Advertisements


Luxury Real Estate Pros Reveal Marketing Secrets Used to Sell Miami Beach Property for a Record-Setting $75 Million

After just four months on the market, a property on Star Island—a neighborhood in Miami Beach, Florida—sold for $75,000,000. At press time, that number set a record as the most expensive sale in the history of Miami real estate. The waterfront mansion, located at 8 Star Island Drive, sits on nearly two acres of land […] The post Luxury Real Estate Pros Reveal Marketing Secrets Used to Sell Miami Beach Property for a Record-Setting $75 Million appeared first on RISMedia. After just four months on the market, a property on Star Island—a neighborhood in Miami Beach, Florida—sold for $75,000,000. At press time, that number set a record as the most expensive sale in the history of Miami real estate. The waterfront mansion, located at 8 Star Island Drive, sits on nearly two acres of land on the ultra-exclusive Star Island, a man-made island connected by a causeway. Celebrities who have called the tiny island of about 30 properties home include: Sean “Diddy” Combs, Emilio and Gloria Estefan, Rosie O’Donnell and Shaquille O’Neal. This record-setting home is unique, though, in that it is perfectly positioned on the island to offer unobstructed views of the Miami skyline. Named ‘Villa Lourdes’ after the seller—Lourdes Sanjenis, whose late husband purchased the property in 1987 for just $1.4 million—the 20,000 square-foot Mediterranean mansion has about 100 feet of direct waterfront. OdySierra The property was marketed by REALTOR®-Associate Elizabeth Lima of Berkshire Hathaway HomeServices (BHHS) Florida Realty. She credits her Managing Broker, Odalys “Ody” Sierra, and the strategic luxury marketing approach of BHHS for making the sale happen. We recently had the opportunity to discuss this historic sale with Sierra. Here, she dives deep into her and Lima’s strategy to sell the home and how other real estate professionals can follow in their footsteps: ElizabethLima   Could you tell us how you and Elizabeth secured this listing? Elizabeth has had a longstanding relationship with the former owner of the house. She built upon that relationship, and we assured the owner that we were the right brand to strategically market a property of that nature. I had the experience to assist as a managing broker. The owner was loyal to our brand and how we wanted to target a very specific market. Sales in Miami have been crazy, and we needed to act if we wanted to achieve that number . Could you explain your strategy for marketing this property? We utilized BHHS’ Luxury Collection Marketing Program, the Wall Street Journal and, for copy that we utilized for brochures and in the MLS, we worked with the duPont Registry. A lot of the marketing was halted because it went under contract so quickly. The home was actually under contract by the time it was featured in the Wall Street Journal and the duPont Registry. We also mailed beautiful, personalized mailers to a targeted list of luxury buyers in the area. These were detailed mailers that looked like high-end wedding invitations. We started calling luxury brokers and sending them photos; everything was very direct. Who wants to purchase a home for almost $80 million? With this strategy, we had four substantial offers within days of listing the property. How do you determine a marketing budget for a property like this? BHHS’ Luxury Collection pays for all of the marketing; the agents and seller don’t pay anything. This home was special so, in addition to the normal marketing that the Luxury Collection does, we also dedicated a cover and feature to the property in the duPont Registry, as well as a press release. We didn’t set aside any sort of budget for this property. We decided to pay whatever we needed to reach these luxury buyers. What did you do differently when it came to listing and showing this property? We really focused on the location. The home was built in the 1990s and hasn’t been updated, so the location on the island was the thing that was unique, with a view of downtown Miami. The location was the focus of all of the copy. We obviously didn’t have an open house…everything was very private. By request of the previous owner, prospective buyers that toured the property were not allowed to take photos, had to sign a confidentiality agreement and had to provide proof of funds. And when we did showings, we tried to schedule them later in the day and spend a lot of time outside so that buyers could experience the incredible sunset. Four months is exceptionally fast to sell a home such as this. Do you attribute that solely to your comprehensive marketing plan and an extremely hot market? Yes, how hot the market is and a lack of inventory is what I’d attribute it to. We were also very strategic with planning before it went live on the MLS. We knew exactly who we would target as soon as the listing went live. We called these people immediately after the home hit the MLS and had appointments for showings the same week. What would your advice be to any other real estate professionals who may be looking to dip their toe in the luxury market? I think the best way to answer that is to tell you how Elizabeth was able to get into the luxury market, because this sale was the first one she handled of this size. About four years ago, the owner of this home told Elizabeth that she would give her this property when she purchased a home to downsize to. Elizabeth told me this during a vision board meeting and, after that conversation, she started regularly printing out listings with price tags of more than $20 million and put her name over the agent’s name. She began to get cold feet when it came time to actually list the home, but I told her she would be doing an injustice to the seller if she backed out. I told her we would sell it together, but she first had to educate herself and reach out to those luxury buyers ahead of time. She also created a mock MLS listing of the property to add to her vision board, as inspiration. The importance of a powerful brand and the tools and resources available through that brand are also key to getting the right support in representing luxury listings, Sierra noted, adding that the two also credit BHHS because of its brand reputation in the luxury market. Listed by: Elizabeth Lima, REALTOR®-Associate at Berkshire Hathaway HomeServices Florida Realty Sold for: $75,000,000 Photos by: Berkshire Hathaway HomeServices Florida Realty Jameson Doris is RISMedia’s social media/blog editor. Email him your real estate news ideas to jdoris@rismedia.com. The post Luxury Real Estate Pros Reveal Marketing Secrets Used to Sell Miami Beach Property for a Record-Setting $75 Million appeared first on RISMedia......»»

Category: realestateSource: rismediaJan 14th, 2022

Building Your Luxury Sphere of Influence from the Ground Up

So, you’re a new luxury real estate professional in the area, and you’re wondering how to go about building your luxury sphere of influence from the ground up. Without a real list of buyers and sellers, how on earth can you expect to do your job? Well, good news is that luxury real estate professionals […] The post Building Your Luxury Sphere of Influence from the Ground Up appeared first on RISMedia. So, you’re a new luxury real estate professional in the area, and you’re wondering how to go about building your luxury sphere of influence from the ground up. Without a real list of buyers and sellers, how on earth can you expect to do your job? Well, good news is that luxury real estate professionals like Liz Heinkel have shared their stories of how they started afresh in communities with absolutely nothing, and what it took to successfully build a robust, profitable, and even record-setting brokerage influence on a community that beforehand never knew she existed. How to Build a Sphere of Influence in Luxury Real Estate These are a few foundational luxury networking tips that will surely foster grass-roots growth for your luxury home marketing and buyer/seller network that have been proven true time and time again by the success of some of the most successful luxury real estate professionals to date. Seek Out Mentorship If you’re a new real estate professional lacking knowledge, it would be in your best interest to go with a larger company/brokerage that has daily training and mentorship opportunities. Some companies even offer business coaching in-office on a daily basis, but you can’t expect that everywhere. Unfortunately, many brokerages don’t have one-on-one sessions or training, leaving you to fend for yourself. So, don’t be afraid to ask for help! Confidence in yourself is important, even in the way you carry yourself before your clients. If not, clients won’t be confident in your abilities as their trusted luxury real estate professional. Knowledge is power — of the neighborhoods you’re selling in, for instance. People will trust you to guide their decision-making. Get Involved In Your Community The real work involved in building your network of friends is getting involved in your ideal farming location. If you’re gonna live and broker in a community, find something you’re passionate about giving back to the community. This is the only way you’ll win the trust as an outsider coming in. Join different groups, like political organizations, yacht clubs, rotary clubs, etc. Develop your network of friendships/relationships with those you rub shoulders with and get to know during meetings or group activities. But make sure not to over join, and don’t join solely with the intention of drumming up new business (this should never be your primary focus as a community member). Join a group or organization you are passionate about giving back to and make genuine connections with those around you—without a business-focus-first approach. If you can find your way around like-minded people, you’re likely to get some new clients out of it as a result. Heinkel mentioned her own experience in her downtown community’s rotary club she had joined, and even became president of, recalling “a couple of Rotarians that reached out to me to sell their house.” It happens over time. Remember, it’s all about the long game when forming relationships. Leave a Personal Touch Write your “thank you” notes with personal touches, especially to those who send you referrals. Make sure you’re also making personal phone calls, keeping in touch, and staying top of mind, or else your client might feel neglected and start looking elsewhere. Personal touch is really the most important element of ongoing contact with your referrers, buyers, and sellers. Hundreds of dollars of postcards amount to nothing without actively engaging with your sphere of influence. Block Your Time for Relationship Building Taking people to lunch or having coffee is a great way to really humanize your relationship with your clients, but it can also take quite a lot of your time — too much if you’re not careful. Make sure to be selective, and don’t overwork yourself. What does your week look like for time blocked for personal connections? Keep up with your list of buyers and sellers, noting those you haven’t connected with in awhile. When it comes down to it, especially if you’ve got a long list and a busy schedule, some of your contacts are likely to fall off the radar regardless. But don’t beat yourself up! You will find your niche clientele so long as you remain genuine in your network building in your target area of interest. Define Your Intention/Passion Set your intention. Know exactly where you want to farm, and simply participate and be as involved as you can in the area. Attend local events, visit the beach, frequent local businesses like cafes, popular brunch spots, or the hottest local restaurants. Check out any social groups that meet in the area of your niche interest. Focusing very clearly on your intention will only support your quest to find those quality client connections waiting for you. Don’t waste your energy or focus on competing real estate professionals and brokers. Always focus on the object of your passion instead. Implement these foundational principles in your network growth strategy, and before you know it, you’ll find yourself on your way to establishing a stronghold in your niche location. Become an Institute member today and get access to some of the top producers in the industry and ready-to-use marketing tools giving you the competency and competitive edge no matter your niche real estate market. The Institute also offers a wide range of resources for you to invest in yourself at any stage in your luxury real estate career—even if you’ve just begun! Diane Hartley is the president of the Institute for Luxury Home Marketing, a premier independent authority in training and designation for real estate agents working in the upper-tier residential market. Hartley brings her passion for luxury marketing and more than 20 years of experience growing and leading businesses to her role as president of the Institute. The post Building Your Luxury Sphere of Influence from the Ground Up appeared first on RISMedia......»»

Category: realestateSource: rismediaJan 13th, 2022

Meet the next generation of luxury entrepreneurs selling millions in real estate, creating art galleries, and building fashion empires

A new crop of luxury entrepreneurs has popped up, creating the businesses they want to see taking over the sector. (L-R), Alex Assouline, Destinee Ross-Sutton, Marina Raphael, Avi Hiaeve.Emilia Brandao; Courtesy the artist and Destinee Ross-Sutton 2020; Marina Raphael; Avi & Co; Yuqing Liu/Business Insider Luxury spans many sectors including, fashion, travel, real estate, and nightclubs.  However, the industry is changing: People want more sustainability and faces that are more diverse. Insider regularly talks to the young people who are making their mark in luxury and challenging the market.  Visit Insider's homepage for more stories. Luxury is a pretty hard sector to tap into — and even years of notoriety doesn't necessarily mean years of financial stability or economic success. The coronavirus pandemic only heightened many of those issues, as brands and retailers throughout the world have been forced to close or declare bankruptcy. Even before the pandemic, however, there were calls for a changing of the guard in the luxury sector. People want more sustainability, leaders who are more tech-savvy, faces that are more diverse, and clothes that come with a meaning and a purpose.Rather than wait around for those currently in charge to change, a new crop of luxury entrepreneurs has popped up, creating the businesses they want to see taking over the sector. These are names and the faces that will come to define and helm the next generation of luxury spending. Insider has been speaking to the new rising faces in luxury about the future of their respective spaces, touching on topics such as the investment value in high-priced watches, and where they hope to see the world after the pandemic subsides. The interviews are being compiled here: Millennial entrepreneur Brandon Blackwood shares how $7,000 and Instagram helped him build a handbag empire that's on track to book $30 million in revenueBrandon BlackwoodBrandon BlackwoodBrandon Blackwood, 29, is the founder of his eponymous handbag line that went viral last year after making a tote that said: "End Systemic Racism." Since then, other styles of his bag have gone viral and he's launched a spring campaign featuring celebrities and influencers like Ryan Destiny, Normani, and Jaime Xie. So far, the brand booked more than $14 million in revenue this year and is on track to close 2021 with $30 million. The 24-year old jewelry designer, whose rings have been spotted on Serena Williams and Meghan Markle, uses half her profits to fund female entrepreneursShilpa YarlagaddaCourtesy of Shilpa Yarlagadda; Taken by Shoji Van KuzumiShilpa Yarlagadda, 24, is the cofounder of Shiffon, the fine jewelry brand that invests its proceeds back into female-funded businesses. For the upcoming election, the brand has partnered with Michelle Obama's When We All Vote foundation for limited-edition hoop earrings to represent the hoops women have to go through for basic rights. In an interview with Business Insider, she talks her career journey, the importance of mentorship, and her partnership with Obama. Inside the world of 'Bling Empire's' Jaime Xie, the tech heiress forging her own path as a fashion influencerJaime XieYoshi UemuraXie told Insider she had never even seen reality TV before joining the cast of Netflix's hit show "Bling Empire." Now she's one of its standout stars and is best known for her fashion and style. Born in Silicon Valley, she said tech wasn't really her thing, and she's always wanted a career in fashion. Now she's an influencer, jet-setting to Paris and Milan, sporting the hottest ready-to-wear looks. In an interview, she gives Insider a peek at her glamorous life. Real estate heiress Danielle Naftali, who is just 27, helped convince a mystery buyer to shell out $35 million for an NYC penthouse during the pandemicJonathan GrassiDanielle Naftali, 27, is expected to take over her father's real estate company Naftali Group, which develops some of New York City's most luxurious properties. But even she had to start at the reception desk. To Insider she breaks down working her way up and how she helped convince a buyer to shell out over $30 million for an apartment during a pandemic. Pajama sets are the new 2-piece suit. A millennial brand explains the wild pandemic year when sales spiked 400% .Joel Jeffery (L) and Molly Goddard (R)Desmond & DempseyHusband-wife duo Molly Goddard and Joel Jeffrey are known for their high-end pajama line Desmond & Dempsey, which also saw record growth during the pandemic as people sought to buy more comfortable clothing. To Insider, they talk about the brand's beginnings and how they hope to further capitalize on the billion-dollar markets of both wellness and comfort wear. Meet the millennial designer and CEO who wants to make comfort clothing the new power dressingMisha NonooCourtesy of Misha NonooDesigner Misha Nonoo thinks comfort clothes will also be part of the new way to power dress. To Insider, she spoke about her career beginnings, her latest collection, and what she thinks the future of sustainable fashion will be in a post-pandemic world. How fashion's 'patient zero' turned her fight with Covid into a new hygiene and wellness lineNga NguyenCourtesy of Nga NguyenAfter being diagnosed with COVID-19 last year, Nga Nguyen was deemed the fashion industry's "patient zero" as she was the first known case in the world of jet-set high fashion to catch the virus. But she's light at the end of the tunnel. To Insider she talks about her new wellness line, inspired by her run-in with the virus, and shares her expectations on what role hygiene products will play in a post-pandemic world. How a 28-year-old sold his first jewelry design for $25,000 and within 3 years built an exclusive client roster including RihannaEmmanuel Tarpin.Emmanuel TarpinCalling in from Paris, Emmanuel Tarpin spoke about his rise in the jewelry industry, how he nabbed two of the industry's top honors, and got Rihanna to fall in love with his work.How a 22-year-old heiress launched a handbag line and within 3 years landed the Netherlands' Queen Maxima as a fanMarina Raphael.marina raphaelAt just 22, Marina Raphael has already built a luxury handbag business that counts the Queen of the Netherlands as a fan. In an interview with Business Insider, she spoke about learning Italian, teaching herself design, and her plans to build the next-big-thing in luxury — as well as being a sixth-generation member of the Swarovski crystal dynasty.Swarovski crystal heiress Marina Raphael explains how she achieved record-breaking sales by selling smaller handbags, donating to charity, and using snail mail to reach customersMarina Raphael with her SS21 collection(1)Marina RaphaelRaphael caught up with Insider again in March of this year to talk about how her brand saw record growth during the pandemic. To cope with the time, she changed her marketing strategies and even reduced the size of her handbags as production took a hit due to closures. Still, the brand came out stronger than ever before. How one millennial CEO built a luxury eyewear brand that's been spotted on everyone from Jeff Bezos to Brad PittCourtesy of Garrett LeightGarrett Leight is the founder, CEO, and creative director of Garrett Leight California Optical. His father, Larry, was the founder of the sunglass brand Oliver Peoples. In an interview with Business Insider, Garrett talks about opening his own eyewear brand and keeping his family legacy alive. Pauline Ducruet isn't so different from other 26-year-old entrepreneurs — she just happens to be Grace Kelly's granddaughterPhoto by Francois Durand/Getty ImagesPauline Ducruet is the founder of the gender-neutral fashion line, Alter Designs. She also happens to be a granddaughter of Grace Kelly through her mother, Princess Stephanie of Monaco. In an interview with Business Insider, she talks about the importance of sustainability in fashion, and how the pandemic almost wiped out her business. A millennial car customizer who counts Lebron James and Kendall Jenner among his clients explains why he's expanding his business with a luxury shoe lineVik Tchalikian.Vik TchalikianVik Tchalikian is best known as the car customizer for the stars and boasts a client list that includes Kendall Jenner, LeBron James, and Billie Eilish. In an interview with Business Insider, he talks about how he used his car knowledge to start up a luxury shoe line. Two Gen Zers turned a $2,000 investment into an art gallery that sells $600K pieces. They want to usher in a new generation of art collectors.Alexis de Bernede (L) and Marius Jacob (R)Darmo ArtBased in France, Alexis de Bernede and Marius Jacob are the founders of Darmo Art gallery. Last summer, their two art shows netted six figures each, and they are now planning future exhibitions in Paris, the French Riviera, and at the Grand Hotel Heiligendamm, an exclusive report in Germany. Millennial fashion designer Alexandra O'Neill is seeing cocktail dress sales skyrocket as customers prepare for the new Roaring 20sCourtesy of Alexandra O'NeillAlexandra O'Neill is the founder of luxury brand Markarian and made headlines last year after First Lady Jill Biden wore a custom Markarian piece for Inauguration. Since then, the company has seen sales skyrocket. What's more, O'Neill held her first New York Fashion Week presentation in September, showing off a collection inspired by Lauren Bacall in the movie "How to Marry a Millionaire." Meet the Black millennial art curator who worked on a Zendaya photoshoot, had her portrait featured in Beyoncé's 'Black Is King,' and was just tapped by auction house Christie's to curate an exhibitDestinee Ross-Sutton.Courtesy the artist and Destinee Ross-Sutton 2020The art industry is notoriously white. Enter, Destinee Ross-Sutton, the 24-year-old art curator who already counts a Zendaya photoshoot and a Christie's exhibit under her name. A shining moment for her this year was when she discovered that a painting of her was featured in Beyoncé's "Black IS King." In speaking with Business Insider, Ross-Sutton talks about her mission to increase diversity and inclusion in the art world.The 28-year-old heir to a luxury publishing house explains how he creates some of the most exclusive — and expensive — private libraries in the worldAlex Assouline.Emilia BrandaoAlex Assouline is a creative library designer who helps create some of the most exclusive — and expensive — libraries in the world. The heir to his family's publishing house, Assouline also helps make stunning coffee books on subjects ranging from feminism to the palace of Versailles. In an interview with Business Insider, he talks about the art of library designing and which books he is helping to make next. Meet the 'VIPER Girls,' the female nightlife entrepreneurs who couldn't get a credit card 4 years ago and now field requests to work the Super Bowl(L) Kelsi Kitchener and (R) Celeste Durve.Courtesy of Kelsi Kitchener and Celeste DurveKelsi Kitchener, 28, and Celeste Duvre, 24, are the cofounders of the guest experience company VIPER, which works with some of the biggest celebrities and brands in the world. Known as the Viper Girls, they manage all points of the overall guest experiences at events. In an interview with Business Insider, Kitchener and Duvre talk about the founding of their company, and being young women in an industry that's long been touted as a "boys club." A 25-year-old set her eyes on taking over the high-end smoking accessories market — and it's workingCourtesy of Smoking JacketChiara di Carcaci, 25, is the founder of Smoking Jacket, a high-end cigarette accessories company that counts a Getty heiress as a fan. In an interview with Business Insider, di Carcaci talks about why she decided to start a luxury cigarette brand, and her ambitions to expand it into a full-service lifestyle company. A 28-year-old fashion brand director explains how ruthless attention to detail has landed Rihanna, Kim Kardashian, and Jennifer Lopez as clientsKyle Bryan.Courtesy of Kyle BryanIn an exclusive interview with Business Insider, Kyle Bryan, brand director at the luxury label LaQuan Smith, breaks down his plans on helping create the next big American fashion house. "A lot of women and celebrities will directly reach out to LaQuan and say, 'I would love for you to make me something,'" he said. "That's how some of our best stuff has even happened."Nisha Persaud's side hustle is creating at-home manicure boxes that are beloved by celebs and have been featured in luxury campaignsDanisha "Nisha" PersaudDanisha "Nisha" PersaudWhen the pandemic made it impossible for Nisha Persaud to get her nails done last year, she created at-home manicure kits to bring the nail salon to her. Since then, she's netted more than $100,000 in revenue and her work has been reposted on social media by Cardi B, received a shoutout by Megan Thee Stallion in a video, and gifted to the model Teyana Taylor for her baby shower. Meet the millennial cofounders of Apparis, the cult-favorite vegan coat brand that raised $3 million in funding this year and just launched a collaboration with Juicy Couture(L) Lauren Nouchi and (R) Amelie Brick.ApparisAmelie Brick, 37, and Lauren Nouchi, 29, are the cofounders of Apparis, an apparel company best known for its vegan coats. In an interview with Business Insider, they talk about why they decided to start a high-end vegan coat line, how the pandemic led them to expand into homewear, and why they decided to launch a collaboration with Juicy Couture. Meet the millennial cofounder of a jewelry brand that has partnered with the NFL and NBA and is on track to make $50 million in revenue this yearChristian Johnston.Courtesy of Christian Johnston cofounder of GLDChristian Johnston is the cofounder of the jewelry brand GLD, beloved by the likes of Justin Bieber and rapper Wiz Khalifa. The company has also done partnerships with the NFL, NBA, MLB, and Disney's Marvel. In an interview with Business Insider, Johnston talks about growing his jewelry company, which is now on track to make $50 million in revenue this year. Hogoè Kpessou worked as an Uber Eats driver before she launched her handbag brand last year. Now she's on track to net seven figures.Hogoè KpessouHogoè KpessouLuxury designer Hogoè Kpessou is best known for her backpacks emblazoned with a gold bumblebee. Before starting her eponymous company, she worked weekend shifts at a local restaurant and delivered food for Uber Eats. Today, she estimates her brand will hit seven figures in revenue in the beginning of 2022. YIMBY with a conscience: Meet the 26-year-old real-estate heir who wants to make affordable housing a reality in the Biden eraDonahue Peebles IIIPeebles CorporationDonahue Peebles III is set to one day take over his father's real estate and development empire, The Peebles Corporation. Speaking to Insider, he talks about his passion for helping make housing more affordable, gives his thoughts on gentrification, and shares his expectations for what's to come under a Biden presidency. Meet the millennial CEO who wants to redefine the ownership of men's clothing, and convinced Alexis Ohanian and Nas to investRegy PerleraCourtesy of SeasonsRegy Perlera is the co-founder of Seasons, an app that allows men to rent designer clothing. He tells Insider that renting clothing is one way to reduce your carbon footprint, and contribute to the circular economy. In 2019, Seasons raised $4.3 million in funding from investors such as Alexis Ohanian's Initialized Capital, Notation Capital, and the rapper Nas.A millennial entrepreneur who runs a high-end watch retailer explains why now is the time to invest in watches — and which timepieces are the most valuableAvi & Co.Avi Hiaeve, owner of the high-end watch retailer Avi & Co., met with Business Insider earlier this year to talk about his watch business as well as give tips for those looking to start investing in luxury watches. "The celebrities and the artists and all of them, they're not wearing watches under $100,000 anymore, everything they want is over $100,000. It's really gone through the roof," he explained to us. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 3rd, 2022

19 underrated part-time jobs that pay well and how to get them

If you can't find a full-time job, want to make extra income, or need schedule flexibility, part-time work is a promising option. The number of people employed part-time has skyrocketed in the past year.Getty Part-time jobs have become a popular to bring in extra cash with a low commitment. Accountants, physician assistants, and programmers are among the highest paid part-time roles. Writing, tutoring, fitness instructing, and graphic designing are also in-demand options. In recent years, it has felt outdated to think about a career in terms of working long hours for many years in a single job and climbing the career ladder in the same profession you chose as a teenager or 20-something. In particular, the COVID-19 pandemic really exploded stereotypes around how and when we do our work.Part-time jobs have expanded since the pandemic hit, according to the Bureau of Labor Statistics. The number of people employed part-time for economic reasons (because employers downgraded full-time jobs, laid people off, or otherwise had to alter their workforce) more than doubled from 4.4 million in February 2020 to 10.9 million in April 2020. And even a year into the global health crisis that number remained higher than it was pre-pandemic. As of September 2021, over 20 million people were working part-time for noneconomic reasons such as balancing school or family — an increase of more than 1.3 million year over year.Below, you'll find 19 high-paying part-time jobs covering a mix of functions, industries, and levels of experience — along with the median hourly rates and links to help you find current job openings. Each rate, pulled from the Bureau of Labor Statistics' 2020 data, is at least $20 an hour (with one exception). It's worth noting that since these are median wages, half of earners in these roles fall below and half fall above this rate. In other words, entry-level positions may pay less, but there are also opportunities to make significantly more.Why work part-time?Almost every industry has part-time jobs. These opportunities, typically requiring less than 30 hours of work per week, can give you some consistency without the demands of a full-time job. You might be able to work remotely and, depending on context and employment status, you may earn paid time off or holidays off, too.You might pursue part-time work because you can't find a full-time job, need or want to make extra income on top of your existing employment, or enjoy the flexibility or variety these positions offer. "More and more people are pursuing their passions, and this means multiple roles," said Muse career coach Jennifer Sukola. Working part-time in a competitive field also lets workers "get their foot in the door, gain experience, and find out if they will eventually want to do [the role] full-time."As someone who's been working as a freelancer for a decade, I've taken on many, many part-time jobs — sometimes simultaneously — in order to work the equivalent of one full-time job. I currently work part-time as a writer since it's a competitive field and I live in a city with few staff jobs. But I've previously held part-time roles in tutoring, administration, and marketing.I love having free time during the day, pursuing work I find interesting, working from home (as many of my part-time roles have allowed me to do), seeking out clients, being able to take on — and say no to! — assignments as I see fit, and having a multifaceted career that's not tied to one role or employer.1. WriterMedian hourly rate: $32.27A writer creates communication materials: in print, online, or both. Short-form content might include social media or blog posts, pamphlets, and email copy, while long-form content could mean articles, web content, newsletters, reports, white papers, and even books. You might be assigned to a topic, or you might pitch and create content on your own. Regardless, you may also have to conduct interviews and research and will usually work with an editor or someone who oversees the quality of your work. Some writers specialize in a particular topic or form — science or finance journalist, technical or medical writer, or grant writer, for example — while others might write more broadly. Entry-level writing gigs usually require at least one year of experience, which could be in the form of an internship.Increasingly, media companies have listed part-time writing jobs that can be done remotely — though they usually request that work be done during business hours. In 2021, I obtained a 20-hour a week writing position at Bustle, which is located in New York, and worked 20 hours a week from Boston. Don't limit yourself to just media, though; lots of organizations — from nonprofits to financial institutions and everything in between — need writers.Find writer jobs on The Muse2. Tutor(Note: BLS groups tutors with other teachers and instructors and does not provide hourly wage information.)Tutors help students — children or adults — learn a subject or skill. The material could range from more fundamental subjects like basic math to high-level content like the SAT or college-level physics. Tutoring doesn't always take place during "normal" business hours, with many clients preferring to meet after work or school hours or on the weekends. Unlike teachers, tutors don't need formal accreditation, but they do need a deep knowledge of the subject they're teaching; that usually translates to at least an undergraduate degree in the subject.Rates can vary pretty widely depending on the subject, your experience, and the location: Tutors in cities like DC and New York City can charge $50 an hour and up, for example. If you work on your own, you can charge more, but working with a tutoring agency means they help find students and take care of some of the employment paperwork. When I worked with an agency in DC, I made $33 an hour, but when I worked on my own I made at least $60 an hour and usually more.Find tutor jobs on The Muse3. Marketing specialistMedian hourly rate: $31.64A marketing specialist is responsible for promoting or selling products or services to new or existing customers — which might be individuals and/or organizations. Specialties include email marketing, market research, social media, ecommerce, and search engine marketing (SEM), but the work fundamentally centers around understanding a target audience and knowing how to reach and persuade them to take action. You may need an undergraduate degree in marketing, communications, or even journalism.Companies sometimes hire part-time marketing specialists to help with particular campaigns or to provide expertise in a particular type of marketing. Smaller organizations might only need — or have the budget for — 10 or 20 hours of marketing and communications work per week. In my case, I offered my copywriting and editing skills on a per-project basis, bidding for work based on my availability and the rate I would charge for the work ($40 and above).Find marketing specialist jobs on The Muse4. Graphic designerAverage hourly rate: $25.66A graphic designer supports a business by creating illustrations, graphics, and other visual concepts and content. Projects can vary from a short-term deliverable like a flyer that needs to be visually appealing to a large-scale project like a book or magazine. According to BLS, a college degree or equivalent coursework is usually essential for developing the necessary skill set, which may include web management if they're putting these designs online. Graphic designers can be hired with a year or less of experience, which students can bridge with an internship, summer job, or pro bono work with a club or faculty member.Part-time graphic designers can work consistently with one organization or with many clients by the project as part of an agency or as freelancers, but they usually need to have more significant experience before striking out on their own.Find graphic designer jobs on The Muse5. Exercise trainer or group fitness instructorMedian hourly rate: $19.48Fitness instructors work with individuals or groups on developing their strength, fitness, flexibility, and related skills. They can work with a variety of ages and experience levels and teach various types of classes (such as kickboxing, Zumba, pilates, or spin), depending on their own experience and training.A personal trainer certification can take several months to complete, but you only need to be 18 and have completed high school to be eligible. You may not need credentials to teach group classes, but some employers will require or encourage certifications in the specific type of fitness (for example, a yoga studio might only hire instructors who've completed a yoga teacher training program). Instructors usually teach classes or train clients part-time at gyms, studios, camps, community centers, and other locations. As a trainer, you might also work directly with clients, scheduling by the session.Find exercise trainer and fitness instructor on The Muse6. Massage therapistMedian hourly rate: $20.97A massage therapist works with clients on the muscles and soft tissues of the body to decrease pain and tightness, relieve pressure, and improve health. They can work with a variety of client types in a variety of settings, from salons to doctors' offices to hospitals. Usually massage therapists complete a program with 500 or more hours of study and hands-on training and most states require a certification or license (the exact requirements vary by location).There may be the opportunity to focus on a specialty like sports massage or deep tissue massage. Depending on the workplace, a massage therapist may work in shifts or as scheduled with clients, but there's often flexibility based on the workload and clientele.Find massage therapist jobs on The Muse7. Insurance sales agentMedian hourly rate: $25.08An insurance sales agent sells policies to prospective customers. The policies mitigate against certain types of risk: Life insurance provides financial compensation to an insured person's beneficiaries in the event of the policy holder's death, for example. Like a number of sales jobs, this type of role requires you to talk to strangers every day, identify their needs, and work with them as they complete a detailed application.The actual position could range from working a call center to meeting clients in person. You only need to have completed high school according to BLS, though employers often look for a bachelor's degree, and in any case, you'd be required to obtain a license. There might be flexibility around working from home, especially if you're selling over the phone, and working non-traditional hours.Find insurance sales agent jobs on The Muse8. Executive assistantMedian hourly rate: $30.34An assistant might be expected to handle administrative tasks in and outside of the office: managing calendars and meetings, handling expenses, greeting visitors, answering the phone, and dealing with other clerical tasks. But an executive assistant, who usually supports one or more leaders in an organization, might also do higher-level work including pulling together research, sales material, and other important information for one or more executives.Usually the more senior the executive you work for, the higher the salary. Employers usually look for an undergraduate degree in a business-related field like marketing or accounting, especially if the candidate has no prior experience.Find executive assistant jobs on The Muse9. AccountantMedian hourly rate: $35.37An accountant prepares, reviews, and files financial documents and maintains and organizes detailed tax and other records. In some cases, they might also weigh in on business decisions, suggest strategies to reduce costs or increase revenue, and make other recommendations. They can work for individuals who have complex financial needs or larger organizations, either in-house or at an accounting firm that works with multiple external clients.An accountant needs an undergraduate degree to work, and becoming a Certified Public Accountant (CPA) or getting another relevant certification can make an accountant look more attractive to employers. Many accountants do work full time, but smaller businesses might only require assistance during tax season or at the end of every quarter. If you pursue the part-time route, you may need more than one client or job to maintain regular work.Find accountant jobs on The Muse10. Real estate agentMedian hourly rate: $24.63A real estate agent is a professional who helps clients sell, buy, or rent a property. This could include a house, an apartment, a residential building, or a commercial property (and less frequently industrial or agricultural properties). Agents keep track of what's on the market, show properties, facilitate interactions and negotiations between parties, and help clients complete relevant paperwork and records to close deals. They also stay on top of trends in the market so they can advise on how much a property might be worth.You do need your real estate license to become an agent, which requires some pre-licensing courses, but besides that, you only need a high school degree. Many real estate professionals do have bachelor's degrees, so sometimes it helps, but employers look for your ability to close on a sale first and foremost. Real estate agents work odd hours (since many people can only go to open houses or viewings at night and on the weekends) but they also have a lot of flexibility to set their own schedules.Find real estate jobs on The Muse11. Physician assistantMedian hourly rate: $55.48 per hourA physician assistant (PA) works in a variety of medical settings (including hospitals and outpatient clinics) and can diagnose and treat patients as well as assist — as the name implies — doctors and other medical professionals. They can work with a doctor doing surgery, help a patient manage a treatment plan as the provider they see most often, order tests, write prescriptions, and handle a long list of other responsibilities. PAs could work in emergency medicine, trauma surgery, transplants, family medicine, pediatrics, and other specialties — meaning you can choose the area of healthcare that interests you once you decide that this career path is of interest.You'll need a master's degree to become a physician assistant. Though most PAs work full time, smaller practices can use part-time PAs, and sometimes larger clinics and hospitals only require part-time shift work (but bear in mind those shifts could be overnight or on weekends).Find physician assistant jobs on The Muse12. Computer programmerMedian hourly rate: $42.88A computer programmer makes sure that an application or software runs correctly by writing code for new software and features and/or testing and fixing code on a regular basis as bugs are discovered. A bachelor's degree is helpful, but some programmers can obtain positions with an associate's degree or no degree at all. Some companies hire part-time programmers, or you can pursue freelance or contract opportunities.Find computer programmer jobs on The Muse13. Software developerMedian hourly rate: $52.95A software developer designs applications and programs — unlike programmers, who typically execute on a plan or optimize a program, developers are more involved in the creative ideation and problem-solving when an app is in its early stages. They might analyze user needs, brainstorm ways to address those needs via an application or feature, design the various elements of that software, lay out different pieces of the project for programmers to execute on, and handle documentation.Developers are in high demand: BLS projects developer jobs will grow 22% between 2020 and 2030, much faster than the 8% average growth for all occupations. Some companies require an undergraduate degree, although it isn't essential. A developer can potentially work remotely and part-time — it just depends on the context and workload. Developers can sometimes work more flexible hours, too.Find software developer jobs on The Muse14. Occupational therapistMedian hourly rate: $41.48When someone is struggling to complete everyday tasks due to injury, illness, pain, and/or disability, an occupational therapist (OT) helps that person adapt their movement and behavior to manage those tasks more effectively. They might focus on helping people do professional work or on enabling them to simply get out of bed and dress themselves. They could work in a person's home or in a professional setting like a hospital or school.This position requires a master's degree as well as licensing. If a school only needs assistance for a few children, for example, an occupational therapist may only need to work part-time hours in that environment. Like some other medical professionals on this list, they can also manage their own businesses and set their own hours.Find occupational therapist jobs on The Muse15. Physical therapistMedian hourly rate: $43.75Like an OT, a physical therapist (PT) can help someone with an illness or injury, but in this case they're working on pain management and mobility. They're an integral part of someone's recovery after a stroke, for example, or in the wake of surgery. A PT might work with a variety of patients — from senior citizens to professional athletes — wherever those patients are, from nursing homes to hospitals to outpatient settings like sports teams or physical therapy clinics.PTs need to be licensed and complete their doctor of physical therapy degree, and some go on to do residencies or fellowships to further specialize. They can work part-time during regular business hours, on evenings and weekends, or a combination of both.Find physical therapist jobs on The Muse16. Dental hygienistMedian hourly rate: $37.06A dental hygienist assists a dentist in cleaning teeth, assessing patients for teeth and gum disease, and communicating best practices around oral health. A dental hygienist often interacts with the patient more frequently than the dentist, which means they need strong customer service and interpersonal skills as well.This role requires completion of a three-year associate's degree (instead of a bachelor's degree) as well as a licensing program. A lot of dental hygienists work part-time, coming in a few days a week, according to BLS, and some may work for more than one dentist or office.Find dental hygienist jobs on The Muse17. Speech-language pathologistMedian hourly rate: $38.69A speech-language pathologist (sometimes called a speech pathologist) helps both children and adults with communication issues. If someone has a challenge, whether it be a speech, language, swallowing, or other communication disorder — which might result from a stroke, hearing loss, developmental delay, Parkinson's disease, autism, or other causes—the pathologist can work with them to mitigate or overcome it.Some speech-language pathologists work in schools or other places where children might be present — before or after school as well as during free periods and as an alternative to their regular classwork. Others work in settings such as hospitals, assisted living centers, private practices, corporations, and the military.It varies by state, but a master's degree is essential and licensing may be required too. On the bright side, the number speech-language pathologist roles is projected to grow 29% from 2020 to 2030, so those who've completed their training and licensing are in high demand.Find speech pathologist jobs on The Muse18. Translator or interpreterMedian hourly rate: $25.16Translators and interpreters convert one language into another — translators via the written word and interpreters via spoken languages. They might assist non-English speaking patients in a hospital or work at a conference center or meeting place where individuals speaking different languages are congregating. They could also work to translate written work such as a manual or book from one language to another.It's essential to have a deep knowledge of languages in this role — with complete fluency in both (whether you grew up bi- or multilingual, majored in a foreign language in college, or otherwise gained competency). An undergraduate degree can sometimes be enough, according to BLS, but sometimes organizations look for continuing education or certifications in the case of court or medical interpreters or translators. Many translators can work remotely. Those who are self-employed tend to have variable hours.Find translator and interpreter jobs on The Muse19. PlumberMedian hourly rate: $27.08Plumbers are the professionals who install, maintain, clean, and repair water, gas, septic and other systems as well as fixtures from toilets to dishwashers. You could be working in a person's home or in a commercial or municipal building, depending on the context and your specialty. As companies work to be more sustainable, plumbers may also help with conserving water.To become a plumber, you would only need a high school degree but there's often vocational training, apprenticeship, and licensing involved. Plumbers are very much dependent on client work, so depending on your boss (and especially if you're self-employed) you can set a limit on how many clients you take on or the hours you're available to work.Find plumber jobs on The MuseEven though they're increasing in popularity, part-time jobs can sometimes be hard to find. It's estimated that up to 85% of all jobs are obtained through networking, and part-time work is no exception.So how do workers go about finding and procuring a high-paying, part-time job? "They can first identify the industries or type of work they want, and then make a list of companies within those industries," Sukola said. Then network actively and often, both with employees at the companies they're interested in to see if part-time work is available and with other part-time workers who hold the kinds of roles they'd like to get into.The key, says Sukola, is having an entrepreneurial spirit: Sometimes positions only materialize because you asked if part-time work was available and a role was adapted or created for you.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 3rd, 2022

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead One year ago, when looking at the 20 most popular stories of 2020, we said that the year would be a very tough act to follow as there "could not have been more regime shifts, volatility moments, and memes than 2020." And yet despite the exceedingly high bar for 2021, the year did not disappoint and proved to be a successful contender, and if judging by the sheer breadth of narratives, stories, surprises, plot twists and unexpected developments, 2021 was even more memorable and event-filled than 2020. Where does one start? While covid was the story of 2020, the pandemic that emerged out of a (Fauci-funded) genetic lab team in Wuhan, China dominated newsflow, politics and capital markets for the second year in a row. And while the biggest plot twist of 2020 was Biden's victory over Trump in the presidential election (it took the pandemic lockdowns and mail-in ballots to hand the outcome to Biden), largely thanks to Covid, Biden failed to hold to his biggest presidential promise of defeating covid, and not only did he admit in late 2021 that there is "no Federal solution" to covid waving a white flag of surrender less than a year into his presidency, but following the recent emergence of the Xi, pardon Omicron variant, the number of covid cases in the US has just shattered all records. The silver lining is not only that deaths and hospitalizations have failed to follow the number of cases, but that the scaremongering narrative itself is starting to melt in response to growing grassroots discontent with vaccine after vaccine and booster after booster, which by now it is clear, do nothing to contain the pandemic. And now that it is clear that omicron is about as mild as a moderate case of the flu, the hope has finally emerged that this latest strain will finally kill off the pandemic as it becomes the dominant, rapidly-spreading variant, leading to worldwide herd immunity thanks to the immune system's natural response. Yes, it may mean billions less in revenue for Pfizer and Moderna, but it will be a colossal victory for the entire world. The second biggest story of 2021 was undoubtedly the scourge of soaring inflation, which contrary to macrotourist predictions that it would prove "transitory", refused to do so and kept rising, and rising, and rising, until it hit levels not seen since the Volcker galloping inflation days of the 1980s. The only difference of course is that back then, the Fed Funds rate hit 20%. Now it is at 0%, and any attempts to hike aggressively will lead to a horrific market crash, something the Fed knows very well. Whether this was due to supply-chain blockages and a lack of goods and services pushing prices higher, or due to massive stimulus pushing demand for goods - and also prices - higher, or simply the result of a record injection of central bank liquidity into the system, is irrelevant but what does matter is that it got so bad that even Biden, facing a mauling for his Democratic party in next year's midterm elections, freaked out about soaring prices and pushed hard to lower the price of gasoline, ordering releases from the US Strategic Petroleum Reserve and vowing to punish energy companies that dare to make a profit, while ordering Powell to contain the surge in prices even if means the market is hit. Unfortunately for Biden, the market will be hit even as inflation still remain red hot for much of the coming year. And speaking of markets, while 2022 may be a year when the piper finally gets paid, 2021 was yet another blockbuster year for risk assets, largely on the back of the continued global response to the 2020 covid pandemic, when as we wrote last year, we saw "the official arrival of global Helicopter Money, tens of trillions in fiscal and monetary stimulus, an overhaul of the global economy punctuated by an unprecedented explosion in world debt, an Orwellian crackdown on civil liberties by governments everywhere, and ultimately set the scene for what even the World Economic Forum called simply "The Great Reset." Yes, the staggering liquidity injections that started in 2020, continued throughout 2021 and the final tally is that after $3 trillion in emergency liquidity injections in the immediate aftermath of the pandemic to stabilize the world, the Fed injected almost $2 trillion in the subsequent period, of which $1.5 trillion in 2021, a year where economists were "puzzled" why inflation was soaring. This, of course, excludes the tens of trillions of monetary stimulus injected by other central banks as well as the boundless fiscal stimulus that was greenlighted with the launch of helicopter money (i.e., MMT) in 2020. It's also why with inflation running red hot and real rates the lowest they have ever been, everyone was forced to rush into the "safety" of stocks (or stonks as they came to be known among GenZ), and why after last year's torrid stock market returns, the S&P rose another 27% in 2021 and up a staggering 114% from the March 2020 lows, in the process trouncing all previous mega-rallies (including those in 1929, 1938, 1974 and 2009)... ... making this the third consecutive year of double-digit returns. This reminds us of something we said last year: "it's almost as if the world's richest asset owners requested the covid pandemic." A year later, we got confirmation for this rhetorical statement, when we calculated that in the 18 months since the covid pandemic, the richest 1% of US society have seen their net worth increase by over $30 trillion. As a result, the US is now officially a banana republic where the middle 60% of US households by income - a measure economists use as a definition of the middle class - saw their combined assets drop from 26.7% to 26.6% of national wealth as of June, the lowest in Federal Reserve data, while for the first time the super rich had a bigger share, at 27%. Yes, the 1% now own more wealth than the entire US middle class, a definition traditionally reserve for kleptocracies and despotic African banana republics. It wasn't just the rich, however: politicians the world over would benefit from the transition from QE to outright helicopter money and MMT which made the over monetization of deficits widely accepted in the blink of an eye. The common theme here is simple: no matter what happens, capital markets can never again be allowed to drop, regardless of the cost or how much more debt has to be incurred. Indeed, as we look back at the news barrage over the past year, and past decade for that matter, the one thing that becomes especially clear amid the constant din of markets, of politics, of social upheaval and geopolitical strife - and now pandemics -  in fact a world that is so flooded with constant conflicting newsflow and changing storylines that many now say it has become virtually impossible to even try to predict the future, is that despite the people's desire for change, for something original and untried, the world's established forces will not allow it and will fight to preserve the broken status quo at any price - even global coordinated shutdowns - which is perhaps why it always boils down to one thing - capital markets, that bedrock of Western capitalism and the "modern way of life", where control, even if it means central planning the likes of which have not been seen since the days of the USSR, and an upward trajectory must be preserved at all costs, as the alternative is a global, socio-economic collapse. And since it is the daily gyrations of stocks that sway popular moods the interplay between capital markets and politics has never been more profound or more consequential. The more powerful message here is the implicit realization and admission by politicians, not just Trump who had a penchant of tweeting about the S&P every time it rose, but also his peers on both sides of the aisle, that the stock market is now seen as the consummate barometer of one's political achievements and approval. Which is also why capital markets are now, more than ever, a political tool whose purpose is no longer to distribute capital efficiently and discount the future, but to manipulate voter sentiments far more efficiently than any fake Russian election interference attempt ever could. Which brings us back to 2021 and the past decade, which was best summarized by a recent Bill Blain article who said that "the last 10-years has been a story of massive central banking distortion to address the 2008 crisis. Now central banks face the consequences and are trapped. The distortion can’t go uncorrected indefinitely." He is right: the distortion will eventually collapse especially if the Fed follows through with its attempt rate hikes some time in mid-2020, but so far the establishment and the "top 1%" have been successful - perhaps the correct word is lucky - in preserving the value of risk assets: on the back of the Fed's firehose of liquidity the S&P500 returned an impressive 27% in 2021, following a 15.5% return in 2020 and 28.50% in 2019. It did so by staging the greatest rally off all time from the March lows, surpassing all of the 4 greatest rallies off the lows of the past century (1929,1938, 1974, and 2009). Yet this continued can-kicking by the establishment - all of which was made possible by the covid pandemic and lockdowns which served as an all too convenient scapegoat for the unprecedented response that served to propel risk assets (and fiat alternatives such as gold and bitcoin) to all time highs - has come with a price... and an increasingly higher price in fact. As even Bank of America CIO Michael Hartnett admits, Fed's response to the the pandemic "worsened inequality" as the value of financial assets - Wall Street -  relative to economy - Main Street - hit all-time high of 6.3x. And while the Fed was the dynamo that has propelled markets higher ever since the Lehman collapse, last year certainly had its share of breakout moments. Here is a sampling. Gamestop and the emergence of meme stonks and the daytrading apes: In January markets were hypnotized by the massive trading volumes, rolling short squeezes and surging share prices of unremarkable established companies such as consoles retailer GameStop and cinema chain AMC and various other micro and midcap names. What began as a discussion on untapped value at GameStop on Reddit months earlier by Keith Gill, better known as Roaring Kitty, morphed into a hedge fund-orchestrated, crowdsourced effort to squeeze out the short position held by a hedge fund, Melvin Capital. The momentum flooded through the retail market, where daytraders shunned stocks and bought massive out of the money calls, sparking rampant "gamma squeezes" in the process forcing some brokers to curb trading. Robinhood, a popular broker for day traders and Citadel's most lucrative "subsidiary", required a cash injection to withstand the demands placed on it by its clearing house. The company IPOed later in the year only to see its shares collapse as it emerged its business model was disappointing hollow absent constant retail euphoria. Ultimately, the market received a crash course in the power of retail investors on a mission. Ultimately, "retail favorite" stocks ended the year on a subdued note as the trading frenzy from earlier in the year petered out, but despite underperforming the S&P500, retail traders still outperformed hedge funds by more than 100%. Failed seven-year Treasury auction:  Whereas auctions of seven-year US government debt generally spark interest only among specialists, on on February 25 2021, one such typically boring event sparked shockwaves across financial markets, as the weakest demand on record hit prices across the whole spectrum of Treasury bonds. The five-, seven- and 10-year notes all fell sharply in price. Researchers at the Federal Reserve called it a “flash event”; we called it a "catastrophic, tailing" auction, the closest thing the US has had to a failed Trasury auction. The flare-up, as the FT put it, reflects one of the most pressing investor concerns of the year: inflation. At the time, fund managers were just starting to realize that consumer price rises were back with a vengeance — a huge threat to the bond market which still remembers the dire days of the Volcker Fed when inflation was about as high as it is today but the 30Y was trading around 15%. The February auaction also illustrated that the world’s most important market was far less liquid and not as structurally robust as investors had hoped. It was an extreme example of a long-running issue: since the financial crisis the traditional providers of liquidity, a group of 24 Wall Street banks, have pulled back because of higher costs associated with post-2008 capital requirements, while leaving liquidity provision to the Fed. Those banks, in their reduced role, as well as the hedge funds and high-frequency traders that have stepped into their place, have tended to withdraw in moments of market volatility. Needless to say, with the Fed now tapering its record QE, we expect many more such "flash" episodes in the bond market in the year ahead. The arch ego of Archegos: In March 2021 several banks received a brutal reminder that some of family offices, which manage some $6 trillion in wealth of successful billionaires and entrepreneurs and which have minimal reporting requirements, take risks that would make the most serrated hedge fund manager wince, when Bill Hwang’s Archegos Capital Management imploded in spectacular style. As we learned in late March when several high-flying stocks suddenly collapsed, Hwang - a former protege of fabled hedge fund group Tiger Management - had built up a vast pile of leverage using opaque Total Return Swaps with a handful of banks to boost bets on a small number of stocks (the same banks were quite happy to help despite Hwang’s having been barred from US markets in 2013 over allegations of an insider-trading scheme, as he paid generously for the privilege of borrowing the banks' balance sheet). When one of Archegos more recent bets, ViacomCBS, suddenly tumbled it set off a liquidation cascade that left banks including Credit Suisse and Nomura with billions of dollars in losses. Conveniently, as the FT noted, the damage was contained to the banks rather than leaking across financial markets, but the episode sparked a rethink among banks over how to treat these clients and how much leverage to extend. The second coming of cryptos: After hitting an all time high in late 2017 and subsequently slumping into a "crypto winter", cryptocurrencies enjoyed a huge rebound in early 2021 which sent their prices soaring amid fears of galloping inflation (as shown below, and contrary to some financial speculation, the crypto space has traditionally been a hedge either to too much liquidity or a hedge to too much inflation). As a result, Bitcoin rose to a series of new record highs that culminated at just below $62,000, nearly three times higher than their previous all time high. But the smooth ride came to a halt in May when China’s crackdown on the cryptocurrency and its production, or “mining”, sparked the first serious crash of 2021. The price of bitcoin then collapsed as much as 30% on May 19, hitting a low of $30,000 amid a liquidation of levered positions in chaotic trading conditions following a warning from Chinese authorities of tighter curbs ahead. A public acceptance by Tesla chief and crypto cheerleader Elon Musk of the industry’s environmental impact added to the declines. However, as with all previous crypto crashes, this one too proved transitory, and prices resumed their upward trajectory in late September when investors started to price in the launch of futures-based bitcoin exchange traded funds in the US. The launch of these contracts subsequently pushed bitcoin to a new all-time high in early November before prices stumbled again in early December, this time due to a rise in institutional ownership when an overall drop in the market dragged down cryptos as well. That demonstrated the growing linkage between Wall Street and cryptocurrencies, due to the growing sway of large investors in digital markets. China's common prosperity crash: China’s education and tech sectors were one of the perennial Wall Street darlings. Companies such as New Oriental, TAL Education as well as Alibaba and Didi had come to be worth billions of dollars after highly publicized US stock market flotations. So when Beijing effectively outlawed swaths of the country’s for-profit education industry in July 2021, followed by draconian anti-trust regulations on the country's fintech names (where Xi Jinping also meant to teach the country's billionaire class a lesson who is truly in charge), the short-term market impact was brutal. Beijing’s initial measures emerged as part of a wider effort to make education more affordable as part of president Xi Jinping’s drive for "common prosperity" but that quickly raised questions over whether growth prospects across corporate China are countered by the capacity of the government to overhaul entire business models overnight. Sure enough, volatility stemming from the education sector was soon overshadowed by another set of government reforms related to common prosperity, a crackdown on leverage across the real estate sector where the biggest casualty was Evergrande, the world’s most indebted developer. The company, whose boss was not long ago China's 2nd richest man, was engulfed by a liquidity crisis in the summer that eventually resulted in a default in early December. Still, as the FT notes, China continues to draw in huge amounts of foreign capital, pushing the Chinese yuan to end 2021 at the strongest level since May 2018, a major hurdle to China's attempts to kickstart its slowing economy, and surely a precursor to even more monetary easing. Natgas hyperinflation: Natural gas supplanted crude oil as the world’s most important commodity in October and December as prices exploded to unprecedented levels and the world scrambled for scarce supplies amid the developed world's catastrophic transition to "green" energy. The crunch was particularly acute in Europe, which has become increasingly reliant on imports. Futures linked to TTF, the region’s wholesale gas price, hit a record €137 per megawatt hour in early October, rising more than 75%. In Asia, spot liquefied natural gas prices briefly passed the equivalent of more than $320 a barrel of oil in October. (At the time, Brent crude was trading at $80). A number of factors contributed, including rising demand as pandemic restrictions eased, supply disruptions in the LNG market and weather-induced shortfalls in renewable energy. In Europe, this was aggravated by plunging export volumes from Gazprom, Russia’s state-backed monopoly pipeline supplier, amid a bitter political fight over the launch of the Nordstream 2 pipeline. And with delays to the Nord Stream 2 gas pipeline from Russia to Germany, analysts say the European gas market - where storage is only 66% full - a cold snap or supply disruption away from another price spike Turkey's (latest) currency crisis:  As the FT's Jonathan Wheatley writes, Recep Tayyip Erdogan was once a source of strength for the Turkish lira, and in his first five years in power from 2003, the currency rallied from TL1.6 per US dollar to near parity at TL1.2. But those days are long gone, as Erdogan's bizarre fascination with unorthodox economics, namely the theory that lower rates lead to lower inflation also known as "Erdoganomics", has sparked a historic collapse in the: having traded at about TL7 to the dollar in February, it has since fallen beyond TL17, making it the worst performing currency of 2021. The lira’s defining moment in 2021 came on November 18 when the central bank, in spite of soaring inflation, cut its policy rate for the third time since September, at Erdogan’s behest (any central banker in Turkey who disagrees with "Erdoganomics" is promptly fired and replaced with an ideological puppet). The lira recovered some of its losses in late December when Erdogan came up with the "brilliant" idea of erecting the infamous "doom loop" which ties Turkey's balance sheet to its currency. It has worked for now (the lira surged from TL18 against the dollar to TL12, but this particular band aid solution will only last so long). The lira’s problems are not only Erdogan’s doing. A strengthening dollar, rising oil prices, the relentless covid pandemic and weak growth in developing economies have been bad for other emerging market currencies, too, but as long as Erdogan is in charge, shorting the lira remains the best trade entering 2022. While these, and many more, stories provided a diversion from the boring existence of centrally-planned markets, we are confident that the trends observed in recent years will continue: coming years will be marked by even bigger government (because only more government can "fix" problems created by government), higher stock prices and dollar debasement (because only more Fed intervention can "fix" the problems created by the Fed), and a policy flip from monetary and QE to fiscal & MMT, all of which will keep inflation at scorching levels, much to the persistent confusion of economists everywhere. Of course, we said much of this last year as well, but while we got most trends right, we were wrong about one thing: we were confident that China's aggressive roll out of the digital yuan would be a bang - or as we put it "it is very likely that while 2020 was an insane year, it may prove to be just an appetizer to the shockwaves that will be unleashed in 2021 when we see the first stage of the most historic overhaul of the fiat payment system in history" - however it turned out to be a whimper. A big reason for that was that the initial reception of the "revolutionary" currency was nothing short of disastrous, with Chinese admitting they were "not at all excited" about the prospect of yet one more surveillance mechanism for Beijing, because that's really what digital currencies are: a way for central banks everywhere to micromanage and scrutinize every single transaction, allowing the powers that be to demonetize any one person - or whole groups - with the flick of a switch. Then again, while digital money may not have made its triumphant arrival in 2021, we are confident that the launch date has merely been pushed back to 2022 when the rollout of the next monetary revolution is expected to begin in earnest. Here we should again note one thing: in a world undergoing historic transformations, any free press must be throttled and controlled, and over the past year we have seen unprecedented efforts by legacy media and its corporate owners, as well as the new "social media" overlords do everything in their power to stifle independent thought. For us it had been especially "personal" on more than one occasions. Last January, Twitter suspended our account because we dared to challenge the conventional narrative about the source of the Wuhan virus. It was only six months later that Twitter apologized, and set us free, admitting it had made a mistake. Yet barely had twitter readmitted us, when something even more unprecedented happened: for the first time ever (to our knowledge) Google - the world's largest online ad provider and monopoly - demonetized our website not because of any complaints about our writing but because of the contents of our comment section. It then held us hostage until we agreed to implement some prerequisite screening and moderation of the comments section. Google's action was followed by the likes of PayPal, Amazon, and many other financial and ad platforms, who rushed to demonetize and suspend us simply because they disagreed with what we had to say. This was a stark lesson in how quickly an ad-funded business can disintegrate in this world which resembles the dystopia of 1984 more and more each day, and we have since taken measures. One year ago, for the first time in our 13 year history, we launched a paid version of our website, which is entirely ad and moderation free, and offers readers a variety of premium content. It wasn't our intention to make this transformation but unfortunately we know which way the wind is blowing and it is only a matter of time before the gatekeepers of online ad spending block us again. As such, if we are to have any hope in continuing it will come directly from you, our readers. We will keep the free website running for as long as possible, but we are certain that it is only a matter of time before the hammer falls as the censorship bandwagon rolls out much more aggressively in the coming year. That said, whether the story of 2022, and the next decade for that matter, is one of helicopter or digital money, of (hyper)inflation or deflation: what is key, and what we learned in the past decade, is that the status quo will throw anything at the problem to kick the can, it will certainly not let any crisis go to waste... even the deadliest pandemic in over a century. And while many already knew that, the events of 2021 made it clear to a fault that not even a modest market correction can be tolerated going forward. After all, if central banks aim to punish all selling, then the logical outcome is to buy everything, and investors, traders and speculators did just that armed with the clearest backstop guarantee from the Fed, which in the deapths of the covid crash crossed the Rubicon when it formally nationalized the bond market as it started buying both investment grade bonds and junk bond ETFs in the open market. As such it is no longer even a debatable issue if the Fed will buy stocks after the next crash - the only question is when. Meanwhile, for all those lamenting the relentless coverage of politics in a financial blog, why finance appears to have taken a secondary role, and why the political "narrative" has taken a dominant role for financial analysts, the past year showed vividly why that is the case: in a world where markets gyrated, and "rotated" from value stocks to growth and vice versa, purely on speculation of how big the next stimulus out of Washington will be, the narrative over Biden's trillions proved to be one of the biggest market moving events for much of the year. And with the Biden stimulus plan off the table for now, the Fed will find it very difficult to tighten financial conditions, especially if it does so just as the economy is slowing. Here we like to remind readers of one of our favorite charts: every financial crisis is the result of Fed tightening. As for predictions about the future, as the past two years so vividly showed, when it comes to actual surprises and all true "black swans", it won't be what anyone had expected. And so while many themes, both in the political and financial realm, did get some accelerated closure courtesy of China's covid pandemic, dramatic changes in 2021 persisted, and will continue to manifest themselves in often violent and unexpected ways - from the ongoing record polarization in the US political arena, to "populist" upheavals around the developed world, to the gradual transition to a global Universal Basic (i.e., socialized) Income regime, to China's ongoing fight with preserving stability in its gargantuan financial system which is now two and a half times the size of the US. As always, we thank all of our readers for making this website - which has never seen one dollar of outside funding (and despite amusing recurring allegations, has certainly never seen a ruble from the KGB either, although now that the entire Russian hysteria episode is over, those allegations have finally quieted down), and has never spent one dollar on marketing - a small (or not so small) part of your daily routine. Which also brings us to another critical topic: that of fake news, and something we - and others who do not comply with the established narrative - have been accused of. While we find the narrative of fake news laughable, after all every single article in this website is backed by facts and links to outside sources, it is clearly a dangerous development, and a very slippery slope that the entire developed world is pushing for what is, when stripped of fancy jargon, internet censorship under the guise of protecting the average person from "dangerous, fake information." It's also why we are preparing for the next onslaught against independent thought and why we had no choice but to roll out a premium version of this website. In addition to the other themes noted above, we expect the crackdown on free speech to accelerate in the coming year when key midterm elections will be held, especially as the following list of Top 20 articles for 2021 reveals, many of the most popular articles in the past year were precisely those which the conventional media would not touch out of fear of repercussions, which in turn allowed the alternative media to continue to flourish in an orchestrated information vacuum and take significant market share from the established outlets by covering topics which the public relations arm of established media outlets refused to do, in the process earning itself the derogatory "fake news" condemnation. We are grateful that our readers - who hit a new record high in 2021 - have realized it is incumbent upon them to decide what is, and isn't "fake news." * * * And so, before we get into the details of what has now become an annual tradition for the last day of the year, those who wish to jog down memory lane, can refresh our most popular articles for every year during our no longer that brief, almost 11-year existence, starting with 2009 and continuing with 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020. So without further ado, here are the articles that you, our readers, found to be the most engaging, interesting and popular based on the number of hits, during the past year. In 20th spot with 600,000 reads, was an article that touched on one of the most defining features of the market: the reflation theme the sparked a massive rally at the start of the year courtesy of the surprise outcome in the Georgia Senate race, where Democrats ended up wining both seats up for grabs, effectively giving the Dems a majority in both the House and the Senate, where despite the even, 50-seat split, Kamala Harris would cast the winning tie-breaker vote to pursue a historic fiscal stimulus. And sure enough, as we described in "Bitcoin Surges To Record High, Stocks & Bonds Battered As Dems Look Set To Take Both Georgia Senate Seats", with trillions in "stimmies" flooding both the economy and the market, not only did retail traders enjoy unprecedented returns when trading meme "stonks" and forcing short squeezes that crippled numerous hedge funds, but expectations of sharply higher inflation also helped push bitcoin and the entire crypto sector to new all time highs, which in turn legitimized the product across institutional investors and helped it reach a market cap north of $3 trillion.  In 19th spot, over 613,000 readers were thrilled to read at the start of September that "Biden Unveils Most Severe COVID Actions Yet: Mandates Vax For All Federal Workers, Contractors, & Large Private Companies." Of course, just a few weeks later much of Biden's mandate would be struck down in courts, where it is now headed to a decision by SCOTUS, while the constantly shifting "scientific" goal posts mean that just a few months later the latest set of CDC regulations have seen regulators and officials reverse the constant drone of fearmongering and are now even seeking to cut back on the duration of quarantine and other lockdown measures amid a public mood that is growing increasingly hostile to the government response. One of the defining political events of 2021 was the so-called "Jan 6 Insurrection", which the for America's conservatives was blown wildly out of proportion yet which the leftist media and Democrats in Congress have been periodically trying to push to the front pages in hopes of distracting from the growing list of failures of the Obama admin. Yet as we asked back in January, "Why Was Founder Of Far-Left BLM Group Filming Inside Capitol As Police Shot Protester?" No less than 614,000 readers found this question worthy of a response. Since then many more questions have emerged surrounding this event, many of which focus on what role the FBI had in organizing and encouraging this event, including the use of various informants and instigators. For now, a response will have to wait at least until the mid-term elections of 2022 when Republicans are expected to sweep one if not both chambers. Linked to the above, the 17th most read article of 2021 with 617,000 views, was an article we published on the very same day, which detailed that "Armed Protesters Begin To Arrive At State Capitols Around The Nation." At the end of the day, it was much ado about nothing and all protests concluded peacefully and without incident: perhaps the FBI was simply spread too thin? 2021 was a year defined by various waves of the covid pandemic which hammered poor Americans forced to hunker down at home and missing on pay, and crippled countless small mom and pop businesses. And yet, it was also a bonanza for a handful of pharma companies such as Pfizer and Moderna which made billions from the sale of "vaccines" which we now know do little if anything to halt the spread of the virus, and are instead now being pitched as palliatives, preventing a far worse clinical outcome. The same pharma companies also benefited from an unconditional indemnity, which surely would come in useful when the full side-effects of their mRNA-based therapies became apparent. One such condition to emerge was myocarditis among a subset of the vaxxed. And while the vaccines continue to be broadly rolled out across most developed nations, one place that said enough was Sweden. As over 620,000 readers found out in "Sweden Suspends Moderna Shot Indefinitely After Vaxxed Patients Develop Crippling Heart Condition", not every country was willing to use its citizens as experimental guniea pigs. This was enough to make the article the 16th most read on these pages, but perhaps in light of the (lack of) debate over the pros and cons of the covid vaccines, this should have been the most read article this year? Moving on to the 15th most popular article, 628,000 readers were shocked to learn that "Chase Bank Cancels General Mike Flynn's Credit Cards." The action, which was taken by the largest US bank due to "reputational risk" echoed a broad push by tech giants to deplatform and silence dissenting voices by literally freezing them out of the financial system. In the end, following widespread blowback from millions of Americans, JPMorgan reversed, and reactivated Flynn's cards saying the action was made in error, but unfortunately this is just one example of how those in power can lock out any dissenters with the flick of a switch. And while democrats cheer such deplatforming today, the political winds are fickle, and we doubt they will be as excited once they find themselves on the receiving end of such actions. And speaking of censorship and media blackouts, few terms sparked greater response from those in power than the term Ivermectin. Viewed by millions as a cheap, effective alternative to offerings from the pharmaceutical complex, social networks did everything in their power to silence any mention of a drug which the Journal of Antibiotics said in 2017 was an "enigmatic multifaceted ‘wonder’ drug which continues to surprise and exceed expectations." Nowhere was this more obvious than in the discussion of how widespread use of Ivermectin beat Covid in India, the topic of the 14th most popular article of 2021 "India's Ivermectin Blackout" which was read by over 653,000 readers. Unfortunately, while vaccines continue to fail upward and now some countries are now pushing with a 4th, 5th and even 6th vaccine, Ivermectin remains a dirty word. There was more covid coverage in the 13th most popular article of 2021, "Surprise Surprise - Fauci Lied Again": Rand Paul Reacts To Wuhan Bombshell" which was viewed no less than 725,000 times. Paul's reaction came following a report which revealed that Anthony Fauci's NIAID and its parent, the NIH, funded Gain-of-Function research in Wuhan, China, strongly hinting that the emergence of covid was the result of illicit US funding. Not that long ago, Fauci had called Paul a 'liar' for accusing him of funding the risky research, in which viruses are genetically modified or otherwise altered to make them more transmissible to humans. And while we could say that Paul got the last laugh, Fauci still remains Biden's top covid advisor, which may explain why one year after Biden vowed he would shut down the pandemic, the number of new cases just hit a new all time high. One hope we have for 2022 is that people will finally open their eyes... 2021 was not just about covid - soaring prices and relentless inflation were one of the most poignant topics. It got so bad that Biden's approval rating - and that of Democrats in general - tumbled toward the end of the year, putting their mid-term ambitions in jeopardy, as the public mood soured dramatically in response to the explosion in prices. And while one can debate whether it was due to supply-issues, such as the collapse in trans-pacific supply chains and the chronic lack of labor to grow the US infrastructure, or due to roaring demand sparked by trillions in fiscal stimulus, but when the "Big Short" Michael Burry warned that hyperinflation is coming, the people listened, and with over 731,000 reads, the 12th most popular article of 2021 was "Michael Burry Warns Weimar Hyperinflation Is Coming."  Of course, Burry did not say anything we haven't warned about for the past 12 years, but at least he got the people's attention, and even mainstream names such as Twitter founder Jack Dorsey agreed with him, predicting that bitcoin will be what is left after the dollar has collapsed. While hyperinflation may will be the endgame, the question remains: when. For the 11th most read article of 2021, we go back to a topic touched upon moments ago when we addressed the full-blown media campaign seeking to discredit Ivermectin, in this case via the D-grade liberal tabloid Rolling Stone (whose modern incarnation is sadly a pale shadow of the legend that house Hunter S. Thompson's unforgettable dispatches) which published the very definition of fake news when it called Ivermectin a "horse dewormer" and claimed that, according to a hospital employee, people were overdosing on it. Just a few hours later, the article was retracted as we explained in "Rolling Stone Issues 'Update' After Horse Dewormer Hit-Piece Debunked" and over 812,000 readers found out that pretty much everything had been a fabrication. But of course, by then it was too late, and the reputation of Ivermectin as a potential covid cure had been further tarnished, much to the relief of the pharma giants who had a carte blanche to sell their experimental wares. The 10th most popular article of 2021 brings us to another issue that had split America down the middle, namely the story surrounding Kyle Rittenhouse and the full-blown media campaign that declared the teenager guilty, even when eventually proven innocent. Just days before the dramatic acquittal, we learned that "FBI Sat On Bombshell Footage From Kyle Rittenhouse Shooting", which was read by over 822,000 readers. It was unfortunate to learn that once again the scandal-plagued FBI stood at the center of yet another attempt at mass misinformation, and we can only hope that one day this "deep state" agency will be overhauled from its core, or better yet, shut down completely. As for Kyle, he will have the last laugh: according to unconfirmed rumors, his numerous legal settlements with various media outlets will be in the tens if not hundreds of millions of dollars.  And from the great US social schism, we again go back to Covid for the 9th most popular article of 2021, which described the terrifying details of one of the most draconian responses to covid in the entire world: that of Australia. Over 900,000 readers were stunned to read that the "Australian Army Begins Transferring COVID-Positive Cases, Contacts To Quarantine Camps." Alas, the latest surge in Australian cases to nosebleed, record highs merely confirms that this unprecedented government lockdown - including masks and vaccines - is nothing more than an exercise in how far government can treat its population as a herd of sheep without provoking a violent response.  The 8th most popular article of 2021 looks at the market insanity of early 2021 when, at the end of January, we saw some of the most-shorted, "meme" stocks explode higher as the Reddit daytrading horde fixed their sights on a handful of hedge funds and spent billions in stimmies in an attempt to force unprecedented ramps. That was the case with "GME Soars 75% After-Hours, Erases Losses After Liquidity-Constrained Robinhood Lifts Trading Ban", which profiled the daytrading craze that gave an entire generation the feeling that it too could win in these manipulated capital markets. Then again, judging by the waning retail interest, it is possible that the excitement of the daytrading army is fading as rapidly as it first emerged, and that absent more "stimmies" markets will remain the playground of the rich and central banks. Kyle Rittenhouse may soon be a very rich man after the ordeal he went through, but the media's mission of further polarizing US society succeeded, and millions of Americans will never accept that the teenager was innocent. It's also why with just over 1 million reads, the 7th most read article on Zero Hedge this year was that "Portland Rittenhouse Protest Escalates Into Riot." Luckily, this is not a mid-term election year and there were no moneyed interests seeking to prolong this particular riot, unlike what happened in the summer of 2020... and what we are very much afraid will again happen next year when very critical elections are on deck.  With just over 1.03 million views, the 6th most popular post focused on a viral Twitter thread on Friday from Dr Robert Laone, which laid out a disturbing trend; the most-vaccinated countries in the world are experiencing  a surge in COVID-19 cases, while the least-vaccinated countries were not. As we originally discussed in ""This Is Worrying Me Quite A Bit": mRNA Vaccine Inventor Shares Viral Thread Showing COVID Surge In Most-Vaxxed Countries", this trend has only accelerated in recent weeks with the emergence of the Omicron strain. Unfortunately, instead of engaging in a constructive discussion to see why the science keeps failing again and again, Twitter's response was chilling: with just days left in 2021, it suspended the account of Dr. Malone, one of the inventors of mRNA technology. Which brings to mind something Aaron Rogers said: "If science can't be questioned it's not science anymore it's propaganda & that's the truth." In a year that was marked a flurry of domestic fiascoes by the Biden administration, it is easy to forget that the aged president was also responsible for the biggest US foreign policy disaster since Vietnam, when the botched evacuation of Afghanistan made the US laughing stock of the world after 12 US servicemembers were killed. So it's probably not surprising that over 1.1 million readers were stunned to watch what happened next, which we profiled in the 5th most popular post of 2021, where in response to the Afghan trajedy, "Biden Delivers Surreal Press Conference, Vows To Hunt Down Isis, Blames Trump." One person watching the Biden presser was Xi Jinping, who may have once harbored doubts about reclaiming Taiwan but certainly does not any more. The 4th most popular article of 2021 again has to do with with covid, and specifically the increasingly bizarre clinical response to the disease. As we detailed in "Something Really Strange Is Happening At Hospitals All Over America" while emergency rooms were overflowing, it certainly wasn't from covid cases. Even more curiously, one of the primary ailments leading to an onslaught on ERs across the nation was heart-related issues, whether arrhytmia, cardiac incidents or general heart conditions. We hope that one day there will be a candid discussion on this topic, but until then it remains one of the topics seen as taboo by the mainstream media and the deplatforming overlords, so we'll just leave it at that. We previously discussed the anti-Ivermectin narrative that dominated the mainstream press throughout 2021 and the 3rd most popular article of the year may hold clues as to why: in late September, pharma giant Pfizer and one of the two companies to peddle an mRNA based vaccine, announced that it's launching an accelerated Phase 2/3 trial for a COVID prophylactic pill designed to ward off COVID in those may have come in contact with the disease. And, as we described in "Pfizer Launches Final Study For COVID Drug That's Suspiciously Similar To 'Horse Paste'," 1.75 million readers learned that Pfizer's drug shared at least one mechanism of action as Ivermectin - an anti-parasitic used in humans for decades, which functions as a protease inhibitor against Covid-19, which researchers speculate "could be the biophysical basis behind its antiviral efficiency." Surely, this too was just another huge coincidence. In the second most popular article of 2021, almost 2 million readers discovered (to their "shock") that Fauci and the rest of Biden's COVID advisors were proven wrong about "the science" of COVID vaccines yet again. After telling Americans that vaccines offer better protection than natural infection, a new study out of Israel suggested the opposite is true: natural infection offers a much better shield against the delta variant than vaccines, something we profiled in "This Ends The Debate' - Israeli Study Shows Natural Immunity 13x More Effective Than Vaccines At Stopping Delta." We were right about one thing: anyone who dared to suggest that natural immunity was indeed more effective than vaccines was promptly canceled and censored, and all debate almost instantly ended. Since then we have had tens of millions of "breakout" cases where vaccinated people catch covid again, while any discussion why those with natural immunity do much better remains under lock and key. It may come as a surprise to many that the most read article of 2021 was not about covid, or Biden, or inflation, or China, or even the extremely polarized US congress (and/or society), but was about one of the most long-suffering topics on these pages: precious metals and their prices. Yes, back in February the retail mania briefly targeted silver and as millions of reddit daytraders piled in in hopes of squeezing the precious metal higher, the price of silver surged higher only to tumble just as quickly as it has risen as the seller(s) once again proved more powerful than the buyers. We described this in "Silver Futures Soar 8%, Rise Above $29 As Reddit Hordes Pile In", an article which some 2.4 million gold and silver bugs read with hope, only to see their favorite precious metals slump for much of the rest of the year. And yes, the fact that both gold and silver ended the year sharply lower than where they started even though inflation hit the highest level in 40 years, remains one of the great mysteries of 2021. With all that behind us, and as we wave goodbye to another bizarre, exciting, surreal year, what lies in store for 2022, and the next decade? We don't know: as frequent and not so frequent readers are aware, we do not pretend to be able to predict the future and we don't try despite endless allegations that we constantly predict the collapse of civilization: we leave the predicting to the "smartest people in the room" who year after year have been consistently wrong about everything, and never more so than in 2021 (even the Fed admitted it is clueless when Powell said it was time to retire the term "transitory"), which destroyed the reputation of central banks, of economists, of conventional media and the professional "polling" and "strategist" class forever, not to mention all those "scientists" who made a mockery of the "expertise class" with their bungled response to the covid pandemic. We merely observe, find what is unexpected, entertaining, amusing, surprising or grotesque in an increasingly bizarre, sad, and increasingly crazy world, and then just write about it. We do know, however, that after a record $30 trillion in stimulus was conjured out of thin air by the world's central banks and politicians in the past two years, the attempt to reverse this monetary and fiscal firehose in a world addicted to trillions in newly created liquidity now that central banks are freaking out after finally getting ot the inflation they were hoping to create for so long, will end in tears. We are confident, however, that in the end it will be the very final backstoppers of the status quo regime, the central banking emperors of the New Normal, who will eventually be revealed as fully naked. When that happens and what happens after is anyone's guess. But, as we have promised - and delivered - every year for the past 13, we will be there to document every aspect of it. Finally, and as always, we wish all our readers the best of luck in 2022, with much success in trading and every other avenue of life. We bid farewell to 2021 with our traditional and unwavering year-end promise: Zero Hedge will be there each and every day - usually with a cynical smile - helping readers expose, unravel and comprehend the fallacy, fiction, fraud and farce that defines every aspect of our increasingly broken system. Tyler Durden Sun, 01/02/2022 - 03:44.....»»

Category: personnelSource: nytJan 2nd, 2022

Cove, Baupost sell Hudson Commons for $1 billion

Cove Property Group and The Baupost Group announced the $1.033 billion sale of Hudson Commons, the 697,958 s/f 25-story trophy tower at 441 Ninth Avenue to CommonWealth Partners in a transaction arranged by CBRE. Located at the nexus of Hudson Yards and Manhattan West, Hudson Commons occupies the full block-front... The post Cove, Baupost sell Hudson Commons for $1 billion appeared first on Real Estate Weekly. Cove Property Group and The Baupost Group announced the $1.033 billion sale of Hudson Commons, the 697,958 s/f 25-story trophy tower at 441 Ninth Avenue to CommonWealth Partners in a transaction arranged by CBRE. Located at the nexus of Hudson Yards and Manhattan West, Hudson Commons occupies the full block-front of Ninth Avenue from 34th-35th Streets. The property is New York City’s most highly regarded redevelopment, pairing the adaptive reuse of an existing brick factory building with a modern glass overbuild to set a new bar for “the office of the future.” One of only four NYC office properties to achieve LEED Platinum status, Hudson Commons is a beacon for sustainability and wellness, designed pre-pandemic to be one of the nation’s healthiest office environments. Hudson Commons offers an amenity-rich environment that evokes a luxury boutique hotel while also delivering efficient, flexible space with high ceilings, natural light, breathtaking views and cutting-edge technology. “This transaction is a bellweather for the resurgence of confidence in the office sector and validation for the value created by forward-looking, sustainable redevelopment at a trailblazing location,” said Kevin Hoo, Managing Partner of Cove Property Group. “Given the aging nature of the majority of Manhattan’s office product, Hudson Commons is a model for the office of the future in this City – sustainably adapting an obsolete property into one that meets every modern standard, from environmental to operational to experiential.” A CBRE team led by Darcy Stacom and Bill Shanahan spearheaded the marketing campaign for Hudson Commons and represented Cove in the negotiations. “The world-class combination of an old factory warehouse with a stunning, healthy and efficient modern tower has been a beacon for tenants and a standout in the creation of a new trophy property,” said Ms. Stacom, Chairman and Head of New York City Capital Markets for CBRE. “This transaction is a resounding affirmation of Cove’s achievement with this renovation, the excellence of the location, and the enduring value of the finest modern office properties in Manhattan.” Cove and Baupost acquired 441 Ninth Avenue in 2016 for $330 million and executed an ambitious campaign to completely renovate the eight-story warehouse building and add an 18-story modern glass-and-steel overbuild. Hudson Commons achieves dramatic sustainability benchmarks, synthesizing brand new infrastructure with enhanced air quality and 14 separate outdoor terraces to meet LEED Platinum standard. Designed from the inside-out to be “the office of the future,” Hudson Commons’ side core configuration maximizes efficiency, light and views and integrates touchless technology and innovative systems to create a healthy environment. Flexible floorplates of 16,000 – 50,000 SF of nearly column-free space with ceiling heights of 14-feet to 28-feet offer intentionally democratized space for every tenant to enjoy a premier experience. “Hudson Commons is a trailblazing property, in location, in design, in intention and in ESG. We are proud to become its steward as it achieves its full potential,” said Brett Munger, CEO and Managing Partner of CommonWealth Partners. “This property has been developed to enable its tenants to attract and retain the very best talent in this new work environment, a base for teams to safely come together and achieve their goals. Hudson Commons is making a real contribution to the renewal of New York City.” Hudson Commons is 75% occupied, with approximately 670,000 square feet of office space and 16,000 square feet of ground-floor retail available. Fitness giant Peloton and rideshare innovator Lyft anchor Hudson Common’s office tenancy. The property is richly amenitized, offering tenant lounges, a bike room, outdoor space totaling nearly 30,000 sq. ft., meeting rooms and conferencing facilities designed to evoke a luxury hospitality setting. The full CBRE team for this transaction includes Ms. Stacom, Mr. Shanahan, Doug Middleton, and Alana Bassen. A Cole Schotz team including Leo Leyva, Jordan Metzger, Danielle Pasquariello, Rab Nalavala, Jan Lewis and associate Daniela Alvarado, represented the seller in the transaction. The post Cove, Baupost sell Hudson Commons for $1 billion appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyDec 20th, 2021

Transcript: Maureen Farrell

     The transcript from this week’s, MiB: Maureen Farrell on the Cult of We is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.   ~~~   RITHOLTZ: This… Read More The post Transcript: Maureen Farrell appeared first on The Big Picture.      The transcript from this week’s, MiB: Maureen Farrell on the Cult of We is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.   ~~~   RITHOLTZ: This week on the podcast, I have a special guest. Her name is Maureen Farrell, and she is the co-author of the book, “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion.” I read this book a couple of weeks ago and just plowed through it. It’s a lot of fun. Everything you think about WeWork is actually even crazier, and more insane, and more delusional than you would’ve guessed. All the venture capitalists and — and big investors not really doing the appropriate due diligence, relying on each other, and nobody really looking at the numbers, which kind of revealed that this was a giant money-losing, fast-growing startup that really was a real estate play pretending to be a tech play. You know, tech gets one sort of multiple, real estate gets a much lower multiple, and Neumann was able to convince a lot of people that this was a tech startup and, therefore, worthy of, you know, $1 billion and then multibillion-dollar valuation. It’s fascinating the — it’s deeply, deeply reported. There is just an incredible series of vignettes, and stories, and reveals that they’re just shocking what Neumann and company were able to — to fob off on their investors. Everything from ridiculous self-dealing to crazy valuations, to lackluster due diligence, and then just the craziest most egregious golden parachute in the history of corporate America. I found the book to be just fascinating and as well as my conversation with Maureen. So, with no further ado, my conversation with Maureen Farrell, co-author of “The Cult of We.” VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My special guest this week is Maureen Farrell. She is the co-author of a new book, “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion.” The book has been nominated for a Financial Times/McKinsey Business Book of the Year Award. Previously, she worked at the Wall Street Journal since 2013. Currently, she is a reporter, investigative reporter for The New York Times. Maureen Farrell, welcome to Bloomberg. FARRELL: Thank you so much for having me. RITHOLTZ: So, let’s start a little bit with your background and history. You — you covered capital markets and IPOs at the Wall Street Journal. What led you and your co-author Eliot Brown to this story because this was really a venture capital and a startup story for most of the 2010s, right? FARRELL: Exactly. And for me, personally, I was covering the IPO market and — and capital markets the sort of explosion of private capital. So, I was looking at WeWork from both angles, basically, you know, in the small cohort of the most interesting companies that were going to go public, along with Uber, Airbnb, Lyft. And it was also part of this group that had raised more capital than anyone ever before. I was looking at SoftBank and its vision fund a lot. And then — I mean, take within this cohort, there were some pretty interesting companies, but I mean, just along the way kept on hearing, you know, Adam Neumann stood out. That’s like a little bit of a different entrepreneur that the — the stories you would just hear over time just became more and more interesting a little and vain. RITHOLTZ: So when did you decide, hey, this is more than just a recurring series of — of articles? When did you say this is a book? We have to write a book about this? FARRELL: So, we were — around August 2019, by then we were writing more and more about the company as it was clear that it was, you know, made it known that it was going to go public. Suddenly, it’s S-1, the — the regulatory documents you file publicly to go public were out there, and they were completely bonkers. They sort of captivated, I think, the imagination of the business reading public. But then over the next few weeks, WeWork was on its way to finally doing this IPO. And my co-author Eliot and I who had been cover — he had covering the company long before me. He’s a real estate. He had been covering them since 2013, then he was out in San Francisco covering venture capital. And it just became the most insane story either one of us had ever reported, like day by day there’s a playbook for IPOs. And they — you know, things are different, but they sort of follow a formula and nothing was making sense. And it just was getting more and more insane until this IPO was eventually called off. And Adam Neumann, the founder and CEO was pushed out of the company for all sorts of crazy things that were given to. RITHOLTZ: So, we’re going to — we’re going to spend a lot of time talking about that. But you hinted at something I — I have to mention. Your co-author covered real estate. Hey, I was told WeWork was a tech startup, and an A.I. company, and everything else but a real estate arbitrage play. How did they manage to convince so many people that they weren’t a Regis. The CEO of Regis very famously said, “How was what they do any different than what we do?” FARRELL: Well, they tried to convince Eliot Brown, my co-author, of the same thing. He — he had heard about Adam Neumann and his company. He started seeing the valuation. Back then I think it was $1 billion, $1.5 billion, and he was … RITHOLTZ: Right. When that became a unicorn, suddenly it was like, “Wait, this is just a real estate play.” FARRELL: Exactly. And he was covering other commercial real estate companies like Regis. And he had followed them and he was like, “Wait, they only have a couple of locations even still at that point.” So, he went in to meet Adam Neumann for the first time, and he’s got great stories. But as part of it, Adam was like really horrified. He was, you know, very nice, his charming self, but also saying, “Hey, you’re a real estate reporter … RITHOLTZ: Right. FARRELL: … for the Wall Street Journal. You’re the last person who should be covering this company. Do you have someone who covers like community companies?” RITHOLTZ: Right. FARRELL: And Eliot said, “No, and I’ll be following you from here on out.” RITHOLTZ: We’ll — we’ll talk about community-adjusted EBITDA a little later also. But — but let’s talk about the genesis of this because Neumann and his partner McKelvey had a — a legit business Greendesk, the — was the predecessor to WeWork. It was sold. I don’t know what the dollar amount was. Was that ever disclosed? FARRELL: Ah. RITHOLTZ: But — but it was not — nothing. It was real. And the two of them rolled that money plus a third partner who is also — Joel Schreiber is a real estate developer in New York, not coincidently. And in 2010, they launched WeWork with the first site in SoHo. So why is this real estate assign long-term leases and sell shorter-term leases at a significant markup? How is this not possibly a real estate concern? How? What was — what was the argument they were making to people that, “Hey, we’re a tech company and we deserve tech company valuations.” FARRELL: Sure. So exactly as you said, they have this Brooklyn business that was the genesis of WeWork. It was — it had a lot of that business, and it was what they took to make WeWork. It has a lot of innovation to it in terms of architecturally the aesthetic of it. I mean, we probably all have been to WeWork. They’re just — they’re beautiful buildings. RITHOLTZ: Funky, fun … FARRELL: Yeah. RITHOLTZ: … open … FARRELL: Light coming through … RITHOLTZ: … with a beer tap and lots of glass. FARRELL: … we had light streaming through the windows. You put — you pack people very close together. So, something they started in Brooklyn, it took off, but then their — the landlord there didn’t want to grow it, so they — they split up, they moved on. Adam and his — his co-founder Miguel McKelvey. And from the very beginning, the idea was something so much bigger. They say they created — they like sketched out something and it was like essentially WeWorld. It would be, you know, schools, and apartments, and this whole universe of we. But basically, as you said, I mean, throughout for the most part, it was this like arbitrage building, arbitrage company in terms of getting long-term leases and splitting it up. RITHOLTZ: All right. So, by 2014, they have a pretty substantial investor list, J.P. Morgan Chase, T. Rowe Price, Wellington, Goldman, Harvard Endowment, Benchmark Capital, Mort Zuckerman. Was this still a rational investment in 2014 or when did things kind of go off the rails? FARRELL: By then it still seemed like the valuation was really getting ahead of itself, and it was very much predicated on this idea that you said being a tech company. And I mean, at Adam Neumann’s genius was in marketing and fund raising. And what he had the ability to do really each step of the way and it’s — it’s masterful was sort of take — take the zeitgeist, like the big business idea of the moment that was captivating investors and put that on top of WeWork. So, he’s very into — a little bit before this like sort of acquainting it to Facebook. You know, Facebook was the social network. This is like a social network in person. RITHOLTZ: In real life, right. FARRELL: In — yeah, real life social network. And he didn’t manage to kind of convince people bit by bit. I mean, it’s interesting, Benchmark, you know, as you know, is like one of the top … RITHOLTZ: Legit — right, top shelf V.C., absolutely. FARRELL: Yeah, that’s been some — behind some of the biggest tech companies. RITHOLTZ: Bill Gurley, Uber, go down the list of just incredible … FARRELL: Snap. RITHOLTZ: … yeah, amazing. FARRELL: eBay. Yeah, they’ve had — through — for decades, they’ve been behind some of the biggest companies. So, they were willing to take a gamble on them, and then they saw red flags, but just decided to jump in anyway. But for Benchmark, I mean, we see and they ultimately — they get in at such a low valuation, it’s … RITHOLTZ: Doesn’t matter. FARRELL: … exactly like — you know, they want their homeruns. And I mean, it’s still — they still ultimately got out at a pretty good — really incredible return, but it’s … RITHOLTZ: Right, $600 million to $10 billion, something like that, something (inaudible). FARRELL: Yeah, something like that. RITHOLTZ: So — so just to clarify because I — I’m — I’m going to be trashing WeWork for the next hour, but this wasn’t a Theranos situation or a Bernie Madoff, this is not an issue of fraud or anything illegal or unlawful. Fees just were insane valuations. Somebody did a great job selling investors on the potential for WeWork, and it didn’t work out. FARRELL: I’m glad you brought that up because a lot of people do ask about the differences and the parallels between Elizabeth Holmes and Adam Neumann. And I — I mean, I almost think the story, in some ways, is more interesting. I mean, the Theranos story is, obviously, the craziest and — and horrifying in so many ways. But with Adam Neumann, on the margins, there are questions about, you know, some of them (inaudible). RITHOLTZ: They’re self-dealing and there’s some — a lot of avarice. And he just cashed out way, way early, so you could criticize his behavior. But, you know, you end up with the VCs and the outside investors either looking the other way or turning a blind eye. It’s not like the stuff wasn’t disclosed or anything, he was very out front. No, I need — I need a private jet because we’re opening up WeWorks in China and in 100 other countries, and I have to join around the world. FARRELL: Yeah, and maybe you (inaudible) thing. RITHOLTZ: Now, you need a $65 million (inaudible) is a different question. But, you know, there — they didn’t hide this. They were like proud of it. FARRELL: No, and I think it is every step of the way, you see. I mean, the investors and these were some of the most sophisticated investors in the world and some of the — you know, they are thought of as the smartest investors. They saw the numbers that WeWork was putting forth and they were real, real numbers. They also saw their projections and the projections were mythical, and they never quite reached them. But you could see, if you are going to invest in any round of WeWork, you could see what their prior projections were, how they failed to hit them. But instead, the thing that we saw time and time again to this point was, very often, Adam Neumann would meet the head of an investment company, whether it’s Benchmark or SoftBank or T. Rowe Price, like the — the main decision-maker totally captivate this person. You know, it’s usually a man. The man would become kind of smitten with Adam and all his ideas and what he was going to do, totally believing it. The underlings would look at the numbers, raise all these red flags, point them out. And then the decision-maker would say … RITHOLTZ: Do it anyway. FARRELL: … yeah, he’s amazing. (COMMERCIAL BREAK) RITHOLTZ: So I want to talk about the rapid rise of WeWork and their — their really fast growth path, but I have to ask, what sort of access did you have to the main characters in the book? Were people forthcoming? I have to imagine there were some people who had grudges and were happy to speak. What — what about the — some of the original founders, Adam and his wife Rebekah? Who — who did you have access to? FARRELL: Sure. So, you know, in the interest of privacy, I can’t get into specifics. But what I will say, the interesting thing was, I mean, when we really got access for hours and hours to the vast majority of players at every step of the way in this book. And the — one of the funny things was, I mean, the pandemic really started right as Eliot and I took book leave. We started a book leave in late February 2020. And we had both planned to sort of be and all around the world, meeting people in person. Eliot had moved to New York to meet a lot of the players in person. Obviously, the world shut down and, you know, was kind of nervous about what that would mean in terms of conversations. And the funny thing was I think people are home, bored, feeling pretty reflective. So, there are a number of people that said … RITHOLTZ: What the hell. FARRELL: … I didn’t know if I wanted to talk to you and … RITHOLTZ: But what the hell. FARRELL: … these — some of these people I probably had like 10 conversations … RITHOLTZ: Really? FARRELL: … for hours with. RITHOLTZ: And — and there are 40 something pages of endnotes. It’s — I’m not suggesting that this isn’t deeply researched because a lot of these conversations that you report on like you’re fly on the wall. Clearly, it can only be one of two or three people. So, it looks like you had a ton of access to a lot of senior people and I guess, we’ll just leave it at that. So — so let’s talk about that early rise in the beginning. They were really ramping up very rapidly. I mean, you could see how somebody interested in investing in a potential unicorn in 2012, ’13, ’14 coming out of the financial crisis. Hey, the idea of all these startups just leaving a little bit of space and not a long-term lease, it looks very attractive. It looks like, hey, you could put WeWorks wherever there’s a tech community, and they should do really well there. FARRELL: Yeah, there — and it was — the marketing was — it was very viral at that point. It was, you know, people would tell their friends about it, and they would fill up very rapidly. And they were building more and more. I mean — and this is one of the — you know, as part of the genius of Adam Neumann was, you know, he was telling people from day one they were really struggling to even secure the lease on the first building. And he was like, oh, we’re going to be global, we’re going to be international. He would set these goals of how many buildings they would open and people internally, and even investors, would say, “Oh, this is impossible.” RITHOLTZ: Right. FARRELL: And he would — and he would hit that. He kept on sort of defying gravity, defying disbelief or questions. So, the growth was incredible and they were filling them up. We could talk about, you know, the lack of the cost of doing so. RITHOLTZ: Right. They — they were paying double to — to real estate agents when everybody else was paying. They were going to competitors and saying, “We’re going to reach out to your tenants, and we’re going to offer them free rent for a year.” I mean, they were really sharp elbowed and very aggressive. FARRELL: Especially as time went on. We did find that there is one year we got all their financials. We — you know, we got our hands on a vast trove of documents, but there was one year — I think it was 2011 — that they, I think, made $2 million in profit. RITHOLTZ: Wow. FARRELL: We were — we were kind of shocked to see that. We don’t think they had ever made a profit. And then from there, they did not, and the billions and billions just added up in terms of losses. RITHOLTZ: So — so the rapid rise, we — we mentioned, they peaked in 2019 at more than $47 billion. Neumann recently did a interview with your fellow Times correspondent Adam (sic) Ross Sorkin, and he was somewhat contrite. He — he had admitted that all the venture money and all the high valuations had — went to his head, quote, “You lose focus on really the core of the business and why the business is meant to be that way. It had a corrosive effect on my thinking.” That’s kind of a surprising admission from him. FARRELL: It was. Yeah, I mean, his mea culpa is very interesting. And I mean, one of the things that people said along the way was, you know, the — the higher the valuation, the more out of touch she became. I mean, he — he had a narcissist. And I don’t know what you want to call it, but … RITHOLTZ: Socio-pathological narcissistic personality disorder? I’m just — I’m not a psychologist, I’m just guessing, or a really successful salesman/CEO. There’s like a thin line between the two sometimes, it seems. FARRELL: And some of it — I mean, it seems insane. It was like, oh, he thought of himself in this like same — like with along with world leaders, but world leaders were really sort of … RITHOLTZ: Tailing him. FARRELL: … really wanted to meet him. RITHOLTZ: Yeah. FARRELL: Yeah. And he was like — we have a scene in the book that he was debating whether or not he was going to cancel on Theresa May because he had promised his wife that he would teach a class on entrepreneurship to their new school, so it was like a few of their kids and a few of their kids’ friends were in the school. RITHOLTZ: Right. FARRELL: And they’re about five years old, five or six. And he had promised — and his wife … RITHOLTZ: Prime Minister, a five-year-old, that’s it. So, when you talk about losing touch with reality, some of the M&A that the startup did. Wavegarden or wave machine was a — like a surf wave machine, meetup.com, Conductor, they ended up dumping these for a fraction of what they paid for them. But what’s the thought process we’re going to become a technology conglomerate? I don’t — I don’t really follow the thinking other than will it be fun to have a wave machine at our buildings, like what’s the rationale there? FARRELL: OK. So, there were — there were two parts to that, and part of it was like it was the world was Adam Neumann’s playground, and he loves surfing, and he thought that — you know, that he found out this company has wave-making mission. They would make waves. So, him and his team went to Spain to surf on them and test them out, but he could basically convince his board, in general … RITHOLTZ: Right. FARRELL: … who had to approve these that anything made sense, whether it’s the jet, the wave pool company or friends of his. I mean, Laird Hamilton, the famous surfer … RITHOLTZ: Right. FARRELL: … was a friend of his. They invested like in his coffee creamer company. But then the second — so it was so many unseen investments that I really didn’t necessarily make any sense. But then on the other side, one of the things that we thought was interesting, he had this deal with Masa who — Masayoshi Son. He’s the CEO of SoftBank, became WeWork’s biggest investor, biggest enabler, you might say. RITHOLTZ: Yeah. FARRELL: And one of the — they were going to do this huge deal that would have actually kept WeWork private forever. It never came to pass, and that’s why it was sort of the beginning of the end when this deal fell apart. But as part of it, a lot of the deal is predicated on growing revenue. So, Adam also became obsessed with acquisitions like whatever they could possibly do to add more revenue to the company. I mean, he was talking about buying Sweet Cream, and he had like got pretty far along in the salad company … RITHOLTZ: Yeah, amazing. FARRELL: … in conversations with them. So, it was this idea of like let’s just throw in anything, we have money, and let’s just grow our top line. Who cares about anything else? RITHOLTZ: Let’s talk about Rebekah Neumann. She was Adam Neumann’s wife. What — what what’s her role in WeWork? How important was she? FARRELL: Her role is just so fascinating throughout. So, I mean, he — he met her right as he was starting Greendesk. And I think she just sort of opened his eyes. She’d grown up very wealthy. She’s Gwyneth Paltrow’s cousin. She had always ties to Hollywood. She gave him a loan early on, a high interest loan, I think even after they were married that we report about in the book. But as time went on, she — she really want a career in Hollywood, decides to — at one point, she — she was trying to be an actress and she tells someone that she’s done with Hollywood. She’s producing babies now. They’ve gone on to have six kids. But she sort of always kind of dabbled in the company, and they retroactively made her a co-founder. RITHOLTZ: Right, she wasn’t there from day one. It was only later she got pretty active. FARRELL: Yeah, she told people like giving tours early on that she help pick out the coffee in the — in the early WeWorks. But — so she became more active, but she was sort of jumped in and out. And it was by the — one of the things that she had a big focus on their kids were growing up, she didn’t really like their choices of private or public schools, so she decided to start — she helmed sort of the education initiative that’s something … RITHOLTZ: And she was deeply qualified for this because she — she was a certified yoga instructor, right? FARRELL: Yeah, she had been. RITHOLTZ: And — and I know she went to Cornell, which is certainly a good school. What bona fide does she bring to technology, real estate, education, like I’m trying to figure it out. And in the book, you don’t really go into any details that she’s qualified to do any of these things. FARRELL: I mean, especially with — with education, it’s like she didn’t — she want this — essentially she wanted a school for her children, and she wanted very specific things in that school. And once again, they decided that that would be the next like frontier for WeWork. They’re always adding different things. But no one really — then they let them do this. They started this school in New York in the headquarters, and they were going to teach the next-generation of entrepreneurs. And … RITHOLTZ: Right. FARRELL: … I mean, they — one of the things — I mean, it was the education arm more than — as much or more than other parts of it is just so tragic because they had a lot of money. She’s — she, like Adam, can just speak like — speak so — like eloquently and with this vision. So, she attracted all these very talented teachers. She sort of wooed them from the schools that they were in before and told them that they were going to start this, you know, new enterprise and change education forever. And it’s just really devolved so quickly. It became very like kind of petty. I mean, if you pull so they have PTSD from her like obsession with like the rugs like … RITHOLTZ: Right, just … FARRELL: … it was a Montessori-type school. And yeah, she obsessed over like the color of white of the rugs and made them like send back 20 rugs. RITHOLTZ: What was the most shocking thing you found out about him or her or both? FARRELL: So, one — one of these was — I mean, there is a lot of the — their personal lives, as we said, whether it was a school or other — other things where their kids are educated in, just the way in which the personal entanglements, you know, small and huge levels, but I’ll give two examples. I mean, one of the things that people said in the school, so within the WeWork headquarters was a whole … RITHOLTZ: Right. FARRELL: … floor and it’s beautiful if you see pictures of it, like it just this – like really incredible school. RITHOLTZ: Money was no object. FARRELL: Yeah. And they had Bjarke Ingels, this famous architect designed the school. And — but they basically, on Friday nights, would have dinners with their friends there. And according to many people would — the team would come in Monday morning … RITHOLTZ: It’d be a disaster. FARRELL: … it will be a complete … RITHOLTZ: Right. FARRELL: … disaster. So, it was like really on so many levels like everything was their personal … RITHOLTZ: So, entitled. FARRELL: Yeah. And the second thing that really shocked us was she was very — she had a lot of kind of like phobias around like health and wellness. And she says — I mean, she had a — a real tragedy in her family. Her brother died from cancer, and so she was always — she’s very focused on and she said it as much in podcasts and things. But she was very fixated on 5G. And she’s worried about vaccines for their kids. And — but the 5G of like what that could do for — you know, these signals. She wouldn’t let them have printers on the floor, like any printers on — wireless printers on the floor of the school. But there is a — they bought this … RITHOLTZ: Can you — can you even by 5G printers today? What — what was the … FARRELL: Oh, no, it’s a wireless. RITHOLTZ: … yeah, just Wi-Fi? FARRELL: Yeah, the wireless like freaked her out, so the teachers of that are like run up and downstairs to just print everything. It seems ridiculous. But the 5G towers, there was one, either being built or built right near there, across the Beam Park. RITHOLTZ: (Inaudible) City Park. FARRELL: Yeah, right nearby. So, she was so obsessed with it. She didn’t want to move in there. They had bought like six apartments in this building that she — the CFO — this is around the time they’re preparing for the IPO. I used to work at Time Warner Cable, who is the CFO of Time Warner Cable. So, she said, “Can you, Artie Minson, help us get rid of the 5G tower and have it moved?” And basically, he deputized another aide who used to work for Cuomo and worked for Governor Christie, the — both former governors. And they — like that was something they — they actually worked on. So, the — yeah, that interplay was just kind of insane. RITHOLTZ: Seems rational. There was a Vanity Fair article, “How Rebekah Neumann Put the Woo-Woo in WeWork,” and — and what you’re describing very much is — is along the lines of that. I’ve seen Neumann described as a visionary, as a crackpot, as — as a grifter, but he thinks he’s going to become the world’s first trillionaire, and — and WeWork the first $10 trillion company. Is — is any realistic scenario where that happens or is he just completely delusional? FARRELL: I mean, it seems insane and like he seems completely delusional, but he had a lot of people going along with him, including the man with one of the biggest checkbooks in the world who is Masayoshi Son, the CEO and Founder of SoftBank, who had just — I mean, the timing of the story, it’s like there’s so many things that happened at the first enrollment. RITHOLTZ: Saudi Arabia wanting to diversify, giving a ton of money. You — you call Son the enabler-in-chief. He — he put more than $10 billion of capital showered on — on to WeWork. How much do you blame Son for all of this mayhem at least in the last couple of years of WeWork’s run as a private company? FARRELL: It seems like he was the main — you know, the main person kind of pushing all of this. And when you talk to a lot of people around Adam, they just said they were just such a dicey match like that Adam was crazy to begin with. Everyone thought that. You know, it can go both ways, but … RITHOLTZ: Yeah, but people drank the Kool-Aid. It — it reminded me — you don’t mention Steve Jobs in the book, but very much the reality distortion field that Jobs was famous for, I very much got the sense Neumann was creating something like that. How did he get everybody to drink the Kool-Aid? Was he just that charismatic and that good of a salesman? FARRELL: I think so. And it was just he could talk about things and make you feel like the reality was there, this reality of distortion field. He was — he was masterful in that. Yet the thing that he did was he always found new pots of money … RITHOLTZ: Right. FARRELL: … all over the world. I mean, it was the time — it was the time when the private capital markets were getting deeper and deeper, the Fidelitys and the T. Rowe that like normally kind of sober mutual funds … RITHOLTZ: Right. FARRELL: … were jumping into startups. And they — they were — we call one of the chapters FOMO. It was like the … RITHOLTZ: Right. FARRELL: … fun FOMO. They were fearful of missing out on the next big thing. So that we’re sort of in this climate where there is an appetite to go after, to just take a chance for the chance of getting the next like maybe not trillion-dollar company, maybe no one but him and Masa believe that, the next big thing. RITHOLTZ: But the next 100X — right. And that’s really — you know, it’s always interesting when you see these stayed, old mutual fund companies that have literally no experience in venture capital or tech startups, but happy to plow into it because they — they — they want to be part of it. And maybe that’s how we end up with community-adjusted EBITDA. Can — can you explain to us what that phrase means? I don’t even know what else to call it. FARRELL: Sure. So WeWork was losing every — every step of the way. They were growing revenue more than doubling it. You know, they’re expanding all around the world. And with that, they were losing just as much, if not more every single year than they were taking in. So, they had this brilliant idea, really a lot stemming from the CFO and Adam Neumann love the CFO’s creation. His name is Artie Minson, the CFO. And it was this idea that you essentially strip out a lot of the costs of kind of creating all the — building out all the WeWorks and, you know, marketing and opening up new buildings. You strip it out, and then you’re suddenly a profitable company. It’s like the magic. RITHOLTZ: Wait, let me — let me make sure I understand this. So, if you eliminate the cost of generating that profit, you suddenly become profitable. How come nobody else thought of this sooner? It seems like a genius idea. FARRELL: Oh. RITHOLTZ: Just don’t — it’s profits, expenses. It’s fantastic. FARRELL: And the — the conviction with which certain people inside, especially on the finance team, believe this. I mean, they were saying throughout that like, oh, we will be a profitable company if we — the idea was if we just stop growing, we could be profitable right now. We take in more per building. (COMMERCIAL BREAK) FARRELL: Then we spend on it. But, you know, that never was the case. RITHOLTZ: So, let’s stick with the delusion concept. We talked about WeGrow, and we talked about WeLive a little bit, crazy stuff. What made this guy think he can help colonize Mars? Right, you’re laughing. You wrote it yourself, and it’s still funny. FARRELL: It is still … RITHOLTZ: By the way, I found a lot of the book very amusing, like very dry, like you guys didn’t try and crack jokes. But clearly, a lot of the stuff was just so insane. You read it, you start to laugh out loud. FARRELL: I’m — I’m glad to hear that because I think that we would joke that like every day. I mean, we’re in different places writing it. We are on calls constantly, and we would call each other. And it was often multiple times a day we would call each other and say, “You will never ever believe what I just heard.” And we would crack up, and we — we had a lot of fun writing it because it’s just — it was — the truth of the story was like more insane than … RITHOLTZ: Right. FARRELL: … anything we could have made up ever. RITHOLTZ: That’s the joke that, you know, the difference between truth and — and fiction is fiction has to make sense, and truth is under no such obligation. So, let’s talk about Neumann colonizing Mars. FARRELL: Yeah. RITHOLTZ: I mean, was that a serious thing or was he just, you know, on one of his insane (inaudible) and everybody comes along? FARRELL: There — there — speaking of fine lines, I mean, he just — I think he — he started to believe more and more of like these delusions. And so, I think he really did, and yeah, he got this — he secured a meeting with Elon Musk, and he – Elon Musk — he always — Adam was always late to every meeting, would make people wait for hours, like even like the bankers in the IPO would just sit around. There’ll be rooms of like dozens of people waiting for Adam, and he’d show up like two hours late. But Elon Musk made him wait for this meeting. They sat and sat and sat, and then he told Elon Musk that getting — that he thought — like building a community on Mars is what he would do and he would help him with. And he said, you know, “Getting — getting to Mars is the easy part. Building a community is the hard part.” RITHOLTZ: Right. Because, you know, it’s very hard to get those beer taps to work in a … FARRELL: Yeah. RITHOLTZ: … low-gravity, zero atmosphere environment. It’s a challenge, only WeWork could accomplish that. FARRELL: The – the fruit water. RITHOLTZ: Right. So — so I want to talk about the IPO, but before I get to that, I — I have to ask about the corporate offsites, the summer camp, which were described as three-day global summits of drinking and drug consumption. It was like a Woodstock event, not like a corporate retreat. How did these come about? FARRELL: So, Adam would say that he never — he grew up in Israel and he moved to the U.S. He lived for a little while the U.S., but move later in life. So, you said he never got to go to American summer camp, so he was going to recreate summer — American summer camp literally. They started at his wife’s family’s had a summer camp in upstate New York. That’s where they started. They just got bigger and bigger, eventually going to England and taking over this like huge like field — this huge estate there and bringing every single member of the company flying them from all over the world. RITHOLTZ: And there were thousands of employees? FARRELL: Thousands upon thousands, and the cost was unbelievable of every piece of it. I mean, every year, they just got bigger and bigger. I mean, the flew at the height of his fame not that he’s far off of it, but Lin-Manuel Miranda like, at the height of Hamilton, they flew him on a private jet. He — he performed on stage. The Roots came, and — and they would pay these people like … RITHOLTZ: Million dollars, right. FARRELL: … a million dollars, yeah. So, the money is no object. RITHOLTZ: That’s a good gig for an afternoon. FARRELL: Yeah, exactly. And they were — you know, especially at the beginning, it was like a younger group of people, in general. And — I mean, these — these were crazy. There’s tons of alcohol sanctioned by the company, handed out by the company. Drugs were in — you know, in supply not handed out by the company, but they were everywhere and … RITHOLTZ: And he talks about drugs. He says, “Well, we — it’s not really drugs, just, you know … FARRELL: He — so yeah, I think it — it got to a point and it was also mandatory to come to these events. So, I mean, the — they were … RITHOLTZ: And they were like meetings where there are shots, everybody has to do shots. FARRELL: Yeah. RITHOLTZ: This — this wasn’t just at these retreats, like hard partying was pretty common throughout the company or anywhere Neumann seemed to have touched. When — when he was there, everybody was expected to step-up and — and party hard. FARRELL: Including the investors. I mean, you’d walk into the office at 10 A.M., according to so many different people. And he’d insist on taking tequila shots with you in the morning in his office. And … RITHOLTZ: You didn’t have a shot before this? You — don’t you … FARRELL: Right. RITHOLTZ: … isn’t that — isn’t how every meeting begins? FARRELL: The breakfast … RITHOLTZ: Right? FARRELL: … of champions. RITHOLTZ: That’s — that’s right. So — so I got the sense from the book that they always seemed to be on the edge of running out of money, and they would always find another source, but it was all leading towards the IPO, but the S-1 one filing, the disclosures that go with an IPO filing, that seemed to be that they’re undoing the — the public just — investing public just torn apart. FARRELL: Exactly. I mean, the interesting piece of that, as you said, it was there’s always a new pool of capital like just when he thought that he was going to have to go public. And the board — and the board — I mean, one of the things we found time and time again was the board would say, you know, he’s really like crazy, things are getting out of hand. But like we won’t say no to him, but eventually he’s going to have to go public. This was back in like 2016-2017. RITHOLTZ: Right. FARRELL: We thought he was going to run out of money, the only place to go because they’re burning so much cash with the public markets. And the public markets will take care of it, which — that kind of floored us each step of the way. But yes, as you said, he — he — he knew how to captivate on — in one-on-one or bigger meetings to convince you of this future to tell you we always describe him kind of as a magician and think of him like this, like don’t look here, look here, like the sleight of hand. He could — then this S-1 came out. It was a regulatory document. You have to follow rules. RITHOLTZ: There’s no sleight of hand in S-1 filing. FARRELL: No, like you have to see. And people suddenly saw the — the broad public the revenue, the losses of a lot, not even all of these, you know, the questionable corporate governance, I mean, the — the … RITHOLTZ: The self-dealing. FARRELL: … the self-dealing, only pieces of that were even in it because the jet wasn’t in the S-1. They didn’t have to disclose it. The — and the interesting thing about this, I think there’s always like this distinction that people try to make between like, oh, the smart money and the dumb money. And it’s like the smart money is like the Fidelitys and the T. Rowes, and the SoftBanks. And then the dumb money, you know, it’s like — or the, you know, the average retail investor. And so, it’s just so interesting that like he — he captivated the — the quote-unquote, “smart money.” And then the minute this was all made public, everything was there, the world saw it and just said like what is — like this is insane. RITHOLTZ: I’m nursing a pet theory that it was Twitter that demolished him because people just had a — I remember the day of this filing, Twitter just blew up with — like a — a million people are taking an S-1 apart sentence by sentence and the most outrageous things bubbled up to the top of Twitter. And it was very clear that they were dead in the water. There was going to be no IPO, and the dreams of these crazy valuations seemed to crash and burn with the — the IPO filing, which — which kind of raises a question about, you know, how was all of this corporate governance so amiss. All the self-dealings that were allowed, so my — my favorite one was he personally trademarked the word We and then charged the company $6 million to use it. Again, he — he’s given these sort of crazy disclosure explanations. Hey, I’m only allowed to say this. But it seems he bought a bunch of buildings in order to flip them to WeWork at a profit. I don’t understand how the board — we mentioned Theranos — here’s the parallel. How did the board tolerate just the most egregious, avarice, lack of interest in the company and only enrichment of oneself? How does the board of directors tolerate that? FARRELL: I know that was — I think, if anything, from this whole story that just floored us was exactly that this board, I mean, it was a — it was a real like heavy-hitting board of directors. They’re not — and all financial people as opposed to Theranos, you know, it was like people who didn’t really know … RITHOLTZ: Politics and generals, and … FARRELL: Yeah. RITHOLTZ: … secretaries of states, right? It was a — and a lot of elderly men who were smitten with her. I mean, like men in — what was Kissinger on the board? He was 90 something. FARRELL: Yeah. RITHOLTZ: So — so with this though, the other thing that’s shocking is, you know, most founders of a successful company, they live a — a reasonably comfortable lifestyle, but the thought process is, hey, one day we’ll go public and my gravy train will come in, and I’ll have a — a high, you know, eight, nine, 10-figure net worth. Early in this time line, he was paying himself cashing out stock worth tens of millions, in some cases, hundreds of millions of dollars way, way early in — in — the company was five years old and he was worth a couple 100 million liquid, and god knows how much on paper. Again, how — how does the board allow that to take place? FARRELL: Yeah, that was — and a board, investors kind of signing off on this were jumping into it, I mean, seeing that he’s going to sell a lot of stock each round. I mean, now there does seem to be a shift and it’s kind of a scary one that this is like more private companies, the founders are selling more and more. But back then, you didn’t really see this very much. And one of the things I find very interesting is he was very much following the Travis Kalanick that — for Uber CEO’s playbook, and literally like following it that like going after the same investors, going around the world. Travis had raised more money than anyone before. Travis, every step of the way, made a huge point of, “I’m all-in. I’m never selling any stock” … RITHOLTZ: Right. FARRELL: … until he was kicked out of the company basically. So, Adam followed his playbook, but each step of the way was — said he took money out and was like prepare about it. RITHOLTZ: I mean, he was very wealthy for a — a scrappy startup founder, 14, 15, 16. You would think, hey, he’s — maybe he’s making a decent living, but not hundreds of millions of dollars, it’s kind of amazing. FARRELL: Or like having many, many, many houses. RITHOLTZ: Right. FARRELL: And they were like he didn’t hide the way in which he was living, having houses all over the world, jet setting all over the world. You know, and, in fact, he almost like, you know, wanted everyone to know that was part of his like a lure. RITHOLTZ: So, when the IPO filing in 2019, when — when that blows up, it seems to have a real impact on Silicon Valley for a while. Suddenly, high-spending, fast-growing, profitless companies looked bad, and now we’re back to we want profit growth and revenue, but that really didn’t last all that long, did it? FARRELL: No, it was unbelievable. I mean, we also — Eliot and I joked that we rewrote the epilogue like five times because, at first, we wrote it saying like this is the fallout. RITHOLTZ: Oh, look at the impact, right. FARRELL: Yeah, and it was — I mean, Masayoshi Son had his own mea culpa like, you know, I believe in Adam, I shouldn’t have, I made mistakes. But also, I want my companies to be profitable now … RITHOLTZ: Right. FARRELL: … like I’m going to invest in these companies or the companies have invested already, they should be profitable. IPO investors, public market investors were totally spooled by money-losing companies. Then — you know, then came the pandemic, then came the Fed pumping money into the system. And then, you know, now, in some ways, it’s like, wow, WeWork always like made — generated revenue and losses. It’s like now today we have Rivian … RITHOLTZ: Right, Rivian and … FARRELL: … pre-revenue … RITHOLTZ: … Lucid and, you know, it’s all potential. Maybe it works out, maybe Amazon buys 100,000 trucks from them, but that’s kind of — that’s a possibility. And, you know, more — more than just the Fed, you had the CARES Act, you had a ton of money flow into the system, but it doesn’t necessarily flow to venture-funded outfits, it’s just a lot of cash sloshing around. Is that — is that a fair statement? FARRELL: Oh, completely. RITHOLTZ: So how quickly were the lessons of WeWork forgotten? FARRELL: Incredibly quickly. I mean, it felt like it had — it like it changed everything for a few months. I mean, the other part of it was Masayoshi Son had — had raised a $100 billion fund, biggest fund ever to invest in tech companies. He was literally about to close his second fund. It was … RITHOLTZ: $108 billion, right? FARRELL: Yeah, another $100 billion fund to just go and like pour into companies. RITHOLTZ: More, right. FARRELL: And then I mean, we’ve heard from all these people who are out meeting sovereign wealth funds, Saudi Arabia, and they were just like every meeting, it was like what about WeWork. And, you know, one of the things we’ve heard was he was pushing for it to just go public, you know, or to — or not to — to not go public because he didn’t want to take the mark. He didn’t want to make … RITHOLTZ: Right. FARRELL: … all of this public. And we have a scene in the book about this that Masa tries to tell him to call off the IPO and tried to force his hand, and Adam is kind of like … RITHOLTZ: Confuses. FARRELL: Yeah. RITHOLTZ: Right. It’s — it’s — it’s really quite — it’s really quite astounding that we end up with — what did he burn through, $20 billion, $30 billion? FARRELL: More than $10 billion, I think. RITHOLTZ: Wow. FARRELL: Yeah. RITHOLTZ: That — that’s a lot of cash. FARRELL: Towards him essentially. RITHOLTZ: So — so here’s the curveball question to ask you. So, you’re now a business reporter at the Times. WeWork obviously isn’t the only company led by an eccentric leader. What are you reporting on now? What’s the next potential WeWork out there? FARRELL: You know, I’m — I’m just getting started. This is just a couple of weeks in, but — so it’s — I don’t quite know what the next WeWork is. I almost feel like there’s a lot of mini WeWorks out there, whether it’s — you know, the company is in the SPAC market. Some of these unicorns, I mean, there’s so many — so many red flags around these companies like I was saying before like if founders taking money out very early and, you know, investors are not really caring and just wanting to get into them, getting these massive packages — pay packages, compensation. So, I think there’s — there’s so many different places to look. I don’t get the sense that there’s one company now that’s sort of — of size of Adam Neumann. I think there are just a lot of many ones. I mean, he was a pretty like captivating and just insane in so many — larger than life in so many ways. But I have no doubt we’re going to find one of them fairly soon. There’ll be more. RITHOLTZ: And — and what do you think the future holds for Adam Neumann himself? He — we — we have to talk about the golden parachute, so not only does SoftBank refinance a couple hundred million dollars in loans that he has outstanding, they give him $183 million package and essentially purchased $1 billion of his stock, so he leaves WeWork as a billionaire. FARRELL: Yeah, it was — I mean, it was just an incredible thing. And I mean, then he got this pay package that they agreed to as part of the bailout. I mean, WeWork, once the IPO was called off, was on the verge of bankruptcy. They were going to run out of money in a couple of months so they had to do this very quickly. They were laid off thousands upon thousands of people. But basically, as part of the negotiations to get Adam Neumann to give up his super voting shares, these potent shares that would have let him continue to keep control of the company to do that, they struck this pay package. And I mean, it’s kind of interesting when we talk about the power founders right now that it wasn’t a wakeup call for Silicon Valley to be more wary of giving this power to founders, like when you saw the price tag that Adam Neumann extracted the cost of pushing out a founder who’s kind of a disastrous founder at some point. RITHOLTZ: Yeah. I — I remember reading that and thinking Son played it terribly. He could’ve said, “Hey, listen, I got $100 billion worth of other investments. If I take a $10 billion write-down, it’ll hurt, but I still have plenty of other money. If this goes belly up, you’re broke, you’re a disaster except I’ll give you $50 million or else you’re just impoverished. Good luck finding the lawsuits for the rest of your life.” That would have been the play, but he didn’t — I guess, it was the other second fund he didn’t want to put at risk. Why — why didn’t he hardball Neumann because I thought Son had all the leverage in that negotiation? FARRELL: That was one of the — like the enduring mysteries, I think, of this whole story because all the things you said are right, plus Adam had taken out so much money in terms. He had so much lent against his stock at $47 billion. I mean … RITHOLTZ: Right. FARRELL: … J.P. Morgan, UBS, Credit Suisse, they have lent him hundreds of millions of dollars, and he would have gotten to default. He like didn’t necessarily have the liquidity to pay back everything … RITHOLTZ: Right. FARRELL: … he had borrowed. So, it was — I mean, it’s kind of amazing in terms of his negotiating skills that Masa and SoftBank. It was led by Marcelo Claure who’s now the WeWork Executive Chairman. They blinked first. RITHOLTZ: Right. FARRELL: They gave Adam a lot. And I totally agree with you, one of the things I’ve heard it was just like the interest of time. They just wanted it done $10 billion or whatever. It doesn’t mean that much. They want to just keep on moving, keep on … RITHOLTZ: Right. FARRELL: … spending, not distract too much and just get this done, but it’s crazy. I mean, the … RITHOLTZ: So … FARRELL: … the time value of money … RITHOLTZ: … could be the greatest golden parachute in the history of corporate America. I mean, I — I’m hard pressed to think of anybody who, on the way out of a — a failing company, and it was a failing company at that moment, squeeze more money out of — out of their board. FARRELL: And just to say, I mean, Andrew Ross Sorkin at — in this first big interview with Adam that he gave was — I mean, Adam defended it in different ways. I mean, Andrew very much pushed him on like why that was okay and … RITHOLTZ: Very aggressively. FARRELL: Yeah. RITHOLTZ: That was early November. And he was sort of contrite and, you know, a little shifty, but for the most part surprisingly transparent. I was — when I was prepping for this, I watched this and, you know, you could see how he constructs that, you know, reality distortion field. But there was definitely more humility than we have seen previously. I don’t want to say humble, but just closer on that spectrum. Clearly, he wants to have a future in — in business, and he needs to offer a few mea culpas of his own. FARRELL: It does feel like this is the first step on the come back toward … RITHOLTZ: Yeah. FARRELL: … Adam Neumann. RITHOLTZ: I think that’s going to be a pretty big uphill battle. That’s going to be quite the Kilimanjaro to — to — to mount given what a debacle … FARRELL: The interesting thing just so in terms of his next step is I — I agree with you, there’s an uphill battle in terms of maybe getting people to — to give him money, but he now has a lot of money and from … RITHOLTZ: Family office, yeah. FARRELL: Exactly. Anecdotally, it sounds like a lot of people are very happy to take his money. So, to begin, that’s, you know, he’s seeding a lot of things that you — who knows where they’re going to go. RITHOLTZ: Interesting. So, I only have you for a limited amount of time. Let me jump to our favorite questions we ask all of our guests starting with, you spend a lot of time researching and writing during the lockdown. Did you have any time to stream anything on Netflix or Amazon Prime? FARRELL: There — I mean, there’s still a lot of like downtime. I — I probably watched not much. You know, there — there was downtime, and I did have a few shows that were … RITHOLTZ: Give us one or two favorites. FARRELL: … Little Fires Everywhere. I really liked Never Have I Ever. RITHOLTZ: I just started watching the last week, it’s quite charming. FARRELL: Yeah, it’s really good. RITHOLTZ: Anything Mindy Kaling does is quite amusing. FARRELL: She is amazing. Schitt’s Creek, we got through the whole — that was with my favorite pandemic. RITHOLTZ: So, the — the funny thing about that is the first episode, too, were like – it’s like — it’s like succession. You don’t like any of these people. The difference being in Schitt’s Creek, you quickly start to warm up to them and they start to reveal their own path to rehabilitation of — of themselves. FARRELL: It just gets better like ever — and then it’s so devastating at the end. RITHOLTZ: So, it was really great, right? That – that was one of my favorites. Let’s talk about your mentors, who helped shape your career as a business journalist. FARRELL: I guess, my earliest mentor as a journalist, in general, was in college, I’d always thought about journalism, and I got an internship with then, I think, a septuagenarian journalist. He — his name was Gabe Pressman. I grew up in New York. He was an NBC … RITHOLTZ: Sure. FARRELL: … journalist. This is sort of the political head honcho of local journalism. I worked for him for a summer. He was in his, I think, late 70s. And he was just the most energetic, passionate journalist I’ve ever met. He was still like chasing after mayors, grilling them. It was — with the Senate race it was Hillary in the Senate race. And it was like the most fun summer I’ve ever had and seeing his energy. And — and he — he passed away a few years ago, but literally, he started blogging into his 90s. And he would joke. He would say, “You know, my wife really wants me to like take a step back and work and teach at Columbia Journalism School,” where he had gone. And he was like, “I’m just not ready like, at some point, like scale back, and he never really did. So, he — I would say he was my first mentor. Just seeing like that, it is the most fun job in the world. He just was seeing that day in and day out. RITHOLTZ: Let’s talk about books. What are some of your favorites and — and what are you reading right now? FARRELL: Sure. I’ll start, you know, I always wish I read more fiction, but it’s like I always get pulled in, especially the business, genre. RITHOLTZ: Sure. FARRELL: So right at this minute, I’m reading “Trillions” by Robbin Wigglesworth. It’s really good. It’s about like index funds, sort of I’m learning a lot from it, the rise of Vanguard. RITHOLTZ: He was my guest last week just so you know … FARRELL: Oh, awesome. RITHOLTZ: … or two weeks ago. FARRELL: I’m midway through, but I’m, yeah, learning … RITHOLTZ: Really interesting. FARRELL: … a ton from it. I just read Anderson Cooper’s book about the Vanderbilts. It’s — I thought it was really great and it’s so interesting. You know, he talks — it starts like the Gilded Age. And you just see so many like eerie and kind of parallels between our age right now and just like the level of like wealth creation and what it leads to. So, I really enjoyed that. I read — this is a little bit dated, but “Say Nothing” by Patrick Radden Keefe. It’s about the troubles in Northern Ireland. It is — I mean, it’s — it’s very sad, but I — and it’s pretty long, and I just could not put it down. It’s … RITHOLTZ: Really? FARRELL: … so great. Yeah, I can’t recommend that one highly enough. RITHOLTZ: Quite, quite interesting. What sort of advice would you give to a recent college grad who was interested in a career in either journalism or — or business? FARRELL: In terms of journalism, I would just say jump in. I mean, it’s such a — as opposed to business, I felt like when I graduated from college, you know, so many people had jobs that they were going to make, you know, a decent amount of money. And with the journalism, you just have to find your way in and a lot of its internships. And it just — the path is hard. There’s no straight line. So, I would just say for journalism, it really helps to just jump into the first job you can get. Work really hard in it. And you just always have to keep — there’s no straight line, but jump and learn from it, meet people, find your mentors everywhere you go, and just keep going. You learn so much on the job. I went to Journalism School at Columbia. It was a super fun year, but it’s like within two days of working as a journalist, you just learn so much you can never learn in school. RITHOLTZ: And our final question, what do you know about the world of IPOs, capital market, business journalism today that you didn’t know 15, 20 years ago when you were first starting out? FARRELL: Okay. What I think have learned and probably the most in writing this book is you think people are rational players, and you think that titans of business are supposed to behave in sort of a rational way, and that these, you know, these checkmarks, these — like a T. Rowe Price or something or Fidelity that they’re going to do a certain amount of work looking at things. And I think the level of irrationality in business of just relationships of people, sort of not necessarily making rational decisions and just going with their gut and going with the people they like, I think, are cool like that that overrides a lot of things. I think it’s just so much less rational than you think it would be. And sometimes the things that are on their face seem really crazy and insane, maybe are. RITHOLTZ: Quite, quite fascinating. We have been speaking with Maureen Farrell. She is the co-author of “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion.” If you enjoyed this conversation, well, be sure to check out any of our previous 400 interviews. You can find those at iTunes, Spotify, wherever your podcasts from. We love your comments, feedback, and suggestions. Write to us at mibpodcast@bloomberg.net. Follow me on Twitter @ritholtz. You can sign up for my daily reads at ritholtz.com. I would be remiss if I did not thank the team that helps put together these conversations each week. Charlie Vollmer is my Audio Engineer. Atika Valbrun is our Project Manager. Michael Batnick is my Director of Research. Paris Wald is my Producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Maureen Farrell appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureDec 15th, 2021

Shvo launches sales at Mandarin Oriental Residences

Michael Shvo has launched sales at the new Mandarin Oriental Residences Fifth Avenue with a team from Douglas Elliman Development Marketing. The marketing boss, who now runs his own luxury real estate development and investment firm, partnered with the asset manager Deutsche Finance America and BLG Capital, a division of... The post Shvo launches sales at Mandarin Oriental Residences appeared first on Real Estate Weekly. Michael Shvo has launched sales at the new Mandarin Oriental Residences Fifth Avenue with a team from Douglas Elliman Development Marketing. The marketing boss, who now runs his own luxury real estate development and investment firm, partnered with the asset manager Deutsche Finance America and BLG Capital, a division of the Turkish conglomerate Bilgili Group, to buy the office condo at 685 Fifth Avenue for $135 million in 2018. Now, they’re ready to sell what will be Mandarin Oriental’s first East Coast residential-only property, following the West Coast debut of Mandarin Oriental Residences Beverly Hills, also developed by SHVO. Units will be priced from $2.5 to $15 million for junior suites to two-bedrooms. Penthouse pricing will be announced at a later date, said Shvo. Renderings via DBOX Located at 685 Fifth Avenue, on the corner of Fifth Avenue and 54th Street, the 29-story former office condo that was once the headquarters of the Italian fashion house Gucci  has been transformed into 69 fully furnished and amenitized luxury residences ranging from junior suites to two-bedroom residences and select penthouses. White-glove services courtesy of Mandarin Oriental’s dedicated concierge team ranges from bartending and butlers to shopping and dog-walking. Residents will also have exclusive access to Boulud Prive, a new dining experience personally curated by Chef Daniel Boulud, only available to residents of the Mandarin Oriental Residences Fifth Avenue and Beverly Hills, through room service or private restaurant and bar service. “We are delighted to be partnering with Mandarin Oriental once again, this time to offer an unparalleled living experience on New York’s Fifth Avenue, one of the world’s most coveted zip codes.” said Michael Shvo, Founder, Chairman and CEO of SHVO. “Truly distinguished from other residential buildings in the city, this exquisitely designed collection of turnkey homes and amenities will offer residents the luxury of living in a five-star hotel without the guests.” The post Shvo launches sales at Mandarin Oriental Residences appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyDec 7th, 2021

Just 4 metaverse projects sold $106 million in virtual land last week, with The Sandbox taking a massive lead: DappRadar

Sales of virtual land boomed last week, bringing in $105.87 million for just four metaverse projects, DappRadar said. MetaverseThinkhubstudio Sales of virtual land have boomed in the last week, bringing in $105.87 million for just four metaverse projects, DappRadar said.  Gaming platform Sandbox dominated with $86.56 million in NFT sales, with Decentraland in second place.  The surge in metaverse-related activity has followed Facebook's name change to Meta, the report said. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. The metaverse is thriving right now, as individuals and companies pile in. A total of $106 million was spent on virtual property in the last week, with purchases of digital land, luxury yachts and other assets, according to data from DappRadar.The Sandbox, an online gaming world that allows users to own plots of land, has dominated activity. Between November 22 to 28, the platform attracted $86.56 million in unique non-fungible token land sales that are tied to the blockchain, DappRadar said.In second place was Decentraland, another virtual platform that brought in $15.53 million in sales of digital plots of land. Smaller competitor CryptoVoxels sold digital land for a total of $2.68 million, while Somnium Space, a metaverse platform, sold $1.10 million worth of real estate. Virtual worlds land NFTs trading volume in 7 daysDappRadarLast week, buyers spent record amounts of money on virtual plots of land in the metaverse, where users can play games, trade digital assets and buy and sell anything from digital sneakers to digital dresses using cryptocurrency tokens.Metaverse Group, a subsidiary of Tokens.com, bought digital land for $2.43 million last Tuesday, a record for property sales on Decentraland. Another plot was purchased for $2.3 million on Axie Infinity, a play-to-earn gaming platform, in the same week. "Undoubtedly, metaverse land is the next big hit in the NFT space. Outputting record sales numbers and constantly increasing NFT prices, virtual worlds are the new top commodity in the crypto space," DappRadar said. Last week, the four leading virtual worlds had attracted over 6,000 traders. Over the previous week, Sandbox boasted the second most traded NFT collection, while Decentraland came in 8th place. The report said the surge in metaverse-related activity started with Facebook's decision in late October to rebrand itself as "Meta", in a nod to its commitment to building out its own digital world for its users."Metaverse events are becoming an industry-standard in the crypto space. Allowing brands, artists, and creators to showcase their work and product to millions of people worldwide, virtual events in the metaverse will only become more popular," the report said. Crypto asset manager Grayscale has said the metaverse is a $1 trillion opportunity. This week, Sandbox saw the sale of the most expensive piece of virtual land ever, after Republic Realm spent $4.3 million on a plot.Decentraland is gearing up to host a 2022 edition of this October's virtual festival that drew in 50,000 attendees who claimed a total of 11,204 NFTs. Sports clubs are diving in too. English soccer club Manchester City has teamed up with Sony to build its own virtual world, according to a statement Tuesday. And German sportswear maker Adidas said recently it had teamed up with crypto exchange Coinbase after announcing it would expand its activities in the metaverse.Gemini exchange founders Tyler and Cameron Winklevoss said they had purchased a plot of virtual land and raised $400 million in a funding round recently which they will use to help build their own metaverse. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 2nd, 2021

Pets Are Increasingly Influencing their Owners’ Housing Decisions

(TNS)—Hannah Wood, a work-from-home product manager for a healthcare company, would like to relocate to Philadelphia to live near her mother, but she’s struggling to find a place that will welcome her roommate, Lea, a 55-pound, mixed-breed dog. Wood initially had hoped to buy a house, but the current competitive market has her searching for […] The post Pets Are Increasingly Influencing their Owners’ Housing Decisions appeared first on RISMedia. (TNS)—Hannah Wood, a work-from-home product manager for a healthcare company, would like to relocate to Philadelphia to live near her mother, but she’s struggling to find a place that will welcome her roommate, Lea, a 55-pound, mixed-breed dog. Wood initially had hoped to buy a house, but the current competitive market has her searching for a rental, and landlords often limit the size and breed of dog. “Many only accept dogs up to 15 or 20 pounds, which excludes like 60% of all breeds,” she said. “It’s been a struggle to find a place without a lot of restrictions.” Pets are increasingly affecting their owners’ real estate choices, whether it’s the neighborhood they choose, the home they buy or rent, or how they arrange and decorate their space. A 2020 realtor.com® survey found that a majority of pet owners consider their animals’ needs before making a home purchase. Of the 2,000 survey participants, 61% were dog owners, 45% owned cats, 12% fish and 9% birds. About half of U.S. households have pets, according to the Census Bureau, and in 2020, owners spent on average $1,201 on dogs and $687 on cats, according to Statistica, a provider of consumer and market data. Pet owners tend to buy larger homes with more bedrooms, Zillow reported in October. Buyers with at least one pet are more likely  to choose a home larger than 3,000 square feet, and about a third  purchased a home with four bedrooms or more, compared to a quarter of buyers without pets. “For me and many people in my generation, (my dog) is my child, where I spend my time and money,” said Wood, who’s 42 and single. “It’s time for real estate companies to understand it’s how we live.” What Pet Owners Want An ideal home for Wood—who would like to move to Philadelphia by January—would be a mid-rise or smaller building with adjacent green space, a nearby park and a space to wash Lea after a muddy walk. Wood has lived in several very pet-friendly cities, including Portland, Oregon, where dog biscuits were available at her building’s front desk, and her current home, Saratoga Springs, New York, where “dogs are allowed everywhere—restaurants, the post office.” “I literally just saw someone walking a cat in a baby carriage,” she said. Philadelphia, with 23.62% of rentals classified as pet-friendly, ranked 28th in a “Lets for Pets” list of 50 U.S. cities compiled in October by All About Cats, which offers expertise on feline behavior and health. New York was first with 66.45% welcoming rentals. In West Philadelphia, competition is fierce in old Victorians for ground level apartments with easy access to fenced-in yards, said Lindsay Johnston with Common Ground REALTORS® in University City, where “a dog is very much a part of the social life.” He sees the same dog owners walking the same loop every day, morning and evening. They also take advantage of the park and designated dog parks nearby. Before buying or renting, pet owners should check for homeowner association or building restrictions on number or type of pets and whether they need to be spayed or neutered. Beyond enough space for their pet, the National Association of REALTORS® says owners often seek a fenced yard; sidewalks; easy-to-clean, durable flooring; a mud room/wash area; a dog door; an animal pool/outdoor water feature; or a cat litter closet. “If you have the option,” Johnston said, “get your pet after you buy or rent, in case you don’t get the square footage or other things you want.” When Mindy Rhodes and John Braxton were house-hunting six years ago, they wanted a quiet, old house with enough acreage for her horse, Spike, whom she had been boarding. She thought the search would take several years, but they spotted an internet listing for a property in suburban West Chester, Pennsylvania, with “just enough land to bring my horse home.” Because horses are happier in a herd, she soon acquired two donkeys, Mama and Mia, to keep Spike company. She also has three dogs, two cats, two rabbits, four chickens in a coop, and a duck named Lucy, who wears a diaper when she comes inside (”I don’t know whether I’d do that again,” Rhodes said). She deemed cats the easiest, because they’re resilient and adaptable to their surroundings. “People train dogs,” Rhodes said. “Cats train people.” Rhodes’ animals enjoy having the run of her three acres, as well as a spot by the fire, she said. “It’s a luxury not to have to walk the dogs.” Pet-Friendly Design Having a dedicated space for pets is a major consideration when organizing a home, according to almost a quarter of the 1,000 adults surveyed last summer by the residential mortgage division of Ally Bank. “For us, dogs are family, so it was just a natural part of the design process to consider them,” said Kirstin McGowan, of Mechanicsville, Pennsylvania, who has two yellow Labrador retrievers, Milly and Bentley. During a recent remodel, she and her husband, Sean, added a built-in shelf for the dogs’ bowls “because there’s nothing more annoying than tripping over them in a tight kitchen,” she said. The McGowans put in hardwood floors and use washable rugs for easier cleaning and have multiple dog beds indoors and out. Because the dogs tend to dig, the couple built a stone patio and limited landscaping to trees in their fenced backyard. They’re in the process of adding a mudroom/laundry room and considering building in dog crates there. And they recently upgraded to a king-size bed for more room to cuddle in the morning with their two young daughters, Charlotte and Eleanor, and the dogs. What Sellers Should Do Certain pet-friendly features can contribute to a higher sale price or faster-than-expected sale, according to a Zillow report on 2020 home sales. Homes that advertise a doghouse in their listing description can sell for 3% more than expected, Zillow found, while homes advertising a fenced backyard or a dog run can sell up to five days faster. When it comes to in-person showings, however, sellers should erase any sign of a pet, especially cat odors, Johnston advised. “You’ll lose 99% of the market if you can’t remove the smell.” Sellers should repair anything damaged by pets, have the home professionally cleaned, replace carpeting and/or refinish floors. During showings, they should stow all toys, bowls and beds, and remove the pet from the house. People and Pets on the Move The coronavirus pandemic has fueled a surge of moving as Americans took advantage of remote work and record-low mortgage rates. At the same time, pet purchase and adoption rose as people were spending more time at home. In 2021, nearly three-quarters of homebuyers reported having at least one pet, up nine percentage points from the previous year, according to a Zillow housing trends report. Pet ownership among renters rose to 57% from 51% in 2020. Realtors and pet owners agree that prospective homebuyers and renters should do their homework and know their pets. “The size of the dog doesn’t necessarily tell you how much space they need,” said Pennsylvania homeowner Janet Cusack, who has a St. Bernard and a Cavalier King Charles Spaniel. The larger dog, Baloo, “just wants to be with people,” she said, although he does enjoy a walk in the woods. Rhodes carefully researched the type and size of pasture and best companions for her horse and spent six months getting acquainted with her property before moving him in. Wood learned from a stay at a pet-friendly hotel in Philadelphia that city sounds like traffic, sirens and fire alarms terrify her dog. Instead of setting restrictions on size or species, Wood said, she thinks landlords should require owners to demonstrate their pets have been trained to coexist peacefully with people and other pets. “Do pet interviews,” she said. “Even a Chihuahua can be mean.” ©2021 The Philadelphia Inquirer, LLC Distributed by Tribune Content Agency, LLC The post Pets Are Increasingly Influencing their Owners’ Housing Decisions appeared first on RISMedia......»»

Category: realestateSource: rismediaNov 29th, 2021

Sotheby’s and Realogy Partner on Acquisition of Concierge Auctions

Sotheby’s and Realogy Holdings Corp. recently acquired Concierge Auctions, a global luxury real estate auction marketplace. Under the terms of the agreement, Sotheby’s and Realogy will take a joint 80% ownership stake in Concierge Auctions, while company co-founders Chad Roffers and Laura Brady will remain president and chief executive officer, respectively. Concierge Auctions will operate […] The post Sotheby’s and Realogy Partner on Acquisition of Concierge Auctions appeared first on RISMedia. Sotheby’s and Realogy Holdings Corp. recently acquired Concierge Auctions, a global luxury real estate auction marketplace. Under the terms of the agreement, Sotheby’s and Realogy will take a joint 80% ownership stake in Concierge Auctions, while company co-founders Chad Roffers and Laura Brady will remain president and chief executive officer, respectively. Concierge Auctions will operate independently, continuing to partner with real estate agents affiliated with many of the industry’s leading brokerages to host luxury online auctions for clients. A newly formed Board of Managers will be made up of Sotheby’s and Realogy executives and chaired by Philip White, CEO and president of Sotheby’s International Realty, a Realogy brand. Financial terms were not disclosed. “Realogy is the market leader in luxury real estate, an area in which we continue to strategically invest to drive future growth,” said Ryan Schneider, Realogy chief executive officer and president, in a statement. “As demand for luxury real estate auctions increases, we believe Realogy and Sotheby’s can jointly bring powerful data and network scale to Concierge Auctions, a valuable tool for real estate agents helping clients expertly navigate the global high-end property market. Laura and Chad have expanded how agents and clients can sell and buy a home, and I look forward to what we can now achieve, together.” “Since 2004, Realogy has had a very successful relationship with Sotheby’s as the operator and steward of the Sotheby’s International Realty brand,” said Philip White, Sotheby’s International Realty CEO and president and newly appointed chairman of Concierge Auctions, in a statement. “Just as the power of Sotheby’s and Realogy has fueled the tremendous growth of Sotheby’s International Realty, we are excited for what this new partnership can bring to Concierge Auctions as Laura and Chad grow their lead in the luxury real estate auctions sector while keeping the agent at the center.” “I look forward to deepening our long-standing and successful partnership with Realogy as we work with Concierge Auctions to develop the luxury real estate auction market further,” said Charles F. Stewart, Sotheby’s CEO, in a statement. “As leaders in digital innovation and fine art and luxury auctions, this partnership is another exciting way to bring Sotheby’s expertise for the benefit of our current and future clients.” Concierge Auctions, founded in 2008, creates predictability and liquidity for sellers in an accelerated time frame and is designed to work with real estate agents as trusted advisors, not disintermediate them, stated the companies, adding that co-founders Roffers and Brady have both served as licensed real estate agents, and the company has never auctioned a property without working in partnership with a local real estate broker. In 2020, Concierge Auctions reported processing more than $3.4 billion in competitive bids with an average home sell price of $3.5 million. This year, the company broke its fourth world record for highest price of a single-family home ever sold at auction with the sale of Villa Firenze, listed for sale at $165 million. Prior world records have included the sale of Villa Passalacqua in Lake Como, Italy (listed for €100 million); Playa Vista Isle in Hillsboro Beach, Florida (listed for $159 million); and Walnut Place in Dallas, Texas (listed for $48.9  million). “We founded Concierge Auctions with a vision to enhance the way luxury properties are bought and sold,” said Brady in a statement. “Thirteen years and billions in sales later, we are the largest auction marketplace for high-end homes, have one of the most comprehensive databases in the industry, and are active in 30 countries and 44 U.S. states. We couldn’t imagine better partners than Sotheby’s and Realogy for our next phase of growth.” “This joint partnership presents a unique opportunity to benefit from two of the most established and renowned companies in the industries that we serve—real estate and auction—and to be part of an even greater vision,” said Roffers. “We look forward to helping more clients than ever before sell their one-of-a-kind real estate assets to the world’s most capable buyers, with speed and certainty.” For more information, please visit www.realogy.com. The post Sotheby’s and Realogy Partner on Acquisition of Concierge Auctions appeared first on RISMedia......»»

Category: realestateSource: rismediaNov 24th, 2021

Futures Flat Amid Fresh Inflation Jitters; Yen Tumbles To 5 Year Low

Futures Flat Amid Fresh Inflation Jitters; Yen Tumbles To 5 Year Low Price action has been generally uninspiring, with US index futures and European stocks flat after UK inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates, while Asian markets fell as investors fretted over early rate hikes by the Federal Reserve after strong retail earnings dented the stagflation narrative.  Ten-year Treasury yields held around 1.63% and the dollar was steady. Cryptocurrencies suffered a broad selloff, while oil extended losses amid talk of a coordinated U.S.-China release of reserves to tame prices. Gold rose. At 7:30 a.m. ET, Dow e-minis were down 14 points, or 0.04%. S&P 500 e-minis were up 1.25 points, or 0.0.3% and Nasdaq 100 e-minis were up 24.75 points, or 0.15%, boosted by gains in Tesla and other electric car-makers amid growing demand for EV makers. Target Corp was the latest big-name retailer to report positive results, as it raised its annual forecasts and beat profit expectations, citing an early start in holiday shopping. But similar to Walmart, shares of the retailer fell 3.1% in premarket trade as its third-quarter margins were hit by supply-chain issues. Lowe's rose 2.2% after the home improvement chain raised its full-year sales forecast on higher demand from builders and contractors, as well as a strong U.S. housing market. Wall Street indexes had ended higher on Tuesday after data showed retail sales jumped in October, and Walmart and Home Depot both flagged strength in consumer demand going into the holiday season. While the readings showed that a rise in inflation has not stifled economic growth so far, any further gains in prices could potentially dampen an economic recovery. Indeed, even as global stocks trade near all-time highs, worries are rising that growth could be derailed by inflation, the resurgent virus, or both. The question remains whether the jump in costs will prove transitory or become a bigger challenge that forces a sharper monetary policy response, roiling both shares and bonds. The market now sees a 19% probability of a rate hike by the Fed in their March 2022 meet, up from 11.8% probability last month. “The markets are still driven by uncertainty regarding how transitory inflation is,” according to Sebastien Galy, senior macro strategist at Nordea Investment Funds. “The market is assessing the situation about inflation -- what is in the price and what is not.” On the earnings front, Baidu reported a 13% jump in sales after growth in newer businesses such as the cloud helped offset a slowdown in its main internet advertising division. Nvidia and Cisco Systems are scheduled to report results later today In premarket trading, Tesla inexplicably rose as much as 2.4% in U.S. pre-market trading, extending a bounce from the previous session after CEO Elon Musk disclosed even more stock sales. Peers Rivian and Lucid added 0.9% and 8.8%, respectively. Here are some of the biggest U.S. movers today: Electric-vehicle makers Rivian Automotive (RIVN US), Lucid (LCID US) and Canoo (GOEV US) all move higher in U.S. premarket trading on heavy volumes, extending their gains and after Rivian and Lucid notched up milestones in their market values on Tuesday. The gains for Rivian on Tuesday saw its market capitalization surpass Germany’s Volkswagen, while Lucid’s market value leapfrogged General Motors and Ford. Tesla (TSLA US) shares rise 1.3% in U.S. premarket trading, extending the bounce the EV maker saw in the prior session and after CEO Elon Musk disclosed more share sales. Visa (V US) shares slip in U.S. premarket trading after Amazon.com said it will stop accepting payments using Visa credit cards issued in the U.K. starting next year. Boeing (BA US) gains 1.9% in premarket trading after Wells Fargo upgrades the airplane maker to overweight from equal weight in a note, saying the risk-reward is now skewed positive. Citi initiates a pair trade of overweight Plug Power (PLUG US) and underweight Ballard Power Systems (BLDP US), downgrading the latter to neutral on weak sales in China and likely delay in meaningful fuel cell adoption. Ballard Power falls 3.4% in premarket trading. La-Z-Boy (LZB US) climbed 7% in postmarket trading after it reported adjusted earnings per share for the fiscal second quarter of 2022 that beat the average analyst estimate and boosted its quarterly dividend. StoneCo’s (STNE US) shares fall as much as 9% in postmarket trading Tuesday after the fintech reported a weaker-than-expected adjusted results for the third quarter. Chembio Diagnostics (CEMI US) rose 11% in extended trading after saying it submitted an Emergency Use Authorization application to the U.S FDA for its new DPP SARS-CoV-2 Antigen test. European stocks treaded water with U.S. equity futures as the worst outbreak of Covid infections since the start of the pandemic held the rally in check. In the U.K., inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates, pressing on the FTSE 100 to lag peer markets. Asian stocks fell, halting a four-day rally, as investors factored in higher Treasury yields and the outlook for U.S. monetary policy to assess whether the region’s recent gains were excessive.   The MSCI Asia Pacific Index slid as much as 0.7%, pulling back from a two-month high reached Tuesday. The banking sector contributed the most to Wednesday’s drop as the Commonwealth Bank of Australia reported cash earnings that were below some estimates. South Korea led the region’s decline, with the Kospi falling more than 1%, weighed down by bio-pharmaceutical firms. Asia’s stocks are taking a breather from a run-up driven by expectations for earnings to improve and economies to recover from quarters of pandemic-induced weakness. The benchmark is coming off a two-week gain of 1.5%.  “Shares are correcting recent gains, although I’d say it’s not much of a correction as the drop is mild,” said Tomo Kinoshita, a global market strategist at Invesco Asset Management in Tokyo. “The relatively solid economic performances in the U.S. and Europe signal positive trends for Asian exporters,” which will support equities over the long term, he said.  U.S. stocks climbed after data showed the biggest increase in U.S. retail sales since March, while results from Walmart Inc. and Home Depot Inc. showed robust demand. The 10-year Treasury yield hit 1.64%, gaining for a fourth day. Japanese equities fell, cooling off after a four-day advance despite the yen’s drop to the lowest level against the dollar since 2017. Service providers and retailers were the biggest drags on the Topix, which dropped 0.6%. Recruit and Fast Retailing were the largest contributors to a 0.4% loss in the Nikkei 225. The yen slightly extended its decline after tumbling 0.6% against the greenback on Tuesday. The value of Japan’s exports gained 9.4% in October, the slowest pace in eight months, adding to signs that global supply constraints are still weighing on the economy. Indian stocks fell, led by banking and energy companies, as worries over economic recovery and inflation hurt investors’ sentiment. The S&P BSE Sensex fell 0.5% to 60,008.33 in Mumbai, while the NSE Nifty 50 Index declined by 0.6%. The benchmark index has now dropped for five of seven sessions and is off 3.7% its record level reached on Oct. 18. All but five of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by a gauge of real estate companies.  Fitch Ratings kept a negative outlook on India’s sovereign rating, already at the lowest investment grade, citing concerns over public debt that’s the highest among similar rated emerging-market sovereigns.  While high-frequency data suggests India’s economic recovery is taking hold, central bank Governor Shaktikanta Das said at an event on Tuesday that the recovery is uneven. “Feeble global cues are weighing on sentiment,” Ajit Mishra, a strategist with Religare Broking, said in a note. He expects indexes to slide further but the pace of decline to be gradual with Nifty having support at 17,700-17,800 level. Shares of Paytm are scheduled to start trading on Thursday after the digital payment company raised $2.5b in India’s biggest initial share sale. Local markets will be closed on Friday for a holiday.  Reliance Industries contributed the most to Sensex’s decline, decreasing 2.1%. The index heavyweight has lost 5% this week, headed for the biggest weekly drop since June 27. In rates, Treasuries were steady with yields slightly richer across the curve and gilts mildly outperforming after paring early losses. Treasury yields except 20-year are richer by less than 1bp across curve with 30-year sector outperforming slightly; 10-year yields around 1.63% after rising as high as 1.647% in early Asia session. Focal points for U.S. session include 20-year bond auction -- against backdrop of Fed decision to not taper in the sector, made after last week’s poorly bid 30-year bond sale, and seven Fed speakers scheduled. The $23BN 20-year new issue at 1pm ET is first at that size after cuts announced this month; WI yield at 2.06% is 4bp richer than last month’s, which tailed the WI by 2.5bp. In Europe, gilts richen slightly across the short end, short-sterling futures fade an open drop after a hot inflation print. Peripheral spreads are marginally wider to core. In FX, the Bloomberg Dollar Spot Index drifted after earlier rising to its highest level in over a year, spurred by strong U.S. retail sales and factory output data Tuesday; the greenback traded mixed versus its Group-of-10 peers though most currencies were consolidating recent losses against the greenback. The pound reached its strongest level against the euro in nearly nine months after U.K. inflation climbed faster than expected to the highest in a decade, heaping pressure on the Bank of England to raise interest rates. The Australian dollar hit a six-week low as third quarter wage data missed the central bank’s target, prompting offshore funds to sell the currency; the three-year yield fell back under 1%. The yen declined to its lowest level in more than four years as growing wagers of quicker policy normalization in the U.S. contrasted with the outlook in Japan, where interest rates are expected to be kept low. Super-long bonds fell. Volatility broke through the recent calm in currency markets, where the cost of hedging against volatility in the euro against the dollar over the next month climbed the most since the pandemic struck in March 2020. The move comes as traders bake in bets on faster rate hikes to curb inflation. The Turkish lira extended the week’s downward move, weakening another 2% against the dollar after comments from Erdogan sent the USDTRY hitting record highs of 10.5619 The Chinese yuan advanced to its highest level since 2015 against a basket of trading partners’ currencies following the dollar’s surge. Bloomberg’s replica of the CFETS basket index rises 0.3% to 101.9571, closer to the level that triggered a shock devaluation by the PBOC in 2015, testing the central bank’s tolerance before stepping in with intervention. In commodities, crude futures dropped as the market weighs the potential for a join U.S.-China stockpile-reserve release. WTI is down more than 1%, back on a $79-handle; Brent slips back toward $81.50, trading near the middle of this week’s range. Most base metals are under pressure with LME copper down as much as 1.4%. Spot gold adds $10 near $1,860/oz. European gas surged to the highest level in a month as delays to a controversial new pipeline from Russia stoked fears of a supply shortage with winter setting in. Cryptocurrencies remained lower after a tumble, with Bitcoin steadying around the $60,000 level. Looking at the day ahead now, and data releases include October data on UK and Canadian CPI, as well as US housing starts and building permits. Central bank speakers include ECB President Lagarde and the ECB’s Schnabel, the Fed’s Williams, Bowman, Mester, Waller, Daly, Evans and Bostic, and the BoE’s Mann. Finally, the ECB will be publishing their Financial Stability Review, and earnings releases today include Nvidia, Cisco, Lowe’s and Target. Market Snapshot S&P 500 futures little changed at 4,696.00 STOXX Europe 600 up 0.1% to 489.79 MXAP down 0.5% to 200.06 MXAPJ down 0.4% to 656.01 Nikkei down 0.4% to 29,688.33 Topix down 0.6% to 2,038.34 Hang Seng Index down 0.2% to 25,650.08 Shanghai Composite up 0.4% to 3,537.37 Sensex down 0.4% to 60,064.33 Australia S&P/ASX 200 down 0.7% to 7,369.93 Kospi down 1.2% to 2,962.42 Brent Futures down 0.8% to $81.79/bbl Gold spot up 0.5% to $1,859.93 U.S. Dollar Index little changed at 95.95 German 10Y yield little changed at -0.25% Euro little changed at $1.1310 Top Overnight News from Bloomberg Bond traders are bracing for a key test Wednesday as the Treasury looks to sell its first long-dated debt since inflation worries spooked buyers at last week’s poorly received 30-year auction Increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to euro-area stability, the European Central Bank warned Germany is giving investors a rare chance to grab some of Europe’s safest and positive-yielding debt. The country will sell one billion euros ($1.13 billion) of its longest-dated debt at 10:30 a.m. London on Wednesday. The country’s 30-year notes are currently trading with a yield 0.09%. It’s a paltry rate, but probably the last time for a while that Germany will offer the maturity ECB Governing Council member Olli Rehn says euro- area inflation is accelerating due to increasing demand pushing up the price of energy and supply bottlenecks, according to interview in Finland’s Talouselama magazine The yuan’s advance to a six-year high versus China’s trading partners this week has investors asking how far the central bank will let the rally run. The yuan extended gains on Wednesday against a basket of 24 currencies of the nation’s trading partners, bringing it close to the level that triggered a shock devaluation by the People’s Bank of China in 2015 Turkish President Recep Tayyip Erdogan vowed to continue fighting for lower interest rates, sending a clear signal to investors a day before the central bank sets its policy. The lira weakened A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed and struggled to sustain the positive lead from the US where better than expected Industrial Production and Retail Sales data spurred the major indices, in which the S&P 500 reclaimed the 4,700 level and briefly approached to within four points of its all-time high. ASX 200 (-0.7%) was led lower by underperformance in the top-weighted financials sector amid weakness in the largest lender CBA despite a 20% jump in quarterly cash profit, as operating income was steady and it noted that loan margins were significantly lower. Mining related stocks also lagged in Australia due to the recent declines in global commodity prices amid the stronger USD and higher US yields. Nikkei 225 (-0.4%) retraced its opening gains after disappointing Machinery Orders and miss on Exports which grew at the slowest pace in eight months, while the KOSPI (-1.2%) suffered due to virus concerns with daily infections at the second highest on record for South Korea. Hang Seng (-0.3%) and Shanghai Comp. (+0.4%) were varied with Hong Kong dragged lower by tech stocks including NetEase post-earnings, while the mainland was choppy as markets continued to digest the recent Biden-Xi meeting that was described by President Biden as a 'good meeting' and in which they discussed the need for nuclear “strategic stability” talks. US and China also agreed to provide access to each other’s journalists, although there were also comments from Commerce Secretary Raimondo that China is not living up to phase 1 trade commitments and it was reported that China is to speed up plans to replace US and foreign tech. Finally, 10yr JGBs were flat with demand hampered following the declines in T-notes, although downside was stemmed amid the flimsy sentiment across Asia-Pac trade and with the BoJ also in the market for JPY 925bln of JGBs mostly concentrated in 1-3yr and 5-10yr maturities. Top Asian News Asia Stocks Set to Snap Four-Day Advance as Kospi Leads Decline Gold Rises as Fed Officials Feed Debate on Inflation Response Deadly Toxic Air Chokes Delhi as India Clings to Coal Power PBOC May Start Raising Rates by 10bps Every Quarter in 2022: TD European equities (Stoxx 600 +0.1%) trade with little in the way of firm direction as the Stoxx 600 lingers around its ATH printed during yesterday’s session. The handover from the APAC session was mostly a softer one after the region failed to sustain the positive lead from the US which saw the S&P 500 approach within four points of its all-time high. Stateside, US futures are just as uninspiring as their European counterparts (ES flat) ahead of another busy day of Fed speak and pre-market earnings from retail names Target (TGT) and TJX Companies (TJK) with Cisco (CSCO) and NVIDIA (NVDA) due to report after-hours. Markets still await a decision on the next Fed Chair which President Biden said will come in around four days yesterday; as it stands, PredictIt assigns a circa 65% chance of Powell winning the renomination. Sectors in Europe have a marginal positive tilt with Media names outperforming peers alongside gains in Vivendi (+1.0%) after Italian prosecutors asked a judge to drop a case against Vivendi's owner and CEO for alleged market manipulation. Travel & Leisure names are the notable underperformer amid losses in sector heavyweight Evolution Gaming (-9.6%) who account for 14% of the sector with the Co. accused of taking illegal wagers. In terms of individual movers, Siemens Healthineers (+4.6%) is one of the best performers in the region after the Co. noted that revenues are on track to grow 6-8% between 2023 and 2025. UK Banking names such as Lloyds (+1.3%) and Natwest (+1.1%) have benefitted from the favourable rate environment in the UK with today’s inflation data further cementing expectations for a move in rates by the BoE next month. Conversely, this acted as a drag on the UK homebuilder sector at the open before moves were eventually scaled back. SSE (-4.5%) underperforms after announcing a GBP 12.5bln investment to accelerate its net zero ambitions. Top European News Epstein’s Paris Apartment Listed for $14 Million, Telegraph Says Volkswagen Shares Stall as Analysts Doubt Its EV Street Cred Germany to Move Ahead With Tighter Covid Curbs Amid Record Cases U.K. Urges EU Not to Start Trade War If Brexit Deal Suspended In FX, the Greenback extended Tuesday’s post-US retail sales and ip gains to set new 2021/multi-year highs overnight when the index hit 96.266 and several Dollar pairs probed or crossed psychological round numbers. However, the latest bull run has abated somewhat amidst some recovery gains in certain rival currencies and a general bout of consolidation ahead of housing data, another raft of Fed speakers and Usd 23 bn 20 year supply that will be of note after a bad debut for new long londs last week, not to mention tepid receptions for 3 and 10 year offerings prior to that. NZD/AUD - A marked change in the tide down under as the Aud/Nzd cross reverses sharply from around 1.0450 to sub-1.0400 and gives the Kiwi enough impetus to regain 0.7000+ status vs its US peer with extra incentive provided by NZ PM Ardern announcing that the entire country is expected to end lockdown and move to a new traffic light system after November 29, while Auckland’s domestic borders will reopen from December 15 for the fully vaccinated and those with negative COVID-19 tests. Conversely, the Aussie is struggling to stay within sight of 0.7300 against its US counterpart in wake of broadly in line Q3 wage prices that leaves the y/y rate still some way short of the 3% pace deemed necessary to lift overall inflation by the RBA. GBP/CAD - Sterling is striving to buck the overall trend with help from more forecast-topping UK data that should give the BoE a green light for lifting the Bank Rate in December, as headline CPI came in at 4.2% y/y, core at 3.4% and PPI prints indicate more price pressure building in the pipeline. Cable printed a minor new w-t-d peak circa 1.3474 in response before waning and Eur/Gbp fell below the prior y-t-d low and 0.8400, but is now back above awaiting more news on the Brexit front and a speech from one of the less hawkish MPC members, Mann. Elsewhere, the Loonie is hovering around 1.2550 vs the Greenback and looking toward Canadian inflation for some fundamental direction as oil prices continue to fluctuate near recent lows, but Usd/Cad may also be attracted to decent option expiry interest between 1.2540-55 in 1.12 bn. CHF/EUR/JPY - All straddling or adjacent to round numbers against the Dollar, but the Franc lagging below 0.9300 on yield differentials, while the Euro has recovered from a fresh 2021 trough under 1.1300 and Fib support at 1.1290 to fill a gap if nothing else, and the Yen just defended 115.00 irrespective of disappointing Japanese machinery orders and internals within the latest trade balance. In commodities, WTI and Brent benchmarks are pressured this morning but the magnitude of the action, circa USD 0.70/bbl at the time of writing, is less pronounced when compared to the range of the week thus far and particularly against last week’s moves. Newsflow has been slim and the downside action has arisen without fresh catalysts or drivers; note, participants are cognisant of influence perhaps being exerted by today’s WTI Dec’21 option expiry. To briefly surmise the morning’s action, Vitol executives provided bullish commentary citing limited capacity to deal with shocks and on that theme, there were reports of an explosion at an oil pipeline in Southern Iran, said to be due to aging equipment. This, alongside reports that Belarus is restricting oil flows to Poland for three-days for maintenance purposes, have not steadied the benchmarks. Elsewhere, last night’s private inventories were mixed but bullish overall, with the headline a smaller than expected build and gasoline a larger than expected draw. On gasoline, some desks posit that this draw may serve to increase pressure for a US SPR release, and as such look to today’s EIA release which is expected to print a gasoline draw of 0.575M. Moving to metals, spot gold and silver are firmer this morning but, in a similar vein to crude, remain well within familiar ranges as specific catalysts have been light and initial USD action has largely fizzled out to the index pivoting the U/C mark. More broadly, base metals are pressured as inventories of iron ore are at their highest for almost three years in China as demand drops, with this having a knock-on impact on coking coal, for instance. US Event Calendar 7am: Nov. MBA Mortgage Applications, prior 5.5% 8:30am: Oct. Building Permits, est. 1.63m, prior 1.59m, revised 1.59m 8:30am: Oct. Building Permits MoM, est. 2.8%, prior -7.7%, revised -7.8% 8:30am: Oct. Housing Starts MoM, est. 1.5%, prior -1.6%; Housing Starts, est. 1.58m, prior 1.56m DB's Henry Allen concludes the overnight wrap Even as inflation jitters remained on investors’ radars, that didn’t prevent risk assets pushing onto fresh highs yesterday, as investor sentiment was bolstered by strong economic data and decent corporate earnings releases. In fact by the close of trade, the S&P 500 (+0.39%) had closed just -0.02% beneath its all-time closing record, in a move that also brought the index’s YTD gains back above +25%, whilst Europe’s STOXX 600 (+0.17%) hit an all-time high as it posted its 16th gain in the last 18 sessions. Starting with the data, we had a number of positive US releases for October out yesterday, which echoed the strength we’d seen in some of the other prints, including the ISMs and nonfarm payrolls that had both surprised to the upside in the last couple of weeks. Headline retail sales posted their biggest gain since March, with a +1.7% advance (vs. +1.4% expected), whilst the measure excluding autos and gas stations was also up by a stronger-than-expected +1.4% (vs. +0.7% expected). Then we had the industrial production numbers, which showed a +1.6% gain in October (vs. +0.9% expected), though it’s worth noting around half of that increase was a recovery from Hurricane Ida’s effects. And that came against the backdrop of solid earnings results from Walmart and Home Depot as well earlier in the session. They saw Walmart raise their full-year guidance for adjusted EPS to around $6.40, up from $6.20-$6.35 previously, whilst Home Depot reported comparable sales that were up +6.1%. To be honest it was difficult to find much in the way of weak data, with the NAHB’s housing market index for November up to a 6-month high of 83 (vs. 80 expected). Amidst the optimism however, concerns about near-term (and longer-term) inflation pressures haven’t gone away just yet, and the 5yr US breakeven rose again, increasing +1.1bps yesterday to an all-time high of 3.21%. Bear in mind that just 12 days ago (before the upside CPI release) that measure stood at 2.89%, so we’ve seen a pretty sizeable shift in investor expectations in a very short space of time as they’ve reacted to the prospect inflation won’t be as transitory as previously believed. The increase was matched by a +1.3bps increase in nominal 5yr yields to a post-pandemic high of 1.27%. The 10yr yield also saw a slight gain of +1.9bps to close at 1.63%, and this morning is up a further +0.7bps. Against this backdrop, the dollar index (+0.58%) strengthened further to its highest level in over a year yesterday, though the reverse picture has seen the euro weaken beneath $1.13 this morning for the first time since July 2020. Speaking of inflation, there were fresh pressures on European natural gas prices yesterday, which surged by +17.81% to €94.19 per megawatt-hour. That’s their biggest move higher in over a month, and follows the decision from the German energy regulator to temporarily suspend the certification of the Nord Stream 2 pipeline, adding further short-term uncertainty to the winter outlook. UK natural gas futures (+17.15%) witnessed a similar surge, and their US counterparts were also up +3.19%. Elsewhere in the energy complex, Brent crude (+0.46%) oil prices moved higher as well. Overnight in Asia, equity indices are trading lower this morning including the CSI (-0.05%), the Nikkei (-0.45%) and the Hang Seng (-0.55%), though the Shanghai Composite (+0.19%) has posted a modest advance. There were also some constructive discussions in the aftermath of the Biden-Xi summit the previous day, with US national security adviser Jake Sullivan saying that the two had spoken about the need for nuclear “strategic stability” talks, which could offer the prospect of a further easing in tensions if they do come about. Looking forward, futures are indicating a muted start in US & Europe later on, with those on the S&P 500 (-0.03%) and the DAX (-0.15%) pointing to modest declines. Elsewhere, markets are still awaiting some concrete news on who might be nominated as the next Fed Chair, though President Biden did say to reporters that an announcement would be coming “in about four days”, so investors will be paying close attention to any announcements. Senator Sherrod Brown, who chairs the Senate Banking Committee, who earlier in the week noted a pick was imminent, followed up by proclaiming he was “certain” that the Senate would confirm either of Chair Powell or Governor Brainard. Staying on the US, as Congress waits for the Congressional Budget Office’s score on Biden’s social and climate spending bill, moderate Democratic Senator Manchin noted continued uncertainty about the bill’s anti-inflationary bona fides. Elsewhere, the impending debt ceiling has worked its way back into the spotlight, with Treasury Secretary Yellen saying that she’ll soon provide updates on how much cash the Treasury will have to pay the government’s bills. The market has started to price in at least some risk, with yields on Treasury bills maturing in mid-to-late December higher than neighbouring maturities, and the Washington Post’s Tony Romm tweeted yesterday that the new deadline that the Treasury was expected to share soon was on December 15. Turning to Germany, coalition negotiations are continuing between the centre-left SPD, the Greens and the liberal FDP, and yesterday saw SPD general secretary Lars Klingbeil state that “The goal is very clear, to have a completed coalition agreement in the next week”. We’ve heard similar comments from the Greens’ general secretary, Michael Kellner, who also said that “We aim to achieve a coalition agreement next week". One issue they’ll have to grapple with is the resurgence in Covid-19 cases there, and Chancellor Merkel and Vice Chancellor Scholz (who would become chancellor if agreement on a traffic-light coalition is reached) are set to have a video conference with regional leaders tomorrow on the issue. Staying on the pandemic, it’s been reported by the Washington Post that the Biden administration will announce this week that it plans to purchase 10 million doses of Pfizer’s Covid pill. The company will submit data for the pill to regulators before Thanksgiving. It’s not just the US that will benefit from Pfizer’s pill however, as the pharmaceutical company will also license generic, inexpensive versions of the pill to low- and middle-income countries, which should be a global boost in the fight against the virus. Looking at yesterday’s other data, the main release came from the UK employment numbers, which showed that the number of payrolled employees rose by +160k in October, whilst the unemployment rate in the three months to September fell to 4.3% (vs. 4.4% expected). That release was better than the Bank of England’s MPC had expected in their November projections, and sterling was the top-performing G10 currency yesterday (+0.06% vs. USD) as the statistics were seen strengthening the case for a December rate hike. In response to that, gilts underperformed their European counterparts, with 10yr yields up +2.7bps. That contrasted with yields on 10yr bunds (-1.4bps), OATs (-1.8bps) and BTPs (-2.6bps), which all moved lower on the day. Interestingly, that divergence between bunds and treasury yields widened further yesterday, moving up to 188bps, the widest since late-April. To the day ahead now, and data releases include October data on UK and Canadian CPI, as well as US housing starts and building permits. Central bank speakers include ECB President Lagarde and the ECB’s Schnabel, the Fed’s Williams, Bowman, Mester, Waller, Daly, Evans and Bostic, and the BoE’s Mann. Finally, the ECB will be publishing their Financial Stability Review, and earnings releases today include Nvidia, Cisco, Lowe’s and Target. Tyler Durden Wed, 11/17/2021 - 07:50.....»»

Category: dealsSource: nytNov 17th, 2021

What"s in the Cards for Realty Income"s (O) Q3 Earnings?

Realty Income's (O) Q3 results will likely reflect the benefits of having essential retail tenants in its roster and gains from accretive buyouts. Realty Income Corp.’s O third-quarter 2021 results are slated for a Nov 1 release, after the bell. The company’s quarterly results will likely display increases in both revenues and funds from operations (FFO) per share.In the last reported quarter, this monthly dividend-paying real estate investment trust (REIT) delivered an in-line performance in terms of FFO per share. Results reflected improved revenues in the quarter.Over the trailing four quarters, the company surpassed estimates on two occasions, met in the other and missed in another, the average negative surprise being 0.30%. This is depicted in the graph below:Realty Income Corporation Price and EPS Surprise Realty Income Corporation price-eps-surprise | Realty Income Corporation QuoteLet’s see how things have shaped up prior to this announcement.Factors to ConsiderPer a report from CBRE Group CBRE, the total retail sales increased 15%, year over year, in the third quarter. The third quarter marked the fourth consecutive quarter of positive retail absorption (+36.7 million square feet) and each asset class marked quarter-over-quarter gains. Also, the average asking rent improved for the third consecutive quarter, up 2.9%, year over year, to $21.31 per square feet during the third quarter.The overall retail availability rate shrunk to a 10-year low of 5.9% in the September-end quarter from the June-end quarter’s 6.2%. New construction deliveries were 6.4 million square feet in the third quarter, down 29% year on year on material cost increases and sourcing delays.Realty Income’s essential retail tenants in its roster have been the saving grace amid this long-standing health crisis. The company’s top four industries (represent more than 37% of rental revenues as of Jun 30, 2021) — convenience stores (accounting for 11.6% of revenue), grocery stores (10.5%), drug stores (7.6%), and dollar stores (7.4%) — sell essential goods and continued to thrive even during the pandemic. As such, the company has received nearly all of the contractual rent due from tenants in these industries since the pandemic started and this trend is likely to have continued in the third quarter as well. Earlier, the company noted that for July, it has collected 99.4% of contractual rent across its total portfolio, inclusive of 98.9% collected from the theater clients.Realty Income’s solid underlying real estate quality and prudent underwriting at acquisition has helped the company maintain its high occupancy levels consistently. In the third quarter too, occupancy level is likely to have been healthy. Also, with the company’s high-quality real estate portfolio leased to large, well-capitalized tenants, its cash flows are expected to have been decent.Realty Income has also emerged as a company with decent financial health through its efforts to boost balance-sheet strength. This trend is likely to have continued through the July-September period as well. The company is focused on external growth through exploring accretive acquisition opportunities. In fact, solid property acquisitions volume at decent investment spreads are likely to have aided the company’s performance.During first-half 2021, Realty Income invested $2.16 billion in 254 properties and properties under development or expansion. This included $994.8 million in the U.K. properties. Such trends are anticipated to have continued in the to-be-reported quarter.In fact, in the third quarter, the company expanded into continental Europe with a €93-million strategic sale-leaseback transaction in Spain. The move, which marked the company’s “debut strategic expansion into Spain”, comprised seven properties under long-term net lease agreements with Carrefour and its real estate subsidiary Carrefour Property.Also, in the third quarter, Realty Income inched closer to the VEREIT, Inc. merger with its shareholders and VEREIT stockholders approving all of the proposals necessary for the deal’s closure.The acquisitions of well-located commercial properties add to the company’s scale, offering a competitive edge to its industry.The Zacks Consensus Estimate for quarterly revenues is pegged at $479.1 million, suggesting an 18.4% increase from the year-ago quarter. The consensus mark for rental revenues (including reimbursable) is $474 million, up from the prior quarter’s $460 million and the year-ago period’s $402 million.Realty Income’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the third-quarter FFO per share has been revised a cent upward to 91 cents in two months’ time. It also suggests 12.4% growth, year on year.Here is what our quantitative model predicts:Our proven model does not conclusively predict a surprise in terms of FFO per share for Realty Income this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Realty Income currently carries a Zacks Rank #2 and has an Earnings ESP of 0.00%.Stocks That Warrant a LookHere are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report surprises this quarter:STORE Capital Corporation STOR, scheduled to announce quarterly numbers on Nov 4, currently has an Earnings ESP of +2.04% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.Federal Realty Investment Trust FRT, set to report earnings results on Nov 4, has an Earnings ESP of +0.49% and carries a Zacks Rank of 2, at present.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. Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative. See Zacks’ Hottest Tech IPOs 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 Federal Realty Investment Trust (FRT): Free Stock Analysis Report Realty Income Corporation (O): Free Stock Analysis Report STORE Capital Corporation (STOR): Free Stock Analysis Report CBRE Group, Inc. (CBRE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 29th, 2021

Futures Slide Dragged Lower By Amazon And Apple

Futures Slide Dragged Lower By Amazon And Apple US equity futures fell along with European and Asian stocks on Friday after tech giants Amazon and Apple and Starbucks sank in premarket trading after their earnings missed expectations, signaling a possible drop of around $180 billion in combined market value when the U.S. reopens, while dizzying bond-market gyrations sparked by surprise central bank announcements amid concerns over inflation and monetary tightening left investors scrambling to guess what happens next. A failure by Biden and the Democrats to pass their massive Build Back Better stimulus package added to the bearish sentiment. At 7:15 a.m. ET, Dow e-minis were down 45 points, or 0.12%, S&P 500 e-minis were down 22 points, or 0.5%, and Nasdaq 100 e-minis were down 138 points, or 0.88%. 10Y yields rose 3bps to 1.61%; the dollar rose while bitcoin was flat at $61,000. “Disappointment on Apple and Amazon results will likely weigh on the market sentiment,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “And there is little to improve the mood, as Joe Biden is still struggling to pass his mega spending bill, the Covid delta-plus cases are surging and the U.S. growth fell short of expectations in the latest read.” There was some relief out of China, where some Evergrande Group bondholders were said to receive an overdue interest payment shortly before the expiry of a grace period, buying more time for the debt-stricken property developer as it tries to raise cash through asset sales. Separately, Joe Biden was dealt a setback on Thursday as the House of Representatives abandoned plans for a vote on an infrastructure bill with progressives seeking more time to consider his call for a separate $1.75 trillion plan for social initiatives. Here are some of the biggest U.S. movers today: Apple slides 3.6% in U.S. premarket trading after the iPhone maker reported disappointing fourth-quarter results and warned about the impact of chip shortages, rekindling worries about the key holiday quarter Amazon slumps 5% in premarket trading after its forecast for holiday sales fell short of analysts’ estimates, signaling the pandemic’s boost to online shopping continues to fade Meta Materials up 2.9% in premarket trading after soaring as much as 32% Thursday postmarket as investors mistook it for Facebook Inc. following the Internet giant’s rebrand Western Digital shares drop 10% in premarket trading after its earnings forecast missed estimates U.S. Steel surges 8% in premarket trading as investors cheer a stock buyback and a hike in dividends Starbucks shares decline as much as 4.9% in U.S. premarket trading as the $20b in new payouts to shareholders failed to offset quarterly results that fell short of expectations B. Riley Financial gained in Thursday late trading after announcing a $4 dividend, composed of a $3 special one-time payout and a doubling of its regular quarterly dividend to $1 DaVita Inc.fell 6.7% in after-hours trading after cutting the top end of its forecast for 2021 adjusted earnings per share from continuing operations Plantronics tumbled 12% postmarket after the headset maker reported second- quarter revenue that missed its own guidance, as well as analyst estimates A10 Networks shares rose 7.5% in extended trading on Thursday after the computer networking products company said it is confident in accelerating growth beyond the previous targets of 6-8% Tailwind Two shares rose 4.9% Thursday postmarket after Terran Orbital Corp., a builder of small satellites, said it is merging with the SPAC and plans to go public in the first quarter of 2022 Focus now turns to the latest readings on U.S. consumer spending and the Federal Reserve’s preferred inflation gauge, the core PCE price index, due at 8:30 a.m. ET, for clues on the health of the economy ahead of the central bank’s policy meeting next week. “(The data) will carry rather more weight with markets. High prints may see the Fed taper trade priced into the end of the week, with stocks lower, especially above the one-two punch from Apple and Amazon,” said Jeffrey Halley, senior market analyst, Asia Pacific, OANDA. “Some actual concrete progress on the U.S. spending bills instead of empty rhetoric could give a pleasant boost to markets in the end of the week as well.” In Europe, the Stoxx 600 index extends losses to hit session low, with most sectors declining, as data showing accelerating euro-area inflation stoked concern of faster rate hikes. The Index was -0.8% as of 11:28 am in London, trims best monthly gain since March Real estate, technology sectors are worst performers, while insurance and energy outperform. BBVA jumped 6.1% in Madrid after it announced the start of a planned stock buyback and reported earnings that beat estimates. Asian equities headed for their third day of declines as disappointing results weighed on big technology stocks, and financials fell as bond-yield curves continued to flatten. The MSCI Asia Pacific Index slid as much as 0.6%, with TSMC, Tencent, AIA and Ping An among the biggest drags. The regional benchmark was set for a weekly loss of 1.1%, its worst in four weeks. The U.S. Treasury yield curve inverted between 20 and 30 years on Thursday, a sign that investors expect central-bank policy tightening to lead to slower economic growth and inflation. Meanwhile, Apple and Amazon.com slid in late trading after reporting weak sales, hurt by the global supply-chain crisis.  “U.S. stock futures and South Korean stocks fell following the drop in Apple,” said Hiroshi Namioka, chief strategist at T&D Asset Management Co. “Investor sentiment deteriorated on concerns about the impact of supply constraints on stocks beyond firms related to Apple.” Benchmarks in Hong Kong, the Philippines, India and Australia were also among the worst performers. The biggest gains were in Indonesia, China and New Zealand In rates, the 10-year US Treasury yield climbed to 1.61% before easing 1 basis point. The curve between 20- and 30-years has inverted for the first time since the U.S. government reintroduced a two-decade maturity in 2020 as inflation pressures and the prospect of interest-rate hikes are whipsawing bond markets. Treasury futures remain near lows of the day into early U.S. session, after trading heavy during Asia session, when Australian bond yields surged as the central bank’s decision not to defend its yield target on Friday fueled bets that policy makers may soon scrap the program. In Treasury futures, multiple block trades shortly after 6am ET were consistent with a curve-steepening wager. Yields were cheaper by 2bp-3bp across the curve, keeping spreads broadly within 1bp of Thursday’s close; 10-year yields around 1.605% are around 1bp richer vs bunds and gilts. Aussie 10-year yields closed 21.8bp cheaper vs U.S. amid speculation that policy makers may soon scrap the yield-curve control program. In the US, 2s10s and 5s30s curves remain flatter on week after reaching most compressed levels in months on Thursday; month-end flows may support long-end Friday, with Bloomberg Treasury index set to extend by an estimated 0.08yr in 4pm rebalancing European bonds extended Thursday’s retreat as data on Eurozone economic growth and inflation topped analysts’ estimates, reinforcing conviction that interest-rate increases are on the horizon after European Central Bank President Christine Lagarde offered only mild pushback against traders’ bets on a hike as soon as October next year. The euro slipped after jumping 0.7% on Thursday, but remains on track for a third week of gains. “In the very near term, because many global central banks are just dipping their feet into taper, not even into quantitative tightening, the aggregate liquidity could remain very supportive,” Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore, said on Bloomberg Television. “Although I think you get very much more discriminatory moves and much more selective moves in the equity markets.” In FX, the U.S. dollar ticked up from a one-month low and crude oil fluctuated and the Bloomberg Dollar Spot Index advanced as much as 0.2% as the greenback rose versus all its Group-of-10 peers apart from the Swiss franc; the Kiwi and Scandinavian currencies were the worst performers. The euro pared about half of Thursday’s advance against the dollar and European bond yields rose. Italian bonds led peripheral underperformance vs. euro-area peers and ECB policy-tightening bets gained momentum as markets continued to digest Lagarde’s lack of reassurance in her comments on Thursday. The pound inched lower in the European session. Gilts’ aggressive flattening moves in previous sessions paused as yield increases were most pronounced in the long end. Australian bond yields surged as the central bank’s decision not to defend its yield target on Friday fueled bets that policy makers may soon scrap the program. The currency hovered under its 200-day moving average. In commodities, Brent and WTI both rose about 0.3%. Spot gold flat on the day, trades just below $1,800/oz. Base metals fall on the LME, with zinc, nickel and aluminum declining the most. Ethereum finally hit a new all-time-high, rising briefly above $4400. Chinese coal futures extended a dramatic decline as China’s government said there’s further room for prices to fall, ratcheting up interventions in the market aimed at easing an energy crisis. Looking at today's data we get preliminary September industrial production, preliminary Q3 GDP from Euro Area, Germany, France and Italy, preliminary October CPI from Euro Area, France and Italy, UK September mortgage approvals, Canada August GDP, US September personal spending, personal income, October MNI Chicago PMI and final October University of Michigan consumer sentiment index are due. In corporate earnings, ExxonMobil, Chevron, AbbVie, Charter Communications, Daimler, BNP Paribas, Aon and NatWest Group are among companies reporting. Market Snapshot S&P 500 futures down 0.4% to 4,567.00 STOXX Europe 600 down 0.5% to 472.83 German 10Y yield up 3.3 bps to -0.103% Euro down 0.2% to $1.1663 Brent Futures up 0.2% to $84.49/bbl Gold spot down 0.3% to $1,793.54 U.S. Dollar Index up 0.14% to 93.48 MXAP down 0.5% to 197.77 MXAPJ down 0.7% to 649.27 Nikkei up 0.3% to 28,892.69 Topix little changed at 2,001.18 Hang Seng Index down 0.7% to 25,377.24 Shanghai Composite up 0.8% to 3,547.34 Sensex down 0.9% to 59,417.39 Australia S&P/ASX 200 down 1.4% to 7,323.74 Kospi down 1.3% to 2,970.68 Top Overnight News from Bloomberg The returns on carry trades are roaring back in the currency markets of the world’s major developed countries, thanks to surging commodity prices, low volatility and the growing ranks of central banks that are tightening monetary policy U.K. households are under increasing financial stress just as the Bank of England contemplates weaning the nation off near-zero interest rates, according to debt-collection firm Lowell China’s junk dollar bonds had their steepest two-month decline in a decade as stress builds in the battered real estate sector and defaults mount to a record France and Italy drove economic growth in the 19-nation euro area in the third quarter following the suspension of most Covid-19 curbs. A surge in consumer spending propelled French output to 3% in the three months through September, exceeding all but one estimate in a Bloomberg survey. Italy reported an expansion of 2.6% that was bolstered by industry and services As the prospect of interest-rate hikes whipsaws bond markets, bears can be forgiven for betting the recent 10-year Treasury selloff will resume in earnest given the inflationary pressures building everywhere. But with a key section of the U.S. yield curve inverting on growth fears, the likes of AXA Investment Managers to HSBC Holdings Plc can find a receptive audience to make a case that the 40-year bull market is alive and well A more detailed look at global markets courtesy of Newsquawk Asia-Pac equities initially traded lower but later painted a mixed picture as the tailwinds from Wall Street dissipated. The S&P 500 and Nasdaq closed at record highs, whilst the DJIA and R2K posted solid gains. Aftermarket earnings saw reports from Apple (-3.5% AM) and Amazon (-4.7% AM), who both fell over 5% at one point, in turn hitting the NQ, with both firms citing supply chain issues. US equity futures overnight resumed trade modestly firmer but then drifted lower as APAC sentiment seeped into the Western futures. The ASX 200 (-1.5%) was dragged lower by its Telecoms and Financials sectors, whilst the KOSPI (-1.3%) conformed to the risk tone. The Nikkei 225 (+0.3%) was initially hampered with some of the export-heavy sectors towards the bottom of the bunch, although later recovered as the JPY eased, and with Japan also looking ahead to the lower house election on Sunday. The Shanghai Comp (+0.8%) saw its opening losses cushioned after another daily net CNY 100bln injection by the PBoC, for a net weekly injection of CNY 680bln – the largest in 21 months. Hang Seng (-0.7%) failed to recover amid post-earnings losses from BYD, Ping An Insurance, and Petrochina, whilst Alibaba and Tencent are also in the red. Finally, the RBA once again refrained from defending the April 2024 yield, with the bond extending its rise to 0.77% vs the RBA's 0.10% target range. Top Asian News Taiwan Growth Slows in Third Quarter Despite Record Exports Asia Stocks Set for Third Day of Losses as Tech, Financials Fall Taiwan 3Q GDP Expands 3.80% Y/Y; Survey Est. 4.3% Malaysia Unveils Biggest Budget to Spur Post-Lockdown Recovery European bourses commenced the session on the back foot, Euro Stoxx 50 -0.9%, though performance throughout the morning has been choppy with indices having been unchanged and lower by as much as 1.0% on the session thus far. The morning’s busy docket hasn’t changed the dial too much, with the action perhaps more a factor of participant’s digesting the US/APAC leads and earnings updates. APAC was subdued with pressure Stateside most pronounced in the NQ (-0.8%) after earnings from Apple (AMZN) and Amazon (AAPL), which both fell around 5.0% in after hours trading, with attention being placed on supply chain issues impacting performance. In Europe, all sectors started in the red, though banking names have picked up given the ongoing drive higher in yields offsetting poorly received updates from the likes of NatWest (-4.5%); attention is on the company’s money laundering provisions of some GBP 300mln. Elsewhere, real estate names are hampered amid reports that UK banks/building societies are to begin increasing mortgage rate given inflation. Auto’s are towards the top of the pile driven by updates from Daimler (+1.7%) and the CFO remarking that market demand is high, could expect an increase in 2022 passenger car sales. Finally, the energy sector is in-focus amid OPEC+ JTC sourced reports (see commodities) and as we have a number of key names due to report stateside, including Exxon (XOM) following Chevron beating on top and bottom lines, +2.1% pre-market. Top European News NatWest Shares Fall as Margin Pressures Overshadow Profit Surge Agnellis Agree to Sell PartnerRe to Covea for $9 Billion Euro-Area Economy Bolstered by France, Italy Growth: GDP Update Telenet Falls as HSBC Cuts to Hold on ‘Drastic’ Strategy In FX, the Dollar has regained some poise following yesterday’s sell-off, largely on the back of a post-ECB rebound in the Euro that knocked the index down to a new w-t-d base and gave other Greenback rivals a lift indirectly. However, the index remains toppy towards the bottom of 94.024-93.277 extremes within a narrow 93.592-320 range, wary about residual or final rebalancing flows that a German bank model suggests is more prominent vs the Pound and Yen. From a tech perspective, the 50 DMA could be pivotal and comes in at 93.415 today after the DXY tested, but respected the 100 DMA circa 94.000 on several occasions, while fundamental drivers may come via a raft of data and survey releases, including PCE price metrics and the Chicago PMI. Aside from all this, yields remain elevated and curves are re-steepening irrespective of a downturn in broad risk sentiment, or perhaps in response to the ongoing bond rout, with safe-haven benefits for the Buck. NZD/AUD - Yet another change in fortunes for the Kiwi and Aussie, as the Antipodean cross rebounds amidst several positive factors for the latter, like much stronger than forecast final retail sales and a pick-up in ppi, while ramp higher in 3 year cash continues unchecked. Hence, Aud/Nzd is eyeing 1.0500 again and Aud/Usd is consolidating near 0.7550, but Nzd/Usd has slipped back below 0.7200. EUR - Some consolidation and a partial loss of the aforementioned ECB-inspired recovery momentum has pushed the Euro back down, with Eur/Usd now testing support and underlying bids around 1.1650 even though flash Eurozone inflation came in well above expectations and most preliminary Q3 GDP prints beat consensus (Germany the exception). Nevertheless, the headline pair looks less inclined to be drawn to the latest option expiries close to 1.1600 (1.5 bn in a band ending at 1.1590) and adjacent to similar size between the half round number and 1.1660 (1.4 bn to be precise). CHF/CAD/GBP/JPY - The Franc is marginally outpacing the Buck and extending its outperformance against the Euro to the brink of 0.9100 and not much further away from 1.0600 respectively in wake of an upbeat Swiss KOF leading indicator, but the SNB could be on edge amidst a sharp ratchet up in implied interest rates via the 3 month strip. Elsewhere, the Loonie is idling either side of 1.2350 vs its US peer in line with crude prices ahead of Canadian monthly GDP and ppi that might provide tangible justification for the BoC’s hawkish shift on QE and rate guidance, Sterling continues encounter resistance circa 1.3800 and 0.8450 against the Euro awaiting developments on the UK-French fishing row front rather than reacting to stronger than forecast BoE mortgage lending and approvals. Similarly, the Yen has taken a raft of Japanese data in stride as it straddles 113.50 in lock-step with its US counterpart and UST/JGB yield differentials In commodities, WTI and Brent are essentially unchanged on the session, and reside towards the mid-point of the week’s range thus far. Newsflow has been limited and we look to energy giant earnings later for further impetus; though, the benchmarks did come under modest pressure on JTC source reports ahead of next week’s OPEC+ gathering. Namely, sources said that the JTC had trimmed its 2021 oil demand forecast to 5.7mln BPD (prev. 5.8mln BPD), though explained that the downward revision was ‘nothing to worry about’ and was due to updated data and rounding effects. Elsewhere, spot gold and silver have been contained within narrow ranges in the European morning with spot gold not experiencing a meaningful move away from the USD 1800/oz handle. Base metals are a touch softer from the contained performance seen in APAC hours where attention was more on thermal coal, following China’s State Planner said there is room for continued adjustments of coal prices; initial investigation results show coal production costs are significantly below current coal spot prices. In wake of this, thermal coal futures once again hit 10% limit down. US Event Calendar 8:30am: Sept. Personal Income, est. -0.3%, prior 0.2%; Personal Spending, est. 0.6%, prior 0.8% 8:30am: Sept. PCE Deflator YoY, est. 4.4%, prior 4.3%; PCE Deflator MoM, est. 0.3%, prior 0.4% 8:30am: Sept. PCE Core Deflator YoY, est. 3.7%, prior 3.6%; Core Deflator MoM, est. 0.2%, prior 0.3% 9:45am: Oct. MNI Chicago PMI, est. 63.5, prior 64.7 10am: Oct. U. of Mich. Sentiment, est. 71.4, prior 71.4; Current Conditions, est. 77.9, prior 77.9; Expectations, est. 67.2, prior 67.2 10am: Oct. U. of Mich. 5-10 Yr Inflation, prior 2.8% 10am: Oct. U. of Mich. 1 Yr Inflation, est. 4.8%, prior 4.8% DB's Jim Reid concludes the overnight wrap The last 36-48 hours has seen a silent rate tantrum that has caused some remarkable volatility at the front end. Silent as equities don’t care for now as US bourses again hit fresh record highs again last night before weak results from Amazon after the bell slightly dented the mood. Although there wasn’t much new in the ECB meeting, the event seemed to calm markets down (even if purely coincidental timing wise) after a pretty stressful Asian and London morning session. To give you a flavour of this 2yr Canadian yields opened (lunchtime London) another +12 bps higher (around +38bps in less than 24 hours) before rallying 25bps over the next 3 hours and then steadying to close -6.5bps on the session, ‘only’ +13.5bps above where they were before Wednesday’s shock BoC news. As another gauge, US 2s10s which on Wednesday morning was at +120bps, rallied another 6bps in Asia and London morning to a low of under +98bps. We closed back at +108.7bps though after a big re-steepening. As we highlighted in yesterday’s CoTD (link here) there was seemingly a big positioning shock that the Canadian and then Aussie news from 24 hours ago encouraged. The latest from the Australian market is that after a +29.7bps move yesterday, 2yr yields have climbed by another +27bps this morning and now sit at 0.8% having been at 0.15% on Wednesday. Remarkable moves and this could set the stage for another frantic London session. The yield on 10yr (+26bps) also jumped as the RBA once again didn’t defend its yield target this morning, contrary to market expectations, leading to speculation that it may be abandoned altogether as early as at the meeting next Tuesday. So this is setting the stage for a seismic event for global markets as there is a huge gap between the 0.1% target and 0.8% where the April 24 note is now trading. Overall government bonds have been all over the place over the last couple of days and the resteepening in the US meant that 10yr yields rose +3.9bps yesterday after rallying early in the session. We’re up another +2.3bps this morning. 20yrs inverted versus 30yrs yesterday for the first time since the issue was re-introduced last year, and this curve finished the session at -2.4bps. On the inflation compensation front, 10yr breakevens narrowed for the second day on the bounce, declining -8.4bps to 2.59% which means that real yields actually rose +12.0bps - their biggest climb since immediately after the June FOMC. European yields rose as 10yr bunds (+4.3bps), OATs (+4.6bps) and BTPs (+10.7bps) and Gilts (+2.3bps) all marched higher, while 2yr yields were +2.5bps, +0.8bps, +9.4bps, and +8.9bps higher respectively. So a mixed bag of curve moves after the BoC/Australia/ECB developments. As in the US, 10yr breakevens narrowed across Europe as well; German, French, Italian, and UK breakevens declined -6.8bps, -4.9bps, -6.0bps, and -1.9bps, respectively. The ECB meeting was the main macro event of the day. Our Europe team offers a more thorough breakdown here, but the three main takeaways are: 1) the ECB recognised that inflation is going to be higher for longer, dropping that it is ‘largely temporary’ from its statement; 2) President Lagarde offered some (but not total) pushback on market pricing, remarking liftoff in 2022 or anytime soon thereafter was inconsistent with the ECB’s forecast and forward guidance; and 3) President Lagarde gave the firmest guidance yet that PEPP would finish in March. Her press conference came hours after Spain reported a +2.0% jump in October inflation versus +1.2% expected, while the German CPI (+0.5%), released just shortly before the press conference, also beat forecasts (+0.5% vs +0.4%). US data was mixed, with a miss in advance Q3 GDP, which came at +2.0% versus +2.6% expected as well as surprising a slowdown in pending home sales (-2.3% vs +0.5% expected), boosted the narrative of slower growth. Meanwhile initial jobless claims (281k versus 288k expected) saw a fresh post pandemic low and personal consumption decelerated slower than expected (+0.9%), coming in at +1.6%. In terms of equities, another string of positive earnings surprises lifted stocks, with the Nasdaq and S&P 500 reaching their record highs by the close. Every sector in the two indices, plus the DJIA finished in the green, with the Nasdaq up +1.39%, the S&P 500 +0.98% higher and the DJIA closing up +0.68%. Strong results from Ford and Caterpillar also added to the bullish outlook. Ford reported that demand was strong and that the semiconductor shortages were easing, prompting them to revise higher profit estimates for the year. Caterpillar also noted end-user demand was strong, and expects it to be strong through next year, but supply chain difficulties will limit their ability to fill orders. After the close, earnings from Amazon and Apple weighed on sentiment. Amazon missed on revenue and earnings, and noted the near-term outlook wasn’t great, due to labour shortages and supply chain woes. Apple was also hit by supply chain issues, which caused them to miss revenue estimates. S&P futures are trading lower by -0.3% ahead of the open this morning. In total, of the 52 S&P companies that reported yesterday, 44 beat on earnings while 34 beat revenue estimates. The dynamic was less optimistic on the other side of the Atlantic, where the STOXX 600 (+0.24%) rose moderately, as it was pulled down by a steep drop in energy (-1.85%) after Royal Dutch Shell missed on earnings as well as faced calls to break up its business from an activist hedge fund. Country-wise, we saw the CAC 40 (+0.75%) and the IBEX 35 (+0.60%) outperforming the DAX (-0.06%) and the FTSE 100 (-0.05%). In Asia, equities are mixed after the late earnings misses in the US and disappointing regional economic data. The Nikkei 225 (+0.29%) and the Shanghai composite (+0.16%) are higher, while the KOSPI (-0.62%) and the Hang Seng (-0.47%) is down. In data releases, industrial production in Japan (-5.4% vs -2.7% expected) and South Korea (-1.8% vs +2.0% expected) declined, heavily missing consensus. Tokyo CPI (+0.1%) was also below projections (+0.4%). Meanwhile, China’s National Development and Reform Commission communicated that coal prices can continue to decrease further, extending the decline in coal futures (-8.68%), as the country faces an acute energy crisis. Elsewhere the dollar is trading higher this morning (+0.05%), while gold (-0.15%) retreated from its gains during yesterday’s European session. In energy markets, oil futures are mixed, as WTI (-0.08%) is marginally lower and Brent (+0.23%) is advancing. Natural gas prices, however, continued to decline yesterday, falling in the US (-1.71%) and Europe (-11.75%). President Biden addressed the nation to sell the public (and, ostensibly, his own party) on a $1.75 trillion social and climate spending framework after prolonged negotiations. Along with the big outlays, the proposal includes revenue raising measures via higher tax surcharges on those making more than $10 million, a 15% minimum corporate tax rate, a 1% excise tax on stock buybacks, and funding to improve IRS enforcement of the current tax code. If Congressional Democrats can agree on the new social bill, it should also enable a vote on the separate $550 billion bi-partisan infrastructure plan. Nothing was tabled for a vote yesterday as progressive Democrats were waiting to see the detailed proposal of the social spending bill before giving the bi-partisan infrastructure bill their imprimatur. Nevertheless, it appears that out of the flurry of headlines, yesterday saw some progress in DC negotiations. In today’s data releases, Japan September jobless rate, preliminary September industrial production, preliminary Q3 GDP from Euro Area, Germany, France and Italy, preliminary October CPI from Euro Area, France and Italy, UK September mortgage approvals, Canada August GDP, US September personal spending, personal income, October MNI Chicago PMI and final October University of Michigan consumer sentiment index are due. In corporate earnings, ExxonMobil, Chevron, AbbVie, Charter Communications, Daimler, BNP Paribas, Aon and NatWest Group are among companies reporting. Tyler Durden Fri, 10/29/2021 - 07:47.....»»

Category: blogSource: zerohedgeOct 29th, 2021

Futures Rebound From Overnight Slide As Oil Keeps Rising

Futures Rebound From Overnight Slide As Oil Keeps Rising US equity-index futures erased earlier declines, rebounding from a loss of as much as 0.8% helped by the start of the European session and easing mounting concerns about stagflation from rising energy prices, signs of widening regulatory scrutiny by China, and the upcoming third-quarter earnings which is expected to post a sharply slower pace of growth and beats than recent record quarters. At 730am ET, Dow e-minis were up 5 points, or 0.1%, S&P 500 e-minis were up 7.25 points, or 0.16%, and Nasdaq 100 e-minis were up 46.75points, or 0.31%. Oiil rose 0.3% to $83.86/bbl while the dollar dipped and 10Y yield drifted back under 1.60%. Gains in tech stocks kept Nasdaq futures afloat on Tuesday, while energy names rose as Brent resumed gains, trading around $84/bbl on expectations that a power crisis from Asia to Europe will lift demand and tighten global balances. Higher oil prices and supply chain disruptions have set off alarm bells for businesses and consumers ahead of the third-quarter reporting season that kicks off on Wednesday with JPMorgan results.  "We believe that market participants could stay concerned over high energy prices translating into further acceleration in inflation, and thereby faster tightening by major central banks," said Charalambos Pissouros, head of research at JFD Group. In the pre-market, Tesla rose 0.7% after data showed the electric vehicle maker sold 56,006 China-made vehicles in September, the highest since it started production in Shanghai about two years ago. Oil firms including Exxon Mobil and Chevron Corp gained 0.1% and 0.3%, respectively, as Brent crude hit a near-three year high on energy crunch fears. Here are the notable movers: China’s Internet sector is one of the “most undervalued” in Morningstar’s coverage, says Ivan Su, an analyst, adding that Tencent (TCEHY US) and Netease (NTES US) are top picks MGM Resorts (MGM US) rises 2% in U.S. premarket trading after stock was upgraded to outperform from neutral and price target more than doubled to a Street-high $68 at Credit Suisse Quanterix (QTRX US) jumped 20% in Monday postmarket trading after the digital-health company announced that its Simoa phospho-Tau 181 blood test has been granted breakthrough device designation by the U.S. FDA as an aid in diagnostic evaluation of Alzheimer’s disease Relay Therapeutics (RLAY US) fell 7% in Monday postmarket trading after launching a $350 million share sale via Goldman Sachs, JPMorgan, Cowen, Guggenheim Securities Westwater Resources (WWR US) rose as much as 26% in Monday postmarket trading after its board of directors approved construction of the first phase of a production facility in Alabama for battery ready graphite products TechnipFMC (FTI US) in focus after co. was awarded a substantial long-term charter and services contract by Petrobras for the pipelay support vessel Coral do Atlântico Fastenal, which was one of the first companies to report Q3 earnings, saw its shares fall 2.4% in premarket trading on Tuesday, after the industrial distributor said the Covid-related boost was fading. The company said growth in the quarter was slightly limited by either slower expansion or contraction in sales of certain products related to the pandemic, when compared to the previous year quarter. While there was an uptick in sales of certain Covid-related supplies, the unit price of many products was down significantly, the company said in a statement.  Third-quarter sales and profit were in line with the average analyst estimate "While investors want to believe the narrative that stock markets can continue to move higher, this belief is bumping up against the reality of how the continued rise in energy prices, as well as supply-chain pressures, are likely to impact company profit margins,” said Michael Hewson, chief market analyst at CMC Markets in London. In Europe, losses led by basic resources companies and carmakers outweighed gains for utilities and tech stocks, pulling the Stoxx Europe 600 Index down 0.1%. Metals miner Rio Tinto was among the worst performers, dropping 2.7%. European equities climbed off the lows having lost over 1% in early trade. Euro Stoxx 600 was down -0.35% after dropping as much as 1.3% initially, led by basic resources companies and carmakers outweighed gains for utilities and tech stocks. The DAX is off 0.3%, FTSE 100 underperforms in a quiet morning for news flow. Miners, banks and autos are the weakest sectors after China reported a sharp drop in auto sales; utilities, tech and real estate post modest gains. European tech stocks slide, with the Stoxx Tech Index dropping as much as 1.4% in third straight decline, as another broker downgrades TeamViewer, while Prosus and chip stocks come under pressure. TeamViewer shares fall as much as 5.1% after Deutsche Bank downgrades the remote software maker to hold from buy following recent guidance cut. Asian stocks fell, halting a three-day rally as uncertainty over earnings deepened amid elevated inflation, higher bond yields and the risk of a widening Chinese crackdown on private industry. The MSCI Asia Pacific Index slid as much as 1.2%, led by technology and communication shares. Alibaba plunged 3.9% following a rally over the past week, while Samsung Electronics tumbled to a 10-month low after at least five brokers slashed their price targets, as China’s power crisis is seen worsening supply-chain disruptions. “Given the run-up in tech so far, it’s not difficult for investors to harvest profits first before figuring out if techs can maintain their growth when yields rise,” said Justin Tang, head of Asian research at United First Partners. Shares in Hong Kong and the mainland were among the worst performers after Chinese authorities kicked off an inspection of the nation’s financial regulators and biggest state-run banks in an effort to root out corruption. The MSCI Asia Pacific Index is down 12% from a February peak, with a global energy crunch lifting input prices and the debt crisis at China Evergrande Group weighing on the financial sector. Investors are waiting to see how this impacts earnings, according to Jun Rong Yeap, a market strategist at IG Asia.  “Increasing concerns on inflation potentially being more persistent have started to show up,” he said. “This comes along with the global risk-off mood overnight, as investors look for greater clarity from the earnings season on how margins are holding up, along with the corporate economic outlook.” Japan’s Topix index also fell, halting a two-day rally, amid concerns about a global energy crunch and the possibility of a widening Chinese crackdown on private industry. The Topix fell 0.7% to 1,982.68 at the 3 p.m. close in Tokyo, while the Nikkei 225 declined 0.9% to 28,230.61. SoftBank Group Corp. contributed the most to the Topix’s drop, decreasing 2.4%. Out of 2,181 shares in the index, 373 rose and 1,743 fell, while 65 were unchanged. “Market conditions were improving yesterday, but pushing for higher prices got tough when the Nikkei 225 approached its key moving averages,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.  The Nikkei’s 75-day moving average is about 28,500 and the 200-day moving average is about 28,700, so some investors were taking profits, he said. Japan’s spot power price increased to the highest level in nine months, as the global energy crisis intensifies competition for generation fuel before the winter heating season. In FX, the Bloomberg Dollar Spot Index reversed an overnight gain as the greenback slipped against all of its Group-of-10 peers. Risk sensitive Scandinavian currencies led gains, followed by the New Zealand and Australian dollars. The pound was little changed while speculators ramped up wagers on sterling’s decline at the fastest rate in more than two years, Commodity Futures Trading Commission data show, further breaking the link between anticipated rate increases and currency gains. The yen steadied after three days of declines. The Turkish lira extended its slide to a record low after President Recep Tayyip Erdogan hinted at a possible military offensive into neighboring Syria. Fixed-income was quiet by recent standards: Treasury futures were off lows of the day, improving as S&P 500 futures pare losses during European morning, and as cash trading resumed after Monday’s holiday. The 10Y yield dipped from 1.61% to 1.59% after hitting 1.65% based on futures pricing on Monday, but the big mover was on the front end, where 2-year yields climbed as much as 4bps to 0.35% the highest level since March 2020 reflecting increased expectations for Fed rate hikes, as Treasury cash trading resumed globally. Two coupon auctions during U.S. session -- of 3-and 10-year notes -- may weigh on Treasuries however.  Treasury and gilt curves bull-flatten with gilts outperforming at the back end. Bunds have a bull-steepening bias but ranges are narrow. Peripheral spreads tighten a touch with long-end Italy outperforming peers. In commodities, Crude futures drift higher in muted trade. WTI is up 0.25% near $80.70, Brent trades just shy of a $84-handle. Spot gold remains range-bound near $1,760/oz. Base metals are mixed with LME lead and nickel holding small gains, copper and aluminum in the red. Looking at the day ahead, central bank speakers include the Fed’s Vice Chair Clarida,Bostic and Barkin, as well as theECB’s President Lagarde, Makhlouf, Knot, Villeroy, Lane and Elderson. Data highlights from the US include the JOLTS job openings for August, and the NFIB’s small business optimism index for September which came in at 99.1, below last month's 100.1. The IMF will be releasing their latest World Economic Outlook. Market Snapshot S&P 500 futures little changed at 4,351.50 STOXX Europe 600 down 0.6% to 454.90 MXAP down 0.9% to 194.41 MXAPJ down 1.0% to 635.42 Nikkei down 0.9% to 28,230.61 Topix down 0.7% to 1,982.68 Hang Seng Index down 1.4% to 24,962.59 Shanghai Composite down 1.2% to 3,546.94 Sensex little changed at 60,149.85 Australia S&P/ASX 200 down 0.3% to 7,280.73 Kospi down 1.4% to 2,916.38 German 10Y yield fell 6 bps to -0.113% Euro up 0.1% to $1.1565 Brent Futures up 0.4% to $84.01/bbl Gold spot up 0.2% to $1,757.84 U.S. Dollar Index little changed at 94.29 Top Overnight Headlines from Bloomberg The EU drew record demand for its debut green bond, in the sector’s biggest-ever offering. The bloc registered more than 135 billion euros ($156 billion) in orders Tuesday for a sale of 12 billion euros of securities maturing in 2037 Investors are dumping negative-yielding debt at the fastest pace since February as concerns about inflation and reduced central bank stimulus propel global interest rates higher French President Emmanuel Macron unveiled a 30-billion-euro ($35 billion) plan to create the high-tech champions of the future and reverse years of industrial decline in the euro area’s second-largest economy British companies pushed the number of workers on payrolls above pre-coronavirus levels last month, an indication of strength in the labor market that may embolden the Bank of England to raise interest rates. As the Biden administration and governments around the world celebrate another advance toward an historic global tax accord, an obscure legal question in the U.S. threatens to tear it apart Chinese property developers are suffering credit rating downgrades at the fastest pace in five years, as a recent slump in new-home sales adds to concerns about the sector’s debt woes German investor confidence declined for a fifth month in October, adding to evidence that global supply bottlenecks and a surge in inflation are weighing on the recovery in Europe’s largest economy Social Democrat Olaf Scholz’s bid to succeed Angela Merkel as German chancellor is running into its first test as tensions emerge in talks to bridge policy differences with the Greens and pro-business Free Democrats A more detailed breakdown of global markets from Newsquawk Asian equity markets traded mostly lower following the indecisive mood stateside where the major indices gave back initial gains to finish negative amid lingering inflation and global slowdown concerns, with sentiment overnight also hampered by tighter Beijing scrutiny and with US equity futures extending on losses in which the Emini S&P retreated beneath its 100DMA. ASX 200 (-0.3%) was subdued as weakness in energy, tech and financials led the declines in Australia and with participants also digesting mixed NAB business survey data. Nikkei 225 (-0.9%) was on the backfoot after the Japan Center for Economic Research noted that GDP contracted 0.9% M/M in August and with retailers pressured after soft September sales updates from Lawson and Seven & I Holdings, while the KOSPI (-1.4%) was the laggard on return from holiday with chipmakers Samsung Electronics and SK Hynix subdued as they face new international taxation rules following the recent global minimum tax deal. Hang Seng (-1.4%) and Shanghai Comp. (-1.3%) adhered to the downbeat picture following a continued liquidity drain by the PBoC and with Beijing scrutinising Chinese financial institutions’ ties with private firms, while default concerns lingered after Evergrande missed yesterday’s payments and with Modern Land China seeking a debt extension on a USD 250mln bond to avoid any potential default. Finally, 10yr JGBs eked minimal gains amid the weakness in stocks but with demand for bonds limited after the recent subdued trade in T-note futures owing to yesterday’s cash bond market closure and following softer results across all metrics in the 30yr JGB auction. Top Asian News Alibaba Stock Revival Halted on Concerns of Rising Bond Yields Iron Ore Rally Pauses as China Steel Curbs Cloud Demand Outlook China’s Star Board Sees Rough Start to Fourth Quarter: ECM Watch Citi Lists Top Global Stock Picks for ‘Disruptive Innovations’ European bourses kicked the day off choppy but have since drifted higher (Euro Stoxx 50 -0.4%; Stoxx 600 Unch) as the region remains on standby for the next catalyst, and as US earnings season officially kicks off tomorrow – not to mention the US and Chinese inflation metrics and FOMC minutes. US equity futures have also nursed earlier losses and reside in relatively flat territory at the time of writing, with broad-based performance seen in the ES (Unch), NQ (+0.2%), RTY (-0.2%), YM (Unch). From a technical standpoint, some of the Dec contracts are now hovering around their respective 100 DMAs at 4,346 for the ES, 14,744 for the NQ, whilst the RTY sees its 200 DMA at 2,215, and the YM topped its 21 DMA at 34,321. Back to Europe, cash markets see broad-based downside with the SMI (-0.1%) slightly more cushioned amid gains in heavyweight Nestle (+0.6%). Sectors kicked off the day with a defensive bias but have since seen a slight reconfiguration, with Real Estate now the top performer alongside Food & Beverages, Tech and Healthcare. On the flip side, Basic Resources holds its position as the laggard following yesterday's marked outperformance and despite base metals (ex-iron) holding onto yesterday's gains. Autos also reside at the bottom of the bunch despite constructive commentary from China's Auto Industry Body CAAM, who suggested the chip supply shortage eased in China in September and expected Q4 to improve, whilst sources suggested Toyota aims to make up some lost production as supplies rebound. In terms of individual movers, GSK (+2.3%) shares spiked higher amid reports that its USD 54bln consumer unit has reportedly attracted buyout interest, according to sources, in turn lifting the FTSE 100 Dec future by 14 points in the immediacy. Elsewhere, easyJet (-1.9%) gave up its earlier gains after refraining on guidance, and despite an overall constructive trading update whereby the Co. sees positive momentum carried into FY22, with H1 bookings double those in the same period last year. Co. expects to fly up to 70% of FY19 planned capacity in FY22. In terms of commentary, the session saw the Germany ZEW release, which saw sentiment among experts deteriorate, citing the persisting supply bottlenecks for raw materials and intermediate products. The release also noted that 49.1% of expects still expect inflation to rise further in the next six months. Heading into earnings season, experts also expect profits to go down, particularly in export-tilted sectors such a car making, chemicals and pharmaceuticals. State-side, sources suggested that EU antitrust regulators are reportedly likely to open an investigation into Nvidia's (+0.6% Pre-Mkt) USD 54bln bid from Arm as concessions were not deemed sufficient. Top European News Soybeans Near 10-Month Low as Supply Outlook Expected to Improve EasyJet Boosts Capacity as Travel Rebound Gathers Pace Currency Traders Are Betting the BOE Is About to Make a Mistake Citi Lists Top Global Stock Picks for ‘Disruptive Innovations’ In FX, the Buck has reclaimed a bit more lost ground in consolidatory trade rather than any real sign of a change in fundamentals following Monday’s semi US market holiday for Columbus Day and ahead of another fairly light data slate comprising NFIB business optimism and JOLTS. However, supply awaits the return of cash Treasuries in the form of Usd 58 bn 3 year and Usd 38 bn 10 year notes and Fed commentary picks up pace on the eve of FOMC minutes with no less than five officials scheduled to speak. Meanwhile, broad risk sentiment has taken a knock in wake of a late swoon on Wall Street to give the Greenback and underlying bid and nudge the index up to fresh post-NFP highs within a 94.226-433 band. NZD/AUD - A slight change in fortunes down under as the Kiwi derives some comfort from the fact that the Aud/Nzd has not breached 1.0600 to the upside and Nzd/Usd maintaining 0.6950+ status irrespective of mixed NZ electric card sales data, while the Aussie takes on board contrasting NAB business conditions and confidence readings in advance of consumer sentiment, with Aud/Usd rotating either side of 0.7350. EUR/CAD/GBP/CHF/JPY - All rangy and marginally mixed against their US counterpart, as the Euro straddles 1.1560, the Loonie meanders between 1.2499-62 with less fuel from flat-lining crude and the Pound tries to keep sight of 1.3600 amidst corrective moves in Eur/Gbp following a rebound through 0.8500 after somewhat inconclusive UK labour and earnings data, but hardly a wince from the single currency even though Germany’s ZEW survey missed consensus and the institute delivered a downbeat assessment of the outlook for the coming 6 months. Elsewhere, the Franc continues to hold within rough 0.9250-90 extremes and the Yen is striving to nurse outsize losses between 113.00-50 parameters, with some attention to 1 bn option expiries from 113.20-25 for the NY cut. Note also, decent expiry interest in Eur/Usd and Usd/Cad today, but not as close to current spot levels (at the 1.1615 strike in 1.4 bn and between 1.2490-1.2505 in 1.1 bn respectively). SCANDI/EM - The Nok and Sek have bounced from lows vs the Eur, and the latter perhaps taking heed of a decline in Sweden’s registered jobless rate, but the Cnh and Cny remain off recent highs against the backdrop of more Chinese regulatory rigour, this time targeting state banks and financial institutions with connections to big private sector entities and the Try has thrown in the towel in terms of its fight to fend off approaches towards 9.0000 vs the Usd. The final straw for the Lira appeared to be geopolitical, as Turkish President Erdogan said they will take the necessary steps in Syria and are determined to eliminate threats, adding that Turkey has lost its patience on the attacks coming from Syrian Kurdish YPG controlled areas. Furthermore, he stated there is a Tal Rifaat pocket controlled by YPG below Afrin and that an operation could target that area which is under Russian protection. However, Usd/Try is off a new ATH circa 9.0370 as oil comes off the boil and ip came in above forecast. In commodities, WTI and Brent front-month futures are choppy and trade on either side of the flat mark in what is seemingly some consolidation and amid a distinct lack of catalysts to firmly dictate price action. The complex saw downticks heading into the European cash open in tandem with the overall market sentiment at the time, albeit the crude complex has since recovered off worst levels. News flow for the complex has also remained minimal as eyes now turn to any potential intervention by major economies in a bid to stem the pass-through of energy prices to consumers heading into winter. On that note, UK nat gas futures have been stable on the day but still north of GBP 2/Thm. Looking ahead, the weekly Private Inventory data has been pushed back to tomorrow on account of yesterday's Columbus Day holiday. Tomorrow will also see the release of the OPEC MOMR and EIA STEO. Focus on the former will be on any updates to its demand forecast, whilst commentary surrounding US shale could be interesting as it'll give an insight into OPEC's thinking on the threat of Shale under President Biden's "build back better" plan. Brent Dec trades on either side of USD 84/bbl (vs prev. 83.13-84.14 range) whilst WTI trades just under USD 81/bbl after earlier testing USD 80/bbl to the downside (USD 80-80.91/bbl range). Over to metals, spot gold and silver hold onto modest gains with not much to in the way of interesting price action, with the former within its overnight range above USD 1,750/oz and the latter still north of USD 22.50/oz after failing to breach the level to the downside in European hours thus far. In terms of base metals, LME copper is holding onto most of yesterday's gains, but the USD 9,500/t mark seems to be formidable resistance. Finally, Dalian and Singapore iron ore futures retreated after a four-day rally, with traders citing China's steel production regaining focus. US Event Calendar 6am: Sept. SMALL BUSINESS OPTIMISM 99.1,  est. 99.5, prior 100.1 10am: Aug. JOLTs Job Openings, est. 11m, prior 10.9m 11:15am: Fed’s Clarida Speaks at IIF Annual Meeting 12:30pm: Fed’s Bostic Speaks on Inflation at Peterson Institute 6pm: Fed’s Barkin Interviewed for an NPR Podcast DB's Jim Reid concludes the overnight wrap It’s my wife’s birthday today and the big treat is James Bond tomorrow night. However, I was really struggling to work out what to buy her. After 11.5 years together, I ran out of original ideas at about year three and have then scrambled round every year in an attempt to be innovative. Previous innovations have seen mixed success with the best example being the nearly-to-scale oil portrait I got commissioned of both of us from our wedding day. She had no idea and hated it at the closed eyes big reveal. It now hangs proudly in our entrance hall though. Today I’ve bought her a lower key gamble. Some of you might know that there is a US website called Cameo that you can pay famous people to record a video message for someone for a hefty fee. Well, all her childhood heroes on it were seemingly too expensive or not there. Then I saw that the most famous gymnast of all time, Nadia Comăneci, was available for a reasonable price. My wife idolised her as a kid (I think). So after this goes to press, I’m going to wake my wife up with a personalised video message from Nadia wishing her a happy birthday, saying she’s my perfect ten, and praising her for encouraging our three children to do gymnastics and telling her to keep strong while I try to get them to play golf instead. I’m not sure if this is a totally naff gift or inspired. When I purchased it I thought the latter but now I’m worried it’s the former! My guess is she says it’s naff, appreciates the gesture, but calls me out for the lack of chocolates. Maybe in this day and age a barrel of oil or a tank of petrol would have been the most valuable birthday present. With investor anticipation continuing to build ahead of tomorrow’s CPI release from the US, yesterday saw yet another round of commodity price rises that’s making it increasingly difficult for central banks to argue that inflation is in fact proving transitory. You don’t have to be too old to remember that back in the summer, those making the transitory argument cited goods like lumber as an example of how prices would begin to fall back again as the economy reopened. But not only have commodity aggregates continued to hit fresh highs since then, but lumber (+5.49%) itself followed up last week’s gains to hit its highest level in 3 months. Looking at those moves yesterday, it was a pretty broad-based advance across the commodity sphere, with big rises among energy and metals prices in particular. Oil saw fresh advances, with WTI (+1.47%) closing above $80/bbl for the first time since 2014, whilst Brent Crude (+1.53%) closed above $83/bbl for the first time since 2018. Meanwhile, Chinese coal futures (+8.00%) hit a record after the flooding in Shanxi province that we mentioned in yesterday’s edition, which has closed 60 of the 682 mines there, and this morning they’re already up another +6.41%. So far this year, the region has produced 30% of China’s coal supply, which gives you an idea as to its importance. And when it came to metals, aluminium prices (+3.30%) on the London Metal Exchange rose to their highest level since the global financial crisis, whilst Iron Ore futures in Singapore jumped +7.01% on Monday, and copper was also up +2.13%. The one respite on the inflation front was a further decline in natural gas prices, however, with the benchmark European future down -2.73%; thus bringing its declines to over -47% since the intraday high that was hit only last Wednesday. With commodity prices seeing another spike and inflation concerns resurfacing, this proved bad news for sovereign bonds as investors moved to price in a more hawkish central bank reaction. Yields in Europe rose across the continent, with those on 10yr bunds up +3.0bps to 0.12%, their highest level since May. The rise was driven by both higher inflation breakevens and real rates, and leaves bund yields just shy of their recent post-pandemic closing peak of -0.10% from mid-May. If they manage to surpass that point, that’ll leave them closer to positive territory than at any point since Q2 2019 when they last turned negative again. It was a similar story elsewhere, with 10yr yields on OATs (+2.6bps), BTPs (+3.9bps) and gilts (+3.1bps) likewise reaching their highest level in months. The sell-off occurred as money markets moved to price in further rate hikes from central banks, with investors now expecting a full 25 basis point hike from the Fed by the end of Q3 2022. It seems like another era, but at the start of this year before the Georgia Senate race, investors weren’t even pricing in a full hike by the end of 2023, whereas they’re now pricing in almost 4. So we’ve come a long way over 2021, though pre-Georgia the consensus CPI forecast on Bloomberg was just 2.0%, whereas it now stands at 4.3%, so it does fit with the story of much stronger-than-expected inflation inducing a hawkish response. Yesterday’s repricing came alongside a pretty minimal -0.15% move in the Euro versus the dollar, but that was because Europe was also seeing a similar rates repricing. Meanwhile, the UK saw its own ramping up of rate hike expectations, with investors pricing in at least an initial 15bps hike to 0.25% happening by the December meeting in just two months’ time. Overnight in Asia, stocks are trading in the red with the KOSPI (-1.46%), Shanghai Composite (-1.21%), Hang Seng (-1.20%), the Nikkei (-0.93%) and CSI (-0.82%) all trading lower on inflation concerns due to high energy costs and aggravated by a Wall Street Journal story that Chinese President Xi Jinping is increasing scrutiny of state-run banks and big financial institutions with inspections. Furthermore, there were signs of a worsening in the Evergrande debt situation, with the firm missing coupon payments on a 9.5% note due in 2022 and a 10% bond due in 2023. And there were fresh indications of a worsening situation more broadly, with Sinic Holdings Group Co. saying it doesn’t expect to pay the principal or interest on a $250m bond due on October 18. Separately in Japan, Prime Minister Fumio Kishida said on Monday that he will raise pay for public workers and boost tax breaks to firms that boost wages to try and improve the country’s wealth distribution. Back to yesterday, and the commodity rally similarly weighed on thin-volume equity markets, though it took some time as the S&P 500 had initially climbed around +0.5% before paring back those gains to close down -0.69%. Before the late US sell-off, European indices were subdued, but the STOXX 600 still rose +0.05%, thanks to an outperformance from the energy sector (+1.49%), and the STOXX Banks Index (+0.13%) hit a fresh two-year high as the sector was supported by a further rise in yields. On the central bank theme, we heard from the ECB’s chief economist, Philip Lane, at a conference yesterday, where he said that “a one-off shift in the level of wages as part of the adjustment to a transitory unexpected increase in the price level does not imply a trend shift in the path of underlying inflation.” So clearly making a distinction between a more persistent pattern of wage inflation, which comes as the ECB’s recent forward guidance commits them to not hiking rates “until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon”, as well as having confidence that “realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term”. Turning to the political scene, Brexit is likely to be in the headlines again today as the UK’s Brexit negotiator David Frost gives a speech in Lisbon where he’s expected to warn that the EU’s proposals on the Northern Ireland Protocol are insufficient. That comes ahead of a new set of proposals that are set to come from the EU tomorrow, with the two sides disagreeing on the extent of border controls required on trade from Northern Ireland with the rest of the UK. Those controls were put in place as part of the Brexit deal to prevent a hard border being put up between Northern Ireland and the Republic of Ireland, whilst also preserving the integrity of the EU’s single market. But the UK’s demands for adjustments have been met with opposition by the EU, and speculation has risen that the UK could trigger Article 16, which allows either side to take unilateral safeguard measures, if the protocol’s application “leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”. On the data front, there wasn’t much data to speak of with the US holiday, but Italy’s industrial production contracted by -0.2% in August, in line with expectations. To the day ahead now, andcentral bank speakers include the Fed’s Vice Chair Clarida,Bostic and Barkin, as well as theECB’s President Lagarde, Makhlouf, Knot, Villeroy, Lane and Elderson. Data highlights from the US include the JOLTS job openings for August, and the NFIB’s small business optimism index for September. In Europe, there’s also UK unemployment for August and the German ZEW Survey for October. Lastly, the IMF will be releasing their latest World Economic Outlook.     Tyler Durden Tue, 10/12/2021 - 07:56.....»»

Category: personnelSource: nytOct 12th, 2021

Shifting Marketing Strategies for Today’s Luxury Climate

On Sept. 14, RISMedia held its annual Real Estate CEO & Agent Leadership Exchange, co-presented this year by the National Association of REALTORS® (NAR). The exclusive full-day, virtual event attracted thousands of industry professionals and featured broker- and agent-focused sessions with some of real estate’s most successful and innovative executives, brokers, agents, coaches and influencers. […] The post Shifting Marketing Strategies for Today’s Luxury Climate appeared first on RISMedia. On Sept. 14, RISMedia held its annual Real Estate CEO & Agent Leadership Exchange, co-presented this year by the National Association of REALTORS® (NAR). The exclusive full-day, virtual event attracted thousands of industry professionals and featured broker- and agent-focused sessions with some of real estate’s most successful and innovative executives, brokers, agents, coaches and influencers. In an incisive look at high-end marketing strategies during an agent-track session at the event—How to Shift Marketing Strategies for Today’s Luxury Climate—moderator Diane Hartley, president of the Institute for Luxury Home Marketing, asked three industry leaders how they maximize marketing opportunities in the luxury home arena. Nashville has been a hot spot in the market since before the onset of COVID-19, noted panelist Jack Miller, principal listing broker with Parks Realty, who three years ago listed the estate home of Kelly Clarkson and her then-husband Brandon Blackstone for an aspirational $9 million. “In a market where the high-end was typically $1 to 3 million, we felt $6 to $7 million was more realistic,” Miller said. “But they were not yet highly motivated to sell, and in the three years the home was on the market, we were able to create a lot of exposure for it—even hosted an episode of ‘Million Dollar Properties’ on HGTV, which generated interest from a pool of wealthy buyers.” The home ultimately sold for $6.9 million, he said, but competition was keen, and in a rising market, he was able to sell several other multi-million-dollar properties, including a Nashville country bar with a $35 million price tag. “You have to focus on what will help your client accomplish their goals,” said Miller. “In this case, taking on a property with an aspirational list price when the market was going up and the seller was in no hurry—and capitalizing on the exposure—was definitely the way to go.” Taking on an overpriced property can indeed open doors, agreed panelist Roman Pavlik, director of the Luxury, Sports and Entertainment Division of Laurie Reeder Luxury Real Estate in South Florida. “The state of the market is critical,” said Pavlik, who has been selling real estate in the Metro Miami, Fort Lauderdale and Palm Beach triangle for more than 20 years. “If it’s going up, it can easily catch up to your pricing—and create a lot of press.” The state of inventory also has a lot to do with marketing strategy, Pavlik added. “There are more upscale buyers than available properties, and many buyers are searching on their own,” he said. “But we have access to MLS information that the public can’t access. I look for high-end leased properties at the end of the lease period, for example, and call the seller. Maybe they’ve been leasing it because they couldn’t get their price, but once they realize how much the property has appreciated, they often decide it’s time to sell.” Consider the relocation market, offered Miller. “The majority of people moving to Nashville today are after a lifestyle change,” he said. “I had one out-of-state buyer looking to spend up to $10 million on a waterfront property and/or one with an indoor basketball court. But after we’d exhausted every property we had to show him, he decided to look in Florida.” Unwilling to lose the client, Miller said, he made the referral to a Florida broker, who ultimately sold the client a property for $18.5 million. “The client was delighted, as was the broker, and I collected a great referral fee,” he said. In any inventory situation, a seller can benefit from accelerated marketing, noted panelist Jennie Heal, president of Supreme Auctions in Scottsdale, Arizona. “We work with homeowners—typically owners who don’t need to sell, but rather want to sell,” she said. “Maybe they have three or four houses around the country, and they want to sell one and invest the proceeds—or they’re tired of the maintenance cost. We partner with high-end agents all over the country, set a window of 30 to 45 days, and create great exposure for the home through the auction process.” The strategy, Heal explained, is to spotlight the property and create pressure to act. “That culminates in a competitive bidding war that brings the highest possible market value for the seller,” she said. Pavlik vouched for the process. “We had a home on the market for two years, priced at $1.8 million,” he said. “The accelerated sale option brought in 120 buyers in 30 days and the property sold for $2.4 million.” But everyone knows a REALTOR® noted Hartley. How do you win the business in the first place? “You do what it takes to set yourself up as the local high-end expert,” said Pavlik. “When clients don’t want to alienate their country club friends by choosing one broker over another, they are likely to turn to you instead.” Miss the event? Click here to purchase access to all the sessions at a special discount. Real Estate CEO & Agent Leadership Exchange 2021 Sponsors Diamond Sponsors Buffini & Company Center for REALTOR® Development Inside Real Estate Real Estate Webmasters Realty ONE Group Platinum Sponsors Elm Street Technology MoxiWorks Master Sponsors Berkshire Hathaway HomeServices Homes.com LoneWolf Technologies Host Sponsors Leading Real Estate Companies of the World® Rocket Mortgage zavvie ShelterZoom Event Sponsors Accredited Buyer’s Representative (ABR®) David Knox Real Estate Training Mbition  Pillar To Post Home Inspectors RPR® Sherri Johnson Coaching & Consulting Barbara Pronin is a contributing editor to RISMedia. The post Shifting Marketing Strategies for Today’s Luxury Climate appeared first on RISMedia......»»

Category: realestateSource: rismediaOct 6th, 2021

Camber Energy: What If They Made a Whole Company Out of Red Flags? – Kerrisdale

Kerrisdale Capital is short shares of Camber Energy Inc (NYSEAMERICAN:CEI). Camber is a defunct oil producer that has failed to file financial statements with the SEC since September 2020, is in danger of having its stock delisted next month, and just fired its accounting firm in September. Its only real asset is a 73% stake […] Kerrisdale Capital is short shares of Camber Energy Inc (NYSEAMERICAN:CEI). Camber is a defunct oil producer that has failed to file financial statements with the SEC since September 2020, is in danger of having its stock delisted next month, and just fired its accounting firm in September. Its only real asset is a 73% stake in Viking Energy Group Inc (OTCMKTS:VKIN), an OTC-traded company with negative book value and a going-concern warning that recently violated the maximum-leverage covenant on one of its loans. (For a time, it also had a fake CFO – long story.) Nonetheless, Camber’s stock price has increased by 6x over the past month; last week, astonishingly, an average of $1.9 billion worth of Camber shares changed hands every day. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more Is there any logic to this bizarre frenzy? Camber pumpers have seized upon the notion that the company is now a play on carbon capture and clean energy, citing a license agreement recently entered into by Viking. But the “ESG Clean Energy” technology license is a joke. Not only is it tiny relative to Camber’s market cap (costing only $5 million and granting exclusivity only in Canada), but it has embroiled Camber in the long-running escapades of a western Massachusetts family that once claimed to have created a revolutionary new combustion engine, only to wind up being penalized by the SEC for raising $80 million in unregistered securities offerings, often to unaccredited investors, and spending much of it on themselves. But the most fascinating part of the CEI boondoggle actually has to do with something far more basic: how many shares are there, and why has dilution been spiraling out of control? We believe the market is badly mistaken about Camber’s share count and ignorant of its terrifying capital structure. In fact, we estimate its fully diluted share count is roughly triple the widely reported number, bringing its true, fully diluted market cap, absurdly, to nearly $900 million. Since Camber is delinquent on its financials, investors have failed to fully appreciate the impact of its ongoing issuance of an unusual, highly dilutive class of convertible preferred stock. As a result of this “death spiral” preferred, Camber has already seen its share count increase 50- million-fold from early 2016 to July 2021 – and we believe it isn’t over yet, as preferred holders can and will continue to convert their securities and sell the resulting common shares. Even at the much lower valuation that investors incorrectly think Camber trades for, it’s still overvalued. The core Viking assets are low-quality and dangerously levered, while any near- term benefits from higher commodity prices will be muted by hedges established in 2020. The recent clean-energy license is nearly worthless. It’s ridiculous to have to say this, but Camber isn’t worth $900 million. If it looks like a penny stock, and it acts like a penny stock, it is a penny stock. Camber has been a penny stock before – no more than a month ago, in fact – and we expect that it will be once again. Company Background Founded in 2004, Camber was originally called Lucas Energy Resources. It went public via a reverse merger in 2006 with the plan of “capitaliz[ing] on the increasing availability of opportunistic acquisitions in the energy sector.”1 But after years of bad investments and a nearly 100% decline in its stock price, the company, which renamed itself Camber in 2017, found itself with little economic value left; faced with the prospect of losing its NYSE American listing, it cast about for new acquisitions beginning in early 2019. That’s when Viking entered the picture. Jim Miller, a member of Camber’s board, had served on the board of a micro-cap company called Guardian 8 that was working on “a proprietary new class of enhanced non-lethal weapons”; Guardian 8’s CEO, Steve Cochennet, happened to also be part owner of a Kansas-based company that operated some of Viking’s oil and gas assets and knew that Viking, whose shares traded over the counter, was interested in moving up to a national exchange.2 (In case you’re wondering, under Miller and Cochennet’s watch, Guardian 8’s stock saw its price drop to ~$0; it was delisted in 2019.3) Viking itself also had a checkered past. Previously a shell company, it was repurposed by a corporate lawyer and investment banker named Tom Simeo to create SinoCubate, “an incubator of and investor in privately held companies mainly in P.R. China.” But this business model went nowhere. In 2012, SinoCubate changed its name to Viking Investments but continued to achieve little. In 2014, Simeo brought in James A. Doris, a Canadian lawyer, as a member of the board of directors and then as president and CEO, tasked with executing on Viking’s new strategy of “acquir[ing] income-producing assets throughout North America in various sectors, including energy and real estate.” In a series of transactions, Doris gradually built up a portfolio of oil wells and other energy assets in the United States, relying on large amounts of high-cost debt to get deals done. But Viking has never achieved consistent GAAP profitability; indeed, under Doris’s leadership, from 2015 to the first half of 2021, Viking’s cumulative net income has totaled negative $105 million, and its financial statements warn of “substantial doubt regarding the Company’s ability to continue as a going concern.”4 At first, despite the Guardian 8 crew’s match-making, Camber showed little interest in Viking and pursued another acquisition instead. But, when that deal fell apart, Camber re-engaged with Viking and, in February 2020, announced an all-stock acquisition – effectively a reverse merger in which Viking would end up as the surviving company but transfer some value to incumbent Camber shareholders in exchange for the national listing. For reasons that remain somewhat unclear, this original deal structure was beset with delays, and in December 2020 (after months of insisting that deal closing was just around the corner) Camber announced that it would instead directly purchase a 51% stake in Viking; at the same time, Doris, Viking’s CEO, officially took over Camber as well. Subsequent transactions through July 2021 have brough Camber’s Viking stake up to 69.9 million shares (73% of Viking’s total common shares), in exchange for consideration in the form of a mixture of cash, debt forgiveness,5 and debt assumption, valued in the aggregate by Viking at only $50.7 million: Camber and Viking announced a new merger agreement in February 2021, aiming to take out the remaining Viking shares not owned by Camber and thus fully combine the two companies, but that plan is on hold because Camber has failed to file its last 10-K (as well as two subsequent 10-Qs) and is thus in danger of being delisted unless it catches up by November. Today, then, Camber’s absurd equity valuation rests entirely on its majority stake in a small, unprofitable oil-and-gas roll-up cobbled together by a Canadian lawyer. An Opaque Capital Structure Has Concealed the True Insanity of Camber’s Valuation What actually is Camber’s equity valuation? It sounds like a simple question, and sources like Bloomberg and Yahoo Finance supply what looks like a simple answer: 104.2 million shares outstanding times a $3.09 closing price (as of October 4, 2021) equals a market cap of $322 million – absurd enough, given what Camber owns. But these figures only tell part of the story. We estimate that the correct fully diluted market cap is actually a staggering $882 million, including the impact of both Camber’s unusual, highly dilutive Series C convertible preferred stock and its convertible debt. Because Camber is delinquent on its SEC filings, it’s difficult to assemble an up-to-date picture of its balance sheet and capital structure. The widely used 104.2-million-share figure comes from an 8-K filed in July that states, in part: As of July 9, 2021, the Company had 104,195,295 shares of common stock issued and outstanding. The increase in our outstanding shares of common stock from the date of the Company’s February 23, 2021 increase in authorized shares of common stock (from 25 million shares to 250 million shares), is primarily due to conversions of shares of Series C Preferred Stock of the Company into common stock, and conversion premiums due thereon, which are payable in shares of common stock. This bland language belies the stunning magnitude of the dilution that has already taken place. Indeed, we estimate that, of the 104.2 million common shares outstanding on July 9th, 99.7% were created via the conversion of Series C preferred in the past few years – and there’s more where that came from. The terms of Camber’s preferreds are complex but boil down to the following: they accrue non- cash dividends at the sky-high rate of 24.95% per year for a notional seven years but can be converted into common shares at any time. The face value of the preferred shares converts into common shares at a fixed conversion price of $162.50 per share, far higher than the current trading price – so far, so good (from a Camber-shareholder perspective). The problem is the additional “conversion premium,” which is equal to the full seven years’ worth of dividends, or 7 x 24.95% ≈ 175% of face value, all at once, and is converted at a far lower conversion price that “will never be above approximately $0.3985 per share…regardless of the actual trading price of Camber’s common stock” (but could in principle go lower if the price crashes to new lows).6 The upshot of all this is that one share of Series C preferred is now convertible into ~43,885 shares of common stock.7 Historically, all of Camber’s Series C preferred was held by one investor: Discover Growth Fund. The terms of the preferred agreement cap Discover’s ownership of Camber’s common shares at 9.99% of the total, but nothing stops Discover from converting preferred into common up to that cap, selling off the resulting shares, converting additional preferred shares into common up to the cap, selling those common shares, etc., as Camber has stated explicitly (and as Discover has in fact done over the years) (emphasis added): Although Discover may not receive shares of common stock exceeding 9.99% of its outstanding shares of common stock immediately after affecting such conversion, this restriction does not prevent Discover from receiving shares up to the 9.99% limit, selling those shares, and then receiving the rest of the shares it is due, in one or more tranches, while still staying below the 9.99% limit. If Discover chooses to do this, it will cause substantial dilution to the then holders of its common stock. Additionally, the continued sale of shares issuable upon successive conversions will likely create significant downward pressure on the price of its common stock as Discover sells material amounts of Camber’s common stock over time and/or in a short period of time. This could place further downward pressure on the price of its common stock and in turn result in Discover receiving an ever increasing number of additional shares of common stock upon conversion of its securities, and adjustments thereof, which in turn will likely lead to further dilution, reductions in the exercise/conversion price of Discover’s securities and even more downward pressure on its common stock, which could lead to its common stock becoming devalued or worthless.8 In 2017, soon after Discover began to convert some of its first preferred shares, Camber’s then- management claimed to be shocked by the results and sued Discover for fraud, arguing that “[t]he catastrophic effect of the Discover Documents [i.e. the terms of the preferred] is so devastating that the Discover Documents are prima facie unconscionable” because “they will permit Discover to strip Camber of its value and business well beyond the simple repayment of its debt.” Camber called the documents “extremely difficult to understand” and insisted that they “were drafted in such a way as to obscure the true terms of such documents and the total number of shares of common stock that could be issuable by Camber thereunder. … Only after signing the documents did Camber and [its then CEO]…learn that Discover’s reading of the Discover Documents was that the terms that applied were the strictest and most Camber unfriendly interpretation possible.”9 But the judge wasn’t impressed, suggesting that it was Camber’s own fault for failing to read the fine print, and the case was dismissed. With no better options, Camber then repeatedly came crawling back to Discover for additional tranches of funding via preferred sales. While the recent spike in common share count to 104.2 million as of early July includes some of the impact of ongoing preferred conversion, we believe it fails to include all of it. In addition to Discover’s 2,093 shares of Series C preferred held as of February 2021, Camber issued additional shares to EMC Capital Partners, a creditor of Viking’s, as part of a January agreement to reduce Viking’s debt.10 Then, in July, Camber issued another block of preferred shares – also to Discover, we believe – to help fund Viking’s recent deals.11 We speculate that many of these preferred shares have already been converted into common shares that have subsequently been sold into a frenzied retail bid. Beyond the Series C preferred, there is one additional source of potential dilution: debt issued to Discover in three transactions from December 2020 to April 2021, totaling $20.5 million in face value, and amended in July to be convertible at a fixed price of $1.25 per share.12 We summarize our estimates of all of these sources of potential common share issuance below: Might we be wrong about this math? Absolutely – the mechanics of the Series C preferreds are so convoluted that prior Camber management sued Discover complaining that the legal documents governing them “were drafted in such a way as to obscure the true terms of such documents and the total number of shares of common stock that could be issuable by Camber thereunder.” Camber management could easily set the record straight by revealing the most up- to-date share count via an SEC filing, along with any additional clarifications about the expected future share count upon conversion of all outstanding convertible securities. But we're confident that the current share count reported in financial databases like Bloomberg and Yahoo Finance significantly understates the true, fully diluted figure. An additional indication that Camber expects massive future dilution relates to the total authorized shares of common stock under its official articles of incorporation. It was only a few months ago, in February, that Camber had to hold a special shareholder meeting to increase its maximum authorized share count from 25 million to 250 million in order to accommodate all the shares to be issued because of preferred conversions. But under Camber’s July agreement to sell additional preferred shares to Discover, the company (emphasis added) agreed to include proposals relating to the approval of the July 2021 Purchase Agreement and the issuance of the shares of common stock upon conversion of the Series C Preferred Stock sold pursuant to the July 2021 Purchase Agreement, as well as an increase in authorized common stock to fulfill our obligations to issue such shares, at the Company’s next Annual Meeting, the meeting held to approve the Merger or a separate meeting in the event the Merger is terminated prior to shareholder approval, and to use commercially reasonable best efforts to obtain such approvals as soon as possible and in any event prior to January 1, 2022.13 In other words, Camber can already see that 250 million shares will soon not be enough, consistent with our estimate of ~285 million fully diluted shares above. In sum, Camber’s true overvaluation is dramatically worse than it initially appears because of the massive number of common shares that its preferred and other securities can convert into, leading to a fully diluted share count that is nearly triple the figure found in standard information sources used by investors. This enormous latent dilution, impossible to discern without combing through numerous scattered filings made by a company with no up-to-date financial statements in the public domain, means that the market is – perhaps out of ignorance – attributing close to one billion dollars of value to a very weak business. Camber’s Stake in Viking Has Little Real Value In light of Camber’s gargantuan valuation, it’s worth dwelling on some basic facts about its sole meaningful asset, a 73% stake in Viking Energy. As of 6/30/21: Viking had negative $15 million in shareholder equity/book Its financial statements noted “substantial doubt regarding the Company’s ability to continue as a going ” Of its $101.3 million in outstanding debt (at face value), nearly half (48%) was scheduled to mature and come due over the following 12 months. Viking noted that it “does not currently maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms.” Viking’s CEO “has concluded that these [disclosure] controls and procedures are not effective in providing reasonable assurance of compliance.” Viking disclosed that a key subsidiary, Elysium Energy, was “in default of the maximum leverage ratio covenant under the term loan agreement at June 30, 2021”; this covenant caps the entity’s total secured debt to EBITDA at 75 to 1.14 This is hardly a healthy operation. Indeed, even according to Viking’s own black-box estimates, the present value of its total proved reserves of oil and gas, using a 10% discount rate (likely generous given the company’s high debt costs), was $120 million as of 12/31/20,15 while its outstanding debt, as stated above, is $101 million – perhaps implying a sliver of residual economic value to equity holders, but not much. And while some market observers have recently gotten excited about how increases in commodity prices could benefit Camber/Viking, any near-term impact will be blunted by hedges put on by Viking in early 2020, which cover, with respect to its Elysium properties, “60% of the estimated production for 2021 and 50% of the estimated production for the period between January, 2022 to July, 2022. Theses hedges have a floor of $45 and a ceiling ranging from $52.70 to $56.00 for oil, and a floor of $2.00 and a ceiling of $2.425 for natural gas” – cutting into the benefit of any price spikes above those ceiling levels.16 Sharing our dreary view of Viking’s prospects is one of Viking’s own financial advisors, a firm called Scalar, LLC, that Viking hired to prepare a fairness opinion under the original all-stock merger agreement with Camber. Combining Viking’s own internal projections with data on comparable-company valuation multiples, Scalar concluded in October 2020 that Viking’s equity was worth somewhere between $0 and $20 million, depending on the methodology used, with the “purest” methodology – a true, full-blown DCF – yielding the lowest estimate of $0-1 million: Camber’s advisor, Mercer Capital, came to a similar conclusion: its “analysis indicated an implied equity value of Viking of $0 to $34.3 million.”17 It’s inconceivable that a majority stake in this company, deemed potentially worthless by multiple experts and clearly experiencing financial strains, could somehow justify a near-billion-dollar valuation. Instead of dwelling on the unpleasant realities of Viking’s oil and gas business, Camber has drawn investor attention to two recent transactions conducted by Viking with Camber funding: a license agreement with “ESG Clean Energy,” discussed in further detail below, and the acquisition of a 60.3% stake in Simson-Maxwell, described as “a leading manufacturer and supplier of industrial engines, power generation products, services and custom energy solutions.” But Viking paid just $8 million for its Simson-Maxwell shares,18 and the company has just 125 employees; it defies belief to think that this purchase was such a bargain as to make a material dent in Camber’s overvaluation. And what does Simson-Maxwell actually do? One of its key officers, Daryl Kruper (identified as its chairman in Camber’s press release), describes the company a bit less grandly and more concretely on his LinkedIn page: Simson Maxwell is a power systems specialist. The company assembles and sells generator sets, industrial engines, power control systems and switchgear. Simson Maxwell has service and parts facilities in Edmonton, Calgary, Prince George, Vancouver, Nanaimo and Terrace. The company has provided its western Canadian customers with exceptional service for over 70 years. In other words, Simson-Maxwell acts as a sort of distributor/consultant, packaging industrial- strength generators and engines manufactured by companies like GE and Mitsubishi into systems that can provide electrical power, often in remote areas in western Canada; Simson- Maxwell employees then drive around in vans maintaining and repairing these systems. There’s nothing obviously wrong with this business, but it’s small, regional (not just Canada – western Canada specifically), likely driven by an unpredictable flow of new large projects, and unlikely to garner a high standalone valuation. Indeed, buried in one of Viking’s agreements with Simson- Maxwell’s selling shareholders (see p. 23) are clauses giving Viking the right to purchase the rest of the company between July 2024 and July 2026 at a price of at least 8x trailing EBITDA and giving the selling shareholders the right to sell the rest of their shares during the same time frame at a price of at least 7x trailing EBITDA – the kind of multiples associated with sleepy industrial distributors, not fast-growing retail darlings. Since Simon-Maxwell has nothing to do with Viking’s pre-existing assets or (alleged) expertise in oil and gas, and Viking and Camber are hardly flush with cash, why did they make the purchase? We speculate that management is concerned about the combined company’s ability to maintain its listing on the NYSE American. For example, when describing its restruck merger agreement with Viking, Camber noted: Additional closing conditions to the Merger include that in the event the NYSE American determines that the Merger constitutes, or will constitute, a “back-door listing”/“reverse merger”, Camber (and its common stock) is required to qualify for initial listing on the NYSE American, pursuant to the applicable guidance and requirements of the NYSE as of the Effective Time. What does it take to qualify for initial listing on the NYSE American? There are several ways, but three require at least $4 million of positive stockholders’ equity, which Viking, the intended surviving company, doesn’t have today; another requires a market cap of greater than $75 million, which management might (quite reasonably) be concerned about achieving sustainably. That leaves a standard that requires a listed company to have $75 million in assets and revenue. With Viking running at only ~$40 million of annualized revenue, we believe management is attempting to buy up more via acquisition. In fact, if the goal is simply to “buy” GAAP revenue, the most efficient way to do it is by acquiring a stake in a low-margin, slow- growing business – little earnings power, hence a low purchase price, but plenty of revenue. And by buying a majority stake instead of the whole thing, the acquirer can further reduce the capital outlay while still being able to consolidate all of the operation’s revenue under GAAP accounting. Buying 60.3% of Simson-Maxwell seems to fit the bill, but it’s a placeholder, not a real value-creator. Camber’s Partners in the Laughable “ESG Clean Energy” Deal Have a Long History of Broken Promises and Alleged Securities Fraud The “catalyst” most commonly cited by Camber Energy bulls for the recent massive increase in the company’s stock price is an August 24th press release, “Camber Energy Secures Exclusive IP License for Patented Carbon-Capture System,” announcing that the company, via Viking, “entered into an Exclusive Intellectual Property License Agreement with ESG Clean Energy, LLC (‘ESG’) regarding ESG’s patent rights and know-how related to stationary electric power generation, including methods to utilize heat and capture carbon dioxide.” Our research suggests that the “intellectual property” in question amounts to very little: in essence, the concept of collecting the exhaust gases emitted by a natural-gas–fueled electric generator, cooling it down to distill out the water vapor, and isolating the remaining carbon dioxide. But what happens to the carbon dioxide then? The clearest answer ESG Clean Energy has given is that it “can be sold to…cannabis producers”19 to help their plants grow faster, though the vast majority of the carbon dioxide would still end up escaping into the atmosphere over time, and additional greenhouse gases would be generated in compressing and shipping this carbon dioxide to the cannabis producers, likely leading to a net worsening of carbon emissions.20 And what is Viking – which primarily extracts oil and gas from the ground, as opposed to running generators and selling electrical power – supposed to do with this technology anyway? The idea seems to be that the newly acquired Simson-Maxwell business will attempt to sell the “technology” as a value-add to customers who are buying generators in western Canada. Indeed, while Camber’s press-release headline emphasized the “exclusive” nature of the license, the license is only exclusive in Canada plus “up to twenty-five locations in the United States” – making the much vaunted deal even more trivial than it might first appear. Viking paid an upfront royalty of $1.5 million in cash in August, with additional installments of $1.5 and $2 million due by January and April 2022, respectively, for a total of $5 million. In addition, Viking “shall pay to ESG continuing royalties of not more than 15% of the net revenues of Viking generated using the Intellectual Property, with the continuing royalty percentage to be jointly determined by the parties collaboratively based on the parties’ development of realistic cashflow models resulting from initial projects utilizing the Intellectual Property, and with the parties utilizing mediation if they cannot jointly agree to the continuing royalty percentage”21 – a strangely open-ended, perhaps rushed, way of setting a royalty rate. Overall, then, Viking is paying $5 million for roughly 85% of the economics of a technology that might conceivably help “capture” CO2 emitted by electric generators in Canada (and up to 25 locations in the United States!) but then probably just re-emit it again. This is the great advance that has driven Camber to a nearly billion-dollar market cap. It’s with good reason that on ESG Clean Energy’s web site (as of early October), the list of “press releases that show that ESG Clean Energy is making waves in the distributive power industry” is blank: If the ESG Clean Energy license deal were just another trivial bit of vaporware hyped up by a promotional company and its over-eager shareholders, it would be problematic but unremarkable; things like that happen all the time. But it’s the nature and history of Camber/Viking’s counterparty in the ESG deal that truly makes the situation sublime. ESG Clean Energy is in fact an offshoot of the Scuderi Group, a family business in western Massachusetts created to develop the now deceased Carmelo Scuderi’s idea for a revolutionary new type of engine. (In a 2005 AP article entitled “Engine design draws skepticism,” an MIT professor “said the creation is almost certain to fail.”) Two of Carmelo’s children, Nick and Sal, appeared in a recent ESG Clean Energy video with Camber’s CEO, who called Sal “more of the brains behind the operation” but didn’t state his official role – interesting since documents associated with ESG Clean Energy’s recent small-scale capital raises don’t mention Sal at all. Buried in Viking’s contract with ESG Clean Energy is the following section, indicating that the patents and technology underlying the deal actually belong in the first instance to the Scuderi Group, Inc.: 2.6 Demonstration of ESG’s Exclusive License with Scuderi Group and Right to Grant Licenses in this Agreement. ESG shall provide necessary documentation to Viking which demonstrates ESG’s right to grant the licenses in this Section 2 of this Agreement. For the avoidance of doubt, ESG shall provide necessary documentation that verifies the terms and conditions of ESG’s exclusive license with the Scuderi Group, Inc., a Delaware USA corporation, having an address of 1111 Elm Street, Suite 33, West Springfield, MA 01089 USA (“Scuderi Group”), and that nothing within ESG’s exclusive license with the Scuderi Group is inconsistent with the terms of this Agreement. In fact, the ESG Clean Energy entity itself was originally called Scuderi Clean Energy but changed its name in 2019; its subsidiary ESG-H1, LLC, which presides over a long-delayed power-generation project in the small city of Holyoke, Massachusetts (discussed further below), used to be called Scuderi Holyoke Power LLC but also changed its name in 2019.22 The SEC provided a good summary of the Scuderi Group’s history in a 2013 cease-and-desist order that imposed a $100,000 civil money penalty on Sal Scuderi (emphasis added): Founded in 2002, Scuderi Group has been in the business of developing a new internal combustion engine design. Scuderi Group’s business plan is to develop, patent, and license its engine technology to automobile companies and other large engine manufacturers. Scuderi Group, which considers itself a development stage company, has not generated any revenue… …These proceedings arise out of unregistered, non-exempt stock offerings and misleading disclosures regarding the use of offering proceeds by Scuderi Group and Mr. Scuderi, the company’s president. Between 2004 and 2011, Scuderi Group sold more than $80 million worth of securities through offerings that were not registered with the Commission and did not qualify for any of the exemptions from the Securities Act’s registration requirement. The company’s private placement memoranda informed investors that Scuderi Group intended to use the proceeds from its offerings for “general corporate purposes, including working capital.” In fact, the company was making significant payments to Scuderi family members for non-corporate purposes, including, large, ad hoc bonus payments to Scuderi family employees to cover personal expenses; payments to family members who provided no services to Scuderi; loans to Scuderi family members that were undocumented, with no written interest and repayment terms; large loans to fund $20 million personal insurance policies for six of the Scuderi siblings for which the company has not been, and will not be, repaid; and personal estate planning services for the Scuderi family. Between 2008 and 2011, a period when Scuderi Group sold more than $75 million in securities despite not obtaining any revenue, Mr. Scuderi authorized more than $3.2 million in Scuderi Group spending on such purposes. …In connection with these offerings [of stock], Scuderi Group disseminated more than 3,000 PPMs [private placement memoranda] to potential investors, directly and through third parties. Scuderi Group found these potential investors by, among other things, conducting hundreds of roadshows across the U.S.; hiring a registered broker-dealer to find investors; and paying numerous intermediaries to encourage people to attend meetings that Scuderi Group arranged for potential investors. …Scuderi Group’s own documents reflect that, in total, over 90 of the company’s investors were non-accredited investors… The Scuderi Group and Sal Scuderi neither admitted nor denied the SEC’s findings but agreed to stop violating securities law. Contemporary local news coverage of the regulatory action added color to the SEC’s description of the Scuderis’ fund-raising tactics (emphasis added): Here on Long Island, folks like HVAC specialist Bill Constantine were early investors, hoping to earn a windfall from Scuderi licensing the idea to every engine manufacturer in the world. Constantine said he was familiar with the Scuderis because he worked at an Islandia company that distributed an oil-less compressor for a refrigerant recovery system designed by the family patriarch. Constantine told [Long Island Business News] he began investing in the engine in 2007, getting many of his friends and family to put their money in, too. The company held an invitation-only sales pitch at the Marriott in Islandia in February 2011. Commercial real estate broker George Tsunis said he was asked to recruit investors for the Scuderi Group, but declined after hearing the pitch. “They were talking about doing business with Volkswagen and Mercedes, but everything was on the come,” Tsunis said. “They were having a party and nobody came.” Hot on the heels of the SEC action, an individual investor who had purchased $197,000 of Scuderi Group preferred units sued the Scuderi Group as well as Sal, Nick, Deborah, Stephen, and Ruth Scuderi individually, alleging, among other things, securities fraud (e.g. “untrue statements of material fact” in offering memoranda). This case was settled out of court in 2016 after the judge reportedly “said from the bench that he was likely to grant summary judgement for [the] plaintiff. … That ruling would have clear the way for other investors in Scuderi to claim at least part of a monetary settlement.” (Two other investors filed a similar lawsuit in 2017 but had it dismissed in 2018 because they ran afoul of the statute of limitations.23) The Scuderi Group put on a brave face, saying publicly, “The company is very pleased to put the SEC matter behind it and return focus to its technology.” In fact, in December 2013, just months after the SEC news broke, the company entered into a “Cooperative Consortium Agreement” with Hino Motors, a Japanese manufacturer, creating an “engineering research group” to further develop the Scuderi engine concept. “Hino paid Scuderi an initial fee of $150,000 to join the Consortium Group, which was to be refunded if Scuderi was unable to raise the funding necessary to start the Project by the Commencement Date,” in the words of Hino’s later lawsuit.24 Sure enough, the Scuderi Group ended up canceling the project in early October 2014 “due to funding and participant issues” – but it didn’t pay back the $150,000. Hino’s lawsuit documents Stephen Scuderi’s long series of emailed excuses: 10/31/14: “I must apologize, but we are going to be a little late in our refund of the Consortium Fee of $150,000. I am sure you have been able to deduce that we have a fair amount of challenging financial problems that we are working through. I am counting on financing for our current backlog of Power Purchase Agreement (PPA) projects to provide the capital to refund the Consortium Fee. Though we are very optimistic that the financial package for our PPA projects will be completed successfully, the process is taking a little longer than I originally expected to complete (approximately 3 months longer).” 11/25/14: “I am confident that we can pay Hino back its refund by the end of January. … The reason I have been slow to respond is because I was waiting for feedback from a few large cornerstone investors that we have been negotiating with. The negotiations have been progressing very well and we are close to a comprehensive financing deal, but (as often happens) the back and forth of the negotiating process takes ” 1/12/15: “We have given a proposal to the potential high-end investors that is most interested in investing a large sum of money into Scuderi Group. That investor has done his due-diligence on our company and has communicated to us that he likes our proposal but wants to give us a counter ” 1/31/15: “The individual I spoke of last month is one of several high net worth individuals that are currently evaluating investing a significant amount of equity capital into our That particular individual has not yet responded with a counter proposal, because he wishes to complete a study on the power generation market as part of his due diligence effort first. Though we learned of the study only recently, we believe that his enthusiasm for investing in Scuderi Group remains as strong as ever and steady progress is being made with the other high net worth individuals as well. … I ask only that you be patient for a short while longer as we make every effort possible to raise the monies need[ed] to refund Hino its consortium fee.” Fed up, Hino sued instead of waiting for the next excuse – but ended up discovering that the Scuderi bank account to which it had wired the $150,000 now contained only about $64,000. Hino and the Scuderi Group then entered into a settlement in which that account balance was supposed to be immediately handed over to Hino, with the remainder plus interest to be paid back later – but Scuderi didn’t even comply with its own settlement, forcing Hino to re-initiate its lawsuit and obtain an official court judgment against Scuderi. Pursuant to that judgment, Hino formally requested an array of documents like tax returns and bank statements, but Scuderi simply ignored these requests, using the following brazen logic:25 Though as of this date, the execution has not been satisfied, Scuderi continues to operate in the ordinary course of business and reasonably expects to have money available to satisfy the execution in full in the near future. … Responding to the post- judgment discovery requests, as a practical matter, will not enable Scuderi to pay Hino any faster than can be achieved by Scuderi using all of its resources and efforts to conduct its day-to-day business operations and will only serve to impose additional and unnecessary costs on both parties. Scuderi has offered and is willing to make payments every 30 days to Hino in amounts not less than $10,000 until the execution is satisfied in full. Shortly thereafter, in March 2016, Hino dropped its case, perhaps having chosen to take the $10,000 per month rather than continue to tangle in court with the Scuderis (though we don’t know for sure). With its name tarnished by disgruntled investors and the SEC, and at least one of its bank accounts wiped out by Hino Motors, the Scuderi Group didn’t appear to have a bright future. But then, like a phoenix rising from the ashes, a new business was born: Scuderi Clean Energy, “a wholly owned subsidiary of Scuderi Group, Inc. … formed in October 2015 to market Scuderi Engine Technology to the power generation industry.” (Over time, references to the troubled “Scuderi Engine Technology” have faded away; today ESG Clean Energy is purportedly planning to use standard, off-the-shelf Caterpillar engines. And while an early press release described Scuderi Clean Energy as “a wholly owned subsidiary of Scuderi Group,” the current Scuderi/ESG Clean Energy, LLC, appears to have been created later as its own (nominally) independent entity, led by Nick Scuderi.) As the emailed excuses in the Hino dispute suggested, this pivot to “clean energy” and electric power generation had been in the works for some time, enabling Scuderi Clean Energy to hit the ground running by signing a deal with Holyoke Gas and Electric, a small utility company owned by the city of Holyoke, Massachusetts (population 38,238) in December 2015. The basic idea was that Scuderi Clean Energy would install a large natural-gas generator and associated equipment on a vacant lot and use it to supply Holyoke Gas and Electric with supplemental electric power, especially during “peak demand periods in the summer.”26 But it appears that, from day one, Holyoke had its doubts. In its 2015 annual report (p. 80), the company wrote (emphasis added): In December 2015, the Department contracted with Scuderi Clean Energy, LLC under a twenty (20) year [power purchase agreement] for a 4.375 MW [megawatt] natural gas generator. Uncertain if this project will move forward; however Department mitigated market and development risk by ensuring interconnection costs are born by other party and that rates under PPA are discounted to full wholesale energy and resulting load reduction cost savings (where and if applicable). Holyoke was right to be uncertain. Though its 2017 annual report optimistically said, “Expected Commercial Operation date is April 1, 2018” (p. 90), the 2018 annual report changed to “Expected Commercial Operation is unknown at this time” – language that had to be repeated verbatim in the 2019 and 2020 annual reports. Six years after the contract was signed, the Scuderi Clean Energy, now ESG Clean Energy, project still hasn’t produced one iota of power, let alone one dollar of revenue. What it has produced, however, is funding from retail investors, though perhaps not as much as the Scuderis could have hoped. Beginning in 2017, Scuderi Clean Energy managed to sell roughly $1.3 million27 in 5-year “TIGRcub” bonds (Top-Line Income Generation Rights Certificates) on the small online Entrex platform by advertising a 12% “minimum yield” and 16.72% “projected IRR” (based on 18.84% “revenue participation”) over a 5-year term. While we don’t know the exact terms of these bonds, we believe that, at least early on, interest payments were covered by some sort of prepaid insurance policy, while later payments depend on (so far nonexistent) revenue from the Holyoke project. But Scuderi Clean Energy had been aiming to raise $6 million to complete the project, not $1 million; indeed, this was only supposed to be the first component of a whole empire of “Scuderi power plants”28 that would require over $100 million to build but were supposedly already under contract.29 So far, however, nothing has come of these other projects, and, seemingly suffering from insufficient funding, the Holyoke effort languished. (Of course, it might have been more investor-friendly if Scuderi Clean Energy had only accepted funding on the condition that there was enough to actually complete construction.) Under the new ESG Clean Energy name, the Scuderis tried in 2019 to raise capital again, this time in the form of $5 million of preferred units marketed as a “5 year tax free Investment with 18% cash-on-cash return,” but, based on an SEC filing, it appears that the offering didn’t go well, raising just $150,000. With funding still limited and the Holyoke project far from finished, the clock is ticking: the $1.3 million of bonds will begin to mature in early 2022. It was thus fortunate that Viking came along when it did to pay ESG Clean Energy a $1.5 million upfront royalty for its incredible technology. Interestingly, ESG Clean Energy began in late 2020 to provide extremely detailed updates on its Holyoke construction progress, including items as prosaic as “Throughout the week, ESG had met with and continued to exchange numerous e-mails with our mechanical engineering firm.” With frequent references to the “very fluid environment,” the tone is unmistakably defensive. Consider the September update (emphasis not added): Reading between the lines, we believe the intended message is this: “We didn’t just take your money and run – honest! We’re working hard!” Nonetheless, someone appears to be unhappy, as indicated by the FINRA BrokerCheck report for one Eric Willer, a former employee of Fusion Analytics, which was listed as a recipient of sales compensation in connection with the Scuderi Clean Energy bond offerings. Willer may now be in hot water: a disclosure notice dated 3/31/2021 reads: “Wells Notice received as a preliminary determination to recommend disciplinary action of fraud, negligent misrepresentation, and recommendation without due diligence in the sale of bonds issued by Scuderi Holyoke,” with a further investigation still pending. We wait eagerly for additional updates. Why does the saga of the Scuderis matter? Many Camber investors seem to have convinced themselves that the ESG Clean Energy “carbon capture” IP licensed by Viking has enormous value and can plausibly justify hundreds of millions of dollars of incremental market cap. As we explained above, we find this thoroughly implausible even without getting into Scuderi family history: in the end, the “technology” will at best add a smidgen of value to some generators in Canada. But track records matter too, and the Scuderi track record of failed R&D, delays, excuses, and alleged misuse of funds is worth considering. These people have spent six years trying and failing to sell power to a single municipally owned utility company in a single small city in western Massachusetts. Are they really about to end climate change? The Case of the Fictitious CFO Since Camber is effectively a bet on Viking, and Viking, in its current form, has been assembled by James Doris, it’s important to assess Doris’s probity and good judgment. In that connection, it’s noteworthy that, from December 2014 to July 2016, at the very start of Doris’s reign as Viking’s CEO and president, the company’s CFO, Guangfang “Cecile” Yang, was apparently fictitious. (Covering the case in 2019, Dealbreaker used the headline “Possibly Imaginary CFO Grounds For Very Real Fraud Lawsuit.”) This strange situation was brought to light by an SEC lawsuit against Viking’s founder, Tom Simeo; just last month, a US district court granted summary judgment in favor of the SEC against Simeo, but Simeo’s penalties have yet to be determined.30 The court’s opinion provided a good overview of the facts (references omitted, emphasis added): In 2013, Simeo hired Yang, who lives in Shanghai, China, to be Viking’s CFO. Yang served in that position until she purportedly resigned in July 2016. When Yang joined the company, Simeo fabricated a standing resignation letter, in which Yang purported to “irrevocably” resign her position with Viking “at any time desired by the Company” and “[u]pon notification that the Company accepted [her] resignation”…Simeo forged Yang’s signature on this document. This letter allowed Simeo to remove Yang from the position of CFO whenever he pleased. Simeo also fabricated a power of attorney purportedly signed by Yang that allowed Simeo to “affix Yang’s signature to any and all documents,” including documents that Viking had to file with the SEC. Viking represented to the public that Yang was the company’s CFO and a member of its Board of Directors. But “Yang never actually functioned as Viking’s CFO.” She “was not involved in the financial and strategic decisions” of Viking during the Relevant Period. Nor did she play any role in “preparing Viking’s financial statements or public filings.” Indeed, at least as of April 3, 2015, Yang did not do “any work” on Viking’s financial statements and did not speak with anyone who was preparing them. She also did not “review or evaluate Viking’s internal controls over financial reporting.” Further, during most or all of the Relevant Period, Viking did not compensate Yang despite the fact that she was the company’s highest ranking financial employee. Nevertheless, Simeo says that he personally paid her in cash. Yang’s “sole point of contact” at Viking was Simeo. Indeed Simeo was “the only person at Viking who communicated with Yang.” Thus many people at Viking never interacted with Yang. Despite the fact that Doris has served as Viking’s CEO since December 2014, he “has never met or spoken to Yang either in person or through any other means, and he has never communicated with Yang in writing.” … To think Yang served as CFO during this time, but the CEO and other individuals involved with Viking’s SEC filings never once spoke with her, strains all logical credulity. It remains unclear whether Yang is even a real person. When the SEC asked Simeo directly (“Is it the case that you made up the existence of Ms. Yang?”) he responded by “invoking the Fifth Amendment.”31 While the SEC’s efforts thus far have focused on Simeo, the case clearly raises the question of what Doris knew and when he knew it. Indeed, though many of the required Sarbanes-Oxley certifications of Viking’s financial statements during the Yang period were signed by Simeo in his role as chairman, Doris did personally sign off on an amended 2015 10-K that refers to Yang as CFO through July 2016 and includes her complete, apparently fictitious, biography. Viking has also disclosed the following, which we believe pertains to the Yang affair (emphasis added): In April of 2019, the staff (the “Staff”) of the SEC’s Division of Enforcement notified the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company, as well as against its CEO and its CFO, for alleged violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder [laws that pertain to securities fraud] during the period from early 2014 through late 2016. The Staff’s notice is not a formal allegation or a finding of wrongdoing by the Company, and the Company has communicated with the Staff regarding its preliminary determination. The Company believes it has adequate defenses and intends to vigorously defend any enforcement action that may be initiated by the SEC.32 Perhaps the SEC has moved on from this matter and will let Doris and Viking off the hook, but the fact pattern is eyebrow-raising nonetheless. A similarly troubling incident came soon after the time of Yang’s “resignation,” when Viking’s auditing firm resigned, withdrew its recent audit report, and wrote a letter “advising the Company that it believed an illegal act may have occurred” – because of concerns that had nothing to do with Yang. First, Viking accounted for the timing of a grant of shares to a consultant in apparent contradiction of the terms of the written agreement with the consultant – a seemingly minor issue. But, under scrutiny from the auditor, Viking “produced a letter… (the version which was provided to us was unsigned), from the consultant stating that the Agreement was invalidated verbally.” Reading between the lines, the “uncomfortable” auditor suspected that this letter was a fake, created just to get him off Viking’s back. In another incident, the auditor “became aware that seven of the company’s loans…were due to be repaid” in August 2016 but hadn’t been, creating a default that would in turn “trigger[] a cross-default clause contained in 17 additional loans” – but Viking claimed it “had secured an oral extension to the loans from the broker-dealer representing the lenders by September 6, 2016” – after the loans’ maturity dates – “so the Company did not need to disclose ‘the defaults under these loans’ after such time since the loans were not in default.” It’s easy to see why an auditor would object to this attitude toward financial disclosure – no need to mention a default in August as long as you can secure a verbal agreement resolving it by September! Against this backdrop of disturbing behavior, the fact that Camber just dismissed its auditing firm three weeks ago on September 16th, even with delisting looming if the company can’t become current again with its SEC filings by November, seems even more unsettling. Have Camber and Viking management earned investors’ trust? Conclusion It’s not clear why, back in 2017, Lucas Energy changed its name to “Camber” specifically, but we’d like to think the inspiration was England’s Camber Castle. According to Atlas Obscura, the castle was supposed to help defend the English coast, but it took so long to build that its “advanced design was obsolete by the time of its completion,” and changes in the local environment meant that “the sea had receded so far that cannons fired from the fort would no longer be able to reach any invading ships.” Still, the useless castle was “manned and serviced” for nearly a century before being officially decommissioned. Today, Camber “lies derelict and almost unheard of.” But what’s in a name? Article by Kerrisdale Capital Management Updated on Oct 5, 2021, 12:06 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: valuewalkOct 5th, 2021

AvalonBay (AVB) Raises Q3 Projections, Acquires Properties

AvalonBay (AVB) raises Q3 total residential rental revenue projections for same-store communities, and acquires properties in Charlotte and Flower Mound. AvalonBay Communities, Inc. AVB recently raised its third-quarter total residential rental revenue projection for the same-store communities on lower-than-expected uncollectible lease revenues, and better-than-expected effective lease rates and occupancy. This residential REIT witnessed higher-than-anticipated delinquent rent payments from COVID-19 rental assistance programs.Particularly, in its recently-released third-quarter operating update, the company noted that it expects total residential rental revenues for same-store communities to inch up 0.9-1.1% from the prior-year period. At the mid-point, this is 180 basis-points (bps) higher than the forecast issued on Jul 28.While the total average physical occupancy of 96.3% in September is flat with the August level, it is up 30 basis points from July and 40 bps from the second quarter. Also, the average like-term effective rent change of 11% in September increased from August’s 8.1%, July’s 5% and second quarter’s negative 1.3%.AvalonBay also witnessed an increase in the average move-in rent value, which, in September 2021 (as of Sep 22), was roughly 24% above the December 2020 level and 6% ahead of the September 2019 mark.During the third quarter, the company has also acquired a number of properties. In Flower Mound, TX, it acquired The Nexus Lakeside for around $117 million. This property comprises 425 apartment homes and approximately 18,000 square feet of commercial space. In Charlotte, NC, the company acquired Hub South End for nearly $104 million and Three 30 Five for roughly $53 million.Markedly, the U.S. apartment market put up an encouraging show in August, as its performance continued to pick up pace in the month, setting new records for rent growth and occupancy.Per a report from the real estate technology and analytics firm RealPage, occupancy is at a new all-time record level, reaching 97.1%. In fact, August 2021 marked the first time that occupancy has ever surpassed the 97% level. Robust occupancy is also fueling rent growth, and effective asking prices for new renters climbed 1.8% in August, in turn, pushing asking prices up 10.3%, year over year. In addition, renters signing renewal leases in August witnessed price increases averaging 5.2%. Rent growth has also been widespread. While the small metros are witnessing robust occupancy, the gateway markets too are seeing a decent increase in the effective asking rents.After living with parents during the onset of the pandemic, young adults are now forming new households, in turn, driving demand for the moderately priced apartments, while a better job-market, particularly for the high-paying employment sectors than in the low-wage positions, is triggering demand for luxury units, per the report.These favourable trends are raising hopes for residential REITs, including AvalonBay, Equity Residential EQR, Essex Property ESS and UDR Inc. UDR.In fact, Equity Residential, in its recently-released operating update, noted that it is concluding a strong leasing season, witnessing healthy demand and pricing for the company’s apartment units. Management, therefore, noted that its same-store revenue growth is on track to meet or slightly surpass the company’s projections mentioned in its second-quarter 2021 earnings release.Also, Essex Property Trust has reaffirmed its third-quarter and full-year 2021 guidance ranges. The REIT’s preliminary August update revealed that the same-property cash delinquencies stood at 0.8% for the month compared with July’s 2.2% and the second quarter’s 2.6%, while financial occupancy was 96.4% in August compared with July’s 96.5%. For the preliminary July-to-August period, the total same-property revenues increased 2.6% year on year, as against the 3% decrease seen in the second quarter.Here’s the price performance chart of the above-mentioned residential REITs in the past six months.Image Source: Zacks Investment ResearchCurrently, AvalonBay, Equity Residential, and UDR Inc. carry a Zacks Rank #2 (Buy), while Essex Property has a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 AvalonBay Communities, Inc. (AVB): Free Stock Analysis Report Equity Residential (EQR): Free Stock Analysis Report United Dominion Realty Trust, Inc. (UDR): Free Stock Analysis Report Essex Property Trust, Inc. (ESS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 27th, 2021

How Evergrande Became Too Big To Fail And Why Beijing Will Have To Bail It Out

How Evergrande Became Too Big To Fail And Why Beijing Will Have To Bail It Out While the world is obsessing with the fate of Evergrande, and more importantly when, or if, Beijing will bail it out, another just as interesting question is how did the company many call "China's Lehman" get to the point of no return and become a global systematic risk. For a fascinating look into how we got here, we turn our readers' attention to a recent article from Caixin titled "How Evergrande Could Turn Into ‘China’s Lehman Brothers'," and which provides one of the most comprehensive insights into why Beijing will have to, even if it is kicking and screaming, bail out Evergrande which, at its core, is just one giant shadow-banking black box whose time has finally run out. * * * For the past two months, hundreds of people have been gathering at the 43-floor Zhuoyue Houhai Center in Shenzhen, where China Evergrande Group’s headquarters occupy 20 floors. They held banners demanding repayment of overdue loans and financial products. Police with riot shields had to be on site to keep things under control. The demonstrators are construction workers at the property developer’s housing projects, suppliers providing construction materials and investors in the company’s wealth management products (WMPs). From paint suppliers to decoration and construction companies, Evergrande owes more than 800 billion yuan ($124 billion) due within one year, while it has only a 10th of that amount of cash on hand. As of the end of June, Evergrande had nearly 2 trillion yuan ($309 billion) of debts on its books, plus an unknown amount of off-books debt. The property giant is on the verge of a dramatic debt restructuring or even bankruptcy, many institutions believe. A bankruptcy would amount to a financial tsunami, or as some analysts put it, “China’s Lehman Brothers.” The venerable American investment bank’s 2008 collapse helped trigger a global financial crisis. Certainly Evergrande, one of China’s three biggest developers, has a giant footprint in China. Unfinished residential buildings at Evergrande Oasis, a housing complex developed by Evergrande Group, in Luoyang, China September 16, 2021 Its liabilities are equivalent to about 2% of China’s GDP. It has more than 200,000 employees, who themselves and many of their families have invested billions of yuan in the company’s WMPs. The company has more than 800 projects under construction, more than half of them halted due to its cash crunch. There are thousands of upstream and downstream companies that rely on Evergrande for business, creating more than 3.8 million jobs every year. Like many of China’s “too big to fail” conglomerates, Evergrande’s crisis has fueled speculation over whether the government will step in for a rescue. Several state-owned enterprises, including Shenzhen Talents Housing Group Co. Ltd. and Shenzhen Investment Ltd., both controlled by the Shenzhen State-owned Assets Supervision and Administration Commission (SASAC), are in talks with Evergrande on its Shenzhen projects, according to people close to the talks. But so far, no deals have been reached. In a statement last week, Evergrande denied rumors that it will go bankrupt. While the developer faces unprecedented difficulties, it is fulfilling its responsibilities and is doing everything possible to restore normal operations and protect the legitimate rights and interests of customers, according to a statement on its website. The company hired financial advisers to explore “all feasible solutions” to ease its cash crunch, warning that there’s no guarantee the company will meet its financial obligations. It has repeatedly signaled that it will sell equity and assets including but not limited to investment properties, hotels and other properties and attract investors to increase the equity of Evergrande and its affiliates. Growth on borrowed money Over the years, Evergrande has faced liquidity pressure several times, but every time it dodged the bullet. This time, the crisis of cash flow and trust is unprecedented. Evergrande shares in Hong Kong plummeted to a 10-year low. Its onshore bonds fell to what investors call defaulted bond level. All three global credit rating companies and one domestic rating company have downgraded Evergrande’s debt. For many years, Chinese developers were driven by the “three carriages” — high turnover, high gross profit and high leverage. Developers use borrowed money to acquire land, collect presale cash before projects even start, and then borrow more money to invest in new projects. In 2018, Evergrande reported record profit of 72 billion yuan, more than double the previous year’s net. But behind that, it spent more than 100 billion yuan a year on interest. Even in good years, the company usually had negative operating cash flow, with not enough cash on hand to cover short-term loans due within a year with and presale revenue not enough to pay suppliers. In addition to borrowing from banks, Evergrande also borrows from executives and employees. When developers seek funds from banks, lenders often require personal investments from the developers’ executives as a risk-control measure, a former employee at Evergrande’s asset management department told Caixin. “At times like this, Evergrande would have an internal fund-raising campaign,” the manager said. “Either the executives would pay out of their own pockets, or they would set a goal for each division.” One crowdfunding product issued to executives was called “Chaoshoubao,” which means “super return treasure.” In 2017, Evergrande tried to obtain project financing from state-owned China Citic Bank in Shenzhen, which required personal investment from Evergrande’s executives. The company then issued Chaoshoubao to employees, promising 25% annual interest and redemption of principal and interest within two years. The minimum investment was 3 million yuan. China Citic Bank eventually agreed to provide 40 billion yuan of acquisition funds to Evergrande. In 2020, Chen Xuying, former vice president of China Citic Bank and head of the bank’s Shenzhen branch from 2012 to 2018, was sentenced to 12 years in prison for accepting bribes after issuing loans. A senior executive at Evergrande said he personally invested 1.5 million yuan and mobilized his subordinates to invest 1.5 million yuan into Chaoshoubao. Some employees would even borrow money to invest in the product because the 25% return was much higher than loan rates. When the Chaoshoubao was due for redemption in 2019, the company asked employees who bought the product to agree to a one-year extension for repayment. Then in 2020, the company asked for another one-year extension. One investor said buyers received an annualized return of 4% to 5% in the last four years, far below the 25% promised return. When Evergrande’s cash flow crisis was exposed, the company chose to repay principal only to current executives. From late August to early September, the company repaid current executives and employees about 2 billion yuan but still owed 200 million yuan to former employees, including Ren Zeping, former chief economist of Evergrande who joined Soochow Securities Co. in March. Evergrande’s wealth division also sells WMPs to the public. Most of these WMPs offer a return of 5% to 10%, with a minimum investment of 100,000 yuan, the former employee at Evergrande’s asset management department said. As the return is higher than WMPs typically sold at banks, many of Evergrande’s employees bought them and persuaded their families and friends to invest, an employee said. Usually, a 20 million yuan WMP could be sold out within five days, the employee said. The company also sells WMPs to construction partners. Evergrande would require construction companies to buy WMPs whenever it needed to pay them, a former employee at Evergrande’s construction division told Caixin. “If the construction companies are owed 1 million or 2 million yuan, we would ask them to buy 100,000–200,000 yuan of WMPs, or about 10% of their receivables,” the former employee said. Although it was not mandatory for construction companies to buy WMPs, they often would do so for the sake of maintaining a good relationship with Evergrande, the former employee said. In addition, Evergrande property owners were also buyers of the company’s WMPs. About 40 billion yuan of the WMPs are now due. “It is difficult for Evergrande to make all of the repayments at once at this moment,” said Du Liang, general manager of Evergrande’s wealth division. Evergrande initially proposed to impose lengthy repayment delays, with investments of 100,000 yuan and above to be repaid in five years. After heated protests by investors, the company tweaked its plan last week, offering three options. Investors can accept cash installments, purchase Evergrande’s properties in any city at a discount, or waive investors’ payables on residential units they have purchased. Some investors opposed the “property for debt” option, as many projects of Evergrande have been halted and there is a risk of unfinished projects in the future. “The proposals are insincere,” a petition signed by some Guangdong investors said. “It’s like buying nonperforming assets with a premium.” The petition urged the government to freeze Evergrande’s accounts and assets and demanded cash repayment of all principal and interest. Some investors chose to accept the payment scheme proposed by Evergrande. They selected Evergrande projects located in hot cities in the hope of making up for losses by resale in the future. As Evergrande owed large amounts to construction companies, more than 500 of Evergrande’s 800-plus projects across the country are now halted. The company has at least several hundred thousand units that have been presold and not delivered. It needs at least 100 billion yuan to complete construction and deliver the units, Caixin learned. Whether and how to repay WMP investors or deliver housing is Evergrande’s dilemma. Debt to construction partners and suppliers In August, the construction company that was contracted to build Evergrande’s Taicang cultural tourism city in Nantong, Jiangsu province, announced the halt of the project due to bills unpaid by Evergrande. The company, Jiangsu Nantong Sanjian Construction Group Co. Ltd., said it put 500 million yuan of its own funds into the project and Evergrande paid it less than 290 million yuan. Sanjian has other construction contracts with Evergrande and its subsidiaries. As of September, Evergrande owes the Nantong company about 20 billion yuan. As of August 2020, Evergrande had 8,441 upstream and downstream companies it was working with. If the flow of Evergrande cash stops, the normal operation of these companies will be disrupted, and some would even face the risk of bankruptcy. In Ezhou, Hubei province, five of Evergrande’s projects have been halted for more than a month, and it owes contractors about 500 million yuan. “Housing delivery involves not only hundreds of thousands of families, but also local social stability,” a banker said. The housing authorities in Guangdong province are coordinating with Evergrande and its construction partners, trying to resume construction, the banker said. Evergrande relies heavily on commercial paper to pay construction partners and suppliers. Among payments it made to Sanjian, only 8% was in cash and the rest in commercial paper. Initially, the commercial paper borrowings were mostly six-month notes with annualized interest rates of 15%–16%. Now most carry interest rates of more than 20%. Holders of such commercial paper can sell the notes at a discount to raise cash. In 2017–18, the discount rate on Evergrande paper could reach 15%–20%. Since May 2021, the few Evergrande notes that could still be sold have been discounted as much as 55%, according to a person familiar with such transactions. For small and medium-sized suppliers, holding a large amount of overdue Evergrande notes is a burden too heavy to bear. In recent months, a number of suppliers sued Evergrande for breach of contract but often settled the cases. A lawyer who represented Evergrande in related cases told Caixin that many plaintiffs chose to negotiate with Evergrande while fighting in court. Evergrande also offered a “property for debt” option to its commercial paper holders. The company said it’s in talks with suppliers and construction contractors to delay payment or offset debt with properties. From July 1 to Aug. 27, Evergrande sold properties to suppliers and contractors to offset a total of 25 billion yuan of debt. Selling assets, but not land Meanwhile, Evergrande has been offloading its assets to raise cash. Its biggest assets are its land reserves. As of June 30, it had 778 land reserve projects with a total planned floor area of 214 million square meters and an original value of 456.8 billion yuan. Additionally, it has 146 urban redevelopment projects. In the past three months, Evergrande has been in talks with China Overseas Land and Investment Ltd., China Vanke Co. Ltd. and China Jinmao Holdings Group Ltd. for possible asset sales. Shenzhen and Guangzhou SASACs have arranged for several state-owned enterprises to conduct due diligence on Evergrande’s urban redevelopment projects, a person close to the matter said. Evergrande has approached every possible buyer in the market, the person said. However, no deals have been reached. Several real estate developers that have been in contact with Evergrande told Caixin that while some of Evergrande’s projects look good on the surface, there are complex creditors’ rights that make them difficult to dispose of. Some potential buyers have said they could consider a debt-assumption acquisition, but Evergrande was reluctant to sell at a loss, Caixin learned. At an emergency staff meeting Sept. 10, the wealth management general manager Du said in a speech that most of Evergrande’s land reserve is not for sale, reflecting the position of his boss, founder and Chairman Xu Jiayin. “In China, land reserves are the most valuable assets,” Du said. “This is Evergrande’s biggest asset and last resort. “For example, for a land parcel, Evergrande’s acquisition cost is 1 billion yuan, and the land itself is worth 2 billion yuan, but the buyer may only offer 300 million yuan,” Du said. “If we sold at a loss, we would have no capital to revive.” For his part, Xu maintained that Evergrande could repay all its debts and recover as long as it turns land into houses and sells them. But even if Evergrande can quickly sell its houses, the revenue would be far from enough to pay down debt. The chance that Evergrande won’t be able to pay interest due in the third quarter is 99.99%, estimated by a banker whose employer has billions of yuan of exposure to the company. As of the end of June, Evergrande had total assets of 2.38 trillion yuan and total liabilities of 1.97 trillion yuan. Of the nearly 2 trillion yuan of debt, interest-bearing debt was 571.7 billion yuan, down about 145 billion yuan from the end of 2020. The decrease in interest-bearing debt was mostly achieved by deferred payables to suppliers. In addition to the 571.7 billion yuan of interest-bearing debt on its books, it’s not a secret that developers like Evergrande have huge off-balance sheet debt. But the amount at Evergrande is not known. In the early stage of projects, developers need to invest a lot of money, which could significantly increase the debt on the balance sheet. Companies often place these debts off their balance sheet through a variety of means. After the pre-sale of the project, or even after the cash flow of the project turns positive, these debts would be consolidated into the balance sheet in the form of equity transfer, according to a property industry insider. For example, 40 billion yuan of acquisition funds Evergrande obtained from China Citic Bank were invested in multiple projects. Among them, 10.7 billion yuan was used by Shenzhen Liangyang Industrial Co. Ltd. to acquire Shenzhen Duoji Investment Co. Ltd. As Evergrande doesn’t have an equity relationship with the two companies, this item was not required to be consolidated into Evergrande’s financial statement. Evergrande used leveraged funds to acquire equities in 10 projects, and none of them were included in its financial statement, the prospectus of its Chaoshoubao shows. Evergrande has sold equity in subsidiaries to strategic investors and promised to buy back the stakes if certain milestones can’t be reached in the future. Such equity sales are actually a form of borrowing, too. In March, Evergrande sold a stake in its online home and car sales platform Fangchebao for HK$16.4 billion ($2.1 billion) in advance of a planned U.S. share sale by the unit. If the online sales unit doesn’t complete an initial public offering on Nasdaq or any other stock exchange within 12 months after the completion of the stake sale, the unit is required to repurchase the shares at a 15% premium. Evergrande’s hidden debts also include unpaid payments to acquire equities. Dozens of small property companies have sued Evergrande demanding cancellation of their equity sales agreements with the company because Evergrande failed to pay them. They are Evergrande’s partners in local development projects. Evergrande usually paid them 30% down for equities but declined to pay the rest even after the project was completed, according to the lawsuits. A plaintiff’s lawyer told Caixin that Evergrande’s project subsidiaries don’t want to go sour with local partners, but they have no money to pay as sales from the projects have been transferred to the parent company. A total of 49 of Evergrande’s wholly owned local subsidiaries have been sued since April, according to Tianyancha, a database of publicly available corporate information. Evergrande also owes land transfer fees to some local governments. Some 20 Evergrande affiliates have not yet made payments to the city government of Lanzhou, the capital of Northwest China’s Gansu province, according to a list of 41 such firms issued in July by the city’s natural resources department. A potential default by Evergrande could spread to markets outside China as it has huge, high-interest offshore bonds. Some of its offshore bonds carry interest rates as high as 15%, a person close to the Hong Kong capital market said. UBS estimates that $19 billion of Evergrande’s liabilities are made up of outstanding offshore bonds. Evergrande has been frantically selling properties at discounts this year. In late May, it offered certain homebuyers 30% to 40% off if they paid entirely in cash. In the first half, the company reported 356 billion yuan of contracted sales, slightly higher than 349 billion yuan for the same period last year. Average selling prices in the first six months declined 11.2%. Meanwhile, payables increased 14.7% to 951 billion yuan, and sales and marketing expenses increased 30% to 17.8 billion yuan. In response to the market environment, the company increased sales commissions and marketing expenses, the company said. Compared with its competitors, Evergrande has higher capital and human costs but lower selling prices, an industry participant said. “How can it make money?” the person said. The developer reported a 29% slide in profit for the first half. Its 10.5 billion yuan of profit mainly reflected an 18.5 billion yuan gain from the sale of some shares and marked-to-market holding in internet unit Henten Networks. It reported a loss in its core property business of 4 billion yuan. Evergrande’s extremely high debt ratio, high financing cost and repeated delays in payments to suppliers, partners and local government show that its liquidity has always been tight, but on the other hand, the fact that it has survived years under this model indicates that it has always been able to generate money, a veteran investor said. Now everyone is watching whether it can dodge the bullet once again. Tyler Durden Mon, 09/20/2021 - 22:00.....»»

Category: blogSource: zerohedgeSep 21st, 2021

Sales Commence at The Wales, a Historically-Significant NY Institution Reimagined by Adellco

Today Adellco formally announces the launch of sales for the condominium residences at The Wales, a 10-story historic building located at 1295 Madison Avenue. The Wales offers a modern take on landmark-living, moments away from Central Park in the heart of Carnegie Hill, a beloved neighborhood on the Upper East... The post Sales Commence at The Wales, a Historically-Significant NY Institution Reimagined by Adellco appeared first on Real Estate Weekly. Today Adellco formally announces the launch of sales for the condominium residences at The Wales, a 10-story historic building located at 1295 Madison Avenue. The Wales offers a modern take on landmark-living, moments away from Central Park in the heart of Carnegie Hill, a beloved neighborhood on the Upper East Side of Manhattan. The neo-renaissance building, an old-world New York institution, features 21 for-sale two- to four-bedroom homes including a striking one-of-a-kind five-bedroom Penthouse. Acclaimed Parisian design firm Pinto is responsible for the remarkable interiors at The Wales. The reveal of The Wales comes on the heels of immense success at 27 East 79th Street, which was also developed by Adellco. Paired with historic architecture from 1899, there is a sense of elegance and unrivaled opulence at The Wales that harkens back to an era of glamour, romance, and enduring quality.  Award-winning design studio Pinto drew inspiration from The Wales’ original facade with its detailed cornices, window surrounds, and brick and stone elements. The Paris-based earned renown for founder Alberto Pinto’s embrace of refined materials fused with rich textures, patterns and a passion for the eclectic. Today, the firm carries on Pinto’s aesthetic legacy with finely detailed interiors crafted for an elite clientele, including luxury yachts, royal palaces, and private jets. For The Wales, the esteemed firm conceptualized a classic design with pre-war influences for the spacious ultra-luxury residences and the beautiful amenity spaces at the building.  “The Wales is a true example of neo-renaissance pre-war architecture at its finest. Appointed with warm yet modern interiors by Pinto, we are presenting an ideal residence for a purchaser who appreciates close proximity to Central Park, the finest schools, and the alluring neighborhood of Carnegie Hill with all it has to offer,” says Matthew Adell, Founder of Adellco. “The Wales comes to market at a time when New York City’s residential real estate market is reaching new heights and new development in Carnegie Hill is exceedingly rare.” The Wales’ elegantly appointed lobby features coffered ceilings, custom moldings, and floors of striking Bianco Estremoz and Grigio Nicola marble paired with Zimbabwe Black granite throughout. Antique wall mirrors reflect the warmly lit custom brass chandelier while a decorative fireplace and seating area offer a timeless focal point along with a custom-designed desk by Pinto. The residences feature herringbone oak flooring with a natural wax finish, custom cornices, and base moldings. Custom kitchens are outfitted with white lacquer cabinetry with an Art Deco-inspired geometric relief pattern and a stainless steel and white oak inlay design, complemented by Crystal Grey calcite stone countertops and backsplashes. Appliances include Sub Zero refrigerators, Wolf gas ranges, ovens and speed ovens, XO wine refrigerators, and a Kohler Aquifer water filtration system. Select residences offer wet bars with a Sub-Zero under-counter refrigerator and Kallista fixtures. Each home features an Asko or Electrolux washer/dryer and all residences have individually-controlled zoned HVAC units. Primary baths include Carrara marble vanity tops, walls, floors, and tub decks as well as geometric tile flooring with Bianco Carrara and Grigio Nicole marble features. Custom vanities feature glossy white lacquer cabinetry and a Kallista under-mount sink. Primary baths feature Kaldawei Centro Duo oval tubs, as well as a standing shower with Kallista, handles in chrome. Secondary baths also feature gorgeous custom vanities, marble details, and Kohler tubs. Powder rooms are appointed with marble wainscoted walls and floors, a custom lacquer vanity with a marble slab top, and chrome-trimmed mirrors with integrated LED lighting.  Pinto designed various amenity spaces at The Wales include a sleek fitness center with richly toned oak wall paneling and equipment by Peloton, Hydrow, and NordicTrack along with a pet spa and grooming station. Bicycle storage and private storage provide added convenience. The Wales’ attentive staff provides 24-hour doorman and concierge services.  “As a Carnegie Hill resident, I’m so excited to see The Wales’ transformation into a luxury residence for discerning buyers in one of Manhattan’s most coveted neighborhoods. We are thrilled to be selling this rarified property,” said JP Forbes, Sales Director of The Wales. “We are excited to come to market at a time when pre-war architecture and large-scale residences are particularly sought after.”  The Wales is situated steps away from Fifth Avenue, Central Park, and the best that Carnegie Hill has to offer including cultural attractions like The Guggenheim Museum, The Cooper Hewitt, and the Jewish Museum. The upscale neighborhood is also home to some of the finest secondary schools in New York. Established restaurants such as Island, Pascalou, and Sfoglia remain tried and true staples for Carnegie Hill locals.  Two-bedroom homes are priced from $3.85 million and three and four-bedroom homes begin at $5.75 million, and $7.42 million, respectively. The crown jewel full-floor Penthouse offers views of Central Park and The Reservoir and is complete with a wraparound terrace, a separate roof terrace with an outdoor kitchen and fireplace, and a private elevator. Penthouse pricing is available upon request.  Occupancy at The Wales is slated for late 2022. For more information, contact please visit www.WalesNY.com, email sales@walesny.com or call 212-842-1855. The post Sales Commence at The Wales, a Historically-Significant NY Institution Reimagined by Adellco appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJan 21st, 2022

State of Luxury Real Estate 2022: Luxury Market Normalizing

A new report released by Luxury Portfolio International (LPI) found that the chaotic real estate market created by COVID-19 is slowly stabilizing. The second annual State of the Luxury Real Estate report by LPI, the luxury marketing division of Leading Real Estate Companies of the World, found that luxury buyers are concentrating more on what […] The post State of Luxury Real Estate 2022: Luxury Market Normalizing appeared first on RISMedia. A new report released by Luxury Portfolio International (LPI) found that the chaotic real estate market created by COVID-19 is slowly stabilizing. The second annual State of the Luxury Real Estate report by LPI, the luxury marketing division of Leading Real Estate Companies of the World, found that luxury buyers are concentrating more on what is important to them—better and more convenient locations, making wise investments and a focus on sustainability. “After an incredible period for luxury real estate, it seems some balance will be restored in the year ahead,” said Mickey Alam Khan, president of Luxury Portfolio International. Stabilizing the scales The 2022 State of Luxury Real Estate report surveyed more than 4,500 affluent consumers in 20 countries, with 1,000-plus looking to purchase luxury homes in the next three years. Supply, demand and pricing are beginning to even out after a whirlwind couple of years for the real estate market. Buyers still outnumber sellers, but the gap is shrinking. According to the report, although half of respondents are still concerned that COVID-19 will again disrupt their lives, they are easing up on their sharp increase in demand for new houses throughout the pandemic, with 38% fewer buyers year-over-year. Meanwhile, 71% of homeowners believe their property will increase in value over the coming year and the amount looking to sell has more than doubled since the year prior, meaning inventory should finally start to catch up with demand. Years 2020 and 2021 saw luxury buyers heading to farther and farther remote areas to escape pandemic fears and restrictions and gain some much-needed space while spending a lot of their time at home. Next year will see a shift in consumers returning to the cities and suburbs they fled. Per the report, a full 77% of luxury buyers say their next home purchase will be within commuting range of a major city, and 55% say it will be in one. While previous years saw buyers’ main purchasing concern as more indoor and outdoor space, many homebuyers now say their next purchase will be as an investment (35%) or in search of a better place to live, be it neighborhood (19%) or city (10%). No matter their reason for buying a luxury property, sustainability is on everyone’s mind. Seventy-five percent of those surveyed for the report said they would be considering sustainability during their next purchase, while 66% of respondents said steps towards sustainability are critically important, and half are even willing to pay more for it. “In this environment, we expect prices to begin stabilizing, demand will remain strong and a healthy, new normal in luxury real estate can start to take hold,” Alam Khan said. To read the full report, click here. The post State of Luxury Real Estate 2022: Luxury Market Normalizing appeared first on RISMedia......»»

Category: realestateSource: rismediaJan 21st, 2022