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North Korea"s Lazarus Hackers Blamed in DeBridge Finance Cyberattack

Company co-founder Alex Smirnov warns all Web3 teams that the phishing campaign is likely widespread......»»

Category: forexSource: coindeskAug 5th, 2022

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

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

Category: blogSource: zerohedgeNov 24th, 2021

Bitcoin & The US Fiscal Reckoning

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

Category: worldSource: nytOct 20th, 2021

Robust Loan Originations Aid Hercules Capital (HTGC) Top Line

Driven by the growing demand for customized financing, Hercules Capital's (HTGC) top line is expected to keep improving. Hercules Capital, Inc. HTGC is expected to keep witnessing a rise in revenues on expectations of growing demand for customized financing. Moreover, backed by solid balance sheet and liquidity positions, the company’s capital deployment activities seem sustainable.Analysts have maintained a neutral stance toward the stock. Over the past 30 days, the Zacks Consensus Estimate for HTGC’s 2022 earnings has been unchanged. The company currently carries a Zacks Rank #2 (Buy).Over the past year, shares of Hercules Capital have lost 11.5% compared with the industry’s decline of 1.9%. Image Source: Zacks Investment Research Looking at its fundamentals, HTGC had $779.7 million in liquidity, including $115.3 million in unrestricted cash and cash equivalents, and $664.4 million in credit facilities, as of Jun 30, 2022. The company also has the availability to draw on credit facilities when required.It maintains long-term issuer ratings of BBB- and Baa3 from Fitch Ratings and Moody’s Investors Service, respectively, and a stable outlook, which renders it favorable access to the debt market.Thus, supported by sufficient earnings strength and a solid balance sheet, the company is expected to be able to continue to meet debt obligations in the near term, even if the economic situation worsens.Moreover, despite the tough macroeconomic scenario, Hercules Capital is expected to continue witnessing growing demand for customized financing from private equity firms and venture capitalists.HTGC’s concentrated focus on its credit performance remains impressive. In 2021, the company closed $2.6 billion in new debt and equity commitments. In the first half of 2022, it reported $1.66 billion in gross new debt and equity commitments. Since the end of the second quarter and as of Jul 26, it closed new gross debt and equity commitments worth $250.2 million.Given a solid liquidity position, Hercules Capital is expected to keep enhancing shareholder value through efficient capital deployment activities. In order to maintain its RIC status, the company distributes approximately 90% of its taxable income.In July 2022, it announced a 6.1% hike in the quarterly distribution, following a 3.1% hike in October 2021 and a 3.2% increase in May 2019. Management plans to revisit its dividend policy at the end of every quarter and determine if any changes are required.However, Hercules Capital has been witnessing a persistent rise in expenses. While expenses declined in the first six months of 2022, the same witnessed a compound annual growth rate of 9.6% over the last six years (2016-2021). Its efforts to expand originations will likely result in elevated costs in the near term, which might put pressure on the bottom line.Along with this, persistent regulatory constraints amid the current tough economic scenario may lead to increased costs of funding, and, thereby, limit the company’s access to the capital market.A couple of other top-ranked stocks from the finance space are Cullen/Frost Bankers, Inc. CFR and Bank OZK OZK. At present, CFR sports a Zacks Rank #1 (Strong Buy) and OZK carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.Over the past year, shares of Cullen/Frost Bankers have gained 12.1%, while that of Bank OZK have lost 6.6%.Over the past 30 days, the Zacks Consensus Estimate for Cullen/Frost Bankers’ current-year earnings has been revised 4% upward, while the same for Bank OZK has moved 5.5% north. Profiting from the Metaverse, The 3rd Internet Boom (Free Report): Get Zacks' special report revealing top profit plays for the internet's next evolution. Early investors still have time to get in near the "ground floor" of this $30 trillion opportunity. You'll discover 5 surprising stocks to help you cash in.Download the report FREE today >>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 Hercules Capital, Inc. (HTGC): Free Stock Analysis Report CullenFrost Bankers, Inc. (CFR): Free Stock Analysis Report Bank OZK (OZK): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacks15 hr. 18 min. ago

Transcript: Anat Admati

       Transcript: Anat Admati The transcript from this week’s, MiB: Anat Admati on Regulations and Techlash, 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. ~~~… Read More The post Transcript: Anat Admati appeared first on The Big Picture.        Transcript: Anat Admati The transcript from this week’s, MiB: Anat Admati on Regulations and Techlash, 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. ~~~  VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have yet another extra special guest, Professor Anat Admati, teaches at the Stanford Graduate School of Business. She is an expert in so many fascinating areas that you wouldn’t think are related but they really are. Why has technology developed the way it has and, more or less, exempt from a lot of government regulations or protected by government regulations? It turns out their business model is a little similar to the way the banking industry has managed to capture a lot of regulators and continue to operate fairly freely without this sort of regulation and capital requirements and equity requirements that would make banking safer. Really a fascinating conversation about everything from misinformation to technology, to banking and financial fragility, I found the discussion to be quite fascinating and I think you will also. With no further ado, my interview with Professor Anat Admati of the Stanford Graduate School of Business. So, let’s talk a little bit about your background. You have a lot of degrees. You have a bachelors from Hebrew University then a Masters in Arts, a Masters in Philosophy and a PhD from Yale University. Tell us a little bit about your academic journey. ANAT ADMATI, PROFESSOR OF FIANCE AND ECONOMICS, STANFORD GRADUATE SCHOOL OF BUSINESS: So, my journey starts where I took a lot of math. I was good in math and I love the math. It was very pretty. It was all — but I decided I probably won’t be good enough to be a mathematician. So, I was kind of, in my romantic mind when I was in my early 20s, I was going to take but not give back to math, that kind of thing. RITHOLTZ: Right. ADMATI: And so, I had to find something and at first, it was going to be sort of applied math like Operations Research, which was the worst kind of math, like optimization. RITHOLTZ: Yes. ADMATI: It’s kind of boring and — but I got an opportunity to go to Yale and these degrees were just kind of simultaneously gotten. I mean, I was at Yale in three and a half years with all those degrees. RITHOLTZ: OK. ADMATI: And I just — an opportunity landed on my lap to go to this program in Operations Research at Yale and I was promised that Yale is very interdisciplinary and once you passed your qualifying exams, you can do whatever you want. RITHOLTZ: But? ADMATI: And I had never taken an economics course before that. But when I got to Yale, my advisor said, why don’t u take microeconomics and take mathematical economics and take some economics. And by the end of the first year, I kind of knew a new language like I — and it was all much more interesting because there was interactions with people and equilibrium and all of that. And by second year, I took the course that was absolutely a must-take in the crowd that I was hanging with, which was Steve Ross’ Financial Economics. Yale didn’t even have a programming in finance. The School of Management was just created. This was back in the late ’70s, early ’80s and he was just teaching people all they needed to know about finance, which was just coming up. RITHOLTZ: They had become professionalized when before it was just a bunch of … ADMATI: Exactly. RITHOLTZ: … disparate theories. So, you find your calling in economics. But you really take some of your background and dig pretty deep into financial regulations in technology. Where did the tech background come from? ADMATI: And then — I’ll tell you. So, that all — I was totally in the sort of finance bubble, first kind of market microstructure, trading mechanism. This is the quaint 1987, a little Black Monday, small Black Monday. RITHOLTZ: Just that little one day glitch. Sure. ADMATI: The little — 19 percent decline in one day. RITHOLTZ: Twenty-two, twenty-two point something. Yes. ADMATI: Yes. So, it was program training and insurance … RITHOLTZ: Yes. ADMATI: Portfolio insurance and all these application strategies and all this stuff. And so, that was kind of the little crisis of the day, right, in the little detail and this before high frequency trading and all the rest of it. RITHOLTZ: Right. ADMATI: But then I worked on trading mechanisms and information getting to prices and informed and uninformed trading and markets for information and newsletters and managed money portfolio theory. And then I got more interested in kind of governance but governance in the narrow sense, corporate governance and contract, which was all about the problems between shareholders and managers. So, that was that and then comes the financial crisis. So, until the financial crisis of 2007 and 2009 or however you go — you actually time it, I was in this finance bubble. I was teaching corporate finance. I did research, theoretical research. I built on mathematical models and analyzed them. And I lived in that little bubble thinking all is well until this crisis, I was like, what just happened? And so, I never was interested in banking particularly we have a lot of silos even within economics … RITHOLTZ: Sure. ADMATI: … let alone in all the social sciences and law and all of that. So, we’re itching our little silo with our little journals, all this stuff. So, I just go curious, wait a minute, I teach corporate finance, the bank is also a corporation, now why does it have like almost no equity funding, what’s going to there? I teach people capital structure theory and what — how are bank so different, why are they so different? They hate equity with this fashion. And so, the more I dug, the weirder it got. It really like I fell in a rabbit hole. It totally was rabbit hole, like curious or uncurious or that kind of thing. RITHOLTZ: Well, tell me if I’m oversimplifying banking because what we’ve seen over the past half century before the financial crisis was simply banks figured out that the less capital they keep on the books, the better their profit margins appear even though they’re essentially just assuming more risk and the better their profit margins are, the richer everybody got. And so, we’ve seen a half century of first deregulation then fairly radical deregulation, all of which works to the banks’ advantages until suddenly it no longer did. ADMATI: So, in the book, we go through a lot of the history of banking, including the basic banking model, which is sort of it’s a wonderful life kind of 363 boring banking model and that too had a crisis in savings and loan and in many other banking crisis. RITHOLTZ: Right. ADMATI: So, it’s not like — banking is inherently risky because inherently, the banks taking risk with depositors’ money and the depositors are unable to really behave like normal creditor. And that’s really sort of the beginning of the sort of original sin in banking that they’re always overleveraged. Always. They’re never efficient in providing any of the services on both sides of the balance sheet because they always have the temptation and the ability to take just a little bit more risk on both sides of the balance sheet. RITHOLTZ: That’s the nature of fractional reserve lending, you get … ADMATI: Well, but it’s their incentives. So, the key to understand it it’s not like essential or efficient. It’s just that that’s how they want it. So, the thing is that banking is sort of inherently fragile because banking is inherently inefficient that way or forever poorly regulated or poorly controlled by their investors, including the depositors. So, to that, you add expansion in the business model that allows taking more risk, hiding more risk with derivatives, with universal banking, all of that, and the increase in safety net, implicit and explicit, with deposit insurance, with all of that. They became able and obviously interested in living more and more and more in debt. Now, even my research, even after the first — after the book, we were already beginning to do this research, I understood a lot better. Stuff that we teach in basic courses is very static theory of how companies fund and it’s like one round of funding, debt and equity, and then the world is over. But for well-living breathing companies, any company, their funding decision as well as investment decisions are always made by shareholders or managers on behalf of shareholders maybe in light of previous commitment. So, in the dynamics of it, once you took debt, your preference has changed completely. You’re no longer maximizing total value of the firm. You’re maximizing the value of equity in the firm. And from that perspective, equity seems expensive to all heavily indebted corporations, banks in particular, because for other corporations, if they take on more and more debt, the creditors will start pushing back. The creditors will start putting covenants. The creditors will jack up their rates because the creditors will worry about all the distorted incentives of the borrower or lender. That happen. Gambled the money in Las Vegas or under investing things because there’s not enough upside. All of those things that characterize sort of the fortunes that characterize heavy indebtedness. RITHOLTZ: So, that makes the finance sector very different than the rest of the stock market? ADMATI: Well, the banking especially because the creditors in banking are particularly passive. And so, therefore, the usual market forces that push against high leverage in other companies that just naturally with no regulation would limit. There’s no corporation that lives its healthy — unless they’re on their way to bankruptcy that lives with single digit equity numbers. Of course, it depends how you measure it and there’s book market, all kinds of other things that we can discuss. But the banks basically got used to — and got stuck and it’s very addictive to be there especially at this extremely low equity level. From that vantage with the overhang of debt being so, so heavy that you’re effectively insolvent all the time but you just not recognize as such. Then you hate equity … RITHOLTZ: Hold on a second. ADMATI: … you want to take money out. RITHOLTZ: So, let’s stay with that point… ADMATI: Yes. RITHOLTZ: … because that’s pretty fascinating. It was pretty clear to observers that the reason Lehman brothers didn’t get bailed out is they were not just a little insolvent but deeply insolvent. The rest of the banks that were out there that survived seem to recapitalize. They sold equity. They brought more money in. Goldman Sachs took a big chunk of money from Warren Buffett. JPMorgan Chase bought Washington Mutual. They did more capital reserves and they ended up buying Bear Stearns as well. ADMATI: When you say capital reserve, again, I mean, people get very confused about what that is. You mean … RITHOLTZ: They put more cash … ADMATI: No. No. No cash. Not cash. Capital is not … RITHOLTZ: Just straight-up equity. ADMATI: Capital is not cash. It’s on the other side of the balance sheet. Capital is about how you fund. It’s not cash reserve. OK. So, it’s — this is really important, there’s a pile of cash. RITHOLTZ: So, let’s put shelves (ph) into that. ADMATI: It’s — let’s dive into that because it’s very, very confusing. To this day, you can find people saying set aside cash. That’s not what capital is about. Capital is about — obviously, there is the measurement to get at a given point of time but when you take a snap shot and you say — talk about capital ratios or risk-weighted capital ratios or all of that, they’re entirely on the funding side. So, you got your assets whatever they are. They have some risk and whatever — however you put numbers on that sort of accounting or — and what’s allowed and not allowed and all of that is like a big can of worms actually. But –and netting of derivatives and all of that. But then the question is how do you fund those assets. And so, the question is how much gets funded by making promises to investors by debt. Any kind, collateral, non-collateral. Now, deposit is very unique because deposits are unsecured debt to the bank. But … RITHOLTZ: To the depositors. ADMATI: To the depositors. They don’t have collateral. RITHOLTZ: Right. ADMATI: OK. So, it’s the FDIC that’s holding the bag there. Now does the FDIC even know how much risk they’re bearing 0 when all the assets are so encumbered that they’re all pledged as collateral? RITHOLTZ: Do they? Because one would assume … ADMATI: No, they don’t. RITHOLTZ: … they — now, I have a very vivid recollection during the financial crisis of the FDIC talking about their reserves dropping from 90 to 60, I think it dropped as low as $40 billion ADMATI: Yes. RITHOLTZ: And hey, if we get a bunch more disasters, we’re not going to be able to cover the depositors. ADMATI: Exactly. Because they stopped charging. Also because there were no defaults before the crisis. They stopped charging deposit insurance and all of a sudden, there was a lot of bank failures, not the big ones except for Lehman but Lehman wasn’t an FDIC insured bank. RITHOLTZ: Right. Right. ADMATI: And so — but when the other banks, small banks, started failing, what do they — what can the FDIC do in general? Well, they can go back to the large banks and just assess them more because they have no way and I can assert this you, no good way to risk adjust their deposit insurance fees. They’re supposed to be self-financing the FDIC through fees but they really are taking a huge leap for insuring what by now must be like, I don’t know, $13 trillion and more will come if there were tremors because money moves back in deposit from money market funds and all of that. RITHOLTZ: From uninsured money market to ensured bank deposits. ADMATI: Exactly. And so, the FDIC, which is assist for corporation, is totally backed by the government. However, in practice, they can — they have a line to treasury for, I think, 500 billion or something. But if — should something actually happen? So, we’re all on trust with the system. They tell us don’t run, don’t rush, your money is safe. And I trust that, RITHOLTZ: No bank runs. ADMATI: No bank runs. RITHOLTZ: So, when you … ADMATI: So, we saw the problem … RITHOLTZ: When you say that they stopped charging fees, I’ve been under the impression that the banks that have that nice little logo, the emblem, FDIC insured, aren’t those banks paying some small percentage of … ADMATI: Usually, they do and basically, I once asked a 40-year veteran of banking in all the biggest banks through the ’60s, ’70s, ’80s, ’90s who was basically came out of retirement to being a private equity firm that was buying distressed banks from the FDIC and he said to me, you’re looking at the big banks, let me tell you what goes on in the small banks. And then I asked him the following simple question because there are thousands of small banks in his country. RITHOLTZ: Right ADMATI: I said, what’s the business model of a small bank? And the answer … RITHOLTZ: They get purchased. ADMATI: The answer was three words, the business model, in other words, the positive net present value of the bank, he said, subsidized deposit insurance. RITHOLTZ: Subsidized deposit insurance. ADMATI: That’s it. In other words, their entire finding — so what they do on the asset side, anybody can do, zero NPV, commercial real estate, whatever. RITHOLTZ: Right. ADMATI: And how they fund is where they’re privileged. Now, what happens, my model of banking safety — basic safety net is that big banks may well be overpaying for the deposit insurance part to the FDIC and the FDIC — and they pass on some subsidies down to the small bank. So, they keep happy enough. And because the big banks have implicit guarantees that are priceless because they have access to the Fed and that is worth a ton. In the financial crisis, let’s remember, Goldman Sachs and Morgan Stanley became bank holding companies RITHOLTZ: Right. Previously, they were brokerage firms. ADMATI: They were investment banks. RITHOLTZ: Right. ADMATI: Regulated by the SEC which also Lehman was and at that time, the commercial banks, so Citibank within Citigroup, were regulated among others by the FDIC and the FDIC had Sheila Bair and Sheila Bair refused to implement this Basel II that had fancy-schmancy risk weights. Manipulable ways, model-based ways to allow the banks to tell us how risky they are and therefore, determined their equity requirements. RITHOLTZ: In other words, mislead regulators … ADMATI: And there’s research that showed that banks in Germany that were allowed to use this advanced approach to this fancy scientific approach to regulation were misrepresenting their own risk and making more loans with less risk weights. In other words, inappropriately low risk weights. RITHOLTZ: Just for that one small leverage. ADMATI: And the — yes. And, of course, the epitome of the failure of this regulation is assets that had zero risk weight but were risky like AAA rated security like Greek government, lending to Greek government in Europe. I mean, the banks in Europe basically fed this subprime lending to the Greek government. RITHOLTZ: Havong stories and he is in RITHOLTZ: Why should Greece pay more in interest rates than another country like Germany? That doesn’t make any … ADMATI: Well, they paid a tiny sliver but the French banks just went and lent them a ton and when they couldn’t pay, the European Union and all these other countries and the regulators that — who allowed these banks to make this reckless loan who had just bailed out these banks from investing in our real estate bubble … RITHOLTZ: Right. ADMATI: … couldn’t admit to their citizens that they would bail out their banks again if Greece default. So, that — they blamed all the things on the lazy Greeks and they kept bailing out Greece so Greece could pay the banks until the banks got out. So, that was the zero risk weight for sovereign lending in Europe and it’s just one example of how awful, awful the regulation was pre-crisis. And then you tell me that they recapitalized and did all of that. I’m not so impressed. Yes. First of all, Bank of America and Citi were zombies coming out of the crisis. RITHOLTZ: Right. ADMATI: Despite multiple bailout of Citi. RITHOLTZ: Citi for sure. Bank of America, not much better. ADMATI: Both of it. (inaudible) and zombie banks, I mean, I believe that. They were the examples where if you wanted to have this systemic resolution through the FDIC, we could have tried it in a — not in a crisis. RITHOLTZ: Meaning put them into a pre-packaged bankruptcy. ADMATI: Yes. Show me that it works. Show me that it works. Outside the crisis where everybody’s failing. I was in this FDIC Systemic Resolution Advisory Committee, was part of Dodd-Frank, was saying, if Lehman Brothers was sent to the FDIC for resolution because FDIC knows so well how to do the small bank resolution just come over the weekend, take over small bank and the people don’t even know. RITHOLTZ: Because they’re the same. Because Lehman Brothers are — so, Lehman Brothers had repo 105 where they were moving all of this risk in order … ADMATI: Thousands of subsidiaries. RITHOLTZ: Right. Just hundreds of billions of dollars and misrepresenting their books … ADMATI: Do you know … RITHOLTZ: … to their – to the regulators and to the investments. ADMATI: Do you know that the Lehman bankruptcy is not even over yet? Every year, I go back and check. RITHOLTZ: Yes. Still going on. Right.0 ADMATI: Still going on. RITHOLTZ: Still on though. ADMATI: So, this is how unresolvable this. Now, in the first … RITHOLTZ: To be fair, it was only 15 years ago. ADMATI: And it was a small — it was a small one by — I mean, this was the biggest bankruptcy at that time but there were … RITHOLTZ: Right. ADMATI: There were fraction of JPMorgan Chase or Citi or all of these that they tell you now can fail without and they have them do living with this all kind of stupid things. RITHOLTZ: I don’t think JPMorgan Chase had failed. ADMATI: No way. No. Because we don’t even … RITHOLTZ: If they did, it would just be incredibly disruptive. ADMATI: Exactly. So, I’m not even blaming for bailing out. I am blaming for not doing basic prevention RITHOLTZ: So, that raises really interesting point. You mentioned the French banks and the lazy Greeks When you offer people free money or dramatically discounted money, we shouldn’t blame the Greeks who took, hey, this is a great deal, we’re going to take this. You have to look at the banks that lent it to them and said, why these banks being so irresponsible and reckless to make such cheap loans to … ADMATI: Under the eyes of their regulators. RITHOLTZ: Yes. ADMATI: Under the eyes of their regulators. So, the regulators are not being called to why they allowed these loans to be made by too-big-to-fail French and German banks. RITHOLTZ: Right. ADMATI: French banks had in 2010 40 percent of Greek bond, government bonds. RITHOLTZ: That’s amazing. ADMATI: Yes. And Greece only did a little bit of restructuring after the banks pretty much got out, left the troika creditors to be a bailout fund of European nations. ECB and IMF, those where the troika. Now, why did IMF invest all? Because IMF was led by some French. No. Because IMF should not have intervened in a European … RITHOLTZ: It’s not their chore. ADMATI: Into European thing. Europe had enough to be able to resolve this. They just didn’t want to. So, IMF, being led by French people, Dominique Strauss-Kahn and then later by Lagarde who had to deal with it later in 2015 when they were kind of adopting their room if you want to call it. RITHOLTZ: So, let’s throw a parallel. The French banks and the Greek borrowers, there were a lot of people criticizing in the 2000s the U.S. homeowners who were taking HELOCs and refinancing and taking loans and I look at it as it’s not the responsibility of the consumer when an institution like a large bank says we’re going to loan you money and we’re not going to charge you interest for three years and then we’ll reset but don’t worry about it. The individual consumer doesn’t understand that. Wait, free cash, where do I sign? It’s the banks and the regulation, the regulatory … ADMATI: It’s the lady in the hot tub in “The Big Short” saying she’s got five houses. RITHOLTZ: Right. That’s right. ADMATI: Exactly. So, the question is how … RITHOLTZ: There is parallel decrease. ADMATI: No. Exactly. So, that’s why I used subprime to kind of raise a parallel. Yes. So, reckless loans were made to people who couldn’t pay, liar’s loans who are clearly couldn’t pay because of the commissions of the mortgages … RITHOLTZ: The whole structure was stuck. ADMATI: The whole structure. And you still had the Fed assuring us everything was fine there and you had a system incredibly levered and interconnected, create through all these contagion mechanisms that we explained in the book. A perfect storm from a small decline in housing prices. I mean, this should — the correction, the price collection itself was much smaller than … RITHOLTZ: Thirty percent of elevated … ADMATI: Than like Internet bubble burst. RITHOLTZ: Right. ADMATI: Which wiped out a lot of paper wealth. RITHOLTZ: And to put some numbers on that, the Internet peak to trough was about 81 percent decline in the NASDAQ comp whereas I think houses fell about 32 percent. Some sector — some areas that … ADMATI: And then there was some default. OK. But it means the amounts were trivial really. And how do they create a global financial crisis from a little housing bubble burst in the U.S.? RITHOLTZ: Securitization and it spread through everywhere. ADMATI: And super-duper triple securitization that are side bets basically on the mortgages and only the big short, they made money. RITHOLTZ: I mean, quite amazing. One of your research pieces really caught my eye. I love this title, “Is The Internet Broken?” Tell us about it. ADMATI: That was actually the title of a course that I taught with one of the producers of HBO “Silicon Valley” where … RITHOLTZ: Which we’ll talk more about later. ADMATI: Which — yes, which I got to be involved in in the last season only and therefore, it was — it was one of the ones I streamed kind of had to been stream sort of to see also the season I ended up at also being a cameo in the last, last show with Middleditch, the whole thing and being there in the Stanford graduation and decorating his office and all that stuff. Anyway, banking is super regulated but poorly regulated but it’s like born — kind of born tied at the hip with the state, with the government because of central banks, because of — so they’re just — because they’re about money, they’re kind of intertwined with government in ways that not everybody understands because they’re still private corporations but they are super-duper connected. RITHOLTZ: And just to put a little context about that, in the first, I don’t know, century of American history, they were completely independent and they failed with shocking irregularities (ph). ADMATI: Because they were all — because we had regulations that also prevented them from diversifying. So, they were very subject to local calamities and they just kept failing and their privately issued money was good as long as it was good and it wasn’t. So, then we decided to have a currency and the whole history of banking et cetera until we got to have national banks and these mammoth banks that consolidated and consolidated and still thousands of other banks. So, just a bloated huge system anyway. So, I was basically — I’ve seen banking since I started looking at it in 2009, 2010 and then becoming involved in that, consumed with that lobbying for policy, how I get to … RITHOLTZ: So, how did you go from banking to technology and the Internet? ADMATI: So, here’s what happened. So, then it’s over 2015, I’m kind of have already spent like literally five years of my life, fulltime, on banking where I just came to look and here I was just — and it’s just kind of — it’s a little bit sickening to kind of being in that environment. I’m like, wait a minute, I’m in Silicon Valley and now, at that point, there was already the first round of what’s called techlash.....»»

Category: blogSource: TheBigPictureAug 8th, 2022

Crypto Bridge Nomad Offers 10 Percent Bounty To The Hackers Who Stole $190M

After losing about $190 million to hackers, crypto startup Nomad has offered to let the hackers keep up to 10% of what they took as a bounty. The company clarified that the bounty is for those who come forward now and who have already returned funds. Nomad Offers Bounty On Stolen Crypto In a statement […] After losing about $190 million to hackers, crypto startup Nomad has offered to let the hackers keep up to 10% of what they took as a bounty. The company clarified that the bounty is for those who come forward now and who have already returned funds. Nomad Offers Bounty On Stolen Crypto In a statement late Thursday, Nomad said it had recovered over $20 million of what had been taken in the hack. The crypto startup has since pinned a tweet about the 10% bounty on its Twitter account. Nomad said the bounty will be considered for any party who returns at least 90% of the total funds they hacked to a “white hat” hacker. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more   The company also agreed not to pursue legal action against white hats and advised the hackers to return the funds to its official recovery wallet address on the Ethereum blockchain. In its tweet, Nomad also advised readers to "be wary of impersonators and other scams." The crypto startup added that it continues to work with its community, law enforcement and blockchain analysis firms to ensure the return of all the stole cryptocurrency. What Happened To Nomad Nomad sustained a $190 million loss when a vulnerability enabled hackers to breach its security and make off with the cryptocurrency. Users of the blockchain were able to withdraw funds of any amount by simply entering any value into the system, even if there weren't enough tokens to cover the withdrawal. While Nomad specifically blamed hackers for the breach of its Bridge, CNBC explained that the nature of the vulnerability meant that no programming or coding skills were needed to exploit it. After others discovered what was happening, they conducted the same attack on Nomad's network. How Nomad And Other Crypto Bridges Work The company is working with law enforcement and blockchain analysis firm TRM Labs to trace the stolen cryptocurrency and identify those behind the attack. Nomad is also working with Anchorage Digital, a bank that holds cryptocurrency for customers. Nomad is a crypto bridge, which connects multiple blockchain networks together, enabling users to transfer tokens from various blockchains. Users deposit tokens, and then the bridge generates the same amount in "wrapped" form on the other side. The wrapped tokens are a claim on the original, which allows users to trade on other platforms than the one their tokens were built on. Updated on Aug 5, 2022, 1:35 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: valuewalkAug 5th, 2022

The crypto winter has investors gearing up for court dates to recoup their losses, while the layoffs continue

Today's big story on Wall Street digs into crypto. With Coinbase and Block on deck to report their latest earnings, the Street has lowered expectations for the fintechs. Investors, meanwhile, are trying to win back some of their losses. Hi. I'm Aaron Weinman. Winter is well and truly here for the crypto space. Fintechs like Coinbase and Block have got nervous earnings coming and Wall Street is bracing for the downturn.Before we get into that, just a kind reminder that it's the last call for nominations for Insider's 2022 class of Wall Street rising stars. Nominate here.Also, there is breaking news from London this morning after the Bank of England hiked interest rates by 50 basis points for the first time since 1995.If this was forwarded to you, sign up here. Download Insider's app here.Jeremy Woodhouse/Getty Images; IStock;1. August might be hot in New York City, but it's been a winter storm for crypto. The month is barely four days old, but already, the US Securities and Exchange Commission is clamping down on questionable crypto schemes and Wall Street has lowered expectations for fintechs like Coinbase and Block.Coinbase, which reports second-quarter earnings on Aug. 9, has lost more than three quarters of its market cap (around $18 billion on Wednesday) this year, while Block has shed in excess of half its value (Approximately $50 billion on Wednesday). Block reports earnings today.To rub salt in crypto wounds, the startup Nomad on Tuesday lost almost $200 million after hackers exploited a flaw in the blockchain-transfer platform's security defenses. The hackers were able to let users enter any value into the system and siphon off the funds, even if Nomad lacked the necessary assets in its deposit base.At the heart of the matter, however, is that popular cryptocurrencies have spiraled this year. Bitcoin, for example, has nearly halved in value.Companies — from Coinbase to Celsius — flew too close to the sun by hiring, and then firing, thousands. Robinhood, the pandemic darling that got everyone from the Bodega attendant to seasoned Wall Streeters playing the stock market, partially blamed the crypto freefall for its latest round of job cuts.Investors, burned by big losses, are now gearing up for court battles. Over 200 cases have been filed, some settled in the million-dollar range, some investors lost, and others are still going. Insider's Jack Newsham spoke to lawyers and investigators about what investors are doing to try to get their money back.In other news:Downtown ChicagoSteve Geer/Getty Images2. Angelo Gordon investors just learned of a rape claim against a former executive. The chief executive of a California pension fund said the litigation "raises concerns" and that the fund is "monitoring the situation closely."3. Disgruntled lenders are fuming at the marketing process of a loan marketed by Goldman Sachs and JPMorgan, Bloomberg reported. The first-lien lenders to a loan for Avaya have hired law firm Akin Gump to examine legal options over what they viewed as inadequate disclosures about the transaction.4. Carlyle has amassed a portfolio of 130 Brooklyn apartments. Carlyle's investment is the latest example of how cashed-up investment firms are becoming corporate landlords and replacing traditional mom-and-pop property owners.5. Staying on real estate, mortgage rates will fall back to Earth after an unprecedented climb. The dip in rates should make homes more affordable, Bank of America analysts said.6. Healthcare startup Calibrate's chief executive used a Zoom call to cull staff. Minutes later, the employees' company laptops were automatically wiped and rebooted.7. Adtech firm Criteo completed the acquisition of rival Iponweb at a revised price. The deal had been jeopardized because much of Iponweb's team is based in Russia. The revised deal valued the target at $250 million, plus a $100 million earn-out.8. New York City's comptroller has chided BlackRock over its fossil fuel holdings, according to this report from Gothamist. Brad Lander and national climate activists are calling on the asset manager to stop investing in the expansion of fossil-fuel infrastructure.9. Here are five little-known stocks that one of Germany's foremost portfolio managers is betting on now. Andreas Strobl is a senior PM at Berenberg Bank and his job is to unearth successful, little-known firms to invest in. He shared his insights, and stocks to avoid, with Insider.10. Goldman Sachs and Thoma Bravo just helped an artificial-intelligence startup raise $90 million. Here's a look at the pitch deck that Aisera used to raise the cash. Thoma Bravo, meanwhile, just agreed to buy ID company Ping Identity for about $2.8 billion.Done deals:Alternative asset manager Balbec Capital has raised over $1.5 billion for its fifth, and largest, flagship fund to date. The fundraise also includes a $100 million expandable co-investment vehicle.Brightwood Capital has provided a term loan to the Yardbird Group, a Miami-based restaurant company. Proceeds will come from Brightwood's third fund and Yardbird will use the money to enhance its existing operations.Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 4th, 2022

JetBlue (JBLU) Stock Down Due to Wider-Than-Expected Q2 Loss

High fuel costs hurt JetBlue's (JBLU) Q2 bottom-line performance. JetBlue Airways JBLU incurred a second-quarter 2021 loss (excluding 11 cents from non-recurring items) of 47 cents per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of 11 cents. Higher operating expenses hurt the bottom line. This wider-than-expected loss disappointed investors. Consequently, shares of JBLU declined 6.4% on Aug 2.Quarterly loss per share was narrower than the year-ago loss of 64 cents. Operating revenues of $2,445 million surged 63.1% year over year but fell short of the Zacks Consensus Estimate of $2,468.3 million. This massive year-over-year jump reflects improving air-travel demand.Passenger revenues, accounting for the bulk of the top line (94.2%), increased to $2,302 million in second-quarter 2022 from $1,388 million a year ago when the impact of coronavirus on air-travel demand was more severe. Other revenues rose 29.6% to $143 million.Other DetailsAll comparisons are presented on a year-over-year basis. Revenue per available seat mile (RASM: a key measure of unit revenues) in the reported quarter improved 35.7% to 14.90 cents. Passenger revenue per available seat mile (PRASM) surged 34.9% to 14.03 cents owing to better air-travel demand. Average fare at JetBlue during the June quarter increased 26.6% to $221.38. Yield per passenger mile shot up 28.5% year over year to 16.48 cents.Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) improved 29.3% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 20.2% to 16,405 million. Consolidated load factor (percentage of seats filled by passengers) increased 5.9 percentage points to 85.1% in the second quarter of 2022 as traffic growth outpaced capacity expansion.In the second quarter, total operating expenses (on a reported basis) escalated 89.2% to $2,558 million, mainly due to a 170.7% rise in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) climbed to $4.24 from $1.91 a year ago, as oil prices move north.JetBlue’s operating expenses per available seat mile (CASM) increased 57.4% to 15.59 cents. Excluding fuel, the metric declined 3.6% to 9.68 cents.JetBlue, currently carrying a Zacks Rank #4 (Sell), exited the second quarter of 2022 with cash and cash equivalents of $1,611 million compared with $2,018 million at the end of 2021. Total debt at the end of the reported quarter was $3,822 million compared with $4,006 million at 2021 end. During the quarter, JBLU regularly paid off scheduled debt and finance lease obligations worth $106 million.OutlookWhile providing guidance for third-quarter 2022, management stated that all comparisons are made with respect to the third quarter of 2019. Capacity is anticipated to be flat or decrease up to 3% from third-quarter 2019 actuals. CASM excluding fuel and special items is predicted to rise 15-17%.RASM is forecast to increase in the 19-23% range. Average fuel cost per gallon in the September quarter is estimated to be $3.68. Capital expenditures in the third quarter are anticipated to be roughly $350 million. Tax rate is anticipated to be 37%. Number of shares are expected to be roughly 325 million. JBLU expects to be profitable in the September quarter.For 2022, capacity is expected to be flat or increase up to 3% from the 2019 levels. CASM, excluding fuel and special items, is predicted to rise 11-14% from the 2019 actuals. Capital expenditures for 2022 are anticipated to be roughly $1 billion. Current-year interest expenses are forecast in the $160-$170 million band. Tax rate is anticipated to be 15%. Number of shares are expected to be roughly 324 million.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings SnapshotsWithin the broader Transportation sector, the likes of J.B. Hunt Transport Services JBHT, CSX Corporation CSX and United Airlines UAL reported second-quarter 2022 results. Take a look.J.B. Hunt reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.Quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year. Total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength in all segments. Total operating revenues, excluding fuel surcharges, rose 21.2% year over year.Quarterly operating income (on a reported basis) climbed 46.2% to $353.08 million on higher volumes, customer rate and cost-recovery efforts. Operating expenses escalated 30.6% to $3.48 billion.CSX reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.Quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.Total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $3,642.2 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge and contribution from the acquisition of Quality Carriers. Overall revenues per unit increased 27%.United Airlines’ second-quarter 2022 earnings (excluding 43 cents from non-recurring items) of $1.43 per share fell short of the Zacks Consensus Estimate of $1.86. Escalated operating expenses induced the earnings miss.The second quarter of 2022 was the first profitable period at UAL since the onset of the pandemic. Operating revenues at United Airlines came in at $12,112 million, beating the Zacks Consensus Estimate of $12,033.7 million. 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. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in 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 JetBlue Airways Corporation (JBLU): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report United Airlines Holdings Inc (UAL): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 3rd, 2022

Goldman Sachs, Morgan Stanley stand to cash in on $3.9 billion Amazon-One Medical deal

Today's biggest story on Wall Street looks at the rainmakers at Goldman Sachs and Morgan Stanley who crafted Amazon's $3.9 billion buy of One Medical. It's a welcome injection for investment-banking teams, which were largely blamed for banks' recent earnings. Hi! Aaron Weinman reporting from New York. Amazon's $3.9 billion purchase of One Medical could net Goldman Sachs and Morgan Stanley millions-of-dollars in advisory fees apiece. It comes as investment banks fall under the microscope for a slow year in dealmaking.Let's unpack who at the two Wall Street giants put this deal together.If this was forwarded to you, sign up here. Download Insider's app here.Goldman Sachs and Morgan Stanley are in line for multimillion-dollar paydays following Amazon's announcement that it's purchasing One Medical.IronHeart/Getty Images1. Goldman Sachs and Morgan Stanley got the nod for Amazon's $3.9 billion purchase of One Medical. It's a welcome payday for the pair especially after investment-banking teams across Wall Street shouldered much of the pain in last quarter's earnings cycle.Goldman Sachs advised Amazon — rekindling a relationship that spans back to 2017,  when the company bought Whole Foods Market for $13.7 billion — and Morgan Stanley advised One Medical on the sale, Insider has learned.Morgan Stanley has advised One Medical at least three times now, following up its lead role on the clinic operator's $245 million initial public offering in January 2020, and its $2.1 billion acquisition of Iora Health in June last year.Amid a dearth of M&A activity, a deal of this size should net each bank millions of dollars in fees. Investment banks typically earn between 2% to 4% (of the enterprise value of a transaction) in revenues for their advisory services. A sought-after client like Amazon, however, might lead banks to lower their price in exchange for the tech giant's business.Amazon's interest in One Medical, meanwhile, started back in the spring of 2022, a person with knowledge of the process told Insider. But the company was not seeking a buyer at the time, this person said.News of Amazon's acquisition sent One Medical's share price to more than $17 per share from a little over $10 last week.For the full story on the genesis of this deal, and the bankers who helped piece the transaction together, check out this report from Insider's Reed Alexander, and myself.In other news:Robert A Tobiansky/Getty; Boris Zhitkov/Getty; Jake Wyman/Getty; José Miguel Hernández Hernández/Getty; Spencer Platt/Getty; Twitter; Anna Kim/Insider2. Legendary Silicon Valley investor Bill Gurley was fed up with how Wall Street handled IPOs. Here's how he took on the Street and revolutionized how companies go public.3. Hedge-fund assets dipped below $4 trillion in June due to poor performance and investor exits. But commodity-trading advisors and macro hedge funds soared. Here are the winners and losers for the first half of the year.4. Investors have piled about $41 billion into artificial-intelligence startups this year, according to Pitchbook. Meet eight lawyers helping these startups patent AI and comply with rules around privacy and safety.5. The crypto world is riled up about former Coinbase employee Ishan Wahi, who's accused of trading tokens before they were listed. The SEC asserted that some of the traded tokens were securities, a label that could create serious issues for entities enabling crypto trading.6. Blackstone's Chief Operating Officer Jon Gray is still all about rental housing and logistics. It's not surprising – short supply and steady demand mean that rents are through the roof right now.7. Staying on real estate, the commercial property market is getting iced by rising rates. One investor expects deals to emerge later this year as the market braces for fire sales.8. Index Ventures partners Nina Achadjian and Paris Heymann are betting on vertical software. They argue these tools — software tailored to specific industries — are "mission critical" to customers. Here's how founders of such companies can pitch VCs.9. Andreessen Horowitz is setting up shop in New York, Miami, and Los Angeles, and doing most of it virtually. Here's why the firm is spreading its influence beyond Silicon Valley.10. Citi has shuttered its municipal proprietary-trading effort, Bloomberg reported. The decision, alongside some high-profile departures from Citi's municipal-bond business, sparked concerns that the bank is stepping back from its storied public-finance business.Done deals:Smart Care, a Wind Point Partners' portfolio company that provides commercial cooking equipment, acquired Espresso Partners, a coffee equipment company.Fifth Wall, a proptech-focused venture-capital fund, closed a $500 million fund. It was the investor's first climate-focused fund that will be invested in renewable energy, and carbon sequestration to decarbonize the real-estate industry.Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.Read the original article on Business Insider.....»»

Category: personnelSource: nytJul 25th, 2022

Affluent A-list residents of a luxury development are pitted against locals in a small farm town in New York

This week we're taking a look at Michael Meldman's luxury Silo Ridge development — where ultrarich residents are suing the small town of Amenia, New York, over taxes. Hi, I'm Matt Turner, the editor in chief of business at Insider. Welcome back to Insider Weekly, a roundup of some of our top stories. On the agenda today:Ultrarich New Yorkers are suing this small farm town.A legendary Silicon Valley VC revolutionized how companies go public.Leaked doc shows how Amazon managers evaluate employees.An economist explains why the US may be hurtling toward a recession.Before we get into this week's stories: Insider's Kali Hays, a senior tech reporter, is giving us an update on the battle between Elon Musk and Twitter.If this was forwarded to you, sign up here.  Download Insider's app here.Your guide to the Musk-Twitter caseIn this photo illustration, the Twitter logo is displayed on the screen of the phone, with Elon Musk's Twitter account in the background. (Sheldon Cooper/SOPA Images/LightRocket via Getty ImagesCompared with the previous three months, the story of Twitter and Elon Musk is at a lull, writes Insider's Kali Hays.The company and the billionaire are in full-on litigation mode, with Twitter winning the first legal spat when a judge on Tuesday agreed that its effort to force Musk to buy it should go to trial in October (Musk's side wanted it in late February).There are sure to be more arguments cropping up between the two sides, likely around discovery, but the Delaware Court of Chancery is not messing around. This case could be entirely resolved by the end of the year.So what's next?A pretrial settlement is not out of the question but not expected, at least not yet. A person with knowledge of the case said the two sides were hardly speaking outside court filings. That could change if something particularly juicy came up in the discovery period, which is just getting underway. Inside Twitter, employees and executives say they feel they are in a strong legal position to win the case. Should Musk lose, he will either face a hefty damages bill or be ordered to complete his acquisition of the company, perhaps at a lower price. Lawyers have speculated that he may win or simply ignore any order against him. But given the court's enforcement powers, from taking hold of his Tesla stock to fining him essentially any amount, he will likely have to comply.Now onto this week's stories.A-list residents sue small farm townThe Barn at Silo Ridge.Courtesy of Discovery Land CompanyAmenia, New York, a small farm town about 100 miles north of Manhattan, is home to the Silo Ridge Field Club — Michael Meldman's luxury development full of Wall Street titans, tech executives, and pro-sports moguls. And many of them are suing the town.The affluent residents are seeking to slash their property-tax assessments, pitting them against locals who feel shut out. And the clash may not be the last, as boldfaced names seek country solace in the work-from-home era.A clash between the ultrarich and a small town.Inside the IPO revolutionRobert A Tobiansky/Getty; Boris Zhitkov/Getty; Jake Wyman/Getty; José Miguel Hernández Hernández/Getty; Spencer Platt/Getty; Twitter; Anna Kim/InsiderBy June 2019, Bill Gurley had lost his faith in the traditional IPO process — so he embarked on a crusade to reshape the industry, which put him at odds with some of Wall Street's most powerful players.Insider's chief finance correspondent, Dakin Campbell, shines a light on how Gurley took on Goldman Sachs on his quest — and how, along with Spotify and others, he helped uncork the greatest wave of innovation to strike the IPO market in decades.More on the rebellion here.Amazon's controversial evaluation systemEmployees walk through a lobby at Amazon's headquarters in Seattle.Elaine Thompson/APA leaked document has shed more light on how Amazon managers evaluate their employees, according to an Insider review. Its latest talent guide shows that performance scores are determined by what an employee delivered and how they delivered it.Amazon staff have already criticized certain performance-review practices, like the company's "unregretted attrition rate." Has Amazon's latest performance and pay review become any less opaque?Here's how pay is decided at Amazon.For more on Amazon, check out:Amazon just hit fast-forward on its vision to transform how you see the doctor'The party is over' for Amazon aggregators. Insiders share what's next — from fire sales to dramatic pivots — as funding evaporates.'We are still going to end up in a recession'Getty Images; Marianne Ayala/InsiderFor a long time, Neil Dutta, an economist, was an optimist who argued against doom-and-gloom predictions. Now he's starting to change his outlook.In recent years, low inflation and weak economic growth meant low interest rates and economic stimulation. But today, Dutta writes, an increasingly hawkish Federal Reserve has launched an aggressive campaign to cool red-hot inflation — even if it means pushing the economy into a recession.Here's why he's sounding the alarm.This week's quote:"Last year was basically a fintech party. There was an explosion of fintech companies. But now we're, like, in a fintech hangover."Mark Fiorentino, a partner at Index Ventures. Fiorentino is one of 26 rising-star VCs who are still bullish on fintechs. More of this week's top reads:Here's a guide to managing your career in an uncertain economy.A new crop of startups is putting carbon credits on the blockchain.Relocation experts share how to successfully become a digital nomad.Dismal earnings and Goldman's plans to resurrect its annual performance reviews confirm bankers' fears about looming layoffs.Leaked emails show Coinbase is "temporarily shutting down" its US affiliate-marketing program.The price of paper has doubled this year. Publishers are worried their magazines and newspapers are in jeopardy.Plus: Keep updated with the latest business news throughout your weekdays by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here tomorrow.Curated by Matt Turner. Edited by Jordan Parker Erb, Sarah Belle Lin, and Lisa Ryan. Sign up for more Insider newsletters here.Read the original article on Business Insider.....»»

Category: worldSource: nytJul 24th, 2022

Choice Equities Fund 2Q22 Commentary: Crocs And SiteOne

Choice Equities Fund commentary for the second quarter ended June 30, 2022. Dear Investor: I hope this letter finds you well. Choice Equities Fund generated losses of -17.4% on a net basis in the second quarter, taking year-to-date performance to -34.6%. This compares to the Russell 2000’s -17.2% loss for the quarter and -23.5% loss […] Choice Equities Fund commentary for the second quarter ended June 30, 2022. Dear Investor: I hope this letter finds you well. Choice Equities Fund generated losses of -17.4% on a net basis in the second quarter, taking year-to-date performance to -34.6%. This compares to the Russell 2000’s -17.2% loss for the quarter and -23.5% loss year-to-date and the S&P 500’s loss of -16.1% for the quarter and -20.0% loss year-to-date. Since inception in 2017, the fund has generated annualized gains of +15.7% versus +5.6% and +12.0% for the Russell 2000 and S&P 500, respectively. .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 Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio 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 2022 hedge fund letters, conferences and more Executive Summary In this letter, we discuss the major macroeconomic events of the quarter and their influence on market performance. We also take a closer look at how the stocks within the market performed in the first half of the year. I highlight two new positions in Crocs, Inc. (CROX) and SiteOne Landscape Supply, Inc. (SITE). Finally, I conclude with a few thoughts on the current outlook and provide a few big picture charts that inform our optimistic view of the coming years. Quarterly Commentary 2022 has been a tough year so far for owners of almost all assets. Equities, bonds and basically everything other than energy-related equities and commodities have produced meaningful losses at the halfway point. Headlines remain bleak. According to the University of Michigan study, consumer sentiment recently hit all-time lows. Declining optimism and increasing interest rates have led to reduced trading multiples across the market. Though earnings thus far have remained resilient, the decline in market multiples has the S&P 500 off to its worst start to a year since 1970, with its decline past the -20% threshold sending the index into bear market territory. Likewise, the Russell 2000 experienced its worst start to a year ever, with trailing four year returns again going negative, much like we saw in the spring of 2020. At times of such market duress, I find it useful to look at how the stocks in the market have behaved rather than just the market-cap weighted indices which contain them. I believe this can a) help us better contextualize how we got here, and also b) inform us of the opportunity set going forward. To that end, the table below, which breaks out the performance of the stocks of several important indices into quintiles by average price performance, highlights just how far-reaching the first half’s selloff has been. Though it is perhaps unsurprising that a subsegment of small caps were among the worst performers, declining nearly -65% since the year began, it is a bit eye-opening to see the components of the Nasdaq producing similar performance. This is even more remarkable when considering mega-caps like Netflix, Inc. (NFLX) and Meta, Inc. (META) landed in the fifth quintile, together accounting for nearly ~$700B of market cap that has evaporated. Portfolio Commentary Against this backdrop, our holdings have not been immune with our portfolio experiencing market-like performance in the recent quarter. All of our equity holdings declined in price, while light hedging activity added about 2% to our return. As always, during the quarter, I attempted to balance the sometimes competing aims of protecting capital with increasing future prospective returns. This is not always an easy balance to achieve, as our portfolio orientation which is primarily constructed around owning equities means that from time to time we will incur mark-to-market losses. Our performance thus far this year reflects this fact. Even so, despite the disappointing performance thus far, or to some degree because of it, I believe our portfolio of companies are trading at unusually high discounts to fair value. I also believe our holdings are well-positioned competitively, well-managed and offer attractive growth prospects. I provide updates on existing holdings below and highlight two new holdings, both from the “fifth quintile.” CROX Crocs, Inc. (NASDAQ:CROX) trades at 5x this year’s earnings and 6x EBITDA. Like many of its peers in the consumer space, the valuation implies the market regards the company as a one-time pandemic beneficiary, and business prospects offer little growth beyond this year. While it would be ill-advised to suggest the company did not benefit from the pandemic’s effects on consumer spending of goods, I think this view is incomplete and neglects to incorporate the tremendous success the management team has achieved since they arrived five years ago. Most recall Croc’s original success as having come from pretty much out of the blue, as the funny-looking but comfortable clogs sent the stock on a meteoric rise shortly after its IPO in 2006. Many also conflate the stock chart with a fad driven boom and bust cycle, even though a closer look at clog volumes actually shows fairly consistent growth over the last twenty years. Even so, the company was not without its problems, primarily from management missteps as an overburdened cost structure created profit headwinds. Accordingly, when Andrew Rees became CEO in 2017, he had his work cut out for him. Initially, he focused his efforts on taking costs out and making the operation more efficient. He shrunk the store count by more than a third and began optimizing their go to market strategy by emphasizing sales through the direct-to-consumer digital channel and through wholesaler channel partners. This enabled the company to devote greater resources to product innovation and marketing, a smart reallocation of corporate resources that offered great payoffs for the branded consumer products company. These efforts have paid off handsomely. Deft and efficient marketing spend with influencers on social media via platforms like Instagram put Croc’s back in the limelight. Clever products like jibbitz, the fun and offbeat charms which can be appendaged to the clogs, grew a second consumables-like revenue stream. Growth and profitability for the core Croc’s brand followed. Today, management is focused on perpetuating the success of the Croc’s clogs, with new product adaptions partly aided by a consistent new diet of jibbitzs. But they are also keen on duplicating their successful playbook in new markets, both geographically in markets like Europe and Asia where they have a lot of room for growth, and importantly, across new products like sandals, and most recently, lightweight loafers. The company’s December purchase of HeyDude was initially panned by investors. Management took on debt to finance the acquisition (though at 3x ebitda it looks quite manageable) and paid a full multiple for a nascent company – born in Italy but selling shoes in America – that most investors had never heard of. Despite the initial share price reaction, the HeyDude acquisition looks quite promising, particularly when considering the company catapulted to half a billion dollars in sales and a low 30s EBITDA margin in just over a decade’s time. Now Croc’s proven management team is intent on building on this strong start by bringing greater resources like increased marketing budgets and broader distribution to the promising brand. Proven industry veteran Rick Blackshaw has been appointed to lead the company’s efforts. Accordingly, the recent acquisition broadens Croc’s product line and adds another promising avenue of growth, positioning the company well to achieve its recent goals which imply multiyear sales and earnings CAGRs north of 20%. Insiders seem to agree the future is bright with several executives and board members making open market purchases all year long. SITE In some ways, quite a lot has changed since our first purchases of SiteOne Landscape Supply Inc (NYSE:SITE) some six years ago. Yet in others, particularly regarding the company’s competitive positioning, very little has. It was this durability in the company’s competitive position that was core to our original investment thesis at the time. Today, after years of growth through acquisitions, the company continues to enjoy a near monopoly-like position in the specialized distribution vertical of lawncare and maintenance supplies, with our latest checks suggesting the company is now 5x the size of its closest peer. Equally promisingly, the industry continues to remain quite fragmented with small independent players. The stock is off nearly 60% from recent highs. The share price decline suggests a meaningfully impaired growth trajectory. Yet, even assuming a 25% haircut to this year’s likely EBITDA, shares still trade at the company’s cheapest valuation on offer since coming public in 2015. The long horizon market growth and consolidation opportunity remains, only now the company stands to benefit from having the best balance sheet it has had at any point since being public. We are delighted to be able to repurchase this business at attractive prices. FARM Farmer Bros Co (NASDAQ:FARM) remains unloved and overlooked. I recently had the opportunity to visit with the company and some other shareholders while touring the new plant in Dallas, TX. Reviewing the visit on my flight home, I had two primary takeaways. First, this company’s operating environment has been exceptionally difficult since this management team took over in late 2019. A great number of the company’s customers were closed due to the pandemic, while coffee-focused day parts like breakfast and locations like hotels have been slower to return to normal purchasing patterns than others. Though the external environment has not cooperated, execution on items within the company’s control have been more promising, as management has positioned the company to prosper when normalcy returns. Second, the company’s market cap of $.....»»

Category: blogSource: valuewalkJul 23rd, 2022

Black investors say crypto is still key to building wealth even as digital assets see steep sell-off in 2022

Black investors are twice as likely to say crypto is their best investment option, according to a study. The trend worries some experts amid a steep slump. Bitcoin Balloon 2Andriy Onufriyenko Some minority investors say crypto is still an important investment even after this year's big crash.  According to a survey, 25% of Black investors own cryptocurrency compared to 15% of white investors.  Experts have expressed concern around minority investors' exposure to risks in the crypto market.  In 2013, as crypto was creeping into the mainstream, Cleve Mesidor was working as an appointee in the Obama administration's Department of Commerce. As a favor to a friend, Mesidor helped pen a press release about bitcoin. Though fairly uninterested and unimpressed at the time, in just a few years Mesidor would find herself steeped in the world of crypto, quitting her job to become a full time representative of the industry and a committed investor. The awakening to the world of crypto came a few years after Mesidor helped with her friend's press release, when she watched "Dope", a movie about a group of Black teenagers who use bitcoin to thwart a financial criminal. The film, she said, sparked a vision in her mind of crypto as a path to racial equity, a tool for people who had been either accidentally or deliberately left out of the traditional financial system. That kind of awakening is a common experience for minority investors who say they're bullish on crypto — and who continue to hold even as the market suffers through a steep sell-off this year. The losses, they say, are inconsequential to the overall objective of the project, with tokens like bitcoin and ethereum providing a sense of freedom, and the potential to level the playing field with those who have never experienced discrimination from lenders or bankers. Jacob Faber, an NYU professor and an expert in social inequality, told Insider that the perspective of people like Mesidor was likely a result of a long history of discrimination in the financial system, with well documented evidence of bias in everything from opening bank accounts to getting a mortgage to getting a loan to start a business.A survey by Ariel Investments and Charles Schwab released in April showed 28% of Black Americans say they distrust banks, compared to just 18% of White Americans. 56% also reported not feeling respected by financial institutions — something Mesidor can relate to. She recalled experiences of her and her family having loan applications denied or being treated poorly by bank employees."I wasn't even taken seriously. You know, when somebody is just like, 'why are you wasting my time?'" Mesidor said. "Get a degree. We did that. Get a good paying job with benefits, did that. And still it's not enough." The result over time has been that many Black and minority investors are either locked out or shy away from traditional investment opportunities that may be offered to white investors, and possibly lured by decentralized (and often riskier) investments.Only 34% of Black Americans own stocks compared to 61% of white Americans, according to the Federal Reserve Board, but that ratio is flipped when it comes to cryptocurrency. Among Black investors, 25% own crypto compared to just 15% of white investors, Ariel and Charles Schwab reported.That also means that Black investors may have more significant exposure to 2022's crypto crash, which has slashed the total market value by about $2 trillion since last November and sent bitcoin tumbling from $69,000 to just over $20,000. But Mesidor feels the trend towards digital assets is only natural for Black investors."If traditional finance has worked for you, you see crypto as risky. You see it as speculative. For those of us who have been locked out, traditional finance is risky," she said. "Asking for a loan is risky. You know the answer, right?"Crypto has been touted as an egalitarian form of finance, away from banks and their conscious or unconscious biases. It's the beauty of what Mesidor refers to as "self-sovereign identity" — you don't need government attention to build the same wealth as your peers.Yet, others are more skeptical."The proliferation of cryptocurrencies and non-fungible assets has become a kind of Ponzi scheme," NYU's Faber said of the trend, adding that any aspirations toward racial equity disguised the industry's risks, which could in fact further erode minority wealth. "The idea that this can be a democratizing currency is not supported by the facts at all," Faber said.And yet, Black investors are still twice as likely to say crypto is their best investment option, according to Ariel and Charles Schwab. After years of research, Mesidor ended a career in politics and dove into crypto full-time in 2017 as head of her non-profit Blockchain Foundation. She is unfazed by bitcoin's plunge, noting that this isn't her first crypto winter, but her third. "We've learned that get-rich-quick schemes in this society rarely benefit us," Mesidor said. "This is not about, 'oh my god, the price of crypto'. It's about building products and services, breaking down barriers, creating access for people." She says she is in the market for the long haul, and among thousands of tokens, she's bullish on the biggest."I think bitcoin is my north star in terms of crypto," Mesidor said.Read the original article on Business Insider.....»»

Category: personnelSource: nytJul 23rd, 2022

Freddie ADU Support Excites Lenders, Advocates

First they were a niche, then a novelty. But as the affordability crisis in housing grows worse, and land-starved coastal areas confront the limitations of single-family zoning, accessory dwelling units (ADUs) are now very much a serious part of the conversation. Perhaps the clearest sign of how much potential policymakers see in these structures (sometimes… The post Freddie ADU Support Excites Lenders, Advocates appeared first on RISMedia. First they were a niche, then a novelty. But as the affordability crisis in housing grows worse, and land-starved coastal areas confront the limitations of single-family zoning, accessory dwelling units (ADUs) are now very much a serious part of the conversation. Perhaps the clearest sign of how much potential policymakers see in these structures (sometimes still referred to as “granny flats” or “in-law suites”) came last month, as Freddie Mac rolled out new financing guidelines that theoretically will begin opening up opportunities for ADUs—as rentals, affordable housing and non-traditional living arrangements—to a huge new segment of the population. “We have a unique opportunity where the cost of building is less than the cost of buying,” said Meredith Stowers, business development manager for Cross Country Mortgage. Stowers joined a diverse group of advocates, real estate practitioners and policymakers on a University of Southern California-sponsored panel last week to discuss how impactful these changes can be in elevating lower-income families into homeownership, as well as how they can expand housing stock in areas that are traditionally resistant to growth. The most immediate change from Freddie is support for ADUs in all their mortgage products—with plenty of requirements and restrictions. This includes loans for both existing homeowners looking to add an ADU as well as homebuyers who want to include the addition of an ADU with their purchase. It’s also important to note that buyers will be able to use (some) rental income from the ADU in their mortgage application, giving low- or moderate-income buyers access to a larger pool of properties. As local governments have loosened restrictions and encouraged ADU production in their areas, some have not seen a significant increase in people taking advantage of the new opportunities. According to Amy Anderson, senior vice president of the Wells Fargo Foundation, inaccessible, obscure or missing financing options for the structures are often to blame. “Financing has emerged as one of the top barriers to production ,” she said. “A critical aspect of ADU financing…is how to change those federal agency programs that can really play a central role in unleashing more private lending financing.” Only a month after going into effect, it is certainly too early to make any sort of judgment on how the new guidelines will shape markets. Some panelists were a little more cautious in their assessment of just how quickly or broadly ADUs will pop up in real estate markets based on the changes, describing them more as a first step than a huge leap forward. “Why don’t you allow multiple ADUs particularly on a family property?” Stowers wondered. “Why can’t we build detached ADUs? We also need to eliminate random obstacles.” Samar Jha, government affairs director for the AARP, said that a Freddie demand that applications using ADU rental income need at least one ADU comp for the appraisal could prove to be a significant roadblock. “Some sort of flexibility on that requirement would be nice,” he said. As the technical aspects of the Freddie program are worked out, and as more lenders look into ADUs as a potentially important part of their portfolios, the question is no longer whether they will erase inventory, affordability and accessibility challenges in the housing market, but rather, how much they can alleviate these issues—and where. “ADU is part of the solution, not the solution,” Jha added. “People say ADUs are not going to solve affordable housing, but it has to be part of the solution.” Who and where None of these changes matter if ADUs aren’t in demand from consumers, or aren’t viable projects for builders. Stowers, who described herself as a boots-on-the-ground mortgage lender “slugging it out” in a competitive California market, said ADUs are growing to serve a mostly unrecognized niche for living. “Our housing policies have tended toward a unique vision of family where we oust the kids out of the house and tell them to go buy a house,” she said. “In fact, most families—brown families especially—are used to ‘family compounds.’ That is the norm for most people around the world.” Working in areas just north of the U.S.-Mexico border in San Diego, California, Stowers claimed that ADUs are often perfect for upwardly mobile immigrant families who utilize the space for long-term multi-generational living situations—something becoming much more common at least in some areas. Even though there is a demand, because financing and land use policies are historically unfriendly to ADUs, many who want an ADU are simply not able to pursue that living arrangement. Stowers said that in her experience, people will “ghost” contractors and blame the builders if there are hiccups in the financing, making them a riskier proposition for everyone. But as financing becomes more stable, and more data allows better underwriting, builders will have a lot more confidence taking on ADU projects, she adds. Conversely, if financing remains difficult, builders and private lenders will likely back away. “If we don’t address this financing more quickly, it will kill this trend,” Stowers lamented. “Freddie, in my view—God bless ‘em, it’s awesome—but it’s a baby step. Because we have to get built first.” Susan Geddes Brown was a longtime mortgage lender who now runs her own company advising financial institutions on construction loan programs (with a specific focus on ADUs). She called Feddie’s changes “a really bold step,” and described how appraisers are working to quantify how valuable ADUs are, even as they are still scarce in some areas. “I think the other piece of that is helping appraisers understand there are multiple ways to get to an opinion of value, where you’re extrapolating data, where you’re overlaying data to help demonstrate what those values are,” she said. “Appraisers just simply don’t have the tools, and it’s not a property tech they’re accustomed to just yet.” Stowers said she once had an appraiser give a three-bedroom, 1,200-square-foot ADU a value of $0. That comes from federal guidelines, she claims, which only lets appraisers look at “marketability” for these structures, but not rental income. ADUs still cannot be considered part of “gross living area.” “A clear change in those guidelines would solve every problem,” Stowers said. Both Jha and the panel’s moderator, Ben Metcalf of the University of California at Berkeley’s Terner Center for Housing, pointed out that many single-family neighborhoods do in fact, have properties with ADUs—they just don’t go by that name. “We talk to people, they’ll be like, ‘We’ve been doing ADUs all along, we just call them duplexes.’ Or, ‘We do ADUs, but we just call them triple-deckers or three-flats,’” Metcalf explained. Jha used an example from popular culture to help demonstrate that ADUs are not a new invention. “The most famous, famous person to ever live in an ADU is The Fonz,” he said, referring to the iconic “Happy Days” character played by Henry Winkler. “ADUs have been since then.” Appraisers and regulators can start to use these already existing structures, which vary regionally and take on all different shapes and sizes, as models of ADU values, the panelists argued. Speaking to RISMedia late last year, Jeff Cohen, an economist at the University of Connecticut, says that the traditional single-family large lot neighborhoods—particularly in the Northeast and West—are going to fade. “Taking these small starter homes, tearing them down and building multi-family units—that might be one way to resolve the supply issues in some ways,” he says. He adds that savvy investors are starting to realize that a single-family lot can quickly be transformed into a multi-family property, sold or rented for significantly more return on investment. That has potentially negative effects with crowding or an overall loss of entry-level single-family homes, as well as positives, with more housing created in highly desirable, land-limited neighborhoods. “Where I live, in a very popular suburb because of the schools and the parks and the relatively safe neighborhoods, you don’t see as much new construction because there’s really no vacant land. But if you move further out…you can have that kind of development, but that might not be where the majority of people want to live.” Back to the financing side, other government entities are already expanding how (and how much) they will finance ADUs. The California Housing Financing Authority (CHFA) recently upped a grant program to $40,000 per family, and a representative who was attending the panel said they had already disbursed $1 million. Amanda Chiancola, a planner working for the city of Salem, Massachusetts, told RISMedia that her relatively small, suburban town (population 44,000) is independently planning to announce a new financing program for affordable ADUs after pushing to facilitate and loosen restrictions around them over the last couple years. She adds that while she is not familiar with the new Freddie guidelines, it usually takes some time for those things to percolate down to the point where builders and local governments will see new permits and applications. But regardless of the specifics, from a purely policy perspective, ADUs are very often well worth the investment. “It’s the least expensive way to create affordable housing,” Chiancola says. The post Freddie ADU Support Excites Lenders, Advocates appeared first on RISMedia......»»

Category: realestateSource: rismediaJul 23rd, 2022

How To Repair A Broke Mindset

It’s time to‌ ‌talk‌ ‌mindsets. You can have one of two different mindsets. You can either have a growth mindset or a broke mindset. I’ll give you an example of a broke ‌mindset. And, more importantly, how not to think. So a while back I published this short where I shared that I took my […] It’s time to‌ ‌talk‌ ‌mindsets. You can have one of two different mindsets. You can either have a growth mindset or a broke mindset. I’ll give you an example of a broke ‌mindset. And, more importantly, how not to think. So a while back I published this short where I shared that I took my family of 6 to all-inclusive resort in the Dominican Republic. Guess how much I paid? Nothing. How was I able to swing a free trip for my entire family? I used our credit card reward points. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more The very first comment that I received was something on the lines of, “the annual fee of $50 pays for itself I guess.” Seriously? What’s there to guess? So what if I dropped $50 for the annual fee. It’s well worth it to get a $15,000 vacation for that. I mean, just do the math. $15000 vs $50. That, my friends, is a broke mindset. And, I don’t want any of you to be broke. So, let’s go over some ways to break from a broke mindset. What’s a Broke Mindset? The first thing we need to do is define what a “mindset”‌ ‌is. Basically, it’s a set of beliefs or thinking that determines how we behave, think, and feel. ‌Let’s dig in to that more specifically. It’s how you think about finances. When you have a broke mindset, it affects your way of thinking about‌ ‌money. ‌In this case, you think negatively about finances if you have a broke mindset. Your bank account is always empty. ‌You‌ ‌don’t have any savings. ‌Also, you’re probably surrounded by broke‌ ‌people as well. And,‌ your idea of happiness is to win the lottery or have more money. Rich people, on the other hand, share one constant trait:‌ ‌a growth‌ ‌mindset. It’s really nothing more than self-growth and perseverance until you reach your goal. In short, the difference between a broke mindset and a growth mindset is the outlook. When you have a broke mindset, it’s negative. But, it’s more positive when you ‌embrace a growth mindset. How Do You Know if You Have a Broke Mindset? So, which mindset do you ‌possess? Sometimes it’s obvious. But, if here’s some telltale signs that you have a broke mindset. Thinking broke all the time. Is your mind always focused on‌ ‌how‌ ‌broke‌ ‌you‌ ‌are? ‌Do you say things like, “I have no chance to be rich” or “I can’t manage money.” Think this way enough and it becomes true. Spending exceeds earning. Are you spending most of your money as soon as you get it. Are you in debt trying to keep up with the Joneses? Both are signs of a broke mindset. Wants come‌ ‌before‌‌ ‌‌needs. Having a broke mentality means you don’t know what’s important. ‌Since you blew your last paycheck on unnecessary stuff, you might have to make late payments for basics like rent. You aren’t saving or investing. Those with a broke mindset also complain about not earning enough‌ ‌to‌ ‌save or invest. ‌You can still set aside a portion of your income to put into your savings account or to invest, even with a modest income. You value quantity over quality. People‌ ‌with‌ ‌a broke mentality usually buy cheap things. ‌They believe it is a waste of‌ ‌money to purchase expensive items. ‌Sadly, cheap is often‌ ‌expensive in the end. It’s hard for you to‌ ‌think‌ ‌outside‌ ‌the‌ ‌box. Your financial situation may become stagnant if you make excuses and never think of alternatives. You‌ ‌think in terms of scarcity. Money is seen as a finite resource that you have to hoard so no one else can get‌ ‌it. ‌Despite your best efforts, you feel as if there will never be enough. You also focus on what don’t have. Ways to Repair Your Broke Mindest I know that admitting that you have a broke mindset isn’t easy. But, that’s the only way you’re going to shift into a growth mindset. After that, you can try the following to help repair your broke mindset. Live each and every single day with a purpose. Every‌ ‌day‌ ‌you‌ ‌have to wake up knowing what you’re going to do. Or, even better, ask, “How are you going to conquer your day?” The rich don’t just roll out of bed at nine o’clock and then think, “hmm what am I gonna do today? What am I gonna focus on today? What business am I going to work on?” They‌ ‌already‌ ‌know‌ ‌exactly‌ ‌what‌ ‌they‌ ‌plan to accomplish‌ ‌that‌ ‌day. ‌In fact, that planning begins the night before or the week before, not the morning of. And, in some cases the month or quarter before. There is no mystery as to what rich people are up to. They know what is on their schedule. They know what their goals are for the week, for the month, for the quarter, and for the year. And that is so crucial if you want to stop being broke and start being rich. In order to achieve your goals, you need to wake up every day with a purpose Focus on what you can work with. “We waste so much time focusing on what is withheld from us,” writes James Clear. In particular, it occurs “after we slip up and get off track from our goals,” he states. “Anytime we don’t do the things we want to do — start a business, eat healthily, go to the gym — we come up with excuses,” such as I don’t have enough money or I’m not sure what to do.” The solution, according to Clear, is to‌ ‌change‌ ‌your‌ ‌mindset‌ ‌by‌ ‌thinking, “I can work with this.” “Because you can,” he ‌promises you. “The truth is that most of us start in the same place — no money, no resources, no contacts, no experience — but some people (the winners) choose to get started anyway.” Even though it’s‌ ‌not‌ ‌easy, “your life will be better if you choose to feel uncomfortable and make progress, rather than complain and make excuses,” he ‌claims. “Shift your focus from what is withheld from you to what is available to you.” “It’s rare that your circumstances prevent you from making any progress. You might not like where you have to start. Your progress might be slow and unsexy,” Clear concludes. “But you can work with this.” Live within your means. Living‌ ‌within your means does not mean sacrificing life experiences or being a “cheapskate”. Instead, it “simply means that you’re spending less or equal than you’re making each month,” explains Deanna Ritchie in a previous Due article. “As a result, you aren’t putting yourself into debt by living off of plastic. And more importantly, this will help you create a more stable financial future.” “Of course, living within your means requires discipline and a little sacrifice,” adds Denna. “However, if you stick with it, you’ll reap the following rewards, in addition to avoiding debt:” There is less anxiety and stress. Your health and success improve as a result of it. Your credit score won’t be the focus of your attention. Having the‌ ‌ability‌ ‌to‌ ‌build‌ ‌wealth. There will be more freedom for you. Your finances will be secure. Is it possible to live within your means without denying‌ ‌yourself? Absolutely. Here are a couple of ideas; Use the 50/30/20 rule to create a budget. ‌Basically, you spend 50% of your take-home income on food and housing, 30% on wants, and 20% on savings. By automating your savings, you can save before you spend. ‌Put a percentage of your paycheck directly into‌ ‌a‌ ‌savings‌ ‌or‌ ‌retirement‌ ‌account. Get rid of frivolous expenses, like gym memberships you no longer use. Stop keeping up the Joneses. ‌Perhaps they are putting on the appearance of being wealthy. ‌It is possible, however, that they are seriously in debt. Delay gratification. ‌If you plan to buy groceries, clothing, electronics, or travel, you might want to wait for a sale or discount. Restructure‌ ‌your‌ ‌debt. ‌Make‌ ‌it easier for you to repay your debts. You may be able to negotiate a better interest rate with lenders or consolidate your debts. Get over you fear of investing. When live within your means something funny happens. You end up with some extra money. It might not be much. But, it’s something. Rather then blowing this surplus, pay off a credit card bill or build an emergency fund. After that? Invest it. ‌Investing your money is the key to growing it and building wealth. I know that investing can give some of you a panic attack. But, there are plenty of low-risk investment options out there. Some of my favorite include; High-yield savings account. These are federally insured savings accounts that have higher interest rates than the national average. Short-term bonds. A short-term bond fund invests in securities that mature within one‌ ‌to‌ ‌three‌ ‌years. ‌They can include commercial papers, certificates of deposit,‌ ‌and government‌ ‌securities. TIPs. This a type of U.S. Treasury bond ‌that protects investors against‌ ‌inflation. Dividend-paying stocks. ‌By investing in dividend stocks, you can earn another income source and build wealth gradually. Preferred stocks. These offer shareholder protection and priority to dividends. Annuities. After maxing out other retirement accounts, buying an annuity provides a guaranteed lifetime income. P2P lending. I’ve used Lending Club in the past and I’ve made 5 and 7 percent. Online real estate. With these platforms you can invest in commercial or residential property. Also, you can use robo-advisors to automate investments, such as Betterment, M1 Finance, or Wealthfront. Keep goals in plain sight. “Write them down on a piece of paper that you see daily as reminders or on a post-it note wrapped around your credit card,” says personal finance expert Andrea Woroch. “You can even make a financial vision board where you paste pictures of your dream home you want to buy or on your dream trip with your family.” “These visuals will help you stick to your goals and positive money management will ultimately lead to a long-lasting change in your money mindset.” Stop hanging out with Buttpews. What’s a “Buttpew?” Well, I also call them anti-wealth hackers. These are the people who are broke, make excuses and whin about everything. They also drag their feet when making decisions. And, for them, the glass is always half-empty. In order to reach your goal of breaking free from a broke mindset, you need to stop wasting your team with these types of people. Read more books. Would you be surprised to learn that the rich prefer to be educated over‌ ‌entertained? Well, that’s what Thomas C. Corley, who studied the daily habits of 177 self-made millionaires for five years, in his book Change Your Habits, Change Your Life has found. As Corley, points out, 88% of rich people “devote thirty minutes or more each day to self-education or self-improvement reading” and that “most did not read for entertainment.” “The rich read to acquire or maintain knowledge,” he adds. ‌What are they reading exactly? ‌Among the books that the rich read, says Corley, are biographies of successful people, history books, and self-help‌ ‌books. While reading is strongly advised, you can also listen to podcasts or watch financial news or YouTube videos. In my opinion, it’s not really the medium. The fact that you’re improving your financial literacy is a surefire way to develop a growth mindset. Take advantage of‌ ‌debt‌ ‌strategically. There are a lot of financial experts who say you should avoid debt like the plague. ‌But, debt isn’t always a bad thing. As an example, good credit is necessary if you plan to buy a car or home. ‌To accomplish this goal, a credit card can be applied for and used responsibly. You‌ ‌can‌ ‌also‌ ‌use‌ ‌debt‌ ‌for your education, property acquisition, or business starts and/or growth. ‌ An‌ ‌example‌ ‌of‌ ‌debt not being used‌ ‌strategically? ‌Don’t max out your credit card on VIP tickets to a music festival if you can’t pay off the balance. As long as you’re using debt wisely, and paying off the balance, don’t be afraid of it. Besides. You might just get a free trip to the Dominican Republic out of it. Appreciate what you have. No matter how broke you think you are, be grateful for everything you have. ‌You won’t get anywhere by stressing about things you don’t have. ‌However, taking care of what you have now will lead to more in the future. Imagine having a mess of finances, yet you want a fresh pair of Jordans. ‌As soon as your income tax refund comes in, you’ll be able to buy‌ ‌these sneakers. ‌But, as a result, you are neither appreciating nor satisfied with what‌ ‌you‌ ‌already‌ ‌have. ‌It’s because of this that you’re in financial trouble. Article by Jeff Rose, Due About the Author Jeff Rose is an Iraqi Combat Veteran and founder of Good Financial Cents. He teaches people wealth hacking. He is a frequent on CNBC, Forbes, Nasdaq and many other publications. He is author of the book "Soldier of Finance: Take Charge of Your Money and Invest in your Future" where he teaches how he escaped from $20,000 in credit card debt to a life of wealth. Updated on Jul 20, 2022, 4:36 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: valuewalkJul 21st, 2022

US Recovers $500,000 From North Korea-Backed Hackers Targeting Hospitals

US Recovers $500,000 From North Korea-Backed Hackers Targeting Hospitals Authored by Aldgra Fredly via The Epoch Times, The U.S. Department of Justice said on July 19 that it seized about $500,000 in cryptocurrency that two American medical centers had paid to North Korean state-backed hackers after a ransomware attack. Deputy Attorney General Lisa Monaco said the seized funds include ransoms paid by health care providers in Kansas and Colorado in 2021 and 2022, according to a statement issued by the Justice Department. According to court documents unsealed on July 19, the Kansas hospital paid the hackers about $100,000 in bitcoin after being unable to access encrypted servers for more than a week. The hospital notified the FBI, which traced the payment and identified China-based money launderers who assisted North Korean state-sponsored hackers in converting the money. The FBI also found that a medical provider in Colorado paid a ransom to the hackers, who used the Maui ransomware to encrypt the medical center’s servers. Authorities seized the contents of two cryptocurrency accounts following the investigation. “Not only did this allow us to recover their ransom payment as well as a ransom paid by previously unknown victims, but we were also able to identify a previously unidentified ransomware strain,” Monaco said. ... According to the advisory, Maui ransomware is operated manually by a remote actor using a “command-line interface” to interact with the malware and to identify files to encrypt. “These sophisticated criminals are constantly pushing boundaries to search for ways to extort money from victims by forcing them to pay ransoms in order to regain control of their computer and record systems,” U.S. Attorney Duston J. Slinkard said in the Justice Department’s news release. The U.S. government has blamed North Korea for a number of high-profile cyberattacks in recent years, including the multimillion-dollar cryptocurrency heist of Axie Infinity, a game in which players can earn cryptocurrency tokens.... The intelligence community warned that Pyongyang, the capital of North Korea, could have the expertise “to cause temporary, limited disruptions of some critical infrastructure networks and disrupt business networks in the United States.” “Pyongyang is well positioned to conduct surprise cyber attacks given its stealth and history of bold action,” the report reads. Read more here... Tyler Durden Wed, 07/20/2022 - 17:40.....»»

Category: dealsSource: nytJul 20th, 2022

Nasdaq (NDAQ) to Report Q2 Earnings: What"s in the Cards?

Nasdaq (NDAQ) Q2 performance is likely to have benefited from the acquisition of Verafin, higher SaaS revenues, higher licensing revenues and organic revenue growth. Nasdaq, Inc. NDAQ is slated to report second-quarter 2022 earnings on Jul 20, before the opening bell. The company delivered an earnings surprise in each of the last four quarters, the average being 5.9%.Factors to ConsiderNasdaq’s second-quarter performance is likely to have benefited from organic revenue growth, strong growth in index and analytics businesses and contributions from the acquisition of Verafin.Non-trading revenues are expected to have benefited from the improved performance of Market Technology and continued strong growth of Market Data, Index and Analytics businesses.The Zacks Consensus Estimate for Analytics businesses revenues is pegged at $56 million, indicating an increase of 12% from the year-ago reported figure. The consensus estimate for Index revenues is pegged at $126 million, suggesting growth of 17.7% from the year-ago reported figure.Market Technology revenues are likely to have benefited from the higher anti-financial crime technology revenues owing to the inclusion of revenues from the acquisition of Verafin, new sales and strong retention, higher SaaS revenues as well as organic revenue growth. The Zacks Consensus Estimate for Market Technology revenues is pegged at $128 million, suggesting growth of 9.4% from the prior-year reported figure.Market Services segment revenues are likely to have been driven by higher organic revenues, higher equity derivatives, cash equities, trade management services revenues, and strong operating leverage on higher trading revenues.The Investment Intelligence segment is expected to have benefited from strong growth in index and analytics businesses as well as a positive contribution from Market Data. An increase in proprietary data revenues from higher international demand, higher licensing revenues from higher average AUM in ETPs linked to Nasdaq indexes and higher licensing revenues from futures trading linked to the Nasdaq-100 Index are likely to fuel this segment. Growth in the eVestment platform from new sales and strong retention are also expected to have added to the upside.Organic growth, growth in the listed issuer base, higher U.S. listings revenues, expansion in listed U.S. corporate issuer base, higher adoption across the breadth of Investor Relations, as well as newer ESG advisory and reporting offerings are likely to have driven the Corporate Platforms segment.Expenses are expected to have risen on higher organic growth and increase from the net impact of acquisitions and divestitures. The uptick is likely to have been partially offset by the lower impact of changes in foreign exchange rates.The continued share buyback is anticipated to have provided an additional boost to the bottom line.The Zacks Consensus Estimate for earnings stands at $1.93, indicating a 1.58% increase from the prior-year reported figure.Q2 VolumesNasdaq reported mixed volumes for second-quarter 2022. U.S. equity options volume decreased 8.7% year over year to 714 million contracts. European options and futures volume increased 3.7% year over year to 16.6 million contracts.Revenues per contract for U.S. equity options increased 8.2% year over year to 13 cents while the same for European options and futures decreased by a cent to 49 cents.Under its cash equities, Nasdaq’s U.S. matched equity volume in the second quarter grossed 139 billion shares, up 21.8% from the prior-year quarter. European equity volume decreased 17.3% year over year to $243 billion. Under fixed income commodities, European fixed income volume increased 2.7% to 7.5 million contracts.In the second quarter, there were 5,064 listed companies on Nasdaq compared with 4,550 in the year-ago period. Total listings grew 11.3% year over year to 5,529.The consensus estimate for listing revenues is pegged at $108 million, suggesting growth of 10.2% from the year-ago reported figure.What Our Quantitative Model StatesOur proven model does not conclusively predict an earnings beat for Nasdaq this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case as you can see below.Earnings ESP: Nasdaq has an Earnings ESP of -1.39%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Nasdaq, Inc. Price and EPS Surprise Nasdaq, Inc. price-eps-surprise | Nasdaq, Inc. QuoteZacks Rank: Nasdaq currently carries a Zacks Rank #4 (Sell).Stocks to ConsiderHere are some stocks from the finance sector with the perfect combination of elements to surpass estimates in their upcoming releases.CME Group Inc. CME has an Earnings ESP of +0.90% and a Zacks Rank #3. The Zacks Consensus Estimate for the to-be-reported quarter implies a year-over-year increase of 15.2%You can see the complete list of today’s Zacks #1 Rank stocks here.CME’s earnings surpassed estimates in each of the last four quarters, the average beat being 3.2%. The Zacks Consensus Estimate for CME Group’s 2022 earnings has moved 0.2% north in the past seven days.American Express Company AXP has an Earnings ESP of +1.92% and a Zacks Rank #3. The Zacks Consensus Estimate for the to-be-reported quarter implies a year-over-year decrease of 15.4%.AXP’s earnings surpassed estimates in each of the last four quarters, the average beat being 33.2%. The Zacks Consensus Estimate for American Express’s 2022 earnings has moved 0.1% north in the past seven days.Ameris Bancorp ABCB has an Earnings ESP of +0.46 and a Zacks Rank #3. The Zacks Consensus Estimate for ABCB’s 2022 earnings implies a year-over-year decrease of 4.8%.Ameris Bancorp’s earnings surpassed estimates in each of the last four quarters, the average beat being 1%. The Zacks Consensus Estimate for ABCB’s 2022 earnings has moved 1.4% north in the past 30 days.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. 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. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in 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 CME Group Inc. (CME): Free Stock Analysis Report Nasdaq, Inc. (NDAQ): Free Stock Analysis Report American Express Company (AXP): Free Stock Analysis Report Ameris Bancorp (ABCB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJul 15th, 2022

3 Equity REIT Stocks Poised to Gain From the Industry Rebound

With the healthy fundamentals of the digital economy, migration trends, easing of restrictions and improving lodging industry fundamentals and favorable demographic trends, Prologis, Inc. (PLD), Extra Space Storage Inc. (EXR) and Host Hotels & Resorts, Inc. (HST) are likely to benefit. The REIT and Equity Trust - Other industry is poised to benefit from improvement in the fundamentals of the real estate market since the onset of the pandemic. With the industry offering the real estate structure for several economic activities, be it real or virtual, there are several pockets of strength. With the healthy fundamentals of the digital economy, migration trends, easing of restrictions and improving lodging industry fundamentals and favorable demographic trends, Prologis, Inc. PLD, Extra Space Storage Inc. EXR and Host Hotels & Resorts, Inc. HST are likely to benefit. While there are concerns stemming from rate hikes to tame inflation, geopolitical issues and the outlook for economic growth, it needs to be noted that REITs generally offer protection against inflation as both rents and values of real estate have a tendency to increase when prices climb.About the IndustryThe Zacks REIT and Equity Trust - Other industry is a diversified group that covers REIT stocks from different asset categories like industrial, office, lodging, healthcare, self-storage, data centers, infrastructures and others. The Equity REITs rent spaces in these properties to tenants and earn rental incomes. Economic growth plays a pivotal role for the real estate sector as economic expansion translates into greater demand for real estate, higher occupancy levels and landlords’ increased power to ask for higher rents. Also, the performance of Equity REITs depends on the underlying asset dynamics and location of properties. So, delving into the fundamentals of these asset categories is essential before making any investment decision. It is important to figure out whether the pandemic-induced behaviors result in only a short-term impact or long-term structural changes.What's Shaping Future of the REIT and Equity Trust - Other Industry?Demand for Certain Asset Categories to Remain Robust: Even as pandemic fears are waning, the shift from in-person communication and commerce to the electronic platform that gathered speed during the pandemic is expected to continue. Therefore, sectors like industrial, infrastructure and data centers, which support the digital economy, are likely to continue prospering in the foreseeable future. Over the long term, apart from the fast adoption of e-commerce, logistics real estate is expected to benefit from a likely increase in inventory levels. Growing reliance on technology and acceleration in digital transformation strategies by enterprises are offering immense opportunities to the data centers and infrastructure REITs. Migration and downsizing trends, remodeling and an increase in the number of people renting homes have escalated the needs of consumers to rent space at a storage facility to park their possessions, benefiting the self-storage REITs. Moreover, demand for life-science real estate has been solid and will likely remain so with effective diagnostics, testing, therapies and vaccines being required to fight the pandemic.Recovering Fundamentals of Property Types Affected by the Pandemic: The rebound in commercial real estate is imbalanced across sectors, with some leading the overall economy and some picking pace later on. What is now encouraging is that a number of property types, which once faced a severe blow because of the pandemic, are now on the path to recovery. There is increased optimism backed by the rebounding fundamentals of the lodging industry, with strong leisure demand and improving levels of corporate and group demand. Also, the healthcare REITs, which are poised to benefit from the strong demographic demands amid the aging of the baby boomer generation, are experiencing an improvement in occupancy in senior housing assets due to widespread vaccination drives. Moreover, office REITs, which were hit hard by the pandemic-led job cuts and remote working environment, are expected to gradually benefit from the increase in office-using employment. There is an improvement in total leasing activity, a decline in short-term renewals and an increase in lease lengths, indicating improving prospects for the office REITs.Inflation Protection and Balance Sheet Strengthening: Moreover, REITs offer natural protection against inflation as both rents and values of real estate have a tendency to increase when prices climb. In fact, over the last 20 years, REIT dividends have mostly surpassed inflation as measured by the Consumer Price Index, making them an apt choice right now. Furthermore, over the years, REITs have managed their balance sheets efficiently and are now well prepared for a rising rate environment. Instead of looking for debt to finance the portfolios, these companies have strategically resorted to equity capital over the past decade. This has helped the balance sheets of the overall REIT industry to become less leveraged in decades.Rate Hike, Geopolitical Tension Raise Concerns: However, a hike in interest rate to tame inflationary issues is a concern because the dependence of REITs on debt for business is more compared to other industries, and this makes investors skeptical about their performance in a rising rate environment. Also, as the investment world treats REITs as bond substitutes for their high and consistent dividend-paying nature, these companies are susceptible to rising rates. This is why REITs’ price performance tends to fluctuate when the Fed is optimistic about raising rates. Moreover, the Ukraine crisis and the resulting sanctions on Russia have affected the commodities market, thereby fueling inflation. Also, the downside risk to the outlook for economic growth has increased. This has raised concerns about REITs’ performance as economic growth plays a pivotal role in shaping the demand for real estate properties.Inflationary Pressures and Supply-Chain Woes: Inflationary pressures and supply-chain woes are expected to push property operating expenses higher. With a strong labor market, a robust development environment and continued supply-chain issues, personnel and repairs, and maintenance and material costs are expected to climb up.Zacks Industry Rank Indicates Bright ProspectsThe Zacks REIT and Equity Trust - Other industry is housed within the broader Finance sector. It carries a Zacks Industry Rank #83, which places it at the top 33% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the positive funds from operations (FFO) per share outlook for the constituent companies in aggregate. Looking at the aggregate FFO per share estimate revisions, it appears that analysts are gaining confidence in this group’s growth potential of late. Over the past year, the industry’s FFO per share estimates for 2022 have moved 1.4% north.Before we present a few stocks that you might want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Lags on Stock Market PerformanceThe REIT and Equity Trust - Other Industry has underperformed both the S&P 500 composite as well as the broader Zacks Finance sector in a year’s time.The industry has declined 15.3%, during this period, compared with the S&P 500’s fall of 12.9%. Meanwhile, the broader Finance sector has declined 14.6%.One-Year Price PerformanceIndustry's Current ValuationOn the basis of the forward 12-month price-to-FFO ratio, which is a commonly-used multiple for valuing REIT - Others, we see that the industry is currently trading at 16.53X compared with the S&P 500’s forward 12-month price-to-earnings (P/E) of 16.29X. The industry is trading above the Finance sector’s forward 12-month P/E of 12.81X. This is shown in the chart below.Forward 12 Month Price-to-FFO (P/FFO) Ratio Over the last five years, the industry has traded as high as 22.46X, as low as 14.76X, with a median of 17.75X.3 Equity REIT - Others Stocks Worth Betting OnPrologis: This is a leading industrial REIT that acquires, develops, operates and manages industrial properties in the United States and worldwide. The company continues to benefit from the scale of its platform.The second quarter was notable, with Prologis announcing a definitive merger agreement in June to acquire Duke Realty Corporation DRE in an all-stock transaction valued at $26 billion, including the assumption of debt. The transaction for Duke Realty’s purchase is expected to be complete in the fourth quarter of 2022, subject to the approval of the shareholders of both the companies and other customary closing conditions.This industrial REIT behemoth’s performance in recent quarters reflects robust demand for its properties, an increase in market rents and low vacancies. Along with the fast adoption of e-commerce, logistics real estate is anticipated to gain from a rise in inventory levels. Given Prologis’ capacity to offer high-quality facilities in key markets and robust balance-sheet strength, it is well poised to bank on these trends.PLD, currently, carries a Zacks Rank #2 (Buy). Over the past month, the Zacks Consensus Estimate for 2022 FFO per share witnessed marginal upward revision to $5.16, reflecting analysts’ bullish outlook. Prologis’ long-term growth rate is projected at 9.8%, ahead of the industry average of 7%. The stock has also rallied 5.7% over the past month.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Extra Space Storage: This REIT offers a vast array of well-located storage units to its customers, including boat storage, recreational vehicle storage and business storage. EXR has earned a solid recognition in the self-storage industry and emerged as the second-largest self-storage owner and operator, and the largest self-storage management company in the United States.The self-storage asset category is basically need-based and recession-resilient in nature. This asset class has low capital-expenditure requirements and generates high operating margins. Additionally, the self-storage industry continues to benefit from favorable demographic changes. The migration and downsizing trend and an increase in the number of people renting homes have escalated the needs of consumers to rent space at a storage facility to park their possessions.Amid these, Extra Space Storage is well-poised to benefit from a high brand value, a diversified portfolio and its presence in the key cities of the United States. It also focuses on expansion through accretive acquisitions, mutually beneficial joint-venture partnerships and a third-party management platform. EXR’s healthy balance sheet position acts as a tailwind.Extra Space Storage currently carries a Zacks Rank #1. The Zacks Consensus Estimate for Extra Space Storage’s 2022 FFO per share has moved marginally upward in the past month to $8.26, reflecting positive sentiments. Extra Space Storage’s long-term growth rate is projected at 7.7%. The stock has also rallied 4.7% over the past month.Host Hotels & Resorts, Inc.: It is the largest lodging REIT and one of the leading owners of luxury and upper-upscale hotels. HST is poised to gain from its well-located properties in markets with strong demand drivers.This increased optimism is backed by the rebounding fundamentals of the lodging industry, with strong leisure demand and improving levels of corporate and group demand across its markets, and its capacity to leverage growth potential. Therefore, with sustained strength in leisure and group and business transient continuing to improve in its urban markets, Host Hotels is poised to experience sequential improvement in revenue per available room (RevPAR) and ride the growth curve.Additionally, the recent trend in estimate revisions for 2022 FFO per share indicates a favorable outlook for HST, with estimates moving 5.1% north over the past two months to $1.65. This also indicates a significant year-over-year increase. HST, currently, carries a Zacks Rank #2. While the company’s shares have declined 5.7% over the past month, this can offer a good entry point.Note: Funds from operations (FFO) is a widely used metric to gauge the performance of REITs rather than net income as it indicates cash flow from their operations. FFO is obtained after adding depreciation and amortization to earnings and subtracting the gains on sales.  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. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in 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 Host Hotels & Resorts, Inc. (HST): Free Stock Analysis Report Prologis, Inc. (PLD): Free Stock Analysis Report Extra Space Storage Inc (EXR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJul 15th, 2022

5 Biggest Challenges Of Data Security In The Financial Service Industry

Collaboration and a proactive approach are essential in discovering new data security risks, regulations, and measures in the financial service industry. Given the fact that companies within the financial service industry use data for finding revenue streams, providing personalized experiences, and storing customer information, it’s essential to focus on data security. Data security is one […] Collaboration and a proactive approach are essential in discovering new data security risks, regulations, and measures in the financial service industry. Given the fact that companies within the financial service industry use data for finding revenue streams, providing personalized experiences, and storing customer information, it’s essential to focus on data security. Data security is one of the key business goals in this sector, as losing customer data can seriously harm an organization’s overall reputation and success. All banking businesses rapidly adopt different technologies, leading to various exposures and challenges. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more This post will introduce the five most significant current challenges and ways to solve them. Data compliance challenges Managing data is undoubtedly one of the biggest challenges of data security today. The amount of data that financial companies are responsible for is often impossible even to imagine, and keeping all that data secure and private isn’t any easier. However, with numerous data privacy regulations popping up worldwide, keeping up with all data compliance challenges has never been more challenging. Organizations even lose approximately $4 million in revenue due to a single data non-compliance event. What is data compliance? Data compliance refers to following specific data-related regulations and standards that governments, corporate governance, or industry organizations set forth. These regulations protect the privacy and security of people’s personal and sensitive information by closely defining the rules and protocols for collecting, storing, managing, and using online data. These regulations can exist on a local, federal, or regional level. Therefore, you’ll come across data compliance guidelines and rules that affect only a particular area (e.g., California), the entire country (e.g., the US), or an even bigger entity (e.g., the EU). Keeping up with the latest laws With data compliance laws, customers worldwide can control how organizations use their personal and sensitive information. Although data compliance laws have been around for some time now, the two latest significant laws are the GDPR and the CCPA. The General Data Protection Regulation (GDPR) is a data compliance law by the European Union. It focuses on providing companies with guidelines on collecting and processing the personal information of people living within the EU boundaries. The California Consumer Privacy Act (CCPA) is a similar law to the GDPR, except it focuses on the citizens of California. Keeping up with the latest laws and regulations is a must for every company that plans to collect and interact with customer data. Companies need to be informed about the latest rules and regulations that could affect them. High compliance costs Becoming and staying data compliant is essential but expensive. Namely, every company that decides to collect, analyze, or store customer data must pay for data compliance. The total compliance costs can vary depending on the law and location. For instance, getting started with the GDPR costs a company approximately €900,000 (more than $1 million), although the maintenance costs vary. The CCPA compliance costs aren’t much cheaper. They can range from $50,000 for small businesses to $2 million for large enterprises. So, even if companies want to be data compliant, paying for all the expenses costs a lot. Technology compliance With technology playing a crucial role in how companies do business today, technological compliance is essential for organizations that want to maintain their financial health. Around 66% of small businesses struggle with financial issues, especially when paying for operational expenditures. Financial technology and apps could be the solution to alleviating these finance-related chores, but keeping up with the latest tech developments and innovations is also necessary for maintaining technology compliance in the long run. Data privacy Maintaining data privacy is rapidly becoming one of the biggest challenges for all companies worldwide, not just those in the financial service industry. Failing to keep data private can lead to unauthorized people accessing the data in question and exposing it, which automatically leads to the damaging of compliance protocols. Therefore, keeping data private, secure, and away from the prying eyes is critical, especially for banking and financial companies that store valuable and confidential information regarding their clients’ finances. Preventing cyberattacks Cyberattacks can damage data compliance by taking advantage of confidential client data. They have recently been on the rise, and preventing them has been a significant challenge. Moreover, various cybercriminal activities are becoming more and more common as online banking services evolve. Financial service companies have to incorporate high-quality systems to detect any suspicious activity and protect customer data at all costs to prevent cyberattacks from happening. Therefore, companies must always be one step ahead if they want to keep cybercriminals at bay and protect their customers by keeping their data secure. Evolving organizations and customer needs In today’s fast-paced world, customer needs develop and evolve rapidly. Organizations must transform to thrive and keep track of the latest developments and the latest customer requirements and requests. Since customer needs evolve so quickly, organizations sometimes need to transform how they function quickly. For instance, the increase of online banking users is only one of the examples of how changing customer needs influence financial companies to enter the digital world and launch their first online banking apps and services. New technologies create new liabilities. We live in a tech-driven world, so new technologies pop up daily. Although tech developments primarily serve to help us create more efficient and streamlined operations, reaching that point isn’t so simple. Implementing tech-driven changes and upgrading the existing systems are demanding processes that require plenty of time, skills, and resources. Therefore, it’s not uncommon for new technologies to create new problems for companies. Moreover, introducing new technologies usually comes with accepting new liabilities as well. That is a big responsibility, and companies are encouraged to carefully think about their duties once they implement a new piece of technology as part of their system. Teaching employees proper data management. The struggles don’t stop once the implementation of new technologies is complete. The most significant challenges begin since all employees need to learn how to navigate and use the newly-implemented systems. Teaching employees proper data management is a detailed and time-consuming process if you want to do it right. Data management practices associated with new technologies can go into great detail when using these technologies properly and utilizing all of their features. It’s vital to ensure every employee receives an in-depth guide on using the newly-acquired tools to prevent mishaps. Technology changes how companies operate. Because financial service companies are so reliant on technology, specific tools and systems can often dictate how these companies and organizations operate daily. Also, the impact of new technologies on operations is quite significant since they can affect data. For instance, the rising popularity of cloud data security influences many financial service companies worldwide to introduce these innovative solutions into their organizations. While cloud-based computing equips employees with more flexibility and freedom, transferring all client data from one place to another is a challenging process for experts. Creating a safe environment for data is a long process. Data safety means protecting all digital information from cyberattacks, including unauthorized access, data breach, corruption, and theft. Data safety has three goals – confidentiality, integrity, and availability. That means the ultimate purpose of it is to protect valuable digital information and data. With each technological change, companies need to adjust their goals of maintaining a safe environment for online data. With that said, that isn’t a one-time job – it is a long and ongoing process companies always need to come back to, revise, and upgrade. Cybersecurity threats A cyberattack is an umbrella term for any digital attempt to steal data, disable computers, use a system to launch further attacks, or cause harm to internet users in a different way. Cybercriminals use various methods to launch a cybercriminal attack. Financial service companies have been the main target for a while now. Namely, cybercriminals attack these institutions to drain bank accounts or transfer funds illegally. The most common methods cybercriminals use are spoofing, data manipulation, third-party services, malware, and data without encryption. Spoofing Spoofing is a cybercriminal method where a person or a program falsifies data and identifies as someone else. Essentially, it is impersonation. Spoofers do it to trick other people into giving them their confidential data, which provides them with an illegitimate advantage to use the received information and gain some benefit. As for the financial service industry, spoofers typically call clients and introduce themselves as bank representatives. They do it to get the credit card and account info from bank clients, after which they can use the obtained data to access the funds. Data manipulation Data manipulation refers to adding, removing, or modifying data in a database. As a cybercriminal activity, data manipulation explains the process of launching an attack to access networks, systems, documents, files, and even confidential data. Once the access has been granted, cybercriminals make small, unnoticeable changes to gain an advantage but still keep users in the dark. When it comes to banking and financial accounts, data manipulation refers to cybercriminals manipulating data by changing account owners and payment recipients or altering payment amounts and destinations. Third-party services Just because your company systems and networks have premium security features doesn’t mean the data you have in your company is entirely safe. It’s safe to say you are working with some third-party services and sharing at least a portion of your data with them. If one of those third-party services doesn’t have robust security systems like you do, they can easily get targeted by various cybersecurity attacks. That can also put your data and security in danger since the cybercriminals will get access to the information you shared with the compromised third-party service. If you think the odds of such activity are low, think again. A staggering 92% of US organizations have experienced similar situations with third-party services. Malware Malware is probably the most common type of cyberattack. Malware is also known as a computer virus. It includes installing malicious software on a system, which then executes unauthorized actions, such as disrupting the daily activities within a business, locking important files, ad spamming, and redirection to malicious websites. The malicious software types are numerous, but worms, viruses, trojans, ransomware, spyware, adware, and malvertising are the most frequently used. Data without encryption Recently, everyone’s been talking about the importance of data encryption. However, what happens if data isn’t encrypted? Maybe you’re lucky enough not to experience any consequences, but no financial service company should rely purely on luck. If the data isn’t encrypted, it’s left in a readable form. That means the data doesn’t have any protection, and anyone skilled enough to intercept the data during transmission can easily access the information. Therefore, working with unprotected data puts you at a significant security risk since basically anyone can obtain your and your client’s data. Third-party vendors A third-party vendor can be a person or company that offers specific services to other companies or customers. Since the financial sector is a highly interconnected sector due to the nature of its business, high interconnectivity with numerous third-party vendors is almost an obligatory feature of every company in this industry. Financial companies can receive all kinds of benefits when working with third-party vendors. Whether they partner up with customer service agencies, insurance brokers, or other banks, the possibilities are endless. Through these partnerships, financial companies can offer better deals to their clients and allow them to solve all banking and insurance tasks in one place. However, working with third-party vendors comes with a unique set of risks and challenges. Vendors can have security leaks. Choosing reliable and secure third-party vendors is essential to keep your data protected. However, you can never be sure if vendor is doing everything to maintain the highest level of privacy and security. So, third-party vendors act as a liability to their partners. The reality is that vendors often have security leaks. However, because financial companies share and exchange their data with these vendors, their security leaks easily translate as financial company leaks. That’s the primary reason banks and other financial institutions continually look for quality third-party vendors who put data privacy and security first. A potential security leak would break their trust with consumers, who would redirect their loyalty to their competitors. It’s crucial to align your practices. Partnering up and working together with someone isn’t as easy as it sounds. It’s a complex process that requires plenty of mutual understanding, effort, and communication. The same goes for financial companies working with third-party vendors. Working together on all aspects is crucial for ensuring data safety, not only for professional reasons but also for clients. We can’t stress the importance of aligning working practices enough. When businesses don’t align their practices, it’s easy to make errors that can cost both companies a lot. Financial companies and their third-party vendors will benefit from open communication and streamlined business processes, including dividing the work to setting future goals. Reporting and monitoring practices are essential. As you already know, communication and the alignment of practices are essential to make a partnership between financial companies and third-party vendors work. Reporting and monitoring are two crucial practices of this process. With reporting and monitoring practices, financial service companies can build a stronger partnership with their third-party vendors, which will allow them to streamline their processes. They’ll get an insight into valuable information that will enable them to make more informed decisions for the future. Nevertheless, reporting and monitoring come with some obstacles too. Namely, as partners, financial companies can’t get full access to the data available from third-party vendors. That means they can receive only a portion of data, significantly limiting their possibilities. Companies work with many vendors. Financial and banking companies partner up with numerous vendors. Of course, the exact number will vary from company to company, but, generally speaking, many third-party vendors are connected to a financial service company at all times. When a company works with so many different vendors, it’s challenging to manage data properly and ensure the highest levels of safety. Keeping track of data available on so many different locations and platforms can quickly become overwhelming, leading to errors in data security. Reducing the number of third-party partners could be one solution, but ensuring everyone implements robust security systems can be an excellent alternative. Data management Data management is the fifth and final challenge of data security in the financial service industry. Like data compliance, data management can significantly affect the level of security. For that reason, it’s crucial to manage data properly and avoid data management mishaps at all costs. What is data management? Data management is the process of collecting, storing, and utilizing data. However, the most critical feature of quality data management is doing it efficiently, securely, and cost-effectively. Good data management should help companies, organizations, and individuals locate valuable data, utilize it, and keep it safe. Once that’s done, companies can optimize the use of the gathered data and make actionable decisions by analyzing the information they receive. With more and more online threats popping up behind every corner, securing robust data management strategies is essential for protecting the business and its clients. Increased volume of data Companies worldwide have turned to digital management, and the amount of data available online has constantly been on the rise for years now. The volume of data usage keeps breaking previously-set records, and it doesn’t show any signs of slowing down. As a result, companies must analyze and manage increased volumes of data, which makes the whole process more complex and expensive. Data complexity is increasing. Technology keeps getting better, and tech tools are becoming more advanced. The tech advancement is breaking all expectations, but that also means the data used during these processes is becoming more complex and extensive. While you can expect that when dealing with demanding tasks and activities, even the most sensitive data is becoming complex today. So, financial service companies should dedicate more time to data collection and analysis if they wish to gather accurate and informative results. Adopting new technologies AI (Artificial Intelligence), ML (Machine Learning), robotics, cloud computing, and numerous other innovative technologies are available to financial companies and clients. Each of these technologies influences how financial companies operate and their data management requirements. Since some of these technologies have only recently become available to the broader public, companies are still trying to figure out ways to adopt these technologies into their existing systems. Most of them are demanding and difficult to master, which creates an additional challenge for all financial service companies trying to keep up with the latest tech advancements. Nevertheless, embracing this tech is vital to stay ahead of the competition, meet consumer demands, and safeguard business and customer data. Increased pressure on companies Finally, financial service companies belong to one of the most competitive industries. With that said, companies experience increased pressure to get as much available data as possible and do everything to analyze the gathered data effectively. Due to this industry’s highly competitive environment, companies are constantly under pressure to upgrade their technologies and introduce new elements that set them apart from the crowd. Failing to implement the latest tech could put them at risk of cyberattacks and other security threats that could harm their organization and customers. Conclusion To sum everything up, companies working in the financial service industry are experiencing numerous challenges regarding data security. From newly-published data compliance laws to the increased cybercriminal activity, it seems like an impossible task to keep track of everything going around and protect their business. However, addressing those challenges is paramount, no matter how complicated it seems. By singling out the five most significant challenges in data security, we hope to give you a sense of clarity and help you detect your weakest points. Once you’re aware of the challenges your company is struggling with, it will be much easier to develop an effective and clever solution. Article by Ben Herzberg, Due About the Author Ben is an experienced tech leader and book author with a background in endpoint security, analytics, and application & data security. Ben filled roles such as the CTO of Cynet, and Director of Threat Research at Imperva. Ben is the Chief Scientist for Satori, the DataSecOps platform. Updated on Jul 13, 2022, 4:18 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: valuewalkJul 13th, 2022

Bill Ackman says he"ll return $4 billion to PSTH investors after failing to close a SPAC deal - and trumpets his next-generation SPARC

The Pershing Square chief blamed the market's rapid rebound after the pandemic crash, investors souring on SPACs, and legal and regulatory challenges. Bill Ackman.Reuters Bill Ackman's Pershing Square Tontine Holdings (PSTH) raised $4 billion in 2020 to finance a merger. The investor's SPAC plans to return the money after failing to close a deal within two years. Ackman blamed the market rebound, skepticism towards SPACs, and legal and regulatory challenges. Bill Ackman had high hopes for Pershing Square Tontine Holdings when he took it public in July 2020, and the special-purpose acquisition company raised a record-breaking $4 billion. Now, he plans to return all of that cash to PSTH shareholders after failing to close a merger deal within the two-year time limit for SPACs.The Pershing Square boss explained in a letter to investors on Monday that when he launched PSTH, he expected the COVID-19 pandemic to continue disrupting capital markets for a while, making his SPAC an attractive alternative to a traditional initial public offering (IPO) for a private company seeking to list its shares.However, the US stock market and economy bounced back in a matter of months."The rapid recovery of the capital markets and our economy were good for America but unfortunate for PSTH, as it made the conventional IPO market a strong competitor and a preferred alternative for high-quality businesses seeking to go public," Ackman said.The billionaire investor also blamed the "extremely poor" performance of SPACs during the pandemic, saying it weighed on sentiment towards the vehicles. Moreover, he cited high redemption rates that ate into post-merger capital, increased the dilution from outstanding stock warrants, and fueled uncertainty about SPAC deals.Ackman pointed to the lawsuit against PSTH, and regulators' proposed new rules for SPACs in March, as other factors that made it tough to close a transaction. He also noted that exceptional businesses can often postpone going public until market conditions improve, limiting the number of potential targets for PSTH.The Pershing Square chief added that PSTH did agree to purchase a stake in Universal Media Group as part of its spin-off from Vivendi last year, but scrapped the deal in the face of regulatory pushback.Ackman ended his letter on an optimistic note. He asserted that SPAC and IPO markets have basically been shut down by the ongoing market turmoil, making it a great time to launch his proposed special-purpose acquisition rights company (SPARC).The investor and his team are still seeking approval for the product, which wouldn't tie up investors' cash or face a two-year deadline like a SPAC. If they get the green light from regulators, they intend to distribute rights to holders of PSTH shares or warrants as of the market close on July 25. The rights would allow investors to buy into the SPARC at a fixed price once it strikes a merger deal."We are disappointed that we did not achieve our initial objective of consummating a high-quality transaction for PSTH," Ackman said in the letter. "We look forward to the opportunity to continue to work on your behalf once SPARC is successfully launched."Read more: Predictable cash-flow is king according to the manager of a market-beating $500 million fund. He lays out what investors should look for in the stocks they pick — and names 6 companies that fit the bill.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 12th, 2022

Bill Ackman says he"ll return $4 billion to PSTH investors after failing to close a SPAC deal — and trumpets his next-generation SPARC

The Pershing Square chief blamed the market's rapid rebound after the pandemic crash, investors souring on SPACs, and legal and regulatory challenges. Bill Ackman.Reuters Bill Ackman's Pershing Square Tontine Holdings (PSTH) raised $4 billion in 2020 to finance a merger. The investor's SPAC plans to return the money after failing to close a deal within two years. Ackman blamed the market rebound, skepticism towards SPACs, and legal and regulatory challenges. Bill Ackman had high hopes for Pershing Square Tontine Holdings when he took it public in July 2020, and the special-purpose acquisition company raised a record-breaking $4 billion. Now, he plans to return all of that cash to PSTH shareholders after failing to close a merger deal within the two-year time limit for SPACs.The Pershing Square boss explained in a letter to investors on Monday that when he launched PSTH, he expected the COVID-19 pandemic to continue disrupting capital markets for a while, making his SPAC an attractive alternative to a traditional initial public offering (IPO) for a private company seeking to list its shares.However, the US stock market and economy bounced back in a matter of months."The rapid recovery of the capital markets and our economy were good for America but unfortunate for PSTH, as it made the conventional IPO market a strong competitor and a preferred alternative for high-quality businesses seeking to go public," Ackman said.The billionaire investor also blamed the "extremely poor" performance of SPACs during the pandemic, saying it weighed on sentiment towards the vehicles. Moreover, he cited high redemption rates that ate into post-merger capital, increased the dilution from outstanding stock warrants, and fueled uncertainty about SPAC deals.Ackman pointed to the lawsuit against PSTH, and regulators' proposed new rules for SPACs in March, as other factors that made it tough to close a transaction. He also noted that exceptional businesses can often postpone going public until market conditions improve, limiting the number of potential targets for PSTH.The Pershing Square chief added that PSTH did agree to purchase a stake in Universal Media Group as part of its spin-off from Vivendi last year, but scrapped the deal in the face of regulatory pushback.Ackman ended his letter on an optimistic note. He asserted that SPAC and IPO markets have basically been shut down by the ongoing market turmoil, making it a great time to launch his proposed special-purpose acquisition rights company (SPARC).The investor and his team are still seeking approval for the product, which wouldn't tie up investors' cash or face a two-year deadline like a SPAC. If they get the green light from regulators, they intend to distribute rights to holders of PSTH shares or warrants as of the market close on July 25. The rights would allow investors to buy into the SPARC at a fixed price once it strikes a merger deal."We are disappointed that we did not achieve our initial objective of consummating a high-quality transaction for PSTH," Ackman said in the letter. "We look forward to the opportunity to continue to work on your behalf once SPARC is successfully launched."Read more: Predictable cash-flow is king according to the manager of a market-beating $500 million fund. He lays out what investors should look for in the stocks they pick — and names 6 companies that fit the bill.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 12th, 2022

Hackers pulled off a $620 million crypto heist by tricking an engineer into applying for a fake job and opening an offer letter containing spyware, report says

After multiple interview rounds, hackers posing as recruiters sent an Axie Infinity engineer an offer letter containing spyware, The Block reported. Axie Infinity is an NFT-based online video game where players can earn Ethereum-based cryptocurrencies.Axie Infinity Media Kit In March, North Korea-linked hackers stole $620 million in crypto from the online game Axie Infinity. Scammers tricked an engineer at the company into applying for a fake job, according to The Block. After multiple interview rounds they sent an offer letter filled with spyware, the report says.  Scammers used an elaborate fake job scheme to steal over $600 million in crypto from the online NFT-based game Axie Infinity, The Block reported Wednesday. The hackers, who the US Treasury linked to North Korea's notorious Lazarus Group, posed as job recruiters on Linkedin and tricked a senior engineer at the game's developer, Sky Mavis, into going through "multiple rounds of interviews" for a position that did not exist, sources told the outlet. They then sent the engineer a fabricated offer letter with "an extremely generous compensation package" that was laced with spyware, The Block reported. Once downloaded, the hackers could access Axie Infinity's blockchain network known as "Ronin," where users transferred Ethereum-based digital currencies in and out of the game.The security breach, which the company first disclosed back in March, is believed to be one of the largest crypto heists in the world. However, experts told Insider in April that the cyberattack shouldn't be a deterrent to widespread crypto adoption, as the heist was largely due to human error and a lack of cybersecurity rather than a flaw in blockchain technology itself. In May, the US Treasury sanctioned the virtual currency mixer Blender.io, which the department alleged was used to obscure the source of over $20.5 million of the cryptocurrency stolen from Axie Infinity. "Virtual currency mixers that assist illicit transactions pose a threat to US national security interests," Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said in a statement. "We are taking action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 7th, 2022