people’s lives and — personal lives and business lives had crossed over long ago that, as an employer, we had to be flexible. I think that’s going to be even more so coming out of the pandemic. People have gotten used to it. The technology has gotten better. Client expectations are different. And so, I think we will be in a — you know, what we — what we think of today as a hybrid model will be a normal model tomorrow. And that doesn’t mean everyone will work from home, but it certainly means a lot more flexibility for employees to inevitably juggle the — the conflicting needs of family and work life. And we’re well prepared for that. (COMMERCIAL BREAK) RITHOLTZ: So as investors, COVID was pretty much an exogenous shock. It — it came out the left field. How did the whole COVID crash and recovery compare to past crises, whether it’s 9/11 or dot-com implosion or the great financial crisis? How do you — how do you wrap your head around this one compared to ones from — from recent past? FRADKIN: You know, it’s — it’s a great question. And I think, Barry, my perspective would be that we often call events like the COVID-19 pandemic tail events or once in a lifetime events. And in some ways, they are and, in some ways, they aren’t. If — if I think about it through the prism of my career experience, we had the crash of October 1987. We’ve seen the collapses of things like Enron and WorldCom. We’ve seen September 11th. We’ve seen Bear Stearns go down. We had the global financial crisis of 2008 and, of course, the pandemic. And each time we call it a tail event, but at some point, we have to admit that there are a lot of tails. So, I want to take you back just to compare and contrast COVID-19 with 2008. I’ll give you this example. I want you to imagine it’s the end of 2007, and you’re presenting the 2008 plan for Northern Trust to our board. And you go to the board and you say, “Look, we expect our revenues to do this and our expenses to do that, and so forth and so on.” And one of the board members raises his or her hand and he says — he or she says, “Barry, that’s — that’s terrific. Sounds like a great plan for 2008.” But I — I — I just want to get your perspective. What happens if Bear Stearns collapses, Freddie, Fannie, Washington Mutual, Wachovia, Merrill Lynch, you know, et cetera, et cetera, Lehman? You know, the whole thing collapses in 2008. How will we perform? I think you’d — you know, I — I think if you had been CFO at that time, you would have said, “Well, you know, that’s just — that’s never going to happen,” but it did. And Northern Trust navigated through that exceptionally well. Not unscarred, but exceptionally well. If you take — if you fast forward from that paradigm to COVID-19, it’s very similar. You know, if — if we had been talking to our board the year before and put forward our plan, I think our board would have said, “Well, okay, you know, that sounds like a great plan. What happens if there’s a global pandemic in every office from which we operate is going to be shut down or substantially shut down? Everyone’s got to work from home on the same day globally.” And, by the way, it’s going to be for a year and a half or more. I’m quite confident you or we would have said, well, that — you know, that’s just not — you know, I don’t know what we’ll do. That’s not going to happen, but it did. And so, I think the — the lesson from these crises is that while they’re different every time, they happen a lot. And so, we have to think about our approach to business, our approach to research, our approach to preparing for the unanticipatable. And as I say, each — each of your examples, September 11th, and COVID, and 2008 are different, but they were all — they all featured substantial disruption, substantial unanticipatable disruption. And at Northern Trust and every other company around the world, you have to be prepared to be agile and adapt quickly. And — and that’s what we’ve been able to do pretty consistently over our 130 plus years of experience. RITHOLTZ: So, given that history and the fact that a big chunk of your clients are ultra-high net worth, how do you think about managing assets compared to what — I don’t know, let’s use the phrase “mass affluent,” that typical approach. Is this more about preserving wealth and it is striking at rich. These folks are, after all, already fairly wealthy. How does this specific demographic change and challenge the way you manage assets for them? FRADKIN: Well, I think, look, wherever one sits on the spectrum of wealth, they generally want to optimize their returns over time. And people have different risk preferences as you would expect. So to caricature it, if you come from nothing and you’ve done exceptionally well financially, you may — not always, but you may have a predisposition to have a stronger defensive component to your portfolio because you don’t want to end up back where you were. You know what it’s like not to have money, you have it, and you want to be defensive. On the other hand, there are people who whether they came from nothing or not, they’ve had tremendous success. They’ve seen the power of capitalism, and they want to not only do as well as they can, but keep going. So, we see things through the eyes of our clients across the continuum. What I would say is people in the ultra net — ultra-high net worth space, at least from my point of view, it’s not so much about they’re more defensive or more offensive. They have more flexibility for choice. They can be defensive because they’ve, you know, so to speak, got more than enough or they can lean in and be more aggressive because they have a bigger cushion than the rest of us. And our clientele is all ends of that spectrum. There’s no — the — the — the notion that some people have, well, once someone’s made a certain amount of money they’re — they’re just trying to preserve it. There are certainly clients that — that exhibit that behavior, but there are an equal number who want to optimize it and aren’t in a completely defensive mindset. So, it depends on the personality type. RITHOLTZ: Very interesting. One of the clichés of the industry is three generations from, you know, short tales to short tales, referring that generational wealth very often gets — I don’t want to say wasted, but frittered away irresponsibly or recklessly. Some people take too much risk. How do you manage around that? Do you — do you ever have families coming to you and say, “Hey, we want to leave money to the next generation, but we want to make sure they get it and that it’s not just, you know, Ferraris and — and weekends in Vegas.” FRADKIN: Yes, all the time. Again, every family is different. Every client is different but, you know, one thing to — one thing that I think is a little bit unfair in — in — not by you, but in the characterization that you refer to is this notion, well, you know, by the third generation it is, you know, frittered away. I think you — you have to remember a couple things. First, when — when we say it’s frittered away, the comparison point is often to someone who did the extraordinary. So if I started from nothing and created $1 billion — $1 billion of wealth, it’s a little unfair to say my kids or my grandkids, you know, they’re not as smart as I am because, you know, they didn’t do it, too. You know, People who have created extraordinary wealth have done so, by definition, it’s — it’s extraordinary, and it’s not reasonable. Even if you have bright, talented, you know, high-functioning kids, it’s not reasonable to assume that each generation is just going to — you know, mom made $1 billion. Mom’s kid made $2 billion and — and mom’s grandkid made — made $4 billion. You know, it’s — mathematically, that’s not a reasonable probability. That’s sad. There is definitely an art to optimizing wealth through the generations. And, of course, it starts in the home and how you raise kids and values and, you know, what you demand of them or not. But a lot of our clients do a great job of trying to steward their wealth, trying to educate their kids, trying to make use of family governance to — to help everyone understand how things work for the family. And so, each client is different, but as with most things, the more you put into it, the more you’re likely to get out of it. And for those who believe it’s an important responsibility to steward that wealth, pass it to future generations, educate those generations, make them or trying to help them be important members of society, they tend to get better outcomes than the rest of us. It’s a — it’s a very — it’s, you know, raising kids and money are two challenging vectors, but we see some great examples of people stewarding wealth through multiple generations not just the — the founder, so to speak. RITHOLTZ: Quite interesting. Let’s talk a little bit about what you call Goals Driven Wealth Management. Start out with what — what exactly is that. FRADKIN: Sure. Goals Driven Wealth Management at Northern Trust is the framework that — that we’ve devised to build personalized wealth plans for clients and it focuses on helping them achieve their individual goals with confidence. It provides a big picture of their wealth and transparent steps on how to manage and optimize wealth over time. So, Barry, one way to think about it is — and I’m being a little bit facetious, but just to make the point, it used to be in this industry that the starting point for how money might be managed was a function of your outlook on the market. You think equities are going to go up, et cetera, so you allocate more to equities. Goals Driven Wealth Management comes at investing through a different lens. The starting point is not so much our call on the markets though that will be important at some point. Our starting point in Goals Driven is what are you and your family trying to accomplish. Once we understand what you’re trying to accomplish and the assets you need to accomplish it, we can, in effect, back in to how to deploy those assets — in stocks, bonds, other asset classes — to give you the best probability of achieving your life goals over time. So, it’s really just a different starting point for how to think about creating an asset allocation that is most effective for you and your family. RITHOLTZ: So, let’s talk about that framework. And again, the question comes back, how different is it for the ultra-high net worth than for the merely wealthy or — or is there a lot of overlapping between the two different types of planning? FRADKIN: The process is really the same no matter where you are on the wealth spectrum. You and your family have goals, and whether you have $1 million, $100 million, $1 billion, $10 billion or whatever the number is, you have something you want to achieve over time. You plan to live to age 90 or 100. This is what you need to live in the style to which you want to be accustomed, and we do a variety of work to figure out, first of all, are you asset-sufficient, meaning under reasonable scenarios, do I have enough if I steward it effectively to live my life the way I want to live it over time? And that happens whether you have, you know — again, whatever the number is, $500,000 or $10 million. The difference, Barry, comes in with the flexibility and options that you have as you create more wealth. So, the starting point is the same: understand your goals, understand your needs, and let’s figure out an asset allocation to give you the best chance to get there. What becomes different for people in the ultra-high net worth space relative to the rest of us is that they can take advantage of more planning techniques. They can take advantage of more techniques to optimize philanthropy. They can take advantage of gifting to future generations and so forth, and so the process is the same. But as you accumulate more money, in general, you have more flexibility on some other things you can do. The ultra-high net worth also have more investment optionality. They have the ability to invest in asset classes like private equity hedge fund and so forth where they may have to trade off some liquidity for a period of time. Those of us who are lower on the spectrum may not be able to endure that in a down market. Those who have more wealth can — can oftentimes weather that storm more. So, the process is the same, but you get more flexibility as your wealth grows. (COMMERCIAL BREAK) RITHOLTZ: We’re going to talk more of about alternative investments in a little bit. I want to stick with a couple of interesting things I read in some Northern Trust research. One of the things that I kind of knew, but I didn’t realize it was this intense was the number of clients you see relocating to new states. It’s been a record volume. Some of that is pandemic related, some of it predates the pandemic. How does that challenge the planning process? How different is it from state-to-state when it comes to things like tax planning? You mentioned trust. You mentioned philanthropic issues. What happens when somebody picks up from one state and relocates to another state? FRADKIN: Yeah, it’s an interesting question. Look, clients relocating has always been with us. If you look at Northern Trust history, we are headquartered in Chicago in the middle of the United States. It’s cold here in the winter, lovely city, but it does get rather cold at wintertime. And often times, as people age and, you know, their kids finish school and so forth, they opt for better environments in the wintertime, so they may want to be in Florida or Arizona or Texas or California. So, one phenomenon we’ve always seen is migration from state-to-state. That phenomenon is also impacted by state tax rates, by state tax considerations. And so, both, because of the pandemic and for tax reasons and lifestyle reasons, were continuing to see movement across state lines. And so, you know, I think the — the message to urban planners is taxes do matter to people. It’s not necessarily the only factor, but even affluent people will think through where do they want to be, where do they want to live, what environment to they want to be in, and what’s the tax impact for their clients. And that phenomenon is — is alive and well. It’s always been there, but it — it does seem to be important as different states consider different policies, if you will. People — residents make their choices, and so it’s — it’s — it’s a phenomenon that’s very much at the front of mind for many of our clients. RITHOLTZ: Interesting. You mentioned taxes. There was a new administration came to town this year, and the expectations are there will be some sort of change in tax policy, potentially including increases in capital gains and increases in estate taxes and, in some cases, fairly substantial increases. How do you plan around that? And since nothing is known for certain in advance what an administration is — is going to do, how do you make decisions in — in the face of that uncertainty? FRADKIN: Yeah, I think our starting point on behalf of our clients is to prepare rather than predict. So, let me give you an example that — that you referred to. The newly proposed tax law change would change the lifetime gift and estate tax exemption amount from $11.7 million down to $5 million. And what this means for people that built up substantial wealth is that if the proposal goes forward as — as offered, you have until the end of this year if you want to make a gift to your heirs of — if you can afford to and if you want to, make a gift of $11.7 million. And again, I can’t tell you whether this will happen. But if we just think about the financial impact here, if you have enough capacity to do that and you choose to do it, you can take $11.7 million out of your estate today, get it to your kids, grandkids, whoever it happens to be tax-free as opposed to, on January 1st, if the law goes forward only as — as offered, you can only do $5 million. And what that means is the difference between — sorry to get, you know, numbers all over — but the difference between 11.7 and five, which is $6.7 million will be taxed, you know, when you die at a — at a high rate. And so we have literally thousands of clients all across the country and each one we’re working with individually to evaluate what’s their financial circumstance, what do they want to do, do they want to make the gift. And by the way, this — this — this tax law change may or may not happen, so people have to make a choice without knowing for sure whether it’s going to happen. I think the bottom line though is people are looking at this carefully. They’re studying it and they’re trying to prepare and make judgments about what might happen and what’s best for their individual circumstance. But tax law changes matter and — and we are in the business of helping our clients figure out what’s the best choice for them with the information that we have. RITHOLTZ: Quite, quite interesting. So, we talked a little bit about alternatives earlier. Let’s address that a bit. There seems to be a growing appetite for all manner of — of alternative investments given that stocks and bonds are all a little bit pricey. Let’s start with private equity. What — what sort of demand is there from your clients for private equity. And — and how do you guys respond to the question of potentially better returns in exchange for far less liquidity? FRADKIN: Sure. Look, investment has become much more granular over the decades and again, just to be facetious, you know, large-cap stocks versus high quality bonds, you know, 40 years ago. Today, clients think in terms of small-cap, mid-cap, large-cap, value, international, emerging markets, private equity, and thousands of flavors of private equity; hedge fund the same thing. So, in the quest for optimizing returns, clients and their professional money managers, Northern Trust included, have searched for different asset classes to combine together to give people the best chance to — to achieve their objectives. Private equity clearly has been in the aggregate — there are winners and losers in private equity, but has been a asset class that has done well for many. There are tradeoffs with private equity, particularly in terms of liquidity. But I would say amongst our clientele, the appetite for private equity and private equity, as a more normalized asset class, continues to grow. It’s not the right asset class for every client, but for clients who have the capacity, the risk tolerance and so forth, it — it definitely can play an important role in a client’s portfolio. And increasingly, we’re seeing more use of private equity today than we did say 10 years ago. RITHOLTZ: What about venture capital or hedge funds, two totally different entities from both each other in private equity, what’s the demand like for those products? FRADKIN: Demand exists for venture capital and for hedge funds as well. Again, the devil is in the detail, not all hedge funds are created equally. The — the — the fees that they charge, the performance that they’ve delivered can differ substantially, but there is again this same notion of I want to diversify my portfolio. I want a — a range of options and so-called alternative investments. Whether you call it private equity, venture capital, hedge funds seem to continue to be growing in appeal to our clientele. RITHOLTZ: What about crypto and things like blockchain and Ethereum? There seems to be a lot of real interest in the space. Are — are you finding your client bases crypto-curious? FRADKIN: I would say the demand for crypto is more muted amongst our clientele than some of what you read in the public press. And that doesn’t mean we have examples of clients who have invested in crypto and done exceptionally well in a right time. But I would say, in general, if I had to caricature it, I would say that crypto is still an evolving asset class that is misunderstood by many. And I think most are treating it carefully. And the ones that are making crypto investments are viewing it more as a — more as a roll of the dice than a rational analytical view of what crypto is trading at today and what it’s going to trade it tomorrow. They view it as a bit of a roll the dice. They may jump in a little bit, but they understand that what goes up can also go down. So, I would say amongst our clientele overall, crypto is still not widely in use. RITHOLTZ: So, we mentioned briefly the market is certainly pricier than it was five or 10 years ago. How do you manage around stocks and bonds neither of which are inexpensive? FRADKIN: Yeah, look, I think for many of our clients, the market does go up, the market got does go down. And one of the great features of our — the goals-driven methodology that we use for clients is that we build a portfolio such that after a lot of analytical work to evaluate their goals and so forth that enables them to endure and not have to sell in a down market. We — we create something that’s called a portfolio reserve. I would liken it to the moat around your castle. Some people like a wide deep moat, some people need a narrower and less deep mode, but think of that as a high-quality fixed income. If the stock market goes down, your — your bonds are still fine. You can still pay your mortgage. Life is good. You can wait until the market goes up or — or returns to normal. So, the one thing we know on behalf of our clients is markets go up and down, and so you have to plan and prepare for that. And so, it’s very difficult to know. You know, again using the COVID-19 example, I think they’re a lot of people who might have argued the markets are going to crash, you know, everyone’s working from home and we can’t get the essentials, and people don’t want to go to the grocery store, and yet the market went up dramatically. So, we try and take a long-stewarded view and help our clients plan and prepare themselves so that when the market does go down, they can get through and — and not have to take adverse steps and sell in dire circumstance. And that’s been very helpful for our clients. RITHOLTZ: So, in terms of forward return expectations, does that — and historically low-bond yields, high equity prices tend to suggest low returns going forward, does that work its way into the planning process or is that really more of an academic theory? FRADKIN: No, it absolutely works its way into the planning process because our starting point is what needs does a client have over the near-term for financial resources. We — we got to make sure they can buy their groceries, and pay their mortgage, and we have to deploy assets against those goals. But once, in working with a client, we figured out the right mix of assets to — to enable them to — to afford those goals over a reasonable period of time, we then have to deploy the rest of the portfolio toward so-called risk assets, equities, private equity, hedge funds, venture — whatever the asset class. And in so doing, we have to bring our judgment about risk and return expectations for each of those asset classes. So, our view of asset classes and what they’re likely to bring over the relatively short-term is still an important part of the process. RITHOLTZ: So, what do you tell investors who say, “You know, I’m really not happy with my muni bond portfolio. It’s barely thrown off two or 2.5 percent.” Investors are always seen to be looking for more yield. How do you respond to that group of clients? FRADKIN: Yeah, I think it — my — our response is really you have to remember what you’re trying to do with that muni bond portfolio. No one is saying it’s a great high returning asset class, but that’s not its role. Its role is to be — I’m making this up, Barry, but generally, the role of that muni bond portfolio is to provide you with certainty, security, confidence, and not have to worry about the other part of your portfolio, let’s just call that equities gyrating up and down. So, of course, people want their muni bonds or their high-quality fixed income to return as much as it can, and it’s our job to try and help people achieve that. But I think you always have to come back to what role is this trying to play. And for most clients, it’s trying to play a role of stability, and reliability, and consistency, and that’s the paramount feature. And in providing that consistency and — and stability and predictability, they give up a little bit of return on that asset class, but they’re trying to get that elsewhere with their equities, private equity, and so forth. So, you had — you had discussed previously, hey, you know, it’s up to us to make the most of a low rate environment. What does that mean? Get — how does one make the most of a low rate environment? FRADKIN: Well, I think, you know, low — low rates create — low interest rates create challenges and opportunities. Maybe two simple ways to think about it are, one, on the challenge side, if you’re living on a fixed income as assets reprice to — and you’re reliant on bonds — your bonds to provide income, the lower rates make the yield on those bonds lower, and so that’s bad from, you know, how much cash flow I have to — to fill my needs. The flipside to that is that when rates are very low, if you want to, if it’s appropriate, if it’s thoughtfully done, you can use credit rather than liquidating stocks to — you know, if you want to buy a new toy, so to speak, a boat, whatever it happens to be, one way to do that is to sell stocks in your portfolio and buy the — you know, whatever it is you want to buy. Another way is to let those stocks keep working on your behalf and, because rates are so low, take advantage of credit. Take a loan, buy that boat and — or whatever it happens to be and pay it back over time. So low interest rates, you know, how can have different conflicting phenomenon, opportunities on the credit side and headwinds on the bond investment site. RITHOLTZ: So — so how do you incorporate all this inflation chatter to — to your planning? We’ve started to see rates tick up the 10-year as — as recording this just about 1.5 percent. And I know there’s an irony in saying that rates are all the way up to 1.5 percent, which historically is incredibly low. How do you figure inflation into your modeling and — and thinking about the future? FRADKIN: Yeah, well, we use multi-scenario modeling. The — the reality is no one knows and so you have to, you know, the — the prognosticators will — will have a view. Some — some believe inflation is here and is going to continue. Others argue it’s so-called transitory. And the truth is we don’t know. We’ll — we’ll find that out tomorrow, so to speak. And so as we work through planning with our clients, we generally are running multiple scenarios, low inflation, medium inflation, high inflation. And we’re trying — as we — as we help clients make decisions, we’re trying to make the best judgment we can at a given point in time. But that’s why you — you really have to — be you have to plan for multiple scenarios and bring agility to your process because we don’t know whether the stock market is going up or down. We don’t know whether inflation will be higher or lower. We have a view. We can have probabilities. But as we’ve seen, whether it was with 2008 or COVID, we — everyone can be wrong. And so, you have to plan and adapt and leave yourself a buffer for when you are wrong, and hopefully it’s not — not catastrophic. RITHOLTZ: So, I know I only have you for a little bit of time. Let me jump to my favorite questions that I ask all of my guests, starting with tell us what you’re streaming these days, what’s keeping you entertained at home, either on Netflix or Amazon Prime or — or wherever. FRADKIN: Well, I’ve — I’ve been working hard so I — I can’t say I’ve — I’ve made great use of Netflix. But what I have just started and this will show you, Barry, how far behind I am is I’ve just started Ted Lasso. So I’m behind the rest of the world, but that’s what I’m on right now. RITHOLTZ: All right. Well, well, you’ll — I could tell you this much, you will enjoy it and — and enjoy catching up with us. What about mentors? Who helped to shape your career? FRADKIN: You know, I’ve had a lot of mentors at Northern Trust over the years, people who were senior to me and people who weren’t, but I learned from everyone. I think when I think about mentors, for me, it’s less about people with whom I work and maybe it’s my interest in history. But I try and learn from people who have overcome insurmountable odds, the Mahatma Gandhis, the Martin Luther Kings, the Winston Churchills, the Vaclav Havels, the Abraham Lincoln. And there’s so much wisdom that I see in people like that because they really faced incredible circumstances and worked through them generally to good outcomes. And so there — those great thinkers are probably the people I’ve learned the most from as I wouldn’t call them mentors to me, but I’ve certainly read about all of them and — and learned a lot from each of them. RITHOLTZ: Let’s talk about books. What are you reading right now and what — what are some of your favorites? FRADKIN: You know, I think in keeping with that theme of mentors over periods of time that interest me, I’ve really enjoyed “The Splendid and the Vile” by Eric Larson, which is about Churchill and the blitz of World War II. And — and again, it — it helps you — it helps me to see just how dire the circumstances were and what he and others had to navigate through. The other book that I’ve dusted off recently, I read some time ago, but I think in view of the pandemic, it seemed interesting to me was “The Hot Zone” by Richard Preston, which has nothing to do with the pandemic, but there are parallels to what we’re dealing with, and it was sort of a gripping — a gripping book if you have time for a good read. RITHOLTZ: Sounds interesting. What sort of advice would you give to a recent college grad who is interested in a career in either investment management or finance? FRADKIN: Yeah, I think, Barry, I’d offer a — a — a couple of themes on this. And I — I don’t know that I narrowed these themes to an interest in investments or finance, although I think they do overlap. But I’d start by saying, it probably be easiest place to get my view there would be to go to YouTube and I — I gave a commencement address at the University of Illinois Chicago and tried to formulate those themes for — for young people. But a — but a few that come to mind at least through my lens are comfort is the enemy of accomplishment. If you want to be the best you can be, you can never be satisfied with where you are. You’ve got to push, push, push and make yourself better each and every day in everything you touch. I think a couple of the other themes that would come to me would be in — in the same vein, we see this in Northern Trust all the time. Excellence is not a part-time job. For people who want to be excellent, who want to do the best job for our clients and our shareholders, you can’t be excellent only when it’s convenient, only when you want to do it or only when you feel like it. You’ve — you’ve got to — excellence is an all-in phenomenon. And then probably the — the — the last thing that comes to my mind is persevere beyond your accomplishments. It’s not what you did yesterday, it’s — you can be proud of what you’ve accomplished. But again, you want to be better going forward. And so be proud of who you are, be proud of your grades, and your — your school, and your degrees, and all that sort of stuff, but those are what you did, you know, two years ago, five years ago, 10 years ago whatever it happens to be, keep pushing forward to be the best you can be. So, persevere beyond your accomplishments. RITHOLTZ: And our final question, what do you know about the world of investing today you wish you knew 35 years ago when you were first starting with Northern Trust? FRADKIN: That is a long list, Barry, but I think what I would say is you don’t have to be right on everything and sometimes being right is more about luck and timing than it is about specific analytical acumen. Uninspiring choices in a bull market can turn out just fine, and well-reasoned ideas in a down market can turn out to be not so good. So, get the direction right more often than not and you’ll be just fine. RITHOLTZ: Really good advice. Thank you, Steve, for being so generous with your time. We’ve been speaking with Steve Fradkin. He is the President of Northern Trust Wealth Management. If you enjoy this conversation, well, be sure and check out any of the other 388 prior discussions we’ve had over the past seven years. You can find those wherever you normally find your favorite podcast, iTunes, Spotify, wherever. We love your comments, feedback, and suggestions. Write to us at mibpodcast@bloomberg.net. You can sign up for my daily suggested reading list at ritholtz.com. Check out my regular column at bloomberg.com/opinion. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack that helps put these conversations together each week. Paris Wald is my Producer. Michael Batnick is my Head of Research. Atika Valbrun is our Project Manager. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Steve Fradkin appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureNov 29th, 2021

Meet the typical Gen Zer, who is quitting their job, has over $17,000 in student debt, and is influencing nearly everything you buy

Gen Z has entered the spotlight. From fashion to work, they're setting the tone for the 2020s and poised to take over the economy in a decade. Gen Z is ready for the spotlight.TIMOTHY A. CLARY/Getty Images Gen Z, the oldest of whom turn 24 this year, is the new "it" generation. They're setting trends in fashion and in the workplace, influencing consumer and worker behavior. And they're saving more than they're spending and set to dominate the economy in 20 years. Gen Z has stolen the crown from millennials as the media darling of the moment. The generation, the oldest of whom turn 24 this year, is in the spotlight as they begin to wield influence over lifestyle, work, and consumer trends. Look no further than various headlines promising how-to meet Gen Z demands in the workforce or market beauty brands to them.It's a coming-of-age story, and Gen Z is shaking things up as they enter young adulthood. They're the first digitally native generation and they're best reached online, where they're often catapulting new trends. They're innovative, entrepreneurial social activists, ready to create and shape a better world.They were hit by the pandemic during some of their most formative years, which could shape their futures over the long term. The oldest members of the "TikTok generation," who graduated into a recession, run the risk of repeating millennials' economic plight, but they're already showing signs of behaviors that could define them for years, trying to save and invest early and embrace a lifestyle based on thrift.By size and spending power, they're set to take over the economy in a decade, but their spending restraint and skepticism about markets could make that economy very different.While it's hard to capture an entire generation when some members are still teens and others are adults — demographic differences that produce data filled with caveats — here's what life looks like for the typical Gen Zer in 2021.Gen Z emerged in the limelight during the pandemic, taking over as the latest "it" generation.ViewApart / Getty ImagesGen Z is the most ethnically diverse generation in history and set to unseat millennials as the most educated generation, too. But Jason Dorsey, who runs the research firm Center for Generational Kinetics (CGK), says they're not millennials 2.0."They are really a distinctive generation with a different set of parents raised at a different time, that are coming into the world with some different views," he said, adding that the oldest members are entering the life stage in which they're exerting enough influence to take the mantle as the "it" generation.Society feels like it finally understands millennials, he explained, and is switching focus to the next generation, which remains a mystery. That leaves Gen Z "shifting and driving much of the conversation," and he predicted they'll do so for the next 15 years.They're the first generation to grow up in a wholly digital era, making them tech-savvy and mobile-first.Roy Rochlin/Getty ImagesGen Z was born into a world marked by technology, the internet, and social media. The average Gen Zer got their first smartphone just before their 12th birthday. They communicate primarily through social media and texts, and spend as much time on their phones as older generations do watching television.The pandemic heightened their digital behaviors. With ample time to scroll on their phones, they digitally bonded with one another as many moved back home during the pandemic at a similar life stage, Dorsey said.This helped TikTok, Gen Z's favored platform, blow up during the pandemic. By September 2020, the social media app had grown by 75%, and expanded into intergenerational use. It signals the growing influence of Gen Z in leading consumer behavior, much like millennials did with Instagram.Like millennials before them, the typical Gen Zer has had — and will have — their share of economic troubles.Brothers91/Getty ImagesThe pandemic put Gen Z on track to repeat millennials' money problems. As is typical with recessions, the youngest workers were hit hardest. Gen Z students could lose $10 trillion of life cycle earnings due to Covid lockdowns, the World Bank has estimated.A Bank of America Research report called "OK Zoomer" found that the pandemic will impact Gen Z's financial and professional future in a similar way to how the Great Recession did for millennials."Like the financial crisis in 2008 to 2009 for millennials, Covid will challenge and impede Gen Z's career and earning potential," the report reads, adding that a significant portion of Gen Z entered adulthood in the midst of a recession, just as a cohort of millennials did."I'm a little worried about ending up like those who graduated around 2008," Maya Tribitt, a junior at the University of Southern California, previously told Insider. "A lot of the fear people my age have about getting jobs right out of college have come from the horror stories of people 10 years older than us. It's really scary to think that might be our new reality."But the typical Gen Zer is already trying to build wealth, hoping to avoid millennials' record of falling behind.Klaus Vedfelt/Getty ImagesAs of 2017, 70% of Gen Zers were already earning their own spending money, per a CGK survey. That's the same amount as millennials, who are 10 years older on average. A follow-up CGK survey in 2020 found that the pandemic has taught Gen Z how to be frugal. They've begun saving money and investing earlier than previous generations did, and they're seeking good job benefits, Dorsey said.More than half (54%) of Gen Zers are saving more since the pandemic began than prior to it, according to the State of Gen Z report. Thirty-eight percent have opened an online investment account, while 39% have opened an online bank account.Despite investing earlier, though, Gen Z is going to have to work harder to get a return. They're set to earn less than previous generations on stocks and bonds, as Credit Suisse's global investment returns yearbook found Gen Z can expect average annual real returns of just 2% on their investment portfolios — a third less than the 5%-plus real returns that millennials, Gen X, and baby boomers have seen. Their average credit-card debt is $1,963, less than any other generation.Noam Galai/Getty ImagesGen X has the most debt because they're in their prime spending years, followed by boomers, according to an Experian Consumer Debt study. It makes sense. With the oldest members of the generation in their early 20s, and the majority of the cohort still in its teen years, Gen Z has yet to enter their prime earning years or come into full spending power. The oldest are still getting their feet off the ground in the workplace, and most don't have assets like a house and a car as older generations do.That's not to say Gen Z is debt-free. On average, they carry loan debt of $15,574.They have less student-loan debt than other generations — an average of $17,338 — but that's likely to grow as the generation ages into college life.Gen Z has a smaller student-debt burden than other generations.Pat Greenhouse/The Boston Globe/Getty ImagesSo says the Experian study.What was once largely viewed as a millennial problem is now becoming an issue for Gen Z. The generation holds 7.37% of the national $1.57 trillion student loan debt, but college is only getting more expensive. That share is expected to grow as more Gen Zers enroll in college.The future of student debt is highly uncertain, as President Joe Biden campaigned on canceling thousands of debt for each student, but he's been reluctant to actually do it since his election. The Democratic Party is in something of a civil war over Biden's authority to cancel debt unilaterally, leaving borrowers at a standstill. Despite their good money habits, the typical Gen Zer drove debt growth during the pandemic. They owe $16,043 on average.Tim P. Whitby/Getty ImagesGen Z had the most debt growth of any generation between 2019 and 2020, with the average balance increasing by 67.2% from $9,593, per the Experian report. But that's still less debt than all other generations have, and Experian said the increase "seemed to track with age — the greatest growth occurred among the youngest consumer group."That growth was mainly across mortgage and personal loan debt; Gen Z owe $169,470 and $6,004, respectively. It seems, then, that homebuying Gen Zers are leading the charge in their generation's debt upswing.But the typical Gen Zer is still set to take over the economy in a decade.Charmedlightph/ Getty ImagesBank of America Research's "OK Zoomer" report found that Gen Z will fare well in the long run. The generation currently earns $7 trillion across its 2.5 billion-person cohort, it stated. By 2025, that income will grow to $17 trillion, and by 2030, it will reach $33 trillion, representing 27% of the world's income and surpassing that of millennials the following year.Research and advisory firm Gen Z Planet recently found that the generation is saving and investing more than it's spending, and now holds $360 billion in disposable income. They're already influencing consumer behavior. The typical Gen Zer is rebelling against all things 2010s, while reviving the trends of the early millennium.Alexi Rosenfeld/Getty ImagesResearch has shown that, in moments of economic turmoil, humans are more likely to feel nostalgia. Gen Z's version of a nostalgic escape from the pandemic is reviving the fashions from the time before social media took over. From wired headphones to claw clips and baggy jeans, they're reviving the Y2K trends of yore in what Sara Fischer of Axios has deemed a "throwback economy." Corded headphones instead of AirPods, for example, are a way for Gen Z to make an "anti-finance bro" statement.They've also been lusting after an "old money" aesthetic characterized by Oxford shirts, tennis skirts, and tweed blazers, a sharp contrast from the "California rich" look of the Kardashians and the casual outfits of the new millennial billionaire class that characterized the 2010s. Prior to the pandemic, the VSCO girl had the internet buzzing. Characterized by a natural look that embodied a crossover between '90s fashion and a surfer lifestyle, she was a contrast to the contoured faces and lip fillers of Instagram influencers. Gen Z's continued embrace of nostalgia is showing she was no fluke, but the harbinger of a new (old) look.Their love for nostalgia explains why the typical Gen Zer likes to shop at thrift stores.Westend61/Getty ImagesThrifting is booming thanks to Gen Zers in search of sustainable, stylish clothes."I've kind of stopped buying clothes from traditional stores," Gen Zer Grace Snelling told Axios. "People almost respect you if what you're wearing is thrifted, and it looks good because you've managed to pull off a cool outfit, and it's sustainable."Recycling and reselling clothes helps the digitally native generation wear new-to-them outfits on a budget they haven't yet posted to social, avoiding repeating looks. It's also a tool to start a lucrative side hustle, in which some are raking in as much as $300,000 a year on apps like Depop and Poshmark.The trend goes beyond clothing. Gen Z (and millennials) are even increasingly eschewing mass-market home decor for vintage furniture, Insider's Avery Hartmans reported. It's not just fashion. The typical post-college Gen Zer is taking their contrarian views to the workplace.Su Arslanoglu/Getty ImagesGen Z is asserting new norms in the workplace, and eschewing the ones implemented by millennials before them. The New York Times' Emma Goldberg wrote that young 20-somethings are challenging tradition by delegating work to their boss, asking for mental health days, working less once they've accomplished their tasks for the day, and setting their own hours. It's part of what Erika Rodriguez called a "slow-up" in a recent opinion piece for the Guardian, referring to a permanent shift in slowing down productivity with the aim of having more separation from work. But some Gen Zers are quitting their jobs altogether, in what LinkedIn CEO Ryan Roslansky called a "Great Reshuffle." He said his team tracked the percentage of LinkedIn members who changed the jobs listed in their profile and found that Gen Z's job transitions have increased by 80% during that time frame.In August, a study by Personal Capital and The Harris Poll found that a whopping 91% of Gen Zers were keen to switch jobs, more than any other generation. While some are seeking greener pastures in other jobs, others are opting out of working altogether, bolstering the "antiwork" movement that embraces a work-free lifestyle.While the vast majority of Gen Zers haven't yet entered the workforce, it stands to reason they'll be just as, if not more so, progressive than their older peers.They're also creative, entrepreneurial, and innovative both inside and outside work.Part of the Students for Hospitals team.Jalen Xing"Gen Z is innovative and powerful," Emma Havighorst, a 2020 graduate, told Insider last year. "The way we see the world is very different from prior generations."For three years, Havighorst has hosted the podcast "Generation Slay," which profiles Gen Z creators and entrepreneurs like mental-health advocate Gabby Frost and nonprofit founder Ziad Ahmed. She said she thinks the pandemic will produce even more innovators."Necessity breeds invention," she said. "We'll be trying to figure out solutions to problems that plagued past generations."Consider high schoolers Daniel Lan and Jalen Xing, who created homemade face shields for hospitals during the pandemic, starting the initiative Students for Hospitals.More than half (58%) of Gen Z respondents in a DoSomething Strategic survey said that, since the pandemic, they had picked up a new activity or were doing more of something they already enjoyed.But perhaps most significantly of all, the typical Gen Zer is ready for change — and they'll do what it takes to make that happen.RODGER BOSCH/AFP via Getty ImagesA generation whose childhood was defined by international protest movements including Occupy Wall Street and the Arab Spring, Gen Z has been at the forefront of activism, from the March for Our Lives anti-gun protest and the climate change movement. Arguably its most famous member is the climate-crisis activist Greta Thunberg.2020 also put the generation front and center in the anti-police-brutality demonstrations sparked by the killing of George Floyd, a Black man who was murdered by a white police officer in Minneapolis. Social networking app Yubo and Insider polled 38,919 US-based Gen Zers, and found that 77% of respondents had attended a protest to support equality for Black Americans.The generation also played a pivotal role in the 2020 election, Insider's Juliana Kaplan reported, which may have finally captured the elusive youth turnout. Tufts University's Center for Information and Research on Civic Learning & Engagement (CIRCLE) revealed youth voter turnout for 2020 was up by at least 5% from 2016 — and could have been up by as much as 9%.It seems, then, that change may start with Gen Z.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 28th, 2021

Millennials own nothing because the economy screwed us over for 25 years - but older generations still try and blame it on our work ethic

Older generations don't understand just how much harder it is for millennials and younger generations to build wealth. Millennials have been screwed over by the economy. Allison Nicole Leung/Insider Intelligence My parents don't understand why I don't own a house, a car, or a retirement savings account. My generation has fewer job opportunities, more student debt, and outrageous housing prices. It's far worse for us than it was for previous generations. Ingrid Cruz is a freelance writer based in Mississippi. This is an opinion column. The thoughts expressed are those of the author. A few months ago my parents chastised me for not really owning anything. I have few savings, don't own a house, investments, or even a 401K due to financial pressures prior to the pandemic, some of which only worsened last year. This is a struggle many millennials face, but I, a first-generation immigrant, often feel guilty and unworthy knowing my net worth is in the negative. As a child, my mother wanted me to go into a respectable, high-paying, stable profession, such as a lawyer, accountant, or perhaps a high-ranking corporate position. She always expected me to buy a home, get married by a certain age, and eventually take care of her as she got older. Instead, I am a writer on a freelance income with student loan debt that will wreck my finances once repayment provisions begin again in 2022. It's hard to make my parents understand that the United States they dreamt of and brought me to in 1989 has drastically changed. The economy is stacked against millennials According to a CNBC report, millennials owned only 5.19% of the United States' total wealth in 2020 - four times less than what boomers owned at the same age. We are a generation that saw income inequality increase just as the Great Recession caused hiring freezes, decreased our odds of finding a good job, and student loan debt skyrocketed. The Bureau of Labor Statistics states that high student loan debt caused millennials to delay major life decisions. Fewer earnings meant delaying marriage, home and car purchases, and not being able to move out of our parents' homes - or having to move back in during a crisis. In drastic situations, fewer earnings also leads people to delay medical care and avoid scheduling routine physical checkups, leaving issues undiagnosed. Navigating the maze of health insurance costs and policies in the United States is also difficult, and takes a toll on our finances. Even for a healthy person, the price of having a child at a hospital can be prohibitive and childcare, care for aging parents, and other line items necessary to sustain a healthy family are frequently financially debilitating. The Great Recession also affected housing, creating shortages that were driving up rent even before the pandemic. Stagnating and low wages are only part of the problem: Even with higher wages, many millennials live paycheck to paycheck because of the many debts they've had to take on in order to get by. The rising costs of living we are currently experiencing, and will be sure to continue experiencing without intervention from the federal and state government, are only going to make it more challenging for millennials, Gen Z, and future generations to build wealth unless we work to ensure pay equity and reasonable costs of living. Rent control, controls on house-flipping that artificially increases the cost of land and rent, and even climate justice that would prevent devastating fires would give millennials peace of mind when it comes to securing housing. Most personal finance advice doesn't apply for our generation Though well-intentioned, many articles on saving money or generating wealth aren't helpful to working-class, marginalized, or economically hard-hit people who have little access to wealth and social capital to begin with. Such finance articles often assume that people who want to save money can afford to spend money at coffee shops, subscriptions, gyms, or can afford online shopping to start with. There's no way to save $4 per day on a cup of coffee if you're not in the position to do so in the first place. Many millennials, especially immigrants and refugees, grew up with the idea that we'd not only come to this country to live a better life, but to own nicer things. In family structures where scarcity was often a factor in everyday life, one of the few ways we can prove our parents' investments and sacrifices were worth it is to achieve an extraordinary amount of financial success.Some people have done so, but they're the exception rather than the rule. Learning financial literacy is a challenge for people who grew up with survival as their main goal. Fact is, it's harder for millennials to move up in their social and income status than previous generations. According to a 2019 analysis by Stanford University, there are also racial homeownership gaps among millennials because every gain from the reforms meant to help people of color own homes after the Civil Rights Movement has been lost.Though many millennials are able to secure wages that are higher than the federal minimum wage, $7.25 per hour is 31% less than the minimum wage in 1968, once inflation is accounted for. As millennials, we're constantly at the whim of market forces that throw us into disarray, with little or no safety nets, and we regularly have to fight against misconceptions about our work ethic or ambitions. But that can change.Success does not equal owning something First, we can stop tying our success and sense of accomplishments to owning things. It's okay to grieve the opportunities and wages we've lost while recognizing that we have done our best. We were taught we lived in a world of promise just as the opportunities conferred to past generations began to disappear. Then, we had a pandemic to consider. Millennials can also talk to the elders in our lives and explain our side of this. The systemic obstacles and injustices we've faced in our quest to make a living are real and different from what our parents faced. Our cost of living, healthcare, childcare, and education expenses are exorbitant, and they weren't this high for previous generations. This may not change the minds of our elders, but it can give us something to consider.We can keep voting, educating, and organizing for our rights, and people of all generations can work to understand how decisions made in the past created the systems, inequities, and issues millennials and the next few generations must grapple with. On top of everything I've mentioned, we also have climate change to deal with - all of which will impact our finances and mental health. The constant need to continue changing minds and ensuring the next generations don't go through what we go through can be exhausting, but chasing after it is well worth it.Finally, we can surround ourselves with like-minded individuals who understand us and can provide moral support and remember to rest whenever we can. Our world and its prospects are exhausting. We needn't feel guilty about finding a few moments of peace and quiet. Read the original article on Business Insider.....»»

Category: dealsSource: nytNov 7th, 2021

Greenhaven Road Capital 3Q21 Commentary: Digital Turbine

Greenhaven Road Capital commentary for the third quarter ended September, 2021, discussing their largest position, Digital Turbine Inc (NASDAQ:APPS). Q3 2021 hedge fund letters, conferences and more Dear Fellow Investors, On the first page of every recent letter, I have noted that we will have down months, quarters, and years. Well, we just had a […] Greenhaven Road Capital commentary for the third quarter ended September, 2021, discussing their largest position, Digital Turbine Inc (NASDAQ:APPS). if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Dear Fellow Investors, On the first page of every recent letter, I have noted that we will have down months, quarters, and years. Well, we just had a down quarter. The funds returned approximately -6% net for the third quarter, bringing YTD returns to approximately +14%. Please check your statements for actual numbers as they may vary by entity, investment date, and class. This may be of little solace to those like my Italian cousin who just joined the partnership, but since the Q1 2020 depths of the pandemic, we have had five straight quarters of positive performance returning well in excess of 250% over the past 15 months. We remain focused on the long term. Declines along the way are inevitable and sometimes offer buying opportunities. We are not trying to time the market; we are trying to generate attractive risk-adjusted returns over a multi-year period. Summer Of APPS When a top five holding starts the quarter at $76 and drops to $48 in a virtual straight line, questions should be asked. This was my July and August with Digital Turbine Inc (NASDAQ:APPS). If I liked the stock enough at $76 for it to be a top five holding, I should love it at $48, but Mr. Market was clearly flashing warning signs. While some of you may have enjoyed a carefree summer, I dove back into Digital Turbine to try and figure out what I might be missing and what the market might be missing. I did the best I could to parse every word and action of CEO Bill Stone, connected with dozens of investors, looked at every sell side report and model I could find, studied competitors, and spoke with former employees. There was such a wide gap between my perception of the company and the daily drubbing of its share price, and I was eager to understand if I was missing something or if there was actually a compelling buying opportunity in front of me. I went deep into the weeds, looking at what was said as well as what was unsaid. Over the summer and into the fall, a more detailed mosaic emerged, and I reached three conclusions. The first is that, after making four acquisitions in a little more than a year, the company has many more moving parts and is very difficult to model at a granular level. Nobody has a robust multi-year model that they have any certainty in. This includes yours truly, who (via the funds) has a large percentage of his family’s net worth invested in APPS, as well as sell-side analysts and even firms that specialize in building financial models for public companies. Digital Turbine’s model has gone from requiring three inputs – phone activations, revenue per phone, and percentage of revenue shared with carriers – to requiring dozens in order to achieve any real detail. The acquisitions each have different drivers, and the company’s new complexity is compounded by the fact that the most recent acquisition closed in Q2. As a result, Digital Turbine has not yet issued one full quarter of reporting with all of the acquired companies included. As best as I can tell, very few investors are letting themselves imagine what the economics will look like if there actually is an industrial logic to these acquisitions – if the companies truly are better combined than as stand-alone entities. To be fair, management was not spoon-feeding investors and was cautious with their public statements, spending months restricting their comments/guidance to saying that operating margins will improve over time. They finally opened up a crack in September, acknowledging that they were tracking 13 areas of potential revenue synergies. The combination of complexity and management conservatism created uncertainty, and many investors sell uncertainty and ask questions later. There was plenty of selling this summer. The second conclusion I reached is that Digital Turbine’s underlying business is extremely healthy. The core app discovery business was profitable last quarter and had organic revenue growth over 90%. The companies they acquired are growing revenue quickly, e.g. AdColony at +46% and Fyber at +198%. Even excluding the opportunities presented by the acquisition discussed below, there is the possibility of substantial future growth from increased penetration. Digital Turbine’s software is still on only 700 million phones, so there is a long runway for international growth with both carriers and manufacturers. Further, the company’s Mobile Posse division (a Q1 2020 acquisition) will be rolling out a new offering to Verizon and AT&T Android customers, and Samsung will be rolling out SingleTap on all devices worldwide. Despite what the share price was implying during Q3, I don’t believe the growth story is impaired. The third conclusion that I reached was that the acquisitions were done to control the advertising transaction from end to end, allowing Digital Turbine to capitalize on both a distribution advantage and a data advantage. They bought AdColony for its relationships with large advertisers and Fyber for its inventory of ads, effectively adding demand and supply, respectively, to their digital advertising platform. Digital Turbine’s distribution advantage is derived from a new offering called SingleTap, which allows an Android phone user to click on an app’s ad and download it in the background without being taken into the Google Play store. This patented offering leads to 2X-5X improved advertising efficiency. In the app world, this is massive, lowering the cost per install by 50% to 80% just by running ads with SingleTap embedded. What started as a $1M/quarter business is quickly approaching a $100M/year business. On an October investor call for Oppenheimer clients, management revealed that this $100M run-rate had been achieved with only 12 clients. A number of “last mile” technical issues have slowed growth and are being addressed, but the logic of taking the SingleTap technology and introducing it to AdColony clients to purchase ads served on Fyber’s networks is very interesting. Controlling the transaction and technology from end to end can yield superior outcomes for all parties. To date, none of the reported numbers reflect the opportunities presented by owning AdColony or Fyber, and there are reasons to believe that a technology that lowers acquisition costs by 50% will be used by more than 12 clients. The second reason that Digital Turbine wants to control the digital advertising from end to end is to take fuller advantage of their data advantage in the marketplace. They do not publicly emphasize their data advantages, but because Digital Turbine software is on the phone and operates under the carrier or OEM’s user agreement, they have access to a lot of data that other digital advertisers lack. How much data and how they can use it is determined, in part, by each carrier or hardware manufacturer, but at a high level, they know the model of phone and when it was activated, the demographics of the owner, what apps are installed, and which and when they have been opened. In a marketplace where advertisers are paying for app installs and activations, these data advantages can yield significantly lower cost per activation and drive advertising dollars towards the Digital Turbine ecosystem. It will take time to integrate the data advantages into campaigns and sell those campaigns to AdColony clients to be run on Fyber ad networks, but the combination of SingleTap and a measurable data advantage for a growing client base could yield lollapalooza results. It is easy to look and feel smart by being pessimistic and snarky, but optimism is usually more profitable. Buying more shares of a company that is up over 10X from the start of 2020 is not easy, but we did. I think Digital Turbine is in an enviable position with sound strategic rationale for controlling the digital advertising from end to end, pairing significant supply with significant demand, and layering in distribution and data advantages in a massive mobile advertising market where their overall market share is still small. On the left tail of negative outcomes, there are execution risk as well as risks associated with Google’s control of Android. At the same time, there are also massively positive potential outcomes such as the possibility that Digital Turbine eventually runs Verizon- or AT&T-branded app stores for the carriers. SingleTap could also be licensed to Snap or other large platforms. Again, SingleTap currently has only 12 clients. What will their revenue be with 100? When you layer in a below-market multiple with potentially dramatic sustained growth, the set-up is attractive. APPS’ price has rebounded from the lows of the summer, but I don’t think my summer was wasted. I now have a different (and potentially more informed) view of Digital Turbine’s distribution and data advantages than many in the market and believe that the market will gain a greater appreciation for the magnitude of the opportunity after the company’s analyst day in November. I think that the summer of 2021 will wind up being a lot more financially rewarding than the summers I cleaned pools. Here is a link to a brief slide deck on APPS that I presented at VALUEx Vail. Given the limited time window to present, it does not get into the details of data, but I think it will still be informative. Top 5 Holdings Our top five holdings should be familiar to limited partners, as we have owned them all prior to this quarter. The largest position is Digital Turbine Inc (NASDAQ:APPS) – discussed at length above. Below are brief updates on the remaining four: PAR Technology (PAR) PAR Technology Corporation (NYSE:PAR) continues to make progress towards moving quick-service restaurant chains to a cloud-based point of sale (POS) system, positioning itself to take advantage of all the opportunities that creates, such as integrating payments, inventory management, and loyalty program apps. The company raised capital during the quarter, which some may view as a negative, but I thought was incrementally quite positive. CEO Savneet Singh’s excellent capital allocation decisions are core to our PAR thesis. So far, every time that he has raised capital, he has made an acquisition. I look forward to seeing what he buys. The other positive development in Q3 was the announcement that PAR’s defense business won a large contract that they had been waiting on. This non-core, non-strategic asset greatly muddles company reporting, and I believe the announcement increases the likelihood that the defense business will be sold, simplifying the story and giving Savneet more capital to invest. KKR (KKR) KKR & Co Inc (NYSE:KKR) remains an extremely resilient business with an A+ team enjoying the secular tailwinds of the migration of investable dollars toward alternative assets, where large allocators like the returns and love the muted volatility. Elastic Software (ESTC) Share prices are up more than threefold since our first purchases of Elastic Software. Elastic NV (NYSE:ESTC) continues to report best-in-class net revenue retention (amount generated from existing customers) of 130%. With recent acquisitions, they are continuing their expansion into security. This is the company with the highest product velocity and largest addressable markets in our portfolio. With a massive base of customers using freemium/opensource products, there are fertile hunting grounds for growth. MarketWise (MKTW) During Q3, MarketWise Inc (NASDAQ:MKTW) reported their first quarter of earnings as a public company. I think it is fair to say that the market was underwhelmed. As of the writing of this letter, shares are down approximately 30% from our purchase price, which I thought was a fair one. As a reminder, MarketWise sells subscriptions to financial newsletters and related products. It is one of a very small handful of businesses that I know of that has grown to $500M+ in annual revenue with only $50,000 invested in the business to date. Gross margins are higher than most software companies at 86%, the company has been profitable all 20 years of operation, and revenue has grown for 18 of the 20 years. In the second quarter, they grew revenues 71%, generated over $50M in cash flow from operations, grew paid subscribers 45%, and grew free subscribers 75%. MarketWise has many attributes we seek from the businesses that we own, including: High Insider Ownership: 92% of outstanding shares are owned by insiders Recurring Revenue: 90%+ customer retention Operating Leverage: Incremental subscriber additions are highly profitable Long Runway for Growth with No Additional Capital: Customers are added at less than 1/5 of their lifetime value and marketing spend is paid back in less than 9 months. By most measures, this is an extremely healthy business, so why the decline? One can never be certain on this question, but my supposition is that the main driver has been the fact that MarketWise does not have a long history in the public markets or any publicly traded peers. Their forward guidance indicated a softening of demand as consumers focused elsewhere with the economy, recreational opportunities, and travel opening back up. These facts – combined with the market’s lack of familiarity with the business, its lack of publicly traded peers, the general apathy for SPACs, and overall uncertainty – led MarketWise to join a very long list of SPACs trading below their $10 IPO price. My working theory is that the company will get better at communicating and the market will get more comfortable with the inputs of the business and the strength of its operating model. There is a large list of free subscribers to convert and a history of growth and operating profits. If growth and profits continue, there is little room for multiples to compress further, and thus we believe the price should rise over time. Shorts The partnership remained short major indices and no individual companies. We have identified a couple of SPAC-related shorts that were not actionable; in one case there was no borrow available, and in another it was at the rate of 200% per year. While we continue to look for diamonds in the rough, rest assured, SPACs are still a fertile hunting ground for shorts. Outlook I generally believe that if we own good businesses run by great management teams, we will do well over time. I tend to discount many of the macro themes of the day. For instance, in 2015 when Greece’s issues were roiling global financial markets, I took some solace in the fact that the GDP of Greece was one-quarter that of the state of Ohio and represented far less than 1% of revenue for any of the companies that we owned. As I look at the wall of worry that is facing investors today, most items, such as supply chain issues, seem temporary and isolated to specific industries. The one worry that is more insidious than supply chains and has a far broader reach than a country-specific issue is inflation. Could the hangover of printing trillions and trillions of dollars include inflation? Yes, there are certainly indications that it could. When I look at our portfolio, I take some solace in the fact that most of the businesses that we own should be able to navigate an inflationary period well. KKR and Digital Turbine are not apparent beneficiaries of inflation, but they should be able to bear the environment as they operate with high margins, have no debt, don’t suffer from major labor costs, and lack long-term contracts where increases cannot be passed on. I also believe that my being right or wrong about my variant perceptions related to core holdings will have a larger impact than the CPI index movements. Thus, I am not building a bunker and we are not going to pivot immediately to gold, but of the thousands of variables out there in the cacophony of worry, inflation is the one I am focused on the most and it may influence our portfolio over time. Just as I have ended many of our letters... as volatility arises, I will attempt to take advantage of the opportunities it creates. We will continue to invest with a long-time horizon, and we will continue to invest like it is our own money – because it is. Thank you for the opportunity to grow your family capital alongside mine. Sincerely, Scott Miller Updated on Nov 2, 2021, 5:09 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 2nd, 2021

DEI trailblazers: 16 diversity executives transforming the workplace in post-George Floyd corporate America

From Nike to Google to Bank of America, Insider's top diversity execs of 2021 have led transformative equity progress under immense pressure. From Nike to Google to Twitter, here are Insider's top diversity trailblazers of 2021. American Express; JP Morgan; Facebook; Nike; Alyssa Powell/Insider The echoes of Black Live Matter protesters may have died down since the summer of 2020, but America's CEOs know the pressure to advance racial equity still hovers over them since the murder of George Floyd.Chief diversity officers were hired at record rates to shoulder the brunt of demands placed on companies shortly after Floyd's death. Indeed found that listings for diversity roles jumped 56% between September 2019 and September 2020. LinkedIn data confirmed that the summer of 2020 saw a spike in the hiring of these roles. The year 2021 was the first test to see whether companies would make real progress. These chief diversity officers - often people of color - have enacted incredible change since then. And the work they do is complicated and exhausting. They are the shepherds of what could be a new era in corporate America. Insider is proud to present its second annual list of diversity officers changing the country. Collectively, these executives are helping break barriers for hundreds of thousands of workers while also challenging their CEOs to make their policies and business practices more inclusive. Rosanna Durruthy, vice president of global diversity, inclusion and belonging at LinkedIn Linkedin's Rosanna Durruthy. Courtesy of Rosanna Durruthy Key accomplishments: A result of Durruthy's diligence, LinkedIn announced in July that it would pay the global cochairs of its employee resource groups $10,000 per year for their work, in addition to their salary. "Historically, ERG leaders take on leadership roles and the associated work in addition to their day jobs, putting in extra time, energy, and insight. And despite the tremendous value, visibility and impact to the organization, this work is rarely rewarded financially," Durruthy said. "The work of ERGs is more important than ever." This past year, LinkedIn also created the option for users to share their preferred pronouns, a big move to make the jobs platform more inclusive, especially for transgender and nonbinary professionals. LinkedIn aims to double the number of Black and Hispanic leaders and managers on its US team over the next five years. Durruthy is also focused on increasing leadership training that focuses on inclusion and diversity. In their own words: "As a leader and an LGBTQ woman of color, it's been really important for me to be in conversation with my peers and to allow them to know that I see them as being responsible for helping create the change we're all endeavoring toward."  Brian Lamb, global head of diversity and inclusion at JPMorgan JPMorgan's Brian Lamb. JPMorgan Chase Key accomplishments: This year, Lamb, Jamie Dimon, and a group of other executives deployed funds from the firm's record-making 2020 $30 billion pledge to address racial injustice. The investment aims to boost the number of Black and Hispanic homeowners, create more affordable housing, and support small businesses through loans.  In September, JPMorgan committed an additional $100 million to Black and Hispanic-led minority depository institutions and community-development financial institutions. A month later, JPMorgan announced to Insider it was pressuring the businesses it works with to increase spending with Black- and Hispanic-led companies. Business professors and economists predicted the bank's efforts would have a ripple effect in the economy, boosting capital spent on minority-owned businesses.  In their own words: "Patience isn't a virtue for me. I'm inspired to live with purpose and positively impact the lives of others — to be bold in our thinking and hold myself and others accountable to both their personal and professional responsibility to drive sustainable change."  Melonie Parker, chief diversity officer at Google Google's Melonie Parker. Google Key accomplishments: With efforts overseen by Parker, Google added diversity, equity, and inclusion materials to orientation for all new hires along with training for managers on how to promote inclusion of employees who are neurodiverse, or people with different ways of brain processing, such as people with ADHD or autism. Google also made significant strides in hiring diverse candidates. It increased Black representation in its US workforce by nearly 20%, from 3.7% to 4.4% and increased Hispanic hiring by a third, from 6.6% to 8.8%, according to the company. Parker also interviewed former first lady Michelle Obama at Google's first Women of Color Summit aimed at promoting mentorship, sponsorship, and career development for women of color at the company.  In their own words: "I believe we need to further expand the horizon of what we do to support employees of color. To me, that means clearer pathways to leadership, mentorship opportunities, more safe spaces both on campus and virtually, and also more DEI exercise for white employees, because it is truly everybody's responsibility to create a welcoming and gainful environment for underrepresented employees." Lesley Slaton Brown, chief diversity officer at HP HP's Lesley Slaton Brown. HP Key accomplishments: Over the past year, Lesley Slaton Brown helped the tech giant increase the number of Black executives at the vice president level and up by 50% and the number of female executives by 32%. Additionally, over 60% of new US hires were from underrepresented groups, including women, people with disabilities, people from underrepresented races and ethnicities, and military veterans.In their own words: "My mantra, is 'Everyone in!' Everybody, especially leaders, must understand the business value of DEI. It's integral to drive meaningful change in the short term and long term." Tim Dismond, chief responsibility officer at the commercial real-estate firm CBRE CBRE's Tim Dismond. CBRE Key accomplishments: As a result of Dismond's efforts, over 50% of the company's promotions and nearly half of new hires in the past year were women, people of color, LGBTQ people, or people with disabilities.He also led an effort to increase spending with suppliers owned by people of color, women, or other historically marginalized group. Across 2020 and 2021, the company is projected to spend more than $1 billion with diverse suppliers. In their own words: "As a Black man, I'm not immune to the undertones of bias in professional settings, and while my experience is not unique, by sharing and showing vulnerability I can effect change and help others feel safe to share their experiences and perspectives."   Dalana Brand, VP of people experience and head of inclusion and diversity at Twitter Twitter's Dalana Brand. Twitter Key accomplishments: Brand has pushed Twitter to further diversify its leadership over the past year. Representation of women in leadership roles increased from 35.4% to 37.7% and Black representation in leadership positions increased from 5.6% to 7.3%.  Brand was also influential in Twitter announcing that employees have the option to work from home indefinitely. The move has helped attract and retain talent for whom working from home is best, such as working parents or people with disabilities.In their own words: "It's not enough for us to simply have diverse teams. We cannot check the box and keep on with our own careers because what we know is that diverse folks will remain excluded from opportunity unless we are intentional about inclusion."  Sonia Cargan, American Express' chief colleague inclusion and diversity officer American Express' Sonia Cargan. American Express Key accomplishments: This year, Cargan made pay equity a top priority. AmEx investigated salaries across gender, race, and ethnicity and made changes to correct any discrepancies, achieving 100% pay equity for colleagues across gender globally and across race and ethnicity in the US. Cargan said the company is working to achieve pay equity across race and ethnicity globally.Cargan was also instrumental in AmEx creating a new office of enterprise inclusion, diversity, and business engagement that works directly with the company's executive committee to weave DEI practices into business strategies. In their own words: "We understood that to drive real change, we needed to further intensify our focus and make inclusion and diversity the heart of not only our workplace but how we do business."  Tara Ataya, chief people and diversity officer at Hootsuite Hootsuite's Tara Ataya. Hootsuite Key accomplishments: After a powerful conversation with other Hootsuite leaders last year about how to better support employees, Ataya guided the company's redesign of its benefits package to make it more inclusive. The company now covers gender-affirmation surgeries, fertility treatment, and financial-counseling services under its health and employee-assistance plans, benefits that are highly coveted and not often offered. Hootsuite also expanded its mental-health counseling services to include more therapists of color. The company also conducted a third-party pay equity report and achieved pay equity. In their own words: "It's about time we see this level of change. Greatness comes from being challenged to be better and do better. I think it is so important that organizations understand the importance of and the business case for DEI in the workplace." Maxine Williams, chief diversity officer at Facebook Facebook's Maxine Williams. Courtesy of Maxine Williams Key accomplishments: Because of Williams' leadership, Facebook has seen a significant increase in women in technical roles (from 15% in 2014 to 24.1% in 2020), as well as Black people in nontechnical roles (from 2% in 2014 to 8.9% in 2020). In 2020, Williams helped Facebook achieve a 38.2% increase in Black leaders, according to the company's latest DEI report. In addition, Williams built a diversity advisory council, a group of 18 employees from diverse backgrounds across the globe who meet quarterly to consult on the company's content policies, products, and human-resources programs.In their own words: "Build DEI into business processes and products from day one. Don't wait for the right time. That time was yesterday." Jarvis Sam, Nike's vice president and head of global diversity, equity, and inclusion Nike's Jarvis Sam. Nike Key accomplishments: Sam drove Nike's plan to increase representation of historically marginalized communities at the leadership level. Over the past year, he helped the company increase representation of women and people of color and at the director level and above by 2 percentage points. Women now make up 43% of directors and above, and people of color make up 27%. Sam also created new coaching programs for vice presidents across all departments to gain new skills, including skills around DEI. Some 56% of the 2020 participants were promoted to new roles within the year.  In their own words: "We have to lift as we climb. If we're not bringing others along with us, we aren't doing our job right." Toni Thompson, VP of people and strategy at Etsy Etsy's Toni Thompson. Etsy Key accomplishments: Over the past year and a half, the company has doubled down on its efforts to hire and promote more people of color thanks to pressure from Thompson. Black, Latino, and Native American hires made up 20% of new hires in 2020, and Black, Latino, and Native American people now comprise 12.2% of Etsy's total workforce, according to the company's most recent diversity report. In addition, employees from these underrepresented communities now comprise 8.7% of Etsy's leadership. The company is on track to reach its goal of doubling the percentage of Black, Latino, and Native American employees by 2023.Thompson helped Etsy expand its mentorship opportunities for women and people of color in engineering. She also launched a third-party pay-equity analysis, which found no discrepancies in pay based on race, ethnicity, or gender, consistent with their first report conducted in 2018. In their own words: "It's very natural for companies to be laser-focused on the financials and goal achievement that influence the financial health of the company. There are many HR and DEI efforts that support the top and bottom line, but it's hard for people to make those connections. I'm thankful the executive team at Etsy gets it, but many leaders at other companies don't."  Kara Helander, managing director and chief diversity, equity, and inclusion officer at The Carlyle Group The Carlyle Group's Kara Helander. The Carlyle Group Key accomplishments: In early 2020, Helander led the charge at the private-equity firm to set a new goal of having 30% of board directors at all of its portfolio companies hail from historically underrepresented groups within two years of ownership. The head of DEI also developed and implemented a new set of criteria for assessing employees up for promotion to managing director, with individuals taking part in an assessment that evaluated their skills in inclusive leadership and management.  In addition, she implemented a change that DEI will be integrated into compensation as part of managers' formal year-end assessments going forward. Helander wants to continue diversifying the financial firm. In 2020, 63% of people hired in the US were women or ethnic minorities, according to the company. In their own words: "Each and every person in an organization can contribute to advancing diversity and inclusion. Accountability is key to sustaining positive change."  Lorie Valle-Yanez, head of diversity, equity, and inclusion at MassMutual MassMutual's Lorie Valle-Yanez. MassMutual Key accomplishments: Valle-Yanez shepherded MassMutual's investments in racial justice to the tune of more than $200 million, with $150 million going to diversifying the businesses the company works with and $50 million to spur job creation among diverse entrepreneurs in Massachusetts.The financial company also released its first public DEI report, which includes a detailed breakdown of its leadership and workforce demographics. In their own words: "The biggest change since George Floyd has been the increased engagement and ownership coming from so many people in the company who are raising their hands and wanting to be part of the change."  Antoine Andrews, chief diversity and social-impact officer at Momentive (formerly SurveyMonkey) Momentive's Antoine Andrews. Momentive Key accomplishments: Andrews was a key figure in Momentive's recent decision to financially recognize employees who lead the company's ERGs, though the company declined to disclose by how much. Working with CEO Zander Lurie, Andrews also shaped Momentive's initiative calling on its suppliers and vendors to increase diversity in their leadership. In their own words: "Stamina is the characteristic most needed to combat inequity, racism, and all other negative 'isms.' Those of us who do this work can easily get tired, frustrated, and discouraged when progress isn't made or is happening slowly. Change requires us to be in shape mentally and physically."  KeyAnna Schmiedl, global head of culture and inclusion at Wayfair Wayfair's KeyAnna Schmiedl. Lyndsay Hannah Key accomplishments: Schmiedl helped Wayfair conduct a third-party pay-equity survey and worked to achieve pay equity for all 16,000 employees across race, disability status, and gender and sexual identity. In addition, Schmiedl led the charge to tie executive compensation to DEI goals.She also helped diversify Wayfair's leadership. The company increased the share of women in leadership positions by 7 percentage points in six months from 25% at the end of the 2020 fourth quarter to 32.8% at the end of June. The company also hired its first two directors of Indigenous descent. In their own words: "I am more consistent in being authentically me from meeting to meeting, interaction to interaction, and I've experienced more folks in the workplace bringing more of their humanity to everyday interactions. I'm having more raw conversations."  Cynthia Bowman, chief diversity and inclusion and talent acquisition officer at Bank of America Bank of America's Cynthia Bowman. Bank of America Key accomplishments: Bowman played a key role in producing Bank of America's $1 billion, four-year commitment made in June 2020 to address underlying economic and social disparities that were exacerbated during the pandemic. In March, Bowman, CEO Brian Moynihan, and other executives expanded this commitment to $1.25 billion over five years to further support investments to advance racial justice through grants to historically Black colleges and universities, Hispanic-serving institutions, and civil-rights organizations. Bowman has helped the financial giant deepen connections with HBCUs and HSIs over the past year and a half. Because of these efforts, the bank's 2021 entry-level class is at least 50% people from historically marginalized backgrounds.  In their own words: "There is no question that achieving strong operating results on equity — the right way — starts with our teammates. Our diversity makes us stronger, and the value we deliver as a company is strengthened when we bring broad perspectives together to meet the needs of our diverse stakeholders."  Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 27th, 2021

Futures Surge To All Time High As Earnings Supercharge Market Meltup

Futures Surge To All Time High As Earnings Supercharge Market Meltup The wall of worry that preoccupied traders just weeks ago has melted away, and has been replaced with a global market melt up (just as Goldman predicted again this weekend), which pushed US index futures to a new all time high this morning when spoos hit 4,580.75, while propelling European and Asian stocks higher as corporate earnings helped boost sentiment amid lingering concerns about inflation and growth. As of 715am ET, US equity futures were up 0.42% or 19.25 points, Dow Jones futures were up 126 points or 0.35% and Nasdaq futures jumped 0.61%, extending cash market gains boosted by Tesla’s rally to a $1 trillion market value on a big order and Facebook’s results announcement revealing strong user growth and a $50 billion stock buyback. 10-year Treasury yields dropped by 1 basis point while the dollar slid to session lows. Bitcoin traded around $63,000. The barrage of earnings reports continued on Tuesday morning, with United Parcel Service, General Electric and 3M all gaining in pre-market trading after strong results. Eli Lilly advanced after raising full-year forecasts. Bakkt shares jumped 36% in the U.S. premarket session after more than tripling Monday when Mastercard said it has inked a deal with the firm to help banks offer cryptocurrency rewards on their debit and credit cards.  Facebook also rose after pledging to buy back as much as $50 billion more in stock, with tech heavyweights Twitter, Alphabet and Microsoft reporting after the market close on Tuesday. Here are all the notable premarket movers: Facebook (FB US) rises as much as 2.5% in premarket as analysts stay bullish despite a third-quarter revenue miss and an outlook that was below consensus. Advertising growth is seen improving in 2022. Tesla (TSLA US) gains 1% after stock closed at a record high, boosted by several factors on Monday including a large car order from rental firm Hertz and Morgan Stanley lifting its price target. Creatd (CRTD US) was up 27% adding to a 50% gain over the past two trading sessions amid a rally in a growing number of retail-trader favorite stocks linked to former U.S. President Donald Trump. Redbox (RDBX US) rises as much as 130% after the firm completed a business combination with Seaport Global Acquisition, a special purpose acquisition company. Cryptocurrency-exposed stocks rise, with Eqonex (EQOS US), previously known as Diginex, more than doubling in value after listing Polkadot on its platform and Bakkt (BKKT US) extending Monday’s gains. Earnings season is helping to counter concerns that elevated inflation and tightening monetary policy will slow the recovery from the pandemic. Some 81% of S&P 500 members have reported better-than-expected results so far, though CitiGroup Inc. warned that profit growth may be close to peaking. Equity markets are “continuing their recovery and we expect this process to continue past big-tech earnings” and this week’s European Central Bank meeting, where policy makers may flag the end to their pandemic bond-buying program, Sebastien Galy, senior macro strategist at Nordea Investment Funds, wrote in a note. Still, some analysts voiced caution over the impact of the COVID-19 pandemic on supply chains: “Even though this has been a good earnings season in aggregate we are starting to see more companies with supply backlogs, hiring difficulties, and rising input prices that are eating into profits,” Deutsche Bank analysts wrote. The debate over price pressures continued when former Treasury Secretary Lawrence Summers said officials are unlikely to deal with “inflation reality” successfully until it’s fully recognized. The MSCI world equity index, which tracks shares in 50 countries, added 0.1% European shares hit the highest level in seven weeks: the Stoxx Europe 600 index rose more than 0.5% led by gains in travel stocks and insurers, and edging close to a the record high reached in September while German stocks gained 0.9%. Reckitt Benckiser gained more than 5% after the maker of Strepsils throat lozenges raised its sales forecast. Swiss lender UBS Group AG climbed after posting a surprise jump in profit, while Novartis AG advanced on news it may spin off its generic-drug unit. After a stellar quarter for U.S. and British banks, Switzerland’s UBS rose over 2% on its highest quarterly profit since 2015, helping the financial services sector climb about 1%. Earlier in the session, the MSCI Asia Pacific Index traded 0.3% higher in afternoon trading, paring an earlier gain of as much as 0.7% which pushed it to its highest level in six weeks.  Asian stocks rose as investors focused on encouraging earnings reports from some of the world’s biggest technology companies. The advance was driven by a subgauge of IT names including South Korean memory chipmaker SK Hynix, which climbed after reporting record sales and forecasting further demand growth. Japanese electronics giants Nidec Corp. and Canon Inc. reported results after Tuesday’s close. “The earnings season so far continues to meet investor expectations and assuage inflationary concerns,” said Justin Tang, head of Asianresearch at United First Partners. Tesla’s order from Hertz, good prospects for the $550 billion U.S. infrastructure bill and the latest talks between U.S. and China officials also helped “inject some risk appetite,” Tang said. Japan led gains among national benchmarks, with the Topix rising more than 1%. The market was helped by a local media report that the ruling Liberal Democratic Party may be able to win a majority of seats on its own in the general elections scheduled for next week. Key gauges in tech-heavy South Korea and Taiwan also jumped more than 0.5%, while benchmarks fell in Hong Kong and China. In China, Modern Land China Co. became the latest builder to miss a payment on a dollar bond, in a further sign of stress in the nation’s real estate sector. Defaults from Chinese borrowers on offshore bonds have jumped to a record. Japanese stocks advanced as investors looked toward earnings reports from major companies and political stability after the upcoming election. Electronics makers and telecommunications providers were the biggest boosts to the Topix, which gained 1.2%. Fast Retailing and Tokyo Electron were the largest contributors to a 1.8% rise in the Nikkei 225. Asian stocks and U.S. futures also rose, following the S&P 500’s climb to a record high, amid positive news from Tesla and Facebook. Japanese companies reporting results today include Canon, Nidec and Hitachi Construction Machinery.  Meanwhile, the ruling Liberal Democratic Party may be able to exceed a majority of 233 seats on its own in the general elections scheduled for Oct. 31, a poll conducted by Asahi showed. “There’s a lot of noise out there but for stocks, it’s about fundamentals, which are corporate earnings,” said Hiroshi Matsumoto, head of Japan investment at Pictet Asset Management. “We’re starting to see some pretty good earnings figures, so I’m thinking we’ll see the Nikkei 225 consolidate around the 29,000 level this week.” In rates, Treasuries were cheaper across front-end of the curve, fading a portion of Monday’s gains even as corporate earnings propel stock futures to new highs. The 10-year TSY yield is lower by less than 1bp at 1.622%; 2-year yields are cheaper by ~1bp on the day while long-end of the curve is richer by ~1.5bp, flattening 2s10s, 5s30s spreads by ~2bp. The TSY curve is flatter with long-end yields richer on the day, unwinding Monday’s steepening move. Treasury auction cycle begins with sale of 2-year notes, followed by 5- and 7-year offerings over next two days.  In FX, the Bloomberg Dollar Spot Index was mixed but slumped to session lows as US traders walked in. The pound led gains followed by other risk-sensitive currencies such as the Australian and New Zealand dollars. Sterling gained even as overnight index swaps show traders trimmed back bets for BOE tightening, pricing in 14 basis points of hikes in November, down from 15 points previously. The yen was the worst performer as demand for haven assets receded following talks between U.S. and Chinese officials on the economy and cooperation in which some incremental progress was made. The euro inched up after gyrating toward the $1.16 handle; the euro’s volatility skew flattened in the past two weeks, suggesting a rebound in the spot market. Given the latter has stalled at a key resistance area, risk reversals could show downside risks once again. The Turkish lira rallied the most in more than four months after President Recep Tayyip Erdogan dropped his demand for 10 Western ambassadors to be expelled from the country. China’s offshore yuan gained for a fourth straight day, lifted by a phone call between the U.S. and China on trade and economic issues. Overnight borrowing costs sunk to one-month lows after the central bank boosted cash injections into the financial system.  In commodities, WTI crude oil was steady around $84 a barrel and Brent traded above $86 as investors weighed the outlook for U.S. stockpiles and prospects for talks that may eventually help to revive an Iranian nuclear accord, allowing a pickup in crude exports. Gold held above $1,800 an ounce and Bitcoin hovered around $62,500. Looking at today's calendar, we get the August FHFA house price index, September new home sales, October Conference Board consumer confidence and Richmond Fed manufacturing index. In central banks, ECB’s Villeroy and de Cos will speak. In corporate earnings, we will get results from Microsoft, Alphabet, Visa, Eli Lilly, Novartis, Texas Instruments, UPS, General Electric, UBS and Twitter Market Snapshot S&P 500 futures up 0.4% to 4,576.25 STOXX Europe 600 up 0.6% to 474.91 MXAP up 0.4% to 200.93 MXAPJ up 0.2% to 662.77 Nikkei up 1.8% to 29,106.01 Topix up 1.2% to 2,018.40 Hang Seng Index down 0.4% to 26,038.27 Shanghai Composite down 0.3% to 3,597.64 Sensex up 0.4% to 61,232.14 Australia S&P/ASX 200 little changed at 7,443.42 Kospi up 0.9% to 3,049.08 German 10Y yield little changed at -0.12% Euro little changed at $1.1609 Brent Futures down 0.3% to $85.76/bbl Gold spot down 0.3% to $1,802.76 U.S. Dollar Index little changed at 93.86 Top Overnight News from Bloomberg Traders are wagering on rate hikes of as much as 158 basis points over the next year in countries including the U.K., New Zealand and South Korea amid soaring costs of living and commodity prices. Yet a flattening in yield curves -- historically seen as the market’s assessment of economic health -- indicates rising concern that such a rapid withdrawal of support will hurt the nascent recovery Financial markets have stubbornly ignored recent warnings from ECB policy makers including Chief Economist Philip Lane that they’re wrong to anticipate a rate hike at the end of next year. The task of persuading people otherwise will fall to President Christine Lagarde as she presents the Governing Council’s latest decision on Thursday A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were lifted by the tailwinds seen stateside, whereby the SPX and DJIA both notched fresh all-time-highs, although the NDX outperformed as Tesla shot past the USD 1000/shr mark and USD 1trl market cap milestone. US equity futures overnight drifted higher with the NQ narrowly outperforming its peers. European equity futures also posted mild gains. Back to APAC, the ASX 200 (+0.1%) was kept afloat by tech names as the sector saw tailwinds from the stateside performance. The Nikkei 225 (+1.8%) outperformed following the prior session’s underperformance, and as the JPY drifted lower during the session. The KOSPI (+0.9%) was also firmer with SK Hynix rising some 3% at the open as chip demand supported earnings. The Hang Seng (-0.4%) and Shanghai Comp (-0.3%) opened flat but the latter was initially underpinned following another chunky CNY 190bln net liquidity injection by the PBoC. The Hang Seng Mainland Properties Index fell almost 5% in early trade, whilst Modern Land noted that it will not be able to meet payments and shares were halted until future notice. Finally, 10yr JGBs were lower amid spillover selling from T-notes and Bund futures. Top Asian News MediaTek Sees 2021 Revenue Growing by 52%; 3Q Profit Beats UBS Going ‘Full Bull’ on China Despite Outflows, Growth Worry China’s IPO Flops Raise Red Flag Over Shares Pricing: ECM Watch Asian Stocks Rise as Investors Focus on Major Tech Earnings European equities (Stoxx 600 +0.6%) trade on a firmer footing after extending on the tentative gains seen at the cash open with the Stoxx 600 at its best level in around seven weeks. The APAC session saw some support via the tailwinds seen in the US after the SPX and DJIA both notched fresh all-time highs and the NDX outperformed and Tesla shot past the USD 1000/shr mark and USD 1trl market cap milestone. The Nikkei 225 (+1.7%) led gains in the region alongside a firmer JPY whilst the Shanghai Comp (-0.3%) was unable to benefit from another chunky liquidity injection by the PBoC. Stateside, futures are indicative of a firmer cash open with the NQ (+0.6%) continuing to outpace peers with Facebook +2.4% in pre-market trade post-results which saw the Co. announce a USD 50bln boost to its share buyback authorisation. From a macro perspective, with the Fed in its blackout period and events on Capitol Hill not providing much impetus for price action, the equity landscape will likely be dominated by earnings with the likes of Alphabet, Microsoft, General Electric, 3M, Visa, AMD and Twitter all due to report today. Earnings are also playing a pivotal role in Europe today with Reckitt (+6.4%) top of the FTSE 100 and supporting the Personal and Household Goods sector after Q3 results prompted the Co. to raise its sales outlook. UBS (+0.6%) is off best levels but still firmer on the session after reporting its highest quarterly profits in six years. Countering the upside from UBS in the Banking sector is Nordea (-4.0%) with shares weighed on by Sampo selling 162mlnn shares in the Co. to institutional investors. Novartis (+1.6%) shares are trading broadly inline with the market after opening gains were scaled back post-Q3 earnings which saw the Co. report a 10% increase in operating profits and announce a strategic review of its generic drug unit Sandoz. Telecoms are near the unchanged mark and unable to benefit from the broader gains seen across the region as Orange (-2.7%) acts as a drag on the sector after announcing a decline in Q3 earnings. Top European News UBS Going ‘Full Bull’ on China Despite Outflows, Growth Worry Adler Sells Real Estate Portfolio Valued at More Than EU1B Europe Gas Extends Gains With Weak Russian Flows, Norway Outages Latest Impact of Europe’s Energy Crisis is a Plunge in Trading In FX, the 94.000 level remains tantalisingly or agonisingly close, but elusive for the Dollar index, and it could simply be a psychological barrier as a breach would clear the way for a complete comeback from trough to 94.174 peak set last week. However, the Greenback has lost some yield attraction and the broad risk tone is bullish to dampen demand on safe-haven grounds, while chart resistance and option expiries are also preventing the Buck from staging a more pronounced rebound ahead of a busier US agenda including housing data, consumer confidence, several regional Fed surveys and the first slug of issuance in the form of Usd 60 bn 2 year notes. Back to the DXY, 93.965-795 encapsulates trade thus far, and the 21 DMA stands at 93.966 today, just 3 ticks shy of Monday’s high. AUD - In similar vein to its US counterpart, the Aussie is finding 0.7500 a tough round number to crack, convincingly, but Aud/Usd is deriving support from the ongoing recovery in industrial metals awaiting independent impetus via Q3 inflation data tomorrow. JPY/CHF - The Yen and Franc continue to lag their major peers and retreat further vs the Dollar, with the former now struggling to keep sight of the 114.00 handle even though hefty option expiries reside from 113.85 to the big figure (1 bn), and Usd/Jpy faces more at the 114.50 strike (1.1 bn), while the latter is sub-0.9200 and unwinding more gains relative to the Euro as the cross probes 1.0700. GBP/NZD - Conversely, Sterling remains primed for further attempts to extend gains beyond Fib resistance and breach 1.3800, while eyeing 0.8400 against the Euro irrespective of some UK bank research suggesting that BoE Governor Bailey may not back up recent hawkish words with a vote to hike rates at the November MPC. Elsewhere, the Kiwi is still hovering above 0.7150 and defending 1.0500 vs its Antipodean rival with a degree of traction via RBNZ Governor Orr warning that climate change could culminate in a lengthy phase of stronger inflation that needs a policy response. EUR/CAD - Both rather flat, as the Euro continues to pivot 1.1600 and rely on option expiry interest for underlying support (1.5 bn rolling off from the round number to 1.1610 today), but also anchored by the 21 DMA that aligns with the big figure, while the Loonie has lost its crude prop on the eve of the BoC, though should also receive protection from expiries at 1.2400 (1 bn) within a 1.2394-68 range. EM - The Try has reclaimed more lost ground to trade above 9.5000 vs the Usd on a mix of corrective price action and short covering rather than any real relief about Turkey’s latest rift with international partners given another blast from President Erdogan who said statements issued by ambassadors on Kavala target his country’s judiciary and sovereignty, adding that the Turkish judiciary does not take orders from anyone. On the flip-side, the Zar is softer alongside Gold and ongoing issues with SA power supply provided by Eskom. In commodities, WTI and Brent have been softer throughout the European morning dipping from the initially steady start to the APAC session after yesterday’s pressured; nonetheless, prices haven’t dipped too far from recent peaks. Newsflow for the complex and broadly has been sparse thus far as focus remains very much on earnings and events due later in the week. Specifically for energy, we had commentary from Russian Deputy PM Novak that he wants OPEC+ to stick to the agreement to increase production by 400k BPD at the November gathering, commentary which had little impact on crude at the time. Elsewhere, the weekly Private Inventory report is due later in the session and expectations are for a build of 1.7mln for the headline crude figure; for reference, both distillates and gasoline stocks are expected to post a draw. Moving to metals, spot gold and silver are pressured this morning with initial downside perhaps stemming from a short-lived resurgence in the USD; however, while the metals do have a negative bias, the magnitude of this – particularly in spot gold – is fairly minimal. Separately, base metals are softer with LME copper hindered and still shy of the 10k figure. Again, newsflow this morning has been limited but we did see a production update from Hochschild who confirmed FY21 production guidance of 360-370k gold-equivalent ounces after reporting that Q3 was the strongest period of the year, thus far. US Event Calendar 9am: Aug. S&P Case Shiller Composite-20 YoY, est. 20.00%, prior 19.95%; 9am: MoM SA, est. 1.50%, prior 1.55% 9am: Aug. FHFA House Price Index MoM, est. 1.5%, prior 1.4% 10am: Oct. Conf. Board Consumer Confidenc, est. 108.2, prior 109.3 Present Situation, prior 143.4 Expectations, prior 86.6 10am: Oct. Richmond Fed Index, est. 5, prior -3 10am: Sept. New Home Sales, est. 758,000, prior 740,000; MoM, est. 2.5%, prior 1.5%;  DB's Jim Reid concludes the overnight wrap If you’ve never seen Lord of the Flies feel free to come round to our house where you’ll get a live performance that gets more authentic the longer this two week half-term holiday we’re in goes on. Yet again working is the safest option. We have the option to “purchase” extra holiday each year but I’m thinking of seeing if I can give some back and take the money instead. They are hard work when put into a room together for any period of time. It was not only the fighting that was the same as last week, markets were pretty similar yesterday too as we saw fresh equity highs alongside renewed multi-year highs in breakevens. There are a few subtle changes in company reporting trends though. Even though this has been a good earnings season in aggregate we are starting to see more companies with supply backlogs, hiring difficulties, and rising input prices that are eating into profits. Indeed yesterday saw a few consumer staples companies lower full year profit outlooks in their earnings releases. Nevertheless, major equity indices marched higher, with the small cap Russell 2000 (+0.93%) and Nasdaq composite (+0.90%) outperforming the S&P 500 (+0.47%). Consumer discretionary stocks were the clear outperformer, driven by news of Tesla (+12.66%) receiving a 100k car order from Hertz. Tesla’s big day saw it become the first automaker to cross 1 trillion dollar market cap and also drove the outperformance of the FANG index ahead of Facebook’s after hours earnings release. Speaking of which, Facebook missed revenue estimates but beat on earnings. Shares were slightly higher in after-hours trading, where they are betting big on virtual reality technology. Overnight in Asia, the Nikkei 225 (+1.75%) and the KOSPI (+0.61%) are outperforming the Hang Seng (-0.42%) and Shanghai Composite (+0.01%). The sentiment in China is being clouded by the news of another developer, Modern Land China Co., missing a payment on a $250 million dollar bond. This news came as Bloomberg reported that Chinese firms set a yearly record on offshore bond defaults. Another development in the region is that Hong Kong has pushed back against yesterday’s calls for an easing in its virus rules which the banks in particular were calling for. In geopolitics, China’s Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen held a call about trade and economic concerns, boosting sentiment in Asian markets, while the S&P 500 mini futures (+0.24%) is trading higher. The yield on 10y Treasury (+0.7bps) is also up. In data releases, South Korean preliminary GDP for Q3 came in at +4.0% versus +4.3% expected, while Japan’s services PPI for September declined to +0.9%, missing estimates of +1.1%. Back to yesterday and in fixed income, as mentioned at the top inflation breakevens continued their march higher. In the US, 10-year Treasury breakevens (+2.7 bps) closed at 2.67%, just shy of their widest levels since 10-year TIPS began trading in 1997. 10yr nominal yields were -0.2 bps lower as real yields slipped -2.3bps to their lowest levels since mid-September. European breakevens kept pace, with 10-year German breakevens increasing +1.9bps to 1.93% and UK breakevens increasing +1.2 bps to 4.20%. As was the case with the US, real yields fell as nominal 10-year yields decreased across Europe. Bunds (-0.9bps), Gilts (-0.5bps), OATs (-1.1bps) and BTP (-3.4bps) yields all fell. Crude oil futures put in a mixed performance. Multiple OPEC+ members signaled they won’t increase supply at their upcoming meeting leading to gains in crude, yet the gains were short lived, as headlines noted that Iran and the EU will stage talks to restore the 2015 nuclear deal, paving a way for Iranian oil supply to return to the market. Brent futures finished +0.54% higher while WTI futures were unchanged. Natural gas prices were on a one-way track higher, however. US natural gas prices had their biggest one-day gain in a year, increasing +11.70%, on the back of a colder forecast for the upcoming winter as supply issues still abound. European and UK natural gas prices were only modestly higher by comparison, increasing +1.27% and +1.86%, respectively. European leaders are gathering in Luxembourg today for an emergency meeting on the energy crisis. European equities were almost unchanged, with the STOXX 600 (+0.07%) finishing with marginal gains with energy (+1.27%) leading. The German DAX (+0.36%) gained with the help of stronger IT (+1.76%) performance despite Ifo expectations (95.4) coming in below consensus (96.6). In other data releases, the Chicago Fed National Activity Index came at -0.13 versus 0.20 expected. The Dallas Fed Manufacturing Activity Index (14.6), however, surprised on the upside by coming above expectations (6.0). Delivery times remained elevated in the survey, and a special question showed that labour supply issues got slightly worse. In virus news, Moderna reported that its vaccine showed a strong immune response for children from 6 to under 12 years old. Meanwhile, China announced in its initial guidelines that unvaccinated athletes at the 2022 Winter Olympics in Beijing would have to quarantine for 21 days, while Hong Kong was pressured by banks to relax its zero-COVID policy. In today’s data releases, August FHFA house price index, September new home sales, October Conference Board consumer confidence and Richmond Fed manufacturing index are due from the US. In central banks, ECB’s Villeroy and de Cos will speak. In corporate earnings, we will get results from Microsoft, Alphabet, Visa, Eli Lilly, Novartis, Texas Instruments, UPS, General Electric, UBS and Twitter   Tyler Durden Tue, 10/26/2021 - 07:47.....»»

Category: blogSource: zerohedgeOct 26th, 2021

Bitcoin & The US Fiscal Reckoning

Bitcoin & The US Fiscal Reckoning Authored by Avik Roy via NationalAffairs.com, Cryptocurrencies like bitcoin have few fans in Washington. At a July congressional hearing, Senator Elizabeth Warren warned that cryptocurrency "puts the [financial] system at the whims of some shadowy, faceless group of super-coders." Treasury secretary Janet Yellen likewise asserted that the "reality" of cryptocurrencies is that they "have been used to launder the profits of online drug traffickers; they've been a tool to finance terrorism." Thus far, Bitcoin's supporters remain undeterred. (The term "Bitcoin" with a capital "B" is used here and throughout to refer to the system of cryptography and technology that produces the currency "bitcoin" with a lowercase "b" and verifies bitcoin transactions.) A survey of 3,000 adults in the fall of 2020 found that while only 4% of adults over age 55 own cryptocurrencies, slightly more than one-third of those aged 35-44 do, as do two-fifths of those aged 25-34. As of mid-2021, Coinbase — the largest cryptocurrency exchange in the United States — had 68 million verified users. To younger Americans, digital money is as intuitive as digital media and digital friendships. But Millennials with smartphones are not the only people interested in bitcoin; a growing number of investors are also flocking to the currency's banner. Surveys indicate that as many as 21% of U.S. hedge funds now own bitcoin in some form. In 2020, after considering various asset classes like stocks, bonds, gold, and foreign currencies, celebrated hedge-fund manager Paul Tudor Jones asked, "[w]hat will be the winner in ten years' time?" His answer: "My bet is it will be bitcoin." What's driving this increased interest in a form of currency invented in 2008? The answer comes from former Federal Reserve chairman Ben Bernanke, who once noted, "the U.S. government has a technology, called a printing press...that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation...the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to...inflation." In other words, governments with fiat currencies — including the United States — have the power to expand the quantity of those currencies. If they choose to do so, they risk inflating the prices of necessities like food, gas, and housing. In recent months, consumers have experienced higher price inflation than they have seen in decades. A major reason for the increases is that central bankers around the world — including those at the Federal Reserve — sought to compensate for Covid-19 lockdowns with dramatic monetary inflation. As a result, nearly $4 trillion in newly printed dollars, euros, and yen found their way from central banks into the coffers of global financial institutions. Jerome Powell, the current Federal Reserve chairman, insists that 2021's inflation trends are "transitory." He may be right in the near term. But for the foreseeable future, inflation will be a profound and inescapable challenge for America due to a single factor: the rapidly expanding federal debt, increasingly financed by the Fed's printing press. In time, policymakers will face a Solomonic choice: either protect Americans from inflation, or protect the government's ability to engage in deficit spending. It will become impossible to do both. Over time, this compounding problem will escalate the importance of Bitcoin. THE FIAT-CURRENCY EXPERIMENT It's becoming clear that Bitcoin is not merely a passing fad, but a significant innovation with potentially serious implications for the future of investment and global finance. To understand those implications, we must first examine the recent history of the primary instrument that bitcoin was invented to challenge: the American dollar. Toward the end of World War II, in an agreement hashed out by 44 Allied countries in Bretton Woods, New Hampshire, the value of the U.S. dollar was formally fixed to 1/35th of the price of an ounce of gold. Other countries' currencies, such as the British pound and the French franc, were in turn pegged to the dollar, making the dollar the world's official reserve currency. Under the Bretton Woods system, foreign governments could retrieve gold bullion they had sent to the United States during the war by exchanging dollars for gold at the relevant fixed exchange rate. But enabling every major country to exchange dollars for American-held gold only worked so long as the U.S. government was fiscally and monetarily responsible. By the late 1960s, it was neither. Someone needed to pay the steep bills for Lyndon Johnson's "guns and butter" policies — the Vietnam War and the Great Society, respectively — so the Federal Reserve began printing currency to meet those obligations. Johnson's successor, Richard Nixon, also pressured the Fed to flood the economy with money as a form of economic stimulus. From 1961 to 1971, the Fed nearly doubled the circulating supply of dollars. "In the first six months of 1971," noted the late Nobel laureate Robert Mundell, "monetary expansion was more rapid than in any comparable period in a quarter century." That year, foreign central banks and governments held $64 billion worth of claims on the $10 billion of gold still held by the United States. It wasn't long before the world took notice of the shortage. In a classic bank-run scenario, anxious European governments began racing to redeem dollars for American-held gold before the Fed ran out. In July 1971, Switzerland withdrew $50 million in bullion from U.S. vaults. In August, France sent a destroyer to escort $191 million of its gold back from the New York Federal Reserve. Britain put in a request for $3 billion shortly thereafter. Finally, that same month, Nixon secretly gathered a small group of trusted advisors at Camp David to devise a plan to avoid the imminent wipeout of U.S. gold vaults and the subsequent collapse of the international economy. There, they settled on a radical course of action. On the evening of August 15th, in a televised address to the nation, Nixon announced his intention to order a 90-day freeze on all prices and wages throughout the country, a 10% tariff on all imported goods, and a suspension — eventually, a permanent one — of the right of foreign governments to exchange their dollars for U.S. gold. Knowing that his unilateral abrogation of agreements involving dozens of countries would come as a shock to world leaders and the American people, Nixon labored to re-assure viewers that the change would not unsettle global markets. He promised viewers that "the effect of this action...will be to stabilize the dollar," and that the "dollar will be worth just as much tomorrow as it is today." The next day, the stock market rose — to everyone's relief. The editors of the New York Times "unhesitatingly applaud[ed] the boldness" of Nixon's move. Economic growth remained strong for months after the shift, and the following year Nixon was re-elected in a landslide, winning 49 states in the Electoral College and 61% of the popular vote. Nixon's short-term success was a mirage, however. After the election, the president lifted the wage and price controls, and inflation returned with a vengeance. By December 1980, the dollar had lost more than half the purchasing power it had back in June 1971 on a consumer-price basis. In relation to gold, the price of the dollar collapsed — from 1/35th to 1/627th of a troy ounce. Though Jimmy Carter is often blamed for the Great Inflation of the late 1970s, "the truth," as former National Economic Council director Larry Kudlow has argued, "is that the president who unleashed double-digit inflation was Richard Nixon." In 1981, Federal Reserve chairman Paul Volcker raised the federal-funds rate — a key interest-rate benchmark — to 19%. A deep recession ensued, but inflation ceased, and the U.S. embarked on a multi-decade period of robust growth, low unemployment, and low consumer-price inflation. As a result, few are nostalgic for the days of Bretton Woods or the gold-standard era. The view of today's economic establishment is that the present system works well, that gold standards are inherently unstable, and that advocates of gold's return are eccentric cranks. Nevertheless, it's important to remember that the post-Bretton Woods era — in which the supply of government currencies can be expanded or contracted by fiat — is only 50 years old. To those of us born after 1971, it might appear as if there is nothing abnormal about the way money works today. When viewed through the lens of human history, however, free-floating global exchange rates remain an unprecedented economic experiment — with one critical flaw. An intrinsic attribute of the post-Bretton Woods system is that it enables deficit spending. Under a gold standard or peg, countries are unable to run large budget deficits without draining their gold reserves. Nixon's 1971 crisis is far from the only example; deficit spending during and after World War I, for instance, caused economic dislocation in numerous European countries — especially Germany — because governments needed to use their shrinking gold reserves to finance their war debts. These days, by contrast, it is relatively easy for the United States to run chronic deficits. Today's federal debt of almost $29 trillion — up from $10 trillion in 2008 and $2.4 trillion in 1984 — is financed in part by U.S. Treasury bills, notes, and bonds, on which lenders to the United States collect a form of interest. Yields on Treasury bonds are denominated in dollars, but since dollars are no longer redeemable for gold, these bonds are backed solely by the "full faith and credit of the United States." Interest rates on U.S. Treasury bonds have remained low, which many people take to mean that the creditworthiness of the United States remains healthy. Just as creditworthy consumers enjoy lower interest rates on their mortgages and credit cards, creditworthy countries typically enjoy lower rates on the bonds they issue. Consequently, the post-Great Recession era of low inflation and near-zero interest rates led many on the left to argue that the old rules no longer apply, and that concerns regarding deficits are obsolete. Supporters of this view point to the massive stimulus packages passed under presidents Donald Trump and Joe Biden  that, in total, increased the federal deficit and debt by $4.6 trillion without affecting the government's ability to borrow. The extreme version of the new "deficits don't matter" narrative comes from the advocates of what has come to be called Modern Monetary Theory (MMT), who claim that because the United States controls its own currency, the federal government has infinite power to increase deficits and the debt without consequence. Though most mainstream economists dismiss MMT as unworkable and even dangerous, policymakers appear to be legislating with MMT's assumptions in mind. A new generation of Democratic economic advisors has pushed President Biden to propose an additional $3.5 trillion in spending, on top of the $4.6 trillion spent on Covid-19 relief and the $1 trillion bipartisan infrastructure bill. These Democrats, along with a new breed of populist Republicans, dismiss the concerns of older economists who fear that exploding deficits risk a return to the economy of the 1970s, complete with high inflation, high interest rates, and high unemployment. But there are several reasons to believe that America's fiscal profligacy cannot go on forever. The most important reason is the unanimous judgment of history: In every country and in every era, runaway deficits and skyrocketing debt have ended in economic stagnation or ruin. Another reason has to do with the unusual confluence of events that has enabled the United States to finance its rising debts at such low interest rates over the past few decades — a confluence that Bitcoin may play a role in ending. DECLINING FAITH IN U.S. CREDIT To members of the financial community, U.S. Treasury bonds are considered "risk-free" assets. That is to say, while many investments entail risk — a company can go bankrupt, for example, thereby wiping out the value of its stock — Treasury bonds are backed by the full faith and credit of the United States. Since people believe the United States will not default on its obligations, lending money to the U.S. government — buying Treasury bonds that effectively pay the holder an interest rate — is considered a risk-free investment. The definition of Treasury bonds as "risk-free" is not merely by reputation, but also by regulation. Since 1988, the Switzerland-based Basel Committee on Banking Supervision has sponsored a series of accords among central bankers from financially significant countries. These accords were designed to create global standards for the capital held by banks such that they carry a sufficient proportion of low-risk and risk-free assets. The well-intentioned goal of these standards was to ensure that banks don't fail when markets go down, as they did in 2008. The current version of the Basel Accords, known as "Basel III," assigns zero risk to U.S. Treasury bonds. Under Basel III's formula, then, every major bank in the world is effectively rewarded for holding these bonds instead of other assets. This artificially inflates demand for the bonds and enables the United States to borrow at lower rates than other countries. The United States also benefits from the heft of its economy as well as the size of its debt. Since America is the world's most indebted country in absolute terms, the market for U.S. Treasury bonds is the largest and most liquid such market in the world. Liquid markets matter a great deal to major investors: A large financial institution or government with hundreds of billions (or more) of a given currency on its balance sheet cares about being able to buy and sell assets while minimizing the impact of such actions on the trading price. There are no alternative low-risk assets one can trade at the scale of Treasury bonds. The status of such bonds as risk-free assets — and in turn, America's ability to borrow the money necessary to fund its ballooning expenditures — depends on investors' confidence in America's creditworthiness. Unfortunately, the Federal Reserve's interference in the markets for Treasury bonds have obscured our ability to determine whether financial institutions view the U.S. fiscal situation with confidence. In the 1990s, Bill Clinton's advisors prioritized reducing the deficit, largely out of a conern that Treasury-bond "vigilantes" — investors who protest a government's expansionary fiscal or monetary policy by aggressively selling bonds, which drives up interest rates — would harm the economy. Their success in eliminating the primary deficit brought yields on the benchmark 10-year Treasury bond down from 8% to 4%. In Clinton's heyday, the Federal Reserve was limited in its ability to influence the 10-year Treasury interest rate. Its monetary interventions primarily targeted the federal-funds rate — the interest rate that banks charge each other on overnight transactions. But in 2002, Ben Bernanke advocated that the Fed "begin announcing explicit ceilings for yields on longer-maturity Treasury debt." This amounted to a schedule of interest-rate price controls. Since the 2008 financial crisis, the Federal Reserve has succeeded in wiping out bond vigilantes using a policy called "quantitative easing," whereby the Fed manipulates the price of Treasury bonds by buying and selling them on the open market. As a result, Treasury-bond yields are determined not by the free market, but by the Fed. The combined effect of these forces — the regulatory impetus for banks to own Treasury bonds, the liquidity advantage Treasury bonds have in the eyes of large financial institutions, and the Federal Reserve's manipulation of Treasury-bond market prices — means that interest rates on Treasury bonds no longer indicate the United States' creditworthiness (or lack thereof). Meanwhile, indications that investors are growing increasingly concerned about the U.S. fiscal and monetary picture — and are in turn assigning more risk to "risk-free" Treasury bonds — are on the rise. One such indicator is the decline in the share of Treasury bonds owned by outside investors. Between 2010 and 2020, the share of U.S. Treasury securities owned by foreign entities fell from 47% to 32%, while the share owned by the Fed more than doubled, from 9% to 22%. Put simply, foreign investors have been reducing their purchases of U.S. government debt, thereby forcing the Fed to increase its own bond purchases to make up the difference and prop up prices. Until and unless Congress reduces the trajectory of the federal debt, U.S. monetary policy has entered a vicious cycle from which there is no obvious escape. The rising debt requires the Treasury Department to issue an ever-greater quantity of Treasury bonds, but market demand for these bonds cannot keep up with their increasing supply. In an effort to avoid a spike in interest rates, the Fed will need to print new U.S. dollars to soak up the excess supply of Treasury bonds. The resultant monetary inflation will cause increases in consumer prices. Those who praise the Fed's dramatic expansion of the money supply argue that it has not affected consumer-price inflation. And at first glance, they appear to have a point. In January of 2008, the M2 money stock was roughly $7.5 trillion; by January 2020, M2 had more than doubled, to $15.4 trillion. As of July 2021, the total M2 sits at $20.5 trillion — nearly triple what it was just 13 years ago. Over that same period, U.S. GDP increased by only 50%. And yet, since 2000, the average rate of growth in the Consumer Price Index (CPI) for All Urban Consumers — a widely used inflation benchmark — has remained low, at about 2.25%. How can this be? The answer lies in the relationship between monetary inflation and price inflation, which has diverged over time. In 2008, the Federal Reserve began paying interest to banks that park their money with the Fed, reducing banks' incentive to lend that money out to the broader economy in ways that would drive price inflation. But the main reason for the divergence is that conventional measures like CPI do not accurately capture the way monetary inflation is affecting domestic prices. In a large, diverse country like the United States, different people and different industries experience price inflation in different ways. The fact that price inflation occurs earlier in certain sectors of the economy than in others was first described by the 18th-century Irish-French economist Richard Cantillon. In his 1730 "Essay on the Nature of Commerce in General," Cantillon noted that when governments increase the supply of money, those who receive the money first gain the most benefit from it — at the expense of those to whom it flows last. In the 20th century, Friedrich Hayek built on Cantillon's thinking, observing that "the real harm [of monetary inflation] is due to the differential effect on different prices, which change successively in a very irregular order and to a very different degree, so that as a result the whole structure of relative prices becomes distorted and misguides production into wrong directions." In today's context, the direct beneficiaries of newly printed money are those who need it the least. New dollars are sent to banks, which in turn lend them to the most creditworthy entities: investment funds, corporations, and wealthy individuals. As a result, the most profound price impact of U.S. monetary inflation has been on the kinds of assets that financial institutions and wealthy people purchase — stocks, bonds, real estate, venture capital, and the like. This is why the price-to-earnings ratio of S&P 500 companies is at record highs, why risky start-ups with long-shot ideas are attracting $100 million venture rounds, and why the median home sales price has jumped 24% in a single year — the biggest one-year increase of the 21st century. Meanwhile, low- and middle-income earners are facing rising prices without attendant increases in their wages. If asset inflation persists while the costs of housing and health care continue to grow beyond the reach of ordinary people, the legitimacy of our market economy will be put on trial. THE RETURN OF SOUND MONEY Satoshi Nakamoto, the pseudonymous creator of Bitcoin, was acutely concerned with the increasing abundance of U.S. dollars and other fiat currencies in the early 2000s. In 2009 he wrote, "the root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." Bitcoin was created in anticipation of the looming fiscal and monetary crisis in the United States and around the world. To understand how bitcoin functions alongside fiat currency, it's helpful to examine the monetary philosophy of the Austrian School of economics, whose leading figures — especially Hayek and Ludwig von Mises — greatly influenced Nakamoto and the early developers of Bitcoin. The economists of the Austrian School were staunch advocates of what Mises called "the principle of sound money" — that is, of keeping the supply of money as constant and predictable as possible. In The Theory of Money and Credit, first published in 1912, Mises argued that sound money serves as "an instrument for the protection of civil liberties against despotic inroads on the part of governments" that belongs "in the same class with political constitutions and bills of rights." Just as bills of rights were a "reaction against arbitrary rule and the nonobservance of old customs by kings," he wrote, "the postulate of sound money was first brought up as a response to the princely practice of debasing the coinage." Mises believed that inflation was just as much a violation of someone's property rights as arbitrarily taking away his land. After all, in both cases, the government acquires economic value at the expense of the citizen. Since monetary inflation creates a sugar high of short-term stimulus, politicians interested in re-election will always have an incentive to expand the money supply. But doing so comes at the expense of long-term declines in consumer purchasing power. For Mises, the best way to address such a threat is to avoid fiat currencies altogether. And in his estimation, the best sound-money alternative to fiat currency is gold. "The excellence of the gold standard," Mises wrote, is "that it renders the determination of the monetary unit's purchasing power independent of the policies of governments and political parties." In other words, gold's primary virtue is that its supply increases slowly and steadily, and cannot be manipulated by politicians. It may appear as if gold was an arbitrary choice as the basis for currency, but gold has a combination of qualities that make it ideal for storing and exchanging value. First, it is verifiably unforgeable. Gold is very dense, which means that counterfeit gold is easy to identify — one simply has to weigh it. Second, gold is divisible. Unlike, say, cattle, gold can be delivered in fractional units both small and large, enabling precise pricing. Third, gold is durable. Unlike commodities that rot or evaporate over time, gold can be stored for centuries without degradation. Fourth, gold is fungible: An ounce of gold in Asia is worth the same as an ounce of gold in Europe. These four qualities are shared by most modern currencies. Gold's fifth quality is more distinct, however, as well as more relevant to its role as an instrument of sound money: scarcity. While people have used beads, seashells, and other commodities as primitive forms of money, those items are fairly easy to acquire and introduce into circulation. While gold's supply does gradually increase as more is extracted from the ground, the rate of extraction relative to the total above-ground supply is low: At current rates, it would take approximately 66 years to double the amount of gold in circulation. In comparison, the supply of U.S. dollars has more than doubled over just the last decade. When the Austrian-influenced designers of bitcoin set out to create a more reliable currency, they tried to replicate all of these qualities. Like gold, bitcoin is divisible, unforgeable, divisible, durable, and fungible. But bitcoin also improves upon gold as a form of sound money in several important ways. First, bitcoin is rarer than gold. Though gold's supply increases slowly, it does increase. The global supply of bitcoin, by contrast, is fixed at 21 million and cannot be feasibly altered. Second, bitcoin is far more portable than gold. Transferring physical gold from one place to another is an onerous process, especially in large quantities. Bitcoin, on the other hand, can be transmitted in any quantity as quickly as an email. Third, bitcoin is more secure than gold. A single bitcoin address carried on a USB thumb drive could theoretically hold as much value as the U.S. Treasury holds in gold bars — without the need for costly militarized facilities like Fort Knox to keep it safe. In fact, if stored using best practices, the cost of securing bitcoin from hackers or assailants is far lower than the cost of securing gold. Fourth, bitcoin is a technology. This means that, as developers identify ways to augment its functionality without compromising its core attributes, they can gradually improve the currency over time. Fifth, and finally, bitcoin cannot be censored. This past year, the Chinese government shut down Hong Kong's pro-democracy Apple Daily newspaper not by censoring its content, but by ordering banks not to do business with the publication, thereby preventing Apple Daily from paying its suppliers or employees. Those who claim the same couldn't happen here need only look to the Obama administration's Operation Choke Point, a regulatory attempt to prevent banks from doing business with legitimate entities like gun manufacturers and payday lenders — firms the administration disfavored. In contrast, so long as the transmitting party has access to the internet, no entity can prevent a bitcoin transaction from taking place. This combination of fixed supply, portability, security, improvability, and censorship resistance epitomizes Nakamoto's breakthrough. Hayek, in The Denationalisation of Money, foresaw just such a separation of money and state. "I believe we can do much better than gold ever made possible," he wrote. "Governments cannot do better. Free enterprise...no doubt would." While Hayek and Nakamoto hoped private currencies would directly compete with the U.S. dollar and other fiat currencies, bitcoin does not have to replace everyday cash transactions to transform global finance. Few people may pay for their morning coffee with bitcoin, but it is also rare for people to purchase coffee with Treasury bonds or gold bars. Bitcoin is competing not with cash, but with these latter two assets, to become the world's premier long-term store of wealth. The primary problem bitcoin was invented to address — the devaluation of fiat currency through reckless spending and borrowing — is already upon us. If Biden's $3.5 trillion spending plan passes Congress, the national debt will rise further. Someone will have to buy the Treasury bonds to enable that spending. Yet as discussed above, investors are souring on Treasurys. On June 30, 2021, the interest rate for the benchmark 10-year Treasury bond was 1.45%. Even at the Federal Reserve's target inflation rate of 2%, under these conditions, Treasury-bond holders are guaranteed to lose money in inflation-adjusted terms. One critic of the Fed's policies, MicroStrategy CEO Michael Saylor, compares the value of today's Treasury bonds to a "melting ice cube." Last May, Ray Dalio, founder of Bridgewater Associates and a former bitcoin skeptic, said "[p]ersonally, I'd rather have bitcoin than a [Treasury] bond." If hedge funds, banks, and foreign governments continue to decelerate their Treasury purchases, even by a relatively small percentage, the decrease in demand could send U.S. bond prices plummeting. If that happens, the Fed will be faced with the two unpalatable options described earlier: allowing interest rates to rise, or further inflating the money supply. The political pressure to choose the latter would likely be irresistible. But doing so would decrease inflation-adjusted returns on Treasury bonds, driving more investors away from Treasurys and into superior stores of value, such as bitcoin. In turn, decreased market interest in Treasurys would force the Fed to purchase more such bonds to suppress interest rates. AMERICA'S BITCOIN OPPORTUNITY From an American perspective, it would be ideal for U.S. Treasury bonds to remain the world's preferred reserve asset for the foreseeable future. But the tens of trillions of dollars in debt that the United States has accumulated since 1971 — and the tens of trillions to come — has made that outcome unlikely. It is understandably difficult for most of us to imagine a monetary world aside from the one in which we've lived for generations. After all, the U.S. dollar has served as the world's leading reserve currency since 1919, when Britain was forced off the gold standard. There are only a handful of people living who might recall what the world was like before then. Nevertheless, change is coming. Over the next 10 to 20 years, as bitcoin's liquidity increases and the United States becomes less creditworthy, financial institutions and foreign governments alike may replace an increasing portion of their Treasury-bond holdings with bitcoin and other forms of sound money. With asset values reaching bubble proportions and no end to federal spending in sight, it's critical for the United States to begin planning for this possibility now. Unfortunately, the instinct of some federal policymakers will be to do what countries like Argentina have done in similar circumstances: impose capital controls that restrict the ability of Americans to exchange dollars for bitcoin in an attempt to prevent the digital currency from competing with Treasurys. Yet just as Nixon's 1971 closure of the gold window led to a rapid flight from the dollar, imposing restrictions on the exchange of bitcoin for dollars would confirm to the world that the United States no longer believes in the competitiveness of its currency, accelerating the flight from Treasury bonds and undermining America's ability to borrow. A bitcoin crackdown would also be a massive strategic mistake, given that Americans are positioned to benefit enormously from bitcoin-related ventures and decentralized finance more generally. Around 50 million Americans own bitcoin today, and it's likely that Americans and U.S. institutions own a plurality, if not the majority, of the bitcoin in circulation — a sum worth hundreds of billions of dollars. This is one area where China simply cannot compete with the United States, since Bitcoin's open financial architecture is fundamentally incompatible with Beijing's centralized, authoritarian model. In the absence of major entitlement reform, well-intentioned efforts to make Treasury bonds great again are likely doomed. Instead of restricting bitcoin in a desperate attempt to forestall the inevitable, federal policymakers would do well to embrace the role of bitcoin as a geopolitically neutral reserve asset; work to ensure that the United States continues to lead the world in accumulating bitcoin-based wealth, jobs, and innovations; and ensure that Americans can continue to use bitcoin to protect themselves against government-driven inflation. To begin such an initiative, federal regulators should make it easier to operate cryptocurrency-related ventures on American shores. As things stand, too many of these firms are based abroad and closed off to American investors simply because outdated U.S. regulatory agencies — the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Treasury Department, and others — have been unwilling to provide clarity as to the legal standing of digital assets. For example, the SEC has barred Coinbase from paying its customers' interest on their holdings while refusing to specify which laws Coinbase has violated. Similarly, the agency has refused to approve Bitcoin exchange-traded funds (ETFs) without specifying standards for a valid ETF application. Congress should implement SEC Commissioner Hester Peirce's recommendations for a three-year regulatory grace period for decentralized digital tokens and assign to a new agency the role of regulating digital assets. Second, Congress should clarify poorly worded legislation tied to a recent bipartisan infrastructure bill that would drive many high-value crypto businesses, like bitcoin-mining operations, overseas. Third, the Treasury Department should consider replacing a fraction of its gold holdings — say, 10% — with bitcoin. This move would pose little risk to the department's overall balance sheet, send a positive signal to the innovative blockchain sector, and enable the United States to benefit from bitcoin's growth. If the value of bitcoin continues to appreciate strongly against gold and the U.S. dollar, such a move would help shore up the Treasury and decrease the need for monetary inflation. Finally, when it comes to digital versions of the U.S. dollar, policymakers should follow the advice of Friedrich Hayek, not Xi Jinping. In an effort to increase government control over its monetary system, China is preparing to unveil a blockchain-based digital yuan at the 2022 Beijing Winter Olympics. Jerome Powell and other Western central bankers have expressed envy for China's initiative and fret about being left behind. But Americans should strongly oppose the development of a central-bank digital currency (CBDC). Such a currency could wipe out local banks by making traditional savings and checking accounts obsolete. What's more, a CBDC-empowered Fed would accumulate a mountain of precise information about every consumer's financial transactions. Not only would this represent a grave threat to Americans' privacy and economic freedom, it would create a massive target for hackers and equip the government with the kind of censorship powers that would make Operation Choke Point look like child's play. Congress should ensure that the Federal Reserve never has the authority to issue a virtual currency. Instead, it should instruct regulators to integrate private-sector, dollar-pegged "stablecoins" — like Tether and USD Coin — into the framework we use for money-market funds and other cash-like instruments that are ubiquitous in the financial sector. PLANNING FOR THE WORST In the best-case scenario, the rise of bitcoin will motivate the United States to mend its fiscal ways. Much as Congress lowered corporate-tax rates in 2017 to reduce the incentive for U.S. companies to relocate abroad, bitcoin-driven monetary competition could push American policymakers to tackle the unsustainable growth of federal spending. While we can hope for such a scenario, we must plan for a world in which Congress continues to neglect its essential duty as a steward of Americans' wealth. The good news is that the American people are no longer destined to go down with the Fed's sinking ship. In 1971, when Washington debased the value of the dollar, Americans had no real recourse. Today, through bitcoin, they do. Bitcoin enables ordinary Americans to protect their savings from the federal government's mismanagement. It can improve the financial security of those most vulnerable to rising prices, such as hourly wage earners and retirees on fixed incomes. And it can increase the prosperity of younger Americans who will most acutely face the consequences of the country's runaway debt. Bitcoin represents an enormous strategic opportunity for Americans and the United States as a whole. With the right legal infrastructure, the currency and its underlying technology can become the next great driver of American growth. While the 21st-century monetary order will look very different from that of the 20th, bitcoin can help America maintain its economic leadership for decades to come. Tyler Durden Tue, 10/19/2021 - 23:25.....»»

Category: worldSource: nytOct 20th, 2021

Inside the World of Black Bitcoin, Where Crypto Is About Making More Than Just Money

“We can operate on an even playing field in the digital world” At the Black Blockchain Summit, there is almost no conversation about making money that does not carry with it the possibility of liberation. This is not simply a gathering for those who would like to ride whatever bumps and shocks, gains and losses come with cryptocurrency. It is a space for discussing the relationship between money and man, the powers that be and what they have done with power. Online and in person, on the campus of Howard University in Washington, D.C., an estimated 1,500 mostly Black people have gathered to talk about crypto—decentralized digital money backed not by governments but by blockchain technology, a secure means of recording transactions—as a way to make money while disrupting centuries-long patterns of oppression. [time-brightcove not-tgx=”true”] “What we really need to be doing is to now utilize the technology behind blockchain to enhance the quality of life for our people,” says Christopher Mapondera, a Zimbabwean American and the first official speaker. As a white-haired engineer with the air of a lecturing statesman, Mapondera’s conviction feels very on-brand at a conference themed “Reparations and Revolutions.” Along with summit organizer Sinclair Skinner, Mapondera co-founded BillMari, a service that aims to make it easier to transmit cryptocurrency to wherever the sons and daughters of Africa have been scattered. So, not exactly your stereotypical “Bitcoin bro.” Contrary to the image associated with cryptocurrency since it entered mainstream awareness, almost no one at the summit is a fleece-vest-wearing finance guy or an Elon Musk type with a grudge against regulators. What they are is a cross section of the world of Black crypto traders, educators, marketers and market makers—a world that seemingly mushroomed during the pandemic, rallying around the idea that this is the boon that Black America needs. In fact, surveys indicate that people of color are investing in cryptocurrency in ways that outpace or equal other groups—something that can’t be said about most financial products. About 44% of those who own crypto are people of color, according to a June survey by the University of Chicago’s National Opinion Research Center. In April, a Harris Poll reported that while just 16% of U.S. adults overall own cryptocurrency, 18% of Black Americans have gotten in on it. (For Latino Americans, the figure is 20%.) The actor Hill Harper of The Good Doctor, a Harvard Law School friend of former President Barack Obama, is a pitchman for Black Wall Street, a digital wallet and crypto trading service developed with Najah Roberts, a Black crypto expert. And this summer, when the popular money-transfer service Cash App added the option to purchase Bitcoin, its choice to explain the move was the MC Megan Thee Stallion. “With my knowledge and your hustle, you’ll have your own empire in no time,” she says in an ad titled “Bitcoin for Hotties.” Read more: Americans Have Learned to Talk About Racial Inequality. But They’ve Done Little to Solve It But, as even Megan Thee Stallion acknowledges in that ad, pinning one’s economic hopes on crypto is inherently risky. Many economic experts have described crypto as little better than a bubble, mere fool’s gold. The rapid pace of innovation—it’s been little more than a decade since Bitcoin was created by the enigmatic, pseudonymous Satoshi Nakamoto—has left consumers with few protections. Whether the potential is worth those risks is the stuff of constant, and some would say, infernal debate. Jared Soares for TIMECleve Mesidor, who founded the National Policy Network of Women of Color in Blockchain What looms in the backdrop is clear. In the U.S., the median white family’s wealth—reflecting not just assets minus debt, but also the ability to weather a financial setback—sat around $188,200, per the Federal Reserve’s most recent measure in 2019. That’s about eight times the median wealth of Black families. (For Latino families, it’s five times greater; the wealth of Asian, Pacific Island and other families sits between that of white and Latino families, according to the report.) Other estimates paint an even grimmer picture. If trends continue, the median Black household will have zero wealth by 2053. The summit attendees seem certain that crypto represents keys to a car bound for somewhere better. “Our digital selves are more important in some ways than our real-world selves,” Tony Perkins, a Black MIT-trained computer scientist, says during a summit session on “Enabling Black Land and Asset Ownership Using Blockchain.” The possibilities he rattles off—including fractional ownership of space stations—will, to many, sound fantastical. To others, they sound like hope. “We can operate on an even playing field in the digital world,” he says. The next night, when in-person attendees gather at Barcode, a Black-owned downtown D.C. establishment, for drinks and conversation, there’s a small rush on black T-shirts with white lettering: SATOSHI, they proclaim, IS BLACK. That’s an intriguing idea when your ancestors’ bodies form much of the foundation of U.S. prosperity. At the nation’s beginnings, land theft from Native Americans seeded the agricultural operations where enslaved Africans would labor and die, making others rich. By 1860, the cotton-friendly ground of Mississippi was so productive that it was home to more millionaires than anywhere else in the country. Government-supported pathways to wealth, from homesteading to homeownership, have been reliably accessible to white Americans only. So Black Bitcoiners’ embrace of decentralized currencies—and a degree of doubt about government regulators, as well as those who have done well in the traditional system—makes sense. Skinner, the conference organizer, believes there’s racial subtext in the caution from the financial mainstream regarding Bitcoin—a pervasive idea that Black people just don’t understand finance. “I’m skeptical of all of those [warnings], based on the history,” Skinner, who is Black American, says. Even a drop in the value of Bitcoin this year, which later went back up, has not made him reticent. “They have petrol shortages in England right now. They’ll blame the weather or Brexit, but they’ll never have to say they’re dumb. Something don’t work in Detroit or some city with a Black mayor, we get a collective shame on us.” Read more: America’s Interstate Slave Trade Once Trafficked Nearly 30,000 People a Year—And Reshaped the Country’s Economy The first time I speak to Skinner, the summit is still two weeks away. I’d asked him to talk through some of the logistics, but our conversation ranges from what gives money value to the impact of ride-share services on cabbies refusing Black passengers. Tech often promises to solve social problems, he says. The Internet was supposed to democratize all sorts of things. In many cases, it defaulted to old patterns. (As Black crypto policy expert Cleve Mesidor put it to me, “The Internet was supposed to be decentralized, and today it’s owned by four white men.”) But with the right people involved from the start of the next wave of change—crypto—the possibilities are endless, Skinner says. Skinner, a Howard grad and engineer by training, first turned to crypto when he and Mapondera were trying to find ways to do ethanol business in Zimbabwe. Traditional international transactions were slow or came with exorbitant fees. In Africa, consumers pay some of the world’s highest remittance, cell phone and Internet data fees in the world, a damaging continuation of centuries-long wealth transfers off the continent to others, Skinner says. Hearing about cryptocurrency, he was intrigued—particularly having seen, during the recession, the same banking industry that had profited from slavery getting bailed out as hundreds of thousands of people of color lost their homes. So in 2013, he invested “probably less than $3,000,” mostly in Bitcoin. Encouraged by his friend Brian Armstrong, CEO of Coinbase, one of the largest platforms for trading crypto, he grew his stake. In 2014, when Skinner went to a crypto conference in Amsterdam, only about eight Black people were there, five of them caterers, but he felt he had come home ideologically. He saw he didn’t need a Rockefeller inheritance to change the world. “I don’t have to build a bank where they literally used my ancestors to build the capital,” says Skinner, who today runs a site called I Love Black People, which operates like a global anti-racist Yelp. “I can unseat that thing by not trying to be like them.” Eventually, he and Mapondera founded BillMari and became the first crypto company to partner with the Reserve Bank of Zimbabwe to lower fees on remittances, the flow of money from immigrants overseas back home to less-developed nations—an economy valued by the World Bank and its offshoot KNOMAD at $702 billion in 2020. (Some of the duo’s business plans later evaporated, after Zimbabwe’s central bank revoked approval for some cryptocurrency activities.) Skinner’s feelings about the economic overlords make it a bit surprising that he can attract people like Charlene Fadirepo, a banker by trade and former government regulator, to speak at the summit. On the first day, she offers attendees a report on why 2021 was a “breakout year for Bitcoin,” pointing out that major banks have begun helping high-net-worth clients invest in it, and that some corporations have bought crypto with their cash on hand, holding it as an asset. Fadirepo, who worked in the Fed’s inspector general’s office monitoring Federal Reserve banks and the Consumer Financial Protection Bureau, is not a person who hates central banks or regulation. A Black American, she believes strongly in both, and in their importance for protecting investors and improving the economic position of Black people. Today she operates Guidefi, a financial education and advising company geared toward helping Black women connect with traditional financial advisers. It just launched, for a fee, direct education in cryptocurrency. Crypto is a relatively new part of Fadirepo’s life. She and her Nigerian-American doctor husband earn good salaries and follow all the responsible middle-class financial advice. But the pandemic showed her they still didn’t have what some of his white colleagues did: the freedom to walk away from high-risk work. As the stock market shuddered and storefronts shuttered, she decided a sea change was coming. A family member had mentioned Bitcoin at a funeral in 2017, but it sounded risky. Now, her research kept bringing her back to it. Last year, she and her husband bought $6,000 worth. No investment has ever generated the kinds of returns for them that Bitcoin has. “It has transformed people’s relationship with money,” she says. “Folks are just more intentional … and honestly feeling like they had access to a world that was previously walled off.” Read more: El Salvador Is Betting on Bitcoin to Rebrand the Country — and Strengthen the President’s Grip She knows frauds exists. In May, a federal watchdog revealed that since October 2020, nearly 7,000 people have reported losses of more than $80 million on crypto scams—12 times more scam reports than the same period the previous year. The median individual loss: $1,900. For Fadirepo, it’s worrying. That’s part of why she helps moderate recurring free learning and discussion options like the Black Bitcoin Billionaires chat room on Clubhouse, which has grown from about 2,000 to 130,000 club members this year. Jared Soares for TIMECharlene Fadirepo, a banker and former government regulator, near the National Museum of African American History and Culture There’s a reason Black investors might prefer their own spaces for that kind of education. Fadirepo says it’s not unheard-of in general crypto spaces—theoretically open to all, but not so much in practice—to hear that relying on the U.S. dollar is slavery. “To me, a descendant of enslaved people in America, that was painful,” she says. “There’s a lot of talk about sovereignty, freedom from the U.S. dollar, freedom from inflation, inflation is slavery, blah blah blah. The historical context has been sucked out of these conversations about traditional financial systems. I don’t know how I can talk about banking without also talking about history.” Back in January, I found myself in a convenience store in a low-income and predominantly Black neighborhood in Dallas, an area still living the impact of segregation decades after its official end. I was there to report on efforts to register Black residents for COVID-19 shots after an Internet-only sign-up system—and wealthier people gaming the system—created an early racial disparity in vaccinations. I stepped away to buy a bottle of water. Inside the store, a Black man wondered aloud where the lottery machine had gone. He’d come to spend his usual $2 on tickets and had found a Bitcoin machine sitting in its place. A second Black man standing nearby, surveying chip options, explained that Bitcoin was a form of money, an investment right there for the same $2. After just a few questions, the first man put his money in the machine and walked away with a receipt describing the fraction of one bitcoin he now owned. Read more: When a Texas County Tried to Ensure Racial Equity in COVID-19 Vaccinations, It Didn’t Go as Planned I was both worried and intrigued. What kind of arrangement had prompted the store’s owner to replace the lottery machine? That month, a single bitcoin reached the $40,000 mark. “That’s very revealing, if someone chooses to put a cryptocurrency machine in the same place where a lottery [machine] was,” says Jeffrey Frankel, a Harvard economist, when I tell him that story. Frankel has described cryptocurrencies as similar to gambling, more often than not attracting those who can least afford to lose, whether they are in El Salvador or Texas. Frankel ranks among the economists who have been critical of El Salvador’s decision to begin recognizing Bitcoin last month as an official currency, in part because of the reality that few in the county have access to the internet, as well as the cryptocurrency’s price instability and its lack of backing by hard assets, he says. At the same time that critics have pointed to the shambolic Bitcoin rollout in El Salvador, Bitcoin has become a major economic force in Nigeria, one of the world’s larger players in cryptocurrency trading. In fact, some have argued that it has helped people in that country weather food inflation. But, to Frankel, crypto does not contain promise for lasting economic transformation. To him, disdain for experts drives interest in cryptocurrency in much the same way it can fuel vaccine hesitancy. Frankel can see the potential to reduce remittance costs, and he does not doubt that some people have made money. Still, he’s concerned that the low cost and click-here ease of buying crypto may draw people to far riskier crypto assets, he says. Then he tells me he’d put the word assets here in a hard set of air quotes. And Frankel, who is white, is not alone. Darrick Hamilton, an economist at the New School who is Black, says Bitcoin should be seen in the same framework as other low-cost, high-risk, big-payoff options. “In the end, it’s a casino,” he says. To people with less wealth, it can feel like one of the few moneymaking methods open to them, but it’s not a source of group uplift. “Like any speculation, those that can arbitrage the market will be fine,” he says. “There’s a whole lot of people that benefited right before the Great Recession, but if they didn’t get out soon enough, they lost their shirts too.” To buyers like Jiri Sampson, a Black cryptocurrency investor who works in real estate and lives outside Washington, D.C., that perspective doesn’t register as quite right. The U.S.-born son of Guyanese immigrants wasn’t thinking about exploitation when he invested his first $20 in cryptocurrency in 2017. But the groundwork was there. Sampson homeschools his kids, due in part to his lack of faith that public schools equip Black children with the skills to determine their own fates. He is drawn to the capacity of this technology to create greater agency for Black people worldwide. The blockchain, for example, could be a way to establish ownership for people who don’t hold standard documents—an important issue in Guyana and many other parts of the world, where individuals who have lived on the land for generations are vulnerable to having their property co-opted if they lack formal deeds. Sampson even pitched a project using the blockchain and GPS technology to establish digital ownership records to the Guyanese government, which did not bite. “I don’t want to downplay the volatility of Bitcoin,” Sampson says. But that’s only a significant concern, he believes, if one intends to sell quickly. To him, Bitcoin represents a “harder” asset than the dollar, which he compares to a ship with a hole in it. Bitcoin has a limited supply, while the Fed can decide to print more dollars anytime. That, to Sampson, makes some cryptocurrencies, namely Bitcoin, good to buy and hold, to pass along wealth from one generation to another. Economists and crypto buyers aren’t the only ones paying attention. Congress, the Securities and Exchange Commission, and the Federal Reserve have indicated that they will move toward official assessments or regulation soon. At least 10 federal agencies are interested in or already regulating crypto in some way, and there’s now a Congressional Blockchain Caucus. Representatives from the Federal Reserve and the SEC declined to comment, but SEC Chairman Gary Gensler assured a Senate subcommittee in September that his agency is working to develop regulation that will apply to cryptocurrency markets and trading activity. Enter Cleve Mesidor, of the quip about the Internet being owned by four white men. When we meet during the summit, she introduces herself: “Cleve Mesidor, I’m in crypto.” She’s the first person I’ve ever heard describe herself that way, but not that long ago, “influencer” wasn’t a career either. A former Obama appointee who worked inside the Commerce Department on issues related to entrepreneurship and economic development, Mesidor learned about cryptocurrency during that time. But she didn’t get involved in it personally until 2013, when she purchased $200 in Bitcoin. After leaving government, she founded the National Policy Network of Women of Color in Blockchain, and is now the public policy adviser for the industry group the Blockchain Association. There are more men than women in Black crypto spaces, she tells me, but the gender imbalance tends to be less pronounced than in white-dominated crypto communities. Mesidor, who immigrated to the U.S. from Haiti and uses her crypto investments to fund her professional “wanderlust,” has also lived crypto’s downsides. She’s been hacked and the victim of an attempted ransomware attack. But she still believes cryptocurrency and related technology can solve real-world problems, and she’s trying, she says, to make sure that necessary consumer protections are not structured in a way that chokes the life out of small businesses or investors. “D.C. is like Vegas; the house always wins,” says Mesidor, whose independently published book is called The Clevolution: My Quest for Justice in Politics & Crypto. “The crypto community doesn’t get that.” Passion, she says, is not enough. The community needs to be involved in the regulatory discussions that first intensified after the price of a bitcoin went to $20,000 in 2017. A few days after the summit, when Mesidor and I spoke by phone, Bitcoin had climbed to nearly $60,000. At Barcode, the Washington lounge, Isaiah Jackson is holding court. A man with a toothpaste-commercial smile, he’s the author of the independently published Bitcoin & Black America, has appeared on CNBC and is half of the streaming show The Gentleman of Crypto, which bills itself as the one of the longest-running cryptocurrency shows on the Internet. When he was building websites as a sideline, he convinced a large black church in Charlotte, N.C., to, for a time, accept Bitcoin donations. He helped establish Black Bitcoin Billionaires on Clubhouse and, like Fadirepo, helps moderate some of its rooms and events. He’s also a former teacher, descended from a line of teachers, and is using those skills to develop (for a fee) online education for those who want to become crypto investors. Now, there’s a small group standing near him, talking, but mostly listening. Jackson was living in North Carolina when one of his roommates, a white man who worked for a money-management firm, told him he had just heard a presentation about crypto and thought he might want to suggest it to his wealthy parents. The concept blew Jackson’s mind. He soon started his own research. “Being in the Black community and seeing the actions of banks, with redlining and other things, it just appealed to me,” Jackson tells me. “You free the money, you free everything else.” Read more: Beyond Tulsa: The Historic Legacies and Overlooked Stories of America’s ‘Black Wall Streets’ He took his $400 savings and bought two bitcoins in October 2013. That December, the price of a single bitcoin topped $1,100. He started thinking about what kind of new car he’d buy. And he stuck with it, even seeing prices fluctuate and scams proliferate. When the Gentlemen of Bitcoin started putting together seminars, one of the early venues was at a college fair connected to an annual HBCU basketball tournament attended by thousands of mostly Black people. Bitcoin eventually became more than an investment. He believed there was great value in spreading the word. But that was then. “I’m done convincing people. There’s no point battling going back and forth,” he says. “Even if they don’t realize it, what [investors] are doing if they are keeping their bitcoin long term, they are moving money out of the current system into another one. And that is basically the best form of peaceful protest.”   —With reporting by Leslie Dickstein and Simmone Shah.....»»

Category: topSource: timeOct 15th, 2021

The ‘Great Resignation’ Is Finally Getting Companies to Take Burnout Seriously. Is It Enough?

Toward the end of last year, Anthony Klotz, a professor of business administration at Texas A&M University who studies workplace resignations, realized that a lot of people were about to quit their jobs. A record 42.1 million Americans quit a job in 2019, according to U.S. Bureau of Labor Statistics data, but that rate dropped… Toward the end of last year, Anthony Klotz, a professor of business administration at Texas A&M University who studies workplace resignations, realized that a lot of people were about to quit their jobs. A record 42.1 million Americans quit a job in 2019, according to U.S. Bureau of Labor Statistics data, but that rate dropped off during the pandemic-addled year of 2020. As 2021 approached, bringing with it the promise of effective vaccines and a return to semi-normal life, Klotz guessed that two things would happen. First, many of the people who wanted to quit in 2020 but held off due to fear or uncertainty would finally feel secure enough to do so. And second, pandemic-era epiphanies, exhaustion and burnout would drive a whole new cohort of people to quit their jobs. In a moment of inspiration, Klotz predicted that a “Great Resignation” was coming. [time-brightcove not-tgx=”true”] It’s safe to say it’s here. Every month from April to August 2021, at least 2.5% of the American workforce quit their jobs. In August alone, more than 4.2 million people handed in their two weeks’ notice, according to federal statistics. So far, 2021 quit levels are about 10% to 15% higher than they were in record-setting 2019, by Klotz’s calculations. Read more: Why Literally Millions of Americans Are Quitting Their Jobs Companies are clearly taking notice, particularly given the staffing shortages that are hamstringing many customer-facing industries and slowing the supply chain. “Just keeping people from quitting is not necessarily a good business strategy,” Klotz says. Increasingly, businesses are trying something more ambitious: actually making their workers happy. For many, that means targeting burnout, a cocktail of work-related stress, exhaustion, cynicism and negativity that is surging during the pandemic. Forty-two percent of U.S. women and 35% of U.S. men said they feel burned out often or almost always in 2021, according to a recent McKinsey & Co. report. For a long time, burnout was seen as the worker’s problem—something they needed to fix with self-care and yoga and sleep if they were going to make it in the rat race of life. There are dozens of studies and even more articles focused on curing burnout from the employee perspective. Mindfulness and meditation can help. Finding social support can help. Tailoring your job to align with your interests and values can help. But according to Christina Maslach, a social psychologist who is the U.S.’ preeminent burnout expert and co-creator of the most commonly used tool for assessing worker burnout, none of these strategies will ever be successful if they place all the onus on the worker. “Nobody is really pointing to the problem, which is that chronic job stresses have not been well managed” by employers, she says. Now, with so many people turning in resignation letters, businesses are starting to get with the program. “There’s mass attrition and it’s very expensive for employers to keep up with the amount of people who are leaving,” says workplace well-being expert Jennifer Moss, author of the recent book The Burnout Epidemic. “Because it’s now a bottom-line issue, more organizations are jumping on board.” For example: tech companies including Bumble, LinkedIn and Hootsuite closed for a week this year to give people a break and combat burnout. Fidelity Investments is piloting a program in which some employees work 30 hours a week, taking a small pay cut but keeping their full benefits. Highwire public relations, which has offices in several major U.S. cities, aimed to eliminate 30% of its meetings to give employees ample time away from Zoom, ideally translating to shorter and more efficient work days. Other employers have implemented programs meant to foster empathy, in hopes of making employees feel appreciated. But as with so many corporate initiatives—and it’s worth noting that these are mostly geared towards office-based workers, though burnout certainly exists among blue-collar workers, too—it’s hard not to feel at least a little skeptical. Can canceling a few Zoom meetings and giving people an extra week of vacation really cure a bone-deep malaise? At its core, burnout is what happens when “chronic job stressors have not been well managed,” Maslach explains. But it’s more complicated than simply feeling stressed-out or overextended. Someone suffering from burnout also has a “negative, hostile, cynical, ‘take-this-job-and-shove-it’ kind of attitude” and negative feelings about their own work and choices, Maslach says. A lawyer who becomes disillusioned with her career and begins to question why she ever went to law school at all might qualify, whereas a psychiatrist who loves but is exhausted by her job probably wouldn’t. Importantly, burnout is not a medical diagnosis or a mental health condition—instead, the World Health Organization classifies it as an “occupational phenomenon.” But studies show that it can overlap with physical and mental health issues, including depression, insomnia, gastrointestinal problems and headaches. It can even be a predictor of chronic diseases including heart disease and type 2 diabetes, research shows. Burnout is particularly common (and well-studied) among medical professionals. As of September 2020, 76% of U.S. health care workers reported exhaustion and burnout, according to the National Institute for Health Care Management Foundation (NIHCM). Even before the pandemic, between 35% and 54% of U.S. doctors and nurses reported symptoms of burnout, NIHCM says. But any person, in any profession, can experience burnout, and right now, people are reporting it in droves. Read more: Physician Burnout Costs the U.S. Billions of Dollars Each Year Work stress didn’t magically appear for the first time during the pandemic, but “there wasn’t this huge other factor looming above everyone’s head” before COVID-19 hit, says Malissa Clark, who studies employee well-being at the University of Georgia. Uncertainty can feed into burnout, she says, as can blurring the boundaries between work and home life or struggling to parent and homeschool children on top of working. In other words, the pandemic has been a “perfect storm” for burnout. For some people in a position to do so, the answer to that problem has been to quit. In a pre-pandemic Deloitte study on burnout, 42% of U.S. respondents said they had left a job specifically because of burnout—which means organizations have a clear motivation to finally take the problem seriously. There’s no one-size-fits-all burnout cure, but Maslach’s research suggests there are six key areas on which businesses should focus: creating manageable workloads giving employees control over their jobs, to the extent possible rewarding and acknowledging good work, either financially or verbally fostering community treating workers fairly and equitably helping workers find value in their work To figure out where to start, companies should ask their employees, Maslach says. Bosses often can’t see problems that exist under their noses, and they never will if they don’t ask. In a 2020 survey from PwC, 81% of surveyed executives said their company had successfully expanded childcare benefits during the pandemic, but only 45% of office workers (who did not necessarily work under the surveyed executives) said their company had done enough to support working parents. Executives were also far more likely to say their companies were supporting their employees’ mental health than were lower-level employees. Boston-based sales and marketing company HubSpot took on an anti-burnout initiative this year, in part because quarterly employee surveys began to show that the ongoing “ambiguity and uncertainty” of the pandemic were getting to people in a major way, says chief people officer Katie Burke. The company announced an annual “week of rest” for the entire staff, so that everyone could take a break without coming back to a mountain of emails; eliminated internal meetings on Fridays; offered trainings for managers who want to better support their teams; and offered resilience workshops to all staff members. On a systemic level, Burke says the company is “taking a look at the things that cause the most stress for people” and trying to develop solutions, like standardizing workloads year round (rather than having busy versus light seasons), automating certain tasks, pushing back deadlines on non-urgent products and helping people figure out how much they can feasibly accomplish in a given timeframe. “We are seeing [the results] in how happy and engaged our employees are, and honestly, just in the anecdotal feedback we’re hearing from people,” Burke says. But even that effort, which is fairly ambitious relative to other workplaces, hasn’t been enough for everyone. Writing on Blind, an anonymous messaging app for people who work in the tech industry, one unnamed HubSpot employee called the week of rest “a hollow gesture without addressing the root cause of burnout in the company.” On LinkedIn, other commenters called it “a Band-Aid.” Maslach agrees that time off alone can’t fix the problem. “If the best thing you can do for your employees is to tell them not to come to work,” she says, “what is wrong with the work?” A better way to ensure lasting change, in Moss’ opinion, is for managers to ask their employees three questions every week: “How are you?” “What are the highs and lows of this week?” And, “What can I do to make next week easier?” If bosses consistently ask those questions and actually work to solve the problems that come to light, Moss says it would go a long way. Most people don’t want “a million dollars,” she says. “It’s probably going to be, ‘Can we delegate some of this work or push this deadline off’…or, ‘I want permission to not have a full day of Zoom meetings next week.’” For people who work in jobs that typically are less flexible, like food service or retail, managers could ask for input about how schedules are made and communicated, or make it easier for people to ask for time off, Klotz says. Even something as simple as allowing people to choose when they take their breaks can make a difference. Of course, there are limits to how much an individual manager can do, particularly if their organization refuses to hire enough people or pay their existing employees fairly. (Some workers are tackling such systemic problems by unionizing or going on strike.) In the end, Moss says, the changes have to come from the top down and permeate every aspect of workplace culture. If and until that happens, Maslach says quitting will sometimes be the best option, at least for people who can afford to do so. There’s no guarantee that the next job will be better, nor that an individual’s relationship to work will change with a new position. But if a company isn’t willing to actually solve the burnout problem at its source, Maslach says employees can’t be expected to muscle through. For those who can’t or don’t want to quit, though, the Great Resignation may hold promise of another sort. Actually getting managers to listen to and solve problems might seem like a pipe dream, but Klotz says this is a perfect time for employees to test their bosses’ limits, given growing anxiety about the number of people who are resigning. If you lay your cards on the table and ask for what you want—different hours, fewer meetings, shifted responsibilities—you may end up in a better situation without going through the disruptive process of leaving and finding a new job, he says. “Why not use the leverage you have,” he says, “to turn the job you have into the job you want?”.....»»

Category: topSource: timeOct 14th, 2021

15 questions to ask about perks and benefits before accepting a job offer

Besides the basics like health insurance, ask your potential new employer if they offer mentorship programs or tuition reimbursement. Job seekers should always understand perks and benefits before accepting a job. Getty Images When you're interviewing for a new job, be sure to learn what perks and benefits the company offers. Ask about healthcare coverage, dental and vision insurance, and remote work flexibility. Some employers offer on-the-job training, while others even offer tuition reimbursement for continuing education. See more stories on Insider's business page. Once you've found a job and company that you're really excited about, salary might top your list of priorities. But while salary is important, it's only part of the overall offer. To get the full scope of what you'll really earn at a job, you need to factor in the perks and benefits that a company offers, too."Look at it as more of a package than just a job with a paycheck," said Leslie Slay, senior vice president of employee benefits services at Woodruff Sawyer, an insurance brokerage and consulting firm.Compensation traditionally includes non-salary benefits like health insurance and retirement plans. And many companies also offer perks - including flexible schedules, educational opportunities, and wellness programs - to support employees in other ways. "More and more, perks and benefits are becoming integrated together" to support employees in a more holistic way, said Bobbi Kloss, director of human capital management services at Benefit Advisors Network.On average, a benefits package makes up about 30% of an employee's total compensation in the US. So it's definitely worth paying attention to the perks and benefits a company offers as you're looking for a job in addition to the salary.Employee benefits and perks can be confusing, though. In fact, about a third of all workers and 54% of millennials said they don't understand the employee benefits they signed up for, according to a 2020 survey by Voya Financial. So as a job seeker it's often up to you to ask a prospective employer plenty of questions to make sure the benefits they're offering meet your needs.Better understanding the benefits and perks you're offered will help you make the best choice about which job offer to accept. To help guide you, here's an overview of 15 common employee perks and benefits you might come across as you look for your next job:1. Health insuranceHealth insurance pays (or helps pay) for your medical expenses as they come up in exchange for a premium, or money paid - by you and/or your employer - to the insurance provider each month. Health insurance plans typically cover doctor visits, prescription drugs, emergency care, and certain medical procedures.Health insurance plans vary from company to company and you'll likely have a few to choose from. Some companies pay the full premium on their employee's behalf, but usually, you have to contribute to the cost with a certain amount that comes out of your paycheck before taxes. You may have some other out-of-pocket expenses, too, such as copays when you visit your doctor. Many insurance plans also have a deductible, which is an amount of money you're responsible for paying before your health coverage kicks in. Make sure you're aware of these costs before you choose a plan to enroll in.And to ensure a company plan meets your needs, Kloss suggests checking that it covers treatments for any medical conditions you have or prescription medications you take and that your preferred doctors are in the plan's network.If you have dependents (most commonly children or a partner you support financially) or plan to soon, you should also check that the plan will cover everyone and how much it will cost you. For example, a company may pay 100% of your health insurance premium but you may be stuck paying the full premium for everyone else in your family (which can add up fast). Read more about what all those health insurance terms mean here.Find jobs at companies that offer health insurance2. Dental and vision insuranceDental and vision insurance cover your dental and eye-care needs. Dental insurance typically covers routine exams, cleanings, x-rays, and some portion of procedures like root canals and fillings. Vision insurance generally covers eye exams and prescription lenses.Many employers offer dental and vision insurance, either as part of health insurance or as separate benefits. But whereas some employers cover a portion or all of the costs of health insurance, most companies require you to pay in full for dental and vision insurance, Slay said.Just as you would with health insurance, check if the plans will let you keep your dentist and eye doctor (if you'd rather not switch) and cover any pre-existing conditions or treatments that you need.Find jobs at companies that offer dental insurance, vision insurance, or both3. Flexible spending accountA flexible spending account (FSA) allows you to put pre-tax money aside to pay for the year's out-of-pocket healthcare costs, like over-the-counter medications, copays for doctor visits, medical devices like crutches or blood sugar tests, or vision and dental care needs like glasses or contacts.Your employer may also contribute up to $500 to your FSA without you contributing anything (they can match you dollar for dollar on top of the $500), so be sure to check if a company will pay into your account before determining your own contributions. Total FSA contributions are capped at a certain amount each year (for example, they were capped at $2,750 for 2021).Find jobs at companies that offer FSA accounts4. Life insuranceLife insurance is an insurance policy that pays a set amount of money to your chosen beneficiary (or beneficiaries) when you die. If you're just starting your career and don't have any children or others who depend on you financially, life insurance may not seem necessary. But it's still something you should consider, Slay said - especially if your company covers your full premium.You decide who you want to leave the money to, such as your parents or another family member, to help cover funeral costs, for example. You could even name your favorite charity as the beneficiary.Find jobs at companies that offer life insurance5. Disability insuranceDisability insurance offers compensation or income replacement when you're unable to work because of an injury or illness that's not job-related. "I can't tell you how critical disability insurance is; it protects your paycheck," Slay said. Disability insurance is usually optional, but worth looking into, she said - just find out what your employer offers and what it will cost you. Some policies are fully paid by an employer and others require you to pay some of the costs in the form of a paycheck deduction, Slay said.There are two types of disability insurance: short term and long term. Short-term disability insurance varies according to your plan, but typically covers you if you're out of work for less than six months and on average pays about 60% of your regular salary, according to the Bureau of Labor Statistics. Most long-term disability insurance lasts for 10 years or less (but some policies last until you reach retirement age) and covers about 60% of your annual earnings.Find jobs at companies that offer short-term disability insurance, long-term disability insurance, or both6. 401(k)sA 401(k) is a retirement-savings plan that's commonly sponsored by your employer. Plans can vary, but generally, you contribute to the fund as a pre-tax paycheck deduction and pay taxes on the money when you withdraw it during retirement. Many companies match employees' 401(k) contributions, either dollar for dollar, where they put in what you put in, or with a partial match - for example, adding 50 cents for every dollar you contribute, up to a certain percentage of your salary. Yearly employee 401(k) contributions are capped (the limit is $19,500 for 2021), but the employer match doesn't count toward the limit.Retirement may seem like a long time away. But Slay urges early-career employees to contribute as much as they can to their 401(k), especially if there's an employer match. The match can help you grow your savings faster and if you're not taking advantage of it, you're essentially leaving money on the table that your employer is offering to give you. Plus, in an emergency, you may be able to pull money out of your 401(k) before retirement (and without paying a tax penalty) for certain expenses, like buying a home or paying medical bills.Some companies have taken a new approach to employee retirement benefits recently to meet their workers' current needs, Slay said. For example, some help employees pay down student loan debt by making direct payments to their lender, while others make a larger 401(k) contribution to employees currently paying off student debt.Find jobs at companies that offer 401(k)s or 401(k)s with company match7. Paid time offPaid time off (PTO) can include paid holidays, sick leave, federal and state holidays, personal days, and vacation days.Typically, the amount of PTO offered by your company is based on how long you've worked for them, and you accrue more PTO over time (for example, if you get 15 days of PTO per year, that means you accrue about 0.058 hours of PTO for every hour you work, or roughly 10.5 hours of PTO per month). If, say, you're looking to start a new job right before a holiday or planned trip, you might want to ask the company if it has a policy about using PTO before you've technically accrued it.How a company offers PTO varies, too. For example, some designate a separate number of personal, sick, or vacation days, which is sometimes required by state law. But, Slay said, more employers are lumping all PTO in together to make taking off easier for employees. Some companies even offer unlimited PTO.Time off is an important factor in your overall compensation, so make sure to ask about how many PTO days you get. Often, you can negotiate your PTO, Slay said, particularly since the pandemic has shown more companies the benefits of giving their workers more time off. "PTO is one of those areas where you can ask for things that are a little different and you might get them." Also, be sure to check if you can carry over unused PTO into a new year and whether you'll be paid for any unused days when you leave the company.Find jobs at companies that offer paid holidays, paid vacation, personal and sick days, or unlimited vacation8. Family and medical leaveThe Family and Medical Leave Act (FMLA) is a US law that enables employees to take unpaid leave for certain family and medical reasons. Employees can take up to 12 weeks off for the birth or adoption of a child, a family member with a medical condition who needs care, their own health condition that prevents them from performing job functions, and other reasons.Under this law, your job is protected and your health insurance continues during this leave. Companies with more than 50 employees are required to comply with the law and you're eligible if you've worked for the company for at least 12 months and meet other requirements. If you're considering going to work for a smaller company, be sure to find out their policies for family and medical leave.Find jobs at companies with more than 50 employees9. Parental leaveParental leave enables employees to take off following the birth of a child, an adoption, or the arrival of a newly placed foster child, or for a child otherwise needing parental care, according to the US Department of Labor. Though the FMLA requires some employers to offer unpaid leave in these instances, there's no broad guarantee of parental leave in the US - which means it comes down to the employer.More than half of US employers offer paid new child leave to women, and 45% offer paid new child leave to men, according to a 2020 study by the Society for Human Resource Management and Oxford Economics. However, specific policies vary for the companies that do offer parental leave, so find out about a prospective employer's rules if you plan to start a family soon, Slay said. Ask whether the leave is paid or unpaid, whether your job will be there waiting for you when you return, and how much time off you're allowed.Find jobs at companies that offer maternity leave, paternity leave, or both10. Remote work optionsRemote work gives employees the freedom to work from home or anywhere else outside of a traditional office setting, either full-time or part-time in a hybrid schedule. The COVID-19 pandemic made remote work a necessity, and it was such a hit with workers that many have said they'll quit their jobs rather than go back to the office. Employers realize that remote work has benefits for them, too, such as opening up a much broader, more diverse talent pool to hire from, so many organizations plan to allow remote work in some fashion post-pandemic.While more employers will be offering fully or partially remote positions after the pandemic off the bat, the ability to work from home is something you can likely negotiate, Kloss said. "I think employers are recognizing after COVID that they can be more flexible in those areas than they ever thought possible." So find out whether you'll be able to work remotely some or all of the time and what the company's policies are for remote work schedules, virtual meetings, and communication. Also ask whether they provide equipment or stipends for internet, phone, or other expenses for remote workers.Find jobs at companies that offer remote work opportunities11. Flexible schedulesA flexible schedule is when your employer allows you to work hours and days outside of the traditional nine-to-five, Monday-to-Friday schedule. For instance, you might work 10 hours a day, four days a week or set core hours when you're available, such as 9 a.m to 1 p.m, and have flexibility the rest of the day to complete your work whenever you'd like. Like with remote work, the pandemic led more companies to offer flexible schedules to accommodate different work styles and time zones as well as employees who have children or other caretaking responsibilities. Flexible schedules are another perk that you can likely negotiate - just make sure you and your employer both come away with a clear idea of which days and times you'll work.Find jobs at companies that offer flexible work hours12. Wellness programsWorkplace wellness programs aim to improve an employee's mental and physical health and offer more resources beyond health insurance. Wellness programs have traditionally included health screenings and tools to help people lose weight or stop smoking, according to the Kaiser Family Foundation.But organizations have taken a broader, more holistic approach to their wellness programs in recent years by offering individualized supports that take into account an employee's emotional, social, physical, and financial needs, Kloss said. Wellness-based perks-such as fitness subsidies, meals, and access to mental wellness apps and counseling - are becoming more common.Even more so than with other perks and benefits, wellness program offerings vary widely, so find out the specifics of what a company offers and consider how it meets your needs.Find jobs at companies that offer wellness programs, fitness subsidies, on-site gym, and meals13. Education benefitsMost companies offer some type of education benefit, including access to online courses, on-the-job training, tuition reimbursement for continuing education, and learning and development stipends to cover educational expenses.If you're just starting your career, these programs can help you succeed long term by keeping your skills fresh, which could increase your chances for promotions or raises, Slay said. Education benefits and perks also signal that a company values and invests in its employees and their growth. So be sure to ask what a company you're planning to work for offers if education is important to you.Find jobs at companies that offer access to online courses, tuition reimbursement, or learning and development stipends14. Mentor programsMentor programs pair you with someone at your company who's more experienced and can answer questions and offer guidance to help you advance in your career. "Mentorship is huge," Slay said. Mentors can serve as advocates to help you navigate the technical and political parts of a job as well as you build and expand your network.Mentorship programs help employees feel valued, create a culture of learning and increase job satisfaction and productivity, Slay said. So find out whether a company provides formal or informal mentoring and what their programs entail.Find jobs at companies that offer mentor programs15. Diversity, equity, and inclusion programsDiversity, equity, and inclusion (DEI) programs and initiatives encourage the representation and participation of different and often underrepresented groups, such as women, people of color, people with disabilities, and the LGBTQ community. The programs may include mentorship opportunities, targeted recruitment efforts, and employee resource groups (ERGs).As with many employee benefits and perks, some DEI programs are more robust than others. So it's a good idea to find out the specifics of what a company offers and how it aligns with your values and needs, rather than just noting that they've ticked the box in offering a DEI program.Find jobs at companies that offer diversity and inclusion programsBefore you accept a job offer, make sure you have a good grasp of the company's benefits and perks and how they fit into your overall compensation structure. Ask plenty of questions to get all the details of how each benefit and perk aligns with your needs and negotiate to get what you want. Keep in mind, too, that when you're searching for open jobs on The Muse, you can set filters so you'll only see open positions at companies that offer the benefits and perks that matter most to you.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 6th, 2021

Luongo: Energy Subsidies, Bitcoin, & The Socialist Takeover That Isn"t

Luongo: Energy Subsidies, Bitcoin, & The Socialist Takeover That Isn't Authored by Tom Luongo via Gold, Goats, 'n Guns blog, “When you subsidize something, you get more of it." - RON PAUL I have a friend who once described Bitcoin to me as an organism which feeds on electricity subsidies. Bitcoin searches out the lowest cost of electricity available and consumes as much of it as it can to produce profit for the miners, since electricity costs are their biggest costs. This is partly why China, for years, attracted the lion’s share of Bitcoin mining. Miners could co-locate next to hydroelectric power plants in China and suck up every extra available cheap and subsidized kilowatt-hour. This is the essence of the free market. It finds inefficiencies and exploits them as capital flows to where it is treated best. It may be ‘predatory’ from the central planners’ point of view, but they opened themselves up to this effect the moment they intervened by subsidizing the market in the first place. Bitcoin exposed a structural weakness in China’s electricity grid this summer which was under massive stress thanks to drought conditions there dimming the output of its hydroelectric generators. This is partly why Chairman Xi Jinping took the aggressive steps to kick the Bitcoin miners out of China this summer. He could see the real costs of electricity rising as coal, oil and natural gas prices skyrocketed but, because of rate subsidies to end-users, revenue to power generating companies was flat. It served him in other strategic ways, like kicking out the flow of Bitcoin within the Chinese economy, cutting down would-be mining company financial oligarchs and ultimately lessening competition for the Digital Yuan. The response from the Socialist is always the same, however. Today Russia is getting blamed for gas prices in Europe. Price gouging in a crisis a moral failure, not the original wealth transfer (itself a theft) from one group of people to another, which is what an electrical subsidy is. They see this as a market failure because to them the greater good is served by subsidizing certain aspects of the economy to achieve political and/or social goals. And, in some ways, they may be correct, but you’ll never know it because there can be no rational calculation of the costs versus the benefits, c.f. Mises’ critique of Socialism from 1921. You see, the market is neutral. It doesn’t have a perspective other than expressing the very human response of seeing an arbitrage opportunity and exploiting it. Rather than being a failure of the free market, Bitcoin miners seeking out and exposing the unsustainability of electricity subsidies is a massive success of market principles. It is firmly rooted in actual human behavior rather than some fantastical one created by a central committee and the force of the gun. China kicking out the Bitcoin miners only forestalled the day of reckoning for its energy industry because their presence was a symptom of a deeper problem not the source of the problem itself. Today, four months later China is now rationing electricity to force demand down. Rather than let market forces raise the prices, divert capital away from energy intensive (and possibly uneconomic) activity and give accurate signals to producers and consumers, China will do the authoritarian thing to blame the people and take away a basic function of a first world society. This is a simple, yet dramatic, example of what’s fundamentally wrong with the world we live in today. China isn’t the only one guilty of this. Subsidies like these are everywhere and they do nothing except create pricing dislocations which attract massive amounts of capital creating economic bubbles in price. If you’re wondering where this headline could come from: Zerohedge answers it with the pullquote. In fact, it is the Austrian School critique of these subsidies which is its core competency; to explain in real terms why government intervention in a market ultimately subsidizes overinvestment in one activity at the expense of another. Capital at any given moment is finite. That means there is competition for it ceteris paribus. That competition means that if better profits can be made mining Bitcoin in China rather than building a new road or gas pipeline, then that’s what will happen. We can create more capital but that requires time, ingenuity and labor. Capital compounds at a pretty linear rate and all we do with things like deficit spending is pull forward capital from the future to subsidize production in the present. Today we produce far more electricity than we use. It’s estimated that as much as 30% of global electricity goes to ground. Bitcoin uses up less than 0.5% of that wasted electricity. It’s actually performing a major market function to blow apart these layers of bureaucratic insanity by preying on a fraction of this over-production. Since prices are set at the margin, small demand or supply shocks can create massive spikes or drops in price if the market is operating at peak capacity. If you really stop to think about it, it’s quite astounding that the world’s economic system is this vulnerable to this basic application of free market principles. Today Bitcoin mining is co-locating next to the cheapest electricity produced on the planet, next to volcanos and nuclear power plants. It’s coming to America in a big, big way where it will further expose rural electrical subsidies here in the U.S. just like it did in China. But, for now, this organism is healthy, strong and in no danger of dying from the heavy hand of inept socialists. French Fried Grid Lines What prompted this article was my reading with a certain perverse glee that France is dealing with the same problem China has but in a different way. They are now suspending a planned tax hike in electricity tariffs because prices to the French consumer are spiking thanks to rising gas, oil and coal prices that its nuclear power infrastructure can’t overcome. Even if France fully passed on the input cost rises to the consumer, the tariffs the government charges for using electricity are another form of subsidy, not to the electricity generator, but to government itself. Why was France considering raising taxes on electricity during a global energy price spike? Because its government spends too much money, doing what…? …regulating its economy, which it has done an objectively miserable job of. So, to subsidize its bloated and now openly tyrannical government France wanted to squeeze its citizens for more money to keep that arrangement in place: to fund The Davos Crowd’s mandates about COVID-9/11 vaccines, restrictions on travel, blasting protestors with water cannons… you know, protecting and serving the public. But with massive protests around the country and the people’s falling confidence and patience with its government, France had to back off lest this latest tax hike enflame passions there even more six months out from a Presidential election. In typical central planner Newspeak they called the simple act of not raising taxes, the ultimate form of government aggression, ‘price protection.’ It’s patently absurd for them to frame it this way when the last thing the French government actually does is protect its people, except those that work for it, from, well, anything. He {French Prime Minister Jean Castex} said any new natgas tariffs following Friday’s scheduled 12.6% hike would be postponed until prices decrease in late March/April, adding that it will shield 5 million households who are on floating-rate contracts. Castex said the French government would lower taxes on power prices, capping the scheduled increase in residential electricity tariffs at 4% in February. In the midst of an energy price crisis the French government, in a blatant pander to voters for the 2022 election, not only scrapped raising taxes but also further subsidized lower income households, encouraging them to use even more electricity and worsening the government’s fiscal position. Someone has to pay to move those electrons around just not those that might vote to re-elect Emmanuel Macron. These are decisions not made with any long-term economic benefits in mind, but rather the most crass short-term political consequences trying to put a band-aid on a government-inflicted wound on the people themselves. “The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, ‘See if it weren’t for the government, you wouldn’t be able to walk.” - HARRY BROWNE Capital Gone Walkabout Meanwhile, Germany is now running out of coal, as a major coal power plant there had to shut down because it ran out. German utility Steag halted its coal-fired power plant Bergkamen-A after it ran out of hard coal supplies amid an energy crunch globally and logistics challenges domestically, the company told Bloomberg on Friday. “We are short of hard coal,” Steag spokesman Daniel Muhlenfeld told Bloomberg via email. Germany has been the poster child for Europe’s Quixotic quest for carbon-neutrality. What it’s wound up with is windmills not spinning (and the birds chirped in excitement), solar panels covered in snow when the cloud cover clears and gas prices never before seen in history, at over $1200 per thousand cubic meters. Oil prices keep trying to fall and new conflicts and controls keep trying to push the price higher, be it from OPEC+ members trying to subsidize their national governments, or the U.S. actively pushing supply off the market to subsidize its LNG exports. But, none of the price rise is because we’re running out but because supply is being artificially restricted by central planners wanting to create a false reality. How does anyone expect the mighty German industrial economy to absorb these costs without some kind of output slowdown? The answer is no one. In fact, if you think through the situation, it’s clear Davos is happy about this because this puts downward pressure on growth, starving out Germany’s powerful industrial and middle class, who stand confused as to the cause, if the results of the election there are any indication. Because those people produce wealth. Growing wealth to those of limited understanding is problematic. If the world is finite, they argue, growth must be finite. That’s only true, however, at any single point on the timeline of our understanding of the universe. Tomorrow we’ll figure out some new thing, some new efficiency, material or overcome some obstacle we didn’t have time for yesterday. We’ll take our surplus time we earned as profit today and deploy it to fix some other problem tomorrow, opening up new pathways for growth. But this type of growth, where it isn’t directed by oligarchs and governments who stand in front of them, is somehow evil or unsustainable. Yeah, for them. For the past fifty years they’ve been telling us peak oil would end modern civilization and yet, absent their manipulations of energy markets through lockdowns, wars, currency manipulation and regulation, the real price of oil has risen just 12% over the past fifty years, when indexed for inflation, which they manipulate to the downside to sustain their power. One could easily argue that today’s price shocks aren’t any more sustainable than any other commodity whose supply and demand fundamentals are driven by politics more than they are the markets themselves. Remove those obstacles and I bet we’ll see oil production subsidies driven out of the market the same way that bitcoin drove China and France to ‘protect consumers’ from electricity subsidies. We had to invent a new word to describe the fight over energy, geopolitics, because of our adherence to the socialists’ maleducation on basic human behavior. We also had to invent a new definition of inflation in the age of money unmoored from the stored energy of gold and other hard assets, based on prices not the supply of money. Instead of basing our money on our past work, tokenized by gold, they gave us a money based on what we will produce for them, debt. What I didn’t show in the above graph is the stability of oil in real terms before we entered this era. All Malthusian arguments about the end of cheap energy are themselves indefensible and unsustainable and yet that is all we are ever told is coming. They deny the Marginal Revolution (1871-74) in economics, which negated all of Marx’s complaints about capitalism before his death (1883), and yet his idiotic ideas fuel the unquenchable thirst for power of midwit oligarchs and the envy of their socialist useful idiots. When someone is lying to you, you really owe it to yourself to ask why. Davos has broken the world supply chain for energy for the sole purpose of proving a point that history itself has already debunked, Facebook be damned. They do this, nominally, in the name of sustainability, arguing the wastefulness of capitalism is the end state of it. But, as I’ve already shown with bitcoin and electricity, oil and money printing, it is the over-production of something through subsidization that creates unsustainable waste and malinvestment which eventually has to be liquidated in a rational system. But instead of bowing to the rational, ending that system of privilege for them, they make the monetary system ever more irrational to the point of absurdity. Last year, Paul Krugman was calling the $1 trillion coin “an accounting gimmick” that “wouldn’t even fool anyone”, now he’s all in on the illegal power grab with a New York Times column headlined, “Biden Should Ignore the Debt Limit and Mint a $1 Trillion Coin”. That only took a little over a year.   The End of Socialism This brings me to the final point of this essay. They are losing. They are losing not because they aren’t powerful or aren’t making our lives miserable but because their system of subsidy, which produces unearned wealth (or rent) for them is failing rapidly. They embarked on this Great Reset solely for the purpose of defaulting on their socialist promises made by buying off present generations with the labor of future generations. We call this in modern parlance debt. Now that the debt is unpayable and the future liabilities of their governments overwhelming everything they have unleashed a torrent of policies around the world to starve, freeze and kill off entire generations of taxpayers who they can’t afford to bribe anymore. COVID-9/11, no matter how you look at it, as a political operation has shortened lifespans in the U.S. by 18 months in 2020, according to the CDC. What will those numbers look like in 2021? This is a radical contraction which lifted trillions of unfunded liabilities in Social Security and Medicare payments from future U.S. governments. And they call libertarians heartless? Draw your own conclusions from this but I think you know what it means. Davos is purposefully shrinking the division of labor in order to prove the Marxist critique of capitalism correct when it has done nothing but lift billions out of poverty which the Malthusian central planners told us a century ago then was unsustainable. Central planners aren’t rational. They are simply tyrants who prey on the fear and weakness of people grown soft through abundance. Because in their mind sustainability is only measured by the continuity of their power over society not the actual economics of that society. The instability, chaos and conflict come from their inability to accept that someone else may have a better solution to society’s problems than they do. And what truly keeps them up at night is the gnawing feeling that the best system is the one where no one person or group of people could ever manage a system as complex and dynamic as seven-plus billion people acting in their own self-interest creating a spontaneous and self-correcting order which doesn’t need their help. When I look out today and see bills in the U.S. Congress to deny unvaccinated people from flying or children from getting an education all I see is a failing system of energy distribution and subsidy trying to protect itself from the ravages of its own stupidity. I’ve said it before and I’ll say it again here, power doesn’t prove you’re smart, it simply makes you stupid. Bitcoin, among other technologies, is slowly eating away at these unsustainable markets while the socialists in China, France and yes, Washington D.C. scramble to keep the central planners’ dream alive of a world where they control access to everything you need to live your most productive life. They are scared to death of a private banking system that doesn’t need them or a division of labor that coordinates production where their toll booths can’t collect. To them we are just livestock to be farmed, batteries to be discharged and liabilities on their balance sheets to be written down. Energy isn’t scarce, it is abundant. Human energy, that is. Oil is finite. So is gas. So is coal. But until we properly price its costs, we’ll never figure out what’s the best replacement for them and at what point in time that change should occur. Between now and then it will be a long, cold winter. “I know you’re out there. I can feel you now. I know that you’re afraid. You’re afraid of us. You’re afraid of change. I don’t know the future. I didn’t come here to tell you how this is going to end. I came here to tell you how it’s going to begin. I’m going to hang up this phone, and then I’m going to show these people what you don’t want them to see. I’m going to show them a world without you, a world without rules and controls, without borders or boundaries, a world where anything is possible. Where we go from there, is a choice I leave to you.”. - NEO, THE MATRIX *  *  * Join my Patreon if you want to subsidize the truth BTC: 3GSkAe8PhENyMWQb7orjtnJK9VX8mMf7ZfBCH: qq9pvwq26d8fjfk0f6k5mmnn09vzkmeh3sffxd6rytDCR: DsV2x4kJ4gWCPSpHmS4czbLz2fJNqms78oELTC: MWWdCHbMmn1yuyMSZX55ENJnQo8DXCFg5kDASH: XjWQKXJuxYzaNV6WMC4zhuQ43uBw8mN4VaWAVES: 3PF58yzAghxPJad5rM44ZpH5fUZJug4kBSaETH: 0x1dd2e6cddb02e3839700b33e9dd45859344c9edcDGB: SXygreEdaAWESbgW6mG15dgfH6qVUE5FSE Tyler Durden Sun, 10/03/2021 - 13:32.....»»

Category: blogSource: zerohedgeOct 3rd, 2021

Globus Maritime Limited Reports Financial Results for the quarter and six-month period ended June 30, 2021

GLYFADA, Greece, Sept. 27, 2021 (GLOBE NEWSWIRE) -- Globus Maritime Limited ("Globus", the "Company", "we", or "our") (NASDAQ:GLBS), a dry bulk shipping company, today reported its unaudited consolidated operating and financial results for the quarter and six-month period ended June 30, 2021. Financial Highlights In H1 2021, Total revenues increased by about 161% compared to H1 2020. The Adjusted EBITDA for H1 2021 increased by about 6.8 million compared to H1 2020. The Total comprehensive loss for H1 2021 decreased by about 94% compared to H1 2020. As of June 30, 2021, and December 31, 2020, our cash and bank balances and bank deposits (including restricted cash) were $78.5 and $21.1 million, respectively, an increase of 272%. As of June 30, 2021, the total outstanding borrowings under our Loan agreements decreased to $34.25 million compared to $37 million as of December 31, 2020, gross of unamortized debt discount, a decrease of about 7%.                                 Three months ended June 30, Six months ended June 30, (Expressed in thousands of U.S. dollars except for daily rates and per share data)   2021   2020   2021   2020   Total revenues   6,829   2,299   11,996   4,589   Total comprehensive loss   (23 ) (4,197 ) (789 ) (13,199 ) Adjusted EBITDA (1)   3,055   (783 ) 4,361   (2,447 ) Basic loss per share (2)   -   (38.66 ) (0.09 ) (158.35 ) Daily Time charter equivalent rate ("TCE") (3)   11,781   3,778   10,859   3,016   Average operating expenses per vessel per day   5,256   4,353   5,471   4,437   Average number of vessels   6.2   5.0   6.1   5.0         (1)   Adjusted EBITDA is a measure not in accordance with generally accepted accounting principles ("GAAP"). See a later section of this press release for a reconciliation of Adjusted EBITDA to total comprehensive loss and net cash used in operating activities, which are the most directly comparable financial measures calculated and presented in accordance with the GAAP measures. (2)   The weighted average number of shares for the six-month period ended June 30, 2021 was 9,001,704 compared to 83,354 shares for the six-month period ended June 30, 2020. The weighted average number of shares for the three-month period ended June 30, 2021 was 10,774,058 compared to 108,577 shares for the three-month period ended June 30, 2020. (3)   Daily Time charter equivalent rate ("TCE") is a measure not in accordance with generally accepted accounting principles ("GAAP"). See a later section of this press release for a reconciliation of Daily TCE to Voyage revenues. Current Fleet ProfileAs of the date of this press release, Globus' subsidiaries own and operate seven dry bulk carriers, consisting of four Supramax, one Panamax and two Kamsarmax. Vessel Year Built Yard Type Month/Year Delivered DWT Flag Moon Globe 2005 Hudong-Zhonghua Panamax June 2011 74,432 Marshall Is. Sun Globe 2007 Tsuneishi Cebu Supramax Sept 2011 58,790 Malta River Globe 2007 Yangzhou Dayang Supramax Dec 2007 53,627 Marshall Is. Sky Globe 2009 Taizhou Kouan Supramax May 2010 56,855 Marshall Is. Star Globe 2010 Taizhou Kouan Supramax May 2010 56,867 Marshall Is. Galaxy Globe 2015 Hudong-Zhonghua Kamsarmax October 2020 81,167 Marshall Is. Diamond Globe 2018 Jiangsu New Yangzi Shipbuilding Co. Kamsarmax June 2021 82,027 Marshall Is. Power Globe 2011 Universal Shipbuilding Corporation Kamsarmax   80,655 Marshall Is. Weighted Average Age: 10.4 Years as of September 27, 2021 544,420   Current Fleet Deployment All our vessels are currently operating on short-term time charters ("on spot"). Management Commentary "During the second quarter we have seen the market gaining momentum. We are pleased to see increased rates across all sectors, the factors being demand as well as supply driven. On the demand side, we see a healthy demand of commodities both on the major as well as the minor bulks. There is significant congestion in ports all around the globe mainly due to COVID-19 related delays and complications. The combined effect of a healthy demand and a limit on the supply of ships helps the market and elevates rates. Since we expect the market to remain strong for the medium term and as our fleet comes out from legacy charters, we will be able to take advantage of the strong rates by positioning it accordingly. "During the second Quarter we continued to improve our balance sheet and build up our fleet. We have managed to refinance and reduce our bank debt at much lower levels compared to our previous loan agreements with the effects to be visible in the following quarters and years. We feel that the new refinancing and new relationship with a respectable financial institution provides the Company with a good base for the future. "In early June we have taken delivery of m/v Diamond Globe, further expanding and modernizing our fleet. As previously communicated, the vessel assumed a charter cover until about the end of the year. Additionally, we have recently announced the delivery of our new vessel m/v Power Globe joining our fleet which immediately performed a short trip at about $31,000 gross per day before proceeding to drydocking for her scheduled maintenance. We will examine the market and hopefully find lucrative business for the vessel when the scheduled maintenance is completed. "Furthermore, last week we entered into an agreement to acquire a 2015 Japanese Kamsarmax for $28,4 million and expect to take delivery of the vessel during the 4th Quarter of 2021. We will examine the charter and market condition closer to the delivery date and do our best to secure the highest rate possible at that time. The addition of this new vessel will expand our fleet and its carrying capacity further and align well with our renewal and expansion strategy. We consider this to be a good addition to the fleet which will further strengthen the position of the company in the market as well as help us build new relationships with customers. "COVID-19 is affecting most parts of our operations, we see delays related to the pandemic on most aspects that relate to technical as well as commercial matters. There are delays on schedules of loading, discharging, crew exchanges and spare part procurement as well as repairs, the delays are also accompanied with increased costs of such operations. We are trying our best as a company to mitigate any effects and delays, always keeping in mind international and local regulations as well as our vessels and crew safety and wellbeing. We are focused in helping and supporting our seafarers during these trying times; we want them to be healthy, happy and demonstrate high morale on board and will continue doing whatever is necessary for their safety and good physical and mental health. "Finally, we believe that the company has a strong balance sheet, and the growing fleet will help us to fully take advantage of the strong market. We are keeping our focus on future environmental regulations and continue to modernize and build up our fleet on that basis. We are confident that with a bigger and modernized fleet will be able to take advantage of the strong market and by extent build long term value for our shareholders." Management Discussion and Analysis of the Results of Operations Recent Developments Issuance of the Series B preferred shares On March 2, 2021, we issued an additional 10,000 of our Series B Preferred Shares to Goldenmare Limited in return for $130,000. The $130,000 was paid by reducing, on a dollar-for-dollar basis, the amount payable as compensation by the Company to Goldenmare Limited pursuant to a consultancy agreement. The issuance of the Series B preferred shares to Goldenmare Limited was approved by an independent committee of the Board of Directors of the Company, which received a fairness opinion from an independent financial advisor. Each Series B preferred share entitles the holder thereof to 25,000 votes per share on all matters submitted to a vote of the shareholders of the Company, provided however, that no holder of Series B preferred shares may exercise voting rights pursuant to Series B preferred shares that would result in the aggregate voting power of any beneficial owner of such shares and its affiliates (whether pursuant to ownership of Series B preferred shares, common shares or otherwise) to exceed 49.99% of the total number of votes eligible to be cast on any matter submitted to a vote of shareholders of the Company. To the fullest extent permitted by law, the holders of Series B preferred shares shall have no special voting or consent rights and shall vote together as one class with the holders of the common shares on all matters put before the shareholders. The Series B preferred shares are not convertible into common shares or any other security. They are not redeemable and have no dividend rights. Upon any liquidation, dissolution or winding up of the Company, the Series B preferred shares are entitled to receive a payment with priority over the common shareholders equal to the par value of $0.001 per share. The Series B preferred shareholder has no other rights to distributions upon any liquidation, dissolution or winding up of the Company. All issued and outstanding Series B preferred shares must be held of record by one holder, and the Series B preferred shares shall not be transferred without the prior approval of our Board of Directors. Finally, in the event the Company (i) declares any dividend on its common shares, payable in common shares, (ii) subdivides the outstanding common shares or (iii) combines the outstanding common shares into a smaller number of shares, there shall be a proportional adjustment to the number of outstanding Series B preferred shares. As of June 30, 2021, Goldenmare Limited owned 10,300 of the Company's Series B preferred shares. Public Offerings On January 13, 2021, the remaining pre-funded warrants from the December 2020 Pre-Funded Warrants were exercised and 130,000 common shares, par value $0.004 per share were issued. On January 27, 2021, the Company entered into a securities purchase agreement with certain unaffiliated institutional investors to issue (a) 2,155,000 common shares, par value $0.004 per share, (b) pre-funded warrants to purchase 445,000 common shares, par value $0.004 per share and (c) warrants (the "January 2021 Warrants") to purchase 1,950,000 common shares, par value $0.004 per share, at an exercise price of $6.25 per share. Total proceeds, net of commission retained by the placement agent, amounted to $15,108,050, before issuance expenses of approximately $122,000. The pre-funded warrants were all exercised subsequently and the total proceeds amounted to $4,450. No January 2021 Warrants have been exercised as of the date hereof. The January 2021 Warrants are exercisable for a period of five and one-half years commencing on the date of issuance. The warrants will be exercisable, at the option of each holder, in whole or in part by delivering to the Company a duly executed exercise notice with payment in full in immediately available funds for the number of common shares purchased upon such exercise. If a registration statement registering the issuance of the common shares underlying the warrants under the Securities Act is not effective, the holder may, in its sole discretion, elect to exercise the warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the warrant. If the Company does not issue the shares in a timely fashion, the warrant contains certain liquidated damages provisions. On February 12, 2021, the Company entered into a securities purchase agreement with certain unaffiliated institutional investors to issue (a) 3,850,000 common shares par value $0.004 per share, (b) pre-funded warrants to purchase 950,000 common shares, par value $0.004 par value, and (c) warrants (the "February 2021 Warrants") to purchase 4,800,000 common shares, par value $0.004 per share, at an exercise price of $6.25 per share. Total proceeds, net of commission retained by the placement agent, amounted to $27,890,500 before issuance expenses of approximately $150,000. The pre-funded warrants were all exercised subsequently and the total proceeds amounted to $9,500. No February 2021 Warrants have been exercised as of the date hereof. The February 2021 Warrants are exercisable for a period of five and one-half years commencing on the date of issuance. The warrants will be exercisable, at the option of each holder, in whole or in part by delivering to the Company a duly executed exercise notice with payment in full in immediately available funds for the number of common shares purchased upon such exercise. If a registration statement registering the issuance of the common shares underlying the warrants under the Securities Act is not effective, the holder may, in its sole discretion, elect to exercise the warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the warrant. If the Company does not issue the shares in a timely fashion, the warrant contains certain liquidated damages provisions. On June 25, 2021, the Company entered into a securities purchase agreement with certain unaffiliated institutional investors to issue (a) 8,900,000 common shares par value $0.004 per share, (b) pre-funded warrants to purchase 1,100,000 common shares, par value $0.004 par value, and (c) warrants (the "June 2021 Warrants") to purchase 10,000,000 common shares, par value $0.004 per share, at an exercise price of $5.00 per share. Total proceeds amounted to $46,580,875 before issuance expenses of approximately $129,000. As of June 30, 2021 550,000 pre-funded warrants were exercised and the total proceeds amounted to $5,500. The remaining 550,000 pre-funded warrants were exercised subsequently. No June 2021 Warrants have been exercised as of the date hereof. The June 2021 Warrants are exercisable for a period of five and one-half years commencing on the date of issuance. The warrants will be exercisable, at the option of each holder, in whole or in part by delivering to the Company a duly executed exercise notice with payment in full in immediately available funds for the number of common shares purchased upon such exercise. If a registration statement registering the issuance of the common shares underlying the warrants under the Securities Act is not effective, the holder may, in its sole discretion, elect to exercise the warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the warrant. If the Company does not issue the shares in a timely fashion, the warrant contains certain liquidated damages provisions. Acquisition of new vessel On June 9, 2021, the Company took delivery of the m/v "Diamond Globe", a 2018-built Kamsarmax dry bulk carrier, through its subsidiary, Argo Maritime Limited, for a purchase price of $27 million financed with available cash. The m/v "Diamond Globe" was built at Jiangsu New Yangzi Shipbuilding Co., Ltd and has a carrying capacity of 82,027 dwt. On July 20, 2021, the Company took delivery of the m/v "Power Globe", a 2011-built Kamsarmax dry bulk carrier, through its subsidiary, Talisman Maritime Limited, for a purchase price of $16.2 million financed with available cash. The m/v "Power Globe" was built at Universal Shipbuilding Corporation in Japan and has a carrying capacity of 80,655 dwt. On September 22, 2021, the Company entered into a memorandum of agreement with an unrelated third party, for the acquisition of the m/v "Peak Liberty", a 2015-built Kamsarmax dry bulk carrier, for a purchase price of $28.4 million. The m/v "Peak Liberty" was built at Tsuneishi Zosen in Japan and has a carrying capacity of 81,837 dwt. The agreement is subject to customary closing conditions. Delivery of the vessel is expected during the 4th quarter of 2021. Debt financing In March 2021, the Company prepaid $6.0 million of the Entrust loan facility, which represented all amounts that would otherwise come due during calendar year 2021. As a result, after this pre-payment we had an aggregate debt outstanding of $31 million, gross of unamortized debt costs, from the Entrust Loan Facility. On May 10, 2021, the Company reached an agreement with CiT Bank N.A. for a loan facility of $34.25 million bearing interest at LIBOR plus a margin of 3.75% per annum. This loan facility is referred to as the CiT loan facility. The proceeds of this financing were used to repay the outstanding balance of EnTrust Loan Facility. Impact of COVID-19 on the Company's Business The spread of the COVID-19 virus, which has been declared a pandemic by the World Health Organization in 2020 had caused substantial disruptions in the global economy and the shipping industry, as well as significant volatility in the financial markets, the severity and duration of which remains uncertain. The measures taken by governments worldwide in response to the outbreak, which included numerous factory closures, self-quarantining, and restrictions on travel, as well as potential labour shortages resulting from the outbreak, had slowed down production of goods worldwide and decreased the amount of goods exported and imported worldwide. Some experts fear that the economic consequences of the coronavirus could cause a recession that outlives the pandemic. Besides reducing demand for cargo, coronavirus may functionally limit the amount of cargo that the Company and its competitors are able to move because countries worldwide have imposed quarantine checks on arriving vessels, which have caused delays in loading and delivery of cargoes. It is possible that charterers may try to invoke force majeure clauses as a result.  Crewing and Crew management operations. Due to COVID-19 there are restrictions on travelling on many jurisdictions. We may face problems in the embarkation and disembarkation our crew members. Many airports around the world as well as many countries impose heavy travel restrictions such as quarantine periods for incoming and outgoing travelers. By extent it is increasingly hard, if not restrictive, for our crews to be relieved by new crew members. We continue to monitor the situation with respect and utmost care for our seafarers, always communicating with the relevant authorities in order to assist them as much as we can in these unprecedented times. Disruption in operations in case crew members get infected. In case one of our crew members is found to be infected by COVID-19 this may lead to delays in cargo operations. It may also need to a detention and quarantine of the ship for an unspecified amount of time. Relevant authorities may require us to perform disinfection and fumigation operations if a crew member gets infected by COVID-19. Crew members may be quarantined if a member is found to be infected. The above may lead to increased costs and lower utilization of our fleet. Dry docking and Repairs. Repair yards and dry docks in the far east, usually selected for the scheduled maintenance of our vessels, may be affected by the closures and travel restrictions in their countries. Shipyard staff and third-party experts as well as spare parts may be harder to procure and provide making the maintenance process potentially lengthier, costlier or unfeasible. Spare parts and supplies may be harder to produce and deliver to a shipyard where they would be utilized for a scheduled maintenance. In addition to the above, and always relating to COVID-19 travel restrictions, it will be difficult for our in-house technical teams to travel to the shipyards in order to monitor the maintenance process, so the maintenance may have to be postponed or 3rd party monitoring technical crews will be hired. Finally, classification society surveyor attendance may be restricted thus not only affecting the time spent within a repair facility but also causing scheduled survey work to be postponed as far as this is permissible. Effect on the following technical department activities yet not limited to: Logistics and supply of spares and expert services may incur increased costs and disruption in Planned Maintenance and consequently lead to increased failures / incidents. Office Personnel attendance is disrupted or impossible, which can have as a result inadequate supervision and lead to increased incidents in third party inspection and reduced maintenance quality. Long-Term planned maintenance (dry docking) unsupervised by company personnel, that can result to lower quality and increased costs. Delays in class surveys, which can lead to postponements. The above ultimately are translated to possible increased costs and reduced maintenance quality which in the long term shall spiral to cost increases again as the aftermath shall have to be dealt with. However, there are presently insufficient statistics to reach to prediction model as regards to the actual increase in costs due to the above disruptions. The Company has evaluated the impact of current economic situation on the recoverability of the carrying amount of its vessels. During the first half of 2020, the Company concluded that events and circumstances triggered the existence of potential impairment of its vessels. These indicators included volatility in the charter market as well as the potential impact the current marketplace may have on the future operations. As a result, the Company performed an impairment assessment of the Company's vessels by comparing the discounted projected net operating cash flows for each vessel to its carrying values. For the first half of 2020, the Company concluded that the recoverable amounts of the vessels were lower than their carrying amounts and an impairment loss of $4.6 million was recorded (see also Note 5). For the first half of 2021 the Company re-evaluated the carrying amount of its vessels and concluded that no further impairment of its vessels should be recorded or previously recognized impairment should be reversed. Results of Operations Second quarter of the year 2021 compared to the second quarter of the year 2020 Total comprehensive loss for the second quarter of the year 2021 amounted to $23 thousand compared to total comprehensive loss of $4.2 million for the same period last year or $38.66 basic and diluted loss per share based on 108,577 weighted average number of shares. The following table corresponds to the breakdown of the factors that led to the decrease in total comprehensive loss during the second quarter of 2021 compared to the second quarter of 2020 (expressed in $000's): 2nd Quarter of 2021 vs 2nd Quarter of 2020 Net loss for the 2nd quarter of 2020 (4,197 ) Increase in Voyage revenues 4,530   Decrease in Voyage expenses 364   Increase in Vessels operating expenses (1,003 ) Increase in Depreciation (238 ) Increase in Depreciation of dry-docking costs (257 ) Increase in Total administrative expenses (156 ) Increase in Other income, net 102   Increase in Interest income 1   Increase in Interest expense and finance costs (487 ) Decrease in Loss on derivative financial instruments 1,309   Decrease in Foreign exchange losses 9   Net loss for the 2nd quarter of 2021 (23 )       Voyage revenuesDuring the three-month period ended June 30, 2021, and 2020, our Voyage revenues reached $6.8 million and $2.3 million, respectively. The 197% decrease in Voyage revenues was mainly attributed to the decrease in the average time charter rates achieved by our vessels during the second quarter of 2021 compared to the same period in 2020. Daily Time Charter Equivalent rate (TCE) for the second quarter of 2021 was $11,781 per vessel per day against $3,778 per vessel per day during the same period in 2020 corresponding to an increase of 212%. Voyage expenses Voyage expenses reached $0.2 million during the second quarter of 2021 compared to $0.6 during the same period in 2020. Voyage expenses include commissions on revenues, port and other voyage expenses and bunker expenses. Bunker expenses mainly refer to the cost of bunkers consumed during periods that our vessels are ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaSep 27th, 2021

Futures Slide Alongside Cryptocurrencies Amid China Crackdown

Futures Slide Alongside Cryptocurrencies Amid China Crackdown US futures and European stocks fell amid ongoing nerves over the Evergrande default, while cryptocurrency-linked stocks tumbled after the Chinese central bank said such transactions are illegal. Sovereign bond yields fluctuated after an earlier selloff fueled by the prospect of tighter monetary policy. At 745am ET, S&P 500 e-minis were down 19.5 points, or 0.43%, Nasdaq 100 e-minis were down 88.75 points, or 0.58% and Dow e-minis were down 112 points, or 0.33%. In the biggest overnight news, Evergrande offshore creditors remain in limbo and still haven't received their coupon payment effectively starting the 30-day grace period, while also in China, the State Planner issued a notice on the crackdown of cryptocurrency mining, will strictly prohibit financing for new crypto mining projects and strengthen energy consumption controls of new crypto mining projects. Subsequently, the PBoC issued a notice to further prevent and dispose of the risks from speculating on cryptocurrencies, to strengthen monitoring of risks from crypto trading and such activities are illegal. The news sent the crypto space tumbling as much as 8% while cryptocurrency-exposed stocks slumped in U.S. premarket trading. Marathon Digital (MARA) drops 6.5%, Bit Digital (BTBT) declines 4.7%, Riot Blockchain (RIOT) -5.9%, Coinbase -2.8%. Big banks including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp slipped about 0.5%, while oil majors Exxon Mobil and Chevron Corp were down 0.4% and 0.3%, respectively, in premarket trading.Mega-cap FAAMG tech giants fell between 0.5% and 0.6%. Nike shed 4.6% after the sportswear maker cut its fiscal 2022 sales expectations and warned of delays during the holiday shopping season. Several analysts lowered their price targets on the maker of sports apparel and sneakers after the company cut its FY revenue growth guidance to mid-single- digits. Here are some of the biggest U.S. movers today: Helbiz (HLBZ) falls 10% after the micromobility company filed with the SEC for the sale of as many as 11m shares by stockholders. Focus Universal (FCUV), an online marketing company that’s been a favorite of retail traders, surged 26% in premarket trading after the stock was cited on Stocktwits in recent days. Vail Resorts (MTN) falls 2.7% in postmarket trading after its full-year forecasts for Ebitda and net income missed at the midpoint. GlycoMimetics (GLYC) jumps 15% postmarket after announcing that efficacy and safety data from a Phase 1/2 study of uproleselan in patients with acute myeloid leukemia were published in the journal Blood on Sept. 16. VTV Therapeutics (VTVT) surges 30% after company says its HPP737 psoriasis treatment showed favorable safety and tolerability profile in a multiple ascending dose study. Fears about a sooner-than-expected tapering amid signs of stalling U.S. economic growth and concerns over a spillover from China Evergrande’s default had rattled investors in September, putting the benchmark S&P 500 index on course to snap a seven-month winning streak. Elaine Stokes, a portfolio manager at Loomis Sayles & Co., told Bloomberg Television, adding that “what they did is tell us that they feel really good about the economy.” While the bond selloff vindicated Treasury bears who argue yields are too low to reflect fundamentals, others see limits to how high they can go. “We’d expected bond yields to go higher, given the macro situation where growth is still very strong,” Sylvia Sheng, global multi-asset strategist with JPMorgan Asset Management, said on Bloomberg Television. “But we do stress that is a modest view, because we think that upside to yields is still limited from here given that central banks including the Fed are still buying bonds.” Still, Wall Street’s main indexes rallied in the past two session and are set for small weekly gains. European equities dipped at the open but trade off worst levels, with the Euro Stoxx 50 sliding as much as 1.1% before climbing off the lows. France's CAC underperformed at the margin. Retail, financial services are the weakest performers. EQT AB, Europe’s biggest listed private equity firm, fell as much as 8.1% after Sweden’s financial watchdog opened an investigation into suspected market abuse. Here are some of the other biggest European movers today: SMCP shares surge as much as 9.9%, advancing for a 9th session in 10, amid continued hopes the financial troubles of its top shareholder will ultimately lead to a sale TeamViewer climbs much as 4.2% after Bankhaus Metzler initiated coverage with a buy rating, citing the company’s above-market growth AstraZeneca gains as much as 3.6% after its Lynparza drug met the primary endpoint in a prostate cancer trial Darktrace drops as much as 9.2%, paring the stock’s rally over the past few weeks, as a technical pattern triggered a sell signal Adidas and Puma fall as much as 4% and 2.9%, respectively, after U.S. rival Nike’s “large cut” to FY sales guidance, which Jefferies said would “likely hurt” shares of European peers Earlier in the session, Asian stocks rose for a second day, led by rallies in Japan and Taiwan, following U.S. peers higher amid optimism over the Federal Reserve’s bullish economic outlook and fading concerns over widespread contagion from Evergrande. Stocks were muted in China and Hong Kong. India’s S&P BSE Sensex topped the 60,000 level for the first time on Friday on optimism that speedier vaccinations will improve demand for businesses in Asia’s third-largest economy. The MSCI Asia Pacific Index gained as much as 0.7%, with TSMC and Sony the biggest boosts. That trimmed the regional benchmark’s loss for the week to about 1%. Japan’s Nikkei 225 climbed 2.1%, reopening after a holiday, pushing its advance for September to 7.7%, the best among major global gauges. The Asian regional benchmark pared its gain as Hong Kong stocks fell sharply in late afternoon trading amid continued uncertainty, with Evergrande giving no sign of making an interest payment that was due Thursday. Among key upcoming events is the leadership election for Japan’s ruling party next week, which will likely determine the country’s next prime minister. “Investor concerns over the Evergrande issue have retreated a bit for now,” said Hajime Sakai, chief fund manager at Mito Securities Co. in Tokyo. “But investors will have to keep downside risk in the corner of their minds.” Indian stocks rose, pushing the Sensex above 60,000 for the first time ever. Key gauges fell in Singapore, Malaysia and Australia, while the Thai market was closed for a holiday. Treasuries are higher as U.S. trading day begins after rebounding from weekly lows reached during Asia session, adding to Thursday’s losses. The 10-year yield was down 1bp at ~1.42%, just above the 100-DMA breached on Thursday for the first time in three months; it climbed to 1.449% during Asia session, highest since July 6, and remains 5.2bp higher on the week, its fifth straight weekly increase. Several Fed speakers are slated, first since Wednesday’s FOMC commentary set forth a possible taper timeline.  Bunds and gilts recover off cheapest levels, curves bear steepening. USTs bull steepen, richening 1.5bps from the 10y point out. Peripheral spreads are wider. BTP spreads widen 2-3bps to Bunds. In FX, the Bloomberg Dollar Spot Index climbed back from a one-week low as concern about possible contagion from Evergrande added to buying of the greenback based on the Federal Reserve tapering timeline signaled on Wednesday. NZD, AUD and CAD sit at the bottom of the G-10 scoreboard. ZAR and TRY are the weakest in EM FX. The pound fell after its rally on Thursday as investors looked ahead to BOE Governor Andrew Bailey’s sPeech next week about a possible interest-rate hike. Traders are betting that in a contest to raise borrowing costs first, the Bank of England will be the runaway winner over the Federal Reserve. The New Zealand and Aussie dollars led declines among Group-of-10 peers. The euro was trading flat, with a week full of events failing “to generate any clear directional move,” said ING analysts Francesco Pesole and Chris Turner. German IFO sentiment indeces will “provide extra indications about the area’s sentiment as  businesses faced a combination of delta variant concerns and lingering supply disruptions”. The Norwegian krone is the best performing currency among G10 peers this week, with Thursday’s announcement from the Norges Bank offering support In commodities, crude futures hold a narrow range up around best levels for the week. WTI stalls near $73.40, Brent near $77.50. Spot gold extends Asia’s gains, adding $12 on the session to trade near $1,755/oz. Base metals are mixed, LME nickel and aluminum drop ~1%, LME tin outperforms with a 2.8% rally. Bitcoin dips after the PBOC says all crypto-related transactions are illegal. Looking to the day ahead now, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Market Snapshot S&P 500 futures down 0.3% to 4,423.50 STOXX Europe 600 down 0.7% to 464.18 German 10Y yield fell 8.5 bps to -0.236% Euro little changed at $1.1737 MXAP up 0.4% to 201.25 MXAPJ down 0.5% to 643.20 Nikkei up 2.1% to 30,248.81 Topix up 2.3% to 2,090.75 Hang Seng Index down 1.3% to 24,192.16 Shanghai Composite down 0.8% to 3,613.07 Sensex up 0.2% to 60,031.83 Australia S&P/ASX 200 down 0.4% to 7,342.60 Kospi little changed at 3,125.24 Brent Futures up 0.4% to $77.57/bbl Gold spot up 0.7% to $1,755.38 U.S. Dollar Index little changed at 93.14 Top Overnight News from Bloomberg China Evergrande Group’s unusual silence about a dollar-bond interest payment that was due Thursday has put a focus on what might happen during a 30-day grace period. The Reserve Bank of Australia’s inflation target is increasingly out of step with international counterparts and fails to account for structural changes in the country’s economy over the past 30 years, Westpac Banking Corp.’s Bill Evans said. With central banks from Washington to London this week signaling more alarm over faster inflation, the ultra-stimulative path of the euro zone and some of its neighbors appears lonelier than ever. China’s central bank continued to pump liquidity into the financial system on Friday as policy makers sought to avoid contagion stemming from China Evergrande Group spreading to domestic markets. A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed with the region failing to fully sustain the impetus from the positive performance across global counterparts after the silence from Evergrande and lack of coupon payments for its offshore bonds, stirred uncertainty for the company. ASX 200 (-0.4%) was negative as underperformance in mining names and real estate overshadowed the advances in tech and resilience in financials from the higher yield environment. Nikkei 225 (+2.1%) was the biggest gainer overnight as it played catch up to the prior day’s recovery on return from the Autumnal Equinox holiday in Japan and with exporters cheering the recent risk-conducive currency flows, while KOSPI (-0.1%) was lacklustre amid the record daily COVID-19 infections and after North Korea deemed that it was premature to declare that the Korean War was over. Hang Seng (-1.2%) and Shanghai Comp. (-0.8%) were indecisive after further liquidity efforts by the PBoC were offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds but has a 30-day grace period with the Co. remaining quiet on the issue. Finally, 10yr JGBs were lower on spillover selling from global counterparts including the declines in T-notes as the US 10yr yield breached 1.40% for the first time since early-July with the pressure in bonds also stemming from across the Atlantic following a more hawkish BoE, while the presence of the BoJ in the market today for over JPY 1.3tln of government bonds with 1yr-10yr maturities did very little to spur prices. Top Asian News Rivals for Prime Minister Battle on Social Media: Japan Election Asian Stocks Rise for Second Day, Led by Gains in Japan, Taiwan Hong Kong Stocks Still Wagged by Evergrande Tail Hong Kong’s Hang Seng Tech Index Extends Decline to More Than 2% European equities (Stoxx 600 -0.9%) are trading on the back foot in the final trading session of the week amid further advances in global bond yields and a mixed APAC handover. Overnight, saw gains for the Nikkei 225 of 2.1% with the index aided by favourable currency flows, whilst Chinese markets lagged (Shanghai Comp. -0.8%, Hang Seng -1.6%) with further liquidity efforts by the PBoC offset by concerns surrounding Evergrande after the Co. failed to make coupon payments due yesterday for offshore bonds. As context, despite the losses in Europe today, the Stoxx 600 is still higher by some 1.2% on the week. Stateside, futures are also on a softer footing with the ES down by 0.4% ahead of a busy Fed speaker schedule. Back to Europe, sectors are lower across the board with Retail and Personal & Household Goods lagging peers. The former has been hampered by losses in Adidas (-3.0%) following after hours earnings from Nike (-4.2% pre-market) which saw the Co. cut its revenue guidance amid supply chain woes. AstraZeneca (+2.1%) sits at the top of the FTSE 100 after announcing that the Lynparza PROpel trial met its primary endpoint. Daimler’s (+0.1%) Mercedes-Benz has announced that it will take a 33% stake in a battery cell manufacturing JV with Total and Stellantis. EQT (-6.5%) sits at the foot of the Stoxx 600 after the Swedish FSA announced it will open an investigation into the Co. Top European News EQT Investigated by Sweden’s FSA Over Suspected Market Abuse Gazprom Says Claims of Gas Under-supply to Europe Are ‘Absurd’ German Sept. Ifo Business Confidence 98.8; Est. 99 German Business Index at Five-Month Low in Pre-Election Verdict In FX, the rot seems to have stopped for the Buck in terms of its sharp and marked fall from grace amidst post-FOMC reflection and re-positioning in the financial markets on Thursday. Indeed, the Dollar index has regained some poise to hover above the 93.000 level having recoiled from 93.526 to 92.977 over the course of yesterday’s hectic session that saw the DXY register a marginal new w-t-d high and low at either end of the spectrum. Pre-weekend short covering and consolidation may be giving the Greenback a lift, while the risk backdrop is also less upbeat ahead of a raft of Fed speakers flanking US new home sales data. Elsewhere, the Euro remains relatively sidelined and contained against the Buck with little independent inspiration from the latest German Ifo survey as the business climate deteriorated broadly in line with consensus and current conditions were worse than forecast, but business expectations were better than anticipated. Hence, Eur/Usd is still stuck in a rut and only briefly/fractionally outside 1.1750-00 parameters for the entire week, thus far, as hefty option expiry interest continues to keep the headline pair in check. However, there is significantly less support or gravitational pull at the round number today compared to Thursday as ‘only’ 1.3 bn rolls off vs 4.1 bn, and any upside breach could be capped by 1.1 bn between 1.1765-85. CAD/NZD/AUD - Some payback for the non-US Dollars following their revival, with the Loonie waning from 1.2650+ peaks ahead of Canadian budget balances, though still underpinned by crude as WTI hovers around Usd 73.50/brl and not far from decent option expiries (from 1.2655-50 and 1.2625-30 in 1.4 bn each). Similarly, the Kiwi has faded after climbing to within single digits of 0.7100 in wake of NZ trade data overnight revealing a much wider deficit as exports slowed and imports rose, while the Aussie loses grip of the 0.7300 handle and skirts 1.1 bn option expiries at 0.7275. CHF/GBP/JPY - The Franc is fairly flat and restrained following a dovish SNB policy review that left in lagging somewhat yesterday, with Usd/Chf and Eur/Chf straddling 0.9250 and 1.0850 respectively, in contrast to Sterling that is paring some hawkish BoE momentum, as Cable retreats to retest bids circa 1.3700 and Eur/Gbp bounces from sub-0.8550. Elsewhere, the Yen has not been able to fend off further downside through 110.00 even though Japanese participants have returned to the fray after the Autumn Equinox holiday and reports suggest some COVID-19 restrictions may be lifted in 13 prefectures on a trial basis. SCANDI/EM/PM/CRYPTO - A slight change in the pecking order in Scandi-land as the Nok loses some post-Norges Bank hike impetus and the Sek unwinds a bit of its underperformance, but EM currencies are bearing the brunt of the aforementioned downturn in risk sentiment and firmer Usd, with the Zar hit harder than other as Gold is clings to Usd 1750/oz and Try down to deeper post-CBRT rate cut lows after mixed manufacturing sentiment and cap u readings. Meanwhile, Bitcoin is being shackled by the latest Chinese crackdown on mining and efforts to limit risks from what it describes as unlawful speculative crypto currency trading. In commodities, WTI and Brent are set the conclude the week in the green with gains in excess of 2% for WTI at the time of writing; in-spite of the pressure seen in the complex on Monday and the first-half of Tuesday, where a sub USD 69.50/bbl low was printed. Fresh newsflow has, once again, been limited for the complex and continues to focus on the gas situation. More broadly, no update as of yet on the Evergrande interest payment and by all accounts we appear to have entered the 30-day grace period for this and, assuming catalysts remain slim, updates on this will may well dictate the state-of-play. Schedule wise, the session ahead eyes significant amounts of central bank commentary but from a crude perspective the weekly Baker Hughes rig count will draw attention. On the weather front, Storm Sam has been upgraded to a Hurricane and is expected to rapidly intensify but currently remains someway into the mid-Atlantic. Moving to metals, LME copper is pivoting the unchanged mark after a mixed APAC lead while attention is on Glencore’s CSA copper mine, which it has received an offer for; the site in 2020 produced circa. 46k/T of copper which is typically exported to Asia smelters. Elsewhere, spot gold and silver are firmer but have been very contained and remain well-within overnight ranges thus far. Which sees the yellow metal holding just above the USD 1750/oz mark after a brief foray below the level after the US-close. US Event Calendar 10am: Aug. New Home Sales MoM, est. 1.0%, prior 1.0% 10am: Aug. New Home Sales, est. 715,000, prior 708,000 Central Bank Speakers 8:45am: Fed’s Mester Discusses the Economic Outlook 10am: Powell, Clarida and Bowman Host Fed Listens Event 10:05am: Fed’s George Discusses Economic Outlook 12pm: Fed’s Bostic Discusses Equitable Community Development DB's Jim Reid concludes the overnight wrap WFH today is a bonus as it’s time for the annual ritual at home where the latest, sleekest, shiniest iPhone model arrives in the post and i sheepishly try to justify to my wife when I get home why I need an incremental upgrade. This year to save me from the Spanish Inquisition I’m going to intercept the courier and keep quiet. Problem is that such speed at intercepting the delivery will be logistically challenging as I remain on crutches (5 weeks to go) and can’t grip properly with my left hand due to an ongoing trapped nerve. I’m very glad I’m not a racehorse. Although hopefully I can be put out to pasture in front of the Ryder Cup this weekend. The big news of the last 24 hours has been a galloping global yield rise worthy of the finest thoroughbred. A hawkish Fed meeting, with the dots increasing and the end of QE potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes. Looking at the specific moves, yields on 10yr Treasuries were up +13.0bps to 1.430% in their biggest daily increase since 25 February, as both higher real rates (+7.9bps) and inflation breakevens (+4.9bps) drove the advance. US 10yr yields had been trading in a c.10bp range for the last month before breaking out higher, though they have been trending higher since dropping as far as 1.17% back in early-August. US 30yr yields rose +13.2bps, which was the biggest one day move in long dated yields since March 17 2020, which was at the onset of the pandemic and just days after the Fed announced it would be starting the current round of QE. The large selloff in US bonds saw the yield curve steepen and the long-end give back roughly half of the FOMC flattening from the day before. The 5y30y curve steepened 3.4bps for a two day move of -3.3bps. However the 2y10y curve steepened +10.5bps, completely reversing the prior day’s flattening (-4.2bps) and leaving the spread at 116bp, the steepest level since first week of July. 10yr gilt yields saw nearly as strong a move (+10.8bps) with those on shorter-dated 2yr gilts (+10.7bps) hitting their highest level (0.386%) since the pandemic began.That came on the back of the BoE’s latest policy decision, which pointed in a hawkish direction, building on the comment in the August statement that “some modest tightening of monetary policy over the forecast period is likely to be necessary” by saying that “some developments during the intervening period appear to have strengthened that case”. The statement pointed out that the rise in gas prices since August represented an upside risks to their inflation projections from next April, and the MPC’s vote also saw 2 members (up from 1 in August) vote to dial back QE. See DB’s Sanjay Raja’s revised rate hike forecasts here. We now expect a 15bps hike in February. The generalised move saw yields in other European countries rise as well, with those on 10yr bunds (+6.6bps), OATs (+6.5bps) and BTPs (+5.7bps) all seeing big moves higher with 10yr bunds seeing their biggest climb since late-February and back to early-July levels as -0.258%. The yield rise didn’t stop equity indices recovering further from Monday’s rout, with the S&P 500 up +1.21% as the index marked its best performance in over 2 months, and its best 2-day performance since May. Despite the mood at the end of the weekend, the S&P now starts Friday in positive territory for the week. The rally yesterday was led by cyclicals for a second straight day with higher commodity prices driving outsized gains for energy (+3.41%) and materials (+1.39%) stocks, and the aforementioned higher yields causing banks (+3.37%) and diversified financials (+2.35%) to outperform. The reopening trade was the other main beneficiary as airlines rose +2.99% and consumer services, which include hotel and cruiseline companies, gained +1.92%. In Europe, the STOXX 600 (+0.93%) witnessed a similarly strong performance, with index led by banks (+2.16%). As a testament to the breadth of yesterday’s rally, the travel and leisure sector (+0.04%) was the worst performing sector on this side of the Atlantic even while registering a small gain and lagging its US counterparts. Before we get onto some of yesterday’s other events, it’s worth noting that this is actually the last EMR before the German election on Sunday, which has long been signposted as one of the more interesting macro events on the 2021 calendar, the results of which will play a key role in not just domestic, but also EU policy. And with Chancellor Merkel stepping down after four terms in office, this means that the country will soon be under new management irrespective of who forms a government afterwards. It’s been a volatile campaign in many respects, with Chancellor Merkel’s CDU/CSU, the Greens and the centre-left SPD all having been in the lead at various points over the last six months. But for the last month Politico’s Poll of Polls has shown the SPD consistently ahead, with their tracker currently putting them on 25%, ahead of the CDU/CSU on 22% and the Greens on 16%. However the latest poll from Forschungsgruppe Wahlen yesterday suggested a tighter race with the SPD at 25, the CDU/CSU at 23% and the Greens at 16.5%. If the actual results are in line with the recent averages, it would certainly mark a sea change in German politics, as it would be the first time that the SPD have won the popular vote since the 2002 election. Furthermore, it would be the CDU/CSU’s worst ever result, and mark the first time in post-war Germany that the two main parties have failed to win a majority of the vote between them, which mirrors the erosion of the traditional big parties in the rest of continental Europe. For the Greens, 15% would be their best ever score, and exceed the 9% they got back in 2017 that left them in 6th place, but it would also be a disappointment relative to their high hopes back in the spring, when they were briefly polling in the mid-20s after Annalena Baerbock was selected as their Chancellor candidate. In terms of when to expect results, the polls close at 17:00 London time, with initial exit polls released immediately afterwards. However, unlike the UK, where a new majority government can immediately come to power the day after the election, the use of proportional representation in Germany means that it could potentially be weeks or months before a new government is formed. Indeed, after the last election in September 2017, it wasn’t until March 2018 that the new grand coalition between the CDU/CSU and the SPD took office, after attempts to reach a “Jamaica” coalition between the CDU/CSU, the FDP and the Greens was unsuccessful. In the meantime, the existing government will act as a caretaker administration. On the policy implications, it will of course depend on what sort of government is actually formed, but our research colleagues in Frankfurt have produced a comprehensive slidepack (link here) running through what the different parties want across a range of policies, and what the likely coalitions would mean for Germany. They also put out another note yesterday (link here) where they point out that there’s still much to play for, with the SPD’s lead inside the margin of error and with an unusually high share of yet undecided voters. Moving on to Asia and markets are mostly higher with the Nikkei (+2.04%), CSI (+0.53%) and India’s Nifty (+0.52%) up while the Hang Seng (-0.03%), Shanghai Comp (-0.07%) and Kospi (-0.10%) have all made small moves lower. Meanwhile, the Evergrande group missed its dollar bond coupon payment yesterday and so far there has been no communication from the group on this. They have a 30-day grace period to make the payment before any event of default can be declared. This follows instructions from China’s Financial regulators yesterday in which they urged the group to take all measures possible to avoid a near-term default on dollar bonds while focusing on completing unfinished properties and repaying individual investors. Yields on Australia and New Zealand’s 10y sovereign bonds are up +14.5bps and +11.3bps respectively this morning after yesterday’s move from their western counterparts. Yields on 10y USTs are also up a further +1.1bps to 1.443%. Elsewhere, futures on the S&P 500 are up +0.04% while those on the Stoxx 50 are down -0.10%. In terms of overnight data, Japan’s August CPI printed at -0.4% yoy (vs. -0.3% yoy expected) while core was unchanged in line with expectations. We also received Japan’s flash PMIs with the services reading at 47.4 (vs. 42.9 last month) while the manufacturing reading came in at 51.2 (vs. 52.7 last month). In pandemic related news, Jiji reported that Japan is planning to conduct trials of easing Covid restrictions, with 13 prefectures indicating they’d like to participate. This is likely contributing to the outperformance of the Nikkei this morning. Back to yesterday now, and one of the main highlights came from the flash PMIs, which showed a continued deceleration in growth momentum across Europe and the US, and also underwhelmed relative to expectations. Running through the headline numbers, the Euro Area composite PMI fell to 56.1 (vs. 58.5 expected), which is the lowest figure since April, as both the manufacturing (58.7 vs 60.3 expected) and services (56.3 vs. 58.5 expected) came in beneath expectations. Over in the US, the composite PMI fell to 54.5 in its 4th consecutive decline, as the index hit its lowest level in a year, while the UK’s composite PMI at 54.1 (vs. 54.6 expected) was the lowest since February when the country was still in a nationwide lockdown. Risk assets seemed unperturbed by the readings, and commodities actually took another leg higher as they rebounded from their losses at the start of the week. The Bloomberg Commodity Spot index rose +1.12% as Brent crude oil (+1.39%) closed at $77.25/bbl, which marked its highest closing level since late 2018, while WTI (+1.07%) rose to $73.30/bbl, so still a bit beneath its recent peak in July. However that is a decent rebound of roughly $11/bbl since its recent low just over a month ago. Elsewhere, gold (-1.44%) took a knock amidst the sharp move higher in yields, while European natural gas prices subsidised for a third day running, with futures now down -8.5% from their intraday peak on Tuesday, although they’re still up by +71.3% since the start of August. US negotiations regarding the upcoming funding bill and raising the debt ceiling are ongoing, with House Speaker Pelosi saying that the former, also called a continuing resolution, will pass “both houses by September 30,” and fund the government through the first part of the fiscal year, starting October 1. Treasury Secretary Yellen has said the US will likely breach the debt ceiling sometime in the next month if Congress does not increase the level, and because Republicans are unwilling to vote to raise the ceiling, Democrats will have to use the once-a-fiscal-year tool of budget reconciliation to do so. However Democrats, are also using that process for the $3.5 trillion dollar economic plan that makes up the bulk of the Biden agenda, and have not been able to get full party support yet. During a joint press conference with Speaker Pelosi, Senate Majority Leader Schumer said that Democrats have a “framework” to pay for the Biden Economic agenda, which would imply that the broad outline of a deal was reached between the House, Senate and the White House. However, no specifics were mentioned yesterday. With Democrats looking to vote on the bipartisan infrastructure bill early next week, negotiations today and this weekend on the potential reconciliation package will be vital. Looking at yesterday’s other data, the weekly initial jobless claims from the US for the week through September 18 unexpectedly rose to 351k (vs. 320k expected), which is the second week running they’ve come in above expectations. Separately, the Chicago Fed’s national activity index fell to 0.29 in August (vs. 0.50 expected), and the Kansas City Fed’s manufacturing activity index also fell more than expected to 22 in September (vs. 25 expected). To the day ahead now, and data highlights include the Ifo’s business climate indicator from Germany for September, along with Italian consumer confidence for September and US new home sales for August. From central banks, we’ll hear from Fed Chair Powell, Vice Chair Clarida and the Fed’s Mester, Bowman, George and Bostic, as well as the ECB’s Lane and Elderson, and the BoE’s Tenreyro. Finally, a summit of the Quad Leaders will be held at the White House, including President Biden, and the Prime Ministers of Australia, India and Japan. Tyler Durden Fri, 09/24/2021 - 08:12.....»»

Category: blogSource: zerohedgeSep 24th, 2021

Financial Advice To A Recent College Graduate

Whitney Tilson’s email in which he provides financial advice to a recent college graduate. Q2 2021 hedge fund letters, conferences and more When I was in Yosemite National Park in early August, my friend slipped and mashed his knee, so I took him to the clinic for an X-ray (nothing was broken, fortunately) and a […] Whitney Tilson’s email in which he provides financial advice to a recent college graduate. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more When I was in Yosemite National Park in early August, my friend slipped and mashed his knee, so I took him to the clinic for an X-ray (nothing was broken, fortunately) and a few stitches. While I was sitting in the waiting room for an hour, I struck up a conversation with a young man whose friend was also getting stitches. I learned that he had just graduated from the University of Nevada, Reno, with a degree in engineering and was looking for a job. When he learned that I was in the investing business, he asked me for advice. Here's what I told him... First, get a job – a real job at a real company where you can put your engineering training to work. Don't even think of trying to start your own business, doing gig work like driving for Uber (NYSE:UBER), or working as a barista at Starbucks (NASDAQ:SBUX). Then, I summarized the main points from this section of my book, The Art of Playing Defense, and e-mailed him a PDF of the entire book... Loss of Wealth I'll acknowledge that the calamity of losing your wealth is a high-class problem (it can only happen to people who have money!). If you're fortunate enough to have a comfortable income and healthy savings, it might be nice to think about making even more, but it's far more important to make sure you don't lose what you already have. Ironically, the surest, fastest way to get poor quickly is to try to get rich quickly. I've known people who spent their whole lives building up their savings only to lose it all in some crazy, half-baked scheme. Common examples include investing everything in their own new business – or someone else's – and it fails; speculating in penny stocks; day trading stocks or, worse yet, options; or getting duped by some online or phone fraudster. Millions of people are ensnared in these traps every year. Another way to become poor, albeit somewhat more slowly, is to lose a good job and not be able to replace it. Or get divorced – boom, there goes half your wealth, plus expenses usually rise (two homes, less favorable tax treatment, etc.). But the most common way to get into financial trouble is to spend more than you earn (after taxes). What this means is that every year, you need to borrow money to fill the gap – and there are lenders galore who will sell you – at a steep price – all the rope you need to hang yourself: credit-card companies, installment lenders, auto dealers, and so forth. To be clear, certain types of debt are fine. It often makes sense to take out a subsidized student loan for a high-quality education or to buy a reasonably valued house with a fixed-rate, low-interest, tax-deductible mortgage. But otherwise, it's usually best to avoid debt. Our economy and, in particular, our financial system is, in many ways, incredibly predatory. It makes it so easy to spend, luring people into living above their means. It is imperative that you resist this siren song. No matter what your income, figure out a way to live within it. Develop Good Financial Habits If you want to build wealth and live comfortably someday, you need to develop good financial habits. A 1996 book called The Millionaire Next Door shaped my thinking on this topic. The authors refuted many misconceptions about financial success, chiefly the idea that to become wealthy, you have to inherit money or have a high-paying job like a Wall Street banker, celebrity, or professional athlete. Instead, the authors discovered that the most common job among millionaires was running a small private business. The second most common was a professional like a doctor or teacher. But, in a fascinating finding, it turned out that income level was only moderately predictive of whether someone would become a millionaire. More important was whether someone lived beneath their means, year in and year out. In their survey of millionaires, the factor that most closely correlated to whether someone was a millionaire was whether they answered "yes" to the question: "Is your spouse more frugal than you are?" Doctors, on average, earn quite a bit more than teachers. Yet, relative to their income, they are less likely to become millionaires because they tend to spend all – or more than all – of their high incomes on big houses in upscale neighborhoods, new cars, country club memberships, fancy vacations, private schools, and so forth. Meanwhile, teachers are far more likely to become millionaires than their incomes would predict because they tend to live frugally. My parents, both teachers, are perfect examples. They can squeeze a dollar until it screams. Growing up, we almost never went out to eat – going to Friendly's once a month was such a treat! My mom clipped dozens of coupons from the circular in the Sunday paper, and when she came home from the supermarket, would crow about how much she'd saved. And she bought most of our clothes at second-hand stores. She still tells my sister and me that our costly educations were funded by her thriftiness. We never had a new car. My dad is a good mechanic, so we always bought 10-year-old cars that he would nurse along for years. I remember in the 1980s when we lived in western Massachusetts, we had a beaten-up 1960s vintage Mercedes. Its heater had stopped working long ago, which was a big problem during the bitterly cold winters. But no matter – we all bundled up in our down jackets and used de-icer spray on the inside of the windows. Similarly, Warren Buffett, despite being one of the wealthiest men in the world, is still very frugal. He could afford to live in a massive estate, but instead has lived in the same house for 61 years! When he first started flying in a private jet, he felt so embarrassed that he nicknamed it "The Indefensible." Save and Invest Once you've developed good financial habits and are saving money every year, you need to invest your savings wisely. The good news is that it's not hard. First, max out your retirement plan(s) like an IRA or 401(k) – especially if your employer will match at least some portion of it (this is free money – take it!). Tax-deferred savings are much more valuable than taxable ones because you won't have to pay taxes on your realized gains each year. The difference over time is enormous. Also, because there's a penalty for taking the money out before you're 65 years old, you're less likely to do something stupid with it. Ideally, set up automatic withholding from your paycheck into your IRA (or another retirement fund) – this makes it easier to save because you never see the money. Then, set up a plan such that the moment the money hits your account, it's automatically invested in an S&P 500 Index fund. (If you want to set aside some money to invest on your own, that's fine – sign up for my newsletters at Empire Financial Research to help you do so – but index most of it.) Finally – this is key – don't look at it! Just let it build, year after year, decade after decade. Whatever you do, don't panic during times of market turmoil and sell – just about everybody who does this has terrible timing, selling at exactly the wrong time (for example, in March 2009 or 2020). Consider the extreme case of my sister, who had a retirement account at her old employer, then switched jobs – and forgot about it! Years later, she remembered it – and discovered hundreds of thousands of dollars (!) because she'd done everything right up front: her employer automatically withdrew the maximum retirement contribution from her paycheck and then invested all of it in an S&P 500 Index fund. When my parents moved to Africa 24 years ago, first to Ethiopia and then, nine years later, to Kenya, where they've since retired, I took charge of their financial affairs. Though neither of them had ever had a big salary, they had both worked for their entire careers, earned decent incomes, and lived super frugally. As a result, they had built up a nest egg of around $800,000. But they were much too conservative in how they'd invested it. Though they were still in their mid-fifties and would likely work another 15 years and live into their nineties, their savings were mostly in cash and bonds – an allocation more appropriate for eighty-year-olds. So I put a third of their savings into my hedge fund and another third into an index fund, such that two-thirds of their savings were in stocks. It was the right call. Two decades later, they're in their late-seventies, and their net worth is multiples of what it once was. They're comfortably retired – though you wouldn't know it from how frugal they still are. When they came back to the U.S. for a couple of months last summer, as they do every year, my mom refused to get a SIM card for her Kenya cell phone that would allow her to make and receive calls, get her e-mail, etc., because it cost too much: one dollar per day! Best regards, Whitney P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com. Updated on Sep 21, 2021, 10:30 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkSep 21st, 2021

70% of millennials are living paycheck to paycheck, more than any other generation

Most millennials are hitting a precarious life stage, full of expensive milestones but not peak earnings. The economy of this century hasn't helped. Millennials paychecks' are wearing thin. Roy Rochlin/Getty Images 70% of millennials say they're living paycheck to paycheck, according to a survey. Millennials are in a precarious life stage, hitting expensive life milestones but not yet peak earnings. The many economic challenges millennials have faced also make things financially difficult. See more stories on Insider's business page. Millennials' wallets are rather skimpy.Seventy percent of the generation said they're living paycheck to paycheck, according to a survey by PYMNTS and LendingClub, which analyzed economic data and census-balanced surveys of over 28,000 Americans. It found that about 54% of Americans live paycheck to paycheck, but millennials had the biggest broke energy.By contrast, 40% of baby boomers and seniors said they live paycheck to paycheck, the least of any generation. Living paycheck to paycheck reflects economic needs and wants just as much, if not more than, incomes or wealth levels, according to the report. Age and family status also factor in greatly. This explains why millennials, who turn ages 25 to 40 this year, are struggling."Millennials - especially older ones - are collectively at important stages of their lives," the report reads. "They may be starting families or taking on their first major purchases, such as homes and new vehicles, but they may also be less advanced in their careers than their older counterparts."It doesn't help that millennials have faced one economic challenge after another since the oldest of them graduated into the dismal job market of the 2008 financial crisis. A dozen years later, many are still grappling with the lingering effects of The Great Recession, struggling to build wealth while trying to afford soaring costs for things like housing and healthcare and shouldering the lion's share of America's student-loan debt.The pandemic threw yet another wrench into their plans by giving them their second recession and second housing crisis before the age of 40. The report acknowledges that the pandemic played a major role in that stretched thin feeling."Living paycheck to paycheck sometimes carries connotations of barely scraping by and of poverty," it states. "The reality of a paycheck-to-paycheck lifestyle in the United States today is much more complex, and the current economic environment has made it even more complicated."It's left even six-figure earning millennials struggling to get by. The survey found that 60% of millennials raking in over $100,000 a year said they're living paycheck to paycheck.Of course, the economy isn't fully to blame. Some millennials, particularly the six-figure earners, are known to fall victim to lifestyle creep, when one increases one's standard of living to match a rise in discretionary income. This makes it more difficult to balance spending and savings habits.But the report found that those who felt they were living paycheck to paycheck were mostly financially responsible. If they received additional sources of income during the year, many tucked it away rather than spent it.It seems, then, that it's a combination of external economic circumstances, a precarious life stage, and some spending habits that are leaving millennials feeling strapped for cash.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 21st, 2021

IB, Loans, Equity Trading to Support BofA"s (BAC) Q4 Earnings

Solid IB and equity trading performance, decent rise in loan demand and robust economy might have aided BofA's (BAC) Q4 earnings amid lower rates and normalizing fixed income trading business. After witnessing robust client activities and market volatility over the past few quarters, market normalization and lower-level volatility (compared with the prior-year period) in the fourth quarter of 2021 are expected to have dampened Bank of America’s BAC trading business to some extent. Thus, trading revenues are not expected to provide much support to the company’s upcoming earnings release, slated to be announced on Jan 19, before market open.Like the past quarters, major indexes – the S&P 500, Dow Jones and Nasdaq – witnessed an upswing during the fourth quarter, with all three touching new highs. Also, concerns over accelerating coronavirus infections across the globe, steady rise in inflation, fading fiscal stimulus and the Federal Reserve’s hawkish monetary stance weighed on investor sentiments.These factors resulted in a heightened level of equity market volatility during the fourth quarter. On the other hand, bond trading remained decent in the October-December quarter.The Zacks Consensus Estimate for equity trading revenues of $1.41 billion suggests an increase of 6.9% from the prior-year quarter’s reported number. The consensus estimate for fixed-income trading revenues of $1.73 billion indicates a rise of 2.4%. The consensus estimate for total trading revenues is pegged at $3.14 billion, implying growth of 4.4%.Other Key Factors at PlayInvestment Banking (IB) Fees: Like the past several quarters, deal-making continued at a robust pace in fourth-quarter 2021, with both deal volume and value witnessing significant growth. This was primarily driven by the resumption of normal business activities, excess liquidity levels, companies’ appetite for strengthening scale and market share and solid economic recovery. Hence, BofA’s advisory fees are likely to have been positively impacted.Continued momentum in the IPO market and a steady rise in follow-up equity issuances might have offered support to equity underwriting fees in the to-be-reported quarter. Bond issuance volumes were modest. Thus, growth in BofA’s equity underwriting and debt origination fees (accounting for almost 40% of total IB fees) is expected to have been decent.The Zacks Consensus Estimate for IB fees of $2.04 billion indicates an increase of 9.4% from the prior-year level.Net Interest Income (NII): Lending activities continued to improve in the fourth quarter. Per the Fed’s latest data, demand for commercial and industrial loans, real estate loans and consumer loans accelerated in October and November. Yet, high levels of pay downs and payoffs and stiff loan pricing competition are likely to have hurt BofA’s loan volumes. This, along with a persistently low-interest-rate environment, is expected to have had some adverse impact on its NII and net interest yield in the quarter.The Zacks Consensus Estimate for NII on FTE basis of $11.4 billion suggests 9.6% growth from the prior-year reported number.Management continues to expect quarterly NII to be roughly $11.3 billion. This is based on the assumptions of the forward interest rate curve materializing, economic recovery, investing more excess liquidity into securities, slightly lower expenses from premium amortization and modest loan growth, partially offset by lower interest income from PPP loans.Expenses: Though the bank continues to digitize operations, upgrade technology and expand into newer markets by opening branches leading to higher related costs, its prior efforts to improve operating efficiency are likely to have resulted in manageable expense levels in the to-be-reported quarter.Management expects fourth-quarter operating expenses to be flat or modestly decline on a sequential basis and be around $14 billion. For 2021, it is projected to be nearly $56.5 billion.Asset Quality: Continuing with the trend of the last few quarters and driven by improving macroeconomic backdrop and stable credit market conditions, BofA is likely to have released reserves that it had taken to cover losses from the effects of the coronavirus pandemic.As the economic outlook and remaining uncertainties continue to improve, management expects reserve levels to keep moving lower. With respect to card losses, given the continued low level of late-stage delinquencies in the 180-day pipeline, card losses are expected to decline in the fourth quarter of 2021.The Zacks Consensus Estimate for non-performing loans of $4.73 billion implies a 4.5% fall.What the Zacks Model UnveilsOur proven model does not predict an earnings beat for BofA this time around. This is because it doesn’t have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Earnings ESP: The Earnings ESP for BofA is -0.66%.Zacks Rank: It currently carries a Zacks Rank #3. Bank of America Corporation Price and EPS Surprise Bank of America Corporation price-eps-surprise | Bank of America Corporation QuoteThe Zacks Consensus Estimate for fourth-quarter earnings is pegged at 76 cents, which has witnessed a downward revision of 1.3% over the past seven days. Nonetheless, the estimated figure suggests growth of 28.8% from the year-ago reported number.Also, the consensus estimate for revenues of $22.08 billion indicates a 9.9% rise.Banks That Warrant a LookHere are few bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:The PNC Financial Services Group, Inc. PNC is scheduled to release fourth-quarter and full-year 2021 earnings on Jan 18. PNC, which carries a Zacks Rank #3 at present, has an Earnings ESP of +2.29%.PNC Financial’s quarterly earnings estimates have decreased marginally over the past month.Commerce Bancshares CBSH is slated to announce fourth-quarter and full-year 2021 results on Jan 19. CBSH currently carries a Zacks Rank #3 and has an Earnings ESP of +1.24%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.CBSH’s earnings estimates for the to-be-reported quarter have moved 3.3% north over the 30 days.BankUnited BKU is scheduled to release earnings on Jan 21. BKU, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +42.98%.The Zacks Consensus Estimate for BankUnited’s fourth-quarter earnings has been unchanged over the past month.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report Commerce Bancshares, Inc. (CBSH): Free Stock Analysis Report BankUnited, Inc. (BKU): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

JPMorgan Chase profit falls as markets revenue dips 11%

JPMorgan Chase & Co. said Friday its fourth-quarter profit fell to $10.4 billion, or $3.33 a share, from $12.14 billion, or $3.79 a share in the year-ago quarter. Managed revenue rose 1% to $30.3 billion, with reported revenue of $29.3 billion. The megabank was expected to earn $3.01 a share and generate revenue of $29.78 billion, according to a survey of analysts by FactSet. Total Markets revenue of $5.3 billion fell 11%, including a drop of 16% in fixed income markets and a 2% dip in equity markets. "The economy continues to do quite well despite headwinds related to the Omicron variant, inflation and supply chain bottlenecks," CEO Jamie Dimon said. "Credit continues to be healthy with exceptionally low net charge-offs, and we remain optimistic on U.S. economic growth as business sentiment is upbeat and consumers are benefiting from job and wage growth." The stock fell about 1% in premarket trades. JPMorgan shares have risen 6.2% so far this year, compared to a drop of 2.3% by the S&P 500 and a dip of 0.6% by the Dow Jones Industrial Average. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news......»»

Category: topSource: marketwatchJan 14th, 2022