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Category: blogSource: crainsnewyorkNov 24th, 2021

Inside the New Basketball League Paying High Schoolers Six-Figure Salaries

A lot is riding on Overtime Elite’s fate Most high school hoops players across America—if they’re lucky—travel to their games in a yellow school bus. They might—if they’re lucky—compete in front of the local junior college scout. But members of Overtime Elite, the new professional basketball league for 16-to-19-year old stars, arrive in style, to play before a far more influential audience. On a crisp autumn morning in Atlanta, more than two dozen Overtime Elite (OTE) pros, who make at least six-figure salaries, stepped off a stretch limo bus, one by one. The players entered the brand-new 103,000 sq.-ft. facility built by Overtime, a five-year-old digital sports media startup that developed a huge following after posting Zion Williamson’s high school dunks on Instagram. Waiting for them at OTE’s inaugural “pro day”: some 60 pro scouts, including reps from 29 out of 30 NBA teams, sitting along the sideline and behind the baskets. They leafed through the scouting packet provided by OTE, which included information like the wingspan and hand width of each player plus advanced statistics on their performances during preseason scrimmages, whispering to one another about which ones they were excited to see. [time-brightcove not-tgx=”true”] Andrew Hetherington for TIMEEmmanuel Maldonado, Ryan Bewley, Bryce Griggs, Jalen Lewis of Overtime Elite taking a quick break from warm ups at the practice courts at the OTE arena. Andrew Hetherington for TIMEPlayers stretch next to practice courts at the OTE arena. As the league’s coaching staff led players through NBA-style drills, the scouts eyed Amen and Ausar Thompson, a set of rangy 6-ft. 7-in. twins from Florida who skipped their senior year of high school to join OTE. The brothers made clever dribble moves, before driving down the lane to throw down thunderous dunks. “The Thompson twins are obviously top talents,” says ESPN draft guru Jonathan Givony, who was also in Atlanta for the OTE pro day. “Those guys are ready to be seriously considered as NBA draft picks.” OTE made a strong first impression, but the evaluators universally agreed that not all of the 26 OTE players in the gym were bound for the NBA. Given the supply of global talent chasing that dream, and the precious few spots available, elementary math suggests such an outcome is all but impossible. The coaching came across as high-level. Anton Marshand, a scout for the Cleveland Cavaliers, expects to make frequent trips to Atlanta this season. “For us to be able to evaluate them now and see their growth over time, that’s the key,” says Marshand. “It’s a pro environment.” Andrew Hetherington for TIMEAmen Thompson (#1) of Team OTE on the show court at the OTE arena. Andrew Hetherington for TIMEAusur Thompson and Amen Thompson chat after practice. OTE is launching at a landmark moment in the history of American sports. For decades, talented teenagers in fields like acting and music could monetize their unique gifts by signing lucrative, life-changing financial agreements. But archaic rules and attitudes largely kept athletes from doing the same, preventing them from cashing in until they reached major pro leagues like the NFL or the NBA. Those restrictions are now going the way of the peach basket. In June, the Supreme Court captured these shifting assumptions concerning athletic amateurism in a ruling that prevents the NCAA from capping education-related benefits. In a scathing concurring opinion, Justice Brett Kavanaugh wrote that the business model of the NCAA, an organization that has long kept college athletes from being paid—despite the millions in revenue many of them generate for their institutions—would be “flatly illegal in almost any other industry in America.” About a week later, the NCAA, with public opinion and the highest court in the land turning against its outdated notions of amateurism, relented, and allowed college athletes to profit off their names, images and likenesses. Read More: Why The NCAA Should Be Terrified Of Supreme Court Justice Kavanaugh’s Concurrence Naturally, businesses—many of them upstart tech platforms—have stepped into the fray, hoping to turn a profit by helping young athletes cash in on new opportunities. Brands like Icon Source, INFLCR and PWRFWD are promising to open up sponsorship opportunities, build social media presence and sell the merchandise of college athletes. A company called Opendorse aims to connect athletes with sponsorship opportunities—not unlike, say, how Uber connects drivers with riders, or Airbnb matches hosts and vacationers. With the loosening of name, image and likeness, or NIL, restrictions, Opendorse expects to quadruple its annual revenue in 2021 to more than $20 million. Tim Derdenger, a professor at the Carnegie Mellon Tepper School of Business, estimates that the NIL market for college athletes alone could reach more than $1 billion in five years. But by betting on the popularity of high school basketball players, Overtime is taking a more radical, and potentially transformative, approach. Overtime’s pitch to players: forget college basketball. OTE promises to pay six-figure salaries and offer access to high-level coaching and skill development in a sports-academy setting, to prepare athletes for a pro career. OTE has also hired teachers and academic administrators so that players can secure their high school diplomas. The operation has financial backing from an All-Star investor lineup, which includes Jeff Bezos’ Bezos Expeditions fund, Drake, Reddit co-founder Alexis Ohanian and a slew of NBA players like Kevin Durant, Carmelo Anthony and Trae Young. In March, Overtime raised $80 million. Andrew Hetherington for TIMEPlayers take classes at a WeWork space in the Buckhead neighborhood of Atlanta. Andrew Hetherington for TIMEBryce Griggs and TJ Clark leave the locker room on to the OTE practice courts in Atlanta. Signing with OTE isn’t a decision players take lightly. Under current NCAA rules, athletes with OTE contracts are classified as professional players who have forfeited any eligibility to play college basketball, an enterprise that, despite all its flaws, is a proven path to lifelong educational benefits and the NBA. If an OTE player does not make it to the NBA or secure a professional gig overseas, Overtime is pledging to kick in $100,000 to pay for a student’s college education. “You can’t beat that,” says Bryson Warren, a would-be high school junior from Arkansas who’s eligible for the 2024 NBA draft. “At the end of the day, I can still be a doctor and make NBA money.” For some, however, the OTE deal sounds almost too good to be true. At pro day, the same scouts who looked up to the ceiling of OTE’s airplane-hangar-size structure in wonder, asked the same question: How is OTE going to survive? The sports landscape is littered with failed professional leagues. Overtime has spent millions on a school, a coaching and basketball operations and performance staff rivaling that of NBA teams, not to mention salaries and housing for its players and a massive new structure. Dan Porter, Overtime’s CEO and co-founder, has heard all the skepticism. “Everyone wonders, What’s the business model?” he says. Porter points to OTE’s late-October opening weekend of games as a sign of the league’s promise: he says OTE content generated 23 million views, and 8.8 million total engagements, across social media. Andrew Hetherington for TIMEJai Smith of Team Elite makes his pre-game entrance on the inaugural night of games at the show court at the OTE arena. What’s more, now that top prospects can sign lucrative sponsorship deals while at proven collegiate powers like Duke, Kentucky, and Kansas, OTE may have to increase salary offers, further driving up its costs. And if Overtime’s marketing prowess helps the players build enough of a social media following to make OTE profitable, will that focus on building brands deter from their athletic development? OTE’s bottom line alone can’t thrive; the company needs to produce NBA draft picks. “We told kids when we recruited them,” says OTE director of scouting Tim Fuller, “our national championship is when you shake [NBA commissioner] Adam Silver’s hand.” A lot is riding on OTE’s fate. Success has potential to create economic empowerment and more options for young, mostly Black athletes who for far too long have been funneled into a system that mostly enriches white coaches and administrators, but not them. It could spawn copycats across sports (with the unintended consequence of further igniting the hyperspecialized, hypercompetitive $19 billion youth sports feeder system that often offers parents a false sense of their kids’ pro potential). OTE’s failure, however, might not cost just Bezos and Drake a rounding error of their overall wealth. Much worse, this disruptive idea could derail dreams. A new model OTE placed its recruiting call to Troy Thompson in the spring, at a fortuitous time. Troy’s twin sons, Amen and Ausar, had just played nearly 30 games over five weeks on the AAU circuit, where overuse injuries are becoming more common. The boys, who were based in Florida, had traveled to Illinois, Wisconsin, Arizona, Missouri and Georgia during this swing. They were able to showcase their ability, but the twins barely had time to practice on the all too common travel sports grind. Were they actually improving? “OTE called right when my mind was going, ‘O.K., I’ve got to find a way to slow this thing down,’” says Troy. The OTE offer—a six-figure salary, plus the emphasis on player development in an academy setting—sounded attractive. “It’s like we’re getting to fast-forward their dreams,” says Troy, who works in security. Ausar was on board. Amen, however, took a little more convincing. “He’s hardheaded,” Ausar says of his twin brother, who was sitting next to him during an OTE post–pro day brunch of pancakes, shrimp, lobster, grits and potatoes, served at a Georgia Tech off-campus apartment complex that houses the OTE players. (It abuts a golf course, and includes a leafy courtyard and a pool.) Amen was looking forward to chasing another high school state title. He had always dreamed of playing college basketball, even as a “one-and-done” player who enters the NBA draft after freshman year. Kansas, Florida, Auburn and Alabama had already offered the twins basketball scholarships, and Kentucky had reached out with interest. “It’s just what I’ve known,” Amen says of college basketball. “And it’s shown to be proven.” After “a million conversations,” says Amen, he was on board. He ultimately thought he had outgrown scholastic competition. In Atlanta, the Thompsons mention to TIME that they have just missed their final high school homecoming. But Amen insists he’s still going to prom. “I’m just going to walk in,” says Amen. He quickly realizes party crashing won’t be so simple. “As soon as I left the school, they didn’t let me shoot in the gym anymore,” says Amen. “So, actually, I will need to have a date [from the school] to prom.” Adjusting to Atlanta took some time. At first, Troy says, his sons complained about the OTE curfew. According to OTE’s dean of athlete experience and culture, former 10-year NBA veteran Damien Wilkins, during the week players must be in the residence building at 10 p.m., and in their apartments at 11 p.m. But Amen and Ausar have gotten accustomed to the rules, and they insist they have no regrets about forgoing their senior year of high school, and the potential to win a national championship in college, to join OTE. Troy believes them. “I guess they’re loving it where they are,” he says. “Because, guess what? Dad hardly ever gets a phone call.” The OTE weekday starts around 9 a.m. when the players arrive—on the limo bus—at school. (Starting in early November, classes will be held at the OTE facility; before then, while building construction was being completed, the classes took place at a WeWork space in Atlanta’s Buckhead neighborhood.) On an October day, one group of students are solving radical expressions in math; in social studies, a trio of players listen to a lecture about English colonial labor systems. A skeleton stands in a common area: the science teacher is reviewing anatomy. Students work on their “persuasive essays,” which they must turn into a 30–60 second commercial spot. Ausar, reading from a marble notebook, touts the benefits of water aerobics: “Who doesn’t love fun times in the pool?” Amen has picked stretching. “Remember, stretching over stress,” Amen says, snapping his fingers and pointing to the camera. Andrew Hetherington for TIMEPlayers take classes at a WeWork space in the Buckhead neighborhood of Atlanta. Andrew Hetherington for TIMEOvertime Elite players relax between classes at the WeWork space. Academics last around 3.5 to 4 hours a day, before the players grab lunch and head to basketball practice. Class sizes are small: the student-teacher ratio rarely exceeds 4 to 1. OTE’s academic head, Maisha Riddlesprigger—Washington, D.C’s. 2019 principal of the year—has heard too many times for her liking the assumption that OTE’s academic component serves as window dressing. “I think that comes from this deficit mindset that you can’t be an athlete and a scholar at the same time,” says Riddlesprigger. Veteran educator Marcus Harden, OTE’s senior administrator for academics and development, admits he worried that these high school juniors and seniors with healthy bank accounts and pro basketball ambitions would tune out classwork. And while some OTE players are more invested in school than others—fighting student phone-scrolling habits in class is an ongoing battle—Harden insists that overall, the students have exceeded expectations. “We would be negligent if we sent them out into the world with fake diplomas,” says Harden. “Even with the short day, I can say we’re doing this with integrity.” For the sake of students who might not make it in basketball, OTE must deliver on this promise. Still, former NBA player Len Elmore, a Harvard Law School grad and current senior lecturer at Columbia University’s sports management program, worries that even if the players who get injured or don’t pan out do return to college, they still might be worse off—savings accounts notwithstanding. “Come on, we’re talking about 17- and 18-year-olds who now have fizzled out at their dream,” says Elmore. “And now you expect them to go to a college that they were recruited by, or that they could have been recruited by, and enroll and go to class and watch other guys playing college basketball, knowing that they could have done that? That to me could also create some mental health issues.” ‘It’s lit’ When Porter, the OTE CEO, was head of digital at superagency WME in 2016, he spotted a shift in the way Gen-Z and younger millennials consumed sports content. Young people were less interested in sitting in front of a TV to watch live basketball or football games. They craved stories, personalities and highlights. They wanted it on demand, on their mobile devices, specifically on the social media platforms that spoke best to them, like Instagram. Porter co-founded Overtime late that year, focusing at first on high school basketball. A proprietary technology allowed videographers to shoot clips in gyms across the country and upload them to the cloud; the company’s social media editors fired off their favorite highlights. Williamson, who despite being built like an offensive lineman could throw down 360-degree slams on his comically inferior schoolboy competition, emerged as Overtime’s first star. The company built a young digitally-native cult following that has grown to more than 50 million followers across Instagram, TikTok, Snapchat, YouTube and other platforms. “If you are an ESPN or a traditional publisher, you can’t appeal to a young audience with a bunch of traditional sports programming,” says Porter. “You also can’t go on your accounts, and be like, ‘It’s lit,’ and a bunch of 50-year-old guys who are looking to figure out who they are going to start on their fantasy team are like, ‘I don’t understand what this is.’” Read more: As College Athletes Finally Start Cashing In, Entrepreneurs Big And Small Also Look To Score Overtime has since branched out into e-commerce, as well as longer-form programming, like a documentary about current Chicago Bears rookie quarterback Justin Fields that lives on YouTube (and attracted some 426,000 views). Blue-chip companies like Gatorade, McDonald’s and Nike have advertised on the platform; Rocket Mortgage sponsored a post in which Miami Dolphins rookie wide receiver Jaylen Waddle looks for houses in South Florida. When Overtime was recruiting former Sacramento Kings and Philadelphia 76ers exec Brandon Williams to run OTE’s basketball operations, Williams, who was previously unfamiliar with the brand, knew he needed to consider the offer when his 10-year-old son gushed over the Overtime stickers that were sitting on his desk—he told Dad Overtime was kind of a big deal. Later, when some little kid spotted Williams wearing an Overtime shirt at an airport, the boy curved his hands into an “O”—a reference to the Overtime logo—as if approving Williams’ youth cred. Andrew Hetherington for TIMEBryce Griggs of OTE with the ball during the inaugural night of games in the show court at the OTE arena. Andrew Hetherington for TIMEThe OTE bench watches the game at the show court at the OTE arena A few factors coalesced to give birth to Overtime Elite. For one thing, Porter got weary of hearing feedback from college basketball programs that they appreciated Overtime giving their recruits exposure on the high school level, since the schools could then capitalize on their popularity. “I’m like, ‘That’s good for you, but that’s not very good for me,’” says Porter. An Overtime-branded league could keep personalities in the company’s ecosystem and give the startup a valuable piece of intellectual property. And the experience of another early Overtime star, current Charlotte Hornets point guard LaMelo Ball, opened Porter’s eyes. Ball spent one of his high school years—and part of the season he would have typically spent in college before becoming eligible for the NBA draft—playing overseas in Lithuania and Australia. He became the third overall pick of the 2020 NBA draft, and won last season’s rookie of the year honors. To Porter, Ball’s experience proved that talented players were willing to try a different path to the NBA. Former NBA commissioner David Stern, who passed away in January 2020, initially told Porter and Overtime’s other co-founder, Zack Weiner, that they were crazy. Overtime already had a compelling core business, and Stern knew from experience the hassles of running a sports league. But Stern eventually came around to the idea; his son, Eric, is one of OTE’s investors. Overtime Elite has signed multiyear, multimillion-dollar sponsorship agreements with Gatorade and State Farm. Both companies have prominent signage at the 1,100-seat “OTE Arena,” which is also part of the 103,000-sq.- ft. structure in Atlanta. OTE’s showcase court, which hosted its first set of games on Oct. 29, features LED lights and a Jumbotron. Topps is producing trading cards for OTE players; Porter says that “hundreds of thousands of dollars’” worth of cards have already sold, and that they should start appearing in Walmart, and hopefully Target, in December or January. Some NFT initiatives are sure to follow. OTE is not live-streaming games yet—Porter wants to create scarcity and buzz—but the content team is creating a mix of highlight packages and an episodic behind-the-scenes docuseries on the players. Overtime—which has yet to turn a profit—expects annual revenue to reach up to $300 million in five years, with Overtime Elite bringing in about a third of that haul. The company, and its investors, are betting that Overtime’s built-in brand notoriety and audience will differentiate OTE from other upstart sports leagues that have failed. “We don’t have that same kind of cold-start problem,” says Porter. ‘Dunk lines for content’ But the high stakes aren’t limited to Overtime’s bottom line. Players are placing their futures in the company’s hands, which puts the onus on OTE’s basketball development staff to ensure that, at worst, each player receives at least a lucrative pro offer overseas. The players do have impressive tools at their disposal. During one practice, for example, a biomechanical engineering Ph.D. rushes to tuck a microchip into the shorts of a few players: this technology allows OTE’s four-person analytics and data science team, led by applied math PhD. and former Philadelphia 76ers researcher Ivana Seric, to track how far and fast players move during practices. This information allows the coaches to better control wear and tear. Cameras atop each shot clock on the OTE practice courts can show, for example, how far to the left or right players are missing their shots. They can adjust accordingly. A 10-person on-court coaching staff, led by former UConn coach Kevin Ollie (who won the 2014 men’s national championship with the Huskies) fans out at four different baskets during practice, allowing players to work on team concepts, like defending screens and pick-and-rolls, and individual skills (they take ample corner threes and floaters, both key tricks of the NBA trade). Like any upstart, however, OTE has experienced hiccups. When Porter came to visit the academic session, a couple of players were unafraid to point out to him that the flimsy boxed roast beef and cheese sandwiches served for lunch—they may have fit it at the Fyre Festival—were subpar nourishment before practice. “This looks scary,” Porter admitted, eyeing the sandwich. “I wouldn’t eat it.” OTE launched in March, and settled on Atlanta as its home in May, meaning the facility, which comes chock-full of amenities like two oversize bathtubs for recovery and a players’ lounge and NFL-size weight room—as well as classroom and office space—needed to be constructed in five months. A few days before OTE’s opening games Halloween weekend, Ollie shouted instructions at practice over hardhats’ drilling; construction detritus forced one door to remain open, allowing a cool Georgia draft to accompany the players on the practice floor. Andrew Hetherington for TIMEKevin Ollie, Head Coach and Director of Player Development of the OTE coaches Team Elite during the inaugural night of games at the show court at the OTE arena. Andrew Hetherington for TIMEYoung fans in the stands watch the action at the OTE arena. While OTE deserves credit for executing its vision so quickly, it could be trying too much too soon. “They’re kind of building the parachute after they jumped out of the plane here,” says Dr. Marcus Elliott, founder and director of P3, a southern California-based sports science institute that provides advanced biomechanical analyses of elite athletes. Ollie was unhappy with this team’s effort at the first practice after pro day—and let the players know it. The energy was far from NBA-level, he told them. This scolding didn’t stop some of the players from lining up near a basket afterward, to show off their leaping ability for Overtime’s ubiquitous cameras. “Dunk lines for content,” said an OTE staffer who was looking on. Dunk lines for content. You probably couldn’t find a more fitting phrase to encapsulate the year 2021 in sports media and culture. Or a more spot-on reminder that kids are placing their basketball gifts in the hands of a digital marketing juggernaut. “I see the potential of this disruption to lead to a much more just and better world for these young athletes,” says Elliott. “But I also see lots of peril. It’s not about getting paid 100 grand to play as a 16- or 17-year-old. It’s about getting your second or third contract in the NBA. And those are challenging and sophisticated blueprints to put together. And so the fact that their DNA has nothing to do with development, that’s concerning.” Andrew Hetherington for TIMEA player hangs onto the net at the OTE practice courts. Overtime insists all incentives align. The company has hired experts like Ollie and the data scientists because the growth of OTE’s business hinges on the Thompson twins, and others, achieving their basketball dreams. After practice, Amen watches film with an OTE assistant coach; Ausar takes part in a small group shooting session that ends at 6 p.m. They both know that to make it to the next level, they must improve on their outside shooting. “I’m going to be in the gym,” says Ausar. “I have nothing better to do. I don’t do anything in Atlanta. I just chill in my room and watch basketball.” Amen and Ausar have talked to each other about backup careers; they both believe they’d be solid hoops commentators. But that can wait. When asked where they both see themselves in two years, neither brother hesitates. Nor do any of the OTE players when asked about their futures. “The NBA.”.....»»

Category: topSource: timeNov 9th, 2021

Leapfrogging Legacy Banking To A Bitcoin Standard

Leapfrogging Legacy Banking To A Bitcoin Standard Authored by Mitch Klee via BitcoinMagazine.com, How looking at the history of technological adoption can give us insights into where Bitcoin could be embraced the fastest... INTRO Throughout time, technology has proven to change our lives by leveraging efficiencies in energy. New ways in how we hunt have saved time and energy for innovation and to live more intentionally. Currently, Bitcoin presents an immense opportunity to change the lives of those who are burdened by old forms of manipulated money and preserve their time and energy. It is the first self-sovereign, programmable money that is proving to destroy expectations of every “expert” imaginable. At the intersection of money and technology, Bitcoin's network effect is spreading like a mind virus to all corners of the globe. This is not a coincidence but the manifestation of a zero to one moment; a radical new technology that will change nearly everything it touches. This article explores the idea that some regions and nations have a higher susceptibility to adoption in new monetary networks. Specifically, I will outline how the unbanked populations of emerging countries can leapfrog legacy systems, straight into a new monetary standard. But first, let's lay the groundwork for understanding how this can happen with some concepts. DEMOCRATIZATION OF TECHNOLOGY To understand leapfrogging, let’s first look into something that naturally happens when humans produce technology: the democratization of technology. As we make technology, the cost reduces, while the ease of production increases. Our tools get better, people’s skills improve, securing the material for production gets easier, logistics improve, and everything is less costly as humans continue increasing the output/yield over time. Simply put, cost goes down, while production goes up. Figure 1. A great example is the printing press. Before this innovation, each book had to be typed out or written one by one and distributed almost by osmosis. This means books were more expensive and were only in the hands of the few. After the printing press, people were able to automate a portion of the process by creating blueprints of the books. This cut down labor costs, and there was a huge explosion in printed material. This may have put people out of work; but it also introduced better dissemination of information to a wider group of people and new opportunities to produce more books for less cost and effort. Another example is photography. Historically, taking photos on film took hours to produce in a dark room. The film had to be brought to a local expert and it would take several days to get back the finished product. Smartphones and photoshop technology made this essentially free. It was then possible to download an app or use the built-in app on smartphones, take pictures, and immediately process them. Democratization of technology has been happening across every single aspect of human society since the beginning of time. Humans create tools to make it easier and cheaper to survive. Each tool becomes better, we then expand and evolve with less energy improving the quality of life. Fast-forward to the internet age. Emerging countries are just now tapping into the power of the internet. Although there are many factors underlying the reasons for expansion, one thing that is known is that technology builds on itself, making each successive technology easier to produce. Not only is there growth, but there is exponential growth. Certain times throughout history, technology has made such a large leap forward that it allows extremely poor countries to skip the legacy technology and quickly adopt the new one. This is called leapfrogging. LEAPFROGGING EXPLAINED Leapfrogging is when the cost to produce one technology is too great for a population, so when a new, drastically cheaper technology is created it’s quickly adopted and the old tech is skipped. This is the coexistence and benefit of separate populations within society. Let's look at the mobile phone revolution as a way to explain leapfrogging. Some societies did not have the wealth or infrastructure to adopt landlines and phone communication when it was brand new, but when the mobile phone was introduced, this gave mostly everyone around the world the ability to opt-in. Figure 2. Landlines in the U.S., 1900–2019. Figure 2 shows the number of landlines in the U.S. population from the 1900s to 2019. Throughout the entirety of the 20th century, the landline was being adopted in the U.S. Consequently it only took a decade to dethrone this old technology. The decline started when the benefit of cell phones outweighed the cost compared to landlines. This is where democratization hit the tipping point and we saw a huge jump from one technology to the next. Now it’s extremely cheap to use technology that is 100 times or even 1,000 times more advanced than the previous. Mobile phones usurped landlines because they were more affordable, easier to use and more mobile. Figure 2 shows how quickly a society can adopt a technology that has significantly more benefits than the previous, even in an advanced society. A similar thing is happening with television and the internet. Netflix came out and disrupted how people consume media on the television. As more platforms emerged, and people realized they could pay a fraction of the cost for a Netflix subscription rather than $100 for cable and a bunch of commercials, the switch was easy. Legacy systems were bogged down by all of the brick-and-mortar stores and overhead costs. They could not compete and pivot quickly enough, so they lost their seat at the table. Figure 3. Number of telephone subscriptions in the U.S. versus worldwide. When comparing fixed telephone subscriptions to other countries, the U.S. was way ahead of most. Many factors were contributing to this. Wealth played a huge part, but much of it was the production and first movers’ advantage. The U.S. was the first country to set up telephone lines from Boston to Somerville Massachusetts and expanded from there. Other countries did not have this opportunity, so they were laggards in the technology simply by default. It also made it easy to have a grid to run on top of, being a technologically advanced country with a power grid. Because it was so resource-heavy to set up this grid, this took over 30 years to build up the infrastructure. Figure 4. Landline subscriptions compared to GDP per capita, 2019. One of the main reasons why it was so hard to increase telephone subscriptions in other countries is because of the initial cost. You can’t just tap into a telephone line, there needs to be a large grid, infrastructure and companies/governments willing to build out this grid. Figure 4 shows that there is a rough line at a GDP per capita of $5,000 to get off zero and start communicating via landline. As the GDP per capita grows in a country, it is more likely they adopt fixed landlines. This is a huge barrier to entry as they try and compete to be a part of the 21st century. With telephones, it brings an easier flow of information across long distances quickly. These are important technologies that helped first-world countries advance quicker than their counterparts. This technology could mean the difference between surviving and thriving in the modern era. Figure 5. Mobile phone subscriptions versus GDP per capita, 2019. Things get much different when you start looking at mobile phones in Figure 5. To have a mobile phone is drastically cheaper than having a landline, all costs considered. Before, you needed the infrastructure and everything that came with installing a landline phone. But with mobile phones, even at a GDP per capita of less than $1,000, you get ~50% penetration of adoption within the population. All of the countries that were left out of communication with landlines, now have leapfrogged the old technology, right into a new standard of mobile phones. People benefit, businesses benefit and countries benefit immensely from these technologies. With mobile communication, people have higher leverage over their energy output. Businesses and life in general are more efficient, in turn creating a higher GDP for the country. It is a feedback loop that is good for all of humanity. When one group of people creates new technology, everyone benefits at one point or another. FROM LANDLINES TO MOBILE PHONES TO INTERNET-CONNECTED SMARTPHONES Not only are poorer countries leapfrogging into mobile phone communication, but they are, in turn, jumping right into the internet age. On top of that, (Android) smartphone costs are dropping significantly every year, with the average cost down by 50% from 2008 to 2016. With the growing ability to connect with the rest of the world comes more opportunities to learn and grow with the rest of the world. An incredible amount of information is available on the internet, and the benefit of being on the network is immeasurable. Figure 6. Mobile versus landline subscriptions, worldwide, 1960–2019. When comparing the numbers of mobile phone users to the numbers of landlines, you get a huge disparity in the pace at which they were adopted. Fixed landlines were around for almost 50 years before they started to see some real competition. Thinking back to our Figure 5, this makes sense, because the cost to build infrastructure is drastically higher than that of mobile phones. The opportunity a landline brought to civilization was immense, but the cost-effective mobility of cell phones transcends previous communication technology by a longshot. As of September 2021, the world’s population was ~7.89 billion people. Of that, there are 10.5 billion cell phones with network connections. That is 2.52 billion more activated phones than there are people. This becomes thought-provoking when adoption data starts to reveal where mobile phones are headed next. As people adopt mobile phones, smartphones are becoming cheaper and more abundant. The cost of production for smartphones is less and less each year, and soon there will be little reason to have a cell phone without internet connection because the cost difference will be so minuscule. Smartphone abundance is allowing people around the world to tap into the internet and it is estimated that “by 2025, 72% of all internet users will solely use smartphones to access the web.” Figure 7. Share of the population using the internet, 1990–2019. Currently, the world is in a transitionary period of communication. Not all of the world has access to the internet, only 65%, with an increasingly rapid pace of adoption. Because it is so inexpensive to get a mobile phone, and the benefits are immense, the world is being onboarded at an incredible rate. To answer the question “What is Leapfrogging?” we can look directly at mobile phones. But it’s not just one leapfrog, it’s more of a continuous onboarding to the digital revolution for the entire human population. Things are getting cheaper, and technology is moving exponentially forward, toward a more connected future. Soon, everyone will have access to the internet and will bring about new and exciting opportunities for the world to grow. With the high rate of adoption in communication technology, mobile phones swept across low-GDP countries allowing information to spread. Smartphones are a small hop away from mobile phones. With smartphones comes all sorts of opportunities not to mention the connection to the world's internet. In developing countries, the internet is starting to hit its hockey stick moment. Adoption continues to grow and as smartphones get cheaper, more people in the world have access to the internet, connecting them to their local and global economies and new innovations will come about in unforeseen ways. This begs the question, what monetary network will they use to transact in the digital age? It's taken years to get the legacy banking system up to speed. We’ve bootstrapped and “Frankensteined” many different ways to connect the internet to a centuries-old banking infrastructure, but these newly onboarded countries have the opportunity to skip that altogether. With no legacy banking infrastructure rooted within the nation, this leaves the door wide open for a new legacy. LEAPFROGGING ONTO A BITCOIN STANDARD It seems the stage is set for a paradigm shift. A perfect storm is brewing in populations that lack bank accounts and access to store their wealth. Coupling this with connection to the internet, and 21st-century e-commerce and monetary system, it is impossible for countries not to adopt it. Because bitcoin is a global asset with no intermediaries, its infrastructure is inherently global. Any improvements to the network, the entire world will benefit automatically without having to update the old tech. Unlike landlines, there is no infrastructure to build, and the barrier to entry is almost zero. You just opt in with a bit of hardware and an internet connection. As of 2017, according to the World Bank, there are 1.7 billion adults in the world without a basic transacting account. Most of these countries with higher rates of unbanked are poor, have high rates of inflation and lower currency stability, not to mention a disconnected state government ripe with problems. This is extremely common when looking at currencies in other low-GDP countries. So, what are some of the biggest factors in which people would want or need to adopt Bitcoin? If we can answer this question, then maybe we can quantify and pinpoint which countries have the biggest opportunity and most to gain from adopting a Bitcoin standard. Figure 8. World’s most unbanked countries (Source). Figure 8 shows the top-10 most unbanked countries as of February 2021. The Oxford dictionary defines “unbanked” as “not having access to the services of a bank or similar financial organization.” Much like building the infrastructure for landlines, it’s expensive to build banks and serve the local economy. Not to mention, many of the people living in these countries don't have the amount of money that would warrant the cost of owning a bank account. Some even share bank accounts with members of their families to save on costs. There is a huge opportunity to solve the problem of banking in low-GDP countries, but many of the digital banking companies around the world are constrained by regulation and geographical jurisdiction. It may be hard to grasp the importance of a bank account having never lived without one, but without a bank, citizens cannot secure funds safely. Without secure funds, the future is uncertain. This is where Bitcoin can solve some of the problems in these less developed and emerging countries. There are three specific ways in which these problems could be solved. 1. Bank the Unbanked Bitcoin gives everyone the ability to be their own bank with something as little as a cell phone. All that's needed is to be connected to the network and accept funds. The smartphone does all of this. It allows people to download a bitcoin wallet, connect to the internet and start transacting. There are many ways in which one can use this wallet. Coincidentally, the countries above who have low banking numbers within their population, also have mobile phones and high internet penetration. This is an open door from a technological standpoint, allowing people to opt into Bitcoin and secure their funds digitally. In addition to using the Bitcoin network to transact on your phone, you can also use it as a cold storage solution. Cold storage is similar to a savings account. This savings account or cold storage is disconnected from the internet, making it harder for people to steal your funds. With the old technology of banks, you would have to pay for this solution, but with Bitcoin, it's free, just download the software and/or buy a hardware wallet. There are some cold storage solutions where you can pay for a hardware device, but creating a phone wallet and securing your keys, gives the people an entry point and on-ramp to storing their wealth in a digital bank. 2. Securely Store Value Over Time The second opportunity is the store of value function. Many of the countries that have unbanked populations and poverty issues are a result of a currency problem. In my previous article, “Bitcoin As A Pressure Release Valve,” I wrote that certain countries have hyperinflated currencies with no option but to turn to the black market. Most of the time, these countries use the U.S. dollar to transact since it holds its value better relative to their currency. Strictly from a monetary standpoint, bitcoin is scarce. It is the most scarce form of money there is. There will only ever be 21 million bitcoin in existence and when the value rises, the production does not increase. This is called elasticity or the lack of elasticity in bitcoin’s case. Unlike fiat money, no government, central bank or agency can print more. And unlike gold, silver or any other commodity, when the demand rises, the amount that is mined stays the same. The first completely inelastic asset in existence is a result of preprogrammed architecture, with consensus in the network that’s default is to not change the protocol. People that live in countries where the money is known to be manipulated, understand Bitcoin almost immediately. When the idea of something that can't be manipulated is presented, the concept of scarcity and 21 million is understood. With the reality of incorruptible money, the current regime in power can't stuff their pockets without alienating the population through force. These people understand this idea because they have experienced it firsthand. When food prices rise faster than people can spend a weekly budget on groceries, it is immediately apparent the importance of a completely scarce, un-manipulatable asset. In developed countries with low levels of unbanked, people have ways of storing their wealth. They have a 401k and IRA, and most people own property. This is a way of storing value over time. It may not be completely efficient, but it is sufficient enough to escape some level of inflation. The alternative would be to keep your dollars in a savings account, and the real yield of that is negative and not a smart way to store money. These countries put money in financial devices, because it is the smart thing to do and it preserves time and energy. Unbanked countries have no way of storing long-term value. It is degraded and evaporated through manipulation and high levels of money printing. Emerging countries cannot store time and value into financial instruments. There is no Apple stock or S&P 500 to put money into. They are stuck with low levels of wealth that are stolen away on an ever-moving treadmill. There is no way of truly saving value or energy spent over time. For the first time, Bitcoin gives the world, particularly those in emerging countries, the ability to hold their value in a closed system that cannot be inflated. Much like the opportunity the mobile phone brought to change communication, bitcoin is the first “store of value'' that is available for low-GDP countries to buy and hold. It allows them to securely transfer their wealth over time, without fear of inflation or confiscation. Add on top of that, if they need to transfer wealth out of the country and flee an oppressive regime, bitcoin is the first asset that gives the ability to do so. Large amounts of gold cannot be taken on a plane or property and homes cannot be transferred to another country. Bitcoin gives people the freedom to do what they want with their earned value, without fear of a centralized power removing it. Bitcoin preserves the fundamental human right of property. 3. Connection to the Digital Economy The third problem Bitcoin solves is connecting and transacting digitally. Being a digitally native asset, bitcoin smooths the rails of commerce allowing low-GDP countries to join the 21st century of commerce. This is huge, and what cell phones did for communication, digital commerce will do the same. It immensely increases our ability to transact and exchange value. Bitcoin allows anyone, anywhere, to join a digital transacting network and exchange value natively over the internet, whether in person or without knowing them at all. Digital economies move at the speed of light, while old-school economies move at the speed of osmosis. This brings more time and efficiency for people on both ends of the transaction. Businesses spend less time on transactions, widen their addressable market, and start putting more time and effort into other things that can improve their work. It is the difference between transacting daily in cash and using a preprogrammed point of sales system. It is simply better. Not only does Bitcoin make things easier and frees up more time, but it is programmable money. Like the internet, Bitcoin can be built in layers. Each layer brings a new way to use it that widens the possibilities and use cases. What the internet did for communication, Bitcoin will do for money. Combining all three of these factors, you get a massive magnetic pull toward adoption of the new technology. It is hard to slow the movement of technological adoption and impossible to stop. Like throwing a match on a tinder-filled hillside, years of opportunity build up in countries that lack technology where innovation and adoption prepare to explode at the right moment. QUANTIFYING BITCOIN ADOPTION IN LOW-GDP COUNTRIES Figure 9. LocalBitcoins and Paxful Vietnamese dong (VND) combined volume in Vietnam (Source). Looking at every one of the top-10 countries from Figure 8, they all have meaningful adoption in Bitcoin and it is growing every week. Not only is Vietnam number two on the unbanked list, but it is also number one on the “Chainalysis 2021 Global Adoption Ranking.” In fact, looking at Figure 10 of adoption through LocalBitcoins and Paxful, USD volume shows that every one of the countries in the top-10 list of unbanked have meaningful adoption. Figure 10. LocalBitcoins and Paxful Vietnamese dong (VND) combined volume. What does this tell us about Bitcoin adoption in unbanked countries? It tells us that it's working. Continuing to see these trends improve will be good for Bitcoin adoption and not to mention the countries in which they are adopting it. All the ingredients are there. Most are unbanked with high internet access and an unreliable currency that isn't natively digital. All you need is time for the adoption to take hold. There are also some concerns that come up when thinking about Bitcoin adoption. Like, “How can they adopt bitcoin when it is so volatile?” Well, there are a few solutions to this problem. The first is that when a population has no choice, something as volatile as bitcoin could mean the difference between losing 30% or losing 90% over the span of one year. Keep in mind that bitcoin is already solving three of the major problems listed above, we are just remedying the problem of volatility. First, look at just bitcoin and its use cases today. For some countries, their currency is just as volatile if not more volatile than bitcoin. Not only that, but it is volatile to the downside, continuing to lose value as the government steals and prints away spent time and energy. If bitcoin were to be used, sure it might be volatile, but this volatility is either short lived, or it’s to the upside. Now look at bitcoin while using it for everyday transactions through Strike, as a more technical solution. This solution is currently available now in El Salvador as a test case and is starting to roll out to more and more countries. People use the Bitcoin and Lightning rails every single day but transact in USD, choosing to either save in bitcoin or not. This solution gives the best of both worlds. One, a population has the ability to transact short term in a currency that isn't volatile, like other emerging countries. Two, this gives access to the payment rails of Bitcoin and the ability to save in the most scarce asset in existence. Looking back historically, bitcoin has grown at a 200% compound annual growth rate and this has the opportunity to conserve and grow wealth immensely. For someone in a developing world, this is life changing. As this trend of adoption in underbanked countries continues, new and exciting ways where Bitcoin is used will emerge. For the first time in history, countries have the ability to store wealth in something that cannot be stolen. It gives the opportunity to transact freely without the permission of the state or government, and it allows people to break free from imposed serfdom. Bitcoin is here and it is only getting bigger. There is a change in the tides of time, and Bitcoin is a once-in-a-millennia technology that is pulling the shores. Tyler Durden Fri, 12/03/2021 - 18:20.....»»

Category: blogSource: zerohedgeDec 3rd, 2021

Bonhoeffer 3Q21 Commentary: Case Study – Millicom

Bonhoeffer Capital Management commentary for the third quarter ended September 2021, providing a case study for Millicom International Cellular SA (NASDAQ:TIGO). Q3 2021 hedge fund letters, conferences and more Dear Partner, The Bonhoeffer Fund returned -2.8% net of fees in the third quarter of 2021. In the same time period, the MSCI World ex-US, a […] Bonhoeffer Capital Management commentary for the third quarter ended September 2021, providing a case study for Millicom International Cellular SA (NASDAQ:TIGO). 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 Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss 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 Partner, The Bonhoeffer Fund returned -2.8% net of fees in the third quarter of 2021. In the same time period, the MSCI World ex-US, a broad-based index returned -0.7% and the DFA International Small Cap Value Fund, our closest benchmark, returned -2.5%. Year to date, the Bonhoeffer Fund has returned 22.9% net of fees. As of September 30, 2021, our securities have an average earnings/free cash flow yield of 14.3% and an average EV/EBITDA of 4.7. The DFA International Small Cap Value Fund had an average earnings yield of 11.1%. These multiples are lower than last quarter primarily due to increasing earnings and declining share prices. The difference between the portfolio’s market valuation and my estimate of intrinsic value is greater than 100%. I remain confident that the gap will close over time and the portfolio quality will continue to increase as we increase allocations to faster-growing firms. Bonhoeffer Fund Portfolio Overview Our investment universe has been extended beyond value-oriented special situations to include growthoriented firms using a value framework, including companies that generate growth through consolidation. There have been modest changes within the portfolio in the last quarter in line with our low historical turnover rates. We have sold Cambria Automotive which is in the process of being acquired and used the proceeds to increase our holdings in Asbury Automotive, Countryside Properties, and Millicom. As of September 30, 2021, our largest country exposures include: South Korea, United States, United Kingdom, Italy, South Africa, and Philippines. The largest industry exposures include: distribution, telecom/media, real estate/infrastructure, and consumer products. We added to some smaller positions within the portfolio and are investigating additional consolidation plays with modest valuations in industries that have nice returns on invested capital such as fiber rollouts, convenience stores, and IT services. Compound Mispricings (37% of Portfolio; Quarterly Average Performance -8%) Our Korean preferred stocks, the nonvoting share of Telecom Italia, Wilh. Wilhelmsen, and some HoldCos all feature characteristics of compound mispricings. The thesis for the closing of the voting, nonvoting, and holding company valuation gap includes evidence of better governance and liquidity. We are also looking for corporate actions such as spinoffs, sales, or holding company transactions and overall growth. Throughout the year, Net1 UEPS has been accumulating cash from the sale of its non-core assets including a Korean transaction processing network and its stake in a crypto bank. This cash, in addition to issuing some debt, was used to purchase Connect, a merchant transaction processor catering to small and medium businesses. This acquisition will complement its consumer fintech EasyPay transaction and ATM network and expand Net1 UEPS’s total addressable market to include small and midsized businesses and lead to profitability. The Korean preferred discounts in our portfolio are still large (25% to 73%). The trends of better governance and liquidity have reduced the discount in names like Samsung Electronics, and more preferred names trade at a premium to common shares. We continue to like the prospects for LG Corp preferred post LX Holdings spinoff from both a business and discount perspective. The current discount to NAV is 74% for the LG Corp preferred. In addition, this discount is based upon a base value of LG Corp with reasonable implied EV/EBITDA multiples of LG Corp subsidiaries of 4.7x for LG Electronics, 13.6x for LG Chemical (including LG’s EV battery division), and 16.7x for LG Household & Health Care. Public LBOs (37% of Portfolio; Quarterly Average Performance -1%) Our broadcast TV franchises, leasing, building products distributors, and roll-on/roll-off (RORO) shipping fall into this category. One trend I’ve noted in these firms is growth creation through acquisitions which provide synergies and operational leverage associated with vertical and horizontal consolidation and the subsequent repurchasing of shares with debt. The increased cash flow is used to pay the debt and the process is repeated. Millicom, this quarter’s case study, is a public LBO that has financed many of its investment opportunities with debt. The recently announced buyout of its Guatemalan JV partner illustrates this. The debt, when used in situations like this, has been paid down over time as Millicom generates a lot of free cash flow and can increase returns like leveraged rollups, as described below. Distribution Theme (41% of Portfolio; Quarterly Performance +3%) Our holdings in car and branded capital equipment dealerships, convenience stores, building product distributors, and capital equipment leasing firms all fall into the distribution theme. One of the main KPIs for dealerships and shopping is velocity or inventory turns. We own some of the highest-velocity dealerships in markets around the world. There have been challenges in some markets hit by COVID, like South Africa and Latin America; but there should be recovery now that vaccines have been approved and distributed. GS Retail, the second largest convenience store operator in Korea (with 14,600 convenience stores and 320 grocery stores), is the security we received for the buyout of GS Home Shopping. We have applied our growth methodology described in the last quarterly report. The following is a summary: The convenience store business is growing and consolidating worldwide. As a result of the acquisition, management is planning on using the younger customer data from GS Retail, the older customer data from GS Home Shopping, and the GS distribution network (42 logistics centers supporting convenience, grocery, and home shopping customers) to provide older and younger customers their products instore (convenience store) or next-day home delivery across Korea. Management expects 10% growth overall, composed of underlying convenience store growth of 4-5% and 5% from cross selling and digital commerce from the merger. Given the fixed costs in the convenience store network and distribution infrastructure, management expects cost synergies to generate net income margins of 5.0%. If these revenue and growth rates are realized, then a P/E closer to comparable convenience stores BGF Retail (Korea), Seven & I, and Alimentation Couche-Tard of 15-20x is not unreasonable. This range has significant upside from current P/E multiple of 5.9x and five-year forward P/E of 4.3x. Telecom/Transaction Processing Theme (36% of Portfolio; Quarterly Performance -2%) The increasing use of transaction processing in our firms’ markets and the rollout of 5G will provide growth opportunities. Given that most of these firms are holding companies and have multiple components of value (including real estate), the timeline for realization may be longer than for other firms. Telecom Italia continues to work with the Italian government and Fiber Corp to merge their telecommunications infrastructures together. Vivendi has called an emergency board meeting to ensure Telecom Italia will retain control of the combined telecommunication infrastructure after the merger. We view this action as a positive despite the decline in Telecom Italia’s share price. The updated sum-ofthe- parts analysis (as detailed in previous letters) implies an upside of 80–100%. In my opinion, much of the recent decline is due to concerns that Telecom Italia will give up control of the combined telecommunications infrastructure. Consumer Product Theme (10% of Portfolio; Quarterly Performance -7%) Our consumer product, tire, and beverage firms comprise this category. The defensive nature of these firms has led to lower-than-average performance due to the stronger performance from more recoverycorrelated names. One theme we have been examining is the increase in sales of adult products (tobacco, alcohol, and lottery) in convenience stores as other stores are removing these products from their product offerings. GS Retail is taking advantage of this trend in Korea. Real Estate/Construction Theme (23% of Portfolio; Quarterly Performance -3%) In my opinion, the pricing of our real estate holdings has been impacted by both a recession and the communist takeover in Hong Kong. The current cement and construction holdings (in US/Europe via BFS and Countryside and in Korea via Asia Cement) should do well as the world recovers from COVID shutdowns and governments start infrastructure programs. Asia Standard also declined during the quarter due to the concern over the decline in its Chinese real estate developer bond holdings. Asia Standard holds a large number of Chinese real estate developer bonds, including those of Evergrande and Kaisa. The Evergrande bonds have declined to about 20% of face value as of September 30 (they were at 40% of face value on July 31, 2021, the last market-to-market valuation date for Asia Standard’s bond portfolio) while the Kaisa bonds have declined to 85% of face value. I ran a stress test assuming a 25% decline in the bond portfolio from July 31, 2021. This is 2x the 13% decline in the portfolio from Evergrande and Kaisa bond prices between July 31, 2021, to September 30, 2021. The resulting NAV/share is $8.09 versus the $10.09 NAV as of July 31, 2021. The September 30 stock price of $0.85 is at a 91% discount to the stressed NAV and 92% to the July 31, 2021, NAV. Consolidation Frameworks In our Q1 letter, we described how we are examining growth opportunities associated with consolidation in fragmented industries. Growth from consolidation can be a resilient form of growth as it is dependent upon the availability of target firms and associated cost and revenue synergies versus overall market growth. When consolidation growth is combined with modest industry growth, some exciting growth can be realized. If the firms also exhibit operational leverage from economies of scale/scope, then the combined effect can be significant growth in earnings or free cash flows. The advantage of this type of growth is that it is realized over time and not recognized by the market in advance. This can be seen in the price charts of many of these firms moving from the lower left to the upper right over time as the growth is realized. Fragmented markets can have long runways associated with consolidation and economies of scale and scope which can lead to cash flow growth in excess of the market growth for many years. We try to identify these markets and firms that can ride the consolation wave over a long timeframe. Some of these firms have valuations reflecting some of the future growth and some have little to no premium reflecting future growth from consolidation. Currently, the internet (an innovation) is providing more consolidation via additional fragmentation of retail demand from offline, online, and omni-channel selling channels. An example is traditional auto dealers using an omni-channel sales approach and Carvana who is exclusively online. Bonhoeffer is looking for businesses that are adopting the innovation (internet distribution) which will enhance growth going forward but where it is not recognized by the market yet, as evidenced by the current stock price. Some analysts have developed useful frameworks to evaluate consolidation or serial acquirer situations. Scott Capital has developed a useful framework1 for categorizing consolidators, shown below: Scott has categorized these types of firms depending upon the level of target integration. Most of the firms we have been examining recently have been rollups (firms in the same industry) with scale-driven synergies and operational leverage. We also hold one platform (Wilh. Wilhelmsen) and one holding company (LG Corp). Another way to look at these firms is cross-sectionally based on total addressable market (TAM) size and integration of operations, as described by Canuck Analysts Substack2 below: Using this framework for our current areas of interest (rollups), I have been monitoring acquisition multiples in the car dealers (Asbury Automotive), local TV and radio firms (Gray Television), building supply distribution (Builders First Source), Latin American telecommunications (Millicom), cement firms (Asia Cement), equipment leasing firms (Ashtead), and network processing (Net 1 UEPS). In each of these segments, multiples have been modest. None of these firms have done international “diworsifying” deals to date and some have recently divested unrelated firms (Net 1 UEPS, Daelim Industrial and LG Corp). In each of these markets, the market share of the top firms is less than 10% except for GS Retail, where itself and FRB have a dominant share of 31% each, and Millicom, where it has a leading or number two position in eight of its nine markets where it competes. The small market shares provide a large runway for consolidation in its existing industry for years to come. Also, none have made international expansion into new markets outside their existing footprints. A return benchmark developed by the Canuck Analysts Substack3 is shown below: This framework, used in combination with calculating return on incremental capital, can illustrate where the invested capital returns can be modest. As an example, we will look at Asbury Automotive. Asbury’s returns on invested capital averaged 13%, and the return on equity averages 31% over the past 10 years plus an organic growth rate of 2 to 3% per year based upon US auto sales and maintenance service costs. This results in an ROIC plus ½ of annual organic growth of about 15%. The size of Asbury’s acquisitions has been about $1.4 billion over the past five years. Below is Asbury’s return on incremental invested capital over the past 10 years which has averaged in the upper teens during that period. For other serial acquirers like Ashtead, the organic growth rate is 6% and its ROICs over the past 10 years is 14% resulting in an ROIC plus ½ of annual organic growth of about 17%. The size of Ashtead’s acquisitions has been about $2.0 billion over the past five years. Conclusion As always, if you would like to discuss any of the philosophies or investments in deeper detail, then please do not hesitate to reach out. Until next quarter, thank you for your confidence in our work and have a safe and warm year-end holiday season. Warm Regards, Keith D. Smith, CFA Case Study: Millicom International Cellular SA (TIGO) Millicom International Cellular SA (NASDAQ:TIGO) provides mobile and broadband telecommunications services to consumers and businesses in Central America (Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama) and South America (Columbia, Bolivia, and Paraguay). TIGO provides legacy voice, wireless and data services, and fiber-based services to firms and individuals. Currently, TIGO has 43.1 million wireless subscribers, including 20.3 million 4G subscribers and 4.9 million home customers, including 8.4 million revenue generating units (RGUs) and 4.1 million broadband subscribers. In addition, TIGO’s network includes 5,400 points of presence and 300,000 business customers. TIGO is the number one or two broadband and wireless provider in eight of the nine markets in which TIGO competes. Recently, TIGO announced the purchase of its joint venture (JV) partner’s share of its JV in Guatemala for $2.2 billion. This transaction will be financed by debt and a shareholder friendly common stock rights offering. TIGO provides mobile money/banking services for five million customers in six countries. TIGO also has 10,000 towers and 13 data centers which can be sold and leased backed. TIGO is in the process of separating its towers and data centers (like Telefónica and América Móvil) and its mobile money/banking service to facilitate sales or investments by third parties. In 2017, TIGO sold 3,410 towers in Columbia, El Salvador, and Paraguay for $417 million or $122,287 per tower. Historically, TIGO operated in both Africa and Latin America. Over the past five years, TIGO has divested its African telecommunications assets and purchased additional assets in Latin America. TIGO’s network passes over 12.2 million homes (24% penetration of total homes) and covers 80% of mobile phones. The firm is in the midst of rolling out fiber to homes to provide broadband connectivity to Latin American customers. This rollout is being funded by cash flow from operations. The firm has been described as building a Charter Communications under a wireless Verizon umbrella. This is similar to our Consolidated Communications play with the additional benefit of having a wireless network and a mobile money business. In most countries in which TIGO operates, they have joint ventures or minority interest local partners. TIGO currently has an average high-speed internet (HSI) penetration rate (a take rate of HSI for homes passed) of about 39% across the countries it serves. This has increased by 1.4% since year-end 2020. To put this in context, most cable broadband penetrations are in the 50% plus range. In seven of the nine countries they serve, TIGO is the number one or two competitor in wireless and broadband in two-player markets (Guatemala, Honduras, El Salvador, Costa Rica, Panama, Bolivia, and Paraguay) and number three in two markets (Nicaragua and Costa Rica). The Q3 2021 mobile average revenue per RGU was $6.40 per month, and the broadband revenue per RGU was $28.10 per month. The largest shares of proportional EBITDA are from Guatemala (38%), Bolivia (11%), Paraguay (11%), Panama (10%), and Columbia (9%). In terms of regions, 70% of EBITDA is from Central America and 30% from South America. TIGO has developed a customer-focused culture at the corporate and country level using NPS as a metric which is collected and used as a management incentive to increase customer satisfaction. In addition, the countries that TIGO serves have stable currencies versus the US dollar. Since 2000, the EBITDA weighted average currency movements have been only 0.7% per year. Another positive trend is the movement of suppliers to US-based firms moving from China to a closer location with political and currency stability—Central America. If we look at the index of economic freedom for the Central American countries in which TIGO primarily operates, they have a moderately free ranking. For the subcategories most of interest to suppliers (tax burden and trade and business freedom), they all are ranked free or mostly free (highest ratings). Millicom and Fiber-optic Rollout The Latin American telecommunications services market is a local, fragmented market. Consolidation has occurred over the past 10 years amongst these local players, and the next generation of technology (fiber-optic connections) is being rolled out. Fiber-optic rollouts are generating organic growth and economies of scale with high incremental user profitability. Millicom has created economies of scale depending upon the geography of the acquired telecommunications firm. There is also the vertical integration across telecommunications services (like wireless, voice, data, cable, and hosting) in a given geography which can create additional economies of scale. With these rollouts, telecommunications companies compete with the local cable companies—and in some cases wireless providers—to provide HSI and other services to customers in their local footprints. Historically, telecommunications and cable firms have had poor customer service, as evidenced by low net promoter scores (NPSs). Keith Rabois, a founder of PayPal, has tweeted, “Formula for startup success: Find large highly fragmented industry w low NPS; vertically integrate a solution to simplify value product.” Part of simplifying the solution is providing multiple services and good customer service. The telecommunication services market fits this description. The new fiber rollouts are analogous to organic startups and thus can also be successful in the vertical integration into these markets. Business and Service Analysis One way to look at telecom business is to divide it into slowly growing (wireless) and quickly growing segments (HSI). The slower-growing wireless business is mature and is growing about 2% per year. The HSI business is growing at an 8% annual rate driven by fiber rollouts in TIGO’s countries. Millicom’s overall mix of wireless and HSI revenue is 33% HSI and 67% wireless, with 67% recurring subscription revenue (HSI and post-paid wireless) but varies by country. The current revenue growth rate is 4.3% and will increase to 5%, by the end of 10 years and the HSI/wireless mix approach 50%/50%. If we look at unit economics of the fiber rollout, it is also quite favorable. According to management, the estimated cost to pass each new customer is about $150; and the cost to connect a customer is $100. This is similar to the cost reported by Oi, a telecommunications firm rolling out a fiber-optic network in Brazil. If you have a final penetration rate of 45% using the current HSI monthly charge of $28/month, and a steady-state EBITDA margin of 45% (which management believes are both achievable at scale; the current margin is 40%), then the payback time is between six and seven years, and the unlevered IRR is 26% and a levered return of 52%. See Exhibit A for details. Latin America Broadband Telecommunications Market The broadband telecom business in Latin America is a fragmented market on an international basis and a concentrated market on a country-by-country basis. The market is a local market, so the smaller country markets only have a few competitors. This leads to less price competition for TIGO than in larger, more urban markets where there are more competitors. Gig speed internet and wireless are core infrastructure services that will be required in the internet service economy. Currently, broadband usage is growing at a 30-40%/year rate and is expected to increase going forward, as more bandwidthintensive applications are developed and rolled out over time. Since most of TIGO’s competition is from cable companies and incumbent telecom firms (that have low NPSs), TIGO has an opportunity to provide improved customer service versus the cable companies. This highlights the importance of the decentralized management system, incentivized and shareholding country managers, and including NPSs in management’s incentive compensation at the corporate and country levels. Of the other publicly traded Latin American telecommunications firms, TIGO has the largest potential to increase HSI organic revenue growth (by 8%) via a fiber rollout in its incumbent territories. This can be seen in the projections based upon the currently planned and financed fiber rollout shown in Exhibit B. The tilt toward the faster-growing Central American countries (which should get some opportunities to replace China as exporters to the US) versus the slower-growing South American countries will also add a nice tailwind. The countries TIGO services had an average real GDP growth rate of 3.2% per year over the past five years versus the overall 0.7% GDP growth rate for all of Latin America. Downside Protection TIGO has been reducing debt over the past few years with a current proportional debt/EBITDA of 2.7x and a goal of 2.0x. TIGO has a bond rating of Ba2 and yields 3.5% for five- to 10-year bonds. TIGO is in a defensive business—telecommunications services—which has a large amount of recurring revenue. HSI data revenues are increasing, while wireless revenues are increasing at a slower rate. See below for projections and Exhibit B for more detailed projections. Below is the proportional historical and projected revenue, EBITDA, and FCF since 2016 when the Guatemalan and Honduran JVs were deconsolidated. Management and Incentives One of the risks in emerging-markets investing is management, as they may have different incentives than those to which Western investors are accustomed. In this case, you have a management team based in the US (Miami) that has been historically influenced by the firm’s domicile, Sweden. TIGO is led by a former Liberty Latin America executive, Mauricio Ramos. He brings the Liberty Media playbook (a successful leveraged rollup strategy of cable-related properties and associated shareholder friendly corporate actions) to the markets that TIGO serves. TIGO is listed in Sweden and the United States and brings the corporate governance practices, capital allocation, and shareholder renumeration approaches to its operations throughout Latin America. In many countries, TIGO has local JV partners which provide TIGO with access to the local connections. TIGO has management incentives, including TIGO stock (with minimum levels for country managers) at both the corporate and country levels. The capital allocation is also done at both the corporate and country levels. This country-level capital allocation, incentives, and stock ownership is unusual for a Latin American company. The major categories of capital allocation for TIGO are: 1) purchasing minority interests from partners, 2) investing in the HSI broadband rollout described above, 3) selective acquisitions, 4) repurchasing shares, or 5) distributing dividends. Categories 1, 2, 3 and 4 have the most well-defined and highest returns and have been used by management in the past. In 2020, the CEO’s management compensation was 20% base salary and 80% incentive-based bonus, of which short-term incentive (STI) is 50% equity based (TIGO shares) and 50% cash based and long-term incentive (LTI) is 100% equity based (TIGO shares). The 2020 STI compensation was based on service revenue growth, EBITDA growth, operational cash flow growth, NPS, and other operational goals. The 2020 LTI compensation is based upon service and EBITDA growth and relative total shareholder return versus peers. The 2020 equity-based shares were issued at $38.09 per share, and the 2019 shares were issued at $42.70 per share. Overall, 700,000 shares were granted in 2020 (about 0.7% of shares outstanding per year). The management team owns 0.7% of TIGO common stock. TIGO has stock ownership guidelines of 5x the salary for the CEO, 3x for other senior managers, and 1x for country managers. Valuation The valuation of TIGO is an interesting exercise because its expected growth rate is accelerated by the fiber rollout and share buybacks described above. The implied growth using the Graham Formula, adjusted to today’s interest rates ((8.5 + 2g)*(4.4/AAA bond rate)) and the current P/E, is -1.8%, clearly implying that the market expects TIGO’s cash flows to continue to decline. Some benchmarks for growth are the projected sales growth rates of 4.5% per year (based upon the fiber rollout), an EBITDA growth rate of 6% per year, and an adjusted free cash flow growth of 12%. The question is whether this growth rate is sustainable over the next seven years. Given the key penetration, margin, investment, and timing assumptions in the projection model, I believe it is. TIGO is the only Latin American publicly traded telecom firm that has a rollout of this magnitude (adding 18% to revenue) scheduled over the next five to seven years. One firm that also has a Latin American footprint is Liberty Latin America (LILA). LILA has grown revenues and EBITDA at about 8% per year since 2015. The EBITDA margin is similar to TIGO, but historically the conversion to FCF from EBITDA was 50% less than TIGO—25% for TIGO and closer to 12% for LILA. The current FCF multiple of LILA is about 16x. If that multiple is applied to TIGO’s FCF, it yields a value of $74 per share, which I believe is a reasonable 12-month target. If, over the five to seven years, a 12% FCF growth is attained, then the earnings will be $8.19. Applying a 23.8x multiple to these earnings (implying a 4% growth rate over the subsequent seven years) means a value of $195 per share is obtained. Another way to look at valuation is on an enterprise basis. If we value TIGO on a forward EBITDA basis of 9x EBITDA (the current multiple of cable overbuilder WOW!), then the resulting value is $200 per share. If we consider both benchmarks, then a $200 price target is not unreasonable. See Exhibit B for details. This results in a five-year IRR of about 42%. In addition to the core assets, TIGO has about 10,000 towers (with an additional 2,000 under construction), 13 data centers, and a mobile banking division. According to management, these non-core assets are being prepared for either sale-leasebacks or investments by third parties. The estimated value of the towers and data centers is about $2 billion—$1.1 billion for the towers and $900 million for the data centers. The tower valuation of $1.4 billion is based upon an estimated value per tower of $120k based upon tower transaction values (TIGO’s historic transactions averaged $122k/tower and a 2021 Telxius transaction was $110k/tower, 9,300 Latin American towers for €900 million) and Telesites’s current valuation of $252k/tower times 12,000 towers. The data center valuation of $750 million is based upon an estimated value per data center of $58k which is based upon Latin American data center transactions (Anxel data centers were purchase by Equinix for $58k/center, three data centers for $175 million, and Telefónica data centers were purchased by Asterion for $58k/data center, nine data centers for €550 million) times 13 data center. Adding together the towers and data centers, the total valuation of these assets is $2.1 billion. The mobile banking division (TIGO Money) can be valued using a range of values based upon the value of African mobile banking firms and Latin American neobank firms. The mobile banking business had 5 million customers and 48 million transactions in 2020. If we use African mobile banking transactions (20 million Airtel customers were purchased for $2.6 billion and 46 million MTN customers were purchased for $5.0 billion), the average value per user is $121. If we use $121/customer times 5 million transactions, it implies a $600 million value for TIGO Money. If we use recent Latin American neobank transactions (40 million Nubank (Brazil) customers were purchased for a $30 billion valuation and 3.5 million Ualá (Argentina) customers were purchased for a $2.45 billion valuation), the average value per user is $750. If we use the midpoint of the African mobile banking and Latin American neobanks of $435, we get $435 times 5 million customers, and the resulting value is $2.2 billion. This is additional value of $2.7 to $4.2 billion ($27 to $42 per share) in addition to the core business value estimated above. So, for example, if you assume a 12% FCF growth rate and the value of non-core assets, you get a total value of $255 to $270 per share. Comparables Given the fiber rollout and the size of TIGO, the comparable firms include US and Italian small-cap telecommunications firms. One of the larger issues in Latin American firms versus developed markets is currency risk, however; as described above, TIGO’s currency risk is similar to developed markets’ risk. The following are the comparable firms in the US and Italian telecommunications markets. The smaller Italian telecom firms have smaller floats than the US firms and are majority controlled (70%+) by the original owners. There have been some private equity acquisitions in the US rural local exchange carriers (RLEC) space, namely Cincinnati Bell and Alaska Communications. These firms have a similar dynamic associated with their respective fiber rollouts, and private equity firms have invested in these firms for similar reasons that make CNSL attractive. Cincinnati Bell has been purchased by the private equity firm Macquarie Infrastructure Partners, which outbid an original offer from Brookfield Asset Management. Alaska Communications is also in the process of being purchased by ATN International and Freedom 3 Capital. The EV/EBITDA paid by these buyers was 6.5 to 6.9x EBITDA for assets with lower margins than the current price of TIGO (4.6x EBITDA). Benchmarking In comparison to other US and Italian firms, TIGO has above-average (but good) FCF ROE and a high EBITDA margin. With TIGO’s fiber rollout and customer take-up, the fixed asset turns and ROEs should increase. With these favorable operational metrics, TIGO has one of the lowest current and 2021 P/FCF ratios of either group. Risks The primary risks to achieving a target valuation of $72 per share for TIGO include: a lower-than-expected broadband penetration of fiber rollout communities; and a quicker-than-expected decline in the legacy telecom lines. Potential Upside/Catalysts The primary upsides/catalysts include: faster-than-expected penetration of uptake of broadband services; operational leverage due to economies of scale; and re-rating to reflect higher growth. Timeline/Investment Horizon The short-term target is $72, which is more than double today’s price. I think the investment thesis can play out over the next three to five years. By that time, TIGO’s net income and earnings should have appreciated by 75%, and the fair multiple could triple with a 4% increased growth rate. If that is the case, then TIGO will attain a 6.7x return to $235 over five years or 46% annualized. This is similar to a “Davis double,” where both underlying earnings increase along with the fair value multiple. Updated on Dec 1, 2021, 1:24 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: valuewalkDec 1st, 2021

Young Wall Streeters are going wild for crypto. Their bosses don"t know what to do about it.

In Insider Weekly: the young Wall Streeters investing in crypto, the rise and fall of Clubhouse, and Spring Health staffers discuss burnout. Welcome back to Insider Weekly! I'm Matt Turner, the editor in chief of business at Insider.Goldman Sachs polled its interns earlier this year on everything from posting to TikTok to the climate crisis. One takeaway: 21% said they'd invested in cryptocurrencies. Given that Wall Street and its workforce are typically heavily regulated and tracked, I found this striking. In the past, financial institutions have waged war on their staffers communicating on encrypted messaging apps, such as WhatsApp. Now, they're facing a generation that's bypassing brokerage accounts to make investments from their crypto wallets. At the same time, these firms are looking to get in on the crypto craze themselves, with Citigroup this week appointing an executive to lead a new crypto team. That could create new conflicts of interest and lead to a clampdown. Until then, as Reed Alexander and Alex Morrell reported this week, young Wall Streeters are making bank on crypto. Read on for a Q&A on their reporting.Also in this week's newsletter:April Koh built a $2 billion mental-health startup by age 29. But a fast-paced culture there created "a systemic issue of burnout."Clubhouse went from the poster child of VC-backed hype to an app full of "drama rooms" and unhappy creators. This is the story of its rise and fall. The Reddit reckoning had short-sellers scrambling. Now they're back with a vengence. "I gave these meme guys, these Reddit guys too much credit," one told Insider.Let me know what you think of all our stories at mturner@insider.comSign up today and become an Insider for our lowest annual subscription rate ever — just $38 for full access to everything we offer.Inside young Wall Street's crypto crazeMarianne Ayala/InsiderReed Alexander and Alex Morrell take us inside their reporting on how young Wall Streeters are making crypto trades — and what banks' compliance departments are saying about it.What prompted you to look into young Wall Street trading crypto?Reed: Alex and I had seen headlines about senior folks on Wall Street making bank on personal crypto trades. We were curious what junior bankers and financial advisors were up to — and how their firms might be thinking about oversight. Wall Street typically has a lot of rules around what workers can invest in, but we discovered that few have any guidelines in place right now that pertain to digital assets. How are these Wall Streeters able to get around red tape and invest in crypto?Reed: Cryptocurrency is still very much an emerging asset class, and many on Wall Street are scratching their heads over how to police it. Using digital wallets instead of their brokerage accounts is one avenue they're taking to buy crypto without having to turn over any information about their investments to their employers. But it's unclear how long this flexible environment may last.How are banks responding to these crypto trades their employees are making?Alex: It's something of a mixed bag, but primarily it's watch and wait right now. Since most banks don't have significant business operations involving crypto, they're not taking great pains to clamp down on employee trading. That could change if banks get the go-ahead from regulators to embrace digital currencies. We're already seeing some signs of this at places like Goldman Sachs, which has been more eager to pursue crypto than some of its competitors.Read the full report here.Turmoil at April Koh's $2 billion mental-health startupSamantha lee/InsiderApril Koh has built a mental-health unicorn backed by Tiger Global by age 29. But the irony of Spring Health, the startup she founded in her senior year at Yale, was that the mental health of some of its employees deteriorated amid a rush to take on more customers.In a moment when many are reevaluating their priorities and putting a greater emphasis on their mental health, the story reflects a broader debate about startup culture. At Spring Health, moving fast sometimes contradicted the self care it was selling. Read what current and former Spring Health staffers are saying.Inside the rise and fall of ClubhouseMarc Andreessen, a venture capitalist and cofounder of Andreessen Horowitz, participating in an "Atlantic Exchange" interview at 1776 in The Penthouse on May 19, 2014, in Washington, DC.Chip Somodevilla/Getty ImagesClubhouse was the breakout app of the pandemic, a place for creators to talk over a trendy and social audio platform. But now, the app is struggling to stay relevant and keep its users happy. "No one really talks about it anymore," one venture capitalist said. And it isn't for a lack of funding. Its user base is dwindling, and so-called drama rooms are hobbling the app. Here's what happened to the VC-darling app of the pandemic.The death of Wall Street short-sellers has been greatly exaggeratedMarianne Ayala/InsiderDuring the Reddit meme-stock boom earlier this year, retail traders slated short-sellers as sworn enemies. Many predicted the end of an era. "Wall Street's Most Reviled Investors Worry About Their Fate" blared one New York Times headline. But today, some short-sellers are thriving more than ever. Here's why the demise of short-sellers has been greatly exaggerated.More of this week's top readsZillow's CEO took a hit over the recent iBuying fiasco. But he's probably "already planning the next thing."The last market bubble taught Henry Blodget how to approach speculation. He shares three lessons ahead of the next bubble.Having trouble with procrastination? This productivity hack can help you cut down screen time by 40%.Google Cloud salespeople are "frustrated" and worried about layoffs after finding out they might be ineligible for 25% of their huge cash bonuses.Amazon is struggling to break into the lucrative market for SaaS business applications.Happy hours, holiday parties, and office gossip are back. For remote workers, the FOMO is real.China's Xi Jinping is tightening his grip on the country. His plans impact the future of the entire world.Compiled with help from Phil Rosen.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 28th, 2021

4 REITs Your Black Friday Shopping Cart Must Have

As consumers are expected to splurge this holiday season amid rising wages and considerable savings, don't forget to add some REIT stocks that house retailers or support e-retailing. Americans celebrated nature’s bounty on Thanksgiving Day. Now, Black Friday will kick off the annual holiday shopping season, giving retailers a chance to enjoy abundant sales.  And why not? With rising income backed by wage compensation and hefty savings accumulated during the pandemic, consumers are ready to splurge.According to the National Retail Federation (“NRF”) Chief Economist Jack Kleinhenz, “The unusual and beneficial position we find ourselves in is that households have increased spending vigorously throughout most of 2021 and remain with plenty of holiday purchasing power.”In fact, the projections from NRF paint an encouraging picture, with holiday retail sales — excluding restaurants, automobile dealers and gasoline stations — anticipated to climb 8.5-10.5% from the prior year to a total of $843.4-$859 billion, suggesting the highest holiday retail sales on record. Online and other non-store sales are estimated to jump 11-15% to a total of $218.3-$226.2 billion, up from the $196.7 billion reported during the same period last year.Even though e-commerce is expected to remain a significant contributor, people are expected to opt for a more traditional holiday shopping experience this year and shift back to in-store shopping. In anticipation, the hiring for positions in bricks-and-mortar stores and warehouse and distribution centers have gained momentum.This optimism would translate into greater benefits for the real estate sector – particularly the REITs. Higher retail sales — whether online or at physical stores — bring huge profits for these REITs. Increased footfall at malls and shopping center would create further demand for space. Online sales too need real space for storage and efficient distribution.In addition, retailers are utilizing the last-mile stores as indispensable fulfillment and distribution centers to serve the dense population close by and outperforming pure e-commerce players on delivery times and cost efficiency. Also, curbside pick-up, combined with click-and-collect options, are likely to continue gaining attention in the present environment and even in the post-Covid era. And REITs making efforts along these lines are likely to add competitive advantage in current times.Stock PicksTo capitalize on this trend, we have handpicked four stocks for your Black Friday cart. Aside from having solid fundamentals, these better-ranked REITs have high chances of market outperformance over the next 1-3 months. These stocks are witnessing positive estimate revisions too, reflecting analysts’ upbeat view.We suggest investing in Simon Property Group SPG, which is a behemoth in the retail REIT industry and enjoys a portfolio of premium retail assets in the United States and abroad. The adoption of an omni-channel strategy and successful tie-ups with premium retailers have been aiding Simon Property Group. It is also tapping growth opportunities by assisting digital brands to enhance their brick-and-mortar presence, as well as capitalizing on buying recognized retail brands in bankruptcy.Additionally, Simon Property is exploring the mixed-use development option, which has gained immense popularity in recent years among those who prefer to live, work and play in the same area. Moreover, with a solid balance-sheet strength and available capital resources, SPG looks poised to ride this growth curve and bank on opportunities emanating from market dislocations.In the third quarter, Simon Property recorded increased leasing volumes, occupancy gains, shopper traffic and retail sales. Also, management raised the 2021 funds from operations (FFO) per share guidance to the $11.55-$11.65 range, up from the $10.70-$10.80 band projected earlier, suggesting an increase of 85 cents at the mid-point. Simon Property announced a 10% sequential hike in its fourth-quarter 2021 dividend. The company will now pay out $1.65 per share compared with the $1.50 paid out earlier. The increased dividend will be paid out on Dec 31 to its shareholders of record as of Dec 10, 2021.Simon Property Group currently carries a Zacks Rank #2 (Buy). Over the past month, the Zacks Consensus Estimate for 2021 FFO per share witnessed upward revision of 3.8% to $11.28, reflecting analysts’ bullish outlook.Another retail landlord is Federal Realty Investment Trust FRT, a North Bethesda, MD-based retail REIT boasting of a portfolio of premium retail assets — mainly situated in the major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles — along with a diverse tenant base, both national and local.Federal Realty has strategically selected first-ring suburbs of nine major metropolitan markets. Due to the strong demographics and the infill nature of its properties, the company has been able to maintain a high occupancy level over the years. Moreover, its focus on open-air format and “The Pick-Up” concept has poised it well to lure tenants even amid the current health crisis. Furthermore, with the resumption of the economy, widespread vaccination and solid consumer spending, the retail REIT is poised to benefit from its superior assets in premium locations and experience improving leasing environment.Currently, FRT carries a Zacks Rank #2 and has a long-term growth rate of 8.4%. Moreover, for 2021, the stock has seen the Zacks Consensus Estimate for FFO per share being revised 4.9% upward to $ 5.36 over the past month. This also suggests an increase of 18.6% year over year.Our next pick is an industrial REIT stock — Rexford Industrial Realty, Inc. REXR — which is focused on the acquisition, ownership and operation of industrial properties situated in Southern California in-fill markets. Recently, Rexford announced shelling out $125.9 million to acquire five industrial properties in the prime in-fill Southern California submarkets.With these buyouts, Rexford’s 2021 acquisition activity has reached $1.4 billion. Also, more than $300 million of acquisitions are under contract or have accepted offer. Southern California is considered a highly valued industrial property market with supply constraints in the United States.Presently, Rexford carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised 2.5% upward over the last 30 days. This also indicates a projected increase of 23.5% year over year.The cart will be incomplete without another industrial REIT. A promising one on the shelf is Bellevue, WA-based Terreno Realty Corporation TRNO, which targets functional buildings at in-fill locations, which enjoy high-population densities and are located near high-volume distribution points.Terreno Realty recently shelled out $7.7 million to purchase an industrial property in Los Angeles, CA, as part of its acquisition-driven growth strategy. Backed by expansion efforts, TRNO is well poised to enhance its portfolio in the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — which display solid demographic trends and witness healthy demand for industrial real estate.Terreno Realty currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised marginally upward to $1.72 over the last 30 days. This calls for an increase of 19.4% year over year.Here’s how the above stocks have performed in the past three months.Image Source: Zacks Investment ResearchNote: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>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 Simon Property Group, Inc. (SPG): Free Stock Analysis Report Federal Realty Investment Trust (FRT): Free Stock Analysis Report Terreno Realty Corporation (TRNO): Free Stock Analysis Report Rexford Industrial Realty, Inc. (REXR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 26th, 2021

JPMorgan (JPM) Mulls Investment in Greek Fintech Viva Wallet

JPMorgan (JPM) is weighing an investment in Greek fintech firm - Viva Wallet. The deal, if finalized, will further expand the bank's digital offerings across Europe. In a bid to further expand globally and improve its digital offerings, JPMorgan JPM is said to be weighing an investment in Greece-based Viva Wallet, a digital banking and payments firm. This news was first reported by Bloomberg, citing persons familiar with the matter.Serving across 23 European countries, Viva Wallet provides services like business accounts, digital debit cards, small business payment solutions and credit card acceptance. Also, it is one of the certified payment companies for London’s black cabs.Viva Wallet is presently working with an advisor to explore strategic options. Per the people familiar with the matter, the firm is seeking a valuation of almost €1.5 billion ($1.7 billion) in any transaction, which might be an outright sale or partnership.Among the potential parties considering investing in the fintech is JPMorgan. Yet, there is no certainty that the deal with JPM will proceed.Last year, Viva Wallet had acquired the Greece-based digital lender Praxia Bank. Despite the COVID-19 related disruptions, the firm recorded a 29% jump in revenues (per the statements posted on its website). Further, in 2020, it had completed its €75 million Series C fundraising while this April, it announced an $80 million funding round with European, Asian and U.S. fintech investors.With global banks looking to expand digital offerings, there has been a steady rise in investments in similar fintechs. JPMorgan itself has poured millions of dollars this year through more than 30 acquisitions and/or strategic investments. For JPMorgan, the primary reasons include expansion of revenue streams beyond traditional banking services as well as strengthening product offering and improving market share globally.Apart from this, JPMorgan, along with other global banks, including Citigroup C, Morgan Stanley MS and Goldman Sachs GS, is trying to capitalize on the opportunity to expand in China’s $53-trillion financial market, which is now open to foreign firms following the removal of ownership restrictions.This August, JPMorgan received regulatory approval to obtain full ownership of its China securities joint venture – J.P. Morgan Securities (China) Co. Similarly, in October 2021, Goldman received a nod from the China Securities Regulatory Commission (“CSRC”) to take full ownership of Goldman Sachs Gao Hua Securities Company Limited. GS informed this in an email sent to all its employees globally.Citigroup is also seeking to enter the lucrative China financial market. For this, Citi has applied to open a new wholly-owned domestic securities business in mainland China. Likewise, last year, Morgan Stanley received approval from the CSRC to take a majority stake in its China securities joint venture – Morgan Stanley Huaxin Securities Company Limited. Upon completion, MS’s stake increased to 51% from 49%.Thus, we can see that several banks are trying to expand operations across the globe to counter the effects of the low-interest rate environment. If JPMorgan finalizes the deal to buy or invest in Viva Wallet, its footprint will be solidified further.Notable similar deals announced by JPMorgan this year include the acquisition of U.K. digital wealth manager Nutmeg Saving & Investment and a 40% stake in Brazilian digital bank C6.Shares of JPM have rallied 31.4% so far this year compared with the industry’s growth of 40.2%. Image Source: Zacks Investment ResearchCurrently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>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 The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Morgan Stanley (MS): Free Stock Analysis Report Citigroup Inc. (C): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 26th, 2021

Equinix (EQIX), EllaLink Team Up on Subsea Cable System

Equinix (EQIX) partners with EllaLink on a high-capacity subsea cable system between Europe and Latin America, offering a 50% increase in network performance. Equinix Inc. EQIX recently partnered with EllaLink and announced the full operation of a high-capacity subsea cable system between Europe and Latin America. The new system offers a 50% increase in network performance among the data centers in Brazil, Portugal and Spain. The routes had to previously transit through North America.The new system was delivered at Equinix's International Business Exchange (IBX) data centers, namelySP4 in São Paulo, LS1 in Lisbon and MD2 in Madrid.Equinix has proficiency in providing state-of-the-art subsea infrastructure. Because of its access to dense, rich ecosystems of networks, clouds, and financial and IT service providers, EQIX was chosen by EllaLink. Moreover, Equinix  earned much reputation and serves as an interconnection partner to 40 and more current subsea cable projects.Equinix is well-positioned, globally, to bank on robust demand for data-center spaces with its Platform Equinix, which comprises more than 237 data centers across 65 metros and 27 countries.Recently, Equinix partnered with DISH DISH to provide digital infrastructure services. The partnership will support DISH’s first cloud-native, open RAN-based 5G network in the United States.With access to Equinix's IBX data centers, DISH will be able to deliver secure critical interconnections across the U.S. 5G network.Robust growth in cloud computing, the Internet of Things and big data, and a greater call for third-party IT infrastructure are spurring demand for data-center infrastructure. This uptrend is likely to benefit Equinix and other data-center landlords like Digital Realty Trust DLR and CyrusOne Inc. CONE.Strength in the artificial intelligence, autonomous vehicle and virtual/augmented reality markets is anticipated to be strong in the upcoming year. As infrastructure providers for the rapidly-growing digital economy, Equinix, Digital Realty and CyrusOne are well-placed for sustainable growth.Shares of Equinix have gained 8.4% over the past six months, outperforming the industry's growth of 4.7%. EQIX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchHowever, the fierce rivalry could propel competitors to resort to aggressive pricing policies, making Equinix vulnerable to pricing pressure.The Zacks Consensus Estimate for DISH’s current-year fund from operations (FFO) per share has been raised marginally in the past month. DISH currently has a Zacks Rank of 3.Over the last four quarters, DISH’s FFO surpassed the consensus estimate on three occasions and missed the mark on the remaining one, the average surprise being 25.3%. Shares of DISH have appreciated 4.3% year to date, outperforming the industry’s rally of 0.5%.The Zacks Consensus Estimate for Digital Realty’s 2021 FFO per share has been raised marginally over the past month. DLR carries a Zacks Rank of 3, currently.Over the last four quarters, Digital Realty’s FFO surpassed the consensus estimate in all the trailing four quarters, the average being 2.57%. Shares of DLR have appreciated 4.7% in the past three months, outperforming the industry’s rally of 2.7%.The Zacks Consensus Estimate for CyrusOne’s 2021 FFO per share has moved marginally north in the past month. CONE is currently Zacks #3 Ranked.Over the last four quarters, CyrusOne’s FFO surpassed the consensus mark on all occasions, the average being 2.32%. Shares of CONE have appreciated 20.9% in the past three months, outperforming the industry’s rally of 2.7%.Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>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 Equinix, Inc. (EQIX): Free Stock Analysis Report DISH Network Corporation (DISH): Free Stock Analysis Report Digital Realty Trust, Inc. (DLR): Free Stock Analysis Report CyrusOne Inc (CONE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 25th, 2021

Citi (C) to Add Staff in Crypto Unit to Boost Market Exposure

Citigroup (C) is set to hire 100 additional people to its digital assets division in an effort to enhance its presence in the cryptocurrency space. In an effort to strengthen and enhance its presence in the digital asset space, Citigroup Inc. C is set to hire 100 additional people to its blockchain and digital assets division. The move comes amid increasing institutional investor demand for exposure to the cryptocurrency market.Per a memo shared by Citigroup with CoinDesk, the company is appointing Puneet Singhvi as head of the division of the Institutional Clients Group (“ICG”) segment, which will come into effect on Dec 1, 2021.Singhvi will now report to Emily Turner, who is in charge of business development at the ICG. Shobhit Maini and Vasant Viswanathan will co-head Global Markets' blockchain and digital assets.Singhvi was the head of Citigroup’s blockchain and digital assets division for Global Markets.Citigroup has been contemplating offering digital assets to clients.Turner stated, “Prior to offering any products and services, we are studying these markets, as well as the evolving regulatory landscape and associated risks in order to meet our own regulatory frameworks and supervisory expectations.”Citigroup, which has been long planning to enter the crypto space, became one of the latest global banks to offer digital assets services for its wealthy clients when in June 2021, it announced the launch of the business offshoot — Digital Assets Group.The division, part of the bank’s wealth management division, focuses on cryptocurrencies, non-fungible tokens, stablecoins and central bank digital currencies.Notably, Citigroup’s long-term strategy to increase fee-based business mix and shrink its non-core assets bodes well for long-term growth. The bank has been investing in growth opportunities across wealth and commercial banking, treasury and trade solutions, and securities service businesses to grow fee revenues across the ICG segment.The efforts are expected to bolster Citigroup’s position in the booming digital industry and help the bank diversify its revenue stream.Over the past year, shares of Citigroup have rallied 19.3% compared with 43.7% growth recorded by the industry. Image Source: Zacks Investment ResearchCitigroup currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Our TakeUntil July 2020, the Office of the Comptroller of the Currency did not grant permission to banks to hold cryptocurrencies. The amendment post-July gave banks the go-ahead to begin exploring cryptocurrency operations.In fact, a few years ago, banks were also not very interested in the crypto and digital asset space. But now, after witnessing an increase in demand for the emerging market, banks and financial institutions are slowly embracing cryptocurrencies.This July, JPMorgan JPM became the first major bank in the United States to allow its financial advisors to give all its wealth-management clients access to cryptocurrency funds. Next month, it came to light that JPMorgan was offering its Private Bank wealth management customers access to an in-house passively managed bitcoin fund. The offering was being made in partnership with bitcoin powerhouse New York Digital Investment Group.JPMorgan has now launched a division focused on digital assets named Onyx. The Wall Street giant has even launched its own digital currency, JPM Coin.Among others, Goldman Sachs GS launched trading with non-deliverable forwards, i.e. derivatives tied to Bitcoin’s price, which will be cash-settled. Goldman Sachs is shielding itself from the cryptocurrency’s fluctuations by trading Bitcoin futures in block trades on CME Group Inc., with Cumberland DRW as its trading partner.The Bank of New York Mellon Corporation BK has been working on offering custodial services to clients. This February, BNY Mellon became the first global custody bank to announce plans to form a new unit called Digital Assets to help its institutional clients hold, transfer and issue digital assets. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>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 The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Citigroup Inc. (C): Free Stock Analysis Report The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 24th, 2021

Latest Treasury, Fed, & BIS Reports Confirm: All Twisted Paths Lead To Gold

Latest Treasury, Fed, & BIS Reports Confirm: All Twisted Paths Lead To Gold Authored by Matthew Piepenberg via GoldSwitzerland.com, The facts keep piling up, and recent BIS, Treasury and Fed reports confirm that all twisted paths lead to gold. In a recent article, I posed the rhetorical question of when will policy makers finally stop lying and allow honest facts and natural market forces to return? Lying is the New Normal Unfortunately, as we examine the two latest working papers from the Fed/Treasury Dept cabal and the Bank of International Settlements, each confirms that lies are officially the new normal. Over the years, we’ve tracked popularized delusions masquerading as policy with evidence rather than awe, addressing such topics as the open fictions of CPI inflation reporting and its “transitory” myth to the latest sample of double-speak spewing out of the Fed or White House. Frankly, these well-masked fibs happen so frequently we never run out of material, including Biden assuring us earlier—and once again last week– of an “independent Fed.” He’s trying a bit too hard to convince us, no? History (Debt) Repeating Itself History’s patterns confirm that the more a system implodes under the weight of its own self-inflicted extravagance (typically fatal debt piles driven by years of war, wealth disparity, currency debasement and political/financial corruption), the powers-that be resort to increasingly autocratic controls, distractions and automatic lying. The list of such examples, from ancient Rome, 18th century France, and 20th century Europe to 21st century America are long and diverse, and whether it be a Commodus, Romanov, Batista, Biden, Franco or Bourbon at the helm of a sinking ship, the end game for bloated leaders reigning over bloated debt always ends the same: More lies, more controls, less liberty, less truth and less free markets. Seem familiar? As promised above, however, rather than just rant about this, it’s critical to simply show you. As I learned in law school, facts, alas, are far more important than accusations. Toward that end, let’s look at the facts. The Latest Joint-Lie from the Treasury Department & Fed Earlier this month, the Fed and Treasury Department came up with a report to discuss, well, “recent disruptions” … The first thing worth noting are the various “authors” to this piece of fiction, which confirm the now open marriage between the so-called “independent” Fed and the U.S. Treasury Dept. If sticking former Fed Chair, Janet Yellen, at the helm of the Treasury Department (or former ECB head, Mario Draghi, in the Prime Minister’s seat in Italy) was not proof enough of central banks’ increasingly centralized control over national policy, this latest evidence from the Treasury and Fed ought to help quash that debate. In the report above, we are calmly told, inter alia, that the U.S. Treasury market remains “the deepest and most liquid market in the world,” despite the ignored fact that most of that liquidity comes from the Fed itself. Over 55% of the Treasury bonds issued since last February were not bought by the “open market” but, ironically, by private banks which misname themselves as a “Federal Open Market Committee” … The ironies (and omissions) do abound. But even the authors to this propaganda piece could not ignore the fact that this so-called “most liquid market in the world” saw a few hiccups in recent years (i.e., September of 2019, March of 2020) … Translated Confessions of a Fake Taper The cabal’s deliberately confusing response (and solution), however, is quite telling, and confirms exactly what we’ve been forecasting all along, namely: More QE by another name. Specifically, these foxes guarding our monetary hen house have decided to regulate “collateral markets and Money Market Funds into buying a lot more UST T-Bills” by establishing “Standing Repo Facilities for domestic and foreign investors” which are being expanded from “Primary Dealers” to now “other Depository Institutions going forward” to “finance growing US deficits” by making more loans “via these repo facilities (SRF and FIMA).” Huh? Folks, what all this gibberish boils down to is quite simple and of extreme importance. In plain speak, the Fed and Treasury Department have just confessed (in language no one was ever intended to understand) that they are completely faking a Fed taper and injecting trillions more bogus liquidity into the bond market via extreme (i.e., desperate) T-Bill support. Again, this is simply QE by another name. Period. Full stop. The Fed is cutting down on long-term debt issuance and turning its liquidity-thirsty eyes toward supporting the T-Bill/ money markets pool for more backdoor liquidity to prop up an otherwise dying Treasury market. Again, this proves that the Fed is no longer independent, but the near exclusive (and rotten) wind beneath the wings of Uncle Sam’s bloated bar tab. Or stated more simply: The “independent” Fed is subsidizing a blatantly dependent America. Biden Doubles Down on the Double-Speak Of course, as evidence of increasingly Fed-centralized control over our national economy now becomes embarrassingly obvious (yet deliberately hidden in “market speak’), it was imperative to roll out Biden from his nap-time and compel him to say the exact opposite. In other words: Cue the spin-selling. No shocker there…  Just 2 days after the foregoing and joint Fed/Treasury “report” went public, the U.S. President, talking points in extra-large font on his prompt-reader), announced that he is “committed to the independence of the Fed to monitor inflation and combat it.”    That’s rich. First, it’s now obvious that the Fed is anything but independent. They might as well share the same office space as the Treasury Dept. Second, the way the Fed “monitors” (aka: lies about) inflation has been an open joke for years. Inflation, as accurately measured by the 1980’s CPI scale, is not at the already embarrassing 6% reported today, but more honestly at 15%. Ouch. When compared against a current (and artificially suppressed) 1.6% yield on the 10-Year UST, that means the most important bond in the global economy is offering you a real yield of negative 13.4%. Think about that for a moment… Thirdly, the Fed is not about “combating” inflation, but rather encouraging more of the same to inflate away debt via negative real rates, as we’ve warned all year. And boy are they getting a nice dose of negative real rates now… In short, if Biden or other political puppets spoke plain truth as opposed to optic spin, his words would translate as follows:  “We are committed to unfettered dependence on the Fed to subsidize our debt and lie about inflation while encouraging more of the same.” Yellen—The Queen of Lies Meanwhile, Yellen chirps in during that same week promising to never allow a repeat of the 1970’s inflation level. Again, nice words; but when using the same CPI scale to measure inflation that was used in the 1970’s, the U.S. is already experiencing 1970’s like inflation. Recently, of course, Yellen openly blamed all our inflation problems on COVID rather than her own reflection. Again, the ironies do abound. Now, on to more acronyms and more, well, lies from above… Enter More BS from the IBS as to CBDC As if the spin coming out of DC was not enough to upset one’s appetite for candor, the Bank of International Settlements (BIS) has been busy telegraphing its own move toward more globalized central controls under the guise of a Central Bank Digital Currency, or “CBDC.” In a recent working paper, the BIS literally produced a graph whereby it foresees central banks issuing CBDC as legal tender issued directly to consumers. Read that last line again. And here’s the BIS’s own graph (or skunk in the woodpile) to prove we’re not making this crazy up: This literally confirms that despite Yellen, Biden and Powell’s recent promises to “combat” inflation (which they hitherto denied even existed), the BIS is now anchoring a new (i.e., more fiat) digital currency system which will send inflation to the moon—not to mention control and monitor the way consumers receive, use and spend “money.” Of course, this is quite convenient to the centralized power brokers. In one CBDC “swoop,” they can now create inflation while controlling consumers at the same time. Welcome to the twisted new normal. Thus, when it comes to the banking elite, it’s far safer to watch what they’re doing rather than trust what they’re saying. As we’ve warned for months, the banking/political cabal want more not less inflation. Why? Because that’s what all historically debt-soaked and failed regimes have wanted and done for centuries—inflate their way out the debt-hole they alone dug. All Twisted Roads Lead to Gold Needless to say, more liquidity, and more inflation, joined by more rate repression, truth destruction and currency debasement means gold’s recent bump north is just the beginning of the ride up and to the right for this “barbourins relic.” As we’ve said with consistent conviction and hard facts, not to mention spot-on inflation reporting, gold’s golden era has yet to even begin. As global currencies fall deeper toward the ocean floor in a sea of excess liquidity, gold, like an historically faithful cork, makes its way to the surface to get the final word. In short: It’s not that gold is getting stronger, it’s just that the currency in your wallet, bank and portfolio is getting weaker. Tyler Durden Wed, 11/24/2021 - 06:30.....»»

Category: blogSource: zerohedgeNov 24th, 2021

A day in the life of the cofounder of Grab, the ride-hailing giant that beat Uber in Southeast Asia and is eyeing a $40 billion listing in the US

Anthony Tan is famous for optimizing his schedule, such as by taking calls on the treadmill. He's been quoted saying he doesn't have time to watch movies. Anthony Tan started Grab in Malaysia in 2012. It now operates across Southeast Asia and is headquartered in Singapore.Edgar Su/REUTERS Anthony Tan is the cofounder of Grab, a ride-hailing company with 25 million monthly transaction users. Grab is based in Singapore, and it now offers a variety of services beyond car rides. Tan, a father of four, starts his day a 6 a.m. and has an early, hour-long dinner with his family every night. Anthony Tan cofounded Grab as a ride-hailing company in 2012.Edgar Su/REUTERSA Harvard graduate and the son of a Malaysian auto-conglomerate owner, Tan started Grab as an alternative to Malaysia's infamous public taxis, which were once ranked the worst cab service in the world. The ride-hailing app grew to rival Uber in Southeast Asia and eventually pushed it out of the region in 2018.Now headquartered in Singapore, Grab aims to be a super app that offers anything from insurance to grocery deliveries to courier services. Grab has almost 25 million monthly transaction users, the company said, and around 7,000 employees, based on figures it released.With Tan, 39, at the helm, Grab is also looking to go public in the US at a $40 billion valuation.The tech CEO is famous for optimizing his schedule for maximum efficiency, such as by taking calls on the treadmill, and has been quoted saying he doesn't have time to watch movies.Here's a look at how Tan gets it all done in a day.6 to 8 a.m: Tan starts his day early with some quiet time. He plays with his kids before heading to the gym for an hour-long workout.Anthony TanTan sticks to an early morning routine of stretching, reading the Bible, praying, and checking his emails from the night before.Then he spends some time playing and cuddling with his four kids. "They're still in the phase where their parents are superheroes, which I savor all I can," said Tan.At 7 a.m., he goes to the gym, sometimes with his wife, Chloe.8 to 9 a.m: Tan starts work at home with an oat milk manuka latte made by his wife.Anthony Tan"In the pre-COVID days, which feels like a distant memory now, I would be traveling every other day to a Southeast Asian country like Indonesia or Thailand," Tan said.He lives in Singapore, where pandemic restrictions are still gradually being eased. Staying home because of COVID-19 has given Tan more time to spend with his family, he said, but it also means his schedule is more crammed with Zoom meetings.Tan works at home from a standing desk is right next to his kids' playroom. It also faces his living room, where there's a mini kids' gym. His workspace placement is intentional because he wants to be able to see his children while he works. And he's got no qualms about his kids making noise during his meetings. "My colleagues are used to this," he said.9 to 10 a.m: Tan attends an online training session for his leadership team about experimentation at work.Anthony TanEveryone working at Grab, including the leadership team, commits time on their schedules to participate in workshops, Tan said. 11 a.m. to noon: Tan calls Grab's country operations and public affairs teams to discuss pandemic-related changes.An oxygen concentrator donation to Indonesia from Grab.Anthony TanTan and his team talk over Grab's operational changes as different countries in the region alter their individual movement restrictions amid the pandemic."We usually do these calls during our monthly business review meetings, but with the Delta variant of Covid, we've had to hold more regular calls for now as we respond to the growing number of cases across the region," said Tan.Noon to 1:30 p.m: Tan has lunch with Teng Wen Wee, the founder of Lo and Behold Group, a collection of restaurants that uses his company's food services.Jordan Lye/Getty ImagesTan has nasi lemak — rice that's cooked with coconut milk and pandan leaves and is typically served with peanuts, sliced cucumbers, sambal chili, and other ingredients.He uses the lunch meeting to get feedback from Wee on Grab's food delivery service as their companies work through Singapore's social distancing measures. Singapore, a country of around 5.45 million people, on Monday raised the number of people allowed at social gatherings from two to five but many restaurants are still struggling.Tan likes taking work lunches, he said, whether with business partners or during one-on-ones with his staff, because there's "nothing like bonding over food."1:30 to 2:30 p.m: Tan hops on a call with a fellow Harvard Business School graduate, who works in a different industry and asked him for some advice.Grab"My journey has been paved by many leaders who I look up to who have provided me with great guidance over the years, and in turn, I believe in sharing knowledge to help others grow and succeed," Tan said.2:30 to 3:30 p.m: Tan has a Zoom meeting with board members of a consortium between Grab and a local telecom.GrabGrab has partnered with Singaporean telecom Singtel to develop a digital bank, and the board discussed plans to keep the project in line with government regulations, said Tan.On the call with him is Hsieh Fu Hua, the board director of GIC, Singapore's sovereign wealth fund."Board meetings are not stuffy events, unlike what one might see on TV. There's usually good energy, and we cover a lot of territory in each session, such as strategy, governance, budgeting, talent, and marketing," Tan said.3:30 to 3:45 p.m: Tan orders a teatime snack between meetings and has a chat with the deliveryman.GrabTan snaps up some coffee and pastries for his break. He also ordered some rice with dishes for his family — from Grab, of course.He said he comes from a traditional Chinese family and likes "hot and hearty soups," but is trying out different types of cuisines.4 to 6 p.m: Tan wraps up his meetings and visits one of Grab's cloud kitchens — commercial kitchens for takeout or delivery services only.GrabGrab's cloud kitchen at Aljunied in eastern-central Singapore offers foods like beef bowls, Japanese maki, and the nasi lemak that Tan had earlier for lunch.Tan discusses several business ventures with his team, like a Food Priority Delivery service where users can pay extra to get their meals faster. If their food arrives late, they get a voucher. Tan said it's like a service guarantee for Grab's food delivery.6 to 7 p.m: Tan has a hard stop for meetings and calls at 6. He and his family set aside an hour to eat dinner together.Grab"It's a habit to eat early now, and my wife and I are known to always host the earliest dinners," Tan said.Then, Tan and his wife Chloe go through some pointers he learned from the leadership seminar earlier. Today, the takeaway points focused on the six fundamental motivations for people's behavior.  7 to 8:30 p.m: Tan gets his kids ready for bed and reads them a bedtime story, which he says is "a rare treat."Grab"No matter how intense the day has been, how many difficult decisions and conversations I've had that day, I just need to sit with the children for five minutes and listen to their hilarious stories to reset myself," Tan said.Life as a CEO has meant that Tan gets to spend less time with his family than he would like. A silver lining of the travel restrictions during the last two years is that he's been at home more, he said.8:30 to 11:30 p.m: Tan calls a few business partners in the US and clears his emails from a second work-from-home desk in his bedroom.GrabAfter dinner, Tan gets back to work and takes some calls with people from different time zones. One of those calls is with the CEO of a Fortune 500 company who's a partner with Grab and an unofficial advisor to Tan and his company."I go through plans for the next couple of hours. The extra quiet allows me to focus and do some deep work," Tan said.11:30 p.m: Tan has an end-of-day stretch, reads a book, and then goes to bed.GrabHe's been reading "Principles" by Ray Dalio, which Tan said is one of his favorite recent reads."It's important to get culture right," Tan said. "Dalio talks about how we should create a culture where it's okay to make mistakes, but not okay not to learn from them."By now, the house is quiet. Tan spends a few minutes finishing up his book, and then retires for the night.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 24th, 2021

A day in the life of the cofounder of Grab, the ride-hailing giant that beat Uber in Southeast Asia and is eyeing a $40 billion IPO in the US

Anthony Tan is famous for optimizing his schedule, such as by taking calls on the treadmill. He's been quoted saying he doesn't have time to watch movies. Anthony Tan started Grab in Malaysia in 2012. It now operates across Southeast Asia and is headquartered in Singapore.Edgar Su/REUTERS Anthony Tan is the cofounder of Grab, a ride-hailing company with 25 million monthly users. Grab is based in Singapore, and it now offers a variety of services beyond car rides. Tan, a father of four, starts his day a 6 a.m. and has an early, hour-long dinner with his family every night. Anthony Tan cofounded Grab as a ride-hailing company in 2012.Edgar Su/REUTERSA Harvard graduate and the son of a Malaysian auto-conglomerate owner, Tan started Grab as an alternative to Malaysia's infamous public taxis, which were once ranked the worst cab service in the world. The ride-hailing app grew to rival Uber in Southeast Asia and eventually pushed it out of the region in 2018.Now headquartered in Singapore, Grab aims to be a super app that offers anything from insurance to grocery deliveries to courier services. Grab has almost 25 million monthly users, the company said, and around 7,000 employees, based on figures it released.With Tan, 39, at the helm, Grab is also looking to go public in the US at a $40 billion valuation.The tech CEO is famous for optimizing his schedule for maximum efficiency, such as by taking calls on the treadmill, and has been quoted saying he doesn't have time to watch movies.Here's a look at how Tan gets it all done in a day.6 to 8 a.m: Tan starts his day early with some quiet time. He plays with his kids before heading to the gym for an hour-long workout.Anthony TanTan sticks to an early morning routine of stretching, reading the Bible, praying, and checking his emails from the night before.Then he spends some time playing and cuddling with his four kids. "They're still in the phase where their parents are superheroes, which I savor all I can," said Tan.At 7 a.m., he goes to the gym, sometimes with his wife, Chloe.8 to 9 a.m: Tan starts work at home with an oat milk manuka latte made by his wife.Anthony Tan"In the pre-COVID days, which feels like a distant memory now, I would be traveling every other day to a Southeast Asian country like Indonesia or Thailand," Tan said.He lives in Singapore, where pandemic restrictions are still gradually being eased. Staying home because of COVID-19 has given Tan more time to spend with his family, he said, but it also means his schedule is more crammed with Zoom meetings.Tan works at home from a standing desk is right next to his kids' playroom. It also faces his living room, where there's a mini kids' gym. His workspace placement is intentional because he wants to be able to see his children while he works. And he's got no qualms about his kids making noise during his meetings. "My colleagues are used to this," he said.9 to 10 a.m: Tan attends an online training session for his leadership team about experimentation at work.Anthony TanEveryone working at Grab, including the leadership team, commits time on their schedules to participate in workshops, Tan said. 11 a.m. to noon: Tan calls Grab's country operations and public affairs teams to discuss pandemic-related changes.An oxygen concentrator donation to Indonesia from Grab.Anthony TanTan and his team talk over Grab's operational changes as different countries in the region alter their individual movement restrictions amid the pandemic."We usually do these calls during our monthly business review meetings, but with the Delta variant of Covid, we've had to hold more regular calls for now as we respond to the growing number of cases across the region," said Tan.Noon to 1:30 p.m: Tan has lunch with Teng Wen Wee, the founder of Lo and Behold Group, a collection of restaurants that uses his company's food services.Jordan Lye/Getty ImagesTan has nasi lemak — rice that's cooked with coconut milk and pandan leaves and is typically served with peanuts, sliced cucumbers, sambal chili, and other ingredients.He uses the lunch meeting to get feedback from Wee on Grab's food delivery service as their companies work through Singapore's social distancing measures. Singapore, a country of around 5.45 million people, on Monday raised the number of people allowed at social gatherings from two to five but many restaurants are still struggling.Tan likes taking work lunches, he said, whether with business partners or during one-on-ones with his staff, because there's "nothing like bonding over food."1:30 to 2:30 p.m: Tan hops on a call with a fellow Harvard Business School graduate, who works in a different industry and asked him for some advice.Grab"My journey has been paved by many leaders who I look up to who have provided me with great guidance over the years, and in turn, I believe in sharing knowledge to help others grow and succeed," Tan said.2:30 to 3:30 p.m: Tan has a Zoom meeting with board members of a consortium between Grab and a local telecom.GrabGrab has partnered with Singaporean telecom Singtel to develop a digital bank, and the board discussed plans to keep the project in line with government regulations, said Tan.On the call with him is Hsieh Fu Hua, the board director of GIC, Singapore's sovereign wealth fund."Board meetings are not stuffy events, unlike what one might see on TV. There's usually good energy, and we cover a lot of territory in each session, such as strategy, governance, budgeting, talent, and marketing," Tan said.3:30 to 3:45 p.m: Tan orders a teatime snack between meetings and has a chat with the deliveryman.GrabTan snaps up some coffee and pastries for his break. He also ordered some rice with dishes for his family — from Grab, of course.He said he comes from a traditional Chinese family and likes "hot and hearty soups," but is trying out different types of cuisines.4 to 6 p.m: Tan wraps up his meetings and visits one of Grab's cloud kitchens — commercial kitchens for takeout or delivery services only.GrabGrab's cloud kitchen at Aljunied in eastern-central Singapore offers foods like beef bowls, Japanese maki, and the nasi lemak that Tan had earlier for lunch.Tan discusses several business ventures with his team, like a Food Priority Delivery service where users can pay extra to get their meals faster. If their food arrives late, they get a voucher. Tan said it's like a service guarantee for Grab's food delivery.6 to 7 p.m: Tan has a hard stop for meetings and calls at 6. He and his family set aside an hour to eat dinner together.Grab"It's a habit to eat early now, and my wife and I are known to always host the earliest dinners," Tan said.Then, Tan and his wife Chloe go through some pointers he learned from the leadership seminar earlier. Today, the takeaway points focused on the six fundamental motivations for people's behavior.  7 to 8:30 p.m: Tan gets his kids ready for bed and reads them a bedtime story, which he says is "a rare treat."Grab"No matter how intense the day has been, how many difficult decisions and conversations I've had that day, I just need to sit with the children for five minutes and listen to their hilarious stories to reset myself," Tan said.Life as a CEO has meant that Tan gets to spend less time with his family than he would like. A silver lining of the travel restrictions during the last two years is that he's been at home more, he said.8:30 to 11:30 p.m: Tan calls a few business partners in the US and clears his emails from a second work-from-home desk in his bedroom.GrabAfter dinner, Tan gets back to work and takes some calls with people from different time zones. One of those calls is with the CEO of a Fortune 500 company who's a partner with Grab and an unofficial advisor to Tan and his company."I go through plans for the next couple of hours. The extra quiet allows me to focus and do some deep work," Tan said.11:30 p.m: Tan has an end-of-day stretch, reads a book, and then goes to bed.GrabHe's been reading "Principles" by Ray Dalio, which Tan said is one of his favorite recent reads."It's important to get culture right," Tan said. "Dalio talks about how we should create a culture where it's okay to make mistakes, but not okay not to learn from them."By now, the house is quiet. Tan spends a few minutes finishing up his book, and then retires for the night.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 24th, 2021

Powell"s Renomination Confirms Fed Policy Continuity: 5 Picks

We have selected five stocks that have strong growth potential for the rest of 2021. These are Dow, PSX, BLDR, WLK and CAR. On Nov 22, President Joe Biden renominated incumbent Fed Chairman Jerome Powell for a second term. Market participants have appreciated the President’s decision as it seems that the White House also wants the central bank to continue its relatively accommodative and moderately hawkish monetary policies. This is because the U.S. economy is suffering from mounting inflationary pressure as the pandemic continues.The renomination of Powell as Fed Chair is likely to remove uncertainties in investors’ minds regarding the central bank’s approach to balance price stability, full employment and economic growth. This will pave the way for the market’s northward journey. We have selected five stocks that are likely to benefit from the continuation of the ongoing monetary policies. These are  Dow Inc. DOW, Avis Budget Group Inc. CAR, Phillips 66 PSX, Westlake Chemical Corp. WLK and Builders FirstSource Inc. BLDR.Fed Remains Dovish Despite TaperingOn Nov 3, Powell said in his post-FOMC meeting statement that the Fed would start reducing its existing $120 billion per month bond-buy program ($80 billion Treasury Note and $40 billion mortgage-backed securities) effective this month.However, despite adopting the first major shift from the ultra-dovish monetary policies that it initiated in March 2020, the overall tone of Powell’s statement sounded dovish as he categorically delinked bond-buy tapering from the future interest rate hike.The Fed decided to reduce its existing bond-buy program by $15 billion per month ($10 billion Treasury Note and $5 billion mortgage-backed securities) per month. At this rate, the quantitative easing program will terminate in June 2022. The gradual elimination of the monetary stimulus is a calculated move by the central bank to avoid a 2013 like taper tantrum.Having initiated the tapering, the Fed chair said “Our decision today to begin tapering our asset purchase does not imply any direct signal regarding our interest rate policy. We continue to articulate a different and more stringent test for the economic conditions that would need to be met before raising the federal funds rate.”Accommodative Monetary Stances to ContinueThe renomination of Powell as Fed Chair and the selection of Fed Governor Lael Brainard as vice-chair of the board of governors indicate that the White House wants the central bank to take a gradual approach using its policy tools and variables to stabilize soaring prices.Both Powell and Brainard are known for their relative dovish approach toward monetary policies. Powell is highly appreciated by market participants for his timely intervention by reducing the Fed funds rate to nearly zero level and initiating a massive $120 billion per month of bond-buy program in order to maintain sufficient liquidity in the economy to cope with the pandemic-led unprecedented economic devastations.On Nov 3, despite initiating tapering of the quantitative easing program, Powell only slightly adjusted the Fed’s view on inflation from “transitory” to “expected to be transitory.” This clearly implies that the central bank is in no hurry to hike the benchmark interest rate from the current range of 0-0.25%. He also said that the Fed is ready to adjust the pace of tapering “if warranted by changes in the economic outlook.”The Fed has maintained that a rate hike is unlikely before the second half of 2022. Moreover, the appointment of Powell and Brainard as the two most powerful heads of the Fed signaled that the first rate hike may be delayed till late 2022.Our Top PicksSeveral good stocks are available for investment for the rest of this year. However, we have applied our VGM Style Score to narrow the search to the five stocks mentioned above. These stocks have strong growth potential for the rest of 2021 and have seen solid earnings estimate revisions within the past 30 days. Each of our picks sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.The chart below shows the price performance of our five picks in the past three months.Image Source: Zacks Investment ResearchDow should gain from cost synergy savings and productivity initiatives. Dow is focused on maintaining cost and operational discipline through cost synergy and stranded cost-removal initiatives. Actions to reduce operating costs are expected to lend support to DOW earnings in 2021.Dow’s restructuring program is also expected to deliver margin benefits. Investment in high-return projects should also be accretive to its earnings. Management is investing in several high-return growth projects including the expansion of downstream silicones capacity.DOW has an expected earnings growth rate of more than 100% for the current-year. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 30 days.Avis Budget Group provides car and truck rentals, car sharing, and ancillary services to businesses and consumers. The ability of Avis Budget Group to cater to a wide range of mobility demands helps it expand and strengthen its global foothold through organic growth.Avis Budget Group operates through distinct global brands that focus on different market segments and complement other brands in their respective regional markets. Fleet expansion and technology enhancement efforts by CAR are likely to enhance its offerings.  Avis Budget Group has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved has 0.8% over the past seven days.Phillips 66 is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strength. The company is a leader in the midstream business, which generates stable fee-based revenues. Phillips 66, is well-positioned for making massive profits from higher demand for distillate fuels.Contributions from the olefins and polyolefins business, backed by high demand, continue to drive PSX’s chemicals segment. Phillips 66’s move of expanding its footprint in the battery supply chain through NOVONIX investment is praiseworthy.Phillips 66 has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 48% over the past 30 days.Builders FirstSource manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. Builders FirstSource operates through four segments: Northeast, Southeast, South and West.Builders FirstSource benefits from its focus on cost synergies, strategic acquisition, and robust demand arising from solid housing and repair & remodeling activities. BLDR continues to focus on investing in innovations and enhancing digital solutions for its customers.  Builders FirstSource has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 31.1% over the past 30 days.Westlake Chemical is benefiting from synergies from the Axiall acquisition. The buyout has diversified its product portfolio and geographical operations. The NAKAN acquisition has also allowed Westlake Chemical to boost its compounding business globally. Further, Westlake Chemical sees favorable demand trends for polyethylene and polyvinyl chloride resin.Strong demand in the polyethylene business is likely to continue, especially in food packaging. Also, rising housing starts in the United States augur well for WLK’s downstream vinyl products business and domestic demand for PVC. Westlake Chemical should also benefit from its capacity expansion projects.Westlake Chemical has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the past 30 days. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>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 Westlake Chemical Corporation (WLK): Free Stock Analysis Report Avis Budget Group, Inc. (CAR): Free Stock Analysis Report Dow Inc. (DOW): Free Stock Analysis Report Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report Phillips 66 (PSX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 23rd, 2021

In Memory Of JFK: The First US President To Be Labeled A Terrorist & Threat To National Security

In Memory Of JFK: The First US President To Be Labeled A Terrorist & Threat To National Security Authored by Cynthia Chung via The Saker blog, In April 1954, Kennedy stood up on the Senate floor to challenge the Eisenhower Administration’s support for the doomed French imperial war in Vietnam, foreseeing that this would not be a short-lived war. In July 1957, Kennedy once more took a strong stand against French colonialism, this time France’s bloody war against Algeria’s independence movement, which again found the Eisenhower Administration on the wrong side of history. Rising on the Senate floor, two days before America’s own Independence Day, Kennedy declared: “The most powerful single force in the world today is neither communism nor capitalism, neither the H-bomb nor the guided missile – it is man’s eternal desire to be free and independent. The great enemy of that tremendous force of freedom is called, for want of a more precise term, imperialism – and today that means Soviet imperialism and, whether we like it or not, and though they are not to be equated, Western imperialism. Thus, the single most important test of American foreign policy today is how we meet the challenge of imperialism, what we do to further man’s desire to be free. On this test more than any other, this nation shall be critically judged by the uncommitted millions in Asia and Africa, and anxiously watched by the still hopeful lovers of freedom behind the Iron Curtain. If we fail to meet the challenge of either Soviet or Western imperialism, then no amount of foreign aid, no aggrandizement of armaments, no new pacts or doctrines or high-level conferences can prevent further setbacks to our course and to our security.” In September 1960, the annual United Nations General Assembly was held in New York. Fidel Castro and a fifty-member delegation were among the attendees and had made a splash in the headlines when he decided to stay at the Hotel Theresa in Harlem after the midtown Shelburne Hotel demanded a $20,000 security deposit. He made an even bigger splash in the headlines when he made a speech at this hotel, discussing the issue of equality in the United States while in Harlem, one of the poorest boroughs in the country. Kennedy would visit this very same hotel a short while later, and also made a speech: “Behind the fact of Castro coming to this hotel, [and] Khrushchev…there is another great traveler in the world, and that is the travel of a world revolution, a world in turmoil…We should be glad [that Castro and Khrushchev] came to the United States. We should not fear the twentieth century, for the worldwide revolution which we see all around us is part of the original American Revolution." What did Kennedy mean by this? The American Revolution was fought for freedom, freedom from the rule of monarchy and imperialism in favour of national sovereignty. What Kennedy was stating, was that this was the very oppression that the rest of the world wished to shake the yoke off, and that the United States had an opportunity to be a leader in the cause for the independence of all nations. On June 30th, 1960, marking the independence of the Republic of Congo from the colonial rule of Belgium, Patrice Lumumba, the first Congolese Prime Minister gave a speech that has become famous for its outspoken criticism of colonialism. Lumumba spoke of his people’s struggle against “the humiliating bondage that was forced upon us… [years that were] filled with tears, fire and blood,” and concluded vowing “We shall show the world what the black man can do when working in liberty, and we shall make the Congo the pride of Africa.” Shortly after, Lumumba also made clear, “We want no part of the Cold War… We want Africa to remain African with a policy of neutralism." As a result, Lumumba was labeled a communist for his refusal to be a Cold War satellite for the western sphere. Rather, Lumumba was part of the Pan-African movement that was led by Ghanaian President Kwame Nkrumah (who later Kennedy would also work with), which sought national sovereignty and an end to colonialism in Africa. Lumumba “would remain a grave danger,” Dulles said at an NSC meeting on September 21, 1960, “as long as he was not yet disposed of.” Three days later, Dulles made it clear that he wanted Lumumba permanently removed, cabling the CIA’s Leopoldville station, “We wish give [sic] every possible support in eliminating Lumumba from any possibility resuming governmental position.” Lumumba was assassinated on Jan. 17th, 1961, just three days before Kennedy’s inauguration, during the fog of the transition period between presidents, when the CIA is most free to tie its loose ends, confident that they will not be reprimanded by a new administration that wants to avoid scandal on its first days in office. Kennedy, who clearly meant to put a stop to the Murder Inc. that Dulles had created and was running, would declare to the world in his inaugural address on Jan. 20th, 1961, “The torch has been passed to a new generation of Americans.” La Resistance Along with inheriting the responsibility of the welfare of the country and its people, Kennedy was to also inherit a secret war with communist Cuba run by the CIA. The Bay of Pigs set-up would occur three months later. Prouty compares the Bay of Pigs incident to that of the Crusade for Peace; the Bay of Pigs being orchestrated by the CIA, and the Crusade for Peace sabotaged by the CIA, in both cases to ruin the U.S. president’s (Eisenhower and Kennedy) ability to form a peaceful dialogue with Khrushchev and decrease Cold War tensions. Both presidents’ took onus for the events respectively, despite the responsibility resting with the CIA. However, Eisenhower and Kennedy understood, if they did not take onus, it would be a public declaration that they did not have any control over their government agencies and military. Further, the Bay of Pigs operation was in fact meant to fail. It was meant to stir up a public outcry for a direct military invasion of Cuba. On public record is a meeting (or more aptly described as an intervention) with CIA Deputy Director for Plans Richard Bissell, Joint Chiefs Chairman Lyman Lemnitzer, and Navy Chief Admiral Burke basically trying to strong-arm President Kennedy into approving a direct military attack on Cuba. Admiral Burke had already taken the liberty of positioning two battalions of Marines on Navy destroyers off the coast of Cuba “anticipating that U.S. forces might be ordered into Cuba to salvage a botched invasion.”[7] (This incident is what inspired the Frankenheimer movie “Seven Days in May.”) Kennedy stood his ground. “They were sure I’d give in to them,” Kennedy later told Special Assistant to the President Dave Powers. “They couldn’t believe that a new president like me wouldn’t panic and try to save his own face. Well they had me figured all wrong.” Incredibly, not only did the young president stand his ground against the Washington war hawks just three months into his presidential term, but he also launched the Cuba Study Group which found the CIA to be responsible for the fiasco, leading to the humiliating forced resignation of Allen Dulles, Richard Bissell and Charles Cabell. (For more on this refer to my report.) Unfortunately, it would not be that easy to dethrone Dulles, who continued to act as head of the CIA, and key members of the intelligence community such as Helms and Angleton regularly bypassed McCone (the new CIA Director) and briefed Dulles directly. But Kennedy was also serious about seeing it through all the way, and vowed to “splinter the CIA into a thousand pieces and scatter it to the winds.” * * * There is another rather significant incident that had occurred just days after the Bay of Pigs, and which has largely been overshadowed by the Cuban fiasco in the United States. From April 21-26th, 1961, the Algiers putsch or Generals’ putsch, was a failed coup d’état intended to force President de Gaulle (1959-1969) not to abandon the colonial French Algeria. The organisers of the putsch were opposed to the secret negotiations that French Prime Minister Michel Debré had started with the anti-colonial National Liberation Front (FLN). On January 26th, 1961, just three months before the attempted coup d’état, Dulles sent a report to Kennedy on the French situation that seemed to be hinting that de Gaulle would no longer be around, “A pre-revolutionary atmosphere reigns in France… The Army and the Air Force are staunchly opposed to de Gaulle…At least 80 percent of the officers are violently against him. They haven’t forgotten that in 1958, he had given his word of honor that he would never abandon Algeria. He is now reneging on his promise, and they hate him for that. de Gaulle surely won’t last if he tries to let go of Algeria. Everything will probably be over for him by the end of the year—he will be either deposed or assassinated.” The attempted coup was led by Maurice Challe, whom de Gaulle had reason to conclude was working with the support of U.S. intelligence, and Élysée officials began spreading this word to the press, which reported the CIA as a “reactionary state-within-a-state” that operated outside of Kennedy’s control. Shortly before Challe’s resignation from the French military, he had served as NATO commander in chief and had developed close relations with a number of high-ranking U.S. officers stationed in the military alliance’s Fontainebleau headquarters. In August 1962 the OAS (Secret Army Organization) made an assassination attempt against de Gaulle, believing he had betrayed France by giving up Algeria to Algerian nationalists. This would be the most notorious assassination attempt on de Gaulle (who would remarkably survive over thirty assassination attempts while President of France) when a dozen OAS snipers opened fire on the president’s car, which managed to escape the ambush despite all four tires being shot out. After the failed coup d’état, de Gaulle launched a purge of his security forces and ousted General Paul Grossin, the chief of SDECE (the French secret service). Grossin was closely aligned with the CIA, and had told Frank Wisner over lunch that the return of de Gaulle to power was equivalent to the Communists taking over in Paris. In 1967, after a five-year enquête by the French Intelligence Bureau, it released its findings concerning the 1962 assassination attempt on de Gaulle. The report found that the 1962 assassination plot could be traced back to the NATO Brussels headquarters, and the remnants of the old Nazi intelligence apparatus. The report also found that Permindex had transferred $200,000 into an OAS bank account to finance the project. As a result of the de Gaulle exposé, Permindex was forced to shut down its public operations in Western Europe and relocated its headquarters from Bern, Switzerland to Johannesburg, South Africa, it also had/has a base in Montreal, Canada where its founder Maj. Gen. Louis M. Bloomfield (former OSS) proudly had his name amongst its board members until the damning de Gaulle report. The relevance of this to Kennedy will be discussed shortly. As a result of the SDECE’s ongoing investigation, de Gaulle made a vehement denunciation of the Anglo-American violation of the Atlantic Charter, followed by France’s withdrawal from the NATO military command in 1966. France would not return to NATO until April 2009 at the Strasbourg-Kehl Summit. In addition to all of this, on Jan. 14th, 1963, de Gaulle declared at a press conference that he had vetoed British entry into the Common Market. This would be the first move towards France and West Germany’s formation of the European Monetary System, which excluded Great Britain, likely due to its imperialist tendencies and its infamous sin City of London. Former Secretary of State Dean Acheson telegrammed West German Chancellor Konrad Adenauer directly, appealing to him to try to persuade de Gaulle to back track on the veto, stating “if anyone can affect Gen. de Gaulle’s decision, you are surely that person.” Little did Acheson know that Adenauer was just days away from signing the Franco-German Treaty of Jan 22nd, 1963 (also known as the ÉlyséeTreaty), which had enormous implications. Franco-German relations, which had long been dominated by centuries of rivalry, had now agreed that their fates were aligned. (This close relationship was continued to a climactic point in the late 1970s, with the formation of the European Monetary System, and France and West Germany’s willingness in 1977 to work with OPEC countries trading oil for nuclear technology, which was sabotaged by the U.S.-Britain alliance. The Élysée Treaty was a clear denunciation of the Anglo-American forceful overseeing that had overtaken Western Europe since the end of WWII. On June 28th, 1961, Kennedy wrote NSAM #55. This document changed the responsibility of defense during the Cold War from the CIA to the Joint Chiefs of Staff and would have (if seen through) drastically changed the course of the war in Vietnam. It would also have effectively removed the CIA from Cold War military operations and limited the CIA to its sole lawful responsibility, the collecting and coordination of intelligence. By Oct 11th, 1963, NSAM #263, closely overseen by Kennedy[14], was released and outlined a policy decision “to withdraw 1,000 military personnel [from Vietnam] by the end of 1963” and further stated that “It should be possible to withdraw the bulk of U.S. personnel by 1965.” The Armed Forces newspaper Stars and Stripes had the headline U.S. TROOPS SEEN OUT OF VIET BY ’65. It would be the final nail in the coffin. Treason in America “Treason doth never prosper; what is the reason? Why, if it prosper, none dare call it treason.” – Sir John Harrington By Germany supporting de Gaulle’s exposure of the international assassination ring, his adamant opposition to western imperialism and the role of NATO, and with a young Kennedy building his own resistance against the imperialist war of Vietnam, it was clear that the power elite were in big trouble. On November 22nd, 1963 President Kennedy was brutally murdered in the streets of Dallas, Texas in broad daylight. With the assassination of Ngo Dinh Diem, likely ordained by the CIA, on Nov. 2nd, 1963 and Kennedy just a few weeks later, de facto President Johnson signed NSAM #273 on Nov. 26th, 1963 to begin the reversal of Kennedy’s policy under #263. And on March 17th, 1964, Johnson signed NSAM #288 that marked the full escalation of the Vietnam War and involved 2,709,918 Americans directly serving in Vietnam, with 9,087,000 serving with the U.S. Armed Forces during this period. The Vietnam War would continue for another 12 years after Kennedy’s death, lasting a total of 20 years for Americans, and 30 years if you count American covert action in Vietnam. Two days before Kennedy’s assassination, a hate-Kennedy handbill was circulated in Dallas accusing the president of treasonous activities including being a communist sympathizer. On November 29th, 1963 the Warren Commission was set up to investigate the murder of President Kennedy. The old Congressman Hale Boggs of Louisiana was a member of that Warren Commission. Boggs became increasingly disturbed by the lack of transparency and rigour exhibited by the Commission and became convinced that many of the documents used to incriminate Oswald were in fact forgeries. In 1965 Rep. Boggs told New Orleans District Attorney Jim Garrison that Oswald could not have been the one who killed Kennedy. It was Boggs who encouraged Garrison to begin the only law enforcement prosecution of the President’s murder to this day. Nixon was inaugurated as President of the United States on Jan 20th, 1969. Hale Boggs soon after called on Nixon’s Attorney General John Mitchell to have the courage to fire J. Edgar Hoover. It wasn’t long thereafter that the private airplane carrying Hale Boggs disappeared without a trace. Jim Garrison was the District Attorney of New Orleans from 1962 to 1973 and was the only one to bring forth a trial concerning the assassination of President Kennedy. In Jim Garrison’s book “On the Trail of the Assassins”, J. Edgar Hoover comes up several times impeding or shutting down investigations into JFK’s murder, in particular concerning the evidence collected by the Dallas Police Department, such as the nitrate test Oswald was given and which exonerated him, proving that he never shot a rifle the day of Nov 22nd, 1963. However, for reasons only known to the government and its investigators this fact was kept secret for 10 months. It was finally revealed in the Warren Commission report, which inexplicably didn’t change their opinion that Oswald had shot Kennedy. Another particularly damning incident was concerning the Zapruder film that was in the possession of the FBI and which they had sent a “copy” to the Warren Commission for their investigation. This film was one of the leading pieces of evidence used to support the “magic bullet theory” and showcase the direction of the headshot coming from behind, thus verifying that Oswald’s location was adequate for such a shot. During Garrison’s trial on the Kennedy assassination (1967-1969) he subpoenaed the Zapruder film that for some peculiar reason had been locked up in some vault owned by Life magazine (the reader should note that Henry Luce the owner of Life magazine was in a very close relationship with the CIA). This was the first time in more than five years that the Zapruder film was made public. It turns out the FBI’s copy that was sent to the Warren Commission had two critical frames reversed to create a false impression that the rifle shot was from behind. When Garrison got a hold of the original film it was discovered that the head shot had actually come from the front. In fact, what the whole film showed was that the President had been shot from multiple angles meaning there was more than one gunman. When the FBI was questioned about how these two critical frames could have been reversed, they answered self-satisfactorily that it must have been a technical glitch… There is also the matter of the original autopsy papers being destroyed by the chief autopsy physician, James Humes, to which he even testified to during the Warren Commission, apparently nobody bothered to ask why… This would explain why the Assassination Records Review Board (ARRB), reported in a July 1998 staff report their concern for the number of shortcomings in the original autopsy, that “One of the many tragedies of the assassination of President Kennedy has been the incompleteness of the autopsy record and the suspicion caused by the shroud of secrecy that has surrounded the records that do exist.” [emphasis added] The staff report for the Assassinations Records Review Board contended that brain photographs in the Kennedy records are not of Kennedy’s brain and show much less damage than Kennedy sustained. There is a lot of spurious effort to try to ridicule anyone who challenges the Warren Commission’s official report as nothing but fringe conspiracy theory. And that we should not find it highly suspect that Allen Dulles, of all people, was a member and pretty much leader of said commission. The reader should keep in mind that much of this frothing opposition stems from the very agency that perpetrated crime after crime on the American people, as well as abroad. When has the CIA ever admitted guilt, unless caught red-handed? Even after the Church committee hearings, when the CIA was found guilty of planning out foreign assassinations, they claimed that they had failed in every single plot or that someone had beaten them to the punch, including in the case of Lumumba. The American people need to realise that the CIA is not a respectable agency; we are not dealing with honorable men. It is a rogue force that believes that the ends justify the means, that they are the hands of the king so to speak, above government and above law. Those at the top such as Allen Dulles were just as adamant as Churchill about protecting the interests of the power elite, or as Churchill termed it, the “High Cabal.” Interestingly, on Dec. 22nd, 1963, just one month after Kennedy’s assassination, Harry Truman published a scathing critique of the CIA in The Washington Post, even going so far as to state “There is something about the way the CIA has been functioning that is casting a shadow over our historic position [as a] free and open society, and I feel that we need to correct it.” The timing of such a scathing quote cannot be stressed enough. Dulles, of course, told the public not to be distressed, that Truman was just in entering his twilight years. In addition, Jim Garrison, New Orleans District Attorney at the time, who was charging Clay Shaw as a member of the conspiracy to kill Kennedy, besides uncovering his ties to David Ferrie who was found dead in his apartment days before he was scheduled to testify, also made a case that the New Orleans International Trade Mart (to which Clay Shaw was director), the U.S. subsidiary of Permindex, was linked to Kennedy’s murder. Col. Clay Shaw was an OSS officer during WWII, which provides a direct link to his knowing Allen Dulles. Garrison did a remarkable job with the odds he was up against, and for the number of witnesses that turned up dead before the trial… This Permindex link would not look so damning if we did not have the French intelligence SDECE report, but we do. And recall, in that report Permindex was caught transferring $200,000 directly to the bankroll of the OAS which attempted the 1962 assassination on de Gaulle. Thus, Permindex’s implication in an international assassination ring is not up for debate. In addition, the CIA was found heavily involved in these assassination attempts against de Gaulle, thus we should not simply dismiss the possibility that Permindex was indeed a CIA front for an international hit crew. In fact, among the strange and murderous characters who converged on Dallas in Nov. 1963 was a notorious French OAS commando named Jean Souetre, who was connected to the plots against President de Gaulle. Souetre was arrested in Dallas after the Kennedy assassination and expelled to Mexico, not even kept for questioning. What Does the Future Hold? After returning from Kennedy’s Nov. 24th funeral in Washington, de Gaulle and his information minister Alain Peyrefitte had a candid discussion that was recorded in Peyrefitte’s memoire “C’était de Gaulle,” the great General was quoted saying: “What happened to Kennedy is what nearly happened to me… His story is the same as mine. … It looks like a cowboy story, but it’s only an OAS [Secret Army Organization] story. The security forces were in cahoots with the extremists. …Security forces are all the same when they do this kind of dirty work. As soon as they succeed in wiping out the false assassin, they declare the justice system no longer need be concerned, that no further public action was needed now that the guilty perpetrator was dead. Better to assassinate an innocent man than to let a civil war break out. Better an injustice than disorder. America is in danger of upheavals. But you’ll see. All of them together will observe the law of silence. They will close ranks. They’ll do everything to stifle any scandal. They will throw Noah’s cloak over these shameful deeds. In order to not lose face in front of the whole world. In order to not risk unleashing riots in the United States. In order to preserve the union and to avoid a new civil war. In order to not ask themselves questions. They don’t want to know. They don’t want to find out. They won’t allow themselves to find out.” The American people would do well to remember that it was first John F. Kennedy, acting as the President to the United States, who was to be declared a terrorist and threat to his country’s national security. Thus is it not natural that those who continue to defend the legacy of Kennedy should be regarded today as threat, not truly to the nation’s security, but a threat to the very same grouping responsible for Kennedy’s death and whom today have now declared open war on the American people. This will be the greatest test the American people have ever been confronted with, and it will only be through an understanding of how the country came to where it is today that there can be sufficient clarity as to what the solutions are, which are not to be found in another civil war. To not fall for the trapping of further chaos and division, the American people will only be able to rise above this if they choose to ask those questions, if they choose to want to know, to want to find out the truth of things they dared not look at in the past for fear of what it would reveal. “Whenever the government of the United States shall break up, it will probably be in consequence of a false direction having been given to public opinion. This is the weak point of our defenses, and the part to which the enemies of the system will direct all their attacks. Opinion can be so perverted as to cause the false to seem true; the enemy, a friend, and the friend, an enemy; the best interests of the nation to appear insignificant, and the trifles of moment; in a word, the right the wrong, the wrong the right. In a country where opinion has sway, to seize upon it, is to seize upon power. As it is a rule of humanity that the upright and well-intentioned are comparatively passive, while the designing, dishonest, and selfish are the most untiring in their efforts, the danger of public opinion’s getting a false direction is four-fold, since few men think for themselves.” -James Fenimore Cooper (1789-1851) We must dare to be among the few who think for ourselves. Tyler Durden Mon, 11/22/2021 - 22:20.....»»

Category: blogSource: zerohedgeNov 22nd, 2021

Gemini raised $400 million in funding to help it build in the metaverse as it goes head to head with archrival Meta

The Winklevosses plan to build "a Gemini experience in different metaverses," they told Forbes on Thursday. Cameron and Tyler WinklevossREUTERS/Brian Snyder Crypto platform Gemini, founded by the Winklevoss twins, raised $400 million in a funding round this week.  The Winklevosses plan to build "a Gemini experience in different metaverses," they told Forbes Thursday. Gemini is rivaling Mark Zuckerberg-led Meta, which in October committed to creating a virtual world. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Crypto exchange Gemini, founded by the Winklevoss twins, has plans to go deep into the metaverse after completing a multimillion-dollar funding round.The plans will bring Tyler and Cameron Winklevoss into competition with old archrival Mark Zuckerberg's Meta – the parent of Facebook — which has plans for a virtual world of its own.New York-based Gemini said Wednesday it had raised $400 million in a new growth equity funding round led by Morgan Creek Digital, with participation from the Commonwealth Bank of Australia and others. The injection of outside financing means the crypto platform is now worth $7.1 billion, it said.Speaking to Forbes, the Winklevoss brothers talked about Gemini's plans to build into metaverses and how they were taking a different path to Facebook. Zuckerberg's company revealed in October it was rebranding as "Meta" to mark its push into virtual worlds."There's these two parallel paths, in terms of technology right now," Cameron Winklevoss said in the Forbes interview Thursday. "There's a centralized path, like Facebook or Fortnite, that is one step away from being a metaverse, and that's totally fine.""But there is another path, which is the decentralized metaverse, and that's the metaverse where we believe there's greater choice, independence and opportunity, and there is technology that protects the rights and dignity of individuals," he added.A "metaverse" is, loosely, a virtual space where people can operate virtual and augmented reality-powered avatars. The virtual world is set to become another dueling arena for Facebook and the Winklevosses, who fought over ownership of the Facebook idea and a $65 million settlement payment for years in court.Gemini has bought a plot of virtual land where it wants to create several locations for its operations, Tyler Winklevoss told Forbes. "Instead of building brick-and-mortar bank branches in meatspace, we're gonna build a Gemini experience in different metaverses, where you can go into Gemini and trade, but it would be immersive instead of on your phone," he said.It's not the first time Gemini has got into the digital reality space. More than half of the portfolio held by the Gemini Frontier Fund, the company's investment arm, is made up of metaverse-related ventures. It has also bought stakes in metaverse platforms like Somnium Space and The Sandbox.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 19th, 2021

Franklin (BEN) Faces Lawsuit for Destroying Blockchain Startup

Franklin (BEN) faces a lawsuit filed by a group of investors for ruining a startup named Onsa to get its technology and enter the fintech market. A lawsuit has been filed against Franklin Resources, Inc. BEN by a group of investors claiming that the company sabotaged a startup named Onsa to get its technology and, hence, an entry into the flourishing fintech market. The news was reported by Bloomberg.Claims suggest that Onsa developed a “tokenized” money market, which could convert assets into digital tokens, being the first of its kind to be approved by the Securities and Exchange Commission.But Franklin has been accused of breaching its fiduciary duty. Per the lawsuit, Franklin took over Onsa’s control through an investment. However, while Onsa had been assured that it would remain an independent company, Franklin misappropriated its technology and liquidated assets in a “pseudo-bankruptcy proceeding” that was developed to shield itself from the liabilities to non-Franklin shareholders.Claims also suggest that Franklin abruptly removed top executives and coders at Onsa in 2020 and recruited some of them to begin its own version of the blockchain technology.The group of Onsa shareholders (known as Blockchain Innovation LLC) claimed, “Franklin Templeton is now on the cusp of launching the technology it took from Onsa under the Franklin Templeton banner, hoping to change its image as a technological dinosaur and to generate enormous financial benefits that flow from Onsa’s innovative technology.”But a Franklin spokeswoman considers the lawsuit to be “misguided.” She claimed that Franklin has heard of Blockchain Innovation LLC for the first time ever, “which appears to be an entity that exists solely to manufacture litigation against Franklin Templeton.”She added that if the group had done any “reasonable diligence,” then the complaint would appear to lack merit.But the group is of the opinion that Franklin ruined a business that could have been compared to blockchain companies that have recently gone public and achieved billion-dollar market valuations.Hence, shareholders are seeking damages “likely in the billions of dollars” and a court order that does not allow Franklin to roll out its tokenized market fund or its “Benji” mobile application or web platform.Our TakeFranklin operates in a business and regulatory environment that is complex, uncertain and subject to change. Also, the company is subject to numerous regulations by the U.S. and non-U.S. regulators that add further complexity to the ongoing global compliance operations and, thereby, hurts profitability.Nevertheless, Franklin’s strong distribution platform, its focus on expanding presence through involvement in acquisitions, and persistently rising asset balances will likely support top-line growth.Over the past year, shares of Franklin have gained 66.4% compared with 31.4% growth recorded by the industry. Image Source: Zacks Investment Research Currently, Franklin carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Several finance companies continue to encounter legal hassles and are charged with huge sums of money for business malpractices.Last month, Washington Federal WAFD agreed to pay a civil money penalty of $2.5 million to the Office of the Comptroller of the Currency (OCC) in relation to its February 2018 Consent Order for Anti-Money Laundering and Bank Secrecy Act (“AML/BSA”) deficiencies.In April 2017, Washington Federal entered an agreement to acquire Anchor Bancorp in an all-stock transaction. That year, in September, the companies amended the merger’s termination date from Dec 31, 2017, to Jun 30, 2018, because of the identification of some faults with respect to procedures, systems and processes of Washington Federal’s BSA program. However, the deal was terminated on Jul 17, 2018.Charles Schwab SCHW was slapped with a class-action lawsuit over violations of its fiduciary duty by placing its interest before the protection of its clients through the bank’s robo-adviser Schwab Intelligent Portfolios’ cash sweep program.The case, filed in the U.S. District Court in Northern California, also accused Schwab of breach of contract and the violation of state laws.Mitsubishi UFJ Financial Group’s MUFG U.S. banking unit, MUFG Union Bank NA, was slapped with a cease-and-desist order by the OCC over its unsound technological practices. The regulator detected that Mitsubishi engaged in “unsafe or unsound practices” linked with technology and operational risk management.According to the order, the bank was also in non-conformity with certain security guidelines. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>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 Franklin Resources, Inc. (BEN): Free Stock Analysis Report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Washington Federal, Inc. (WAFD): Free Stock Analysis Report Mitsubishi UFJ Financial Group, Inc. (MUFG): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksNov 16th, 2021

6 Reasons to Add Simon Property Group (SPG) Stock Right Now

Simon Property's (SPG) portfolio of premium retail assets, efforts to support omni-channel retailing and solid balance-sheet strength will help it tap growth amid an improving environment. Improving economy, widespread vaccination, boost in shopper confidence and healthy consumer spending raise hopes for the Retail REIT industry constituents in the holiday season.The retail REIT behemoth — Simon Property Group SPG — is well poised to ride on this growth curve backed by its portfolio of premium retail assets in the United States and abroad, solid operating fundamentals and strategic moves. Simon Property’s third-quarter 2021 funds from operations (FFO) per share of $3.13 exceeded the Zacks Consensus Estimate of $2.47 on better-than-anticipated top-line growth.Shares of SPG have gained 15% in the past month, while its industry has inched up 1.9%. Also, the recent trend in the 2021 FFO per share estimate revision indicates a favorable outlook for SPG as it moved nearly 1% up to $10.33 over the past week. This Zacks Rank #2 (Buy) stock is likely to rally further in the near term on a number of favorable factors.Image Source: Zacks Investment ResearchLet’s explore what makes the SPG stock a solid choicePremium Asset Base: Simon Property enjoys a wide exposure to retail assets across the United States. Moreover, Simon Property’s international presence fosters sustainable long-term growth as compared with its domestically focused peers. The REIT’s ownership stake in Klépierre facilitates the expansion of its global footprint, which gives it access to premium retail assets in the high barrier-to-entry markets of Europe. Diversification, with respect to both product and geography, will help SPG grow in the long term.Omni-channel Strategy: Adoption of an omni-channel strategy and successful tie-ups with premium retailers have been aiding the company. Particularly, Simon Property’s online retail platform, weaved with an omni-channel strategy, will likely be accretive to its long-term growth. It is also tapping growth opportunities by assisting the digital brands to enhance their brick-and-mortar presence as well as banking on buying recognized retail brands in bankruptcy. Additionally, Simon Property is exploring the mixed-use development option, which has gained immense popularity in recent years among those who prefer to live, work and play in the same area.Acquisitions, Development and Redevelopment: The retail REIT has been restructuring its portfolio, aiming at premium acquisitions and transformative redevelopments. For the past few years, the company has been investing billions in transforming its properties focused on creating value and driving footfall at its properties. After a temporary pause amid the pandemic, Simon Property is now active again in redevelopment and new developments. Last December, Simon Property also completed the acquisition of Taubman Centers, Inc., adding a number of premier retail assets to its portfolio.Improving Leasing Environment and Guidance Raise: With the resumption of the economy and improvement in the leasing environment, Simon Property is poised to benefit from its superior assets in premium locations. In the third quarter, the company recorded increased leasing volumes, occupancy gains, shopper traffic and retail sales. Also, management raised the 2021 FFO per share guidance to the $11.55-$11.65 range, up from the $10.70-$10.80 band projected earlier, suggesting an increase of 85 cents at the mid-point.Balance Sheet: Simon Property is steadily making efforts to bolster its financial flexibility. This enabled the REIT to exit third-quarter 2021 with $8 billion of liquidity. Through the first nine months of the year, Simon Property was active in both the secured and unsecured credit markets. Following the quarter-end, the company amended and extended its $3.5-billion unsecured multi-currency revolving credit facility, which will initially mature on Jan 31, 2026, and at the company’s sole option, can be extended for a year. Simon Property’s total secured debt to total assets was 21%, while the fixed-charge coverage ratio was 4.5 as of Sep 30, 2021, well ahead of the required level. Moreover, the company enjoys a corporate investment-grade credit rating of A from Standard and Poor's and a senior unsecured rating of A3 from Moody’s. With solid balance-sheet strength and available capital resources, SPG remains well poised to navigate negative externalities and bank on the opportunities generated from market turbulences.Dividend: Solid dividend payouts are the biggest enticement for REIT investors and Simon Property is committed to boosting shareholder wealth. Last year, while several REITs suspended dividend payments in light of the pandemic that disrupted the macro economy and affected rent collections, Simon Property continued with its dividend payment, though at a reduced rate, distributing $1.30 instead of the prior payment of $2.10. Later, the company announced dividend hikes with the most recent one being declared concurrent with the third-quarter earnings release. The company announced a 10% sequential hike in its fourth-quarter 2021 dividend to $1.65 per share. This followed a 7.1% sequential hike in its third-quarter 2021 dividend to $1.50 and 7.7% sequential increase in second-quarter dividend to $1.40 per share. This spate of dividend increases brings additional relief to investors and reaffirms confidence in this retail landlord.Other Key PicksFederal Realty Investment Trust’s FRT FFO per share estimate for the current year moved up 0.8% to $5.28 in the past week.Federal Realty carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Realty Income O holds a Zacks Rank of 2, at present and has a long-term growth rate of 4.4%.The Zacks Consensus Estimate for Realty Income’s 2021 FFO per share has been revised marginally upward in a month’s time.Regency Centers Corporation’s REG Zacks Consensus Estimate for the ongoing-year FFO per share has moved marginally up to $3.81 over the past week.Currently, Regency Centers carries a Zacks Rank of 2.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>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 Simon Property Group, Inc. (SPG): Free Stock Analysis Report Federal Realty Investment Trust (FRT): Free Stock Analysis Report Regency Centers Corporation (REG): Free Stock Analysis Report Realty Income Corporation (O): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksNov 16th, 2021

Metabeta Analysis: 42% Of Accelerators Worldwide Struggle With Startup Reporting

According to an internal analysis run by Metabeta, a data-driven startup investment platform in the EU, 42% of accelerators all around the globe struggle with startup reporting issues. The same analysis also shows that deal flow is a major challenge for 2 out of 3 accelerators. Q3 2021 hedge fund letters, conferences and more The […] According to an internal analysis run by Metabeta, a data-driven startup investment platform in the EU, 42% of accelerators all around the globe struggle with startup reporting issues. The same analysis also shows that deal flow is a major challenge for 2 out of 3 accelerators. 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 Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss 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 The analysis made by Metabeta consists of a survey applied on 126 accelerators worldwide, as well as 50 in-depth interviews, in the past two years. Deal Flow, Startup Reporting And Mentor Matching: The Biggest Challenges Accelerators Currently Face One of the biggest challenges accelerators face regards the deal flow. 59% of those facing issues with the deal flow confront themselves with low quality applications, while 31% are having trouble with the number of the applications received. 26% of the accelerators surveyed have both low quality and insufficient applications. As an answer to this challenge, specialization is the most common strategy used. 61% of the analyzed accelerators have a focus (on a certain industry or on a discipline), but this does not necessarily tackle the problem of the insufficient applications received, according to Metabeta. The quality increases with specialization, but the volume remains a challenge. Regarding the startup reporting issues that almost half of the accelerators surveyed identified, 30% of them face this challenge after the program ends, while 28% of them face it both during and after the program. This is considered to be caused by: lack of discipline from the startup founders that fail to comply with this request (46%), followed by lack of a proper system to collect the necessary metrics (22%) and finally by knowing the right metrics to track, according to each startup business model and development stage (12%). When it comes to the mentoring aspect, according to Metabeta findings, the most common issues accelerators meet are: matching the right mentors with the startups (26%), the quality of mentors (22%), the mentors’ commitment (16%), their engagement (16%) and finally their schedule availability (10%). The VC Market’s Challenges: No Mature Solution For Deal Scraping, Deal Flow Load, And Messy Operations On the other hand, according to Metabeta available data, similar challenges are valid for the VC market as well, namely the deal flow load, costly processes and messy operations being reported by VCs all around the globe. An analysis run by Metabeta on VC funds also showed a lack of a data-driven approach that could save time, resources and effort regarding the startup investment decisions. “We believe the entire startup investment market can benefit from automating their most important operations and also from making decisions based on a more data-driven approach. Whether it’s for founder analysis, early stage startup discovery, sourcing automation, growth tracking and data management, Metabeta solution can be used in order to tackle all these challenges more efficiently”, Marius Ursache, Co-founder and CEO of Metabeta, explained. Metabeta: The Tool Used By 6.000 Startups And 80+ Investors And Accelerators All Around The World To Tackle Their Current Challenges Metabeta is the first data-driven startup investment platform in the EU, that aims to solve the main challenges that accelerators and VC funds reported in the internal studies above. With the digital tool provided by Metabeta, investors, accelerators and startups collaborate better and more efficiently, through the entire investment lifecycle. After a seed round of 500K euros received this year, Metabeta has reached 6.000 startups and 80+ investors and accelerators all around the world, as recurrent users of the platform. Metabeta’s goal for 2022 is to become the leading investment marketplace for early-stage startups, accelerators, and VCs in Europe, using accurate data insights. About Metabeta Metabeta is a data-driven investment platform that helps investors, accelerators and startups collaborate better and more efficiently, through the entire investment lifecycle. The company is currently building an investment marketplace that supports investors in finding the right startup deals, while also providing the tools to manage deal flow, diligence and later portfolio management. Metabeta was founded in 2019 in Romania by serial entrepreneurs Marius Ursache (also known for co-founding Eternime and being a teaching fellow at MIT and Entrepreneur in Residence at Techstars and Singularity University) and Vlad Bodi (known for Maxcode, Thinslices and Bepretty, one of the leading B2B marketplaces in LatAm). Updated on Nov 16, 2021, 2:26 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 16th, 2021

Futures Rise As Usual, Approaching All Time High

Futures Rise As Usual, Approaching All Time High US equity futures resumed their upward climb (after Goldman quadrupled down on its call for a massive, year-end meltup driven by $15BN in inflows every single day) as major technology stocks advanced, and as investors awaited a slew of retail earnings and economic data this week to gauge the health of consumer spending while keeping an eye on runaway inflation. Better-than-estimated profit growth has led to a rally in markets, helping ease recent concerns over the hottest U.S. inflation in 30 years. At 730 a.m. ET, Dow e-minis were up 94 points, or 0.26%. S&P 500 e-minis were up 9 points, or 0.20% and about 20 points from their all time high around 4,711; while Nasdaq 100 e-minis were up 30.5 points, or 0.19%. The three major Wall Street indexes had fallen between 0.3% and 0.7% last week when the S&P 500 also snapped its longest winning streak since August 2020, amid concerns over high inflation and weakening consumer sentiment. Investors had begun pivoting into economically resilient sectors, mainly technology, towards the end of the week. Market-heavy GAMMA (fka FAAMG) stocks rose between 0.1% and 0.8% in premarket trade, with Meta Platforms Inc leading gains. On the other end, Tesla shares fell as much as 2.6% in U.S. premarket session after Elon Musk suggested over the weekend that he would sell even more stock after offloading almost $7 billion worth of shares over the past week. Tesla's declines follow a steep 15.4% drop last week after Musk offloaded a combined $6.9 billion worth of shares in the electric-car maker. Meanwhile, blank-check company Gores Guggenheim rose as much as 25% as the stock was touted among retail traders. Rivian shares were down about 2.7% in U.S. premarket trading after the electric-truck maker surged following its IPO last week. Dollar Tree Inc added 5.4% after activist investor Mantle Ridge LP revealed a 5.7% stake in the discount retailer. Strong corporate earnings are helping drive investors into stocks and overshadowing fears about the hottest U.S. inflation print in three decades. The sentiment found its way into calmer bond markets, where these fears had played out in the highest volatility since the onset of pandemic.   “Central banks may be becoming less accommodative, but they will be anxious not to derail the recovery or financial markets,” according to Cesar Perez Ruiz, chief investment officer at Pictet Wealth Management and head of asset alloaction Christophe Donay. “Q3 results have offered further proof of corporate strength.” Focus this week will be on earnings reports from several major retailers including Walmart Inc, Target Corp, Home Depot and Macy's. Their results will round off an upbeat third-quarter earnings season, which pushed Wall Street to new highs. Retail sales data for October is also due on Tuesday, and is expected to show the impact of inflation on consumer spending. Looking ahead not everyone is euphoria: in its 2022 forecast, Morgan Stanley strategists warn that inflationary headwinds may become a bigger force against U.S. stocks next year; they prefer peers in Europe and Japan. They forecast the S&P 500 will end 2022 at 4,400 -- some 6% below current levels. For bonds, they expect 10-year yields to rise to 2.10% by the end of next year on improving growth and higher real rates, up from 1.54% on Monday. “One reason we like equities in Europe and Japan is that we think inflationary challenges there are much less daunting than elsewhere,” strategists led by Andrew Sheets wrote Sunday. They also cited “more reasonable valuations, limited central bank tightening and less risk from higher taxes” vis-a-vis the U.S. In Europe, Stoxx 600 Index was little changed near a record high as rising earnings estimates supported the region’s stocks. Travel and leisure and retailers led the gains, while miners slumped. Here’s the latest on what analysts are saying about European equities: EasyJet cut to reduce from hold at Kepler Cheuvreux due to deteriorating traffic trends and a risk that it has to incentivize demand with fare discounts. Alfen Beheer loses its only buy rating as Berenberg downgrades to hold on limited near- term upside, even after last week’s sell-off in the shares. Direct Line cut to hold and Admiral raised to buy at Berenberg with the broker switching preferences in its U.K. non- life insurer coverage. B&M European is cut to underperform from sector perform at RBC with growth set to become harder to deliver for the discount retailer and better value seen elsewhere in the sector. Wood’s strategic review of its built environment business could unlock “meaningful value,” Citi writes in note upgrading the energy-services firm to buy. Earlier in the session, shares fluctuated in Hong Kong and dipped in China, where traders weighed stronger-than-expected retail sales and industrial output, central bank liquidity support and a drop in home prices. Beijing’s crackdown on real-estate leverage is among the headwinds for the world’s second-largest economy. That said, Asian equities rose for a third day as the strength in U.S. technology heavyweights Friday helped ease market worry over global inflation, reigniting appetite for growth stocks.  The MSCI Asia Pacific Index advanced as much as 0.6%, with TSMC, Tencent Holdings and Samsung Electronics among the largest contributors to the gauge’s rise. South Korea’s Kospi was the top performer among the region’s benchmarks, adding 1%.  Futures on the Nasdaq 100 climbed in Asia after the underlying measure added 1% on Friday. U.S. equities rose led by technology and communication services, with share prices remaining near all-time highs after a strong corporate earnings season.  Overall, the positive mood from last week is extending to today’s trading, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. “Chip-related stocks are doing pretty well following the earnings season, which is also backing gains for the market.” The regional benchmark capped its second straight week of gains on Friday, helped by positive earnings readings. Price data from the U.S. and China remain in focus as traders fear elevated inflation could lead to tighter monetary policy. U.S. consumer sentiment unexpectedly collapsed in early November as Americans grew increasingly concerned about inflation. Japanese stocks rose after the Nikkei newspaper reported on Friday that the government plans to compile an economic stimulus package of more than 40 trillion yen ($351 billion) in fiscal measures. “Economic stimulus had been expected to be about 30 trillion yen, but a new figure of 40 trillion yen is likely to be cheered by investors,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute Co.  The Topix index rose 0.4% to close at 2,048.52 in Tokyo, while the Nikkei 225 advanced 0.6% to 29,776.80. Toyota Motor contributed the most to the Topix’s gain, increasing 1.1%. Out of 2,180 shares in the index, 1,051 rose and 1,029 fell, while 100 were unchanged. India’s benchmark index ended flat after wholesale prices surged higher-than-expected in October, weighing on metal and financial stocks. The S&P BSE Sensex was little changed at 60,718.71 in Mumbai, while the NSE Nifty 50 Index was flat at 18,109.45. Both gauges gained as much as 0.6% earlier on the back of an earnings season in which a majority of Nifty 50 companies reported results that beat expectations.  Both indexes, however, failed to hold onto their initial advance after wholesale prices rose 12.5% in October, more than economists’ consensus of a 11.1% advance, led by a rise in manufactured products as well as fuel and power prices. Nine of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by gauges of metal and basic materials companies.  India will release monthly trade figures after market hours. The corporate earnings season for the three months ended September finished last week with 29 of the Nifty 50 companies beating analyst estimates. Three companies made their trading debut on Monday, with chemical maker Sigachi Industries rising 267% over its IPO price. One97 Communications Ltd., the operator of digital payments app Paytm which raised $2.5b in India’s biggest IPO, is slated for Thursday. In FX, the Bloomberg Dollar Spot Index slipped with the greenback weaker against all of its Group-of-10 peers. Commodity currencies, led by Norway’s krone, were the best performers. The Treasury curve bull flattened, with yields falling by up to 2bps. The euro hovered around $1.1450; the French presidential election next year is the scheduled event carrying the highest risk for the common currency, according to options gauges. The pound steadied as traders await clues on monetary policy from BOE Governor Andrew Bailey during parliamentary testimony later Monday. U.K. economists expect a rate increase to 0.25% next month, according to a Bloomberg survey. U.K. economists have become more hawkish over the past month and now expect the Bank of England to increase interest rates in December as concerns about inflation intensify. Sweden’s krona inched up after inflation accelerated more than forecast in October. Meanwhile, the Australian dollar rose on data that China’s economy performed better than expected in October. The nation’s sovereign bonds also extended opening gains after China home prices fell again, sapping real-estate shares. Japan’s super-long government bonds underperformed amid concerns that supply may increase to finance government spending. The yen consolidated In rates, Treasury yields broadly within a basis point of Friday’s close, the curve fractionally steeper. The front-end and belly outperform, following bigger gains for Aussie front-end, which attracted buyers during Asia session. Stocks supported, with S&P 500 futures above Friday’s high.  Treasury yields were richer from front-end out to 10-year sector, which trades around 1.55%, outperforming gilts and bunds by ~1bp; long-end cheapens slightly on the day, steepening 5s30s by ~1bp.  Euro- area bonds gained, led by the periphery, following comments on inflation by ECB Chief Economist Philip Lane over the weekend. ECB’s Lane said recent price inflation is “really part of the pandemic” and people should not panic, in an interview with RTE on Saturday. The Fed begins tapered purchase schedule released Friday; schedule departed slightly from Nov. 3 plan by leaving target size of operations in 10- to 22.5-year sector unchanged while trimming 22.5- to 30-year more, which spurred outperfomance by 20-year sector In commodities, crude futures drifted lower with focus on U.S. energy policy and commentary from OPEC speakers. WTI is down 0.6%, trading either side of $80; Brent drops through Asia’s worst levels before running into support near $81. Spot gold fades Asia’s weakness to trade flat near $1,863/oz. Most base metals are in the red with LME nickel underperforming; copper trades flat.  Looking at today's calendar, it's quiet on the news front with just the US November Empire State manufacturing survey on deck. Biden will meet virtually with Chinese President Xi Jinping on Monday. Tensions between the two countries have been building over issues including Taiwan and restrictions on sales of U.S. technology to China. Market Snapshot S&P 500 futures up 0.1% to 4,685.00 STOXX Europe 600 little changed at 487.13 MXAP up 0.4% to 200.95 MXAPJ up 0.4% to 656.76 Nikkei up 0.6% to 29,776.80 Topix up 0.4% to 2,048.52 Hang Seng Index up 0.2% to 25,390.91 Shanghai Composite down 0.2% to 3,533.30 Sensex up 0.1% to 60,771.98 Australia S&P/ASX 200 up 0.4% to 7,470.11 Kospi up 1.0% to 2,999.52 Brent Futures down 0.9% to $81.46/bbl Gold spot down 0.2% to $1,860.89 U.S. Dollar Index little changed at 95.09 German 10Y yield little changed at -0.27% Euro little changed at $1.1447 Top Overnight News from Bloomberg  Federal Reserve Bank of Minneapolis President Neel Kashkari said the U.S. central bank shouldn’t overreact to elevated inflation even as it causes pain for Americans, because it is likely to prove temporary A reduction in China’s reserve requirement ratio looks increasingly unlikely after the authorities rolled over all policy loans coming due and data surprised on the upside, suggesting that bonds will have little room to gain China’s industrial output rose 3.5% in October from a year earlier, while retail sales growth accelerated to 4.9%, beating economists’ forecasts Japan’s gross domestic product contracted at an annualized pace of 3% in the three months through September from the previous quarter, the Cabinet Office reported Monday. Economists had forecast a 0.7% decline Bank of Japan Governor Haruhiko Kuroda said financial stress from the pandemic is limited to certain sectors of the economy, potentially signaling the BOJ is planning to scale back its Covid-era funding program European Central Bank President Christine Lagarde doubled down on her assessment that euro-area inflation will ease as economies rebound, falling back below the 2% target in the medium term. Yet analysts see itfaster than previously thought this year and next A short-lived reprieve for emerging- market carry trades funded in dollars looks to be over, with an upsurge in U.S. inflation making the outlook increasingly treacherous The U.K. is expanding its Covid-19 booster program to younger people as the country seeks to head off another wave of infections this winter. A third vaccine dose will be available to people aged 40 to 49 starting six months after their second shot, the government said Monday Oman said there was no need for OPEC+ to accelerate oil-production increases, signaling at least some members of the group will continue to resist U.S. pressure for more crude   A more detailed look at global markets courtesy of Newsquawk Asian equity markets began the week with a lack of firm direction as the region digested varied tier-1 economic releases including better than expected Chinese activity data and miss on Japanese GDP, with attention also on a slew of earnings results and corporate updates. ASX 200 (+0.4%) and Nikkei 225 (+0.6%) both opened higher and took impetus from last Friday’s gains on Wall Street but with upside in Australia capped as financials and energy lagged, while Japanese participants weathered the weak GDP data which showed a wider than expected quarterly contraction during Q3, when the economy was still mired by widespread state of emergency declarations in key areas including Tokyo and its surrounding prefectures. Nonetheless, Japanese stocks have taken the disappointing economic growth within their strides as it justifies the incoming stimulus package which was said to have been increased to over JPY 40tln in fiscal spending and with Japan reportedly to resume its Go To Travel campaign in mid-January. Conversely, Hang Seng (+0.2%) and Shanghai Comp. (-0.2%) were initially moderately pressured despite stronger than forecast Industrial Production and Retail Sales data from China, as well as the PBoC’s CNY 1tln MLF announcement which matched this month’s expiring MLF loans and further dampened prospects of PBoC easing. Today also saw the launch of the Beijing Stock Exchange which aims to help SMEs raise capital and included 81 companies in the first batch of listings, while participants await the Biden-Xi virtual meeting which is set to take place Monday evening at 19:45EST or Tuesday morning in Asia and with US Treasury Secretary Yellen and Secretary of State Blinken set to join in on the call. Finally, 10yr JGBs are higher as they tracked a marginal rebound in T-notes and following the disappointing Japanese GDP release, but with gains capped as stocks in Tokyo remained afloat and amid the absence of BoJ purchases in the market today. Top Asian News Cathay Crew Who Flew From Frankfurt Doing 21-Day Quarantine Duterte Runs for Philippine Senate, Avoids Clash With Daughter Greenland Jumps in Bond Market After Classification Change Chinese Startup Meicai Is Said to Pick Banks for Hong Kong IPO European equities (+0.1%) trade with minor gains which have nudged the Stoxx 600 to a high of 487.21 in what has been a quiet start to the week. The desk will continue to monitor further lockdown restrictions across the region, however, updates from the Netherlands and Austria have done little to dent sentiment thus far. The handover from the APAC region was a mixed one as the soft GDP data from Japan was overshadowed by forthcoming stimulus efforts whilst Chinese equities were unable to garner much upside from stronger than forecast Industrial Production and Retail Sales data. Participants were also awaiting the Biden-Xi virtual meeting which is set to take place Monday evening at 19:45EST or Tuesday morning in Asia. Stateside, futures are trading with gains of a similar magnitude to their European counterparts (ES +0.1%) with not a great deal on the docket beyond the NY Fed Manufacturing print at 13:30GMT/08:30EST. Back to Europe, sectors are relatively mixed with Travel & Leisure top of the leaderboard amid gains in Deutsche Lufthansa (+1.7%) after the Co. was upgraded to neutral from sell at UBS. Oil & Gas names have been granted some reprieve following the selling pressure seen towards the latter half of last week. To the downside, Basic Resources is the standout laggard amid underlying price action in the metals space. In terms of individual movers, Ahold Delhaize (+2.4%) is one of the best performers in the Stoxx 600 after announcing a EUR 1bln buyback as of 2022, accelerated its growth/investment plan and will explore an IPO of Bol.com. Shell (+1.8%) is seen higher on the session after announcing that it is looking to implement a simplified structure and move its tax residency to the UK from the Netherlands. To the downside, Philips (-12.1%) sits at the foot of the Stoxx 600 as concerns continue to mount over its ventilator recall issues in the US. Finally, BBVA (-3.7%) is seen lower on the session after launching a tender offer to acquire the remaining 50.2% of Turkiye Garanti Bankasi. Top European News U.K. Expands Covid-19 Booster Program to People in Their 40s Austria Locks Down Unvaccinated as Europe Tightens Covid Curbs Cathay Crew Who Flew From Frankfurt Doing 21-Day Quarantine Telefonica Launches Tender Offer for Hybrid Notes In FX, the Aussie and Kiwi are outperforming their major peers, or making the most of ongoing Greenback consolidation off last week’s new y-t-d highs, with the former also gleaning encouragement from Chinese data overnight as ip and retail sales beat consensus. Aud/Usd is back above 0.7350 and Nzd/Usd has reclaimed 0.7050+ status as the Aud/Nzd cross hovers in the low 1.0400 zone and eyes an unusually large 1 bn option expiry at the round number. Similarly, the Norwegian and Swedish Krona are both firmer vs a somewhat leggy/lethargic Euro, but with assistance from macro releases in the form of trade and inflation respectively. Eur/Nok is probing 9.9200 and Eur/Sek is testing bids and support around 10.0000 compared to peaks near 9.9600 and 10.0330. CAD/DXY - No lasting support from crude prices for the Loonie as WTI retreats through Usd 80/brl from Usd 81.20 at best, but Usd/Cad has reversed from 1.2550+ ahead of Canadian manufacturing sales and wholesale trade that are out alongside the more timely Empire state survey. Meanwhile, the index is meandering either side of 95.000 within a 95.152-94.963 band having ‘topped out’ at 95.266 in wake of US CPI and a far from well received new 30 year issue. GBP/EUR/CHF/JPY - All narrowly mixed against the Buck and seemingly awaiting clearer direction from their US counterpart or independently, as Cable continues to straddle a key Fib level (1.3412) in advance of testimony from the BoE on the latest MPR and top tier UK data from tomorrow. Eur/Gbp is sitting even tighter around 0.8530 before talks intensify to try and resolve differences on NI Protocol, while Eur/Usd is pivoting 1.1450, Usd/Chf is rotating around 0.9200 and Usd/Jpy is holding mostly below 114.00. Note, the Euro has ECB speakers to digest (see Headline Feed at 10.01GMT for remarks from President Lagarde) and look forward to, while the Franc has not really responded to small rises in weekly Swiss sight deposits and the Yen has largely brushed aside much weaker than expected Japanese GDP and a draft document saying that the government and BoJ share a strong sense of urgency about supply shortages, whilst maintaining an appropriate combination of monetary and fiscal policies. In commodities, WTI and Brent are softer this morning, with losses in excess of 1.0% on the session thus far. Such pressure stems from demand-side updates in the wake of further COVID-19 measures being announced/implemented, most recently that Austria is entering a lockdown for the un-vaccinated and the Netherlands is to reimpose social distancing from Saturday. Furthermore, given the surge in cases seen in Germany in recent weeks the three-parties in coalition discussions intend to put forward proposals to Parliament on Thursday for renewed measures, which will reportedly include contact restrictions. On the other hand, the supply-side of the equation is cognisant of the looming imposition of further restrictions on Belarus by the EU, particularly as Leader Lukashenko last week said they would respond to any sanctions and suggested closing gas/goods transit through Belarus. Additional sanctions are, currently, scheduled to be announced this afternoon. Separately, and perhaps adding pressure, is commentary from various oil ministers the most pertinent of which has seen the UAE representative announce they are to increase production to over 5mln BPD from the current 4mln by 2030, alongside expecting a Q1-2022 oil surplus. Currently, the benchmarks are in proximity to the sessions trough which resides around USD 0.10/bbl below Friday’s low of USD 79.78/bbl in WTI, for instance. Moving to metals, spot gold and silver have been grinding higher throughout the European morning but are yet to retrace the downside seen overnight in-spite of the stronger Chinese data though this failed to spur regional or base-metal performance either. In terms of bank views, the Head of Energy Research at Goldman Sachs predicting the precious metal is set for a boom to the USD 2k level. US Event Calendar 8:30am: Nov. Empire Manufacturing, est. 22.0, prior 19.8 DB's Jim Reid concludes the overnight wrap This morning I’ve just put out a short note which I hope will win the catchiest research title of the year award. It’s called “If you think real yields are low, look at these charts…”. See here for the link. Regular readers will know my view that inflation will be structurally higher going forward and that for the rest of my career developed market real yields will likely stay negative even if nominal yields climb. This is because with debt so high, history suggests that heavy financial repression will be necessary to manage this. However, nothing could have prepared me for 2021 so far with US CPI at 6.2% YoY in October and 10-year US yields stuck below 1.6%. On a spot basis real yields are c.-4.6% and at around 70-year lows. If you think real yields are low, however, take a look at the 200-year graphs in the note to see that whenever debt has spiked historically, real yields have moved a lot lower than even today’s levels, albeit through inflation around or above 20%. These are extreme times but history offers even more extreme examples. Staying with inflation DB’s Francis Yared and I did a webinar on inflation last week and the recording can be viewed here. You’ll need Francis’s slides at hand on Regime Shifts in Inflation (link here) and mine (link here) on what history can tell us about inflation and what it means for asset prices in the future. I thought it was a really good webinar but I am slightly biased. Maisie and mum came back from a week in hospital at the weekend. Mum slept for 18 hours on Saturday leaving me to work out how the wheelchair folds up and reopens and delivering what I hoped was the right dose of morphine. It’s going to be tough living with a wheelchair for the next year as Maisie’s hip bone tries to regrow but after hearing many stories from my wife about children in the ward with life threatening conditions you realise that you’re actually pretty lucky. Before you think I’ve gone all zen, I did nearly throw the wheelchair across the room when it wouldn’t unfold. I’d missed a small lever under the seat. After a tiring last week at home and in the markets it’s a quieter week ahead in terms of the calendar, though market attention will continue to focus on the question of who might be appointed as the next Fed Chair, as well as the latest inflation statistics from a number of countries, including the UK (Wednesday). There is a reasonable amount of Fedspeak so it’ll be especially interesting to hear those on the transitory side to see if last week’s shocking print has impacting their thinking. Otherwise, geopolitics will be in focus, with today’s virtual meeting between US President Biden and Chinese President Xi, alongside continued speculation about whether the UK might trigger Article 16 of the Northern Ireland Protocol even if tensions have eased a touch in the last few days. Starting with today’s virtual meeting between President Biden and President Xi, it is set to take place at 7:45 PM Washington time, which will be 8:45 AM on Tuesday in Beijing. While both the presidents spoke over the phone twice this year, this is the first time it is being dubbed as a summit. There is some thought that tariff reductions could be on the agenda, especially given current US inflation levels but it might be a bit early for that in any relationship rebuild. We’ll know more in time for tomorrow’s EMR. The monthly Chinese data dump came in better than expected overnight with industrial output +3.5% yoy (vs. 3% expected), retail sales 4.9% yoy (vs 3.7% expected) but fixed-asset investment slightly missing at 6.1% (vs 6.2% expected). There is some discussion that the retail sales beat may be led by higher prices and also higher food sales as consumers prepare for the possibility of winter virus restriction. Asian stocks are trading mixed with the KOSPI (+1.04%) and the Nikkei (+0.48%) trading in the green while the Hang Seng (-0.08%), Shanghai Composite (-0.29%) and CSI (-0.29%) trading lower. In Japan GDP shrank by -0.8% from the last quarter (-0.2% consensus and +0.5% previous) augmenting expectations of a stimulus package by Prime Minister Fumio Kishida, which is expected to be announced at the end of this week. The Nikkei reported last Friday that the stimulus could top 40 trillion yen ($350 bn). Futures are pointing to a muted start in US & Europe with S&P 500 futures (-0.01%) and DAX futures (-0.08%) both fairly flat. Moving onto the rest of the week, there are a few decisions from EM central banks over the week ahead, including Turkey, South Africa and Indonesia (all Thursday). However, the main focus for investors will be the speculation about who might be the next Fed Chair, particularly in light of the news out last week that both incumbent Fed Chair Powell and Governor Brainard had been interviewed for the position. Powell’s current four-year term comes to an end in February, and whoever’s nominated would require senate confirmation for another term. At this point 4, 8 and 12 years ago, the announcement of who’d be nominated had already been made, but we still don’t have a date for when we might get the news. However, it may not be too far away, with President Biden saying in Glasgow on November 2 that it would be “fairly quickly”. On the data side, there’ll be an increasing amount of hard data out of the US for October, including retail sales, industrial production (both Tuesday) and housing starts (Wednesday). Meanwhile, there’ll also be some important UK data as the Bank of England mulls over their monetary policy settings ahead of their meeting next month. On Tuesday, there’s the latest employment report, and then on Wednesday, we’ll get the latest CPI reading for October. Turning to politics, it’s worth keeping an eye out for any developments on Brexit, with speculation rising that the UK government could trigger Article 16 of the Northern Ireland Protocol. Over the last 3 or 4 days the mood music has moved a little towards compromise so we’ll see if this gathers some momentum. Lastly on the earnings front, it’s the tail end of the season now, but there are still a few major companies left to report. Tomorrow we’ll hear from Walmart and Home Depot, before Wednesday brings reports from Nvidia, Cisco, Lowe’s and Target. Then on Thursday, we’ll hear from Intuit, Applied Materials and TJX. Recapping last week now and inflation had a strong stranglehold on the market narrative, as much higher-than-expected US CPI data drove Treasury yields higher, led by the belly of the curve. Global sovereign yields increased in sympathy. Quickly recapping the highlights from the pivotal CPI data: year-over-year headline CPI of 6.2% and core CPI of 4.6% were each the highest readings since the early 1990s and we’re generally getting to levels last seen consistently at the start of the 40yr disinflationary trend in the early 1980s. Price gains were shared across a broad range of components, which prompted some rabble rousing out of Democratic politicians, including President Biden. Five-year Treasury yields increased +13.5 bps as investors brought forward the expected timing of increases to the fed funds rate. Markets are pricing the first Fed rate hike by the July FOMC and 2.5 hikes through 2022. This compares with a September FOMC lift-off and fewer than 2 hikes in 2022 a week before. All told, 2yr, 5yr, and 10yr Treasury yields increased +11.7bps (+0.5bps Friday), +17.1bps (+1.0bps Friday), and +11.9bps (+2.1bps Friday) on the week. 10yr inflation breakevens hit their highest levels on record, finishing the week at 2.72%. Real yields were the only rates declining on the week, with 10yr real Treasury yields retreating -6.6bps (+0.8bps Friday) to end the week at -1.17%, just above all-time lows. Other developed sovereign bond yields followed Treasuries higher, with ten-year yields in Germany, UK, France, and Italy increasing +2.1bps (-2.8bps Friday), +6.9bps (-0.6bps Friday), +3.5bps (-2.8bps Friday), +7.8bps (-0.8bps Friday) on the week. The spectre of higher inflation and concomitant monetary policy tightening put an end to the recent S&P 500 win streak. After posting eight straight days of record highs by Tuesday, the S&P 500 retreated -0.31% this week, including -0.82% on Wednesday alone following the inflation data, but made a heroic effort to reclaim lost ground Friday, gaining +0.72%. Mega cap stocks were notable laggards, due to the increase in discount rates, with FANG+ stocks down -0.49% (+1.00% Friday). The index was also hit by a -15.44% collapse in Tesla stocks following news that Elon Musk would liquidate some of his holdings, which he duly did. European stocks proved more resilient, with the STOXX 600 (+0.68% on the week, +0.30% Friday), DAX (+0.25%, +0.07%), and CAC 40 (+0.72%, +0.45%), again posting new all-time highs to finish the week. On the virus front, Pfizer requested regulatory approval for all US adults to be eligible to receive the company’s Covid-19 booster shot, while climbing cases in Europe have prompted renewed lockdown measures and enhanced vaccination efforts across the continent. Federal Vice Chair for Supervision Quarles announced he would resign at the end of the year, as was widely anticipated. There was a steady leak of news on the impending nomination for Fed Chair, but neither Chair Powell nor Governor Brainard, the two favorites for the position, saw their chances much changed following the news. The Fed also released its bi-annual Financial Stability Report and concluded that asset prices remain vulnerable to deteriorating investor risk sentiment, virus progress, or economic recovery. Geopolitical tensions bubbled in Europe. Threats from Belarussian President Lukashenko to cut the transit of natural gas from Russia to Europe, and reports of potential Russian plans for further military excursions into Ukraine, drove European natural gas prices higher in the second half of the week. President Putin apparently warned the US and its allies that Moscow would not tolerate expansion of Western military influence in Ukraine. Tyler Durden Mon, 11/15/2021 - 07:59.....»»

Category: blogSource: zerohedgeNov 15th, 2021

Bank Hapoalim Announces Third Quarter 2021 Results

TEL AVIV, Israel, Nov. 15, 2021 /PRNewswire/ -- Bank Hapoalim (TASE: POLI) (OTC:BKHYY) today announced its financial results for the third quarter ended September 30, 2021. Key highlights  Net profit in the third quarter of 2021 totaled NIS 1,207 million, compared with NIS 1,419 million in the last quarter and NIS 816 million in same quarter last year. The results were supported by strong underlying business performance, mainly credit growth and an increase in fees, profits from investment in shares, income from credit losses, and the positive CPI. Net profit for the first nine months of 2021 totaled NIS 3,980 million. Return on equity (ROE) for the quarter stood at 11.8%, compared with 14.5% in the previous quarter and 8.8% in the same quarter last year. ROE for the first nine months of 2021 stood at 13.1%. Shareholder's equity grew by 9.6% versus last year, to NIS 42.7 billion. The Common Equity Tier 1 (CET1) capital ratio as at September 30, 2021, stood at 11.18%, well above both current regulatory (9.20%) and internal (9.5%) capital targets. Upon the expiration of the temporary order (December 31, 2021), if it is not extended or updated, the board of directors intends to update its internal target for the CET-1 capital ratio to 10.5%. The total capital ratio as at September 30, 2021, stood at 13.69%. The USD 1 billion Tier 2 issuance which the bank finalized in October will be recorded in the capital of the fourth quarter. As of today, based on third-quarter balances, the issuance will contribute roughly 84 basis points to the total capital ratio. The board of directors of the bank approved a dividend distribution of 30% of third quarter net profit, in the amount of NIS 362 million, as well as NIS 500 million in respect of the net profit of the first half of 2021. The total amount to be paid is NIS 862 million; the date of payment is December 8, 2021. Balance sheet Net credit to the public totaled NIS 335.3 billion, compared with NIS 323.8 billion at the end of June 2021, an increase of 3.6%, thereby completing 11.1% growth in the first nine months of 2021 and 14.5% growth in the last year. The growth in the credit portfolio was recorded in all segments of operations, in line with the bank's strategy. Corporate credit and commercial credit each increased by 4.3% in the third quarter, thereby completing 15.1% and 17.2% growth since the beginning of this year, respectively. Amid high demand in the housing market, the housing loans portfolio increased by NIS 4.5 billion in the third quarter, reflecting growth of 4.3% in the quarter, 10.9% since the beginning of this year, and 13.6% in the last twelve months. The consumer and small business segments are showing gradual recovery in the demand for credit. Accordingly, the bank saw 1.1% and 0.7% growth in the quarter in these segments, respectively. Total deposits crossed the half trillion shekel threshold, reaching NIS 505 billion, an increase of 21.2% compared to the corresponding quarter. Retail deposits totaled NIS 289 billion, an increase of 5.7% year-on-year. Allowance for credit losses totaled NIS 5.8 billion as at September 30, 2021, reflecting an NPL coverage ratio of 206%. NPL balances declined by 12.7% since the beginning of this year, to NIS 2.8 billion, constituting 0.82% of total credit to the public. Income statement Income from regular financing activity totaled NIS 2,598 million in the third quarter of 2021, an increase of 11.2% compared to the corresponding quarter and 2.3% versus the last quarter, driven by consistent growth of the credit portfolio and an increase in the CPI. The financial margin stayed relatively flat in the quarter, at 1.85%. Other financing income amounted to NIS 179 million, mainly including profits from Poalim Equity, the non-financial investment arm of the bank. Poalim Equity: The growing investment activity of Poalim Equity generated profit in the amount of NIS 110 million in the quarter and NIS 268 million in the first nine months of the year, compared with NIS 14 million and NIS 23 million in the comparable periods last year. Fee income totaled NIS 838 million in the third quarter, compared with NIS 802 million in the previous quarter, an increase of 4.5%, and an 11.0% increase compared to the corresponding quarter. The increase in fees was driven by the rebound in the economy and the increase in the volume of business. Operating and other expenses totaled NIS 1,999 million in the third quarter, compared with NIS 1,980 million in the previous quarter and NIS 1,851 million in the same quarter last year. The increase in expenses versus last year was mainly influenced by an increase in salary expenses, due to an increase in the provision for performance-based bonuses, in line with the improvement in profitability, and a provision for a grant in honor of the centennial of the bank. The cost-income ratio for the third quarter of 2021 stood at 54.9%, compared with 56.1% in the corresponding quarter. The bank's credit portfolio quality, along with an improvement in macroeconomic parameters, continued to be reflected in a low volume of credit losses. Income from credit losses amounted to NIS 252 million for the quarter compared with income from credit losses of NIS 647 million and an expense of NIS 193 million in the previous and corresponding quarters, respectively. The income from credit losses in the third quarter of 2021 was due to a further reversal of the collective provision (although at a lower level than in previous quarters) and recoveries from individual provisions. Recent developments Green Tier 2 issuance: In view of the continued accelerated growth at the bank, with the aim of diversifying its investor base and optimizing its capital structure, the bank completed an international private offering of CoCo (contingent convertible) bonds at a scope of USD 1 billion. The offering was oversubscribed by more than USD 2.6 billion, drawing participation from institutional investors in the United States, the European Union, the United Kingdom, and Asia. The green CoCo bonds were issued for a maximum period of 10.25 years, at an annual interest rate of 3.255% (the bank has an option for full early redemption beginning five years from the date of issuance); they are compliant with the ESG principles of the International Capital Market Association (ICMA) for instruments of this type. The bank intends to use an amount equivalent to the proceeds of the offering to finance environment-friendly projects in the areas of renewable energies, green transportation, green building, waste recycling, and energy efficiency. Business delegation to the UAE: In October, the bank led a senior business delegation to the United Arab Emirates with the Israel Export Institute, with the aim of creating access to markets and new business opportunities for its clients. The delegation, which consisted of more than 200 business leaders in Israel's tech and finance sectors along with senior executives of the bank, participated in a first-of-its-kind business conference in Abu Dhabi with local government and industry officials. The conference provided an opportunity to strengthen and develop the initial contacts formed during an earlier visit to the UAE, and to contribute to the progress and promotion of business and gain standing in the markets. Appointment of directors: At the shareholder meeting of the bank held on October 21, 2021, the following directors were elected: Mr. Ruben Krupik and Mr. Yoel Mintz were elected to serve as external directors of the bank, and Ms. Ronit Schwartz was elected to serve as an other (non-external) director, for a period of three years. The appointments are subject to approval by the Bank of Israel. The strategic plan of the bank, adopted in late 2020, aspires to realize the bank's vision – "Committed to growth through innovative and fair banking for our customers". The performance of the bank this quarter reflects consistent, resolute execution of its strategy, key elements of which are: Growth in banking activity – The bank will work to grow the volume of its activity with retail, commercial, and corporate banking customers, while continually improving its value proposition for customers. Development of new banking – The bank will promote the development of new distribution channels for banking services and products, with an emphasis on new digital distribution channels based on advanced data-analysis capabilities and an outstanding user experience. Building a growth-supporting organizational infrastructure – The bank will work to drive processes encouraging a customer-centric, growth-supporting organizational culture, enabling it to improve its delivery and time to market. Conference-call information Bank Hapoalim will host a conference call today to discuss the results. The call will take place at 5:00 p.m. Israel time / 3:00 p.m. UK time / 10:00 a.m. US Eastern time. To access the conference call, please dial: +1–888-281-1167 toll-free from the United States, +0-800-917-9141 toll-free from the United Kingdom, or +972–3-918-0610 internationally. No password is required. The call will be accompanied by a slide presentation, which, together with the financial statements, will be available on the Bank Hapoalim website at www.bankhapoalim.com, under Investor Relations > Financial Information. A recording of the conference call will be available on the bank's website at the above address one business day following the completion of the call. Please note: The conference call does not replace the need to peruse the immediate reports and the financial statements of the bank, including all of the forward-looking information included therein, in accordance with Section 32A of the Israeli Securities Law, 1968. About Bank Hapoalim Bank Hapoalim is Israel's leading financial group. In Israel, Bank Hapoalim operates 179 retail branches, regional business centers, and specialized industry relationship managers for major corporate customers. The Bank Hapoalim Group includes holdings in financial companies engaged in investment banking, trust services, and portfolio management. Internationally, commercial banking services are provided in North America by the New York branch. Bank Hapoalim is listed on the Tel Aviv Stock Exchange (TASE: POLI) and holds a Level-1 ADR program. For more information about Bank Hapoalim, please visit us online at www.bankhapoalim.com. Please note: This press release was prepared for convenience only. In case of any discrepancy, the bank's reported financial statements in Hebrew will prevail. Contact Tamar Koblenz                Head of Investor Relations T: +972 3 567 3440  E:  Tamar.koblenz@poalim.co.il   Table 1-1: Condensed financial information and principal performance indicators over time.....»»

Category: earningsSource: benzingaNov 15th, 2021

Bitcoin Adoption Is The Start Of A Digital Revolution

Bitcoin Adoption Is The Start Of A Digital Revolution Authored by Emeka Ugbah via BitcoinMagazine.com, The global adoption of bitcoin is only beginning as the world evolves toward a society based upon cryptographically secured money... It's remarkable how far we've come in only a little more than a decade. Since its launch in 2009 by the pseudonymous creator Satoshi Nakamoto, bitcoin, the world's first and largest cryptocurrency by market capitalization and dominance, has seen astonishing rises in value. Taking a look back at when the digital asset saw its first significant price increase, going from trading at a few fractions of a cent to 0.08 cents and then to $1, no one could have predicted with absolute certainty that we would one day live in a world where the asset would have gained over 6 million percent. Well, it happened in only 12 years. This astronomical growth gave birth to a whole new industry that has altered our perception of the financial world. It has also, just as expected, piqued the interest of millions of users worldwide. From nation-states to individuals, both private and publicly-owned companies and global financial institutions, these entities are either already invested and therefore now beneficiaries of this new monetary revolution, they are still on the sidelines thinking about how best to get involved, or just outrightly against the idea of this disruptive innovation, playing a blind eye to what it stands for, or just sadly oblivious of it. THE PANDEMIC VERSUS THE GLOBAL ECONOMY Image by Gerad Altmann from Pixabay 2020 was an inflection point for the entire global financial market. The pandemic, as well as efforts by different countries to contain it, resulted in an unprecedented collapse of the global economy. In an attempt to salvage the situation, central banks lept into action, printing so much money that it further skewed the already unbalanced supply and demand relationship. That action laid bare what was already known, the fact that the monetary policies of most developed nations, and by extension the less developed ones, are tethered to a flawed system. After the markets crashed, it became clear that adverse measures had to be adopted if the world isn’t to end up in yet another recession. These measures had to be adopted at all levels, from the individual to the national, as well as at the corporate and institutional levels. The cryptocurrency market wasn’t spared during the crash, of course. Devastating declines were experienced across the board. Bitcoin itself lost over 50% of its value in March 2021. But as a result of its intrinsically scarce nature, its recovery was unlike anything seen in modern times within the financial world. Over the space of eight months, Bitcoin was able to crawl and claw its way back up, breaking its previous all-time high of $20,000 reached at the peak of its 2017 bull run. And since then the price of the digital asset has been on an absolute tear, bulldozing its way through psychological levels of resistance, printing new all-time highs and defying all the fear, uncertainty and doubt thrown its way. As expected, this parabolic rise in the value of the asset didn't happen under the radar. Right before its steady climb, rumors and whispers of institutional interest in bitcoin began flooding the space, a lot of which was later confirmed by the institutions themselves. One such institution was MicroStrategy. THE CORPORATIONS JUMP IN New York City skyline view. Image by Manuel Romero from Pixabay In August 2020, MicroStrategy — the largest independent, Nasdaq-listed, publicly-traded cloud-based business intelligence provider — announced the purchase of 21,454 bitcoin for a total purchase price of $250 million, including fees and expenses. The company deliberated for months before deciding on a capital allocation approach. CEO Michael J. Saylor, went ahead to state that some macro factors — along with the public health crisis caused by the pandemic — forced governments around the world to adopt financial stimulus measures like quantitative easing to mitigate the crisis. Despite their best intentions, these measures may well depreciate the long-term real value of fiat currencies and many other various asset classes, along with many of those traditionally held by corporate treasury operations. The company's bitcoin acquisitions didn't stop at 21,454 bitcoin. Overall, MicroStrategy is said to hold a total of 114,042 bitcoin worth $6,966,574,887 based on the current price of the asset at the time of writing. Their total acquisition was purchased for $3.16 billion at an average price of $27,713 per bitcoin. Following the announcement of MicroStrategy's acquisitions, news broke that Ruffer, a UK-based wealth management firm, had followed suit. The financial firm invested 2.5 percent of its $27 billion portfolio into bitcoin in November 2020. But unlike MicroStrategy who still holds bitcoin to date, purchasing a few thousands more now and again, Ruffer’s game plan was different. They opted to take out their initial investment of $650 million in profit, and subsequently, when the price of bitcoin began showing signs of weakness just before the May 2020 crash, they sold their entire position, turning a $650 million investment into $1.1 billion in the process. If that isn’t evidence of the market's potential, it'd be difficult then to think of anything else that could be. The wealth management firm wasn't the only non-crypto or blockchain-native company to demonstrate this. The Tesla case, despite having a different twist, still pushed that narrative. The American electric vehicle and renewable energy company revealed in February that it had purchased 42,902 bitcoin worth $1.5 billion. They also announced that "according to relevant regulations and initially on a limited basis," they have begun making arrangements to accept bitcoin payments in return for their products. This news, as predicted, had a tremendous impact on the price of the digital asset, driving investors into a buying frenzy that drove the price up by more than 20% in just a few days that followed. As the months ticked by and the price of bitcoin verged into the unsteady waters that marred the second quarter of 2021, the air was saturated with fear, uncertainty and doubt. Different countries had begun yet again putting up measures to stifle the growth of the bitcoin and the entire cryptocurrency market, pushing out exaggerated data and false narratives about the Bitcoin network’s energy consumption, claiming that Bitcoin miningis not good for the environment. In the midst of all that, it was reported that Tesla had sold its bitcoin position and would no longer accept the asset as payment for their products. However, Tesla CEO Elon Musk, tweeted in response to the heat he had been receiving from the cryptocurrency community, saying that “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving the market. When there’s confirmation of reasonable (~50%) clean energy usage by miners with a positive future trend, Tesla will resume allowing bitcoin transactions.” To date, the company still holds 42,000 bitcoin and is said to have no plans of selling. THE CHANGE OF AN INSTITUTIONAL VIEWPOINT It is interesting to think about how things have changed though. A few years ago, a number of these corporations and institutions that are now hovering around bitcoin and some of the major altcoins, had a completely different opinion. In 2017, analysts at Morgan Stanley, the American multinational investment bank, stated that “Bitcoin’s real value could be zero.” Fast-forward to 2021, Morgan Stanley became “the first big U.S. bank to offer its wealthy clients access to bitcoin funds.” Also in 2017, Jamie Dimon, a long time to-date opponent of bitcoin and CEO of JPMorgan Chase & Co., another investment bank, was quoted as saying, “Bitcoin is a fraud that will blow up;” furthermore that, “cryptocurrency is only fit for use by drug dealers, murderers and people living in North Korea.” Fast forward yet again to 2021, two of the investment bank’s strategists Amy Ho and Joyce Chang wrote; “In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.” Jamie Dimon himself, still unchanged in his view, recently stated that he still sees bitcoin as “worthless,” but “our clients are adults. They disagree. If they want to have access to buy or sell bitcoin, we can’t custody it — but we can give them legitimate, as clean as possible access.” Goldman Sachs, yet another multinational investment bank, reopened their cryptocurrency trading desk, a little over a year after they listed five reasons “why bitcoin is 'not an asset class', nor 'a suitable investment.’” PayPal and Visa, the payment processing behemoths who have also in the past expressed their stances against bitcoin, calling it “ridiculous as a store of value” and “unacceptable as a payment system,” now both have completely different stands. PayPal now allows users to buy and sell bitcoin as well as a few other cryptocurrencies on their platform, while Visa is working on enabling bitcoin purchasing on theirs. A complete 180-degree turn from where they both were years ago. An interesting turn of events by all standards, no? There are currently a few arguments floating around on this topic: Some schools of thought will argue that without the corporations and institutions, the entire bitcoin and cryptocurrency network won’t reach its full potential, and that mainstream adoption is vital for its continued growth, seeing as the corporations have the ability inject so much capital into the networks. Data has it that the Global Asset Management industry holds $103 trillion as AUM (assets under management). Retail portfolios, representing 41% of global assets at $42 trillion and institutional investments amounting to $61 trillion, or 59%. From the data gathered, if the global institutions were to adopt the 1% portfolio allocation model to bitcoin as suggested by JPMorgan Chase & Co., this would mean an additional $1.03 trillion would flow into bitcoin, which already has a $1.15 trillion market capitalization. That would probably see the price of the digital asset shoot towards the $120,000 range. So is there a valid point in that argument? Another argument is that these corporations and institutions are only getting into bitcoin and other cryptocurrencies — not because they support the growth of the networks nor have beliefs in the blockchain technology, decentralization and its impact on the future — but that they are all capitalists who will sell as soon as they make a profit, much like Ruffer did. If we are being completely honest, who isn't in it for the profit? Though most of the participants in the cryptocurrency space can boldly say that they are in it for a whole lot more. However, there's no doubt that wealth creation and preservation remains an underlying incentive. The increase in institutional interest and involvement within the space will inherently bring some form of stability reducing the wild price volatility that the digital asset market has been known for. The market will certainly have a whole lot more liquidity. It all makes for a bit of a conundrum because the lack of liquidity in the market is one of the reasons why institutions aren’t jumping in mass just yet. “The crypto asset class is relatively still too small, illiquid and lacking depth to absorb large pension funds like institutional investments that would otherwise move the markets,” - Amber Ghaddar, cofounder of decentralized capital marketplace AllianceBlock. The third argument is that for the institutions to be committed fully to allocating portions of their portfolio into bitcoin or other digital assets, regulatory clarity has to be achieved within the space. Institutions operate within certain regulatory frameworks, that’s a known fact. Bitcoin and other cryptocurrencies are largely unregulated. The philosophy behind the creation of bitcoin in the first place has decentralization at its core, which makes it a bit of a nightmare for regulators. MY THOUGHTS It is as clear as a bright, sunny day that regulators worldwide have bitcoin and the entire cryptocurrency market in their crosshairs. Why has it now become a thing after over a decade of being in existence? Is it because the entire space has now garnered so much popularity that it can no longer be ignored? Or is it because the regulators are only just starting to figure out how to peek through the multiple complex layers of this otherwise nascent financial innovation? Of these two scenarios, the first can certainly be considered valid to some extent. But the second scenario, if the regulators only just started scrambling to try and regulate the space because they think they have figured it out, then it probably means they haven’t. Bitcoin was designed to self-regulate and preserve. Embedded within the codes of the protocol are set rules and mechanisms put in place to enforce any and all needed regulations, from supply schedules to security. Its adherence to these rules is pertinent to the network's existence, buttressing the earlier mentioned self-regulatory and preservative point. There is a reason why it is considered a “trustless” payment network after alI, no? Now the argument that institutional adoption is required for bitcoin to attain its status as the hardest, most sound form of money, as well as a store of value is false, to say the least. The Bitcoin network was meticulously designed to be self-sustaining and its native currency transacted peer-to-peer by individuals who freely opted into its usage. As the number of users grows, so will its security, and as a result its value. With all that said, for lack of a better way to put these next few words, it’s a “if you can’t beat them, join them, or just leave them alone” thing. Tyler Durden Wed, 11/10/2021 - 22:45.....»»

Category: smallbizSource: nytNov 10th, 2021