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Problems Always Abound, But The. U.S. Remains The World’s Oasis

For weekend reading, senior writer from Navellier & Associates, Gary Alexander, offers the following commentary: “The farther backward you can look, the farther forward you are likely to see.” – Winston Churchill Q1 2022 hedge fund letters, conferences and more May Crashes You seldom hear about “May crashes,” but the two worst crashes of the 19th […] For weekend reading, senior writer from Navellier & Associates, Gary Alexander, offers the following commentary: “The farther backward you can look, the farther forward you are likely to see.” – Winston Churchill 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); Q1 2022 hedge fund letters, conferences and more May Crashes You seldom hear about “May crashes,” but the two worst crashes of the 19th century began in early May: May 8-12 unleashed the Panic of 1837 with the failure of several major banks. It was the most devastating economic Depression in American history to that date, and it was caused mostly by departing President Andrew Jackson’s fetish for “balancing the budget.” Before leaving office two months earlier, in March, Jackson had wiped out the national debt and abolished the Second Bank of the United States, simply by not renewing its charter. The sudden lack of credit (or a central bank) triggered a “liquidity crisis” that closed hundreds of banks, and thousands of small businesses and farms, which had heavily relied on their local banks. At one point, the New York militia had to be mustered out to keep order on Wall Street. The Panic of 1837 lasted seven years, until 1844. May 1-5 was the opening week of the Panic of 1893, which lasted well into 1895 and was only fully relieved by Klondike Gold. Surpassing 1837, it became the new “worst economic crisis in U.S. history.” May 3 was Wall Street’s worst day in a decade. Call it “Black Wednesday” if you will. On Thursday, the Panic deepened, with the failure of the National Cordage Company, the so-called “rope trust.” Most of the other industrial stocks – the cutting-edge NASDAQ-type tech stocks of the day – also fell sharply, while most railroads barely held on, for a while. By the end of 1893, over 600 banks failed. Stocks plummeted, major railroads went into receivership, 15,000 businesses went bankrupt and 20% of the workforce was unemployed in 1894, causing labor strikes and mass national unrest. A month earlier, on April 5, the New York Times printed one of those famously bad predictions: “It is too soon to say that a bull market is upon us, but figures show that the tendency is toward higher prices.” Actually, that’s true: 1837 is just a “blip” and 1893-95 is hard to find in this long-term market chart: The Dow Jones Industrial Index was not born until May of 1896, but it is up over 900-fold since then, rising from an opening value of 40.94 to its recent peak of 36,952.65. Something else marked those 1837-44 and 1893-95 Depressions, and that was a massive inflow of new Americans to our shores, along with Westward expansion. European political unrest and the Irish famine brought an avalanche of immigrants after the Panic of 1837-44, and then the persecution of minorities, especially Jews, drove millions more through Ellis Island, beneath the Statue of Liberty, in 1895 to 1910. You’d never know when our worst Depressions were happening from this chart. Our greatest waves of human arrivals came during our “Panic of 1837” (to 1850) and then from Eastern Europe in the 1890s. To put faces on those statistics, here’s a birthday tribute to four of those immigrants from the 1890s to the 1910s. Two Austrian Americans and Two Russian Americans Make Great Music in the Movies “A steppe is a steppe is a steppe…the steppes of Russia are much like the prairies of America.” - Film composer Dmitri Tiomkin (born in Ukraine, May 10, 1894) Tuesday marks the birthday of two great film composers born in Austria and Ukraine, plus America’s premier tunesmith, born May 11 in Russia, and an Austrian American who sang most of his songs first. They were all born 1888 to 1899 and I’m profiling them on my weekly radio show on Friday. They exemplify why America has always been the #1 oasis for freedom. In birth order: Max Steiner (born May 10, 1888 in Vienna) was a child prodigy who allegedly studied piano under Brahms and conducting under Mahler, but he tired quickly of Europe’s anti-Semitism and favoritism, so he migrated first to London, then New York, and finally to Hollywood, where he virtually invented modern film scoring, starting with “King Kong,” then “Gone with the Wind” and 300+ films overall. Irving Berlin (born May 11, 1888, in Russia) came to America at age 5 after an arduous six-month journey by land and sea after Cossacks burned down his village. In his beloved America, he cornered the market on patriotic and holiday songs and had a long, successful working relationship with Fred Astaire (below). Berlin (and Astaire’s father) both entered the U.S. at the start of the Panic of 1893. He set the Statue of Liberty poem to music, and donated God Bless America royalties to the Scouts. Dmitri Tiomkin (born May 10, 1894, in central Ukraine) was also Jewish, therefore subject to the Cossacks’ swords, then Lenin’s censors, so he escaped to Berlin, where worse anti-Semitism drove him to Hollywood, where he began writing scores for all those Frank Capra films that glorify America, like “It’s a Wonderful Life” and “Mr. Smith Goes to Washington,” but his greatest scores came from the expanse of the West (like “High Noon” or “Giant”), which felt like Ukraine to him. One of his last songs, from “Alamo,” is reminiscent of the plight of Ukraine today: About crops not planted by farmers facing likely death defending their homeland: “The Green Leaves of Summer.” A time just for plantin’, a time just for ploughin’. A time just for livin’, a place for to die. ‘Twas so good to be young then, to be close to the earth, Now the Green Leaves of Summer are callin’ me home. Fred Astaire (born Frederick Austerlitz, on May 10, 1899) brought more of the Great American Songbook to Americans than any other singer, although he was primarily a dancer. His life turned on key decisions by his father, also named Frederick, who was born in the suburb of Linz, Austria, where the Hitler family lived. His Jewish parents had converted to Roman Catholicism. The elder Frederick made his way to America, to Omaha. Otherwise, his children would have grown up near the Hitler clan. Fred brought the music of our greatest Jewish composers (like Irving Berlin, George & Ira Gershwin, Jerome Kern and Arthur Schwartz) to the world’s ears while Hitler was condemning them.Let us also honor the Prussian Lutheran (Aryan) Johanna (Anna) Geilus, who married Frederick Austerlitz (the elder) when she was just 16, in Omaha, and became the gentle, patient stage mother to young Fred and older sister Adele, taking them to New York when they were five and seven, working to put the kids into the best dance schools, then tutoring them at night. A Time Capsule from 85 Years Ago, May 6-7, 1937: A Blimp Blows Up…Then a Black & White Boiler Room “The world is in a mess. With politics and taxes, and people grinding axes, there’s no happiness… - Ira Gershwin, May 7, 1938 On Friday night, May 6, 1937, the 804-foot-long Swastika-bedecked dirigible, the Hindenburg, burst into flames over Lakehurst, NJ, killing 36. Suddenly, ocean liners seemed a lot safer way to cross the Atlantic. The next day, Saturday, May 7, “Shall We Dance” opened in theaters across America, with Fred Astaire and Ginger Rogers aboard an ocean liner. One of the first Gershwin songs Fred sings is in the boiler room with a dozen black workers and singers: “Slap That Bass.” Imagine this half-Jewish dancer from Hitler’s hometown singing a song by a pair of Jewish brothers with an integrated cast of a dozen black musicians. The song starts: “The world is in a mess. With politics and taxes, and people grinding axes, there’s no happiness…. Fred responds: Dictators would be better off if they’d ‘zoom/zoom’ now and then.” - Lyrics by Ira Gershwin in “Slap That Bass,” from Shall We Dance, 1937 Yes, the world was a mess: The Dow was in a second terrible decline in the 1930s, falling 33% in 1937, and fully 49% from March 10, 1937 (Dow 194.4) to March 31, 1938 (Dow 98.95), but then it gained 10-fold in 30 years, to 985 in 1968. The world is always in a mess, but there’s always a morning, and music. In context, that 1938 low was well above the 1932 low (Dow 41), and the long-term recovery quickly resumed. A year earlier, on June 19, 1936, a young black U.S. heavyweight, Joe Louis, 22, lost to 30-year-old German former champ Max Schmeling in a 12th-round knockout in Yankee Stadium. Then, in August, the Olympics in Berlin were designed to show the superior German race, but Ohio’s Jesse Owens, also 22, won four Gold Medals. George Gershwin and Fred Astaire first met when they were 15 and vowed to do shows together. Their first show opened on Broadway in December 1924: “Lady Be Good.” In the same week, Hitler emerged from Landsberg Prison with his “Mein Kampf” ready for the printers. America’s bright shores saved the lives of millions like Fred and George. If George and Fred’s parents hadn’t mustered the courage to leave Europe in the 1890s, despite a ‘Panic’ in our markets, their films and music would not exist, and they would likely be killed by Hitler. As it turned out, Gershwin died of a brain tumor in July 1937, but his music lives forever. America was their oasis. As for Joe Louis, he trounced Max Schmeling in a much-touted 1938 rematch in Yankee Stadium, in Joe’s fourth heavyweight title defense, as white and black Americans cheered America’s “Brown Bomber” on their radios. Only in America. Updated on May 13, 2022, 5:26 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkMay 13th, 2022

From Resort to Residential: Disney Expands on Community Living

Disney has always been well-known for its hospitality. Songs like, “Be Our Guest,” invite audiences to make a home for themselves—whether they’re visitors being delighted at the theme parks or families cozied up on the couch. Now, Disney hopes to repurpose its company commitment towards placemaking with a real estate venture sequel it hopes will… The post From Resort to Residential: Disney Expands on Community Living appeared first on RISMedia. Disney has always been well-known for its hospitality. Songs like, “Be Our Guest,” invite audiences to make a home for themselves—whether they’re visitors being delighted at the theme parks or families cozied up on the couch. Now, Disney hopes to repurpose its company commitment towards placemaking with a real estate venture sequel it hopes will have a better ending than its last. In the first quarter of 2022 alone, the entertainment and media conglomerate has announced the development of two major residential community properties. On April 6, the Walt Disney Company announced in a press release that it will be using  80 acres of land in Orange County, California to bring affordable housing opportunities to qualifying public applicants and its cast members (as Disney calls its employees). This development will expand on the initiatives it’s taken to address the nation’s affordable housing crisis—which also include several housing developments built around the Disneyland Resort. Credit: @Disney In February, Disney also announced the launch of its new Storyliving by Disney communities, which will offer housing, entertainment and unique amenities encompassing a plot of land in Rancho Mirage, California—dubbed Cotino. Aerial View of Palm Springs In collaboration with Scottsdale-based DMB Development specializing in planned communities, Cotino will allow homebuyers to purchase single-family homes, villa estates and condominiums, with some neighborhoods designated as 55+. Cast members will also manage day-to-day associations. While Orange County remains in a concept phase, Storyliving in Rancho Mirage has been approved and will include a mixed-use district featuring shopping, dining and entertainment, a beachfront hotel and beach park with recreational water activities that can be accessed by the public through the purchase of a day pass. Rancho REALTORS® have voiced their support for this endeavor, highlighting the power of influence communities like Cotino can have on a new era of homebuyers. “There is an increasing market for lifestyle communities with conveniences—hotel, shops, restaurants—and easy access through walkability,” says Geoff McIntosh, broker associate for Coldwell Banker and former president of the California Association of REALTORS®. “Leave the car at home! We have a clientele—especially baby boomers and millennials—looking for exactly that.” He adds that this development aims to deliver on its decades-plus mission of enchantment and enterprise. “Leveraging the Disney brand is brilliant—with Disneyland opening in 1955 that brand is uniquely positioned to have broad appeal. Recognized as a “quality-trusted” brand with incredible Imagineering looks like a winning combination to me.” The tagline on the Storyliving by Disney website reads, “Imagine. Create. Live your story.,” displaying illustrated, concept renderings of a diverse community backlit by a picturesque, desert-spring landscape. “A Living Painting,” another tagline suggests. The notion of a suburban utopia conceived by Disney isn’t new. Many are familiar with Disney’s past residential endeavors—the most recent being the multi-million-dollar luxury properties in Golden Oak, Florida, located within Walt Disney World Resort, and its first and former residential model in Celebration, Florida. The concept draws upon decades of achievements in innovation, brand loyalty…and quite a few learning-curves. Something to Celebrate In 1966, when Walt Disney outlined his vision for the Experimental Prototype Community of Tomorrow (EPCOT), it was less a suggestion for a compact representation of world heritage, but moreover an Arcadian Americana. Disney died a year later, and his grand vision metamorphosed into EPCOT park in 1982. In 1991, the company turned back the pages of his book and began planning an actualized version of Walt’s perfect town—climate-controlled bio-dome excluded. Epcot in Disney World at Sunset Disney secured nearly 5,000 acres of land in Osceola County, Florida, a stone’s throw away from the parks, and in 1996, his vision was fully realized. “Celebration” was a community styled off of the holistic design movement, New Urbanism, which aims to shift away from low-density zoning and single-use buildings and homes that became popular after the end of World War II. New Urbanism promotes walkable, mixed-family neighborhoods, a centralized main street, accessible public spaces and a community model where function influences social well-being. Disney hired celebrity architects around the world to design its residential and commercial infrastructure. Celebration’s Town Center contained commerce, a town hall, a movie theater, schools and other civic establishments incorporated into the town. Homes were designed in different architectural styles like Classical, Victorian and Colonial Revival, with a front porch and garage in the back. Everything from street signs to storefronts, even manhole covers, were designed to tie the whole town together. Postcard Perspective When Kim Hawk first heard of Celebration, she was one of the first (of 5,000) people who showed up for the lottery Disney held for the sale of the first 350 homes. “My mother, who was a broker at the time, said to me, ” Now’s the time to activate your life,” because it’s always smart when you can see a project from the ground up. I’ve been here for over 25 years since.” Hawk, a REALTOR® for Florida in Motion Realty and reputed locally as the “Fairygodmother of Real Estate Near Disney,” shared what it was like at the start in terms of buyer expectations. “There were people that put every bit of their energy into getting a house here,” she says. “Back in those days, it was required that you had to sell whatever property that you lived in prior because they wanted to have founding residents. All of a sudden, you really started to see the definition of supply and demand. The power of Disney behind the community really amped up the sales quickly.” Hawk reveals that the community’s walkable streets, fiber optics and locale under a no-fly zone are still attractable assets. “Because people are concerned about the pandemic returning, people have adopted this mindset of ‘who has the right resources where I can live the best lifestyle possible’,” she says. “I would say Celebration is skyrocketing because of that. Now, we’re getting calls from people who say, “I just want to live in Celebration, you don’t even have to show me the house.” Great Reflections of the Celebration, Florida Downtown and Lakefront Social analyst and author Andrew Ross, who wrote about his year-long stint living in Celebration in his book, The Celebration Chronicles: Life, Liberty, and the Pursuit of Property Value in Disney’s New Town, resounded in favor of Celebration’s design scheme. “The first people who came to Celebration were just dying to live on Disney land. You can compare Celebration with typical suburban subdivisions in Central Florida, but I think the quality of offering was far superior,” he details. “A master plan residential development wasn’t all that experimental at the time. However, when you think about the identity of the developer and that they were able to build a town center before people even moved in—that has never happened before in real estate history.” Ross also has been vocal about the issue of affordable housing in American suburbs and rural areas, and cites Disney’s own shortcomings on the issue. His 2021 follow up to Celebration Chronicles titled Sunbelt Blues: The Failure of American Housing, provides even further insight into Disney’s response (or lack thereof) to the need for affordable housing within Celebration itself. “At the time Celebration was built, the alternative was for the developer to put a bunch of money into a fund and have affordable housing built off-site, which is what they did,” he explains. “It was only $300,000—that doesn’t give you much affordable housing. As a result, there was nothing built-in in the way of permanent affordable housing in Celebration.” The town remains to be a mixed-income community, but Ross articulates how once these kinds of properties become commercially successful, they no longer become affordable—which is what happened in Celebration and other New Urbanist-showpiece towns like it. Hawk retrospectively addresses the issue of affordability in Celebration, saying, “It probably was a little bit of a stretch 25 years ago, but I think a lot of those people are now very happy with it because when they went to sell, they made a good amount of money from the properties.” Because of its Disney name, critics couldn’t help but perceive Celebration as an extension of the theme parks—which complicated matters of public interest, according to Ross. “The problem is, visitors and consumers of the theme parks are accustomed to a high level of customer satisfaction” he explains. “I think there were some people who expected that Disney would be on call if something went wrong and that they’d deliver customer satisfaction, but that doesn’t happen in real estate. You can’t control the speech of the residents in the same way you control animatronic figures in the theme park.” Walt Versus Wall Street Disney’s conflation of imagination and perception resulted in a fairytale-like dilemma. In truth, it was a real town, like any, with real problems. Even though Celebration proved to be a commercial success for Disney in terms of home sales, the company sold Town Center in 2004 to Lexin Capital, a private-equity New York City firm. Disney claimed that it wanted to focus on selling other commercial lands, but insisted it’d keep a watchful eye on the town for several more years. While Lexin assured that the effects on the town were going to be nothing short of a change in guard, the next decade plus proved otherwise. The years following ignited a media frenzy. Crime, educational tussles and a litany of lawsuits from disgruntled residents plagued the town. Hawk recounts how many residents wanted power to transfer over to its own residents who knew the town best. “I was a member of a group of people that said we wanted to buy downtown versus Disney going out and selling it to a group that wasn’t familiar. I think if that had been the case, it might have been a better situation.” She does maintain, however, that the issue involved both personal and public deception, since resolved. “As far as expectations of what should be delivered, the town’s doing pretty well right now,” she holds. “My heart does go out to a couple people who had to fight in order to get the results that they wanted, but I wouldn’t say it was the town in its totality that was an issue.” Celebration’s distinctive origins and design elements cement it as an entirely unique community, however, Ross addresses its drawbacks in a much broader context. “There are communities all across America with a similar story to tell when they get taken over by private equity. They usually don’t go after fairly affluent places like Celebration, and they don’t usually get pushback (i.e. residents who fight back), but that’s what happened in Celebration.” A New Chapter of Real Estate Though Disney’s past real estate ventures do not necessarily dictate the future of Cotino, it certainly informs how they move forward. The narrative for Storyliving characterizes this project as an entirely new venture for Disney, and in many ways it is. Since it is not the developer, it’s safe to assume that it would want to distance their brand more so than it has in the past. Bringing his expertise in planned communities and Disney into the fold is DMB’s president and CEO, Brett Harrington, who formerly served as Celebration’s town manager in its formative years. Though Rancho Mirage Mayor, Ted Weill, believes that Cotino will be a “fabulous fit” for the community and serve as a much-needed economic boost—he took the time to dispel some public concerns on the government website. Its location has raised eyebrows. The state of California is experiencing a two-decade drought, and with plans to feature a 24-acre, “grand oasis,” lagoon on the property, many are wary of the environmental impact a structure like that will do. Disney safeguards the potential water shortage issues by stating they will be employing the use of Crystal Lagoons, which promotes sustainable, eco-friendly, low-consumption technologies. Others question its location in relation to its nearest park. In contrast, Celebration is at arm’s length with Walt Disney World, and Golden Oak is located within the resort itself. Cotino does not have the luxury of such proximity (nearby Disneyland is two hours away). Disney squares this by tying the land to the magic man himself, Walt Disney. The Coachella Valley was a beloved destination for Walt Disney and his wife Lillian, as well as other golden-age celebrities and U.S. presidents alike. It was a reprieve from the hustle and bustle of Hollywood, with Cotino offering a similar level of escapism. Disney has yet to announce how much homes will cost, but it has stated that they will not be developing, building or selling the homes themselves. What is certain, however, is that REALTORS® up to the challenge of selling these homes will be marketing towards a very niche demographic who might welcome the idea of morning tee times, solitude in the Santa Ana’s and a community of like-minds with a penchant for theatrics. David Cantwell, managing broker for Berkshire Hathaway HomeServices Bennion Deville Homes, offered a generally optimistic approach to this development, and revealed that the Disney connection was unbeknownst to city officials until the day before the official announcement came through. “The response has been mostly positive,” he says. “It’s amazing was able to keep it quiet.” Cantwell, whose corporate offices reside in Rancho Mirage, is encouraged that the city has put in place conservation efforts so that the water being taken from aquifers underneath the land and through its Colorado River reserves is mitigated through the use of the advanced tech being used to fill the lagoon. “We have no thoughts on it going dry,” he maintains. He also gave insight into the potential rate of these Cotino homes in lieu of an already steep market. He noted that forces that have driven detached home prices higher, (i.e. low inventory and rising sales) continue to dominate the Coachella Valley housing market—currently averaging $630,000 for detached homes. “Considering that the median price for homes have gone up over 40% in the Coachella Valley, we expect that the rate for these new properties will go for $500,000 or more, which is actually below the median in the area.” As for who might be eying these homes, Cantwell categorized this target demographic as 55+ residents (the median age in Rancho Mirage is 65), Midwest and Pacific Northwest buyers who look for secondary homes in warmer climates and higher income families interested in the amenities being developed on the property. In regard to its future community impact, Cantwell assures that this project can only bring out good things for the housing market. “We need the inventory. A project of this size helps our market currently being affected by a low-cycle housing market. This property also offers plenty of room for growth in the commercial sector.” Geoff McIntosh of Coldwell Banker additionally gave insight into the eventual process of selling these homes—and is hopeful that these properties would foster new leads and growth opportunities for area real estate agents. “I would anticipate that there will be an onsite sales team that handles the initial sell out. Given the size and scope of the project it will likely take years,” McIntosh estimates. “Generally, new developments are very welcoming of the local real estate community as we are influential in introducing prospective buyers to all the options they have in the area. Usually the onsite sales office represents both the developer and the new home buyers received through referrals by local REALTORS®.” Though many are wary of this property’s large footprint negatively impacting the landscape, McIntosh trusts the experts and the bottom-line overview as compared to similar properties in the area. “I believe adequate studies have been completed to address these concerns and the location of the project is 618 acres of undeveloped desert land on the north side of most of the improved property in Rancho Mirage. In comparison, Del Webb Rancho Mirage is on a site about half the size with roughly 1,050 planned homes at completion. There are only 1932 residences and a 400-room boutique hotel on site at Cotino, so it will be relatively low density.” In a continued market that favors the seller, Judy Ziegler of Bennion Deville Homes contends that agents have the leg up. Compared to years past when the area really catered to secondary homes, work-from-home opportunities and an emphasis on life-work balance has made the greater Palm Springs area and alfresco living desirable year-round. “COVID changed our entire market. People are staying here,” she says. A project of this scale naturally invites some curiosity and criticism. It’s safe to say onlookers will be tuning into every phase of this venture—from the very first nail to the cutting of the ribbon. Storyliving seeks to expand on the concept of storytelling set out by Walt himself nearly a century ago wherein everyday is the story, and you hold the pen. There is hope, however, that these communities foster a new chapter of real estate beyond just its whimsicalities and brand name. These undertakings illuminate the desire and necessity for a larger scope of natural and accessible living spaces throughout the country. Whether Disney will be the one to change the status quo of real estate, only time will tell. Joey Macari is RISMedia’s associate editor. Email her your real estate news ideas at jmacari@rismedia.com. The post From Resort to Residential: Disney Expands on Community Living appeared first on RISMedia......»»

Category: realestateSource: rismediaApr 18th, 2022

Planet Earth’s Future Now Rests in the Hands of Big Business

On a brisk Monday in Houston in early March, dozens of protesters gathered across the street from the giant Hilton hotel hosting CERAWeek, the energy industry’s hallmark annual conference. Their signs accused the corporate executives inside of betraying humanity in pursuit of financial return. STOP EXTRACTING OUR FUTURE, read one. PEOPLE OVER PROFIT, read another.… On a brisk Monday in Houston in early March, dozens of protesters gathered across the street from the giant Hilton hotel hosting CERAWeek, the energy industry’s hallmark annual conference. Their signs accused the corporate executives inside of betraying humanity in pursuit of financial return. STOP EXTRACTING OUR FUTURE, read one. PEOPLE OVER PROFIT, read another. Two days later, inside a standing-room-only hotel ballroom, Jennifer Granholm, the U.S. secretary of energy, offered a different message to the executives: the Biden Administration needs your help to tackle climate change. The scene encapsulated this moment in the fight to address global warming: some of the most ardent activists say that companies can’t be trusted; governments are saying they must play a role. [time-brightcove not-tgx=”true”] They already are. The U.S. Department of Energy has partnered with private companies to bolster the clean energy supply chain, expand electric-vehicle charging, and commercialize new green technologies, among a range of other initiatives. In total, the agency is gearing up to spend tens of billions of dollars on public-private partnerships to speed up the energy transition. “I’m here to extend a hand of partnership,” Granholm told the crowd. “We want you to power this country for the next 100 years with zero-carbon technologies.” Across the Biden Administration, and around the world, government officials have increasingly focused their attention on the private sector—treating companies not just as entities to regulate but also as core partners. We “need to accelerate our transition” off fossil fuels, says Brian Deese, director of President Biden’s National Economic Council. “And that is a process that will only happen if the American private sector, including the incumbent energy producers in the United States, utilities and otherwise, are an inextricable part of that process—that’s defined our approach from the get go.” Photo illustration by C.J. Burton for TIME For some, the emergence of the private sector as a key collaborator in efforts to tackle climate change is an indication of the power of capitalism to tackle societal challenges; for others it’s a sign of capitalism’s corruption of public institutions. In the three decades since the climate crisis became part of the global agenda, scientists, activists, and politicians have largely assumed that government would need to dictate the terms of the transition. But around the world, legislative attempts to tackle climate change have repeatedly failed. Meanwhile, investors and corporate executives have become more aware of the threat climate change poses to their business and open to working to address its causes. Those developments have laid the foundation for a new approach to climate action: government and nonprofits partnering with the private sector to do more—a new structure that carries both enormous opportunity and enormous risk. Read More: This Mining Executive Is Fighting Her Own Industry to Protect the Environment Just 100 global companies were responsible for 71% of the world’s greenhouse gas emissions over the past three decades, according to data from CDP, a nonprofit that tracks climate disclosure, and pushing the private sector to step up is already showing dividends. Last fall, more than 1,000 companies collectively worth some $23 trillion set emissions-reduction goals that line up with the Paris Agreement. “We are in the early stages of a sustainability revolution that has the magnitude and scale of the Industrial Revolution,” says Al Gore, the former U.S. Vice President who won the Nobel Peace Prize for his work on climate change. “In every sector of the economy, companies are competing vigorously to eliminate unnecessary waste to become radically more energy efficient, and focus on the sharp reduction of their emissions.” Despite that momentum, risks abound. Companies have an incentive to make big commitments, but they need a credible system to set the rules of the road and ensure that those pledges can be scrutinized. Even then, corporate progress is unlikely to add up to enough without clear policy that incentivizes good behavior and/or punishes bad behavior. “To catalyze business, we need governments to lead and set strong policies,” says Lisa Jackson, vice president of environment, policy and social initiatives at Apple and a former head of the U.S. Environmental Protection Agency. “That’s just what the science says.” Nor are companies built to address the array of social challenges—millions displaced, millions more with livelihoods destroyed, the escalating health ailments—that will arise from climate change and the transition needed to address it. “The private sector has been surprisingly aggressive on climate in the last 12 months,” says Michael Greenstone, former chief economist in Obama’s Council of Economic Advisers. “But that is a very misshapen approach: there’s no real substitute for a coherent climate policy.” It’s increasingly hard to imagine how we find such a policy in time. In February, the IPCC, the U.N.’s climate science body, warned of a “rapidly closing window of opportunity to secure a livable and sustainable future.” Emissions need to peak by 2025 in order to have a decent chance of limiting warming to 1.5°C. In a landmark report outlining the possible levers to cut global emissions, the IPCC found that private sector initiatives, if followed through, could make a “significant” contribution to that goal. The group assessed the impact of 10 private sector initiatives, and found they could result in a total of 26 gigatonnes in reduced or avoided emissions by 2030—equivalent to more than five years of U.S. carbon pollution. How this partnership between government and industry plays out will shape not just the trajectory of emissions over the coming years and decades but also the future of democratic governance and how society will manage the now inevitable social disruption that will result from climate change. To understand how we got here, it’s helpful to look back to a remarkable coincidence of history. Climate change entered public consciousness at the same time that, in the U.S., the zeitgeist turned against government’s playing a robust role in society. In 1988, when then NASA scientist James Hansen offered his now famous warning that the planet was already warming as a result of human activity, and TIME soon after named the “Endangered Earth” as “Planet of the Year,” American voters had spent eight years hearing President Ronald Reagan tell them that government lay at the root of society’s problems. So it’s perhaps no wonder that in the decades that followed, government attempts to tackle a new problem, unprecedented in scope and scale, encountered roadblocks. That effort began in earnest in 1992 as heads of government from around the world gathered in Rio de Janeiro to inaugurate a new U.N. framework to address climate change. Every year since, with the pandemic-related exception of 2020, countries have met to hash out solutions to the problem. But, in the first two decades of talks, a comprehensive solution failed to break through. In the U.S., the lagging climate policy can in large part be attributed to the then pervasive free-market ideology, which dictated that businesses exist to make a profit. From the 1990s, and into the new century, fossil-fuel companies as well as heavy industry spent millions denying the existence of the problem and funding organizations that opposed climate rules. Other firms remained on the sidelines of an issue that seemed unrelated to their core business. The results in the political arena were clear. President Bill Clinton tried to pass an energy tax in Congress, but a concerted lobbying effort from manufacturers and the energy industry doomed the plan. George W. Bush publicly questioned the science of climate change and appointed executives from the oil and gas industry into senior positions in his Administration. Barack Obama pursued comprehensive climate legislation that would have capped companies’ emissions in 2009; the legislation failed to make it to the floor of the Senate after a prominent group of businesses condemned it. Christophe Archambault—Pool/ReutersThe launch of a key climate coalition for businesses in 2017 with Bill Gates, Michael Bloomberg, and others But around that time, many business leaders began to feel pressure to do something on climate for the first time. Prioritizing environmental, social, and corporate governance concerns in investing, or ESG for short, had risen from a niche idea in the early 1990s to a mainstream approach to investment two decades later. At that point, a growing flow of reports from financial institutions warned of the economic consequences of inaction. And key voices in the business community—from Michael Bloomberg to Bill Gates—took the message on the road, telling CEOs to take climate change seriously. From 2012 to 2014, the value of investment in the U.S. earmarked for sustainable funds that took into account ESG issues close to doubled, to nearly $7 trillion, according to data from the U.S. SIF Foundation, a nonprofit that advocates for sustainable investment strategies. To foster this momentum, government leaders sought to bring business into the policymaking conversation. Their goal was to create what is often referred to as a virtuous cycle: if they could get commitments from the private sector on climate issues, they argued, it would, theoretically, push government to do more, which in turn would push companies to double down. In 2015, that approach was put into practice as a group of business leaders showed up in Paris to talk with government officials. The result: CEOs declared their commitment to reducing emissions, and the final text of the Paris Agreement created a formalized framework for involving private companies in the official U.N. process. Just a year later, the U.S. elected Donald Trump as President and began to unravel the country’s environmental rules. Five months into office, he announced that he would take the U.S. out of the Paris Agreement. Within hours, 20 Fortune 500 companies declared that they were “still in” the global climate deal and would cut their emissions in hopes of keeping the U.S. on track. By the time Trump left office, more than 2,300 American companies had joined the coalition. For many pushing climate action, working with the private sector became the best path forward. “More and more power is distributed in societies,” Antonio Guterres, the U.N. Secretary-General, told me in 2019, explaining his extensive outreach to the business community on climate. “If you want to achieve results, you need to mobilize those that have an influence in the way decisions are made.” The most important private-sector push came from the institutional investors at the center of the global economy, who control trillions of dollars in assets and are invested in every sector and essentially every publicly traded firm. When you own a little bit of everything, the scenarios portending climate-driven economic decline are terrifying. “We’re too big to just take all of our hundreds of billions, and try to find a nice safe place for that money,” Anne Simpson, then-director of board governance and sustainability at CalPERS, California’s $500 billion state pension fund, told me in 2019. “We’re exposed to these systemic risks, so we have to fix things.” With the U.S. government on the sidelines, these investors joined together to send a signal. When French President Emmanuel Macron hosted a climate summit in Paris in December 2017, he brought together a group of investors controlling $68 trillion in assets to launch Climate Action 100+. In the beginning, this consortium used their status as high-profile investors to push emissions reductions in 100 publicly traded companies through one-on-one engagements with high-level executives. “All of this made for a reorganization of the politics of climate,” says Laurence Tubiana, a key framer of the Paris Agreement who now heads the European Climate Foundation. “It has now crystallized into something new: a strong coalition between business, financial institutions, investors, and governments.” All these threads came to a head last year in Glasgow at the U.N. climate conference. Walking around the Scottish Events Center last November, it would have been easy to forget that the conference was ostensibly for government officials. An attendee could easily spot, among the 40,000 attendees, high-profile business leaders mingling in the hallway. And by many accounts, the most significant news involved the private sector. Six major automakers joined with national governments to declare that they would produce 100% zero-emissions passenger vehicles no later than 2035. A group of financial institutions representing $130 trillion in assets committed to aligning its investments and operations with the Paris Agreement. What sort of emissions reduction does this all add up to? The truth is no one really knows. An analysis of more than 300 member companies of the Science Based Targets initiative, a leading voluntary program for corporations to set emissions reduction targets in line with the Paris Agreement, found that, on average, each company succeeded in reducing their direct emissions annually by more than 6% between 2015 and 2019. But the global framework for emissions reduction centers on country-level commitments, and in its most recent report, the IPCC noted the ability to track corporate progress separate from national-level commitments remains “limited.” The multilateral system for addressing climate change inaugurated in Rio, created by government for government, has evolved into something else. And, in the assessment of many activists, the result has left out concerns about justice in the transition. In Glasgow, activists and civil-society groups complained about being excluded from negotiating rooms while business leaders were ushered onstage. “It now looks more like a trade summit, rather than a climate convention,” says Asad Rehman, who organized for the COP26 Coalition, a climate-justice group. These activists worry about what the resulting government decisions look like when they’re made hand in hand with businesses. “The very people who created this crisis are now positioning themselves as the people who will solve it,” says Rehman. “The decisions being made seem very much to be locking us into a particular approach to solve the crisis—and, of course, that approach is not necessarily in the best interest of the people.” Last December, just a few weeks after returning to the U.S. from Glasgow, I caught a flight from Chicago to Washington, D.C., on what United Airlines billed as the first flight operated with an engine running on only a lower-carbon alternative to jet fuel. As we approached Reagan Airport, Scott Kirby, the airline’s CEO, told me about the coalition—including companies like Deloitte, HP, and Microsoft—he has formed to help bring the fuel to market. “This is not just about United Airlines; this is about building a new industry,” Kirby told me. “To do that, we’ve got to have a lot of airlines participate, we’ve got to have partners participate… and we’ve got to have government participate.” Kirby had chosen Washington as the destination for this flight for a reason: to truly deploy the technology would require some help from the U.S. government. The Biden Administration has been eager to serve as a partner, proposing a tax credit for sustainable aviation fuel and using the bully pulpit to tout United’s work—and aviation is just the tip of the iceberg. The administration has sought to partner on climate with companies across the country and across industries. It almost goes without saying that Biden has been the most aggressive U.S. president yet on the climate issue. His administration has introduced or tightened more than 100 environmental regulations; worked with activists to address the inequalities worsened by climate change; and put climate at the center of “Build Back Better,” its signature $2 trillion spending package that failed to pass Congress last year. He has worked with activists to address the inequalities worsened by climate change. But engagement with the private sector offers a different avenue to push for emissions reduction, and, administration officials say, it has been a key part of his climate strategy. “That’s him availing every tool he’s got,” says Ali Zaidi, Biden’s Deputy National Climate Advisor, of Biden’s private sector engagement. “One of those superpowers that he has is the ability to meet people where they are and bring them along.” Jeff J Mitchell—Getty ImagesGreenpeace activists protest corporate involvement at the COP26 U.N. climate talks, in November 2021 That approach is also based in a sense of realism: the technologies we need to cut emissions over the next decade exist today and any reasonable consideration of how the world can cut carbon emissions means deploying those technologies as quickly as possible—largely by getting companies to adopt them. We need “to take the technology that DOE has spent so many years working on and actually get it in the hands of consumers,” says Jigar Shah, who runs the department’s Loan Program Office. I met Shah, who previously ran a clean energy investment fund, in a small conference room in Houston where he had been taking meetings with a range of companies to convince them to do business with his agency—and more broadly the federal government. Shah has $40 billion at his disposal to invest in promising companies and projects. The idea, he says, is if business and government work together, they can move quickly to build a low-carbon economy by restoring the country’s ability to do big things. “We actually haven’t done these big things for 30 years,” he says. “America truly has sort of lost this general understanding of, like, how does an airport add a runway? How does a road get widened? Who makes the decision on upgrading our wastewater treatment plant?” The business-oriented approach to climate change permeates the Biden Administration. Last September, I watched in the back of the room in Geneva as John Kerry, Biden’s Special Presidential Envoy for Climate, pitched the Administration’s approach to CEOs of some of the world’s biggest companies, presenting more than 30 slides detailing a new government program to catalyze production of clean technologies, in sectors ranging from air travel to steel manufacturing. Instead of government mandates, Kerry proposed that companies themselves take the lead by making deals to purchase clean technology. “Because we’re behind, we have got to find ways to step up,” he told the gathered CEOs. Read More: Biden Wants an American Solar Industry. But It Could Come at an Emissions Cost Kerry’s approach echoes the realism of the Biden Administration’s. The truth is that in 2022 Big Business has the power to influence—and halt—much of what the government does. “I’m convinced, unless the private sector buys into this, there won’t be a sufficient public-sector path created, because the private sector has the power to prevent that,” Kerry told me in September. “The private sector has enormous power. And our tax code reflects that in this country. And what we need is our environmental policy to reflect the reality.” It makes sense then that from the outset the Biden Administration’s climate-spending plan has focused primarily on carrots rather than sticks. That is, it included a laundry list of rewards for companies doing positive things—namely tax credits for clean energy and subsidies for technologies like electric vehicles. Meanwhile, the two key policies that would have penalized businesses for their emissions—a fee for methane emissions and a tax when power companies failed to meet emissions-reductions targets—were abandoned after industry pushback. Despite those concessions, the most influential trade groups that lobby in Washington on behalf of big businesses still refused to back the overall legislation—because it required an increase in corporate taxes. It’s a reality that climate advocates readily decry as hypocrisy, and an indicator that business isn’t serious about climate change. In the coming weeks, as negotiations for a revamped climate-spending bill accelerate, businesses will have another chance to show they are serious about climate policy. It brings to mind a key moment in a panel I moderated in April last year with Granholm, and a handful of top corporate executives’ work to reduce their companies’ emissions. “You are visionaries and you are leading, and there’s so many thousands of other businesses that can learn from your example, and there are a lot of members of Congress that could learn from your words. And it’s not to get political, but sometimes folks just need to hear,” she told them. “To the extent you can, we’d be really grateful because we feel like our hair is on fire.” They can still help, but the clock is ticking. Even before Joe Biden took office, the American auto industry had begun to adopt the President-elect’s ambition of a rapid transition to electric vehicles. Within weeks of the election, GM dropped a lawsuit that sought to block more stringent fuel-economy standards. Two months later, it said it would go all electric by 2035. Meanwhile, Biden committed to a federal-government purchase of hundreds of thousands of electric vehicles. Since then, the U.S. auto industry has become an electric-vehicle arms race, with companies left and right announcing new capital expenditures to advance the national electric-vehicle fleet. GM says it will spend $35 billion in the effort over the next few years. Ford says it’s spending $50 billion. “The biggest thing that’s happening here is there’s a realization, on the part of both labor and business now, that this is the future,” Joe Biden said as he stood with auto industry executives, union leaders and administration officials on the White House lawn last August. Last year, I traveled to Ohio and Tennessee to see firsthand how the pressing questions about this transformation were playing out on the ground in the cities and towns that have relied on the auto industry for decades. In conversations with workers and local officials, I could sense excitement, but also consternation. Building an electric vehicle requires less labor than does its old-fashioned counterpart, and there’s no guarantee that new jobs created will be covered with a union. “There’s just going to be a lot less people building cars,” Dave Green, a GM assembly worker who previously led a local UAW branch in Ohio, told me at the time. The green transition will also displace oil, gas, and coal workers. Entire cities in flood and fire zones will be dislocated. Diseases will spread more quickly. How will society manage such problems, accounting for a diverse array of interests, without a comprehensive, government-led approach to the transition? Not well, if past transitions are any indicator. Inequality soared during the Industrial Revolution, and the U.S. is still dealing with the economic fallout of globalization in the 2000s, when many blue collar jobs were outsourced. To make up for the slow pace of government policy to guarantee an equitable transition, many activists have set their sights on influencing corporations directly. In 2019, for example, hundreds of Amazon employees walked out of work, insisting that the company do more to address climate change. Across a range of industries, corporate leaders now say that climate change is a top concern for recruits. Consumers, too, have begun to push companies to change, largely through the power of their dollars, by refusing to buy from companies with poor labor and environmental practices. “It’s not perfect,” says Michael Vandenbergh, a law professor at Vanderbilt University Law School who served as chief of staff at the U.S. Environmental Protection Agency under Clinton. But “it will buy us time until the public demands that government actually overcome some of the democracy deficits that we face.” As challenging as it may be in these polarizing times, overcoming that democracy deficit is necessary, not just to accelerate the transition away from fossil fuels but also to protect those most vulnerable to the effects of climate change and to the necessary changes ahead. It’s for that reason that the upswing in climate-activist movements—from the youth’s marching for a Green New Deal to the union members’ joining with climate activists to push for a just transition—matters beyond any policy platform. Climate change will reshape the lives of people everywhere. A truly just transition will require people to engage in the fight to fix it. —With reporting by Nik Popli and Julia Zorthian......»»

Category: topSource: timeApr 14th, 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

Inflation Isn’t Transitory

In his Daily Market Notes report to investors, while commenting on inflation, Louis Navellier wrote: Q3 2021 hedge fund letters, conferences and more Inflation Diverts Investment The psychology of selling high P/E multiple stocks in the face of higher inflation/ higher interest rates came to roost midday yesterday. The correction was relatively modest in view of Indexes […] In his Daily Market Notes report to investors, while commenting on inflation, Louis Navellier wrote: if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Inflation Diverts Investment The psychology of selling high P/E multiple stocks in the face of higher inflation/ higher interest rates came to roost midday yesterday. The correction was relatively modest in view of Indexes being so near all-time highs, and there is further follow through on the open this morning, but "Value" names had their best day versus "Growth" names had their best relative performance yesterday since March. Stepping back you'll see gold is weaker, crude oil is lower, and just announced PMI is lower than expected.  The concerns about inflation should fade somewhat today for these reasons.  Also, note that the 10-year US Treasury yield remains lower than 1.7% and the 30-year below 2%.  These gyrations are most likely traders positioning for the long holiday weekend and not a major shift in market sentiment. The primary risk to further new highs into January is a Black Swan event, something that will never go away, and if it comes will most likely turn out to be yet another buying opportunity. Retail sales surged 14.8% for the past 12 months ending October according to the Commerce Department.  This is despite product backlog.  As I have been saying all year, consumers are not that picky. Put money in their pocket and they will buy things. The Commerce Department reported on Tuesday that retail sales surged 1.7% (month over month) in October and have surged 14.8% in the past 12 months. Again The Employment Mandate When continuing unemployment claims crack the 2 million level (they came in at 2.08 million in the latest report), it will likely be big news and convince the Fed that they have fulfilled their employment mandate. Even though more than four million jobs have disappeared since the beginning of the pandemic, it appears that many workers decided to retire early. As soon as the Fed decides it has done enough to stimulate job creation, it can turn its attention to inflation. Inflation is all over the news.  Even though economic growth remains strong, the University of Michigan’s consumer sentiment index recently fell to a 10-year low as both inflation and product shortages are making folks angry. Transitory It Ain’t Our latest survey showed that 85% of retail investors believe that the recently passed infrastructure bill will increase inflation. One respondent called it "throwing gas on a fire." Inflation may be “transitory” as the administration claims, but these charts demonstrate it is not transitory enough for retail investors.  Inflation, notwithstanding, I am expecting a robust holiday season. The Atlanta Fed’s GDP Now model shows the U.S. economy’s GDP growth is accelerating from an estimated 2% annual pace in the third quarter to a whopping 8.7% annual pace in the fourth quarter. Although the Atlanta Fed tends to be too optimistic early in a quarter, there is no doubt growth is back. It is very odd for a President’s popularity to be plunging when economic growth is reported to be “resurging,” but that is exactly what is happening. The Fed saw that inflation rates decelerated some last summer, so they could argue that inflation would be “transitory.” However, that argument ended in October, when inflation resurged and spooked politicians, but the Fed and other central bankers are experts in “kicking the can down the road” and I suspect that they will now claim that inflation may be transitory until 2023 or later. In defense of the Fed, the U.S. dollar is now at a 16-month high relative to emerging market currencies, according to The Financial Times. A strong dollar will help suppress inflation somewhat, because most commodities are priced in dollars. However, a stronger dollar makes goods even more expensive for emerging markets, so worldwide GDP growth may stall, especially due to China’s domestic problems. I anticipate a big leadership change in Congress next November. It will be interesting if the Biden Administration tacks to the center, like Bill Clinton did after 1994, which boosted his popularity. Wall Street likes a more “balanced” government, so the latest political developments are being well received, thereby boosting investor confidence. In this inflationary environment, millions of Americans are pouring more money into the stock market seeking higher yields and protection from inflation. Also notable is that gold is now at a five-month high. Internationally, the Chinese economy is now in disarray and Europe is struggling with another Covid-19 outbreak. The truth is that as you look around the world, the U.S. is looking more like an oasis, due to higher interest rates, a capitalistic culture, and 50 states that compete with each other for business. Heard & Notable British cyclist Anthony Hoyte, nicknamed the "pedaling Picasso," covered a distance of 66.48 miles on the streets of London and used a GPS tracking app to create a massive image of a man with a mustache. The record-breaking ride was completed in 8.5 hours. Source: UPI Updated on Nov 23, 2021, 4:57 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 23rd, 2021

The Fed Has Completed Its Unemployment Mandate

In his Daily Market Notes report to investors, while commenting on the unemployment mandate, Louis Navellier wrote: Q3 2021 hedge fund letters, conferences and more Bullish Investors We survey our investors, who are predominantly retail, to assess sentiment. Results from our survey on Tuesday show retail investors are bullish. While there are many crosscurrents in […] In his Daily Market Notes report to investors, while commenting on the unemployment mandate, Louis Navellier wrote: .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); Q3 2021 hedge fund letters, conferences and more Bullish Investors We survey our investors, who are predominantly retail, to assess sentiment. Results from our survey on Tuesday show retail investors are bullish. While there are many crosscurrents in the markets which could provoke pessimism, the survey suggests that investors are buoyed by the prospect of a robust earnings season.  Another sentiment that emerged was that wage increases, though additive to inflation, are a net positive to consumer spending. Bearish investors on the other hand cited inflation fears as the primary driver of their cautiousness.  That more investors were uncertain about the direction of the market, 15%, than were bearish, 10%, is notable and indicates the see-saw action we are seeing in the market at large may continue. Unemployment Mandate Complete The Labor Department on Thursday announced that weekly unemployment claims fell to 293,000 in the latest week. Economists were expecting weekly and continuing unemployment claims to come in at 320,000. I think it is safe to conclude that the Fed has completed its unemployment mandate and can now turn its attention to another mandate, namely fighting inflation. Taiwan Is Safe I get a lot of questions about what is going to happen when China takes over Taiwan after tormenting the island nation an untold number of times with the Chinese air force invading Taiwanese airspace.  My standard answer is that “China will not harm Taiwan’s infrastructure, since they need the semiconductor chips too!”  This was reconfirmed by Chinese President Xi Jinping when he recently called for a “peaceful reunification” with Taiwan.  Not surprisingly, Taiwanese President Tsai Ing-wen said that Taiwan would not bow to Chinese pressure. China currently has its own economic problems and based on the official Purchasing Managers Indexes (PMI), both its service and manufacturing sectors are now in a recession.  Furthermore, the Trump Administration’s sanctions on 5G pioneer Huawei have been severely hurt by these sanctions, so its 5G market share is shrinking. Since the Biden Administration did not lift modify the Trump Administration’s tariffs on China, if China invaded Taiwan, they not only risk a military reprisal but also potentially more tariffs from the Biden Administration.  So conclusion, Taiwanese semiconductor companies, especially United Microelectronics (UMC), remain great near-term buys since I do not expect China to invade Taiwan. As inflation continues to heat up and push China and other nations deeper into recession, the U.S. remains an oasis to the world. The port bottlenecks and supply chain glitches persist, but at least the U.S. is not expected to be crippled by high coal and natural gas prices that are now hindering China and Europe. Heard & Notable Facebook removed or flagged 31.5 million content pieces containing hate speech in the second quarter, a 25% increase compared to the first quarter number of 25.2 million. Five out of every 10,000 content pieces containing hate speech slipped past Facebook's flagging and deletion processes. Source: Statista Updated on Oct 14, 2021, 1:01 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 14th, 2021

I work remotely in southeast Asia for a month every year. I"m often up past 2 a.m. — but it"s worth it to be in a tropical paradise.

Sergi Benet is the cofounder of Balio, a financial-education platform. He told Insider what it's like working remotely from places like Bali. Sergi Benet and Andrea Gimeno in Bali.Sergi Benet Sergi Benet is the cofounder of Balio, a financial-education platform. He spends just over a month each year working from an exotic location with his partner. This is how they work remotely from another continent, as told to journalist David Vázquez. This is an edited, translated version of an as-told-to essay that originally appeared on May 21, 2022. It is based on a transcribed conversation with Sergi Benet.My partner, Andrea Gimeno, and I always had the same thought when we went on vacation. We wanted to go beyond the normal tourist experience.We believed that you needed to work and live like a local to really get to know a place. We pushed this thought aside for years until, in late 2019, we realized that maybe there was a way to fit it into our lives.A work and family crisis made us want a change of scenery and to escape our daily routine, but it was too difficult for us to take last-minute vacations, as we're both entrepreneurs.So we decided to compromise: We'd spend a month and a half living and working outside of Europe. This way, we'd get to experience a new country, our customers and suppliers wouldn't even realize that we'd left Spain, and we could travel without losing a single day of vacation.We enjoyed the experience so much that we decided we wanted to repeat it as soon as we could.Our first destination was Chiang Mai, ThailandLocated in the mountainous north, it's the second-largest city in the country. It seemed an ideal destination for us as it had a large number of cafés with WiFi connection. That, we thought, would ensure we could work remotely without any problems.It was one of our biggest mistakes as newbies. The cafés would get crowded, making remote work particularly difficult.In a coworking space, on the other hand, you know that the internet connection will always be reasonably stable and that you'll almost always have quiet places to speak with partners, investors, or clients.Apart from this small mistake, our month and a half in Chiang Mai opened up a world of possibilities for us.But our routine was nothing special. We tried to get up fairly early, around 8 or 9 a.m.. Afterward, we'd spend some time at the gym or go for a walk.We'd start our working day around lunchtime to be closer to Spanish working hours. We'd work until well after midnight.We tried to keep our routine in line with usual working hours in Chiang Mai. The only exception was on weekends, when we took the opportunity to visit nearby towns or escape to an island.We returned to Spain at the beginning of 2020, and any thoughts of our next trip were delayed due to the COVID-19 pandemic. As more months passed, though, we thought about our experience in Chiang Mai, and the more we wanted to get away again.For our next trip, we chose Bali, an island in Indonesia with good internet connection and lots of coworking spacesIf there are lots of coworking spaces, you can move between them if, for example, the air-conditioning breaks down in one you're working in.Our routine is very similar to the one we had in Chiang Mai: We got up early to have some free time in the morning, start working later, work until very late, and save any longer excursions for the weekend.It's a demanding routine, but it helps us get to know the place more than we would on a tourist holiday, and it allows us to keep working while we're here.The experience won't be for everyone though.You have to be disciplined and set yourself a routine, and it's particularly important to get going early in the morning. If you can't do that, then this way of working probably isn't for you.You also need to get used to working in extremely hot and humid conditions, and you need to be passionate about discovering every nook and cranny of the places you travel to, or you won't get the most out of the experience.For our trip to Bali, my partner and I set a monthly budget of about 1,500 euros, which included accommodation and food. Flights cost us about 700 euros each.One interesting way we found of meeting this budget is to adapt to the local culture, especially with things like food.In Bali, it's often cheaper to eat out than to try to cookSo if one day we spend a bit too much, we try to compensate the following day by eating in one of the local spots. It often only costs about 10 euros for both of us to eat out.One drawback is the long working hours. As a cofounder of a financial-education platform, I'm fortunate to have the trust of my business partners and investors. But it's almost impossible to ignore the fact that I'm on a tropical island. So in order to show my commitment to projects is still the same as at home, I find myself working even more hours than I would in Spain. I often work until well past 2 a.m.But I assure you, it pays off. So much so that my partner and I are already planning our next trip. At the moment, we've got Argentina in our sights. The country has a growing number of digital nomads and places to work, and the standard of living remains more or less stable for those paid in euros.Read the original article on Business Insider.....»»

Category: topSource: businessinsider7 hr. 33 min. ago

I work remotely in southeast Asia for a month every year. I"m often up past 2 a.m — but it"s worth it to be in a tropical paradise.

Sergi Benet is the cofounder of Balio, a financial-education platform. He told Insider what it's like working remotely from places like Bali. Sergi Benet and Andrea Gimeno in Bali.Sergi Benet Sergi Benet is the cofounder of Balio, a financial-education platform. He spends just over a month each year working from an exotic location with his partner. This is how they work remotely from another continent, as told to journalist David Vázquez. This is an edited, translated version of an as-told-to essay that originally appeared on May 21, 2022. It is based on a transcribed conversation with Sergi Benet.My partner, Andrea Gimeno, and I always had the same thought when we went on vacation. We wanted to go beyond the normal tourist experience.We believed that you needed to work and live like a local to really get to know a place. We pushed this thought aside for years until, in late 2019, we realized that maybe there was a way to fit it into our lives.A work and family crisis made us want a change of scenery and to escape our daily routine, but it was too difficult for us to take last-minute vacations, as we're both entrepreneurs.So we decided to compromise: We'd spend a month and a half living and working outside of Europe. This way, we'd get to experience a new country, our customers and suppliers wouldn't even realize that we'd left Spain, and we could travel without losing a single day of vacation.We enjoyed the experience so much that we decided we wanted to repeat it as soon as we could.Our first destination was Chiang Mai, ThailandLocated in the mountainous north, it's the second-largest city in the country. It seemed an ideal destination for us as it had a large number of cafés with WiFi connection. That, we thought, would ensure we could work remotely without any problems.It was one of our biggest mistakes as newbies. The cafés would get crowded, making remote work particularly difficult.In a coworking space, on the other hand, you know that the internet connection will always be reasonably stable and that you'll almost always have quiet places to speak with partners, investors, or clients.Apart from this small mistake, our month and a half in Chiang Mai opened up a world of possibilities for us.But our routine was nothing special. We tried to get up fairly early, around 8 or 9 a.m.. Afterward, we'd spend some time at the gym or go for a walk.We'd start our working day around lunchtime to be closer to Spanish working hours. We'd work until well after midnight.We tried to keep our routine in line with usual working hours in Chiang Mai. The only exception was on weekends, when we took the opportunity to visit nearby towns or escape to an island.We returned to Spain at the beginning of 2020, and any thoughts of our next trip were delayed due to the COVID-19 pandemic. As more months passed, though, we thought about our experience in Chiang Mai, and the more we wanted to get away again.For our next trip, we chose Bali, an island in Indonesia with good internet connection and lots of coworking spacesIf there are lots of coworking spaces, you can move between them if, for example, the air-conditioning breaks down in one you're working in.Our routine is very similar to the one we had in Chiang Mai: We got up early to have some free time in the morning, start working later, work until very late, and save any longer excursions for the weekend.It's a demanding routine, but it helps us get to know the place more than we would on a tourist holiday, and it allows us to keep working while we're here.The experience won't be for everyone though.You have to be disciplined and set yourself a routine, and it's particularly important to get going early in the morning. If you can't do that, then this way of working probably isn't for you.You also need to get used to working in extremely hot and humid conditions, and you need to be passionate about discovering every nook and cranny of the places you travel to, or you won't get the most out of the experience.For our trip to Bali, my partner and I set a monthly budget of about 1,500 euros, which included accommodation and food. Flights cost us about 700 euros each.One interesting way we found of meeting this budget is to adapt to the local culture, especially with things like food.In Bali, it's often cheaper to eat out than to try to cookSo if one day we spend a bit too much, we try to compensate the following day by eating in one of the local spots. It often only costs about 10 euros for both of us to eat out.One drawback is the long working hours. As a cofounder of a financial-education platform, I'm fortunate to have the trust of my business partners and investors. But it's almost impossible to ignore the fact that I'm on a tropical island. So in order to show my commitment to projects is still the same as at home, I find myself working even more hours than I would in Spain. I often work until well past 2 a.m.But I assure you, it pays off. So much so that my partner and I are already planning our next trip. At the moment, we've got Argentina in our sights. The country has a growing number of digital nomads and places to work, and the standard of living remains more or less stable for those paid in euros.Read the original article on Business Insider.....»»

Category: topSource: businessinsider13 hr. 21 min. ago

Hauling Houses and Buying the Block: Outside-the-Box Ideas in Housing

Editor’s Note: This is the first part in a three-part series on local innovations focused on affordability and community development. Often in the housing industry, people get caught looking up. Expecting the next big thing or the solution to long-standing problems to come from a national think-tank, a big conglomerate or an established thought leader… The post Hauling Houses and Buying the Block: Outside-the-Box Ideas in Housing appeared first on RISMedia. Editor’s Note: This is the first part in a three-part series on local innovations focused on affordability and community development. Often in the housing industry, people get caught looking up. Expecting the next big thing or the solution to long-standing problems to come from a national think-tank, a big conglomerate or an established thought leader is not misguided—a lot of world-changing ideas do originate from these spheres. At the same time, it is easy to miss spectacularly innovative new ideas or approaches simply because they come from elsewhere—from small markets, from outsiders and from different disciplines. As the entire industry buckles under the weight of a long-simmering crisis of both affordability and lack of inventory, it is possible real estate will claw its way back up through methods and approaches already practiced. It is also possible that, high in the upper echelons of the C-suite, experienced executives and academics are concocting the eventual solutions that will address longer-term problems in real estate like the racial homeownership gap, pessimism around affordability, entry-level new home construction and gentrification. But it is also possible these ideas are germinating at the grass-roots level, driven by innovators who have found new ways to view housing unencumbered by the burdens of convention and preconception, drawing on resources or expertise not endemic to industry thinking. With how local real estate is, it seems even more likely that great change might grow from the bottom up rather than top-down. Almost always starting small, these ideas have the chance to grow and spark real and foundation change in how we think about housing: BuildUP At 4 a.m. one morning in January of 2017, Harvard doctoral student and educator Mark Martin woke up, and within hours he had the outline for an entirely unprecedented program that would aim to sweepingly and intimately address education, homeownership, skilled labor and real estate markets all together—at least on a small scale. “Young people would be a part of the solutions in their own neighborhoods rebuilding homes, we would pay them for it, and they would eventually own the homes,” he says. “All of it just kind of hit me at once.” Martin had spent most of his career in education, frustrated and disillusioned by how badly American schools were failing to meet even the basic needs of students. At Harvard, he says he encountered plenty of sympathy and others sharing that same frustration, but very little in the way of solutions. “It seemed like we were just going about education the wrong way,” he says. A year and a day after his early morning revelation, returning to his childhood home in Birmingham, Alabama, Martin launched BuildUP—a fully accredited school that takes young people out of the crumbling local education system and teaches them a myriad of practical skills, including how to build and maintain a home. That home is both their graduation gift and final project, a fully realized dream of homeownership in their home community, imparted with the skills and tools to build a better life. With around 30 young people enrolled and over 30 houses already owned and in the process of renovation or relocation, BuildUP remains small but has exceeded Martin’s timeline. Other regions as far away as Pennsylvania are already looking at creating some version of the program, he says. “Our hope is that by doing something boldly different, unique, we can kind of push on systems that control almost all of education,” he says. As skilled labor remains another huge part of the home shortage crisis, students educated through BuildUP will be able to join the local labor force, finding decent paying jobs and able renovate and create new housing stock in neighborhoods that have sunk under decades of neglect. In the area of Birmingham where BuildUP is focused, Martin says that changing the trajectory of neighborhoods is a hugely important part of the equation. “Basically everyone who could get out did get out, so you’re left with almost nothing but people who got stuck in homes that are grossly underwater,” he explains. “Others got stuck because they’re so poor they can’t go anywhere.” Launching in these communities was a conscious decision that would prove that the program could work in even the most depressed areas, according to Martin. This decision—to open up in some extremely low income neighborhoods—also brought support from Fannie Mae, Martin says, with BuildUP standing out as a program that targets extremely poor families for homeownership opportunities. BuildUP is currently looking to launch its own mortgage product, according to Martin, with the help of Fannie Mae and other supporters. “Fannie Mae really wants to be a part of this,” he says. The homes themselves have so far been acquired by nearly every means imaginable—some from government auctions or land banks, some purchased from private owners for cheap and several homes literally donated and relocated from nearby affluent areas. “We pick it up off the foundation, and we’ll roll it into places like Ensley or Titusville,” he says. “Areas that have seen nothing but decline. We’ll take a house that appraises for $250,000 or $200,000 in that neighborhood and then put it on land in our neighborhood.” Many of these homes are in good shape, scheduled for demolition by wealthy owners who are building something else on the land. “If they can donate the home and be a part of rebuilding Birmingham and be a part of forever changing a family’s life…that’s pretty impactful,” Martin says. “But it also works pretty well financially because it goes from being something they’re going to pay out of pocket , to being something they get a huge tax break on.” The city also benefits as new properties are added to the tax rolls, blighted homes are revitalized and new laborers join the local economy, Martin points out. He says he hopes towns recognize just how great an opportunity this is, imagining some sort of “buy one get one free” program for dilapidated land could accelerate how quickly neighborhoods are revived (it took 22 months to receive a property from the local land bank). “A lot of people don’t understand,” he says. “Without the population, you can’t just rebuild the whole city.” For the students, who will graduate with a post-secondary degree and a home of their own, the impact is hard to quantify, Martin says. Though BuildUP has yet to honor its first graduating class (some students have received high school diplomas and are living in their homes, but have not yet completed their college education), Martin envisions programs like his able to have tremendous impacts for people and housing across the country. “There’s plenty of need,” he says. “If we make a big enough dent then others start to improve and others start to move in, and all of the sudden it’s the hot spot in town. It doesn’t take long for prices to shoot up.” The post Hauling Houses and Buying the Block: Outside-the-Box Ideas in Housing appeared first on RISMedia......»»

Category: realestateSource: rismedia14 hr. 48 min. ago

Tales Of The Very-Much-As-Expected

Tales Of The Very-Much-As-Expected By Michael Every of Rabobank Tales of the Very-Much-as-Expected Once upon a time there was a popular UK show called ‘Tales of the Unexpected’, a pound-shop version of ‘The Twilight Zone’, but fun for all that. For most in markets, 2022 is proving to be a ‘tale of the unexpected’. For those who dwell in twilight zones, it’s sadly all very much as expected. First, yesterday saw the previously-flagged fiscal package from the UK government worth a huge £15bn, giving households hundreds of pounds to offset soaring energy costs, and imposing a 25% windfall tax on energy firms. Doing so had been vociferously rejected for weeks, but the Australian election result cleared heads. As the Daily Mail put it, “In effect, what the Chancellor has announced is ‘helicopter money’ – cash handouts to ordinary citizens. Nothing else, it seems, could give the immediate help they need to get through this economic crisis.” They are wrong, of course. Monetization is what everyone did during Covid. This time, taxes are being raised on the rich – so this is partial monetization and partial redistribution. The true-blue Mail is happy with that state action, which says a lot about where we are today: indeed, what are states there for if not this kind of thing? Yet while sensible policy, this is also inflationary. Unless energy supply increases, as demand now doesn’t fall, prices will increase. On which note, the White House now says it supports opening more oil refineries – except that takes a long time to achieve, and more so when you have the prospect of windfall taxes and a dislike of fossil fuels. Oil is meanwhile back up to around $118 a barrel despite more releases from the US Strategic Petroleum Reserve (SPR). If China reopens, the US may have to refill the SPR at higher prices than it sold from it. ‘Sell low and buy high’ – there is a tale of the unexpected.   Second, agri commodity markets took a dip on rumors Russia was allowing vessels laden with grain to leave the Black Sea from Ukrainian ports. President Putin stated he was not driving the global food crisis, and that he would be willing to drop his naval blockade,… if the West removes its economic sanctions. This isn’t food blackmail, honest, as Davos rightly called it, and which we had flagged as a key risk before the was even started. The White House response is that this quid pro quo is not on the cards; the EU, which may finally get an oil embargo over the line in days, is proposing making breaking Russia sanctions a crime; and Ukraine is unlikely to play the good cop knowing if its food starts flowing again (some via Russian hands), world attention will shift elsewhere. In short, our agri markets team view remains that any price dips look to be temporary rather than structural. Indeed, while fertilizer prices are way off their highs, it is because farmers are using less of it, which will mean lower crop yields. Bloomberg’s David Fickling asks, ‘Now Even Chicken is Getting Too Expensive?’. US egg prices are also about to leap 21% y-o-y due to bird flu, it is reported. It’s a good job we don’t farm monkeys. Third, US Secretary of State Blinken gave a speech framing the White House’s approach to China. Blinken and you missed anything new, however. With the physical and vocal presence of a junior-high school teacher failing to intimidate a class of 10-year olds, he laid out a new plan the same as the old one, with rebranding of “invest, align, and compete”. Yet there was the usual mixed messaging of China being an authoritarian threat to the international order, but also an essential partner in solving global problems. There was incremental movement in implying US businesses should think of ‘values not prices’ – yet no action at all to enforce such hard choices. Indeed, the key message, again, was that the US does not want a Cold War with China,… as many other voices underline not only are they in one, but the risk is a slide towards something worse. This was a speech given against the backdrop of a Chinese diplomatic tour through Pacific islands to offer them security deals: look at the map here and spot a pattern? As China expert @BaldingsWorld puts it in his own blunt fashion, “China is preparing for war and the US is hoping to restart the Shanghai Four Seasons breakfast buffet for conferences. We aren’t even playing the same game at this point.” And there are darker claims out there on YouTube and Twitter (as is always the case). Yet even in the bright lights of Congress, yesterday’s Senate Appropriations Committee hearing on the FY2023 Navy and Marine Corps budget heard the Secretary of the Navy stress, “Our national security depends on sea power”; Senator Shelby say the proposed budget does not appear enough due to inflation and the need to boost defence in a dangerous world – and that while the Navy is constrained in what budget it can present, the Congress is not; and Senator Graham argue it is incredibly dangerous, represents irresponsibility in terms of threats facing the nation, and that the US requires a bigger, not smaller Navy as, “Our enemies are going up and we are going down, which is a recipe for disaster.” That is obviously not the White House stance, but Congress can dispose much more than the president is proposing. One can understand why Blinken wants to cool hot heads to avoid terrifying scenarios. Yet does such a placatory stance work, or makes things worse with a lag? Many voices point to Vegetius (“Si vis pacem para bellum”) and the undeniable fact that Western olive branches have failed to act as any kind of carrot (or stick) against both Russia and China for over a decade. Worse, the White House, which left Taiwan out of the newly-launched IPEF trade deal to appease China, is now talking about separately deepening economic ties with it bilaterally(!) According to reports from Bloomberg, the focus will be on enhanced cooperation and supply-chain resiliency --which seems a somewhat odd choice given the CLS analysis above-- as well as agri products, although not a full free-trade deal. Beijing will be livid. And fat tail risks fatten further. Focusing on the commercial side of this, Columbia Law School (CLS) discusses SEC guidance over potential legal claims US firms could face for allegedly misleading shareholders about the impact of risk events on their supply chains, looking at Covid-19, Russia-Ukraine, and the “next domino” of Taiwan. On the latter they conclude: “The implications for ocean-going trade is at once simple, and terrifying… a PRC invasion of Taiwan could result in a termination of all commercial shipping within 1,500 nautical miles... Issuers would not only lose access to the PRC, but also to ports and markets in Japan, the ROK, Vietnam, Thailand, and Indonesia. It is also highly unlikely that insurers would underwrite any coverage for vessels transiting the Pacific, given the distinct possibility that either Taiwan or the PRC would misidentify a merchant vessel as a combatant. The same is likely true for air freight passing within missile range of the PRC or Taiwan borders.” Furthermore, they add: “A final feature of a PRC-Taiwan conflict is the likely nationalization of PRC natural resources and manufacturing facilities owned by western companies, or controlled by US-PRC joint ventures.  The same is true for manufacturing facilities used by US issuers to source production from private PRC entities.  In the event of an invasion of Taiwan, the PRC is likely to seize these facilities, and issuers are unlikely to have any viable means to recover resulting losses.” Imagine the impact on supply chains and financial markets! Some are laughing at Western stock-pickers who called China “uninvestable” just before some key stocks saw a huge rally. Good point:  but who laughs last laughs longest, as they say. CLS also stresses that SEC’s ‘Pandemic Guidance and Sample Letter’ provides a valuable blueprint for US firms with such potential exposures in how to make them clear to investors: proactive disclosures of Taiwan-related risk (rather than “It won’t happen” stances); and mitigating potential litigation risk by reviewing all statements referencing supply chains, considering single points of failure and inventory, and monitoring developments in Asia. Which, I would suggest, best involves more than listening to Blinken, or indeed any one voice. Fourth, Fed Vice-Chair Brainard just spoke to Congress about digital assets. Her view was clear: she wants to see robust action on a US Central Bank Digital Currency in the wake of the recent crypto market collapse - and because China is pushing ahead with its own. However, she sees this is something Congress needs to act on. She also wants a clear crypto “regulatory guardrail” to protect investors and financial stability, probably meaning no more of this please, or perhaps taxing it close to the same point. After all, we need to get people back in the labor force again chop-chop, rather than day-trading at home and making far more than minimum wage in some cases. (Until recently.) In short, the same kind of ‘national security’ wave we got in the UK with its windfall taxation and helicopter money, which we see in regard to Ukraine and global food supplies, and that we heard from Congress over the size of the US Navy and the risks around it, is likely coming for crypto too. At least Brainard implied she didn’t want to remove physical dollar deposits, which is much of the appeal of the currency around the world. (For good, and bad ‘Twilight Zone’, reasons.) * * * Take this all together and look ahead. What will be the market ‘tale of the unexpected’ for the second half of 2022 and 2023, and what will prove the ‘tale of the very-much-as-expected’? Happy Friday. Tyler Durden Fri, 05/27/2022 - 10:18.....»»

Category: blogSource: zerohedge17 hr. 5 min. ago

Escobar: NATO vs Russia - What Happens Next

Escobar: NATO vs Russia - What Happens Next Authored by Pepe Escobar via The Cradle, In Davos and beyond, NATO's upbeat narrative plays like a broken record, while on the ground, Russia is stacking up wins that could sink the Atlantic order... Three months after the start of Russia’s Operation Z in Ukraine, the battle of The West (12 percent) against The Rest (88 percent) keeps metastasizing. Yet the narrative – oddly – remains the same. On Monday, from Davos, World Economic Forum Executive Chairman Klaus Schwab introduced Ukrainian comedian-cum-President Volodymyr Zelensky, on the latest leg of his weapons-solicitation-tour, with a glowing tribute. Herr Schwab stressed that an actor impersonating a president defending neo-Nazis is supported by “all of Europe and the international order.” He means, of course, everyone except the 88 percent of the planet that subscribes to the Rule of Law – instead of the faux construct the west calls a ‘rules-based international order.’ Back in the real world, Russia, slowly but surely has been rewriting the Art of Hybrid War. Yet within the carnival of NATO psyops, aggressive cognitive infiltration, and stunning media sycophancy, much is being made of the new $40 billion US ‘aid’ package to Ukraine, deemed capable of becoming a game-changer in the war. This ‘game-changing’ narrative comes courtesy of the same people who burned though trillions of dollars to secure Afghanistan and Iraq. And we saw how that went down. Ukraine is the Holy Grail of international corruption. That $40 billion can be a game-changer for only two classes of people: First, the US military-industrial complex, and second, a bunch of Ukrainian oligarchs and neo-connish NGOs, that will corner the black market for weapons and humanitarian aid, and then launder the profits in the Cayman Islands. A quick breakdown of the $40 billion reveals $8.7 billion will go to replenish the US weapons stockpile (thus not going to Ukraine at all); $3.9 billion for USEUCOM (the ‘office’ that dictates military tactics to Kiev); $5 billion for a fuzzy, unspecified “global food supply chain”; $6 billion for actual weapons and “training” to Ukraine; $9 billion in “economic assistance” (which will disappear into selected pockets); and $0.9 billion for refugees. US risk agencies have downgraded Kiev to the dumpster of non-reimbursing-loan entities, so large American investment funds are ditching Ukraine, leaving the European Union (EU) and its member-states as the country’s only option. Few of those countries, apart from Russophobic entities such as Poland, can justify to their own populations sending huge sums of direct aid to a failed state. So it will fall to the Brussels-based EU machine to do just enough to maintain Ukraine in an economic coma – independent from any input from member-states and institutions. These EU ‘loans’ – mostly in the form of weapons shipments – can always be reimbursed by Kiev’s wheat exports. This is already happening on a small scale via the port of Constanta in Romania, where Ukrainian wheat arrives in barges over the Danube and is loaded into dozens of cargo ships everyday. Or, via convoys of trucks rolling with the weapons-for-wheat racket. However, Ukrainian wheat will keep feeding the wealthy west, not impoverished Ukrainians. Moreover, expect NATO this summer to come up with another monster psyop to defend its divine (not legal) right to enter the Black Sea with warships to escort Ukrainian vessels transporting wheat. Pro-NATO media will spin it as the west being ‘saved’ from the global food crisis – which happens to be directly caused by serial, hysterical packages of western sanctions. Poland goes for soft annexation NATO is indeed massively ramping up its ‘support’ to Ukraine via the western border with Poland. That’s in synch with Washington’s two overarching targets: First, a ‘long war,’ insurgency-style, just like Afghanistan in the 1980s, with jihadis replaced by mercenaries and neo-Nazis.  Second, the sanctions instrumentalized to “weaken” Russia, militarily and economically. Other targets remain unchanged, but are subordinate to the Top Two: make sure that the Democrats are re-elected in the mid-terms (that’s not going to happen); irrigate the industrial-military complex with funds that are recycled back as kickbacks (already happening); and keep the hegemony of the US dollar by all means (tricky: the multipolar world is getting its act together). A key target being met with astonishing ease is the destruction of the German – and consequently the EU’s – economy, with a great deal of the surviving companies to be eventually sold off to American interests. Take, for instance, BMW board member Milan Nedeljkovic telling Reuters that “our industry accounts for about 37 percent of natural gas consumption in Germany” which will sink without Russian gas supplies. Washington’s plan is to keep the new ‘long war’ going at a not-too-incandescent level – think Syria during the 2010s – fueled by rows of mercenaries, and featuring periodic NATO escalations by anyone from Poland and the Baltic midgets to Germany. Last week, that pitiful Eurocrat posing as High Representative of the EU for Foreign Affairs and Security Policy, Josep Borrell, gave away the game when previewing the upcoming meeting of the EU Foreign Affairs Council. Borrell admitted that “the conflict will be long” and “the priority of the EU member states” in Ukraine “consists in the supply of heavy weapons.” Then Polish President Andrzej Duda met with Zelensky in Kiev. The slew of agreements the two signed indicate that Warsaw intends to profit handsomely from the war to enhance its politico-military, economic, and cultural influence in western Ukraine. Polish nationals will be allowed to be elected to Ukrainian government bodies and even aim to become constitutional judges. In practice, that means Kiev is all but transferring management of the Ukrainian failed state to Poland. Warsaw won’t even have to send troops. Call it a soft annexation. The steamroller on the move As it stands, the situation on the battlefield can be examined in this map. Intercepted communications from the Ukrainian command reveal their aim to build a layered defense from Poltava through Dnepropetrovsk, Zaporozhia, Krivoy Rog, and Nikolaev – which happens to be a shield for the already fortified Odessa. None of that guarantees success against the incoming Russian onslaught. It’s always important to remember that Operation Z started on February 24 with around 150,000 or so fighters – and definitely not Russia’s elite forces. And yet they liberated Mariupol and destroyed the elite neo-Nazi Azov batallion in a matter of only fifty days, cleaning up a city of 400,000 people with minimal casualties. While fighting a real war on the ground – not those indiscriminate US bombings from the air – in a huge country against a large army, facing multiple technical, financial and logistical challenges, the Russians also managed to liberate Kherson, Zaporizhia and virtually the whole area of the ‘baby twins,’ the popular republics of Donetsk and Luhansk. Russia’s ground forces commander, General Aleksandr Dvornikov, has turbo-charged missile, artillery and air strikes to a pace five times faster than during the first phase of Operation Z, while the Ukrainians, overall, are low or very low on fuel, ammo for artillery, trained specialists, drones, and radars. What American armchair and TV generals simply cannot comprehend is that in Russia’s view of this war – which military expert Andrei Martyanov defines as a “combined arms and police operation” – the two top targets are the destruction of all military assets of the enemy while preserving the life of its own soldiers. So while losing tanks is not a big deal for Moscow, losing lives is. And that accounts for those massive Russian bombings; each military target must be conclusively destroyed. Precision strikes are crucial. There is a raging debate among Russian military experts on why the Ministry of Defense does not go for a fast strategic victory. They could have reduced Ukraine to rubble – American style – in no time. That’s not going to happen. The Russians prefer to advance slowly and surely, in a sort of steamroller pattern. They only advance after sappers have fully surveilled the terrain; after all there are mines everywhere. The overall pattern is unmistakable, whatever the NATO spin barrage. Ukrainian losses are becoming exponential – as many as 1,500 killed or wounded each day, everyday. If there are 50,000 Ukrainians in the several Donbass cauldrons, they will be gone by the end of June. Ukraine must have lost as many as 20,000 soldiers in and around Mariupol alone. That’s a massive military defeat, largely surpassing Debaltsevo in 2015 and previously Ilovaisk in 2014. The losses near Izyum may be even higher than in Mariupol. And now come the losses in the Severodonetsk corner. We’re talking here about the best Ukrainian forces. It doesn’t even matter that only 70 percent of Western weapons sent by NATO ever make it to the battlefield: the major problem is that the best soldiers are going…going…gone, and won’t be replaced. Azov neo-Nazis, the 24th Brigade, the 36th Brigade, various Air Assault brigades – they all suffered losses of 60+ percent or have been completely demolished. So the key question, as several Russian military experts have stressed, is not when Kiev will ‘lose’ as a point of no return; it is how many soldiers Moscow is prepared to lose to get to this point. The entire Ukrainian defense is based on artillery. So the key battles ahead involve long-range artillery. There will be problems, because the US is about to deliver M270 MLRS systems with precision-guided ammunition, capable of hitting targets at a distance of up to 70 kilometers or more. Russia, though, has a counterpunch: the Hermes Small Operational-Tactical Complex, using high precision munitions, possibility of laser guidance, and a range of more than 100 kilometers. And they can work in conjunction with the already mass-produced Pantsir air defense systems. The sinking ship Ukraine, within its current borders, is already a thing of the past. Georgy Muradov, permanent representative of Crimea to the President of Russia and Deputy Prime Minister of the Crimean government, is adamant: “Ukraine in the form in which it was, I think, will no longer remain. This is already the former Ukraine.” The Sea of ​​Azov has now become a “sea of ​​joint use” by Russia and the Donetsk People’s Republic (DPR), as confirmed by Muradov. Mariupol will be restored. Russia has had plenty of experience in this business in both Grozny and Crimea. The Russia-Crimea land corridor is on. Four hospitals among five in Mariupol have already reopened and public transportation is back, as well as three gas stations. The imminent loss of Severodonetsk and Lysichansk will ring serious alarm bells in Washington and Brussels, because that will represent the beginning of the end of the current regime in Kiev. And that, for all practical purposes – and beyond all the lofty rhetoric of “the west stands with you” – means heavy players won’t be exactly encouraged to bet on a sinking ship. On the sanctions front, Moscow knows exactly what to expect, as detailed by Minister of Economic Development Maxim Reshetnikov: “Russia proceeds from the fact that sanctions against it are a rather long-term trend, and from the fact that the pivot to Asia, the acceleration of reorientation to eastern markets, to Asian markets is a strategic direction for Russia. We will make every effort to integrate into value chains precisely together with Asian countries, together with Arab countries, together with South America.” On efforts to “intimidate Russia,” players would be wise to listen to the hypersonic sound of 50 Sarmat state-of-the-art missiles ready for combat this autumn, as explained by Roscosmos head Dmitry Rogozin. This week’s meetings in Davos brings to light another alignment forming in the world’s overarching unipolar vs. multipolar battle. Russia, the baby twins, Chechnya and allies such as Belarus are now pitted against ‘Davos leaders’ – in other words, the combined western elite, with a few exceptions like Hungary’s Prime Minister Viktor Orban. Zelensky will be fine. He’s protected by British and American special forces. The family is reportedly living in an $8 million mansion in Israel. He owns a $34 million villa in Miami Beach, and another in Tuscany. Average Ukrainians were lied to, robbed, and in many cases, murdered, by the Kiev gang he presides over – oligarchs, security service (SBU) fanatics, neo-Nazis. And those Ukrainians that remain (10 million have already fled) will continue to be treated as expendable. Meanwhile, Russian President Vladimir “the new Hitler” Putin is in absolutely no hurry to end this larger than life drama that is ruining and rotting the already decaying west to its core. Why should he? He tried everything, since 2007, on the “why can’t we get along” front. Putin was totally rejected. So now it’s time to sit back, relax, and watch the Decline of the West. Tyler Durden Thu, 05/26/2022 - 02:00.....»»

Category: personnelSource: nytMay 26th, 2022

The crypto crash and the future of bitcoin — 3 perspectives from an economist, a researcher, and an investor

Experts from the Frankfurt School of Finance, Emden Research, and Rudy Capital spoke with Insider about how they saw the future of cryptocurrencies. From left: Timo Emden, Philipp Sandner, and Thomas Faber.Emden/ Thomas Faber /Frankfurt School Blockchain Center / filo /Namthip Muanthongthae / Getty Images Crypto markets have recently crashed as part of a global sell-off in risky assets. Bitcoin has fallen by 25% in the past month, while Luna has lost 99% of its value. Three crypto experts told Insider how they saw the future of cryptocurrencies. This is an edited, translated version of an article that originally appeared on May 21, 2022.TerraUSD (UST) — a stablecoin that uses an algorithm to maintain its value by keeping it pegged to the US dollar — recently broke away from its dollar peg, which caused its sister coin Luna to lose over 99% of its value.In an interview with Insider, Philipp Sandner, the head of the Frankfurt School Blockchain Center at the Frankfurt School of Finance & Management, said bitcoin and other crypto tokens had been "dragged along" with the crash of UST and Luna.Sandner said the collapse resulted from numerous overvaluations and inflated token prices, which he referred to as "almost monstrous structures" that have emerged in the cryptosystem. But it's not just UST that's causing problems for bitcoin and the crypto world. Rising interest rates also affect prices, said the crypto analyst Timo Emden of Emden Research, a research firm that focuses on cryptocurrencies and blockchain. "The days of 'cheap money' are over.""Rising interest rates are proving to be poison for risky asset classes," he said. "The fear of rapid interest-rate hikes, especially by the US Federal Reserve, is taking away one of bitcoin and company's most important stimuli in recent months," he continued, alluding to the record-low interest rates of the past few years.Bitcoin and other cryptocurrencies also appear to be correlated with tech stocks, as the crypto crash comes on the back of a sell-off in more established stocks.But Emden believed that it's still a "fantastic and promising" technology."All the swan songs to bitcoin are, in my view, too early," Emden said. But from a fundamental and technical point of view, the outlook has "clouded over considerably," he added.On bitcoin's price, Emden added that "a slide to $20,000 should not come as too much of a surprise."For the crypto analyst Thomas Faber of Rudy Capital, the current macro view is "relatively gloomy." But he feels the long-term outlook "remains positive." "Nothing has changed in the foundations, value propositions, and visions of most crypto projects," Faber said. "Its disruptive firepower in many areas, such as decentralized finance, remains unchanged and will continue to gain momentum in the coming years," he added. But in the short term, he said, investors should expect further declines.Emden said the recent crash indicated the current aversion to risky asset classes. "Investors are fleeing their investments in panic," he said. "No one wants to catch the falling knife at the moment. Bargain hunters continue to stay away. The fundamental, as well as the technical, situation remains clouded. The stock-market lights are still red," Emden added.Many investors must decide whether to try to wait out the crash or sell off their remaining book profits at the "last second," he said."So there's a danger of the downward spiral continuing. Momentum has developed, which is difficult to stop," Emden continued. He added that investors should prepare for further uncertainties in the coming hours and days.For Sandner, the crypto crash leaves "a lot of scorched earth" for investors, especially those who "never really engaged with cryptocurrencies, but just invested in any old tokens."The professor believed that we were in one of the "worst crises for crypto assets.""Being part of the crypto scene has given me a thick skin over the years," Sandner said.He's experienced such crashes a few times. He said the first time you experience a crash, "you're shocked. The second time, you're also shocked because you thought it wouldn't happen again. But then you realize that crypto markets, just like stock markets, are often incredibly overvalued."Sandner believed this wouldn't be the last crypto crash: "Sometime in a few years, bitcoin will plummet again." He said this volatility provided an argument for stricter regulation to contain crypto's "wild growth."Sandner said that many people "have lost a lot of money" and now don't have the resources or the will to invest more, so they're "turning their backs" on crypto. He added that this creates a lack of liquidity and means the price can't rise.Sandner didn't believe that crypto prices would continue to fall further at the moment. "My gut feeling is that we've reached the bottom," he said.Bitcoin has fallen by about 25% in the past month, while ethereum has fallen by about 35%, and solana by about 50%. It appears that the tokens all correlate with each other, Sandner said.If bitcoin fell another 25%, then because of the correlation, the other cryptocurrencies would fall another 35% or 50%, which means they would have crashed by about 75% in just a few weeks, he added."Maybe a lot of things were inflated, but I can't see the tokens only holding around 20% of their original value," Sandner said. But he added that "anything is possible with bitcoin."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 25th, 2022

Meet The Globalists: Here Is The Full Roster Of Davos 2022 Attendees

Meet The Globalists: Here Is The Full Roster Of Davos 2022 Attendees The infamous World Economic Forum (WEF) will host its annual meeting in Davos this week, and Jordan Schachtel,via 'The Dossier' Substack, is going to make sure you know who is attending the invite-only gathering. For those of you who are new to this nefarious organization: The World Economic Forum (WEF), through its annual Davos conference, acts as the go-to policy and ideas shop for the ruling class. The NGO is led by a comic book villain-like character in Klaus Schwab, its megalomaniac president who articulates a truly insane, extremist political agenda for our future. Heard one of your politicians declaring support for the “Build Back Better” agenda? How about the “Great Reset?” All of those bumper sticker political narratives were popularized by the World Economic Forum. Have you read about the ESG (Environmental, Social, and Governance) movement? That’s also a WEF favorite. Davos 2022 includes the usual components of WEF’s “you’ll own nothing and you’ll be happy” totalitarian eco statist agenda. Topics discussed and panels at the 2022 meeting will include: Experience the future of cooperation: The Global Collaboration Village Staying on Course for Nature Action Future-proofing Health Systems Accelerating the Reskilling Revolution (for the “green transition”) The ‘Net’ in Net Zero The Future of Globalization Unlocking Carbon Markets And of course, a Special Address by Volodymyr Zelenskyy, President of Ukraine The American contingent will include 25 politicians and Biden Administration officials. US Secretary of Commerce Gina Raimondo will join Climate Czar John Kerry as the White House representatives there. They will be joined by 12 democrat and 10 republican politicians, including 7 senators and two state governors Without further delay, I’ve provided the entire list of attendees who are showing up to Davos next week. I’ll list the Americans below and the rest are linked below that in an attached document. Gina Raimondo Secretary of Commerce of USA USA John F. Kerry Special Presidential Envoy for Climate of the United States of America Bill Keating Congressman from Massachusetts (D) Daniel Meuser Congressman from Pennsylvania (R) Madeleine Dean Congresswoman from Pennsylvania (D Ted Lieu Congressman from California (D) Ann Wagner Congresswoman from Missouri (R) Christopher A. Coons Senator from Delaware (D) Darrell Issa Congressman from California (R) Dean Phillips Congressman from Minnesota (D) Debra Fischer Senator from Nebraska (R) Eric Holcomb Governor of Indiana (R) Gregory W. Meeks Congressman from New York (D) John W. Hickenlooper Senator from Colorado (D) Larry Hogan Governor of Maryland (R) Michael McCaul Congressman from Texas (R) Pat Toomey Senator from Pennsylvania (R) Patrick J. Leahy Senator from Vermont (D) Robert Menendez Senator from New Jersey (D) Roger F. Wicker Senator from Mississippi (R) Seth Moulton Congressman from Massachusetts (D) Sheldon Whitehouse Senator from Rhode Island (D) Ted Deutch Congressman from Florida (D) Francis Suarez Mayor of Miami (R) Al Gore Vice-President of the United States (1993-2001) (D) Full list of confirmed attendees of 2022 World Economic Forum Annual Meeting Here’s the PDF File in case the link goes down. There is one member of the 'elites' that is not going to be there (and never has). As Mohamed El-Erian writes in an op-ed at Bloomberg, Davos meetings are full of potential but rarely full of solutions. I have never taken up the opportunity to attend the Davos meeting and I will pass again this year. That, however, does not mean that I do not follow its evolution and outcomes. I am certainly interested in what could emerge from a meeting that brings together so many leaders of governments, civil society and business. In an ideal world, this year’s meeting would prove catalytic in two important ways.  First, it would trigger greater awareness of ongoing watershed developments in the global economy and draw attention to how differently these are viewed around the world. And second, it would point to ways in which an increasingly “zero-sum” view of international coordination can be reshaped to contribute to collective resilience and inclusive prosperity. The list of ongoing watershed developments in the global economy is long, extending well beyond the horrific war in Ukraine and the associated human tragedies. Here is an example of what is on such a list: Due to the convergence of food, energy, debt and growth crises, a growing number of poorer countries face a rising threat of famine — and this is but one part of the “little fires everywhere” phenomenon undermining lives and livelihoods around the world. Inflation at 40-year highs in wealthier countries is undermining standards of living and growth engines, hitting the poor particularly hard, fueling political anger, eroding institutional credibility, and undermining the effectiveness of economic and financial policy. The inability to deal with critical secular challenges, including climate change, is seeing short-term distractions compound what already are meaningful long-term challenges. Private- and public-sector efforts to strike a better balance between highly interconnected supply chains and national/corporate resilience are complicated by a global economy that lacks sufficient momentum for this to be done in an orderly fashion. The western weaponization of international finance, while effective in bringing the eleventh largest economy in the world to its knees, has been pursued without a global framework of standards, guidelines and safeguards. I suspect that, while the vast majority of Davos participants will agree on this list (and, indeed, add a few more items), there will be quite a bit of disagreement on the causes and longer-term consequences. Such disagreement is problematic in two ways. First, it undermines the shared responsibility needed to address challenges with important international dimensions; and second, it erodes even more trust in the existing international order. Unless the disagreements can be resolved, the damaging effects will deepen and spread.  On paper, the upcoming Davos meeting would be perfectly suited for resolving these conflicts. History, however, does not provide much encouragement or optimism. Time and time again, Davos has fallen victim to a lack of focus and actionable unifying vision. Individual and collective interests have remained unreconciled. Distractions abound. As a result, the output has been, at best, backward-leaning. Given the multiple crossroads facing the global economy, this would be a particularly good time for Davos to fulfill its considerable potential — to look ahead, not back. To identify solutions instead of just problems. Otherwise, the forum will evolve even more into a network and social club that is, and is widely perceived to be, even more decoupled from the realities of many and the challenges of most. Tyler Durden Mon, 05/23/2022 - 02:00.....»»

Category: blogSource: zerohedgeMay 23rd, 2022

"Extremely Tense" Beer Bottle Shortage Emerges Ahead Of Germany"s Oktoberfest

"Extremely Tense" Beer Bottle Shortage Emerges Ahead Of Germany's Oktoberfest The world's largest beer festival, "Oktoberfest," situated in Munich, Germany, is four months away, and the country's energy crisis has sparked a beer bottle shortage.  Germany is Europe's largest manufacturing hub and faces exorbitantly high energy costs, rapid inflation, and a breakdown in supply chains, pressuring energy-intensive glass manufacturers. This economic backdrop alone could unleash stagflation.  Holger Eichele of the German Brewers' Federation told the German newspaper Bild the beer bottle shortage would impact small- and medium-sized breweries the hardest. He described the situation as "extremely tense" as the rising cost of production and logistics problems plague breweries.  "If you don't have long-term contracts, you currently have to pay 80% more for new glass bottles than you did a year ago. Some breweries are threatened with idling, they may soon be without bottles," Eichele warned.  Bild found the shortage of glass bottles is due to the soaring cost of fossil fuels, such as natural gas and diesel.  "The current energy price crisis poses major challenges for the energy-intensive glass industry. Energy costs have risen by up to 500% compared to the previous year ... These costs alone account for up to 20% of the operating costs in the glass industry," a spokeswoman for the Federal Glass Industry Association said.  A spokesperson for the century-old Radeberger brewery, located four hours northeast of Oktoberfest, said the beverage and brewing industry is strained and will worsen through summer. It remains to be seen how a beer bottle shortage affects Oktoberfest, scheduled for late September.  Tyler Durden Sun, 05/22/2022 - 07:35.....»»

Category: blogSource: zerohedgeMay 22nd, 2022

Why Is Crude Oil Ignoring US Inventories?

While the current pull-back on black gold is fundamentally triggered by different forces, where is the prevailing wind coming from that is pushing prices lower? On Wednesday, the day after the US Fed’s Chair Powell showed a more hawkish tone, crude oil prices dropped 2.5% following profit-takings on most commodity markets – new fears emerged […] While the current pull-back on black gold is fundamentally triggered by different forces, where is the prevailing wind coming from that is pushing prices lower? On Wednesday, the day after the US Fed’s Chair Powell showed a more hawkish tone, crude oil prices dropped 2.5% following profit-takings on most commodity markets – new fears emerged that a world economic slowdown combined with rising interest rates could negatively impact the global demand. By the way, talking about profit-takings, our subscribers took theirs on Monday within the last phases of the strong rally in crude oil that hit our last projected targets. 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); Q1 2022 hedge fund letters, conferences and more United States Crude Oil Inventories The commercial crude oil reserves in the United States unexpectedly dropped in the week ended May 13, according to figures released on Wednesday by the US Energy Information Administration (EIA). US crude inventories have decreased by almost 3.4 million barrels, which implies greater demand and would normally be considered a bullish factor for crude oil prices. However, it appears that with the US Federal Reserve’s sustained hawkish tone, which contributes to pushing commodities to the lower side, the market does not pay as much attention to US crude inventories, which are relegated to the background… (Source: Investing.com) WTI Crude Oil (CLM22) Futures (June contract, daily chart) United States Gasoline Inventories On the other hand, some additional figures extracted from the same EIA report were released: These are US Gasoline Reserves, which plunged by almost 4.78 million barrels over a week, while the market forecasted a decline of only 1.33 million barrels. (Source: Investing.com) RBOB Gasoline (RBM22) Futures (June contract, daily chart) Consequently, despite demand for black gold, which nevertheless remains at a high level according to the two above figures, crude oil prices continued to slide on Thursday. They proceeded with their decline from the previous day, still dampened by fears of a global economic slowdown. The possible easing of US sanctions against Venezuela could be considered another bearish factor, coming in addition to the Hungarian veto on the EU’s plan to ban Russian oil. The European problems didn’t stop there, as Turkey opposed the opening of talks on the NATO membership extension to Finland and Sweden after the two Nordic countries submitted a formal application. The current situation of Hungary is quite understandable, since the Central European country is particularly dependent on Russian hydrocarbons. So, what do you think will now happen to black gold? Let us know in the comments. That’s all, folks, for today. Happy trading! Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien Bischeri Oil & Gas Trading Strategist The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Updated on May 19, 2022, 11:14 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkMay 19th, 2022

Saga Partners 1Q22 Commentary: Carvana And Redfin

Saga Partners commentary for the first quarter ended March 31, 2022. During the first quarter of 2022, the Saga Portfolio (“the Portfolio”) declined 42.4% net of fees. This compares to the overall decrease for the S&P 500 Index, including dividends, of 4.6%. The cumulative return since inception on January 1, 2017, for the Saga Portfolio […] Saga Partners commentary for the first quarter ended March 31, 2022. During the first quarter of 2022, the Saga Portfolio (“the Portfolio”) declined 42.4% net of fees. This compares to the overall decrease for the S&P 500 Index, including dividends, of 4.6%. The cumulative return since inception on January 1, 2017, for the Saga Portfolio is 112.0% net of fees compared to the S&P 500 Index of 122.7%. The annualized return since inception for the Saga Portfolio is 15.4% net of fees compared to the S&P 500’s 16.5%. Please check your individual statement as specific account returns may vary depending on timing of any contributions throughout the period. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Interpretation of Results I was not originally planning to write a quarterly update since switching to semi-annual updates a few years ago but given the current drawdown in the Saga Portfolio I thought our investors would appreciate an update on my thoughts surrounding the Portfolio and the current market environment in general. The Portfolio’s drawdown over the last several months has been hard not to notice even for those who follow best practices of only infrequently checking their account balance. Outperformance vs. the S&P 500 since inception has flipped to underperformance on a mark-to-market basis and the stock prices of our companies have continued to decline into the second quarter. In past letters I have spent a lot of time discussing the Saga Portfolio’s psychological approach to investing to help prepare for the inevitable chaos that will occur while investing in the public markets from time-to-time. It’s impossible to know why the market does what it does at any point in time. I would argue that the last two years could be considered pretty chaotic, both on the upside speculation and now what appears to be on the downside fear and panic. I will attempt to give my perspective on how events played out within the Saga Portfolio with an analogy. Let’s say that in 2019 we owned a fantastic home that was valued at $500,000. We loved it. It was in a great neighborhood with good schools for our kids. We liked and trusted our neighbors; in fact, we gave them a spare key in case of emergencies. It was the perfect home for us to live in for many years to come. Based on the neighborhood becoming increasingly attractive over time, it was likely that our home may be valued around $2 million in ~10 years from now. This is strong appreciation (15% IRR) compared to the average home, but this specific home and neighborhood had particularly strong long-term fundamental tailwinds that made this a reasonable expectation. Then in 2020 a global pandemic hit causing a huge disorientation in the housing market. For whatever reasons, the appraised value of our home almost immediately doubled to $1 million. Nothing materially changed about what we thought our home would be worth in 10 years, but now from the higher market value, the home would only appreciate at a lower 7% IRR assuming it would still be worth $2 million in 10 years. What were our options under these new circumstances? We could move and try to buy a new home that provided a higher expected return. However, the homes in the other neighborhoods that we really knew and liked also doubled in price, so they did not really provide any greater value. Also, the risk and hassle of moving for what may potentially only be modestly better home appreciation did not make sense. We could buy a home in a less desirable neighborhood where prices looked relatively cheaper, but we would not want to live long-term. Even if we decided to live there for many years, the long-term fundamental dynamics of the crummy neighborhood were weak to declining and it was uncertain if the property would appreciate at all despite its lower valuation. We could sell our home for $1 million and rent a place to live for the interim period while holding cash and waiting for the market to potentially correct. However, we did not know if, when, or to what extent the market would correct and the thought of renting a place temporarily for our family was unappealing. For the Saga family, we decided to stay invested in the home that we knew, loved, and still believed had similar, if not stronger prospects following the COVID-induced surge in demand in our neighborhood. Now, for whatever reason, the market views our neighborhood very poorly and the appraised value of our home declined to $250,000, below any previous appraisals. It seems odd because it is the exact same home and the fundamentals of the neighborhood are much stronger than several years ago, suggesting that the expected $2 million value in the future is even more probable than before. It is a very peculiar situation, but the market can do anything at any moment. Fortunately, the lower appraisal value does not impact how much we still love our home, neighborhood, schools, or what the expected future value will be. In fact, we prefer a lower value because our property taxes will be lower! One thing is for certain, we would never sell our home for $250,000 simply because the appraised value has declined from prior appraisals. We would also never dream of selling in fear that the downward price momentum continues and then hopefully attempt to buy it back one day for $200,000. We can simply sit tight for as long as we want while the neighborhood around us continues to improve fundamentally over time, fully expecting the value of our home to eventually go up with it. It just so happens humans are highly complex beings and do not always react in what an economist may consider a rational way. Our emotions are highly contagious. When someone smiles at you, the natural reaction is to smile back. When someone else is sad, you feel empathy. These are generally great innate characteristics for helping to build the strong relationships with friends and family that are so important throughout life. But it also means that when other people are scared, it also makes you feel scared. And when more and more people get scared, that fear can cascade exponentially and turn into panic, which can cause people to do some crazy things, especially when it comes to making long-term decisions. As fear spreads, all attention shifts from thinking about what can happen over the next 5-10+ years to the immediate future of what will happen over the next day or even hour. Of course, during times of panic, “this time is always different.” It may very well be the case, but the world can only end once. Historically speaking, things have tended to work out pretty well over time on average. I am by no means immune to these contagious feelings. My way of coping with how I am innately wired is by accepting this fact and then trying to know what I can and cannot control. A core part of my investing philosophy is that I do not know what the market will do next, and I never will. Inevitably the market or a specific stock will crash, as it does from time-to-time. This “not timing the market” philosophy or treating our public investments from the perspective of a private owner may feel like a liability during a drawdown, but it is this same philosophy of staying invested in companies we believe to have very promising futures which positions us perfectly for the inevitable recovery. Eventually, emotions and the business environment will normalize, and the storm will pass. It could be next quarter, year, or even in several years, but we will be perfectly positioned for the recovery, at which point the stock price lows will likely be long gone. The whole investing process improves if one can really take the long-term view. However, it is not natural for people to think long-term particularly when it comes to owning pieces of publicly traded companies. It is far more natural to want to act by jumping in and out of stocks in an attempt to outsmart others who are trying to outsmart you. When the market price of your ownership in a business is available and fluctuating wildly every single day, it is hard to ignore and not be influenced by it. While one can get lucky through speculation, the big money is made by investing, by owning great businesses and letting them compound owner’s capital over many years. As the market has evolved over the last few decades, there appears to be an ever-increasing percent of “investors” who are effectively short-term renters, turning over the companies in their portfolios so quickly that they never really know the business that lies below the surface of the stock. While more of Wall Street is increasingly focused on the next quarter, a potentially looming recession, the Fed’s next interest rate move, or trying to time the market’s rotation from one industry into another, we are trying to think about what our companies’ results will be in the year 2027, or better yet 2032 and beyond. The most significant advantage of investing in the public market is the ability to take advantage of it when an opportunity presents itself or to ignore the market when there is nothing to do. The key to success is never giving up this advantage. You must be able to play out your hand and not be forced to sell your assets at fire sale prices. Significant portfolio declines are a good reminder of the importance of only investing money that you will not need for many years. This prevents one from being in a position where it is necessary to liquidate when adverse psychology has created unusually low valuations. However, we do not want to simply turn a blind eye to stock price declines of 50% or more and dig our heals into the ground believing the market is just being irrational. When the world is screaming at you that it believes your part ownership in these companies is worth significantly less than the market believed not too long ago, we attempt to understand if we are missing something by continually evaluating the long-term outlooks of our companies using all the relevant information that we have today from a first principles basis. Portfolio Update Instead of frequently checking a stock’s price to determine whether the company is making progress, I prefer looking to the longer-term trends of the business results. There will be stronger and weaker quarters and years since business success rarely moves up and to the right in a perfectly straight line. As a company faces headwinds or tailwinds from time-to-time, the stock price may fluctuate wildly in any given year, however the underlying competitive dynamics and business models that drive value will typically change little. Regarding our companies as a whole, first quarter results reflected a general softness in certain end markets, including the used car, real estate, and advertising markets. However, the Saga Portfolio’s companies, on average, provide a superior customer value proposition difficult for competitors to match. Most of them have a cost advantage compared to competitors; therefore, the worse it gets for the economy, the better it gets for our companies’ respective competitive positions over the long-term. For example, first quarter industry-wide used car volumes declined 15% year-over-year while Carvana’s retail units increased 14%. Existing home sales decreased 5% during the quarter while Redfin’s real estate transactions increased 1%. Digital advertising is expected to grow 8-14% in 2022 while the Trade Desk grew Q1’22 revenues 43% and is expected to grow them more than 30% for the full year 2022. While industry-wide TV volumes remain below 2019 pre-COVID levels, Roku gained smart TV market share sequentially during the quarter, continuing to be the number one TV operating system in the U.S. and number one TV platform by hours streamed in North America. Weaker industry conditions will inevitably impact our companies’ results; however, our companies should continue to take market share and come out on the other side of any potential economic downturn stronger than when they went in. For the portfolio update, I wanted to provide a more in-depth update on Carvana and Redfin which have both experienced particularly large share price declines and have recent developments that are worth reviewing. Carvana I first wrote about Carvana Co (NYSE:CVNA) in this 2019 write-up. I initially explained Carvana’s business, superior value proposition compared to the traditional dealership model, attractive unit economics, and how they were uniquely positioned to win the large market opportunity. Since then, Carvana has by far exceeded even my most optimistic initial expectations. While the company did benefit following COVID in the sense that customers’ willingness to buy and sell cars through an online car dealer accelerated, the operating environment over the last two years has been very challenging. Carvana executed exceedingly well considering the shifting customer demand in what is a logistically intensive operation and what has been a tight inventory environment due to supply chain issues restricting new vehicle production. Sales, gross profits, and retail units sold have grown at a remarkable 104%, 151%, and 87% CAGR over the last five years, respectively. Source: Company filings Shares have come under pressure following their first quarter results, which reflected larger than expected losses. The quarter was negatively impacted by a combination of COVID-related logistical issues in their network that started towards the end of the fourth quarter as Omicron cases spread. Employee call off rates related to Omicron reached an unprecedented 30% that led to higher costs and supply chain bottlenecks. As less inventory was available due to these problems, it led to less selection and longer delivery times, lowering customer conversion rates. Additionally, interest rates increased at a historically fast rate during the first quarter which negatively impacted financing gross profits. Carvana originates loans for customers and then sells them to investors at a later date. If interest rates move materially between loan origination and ultimately selling those loans, it can impact the margin Carvana earns on underwriting those loans. Industry-wide used car volumes were also down 15% year-over-year during the first quarter. While Carvana continues to grow and take market share, its retail unit volume growth was slower than initially anticipated, up only 14% year-over-year. Carvana has been in hyper growth mode since inception and based on the operational and logistical requirements of the business, typically plans, builds, and hires for expected capacity 6-12 months into the future. This has historically served Carvana well given its exceptionally strong growth, but when the company plans and hires for higher capacity than what occurs, it can lead to lower retail gross profits and operating costs per unit sold. When combined with lower financing gross profits in the quarter from rising interest rates, losses were greater than expected. In February, Carvana announced a $2.2 billion acquisition of ADESA (including an additional $1 billion plan to build out the reconditioning sites) which had been in the works for some time. ADESA is a strategic acquisition to help accelerate Carvana’s footprint expansion across the country, growing its capacity from 1.0 million units at the end of Q1’22 to 3.2 million units once complete over the next several years. It is unfortunate the acquisition timing followed a difficult quarter that had greater than expected losses, combined with a generally tighter capital market environment. Carvana ended up raising $3.25 billion in debt ($2.2 billion for the acquisition and $1 billion for the buildout) at a higher than initially expected 10.25% interest rate. Given these higher financing costs and first quarter losses, they issued an additional $1.25 billion in new equity at $80 per share, increasing diluted shares outstanding by ~9%. Despite the short-term speedbumps surrounding logistical issues, softer industry-wide demand, and a higher cost of capital to acquire ADESA, Carvana’s long-term outlook not only remains intact but looks even more promising than before. To better understand why this is the case and where Carvana is in its lifecycle, it helps to provide a little background on the history of retail. While e-commerce is a more recent phenomena that developed from the rise of the internet in the 1990s, the retail industry has undergone several transformations throughout history. In retailing, profitability is determined by two factors: the margins earned on inventory and the frequency with which they can turn inventory. Each successive retail transformation had a similar economic pattern. The newer model had greater operating leverage (higher fixed costs, lower variable costs). This resulted in greater economies of scale (lower cost per unit) and therefore greater efficiency (higher asset turnover) with size that enabled them to charge lower prices (lower gross margins) than the preceding model and still provide an attractive return on capital. The average successful department store earned gross margins of ~40% and turned inventory about 3x per year, providing ~120% annual return on the capital invested in inventory. The average successful big box retailer earned ~20% gross margins and turned its inventory 5x per year. Amazon retail earns ~10% gross margins (including fulfillment costs in COGS) and turns inventory at a present rate of 12x times annually. The debate that surrounds any subscale retailer, particularly in e-commerce, is whether they have enough capital/runway to build out the required infrastructure and then scale business volume to spread fixed costs over enough units. Before reaching scale, analysts may point to an online business’ lower price points (“how can they charge such low prices?!”), higher operating costs per unit (“they lose so much money per item!”), and ongoing losses and capital investments (“they spend billions of dollars and still have not made any money!”) as evidence that the model does not make economic sense. Who can blame them since the history books are filled with companies that never reached scale? However, if the retailer does build the infrastructure and there is sufficient demand to spread fixed costs over enough volume, the significant capital investment and high operating leverage creates high barriers to entry. If we look to Amazon as the dominant e-commerce company today, once the infrastructure is built and reaches scale, there is little marginal cost to serve any prospective customer with an internet connection located within its delivery footprint. For this reason, I have always been hesitant to invest in any e-commerce company that Amazon may be able to compete with directly, which is any mid-sized product that fits in an easily shippable box. As it relates to used car retailing, the infrastructure required to ship and recondition cars is unique, and once built, the economies of scale make it nearly impossible for potential competitors to replicate. Carvana is in the very early stages of building out its infrastructure. There is clearly demand for its attractive customer value proposition. It has demonstrated an ability to scale fixed costs in earlier cohorts as utilization of capacity increases, providing attractive unit economics at scale. Newer market cohorts are tracking at a similar, if not faster market penetration rate as earlier cohorts. Carvana is still investing heavily in building out a nationwide hub-and-spoke transportation network and reconditioning facilities. In 2021 alone, Carvana grew its balance sheet by $4 billion as it invested in its infrastructure while also reaching EBITDA breakeven for the first time. The Amazon story is a prime example (pun intended) of a new and better business model (more attractive unit economics) that delivered a superior value proposition and propelled the company ahead of its competition, similar to the underlying dynamics occurring in the used car industry today. Amazon invested heavily in both tangible and intangible growth assets that depressed earnings and cash flow in its earlier years (and still today) while growing its earning power and the long-term value of the business. The question is, does Carvana have enough capital/liquidity to build out its infrastructure and scale business volume to then generate attractive profits and cash flow? Following Carvana’s track record of scaling operating costs and reaching EBITDA breakeven in 2021, the market was no longer concerned about its liquidity position or the sustainability of its business model. However, the recent quarterly loss combined with taking on $3 billion in debt to buildout the 56 ADESA locations across the country raises the question of whether Carvana has enough liquidity to reach scale. Carvana’s current stock price clearly reflects the market discounting the probability that Carvana will face liquidity issues and therefore have to raise further capital at unfavorable terms. However, I think if you look a little deeper, Carvana has clearly demonstrated highly attractive unit economics. It has several levers to pull to protect it from any liquidity concerns if needed. The $2.6 billion in cash (as well as $2 billion in additional available liquidity in unpledged real estate and other assets) it has following the ADESA acquisition, is more than enough to sustain a potentially prolonged decline in used car demand. The most probable scenario over the next several quarters is that Carvana will address its supply chain and logistical issues that were largely due to Omicron. As the logistical network normalizes, more of Carvana’s inventory will be available to purchase on their website with shorter delivery times, which will increase customer conversion rates. This will lead to selling more retail units, providing higher inventory turnover and lower shipping costs, and therefore gross profit per unit will recover from the first quarter lows. Other gross profit per unit (which primarily includes financing) will also normalize in a less volatile interest rate environment. Combined total gross profit per unit should then approach normalized levels by the end of the year/beginning of 2023 (~$4,000+ per unit). Like all forms of leverage, operating leverage works both ways. For companies with higher operating leverage, when sales increase, profits will increase at a faster rate. However, if sales decrease, profits will decrease at a faster rate. While Carvana has high operating leverage in the short-term, they do have the ability adjust costs in the intermediate term to better match demand. When demand suddenly shifts from plan, it will have a substantial impact on current profits. First quarter losses were abnormally high because demand was lower than expected. Although, one should not extrapolate those losses far into the future because Carvana has the ability to better adjust and match its costs structure to a lower demand environment if needed. As management better matches costs with expected demand, operating costs as a whole will remain relatively flat if not decline throughout the year as management has already taken steps to lower expenses. As volumes continue to grow at the more moderate pace reflected in the first quarter and SG&A remains flat to slightly declining, costs per unit will decline with Carvana reaching positive EBITDA per unit by the second half of 2023 in this scenario. Source: Company filing, Saga Partners Source: Company filing, Saga Partners With the additional $3.2 billion in debt, Carvana will have a total interest expense of ~$600 million per year, assuming no paydown of existing revolving facilities or net interest income on cash balances. Management plans on spending $1 billion in capex to build out the ADESA locations. They are budgeting for ~$40 million in priority and elective capex per quarter going forward suggesting the build out will take ~6 years. Total capex including maintenance is expected to be $50 million a quarter. Carvana would reach positive free cash flow (measured as EBITDA less interest expense less total Capex) by 2025. Note this assumes the used car market remains depressed throughout 2022 and then Carvana’s retail unit growth increases to 25% a year for the remainder of the forecast and no benefit in lower SG&A or increased gross profit per unit from the additional ADESA locations was assumed. Stock based compensation was included in the SG&A below so actual free cash flow would be higher than the chart indicates. Source: Company filings, Saga Partners Note: Free cash flow is calculated as EBITDA less interest expense less capex After the close of the ADESA acquisition, Carvana has $2.6 billion in cash (plus $2 billion in additional liquidity from unpledged assets if needed). Assuming the above scenario, Carvana has plenty of cash to endure EBITDA losses over the next year and a half, interest payments, and capex needs. Source: Company filings, Saga Partners The above scenario does not consider the increasing capacity that Carvana will have as it continues to build out the ADESA locations. After building out all the locations, Carvana will be within one hundred miles of 80% of the U.S. population. This unlocks same-day and next-day delivery to more customers, leading to higher customer conversion rates, higher inventory turn, lower risk of delivery delays, and lower shipping costs, which all contribute to stronger unit economics. Customer proximity is key. Due to lower transport costs, faster turnaround times on acquired vehicles, and higher conversion from faster delivery speeds, a car picked up or delivered within two hundred miles of a recondition center generates $750 more profit than an average sale. It is possible that industry-wide used car demand remains depressed or even worsens for an extended period. If this were the case, management has the ability to further optimize for efficiency by lowering operating costs to better match demand. This is what management did following the COVID demand shock in March 2020. The company effectively halted corporate hiring and tied operational employee hours to current demand as opposed to future demand. During the months of May and June 2020, SG&A (ex. advertising expense and D&A) per unit was $2,600, far lower than the $3,440 reported in 2020 or $3,654 in 2021. Carvana has also historically operated between 50-60% capacity utilization, indicating further room to scale volumes across its existing infrastructure without the need for materially greater SG&A expenses. Advertising expense in older cohorts reached ~$500 per unit, compared to the $1,126 reported for all of 2021, while older cohorts still grew at 30%+ rates. If needed, Carvana could improve upon the $2,600 SG&A plus $500 advertising expense ($3,100 in total) per unit at its current scale and be far below gross profit per unit even if used car demand remains depressed for an extended period of time. When management optimizes for efficiency as opposed to growth, it has the ability to significantly lower costs per unit. Carvana has highly attractive unit economics and I fully expect management will take the needed measures to right size operating costs with demand. They recently made the difficult decision to layoff ~2,500 employees, primarily in operations, to better balance capacity with the demand environment. If we assume it takes six years to fully build out the additional ADESA reconditioning locations, Carvana will have a total capacity of 3.2 million units in 2028. If Carvana is running at 90% utilization it could sell 2.9 million retail units (or ~7% of the total used car market). If average used car prices decline from current levels and then follow its more normal longer-term price appreciation trends, the average 2028 Carvana used car price would be ~$23,000 and would have a contribution profit of ~$2,000 per unit at scale. This would provide nearly $5.6 billion in EBITDA. After considering expected interest expense, maintenance capex, and taxes, it would provide over $4 billion in net income. If Carvana realizes this outcome in six years, the company looks highly attractive (perhaps unreasonably attractive) compared to its current $7 billion market cap or $10 billion enterprise value (excluding asset-based debt). Redfin I recently wrote about Redfin Corp (NASDAQ:RDFN) in this December 2021 write-up. I explained how Redfin has increased the productivity of real estate agents by integrating its website with its full-time salaried agents and then funneling the demand aggregated on its website to agents. Redfin agents do not have to spend time prospecting for business but can rather spend all their time servicing clients throughout the process of buying and selling a home. Since Redfin agents are three times more productive than a traditional agent, Redfin is a low-cost provider, i.e., it costs Redfin less to close a transaction than a traditional brokerage at scale. It is a similar concept as the higher operating leverage of e-commerce relative to brick & mortar retailers. Redfin has higher operating leverage compared to the traditional real estate brokerage. Real estate agents are typically contractors for a brokerage. They are largely left alone to run their own business. Agents have to prospect for clients, market/advertise listings, do showings, and service clients throughout each step of the real estate transaction. Everything an agent does is largely a variable cost because few of their tasks are automated. Redfin, on the other hand, turned prospecting for demand, marketing/advertising listings, and investments in technology to help agents and customers throughout the transaction into more of a fixed cost. These costs are scalable and become a smaller cost per transaction as total transaction volumes grow across the company. Because Redfin is a low-cost provider, it has a relative advantage over traditional brokerages. No other real estate brokerage has lowered or attempted to lower the costs of transacting real estate in a similar way. This cost advantage provides Redfin with options about how to share these savings on each transaction. Redfin has primarily shared the cost savings with customers by charging lower commission rates than traditional brokerages. By offering a similar, if not superior, service to customers compared to other brokerages yet charging lower fees, it naturally attracts further demand which then provides Redfin with the ability to scale fixed costs per transaction even more, further widening their cost advantage to other brokerages. So far, the majority of those cost savings are shared with home sellers as opposed to homebuyers. Sellers are more price sensitive than homebuyers because the buyer’s commission is already baked into the seller’s contract and therefore buyers have not directly paid commissions to agents historically. Also, growing share of home listings is an important component of controlling the real estate transaction. The seller’s listing agent is the one who controls the property, decides who sees the house, and manages the offers and negotiations. Therefore, managing more listings enables Redfin to have more control over the transaction and further streamline/reduce inefficiencies for the benefit of both potential buyers and sellers. Redfin also spends some of their cost savings by reinvesting them back into the company by hiring software engineers to build better technology to continue to lower the cost of the transaction. This may include building tools for agents to service clients better, improving the web portal and user interfaces, on-demand tours for buyers to see homes first, automation to give homeowners an immediate RedfinNow offer, etc. Redfin also invests in building other business segments like mortgage, title forward, and iBuying which provide a more comprehensive real estate offering for customers which attracts further demand. So far, the lower costs per transaction have not been shared with shareholders in the form of dividends or share repurchases, and for good reason. In theory, Redfin could charge industry standard prices and increase revenue immediately by 30-40% which would drop straight to the bottom-line assuming demand would remain stable. However, giving customers most of the savings through lower commissions has obviously been one of the drivers for attracting demand and growing transaction volume, particularly for home sellers. The greater the number of transactions, the lower the fixed costs per transaction, which further increases Redfin’s cost advantage compared to traditional brokerages, which provides Redfin with even more money per transaction to share with either customers, employees, and eventually shareholders. With just over 1% market share, Redfin should be reinvesting in growing share which will increase the value of the business and inevitably benefit long-term owners of the company. Redfin’s stock price has experienced an especially large decline this year. I typically prefer to not attempt to place an explanation or narrative on short-term stock price movements, but I will do it anyways given the substantial drop. There are primarily two factors contributing to the market’s negative view of the company: first, the market currently dislikes anything connected to the real estate industry and second, the market currently has little patience for any company that reports net losses regardless of the underlying economics of the business. Real estate is currently a hated part of the market, and potentially for good reason. It is a cyclical industry, and the economy is potentially either entering or already in a recession. Interest rates are expected to continue to rise, negatively impacting home affordability, while an imbalance in the housing supply persists with historically low inventory available helping fuel an unsustainable rise in housing prices. From a macro industry-wide perspective, the real estate market will ebb and flow with the economy over time, but demand to buy, sell, and finance homes will always exist. I do not have the ability to determine how aggregate demand for buying or selling a home will change from year-to-year, but I do know that people have to live somewhere and if Redfin is able to help them find, buy or rent, and finance where they live better than alternative service providers, then the company will gain share and grow in value overtime. Redfin has also reported abnormally high losses of $91 million in the first quarter for which the current market has little appetite. It feeds the argument that Redfin does not have a sustainable business model. While losses can be a sign of unsustainable economics, that is not the case for Redfin. There are several factors that are all negatively hitting the income statement at the same time, and all should improve materially over the next year or two. Higher first quarter losses largely reflect: Agent Productivity: First quarter brokerage sales increased 7% year-over-year, but lead agent count increased 20%, which meant agents were less productive, leading to real estate gross profits declining $17 million from the prior year. Lower productivity was a result of a steeper ramp in agent hiring towards the end of the year against lower seasonal transaction volumes. It typically takes about six months for new agents to get trained and start closing transactions and then contributing to gross profits. Any accelerated hiring, particularly during a softer macro environment, will be a headwind while Redfin is paying upfront costs before any revenue is being generated. Further, closing transactions has been difficult particularly for buyers, which is where most new agents start. The housing market has been unbalanced where there is not enough inventory. A home for sale will typically receive many competing offers which makes it difficult for a buyer to win the deal. Since Redfin agents are mostly paid on commission (~20% salary plus the remainder being commission), it has been more difficult for new agents to earn a sufficient income in the current real estate environment. In response, Redfin started paying $1,500 retention bonuses for new agents who could guide customers to the point of bidding on a home, regardless of whether those bids win. While the bonus may impact gross profits in the near-term before a customer closes a transaction, it will not impact gross margins in the long-term when a transaction eventually takes place. Going forward, agent hiring will return to more normal rates and the larger number of new hires from recent quarters will ramp up which will improve productivity and gross profits. RentPath: Redfin bought RentPath out of bankruptcy for $608 million in April 2021, primarily to incorporate its rentals on its website which helps Redfin.com show up higher on Internet real estate searches. Prior to the acquisition, RentPath had no leadership direction for several years and declining sales and operating losses. RentPath had new management start in August 2021 and was integrated into Redfin.com in March. It finally started to see operational improvement with sales increasing in February and March year-over-year for the first time since 2019 despite a significant decrease in marketing expenses. While RentPath had $17 million in losses during the first quarter and is expected to have $22 million in losses in the second quarter, operations will improve going forward. Management made it clear that RentPath will be a contributor to net profits in its own right and not just a driver of site traffic and demand to Redfin’s brokerage business. Mortgage: A recent major development was the acquisition of Bay Equity for $135 million in April. Redfin was historically building out its mortgage business from scratch but after struggling to scale the operation decided to buy Bay Equity. Redfin was spending $13 million per a year on investing in its legacy mortgage business but going forward, mortgage will now be a net contributor to profits with Bay expected to provide $4 million in profit in the second quarter. The greater implication of having a scaled mortgage underwriter that is integrated with the real estate broker is that they can work together to streamline and expedite the transaction closing which has become an increasingly important value proposition for customers. Looking just a little further into the future, having a scaled and integrated mortgage underwriter can provide Redfin with the capability of providing buyers with the equivalent of an all-cash offer to sellers. Prospective homebuyers who offer all-cash offers to sellers are four times as likely to win the bid and sellers will often accept a lower price from an all-cash buyer vs. one requiring a mortgage. A common problem that many homeowners face is that when they are looking to move, it is difficult to get approved for a second mortgage while holding the current one. Much of their equity is locked in their current home. Frequently, a homebuyer wins an offer on a new home and then is in mad dash to sell their existing home in order to get the financing to work. It is not ideal to attempt to sell your home as fast as possible because it decreases the chance of getting the best price possible. A solution that Redfin could offer as a customer’s agent and underwriter is provide bridge financing between when a customer buys their new home and is then trying to sell their existing home and is therefore paying on two mortgages. Redfin would be able to make a reasonable appraisal for what a customer’s existing home will sell for (essentially what Redfin already does with iBuying) and underwriting the incremental credit exposure they are willing to provide the buyer. The buyer would then have “Redfin Cash” which would work like a cash offer. If this service helps buyers win a bid four times more often, it would even further differentiate Redfin’s value proposition and attract further demand. At least in the near-term, the mortgage segment will go from being a loss center to a contributor to net profits as well as further improving Redfin’s customer value proposition. Restructuring and transaction costs: Redfin had $6 million in restructuring expenses related to severance with RentPath and the mortgage business as well as closing the Bay Equity acquisition. $4 million in restructuring expenses are expected in the second quarter but these expenses will go away in future quarters. The combination of the above factors provided the headline $91 million net loss for the first quarter. Larger than normal losses between $60-$72 million are still expected in the second quarter. However, going forward losses are expected to continue to improve materially. While Redfin is not done investing in improving its service offerings, it should benefit from the significant investments it has already made over the last 16 years. Redfin has been building and supporting a nationwide business that only operated in parts of the country and had to incur large upfront costs. Going forward, it will benefit from the operating leverage baked into its cost structure with gross profits expected to grow twice as fast as overhead operating expenses. Redfin is expected to be cash flow breakeven in 2022 and provide net profits starting in 2024. Redfin has built a great direct to consumer acquisition tool that is unmatched by any real estate broker. It has spent the costs to acquire the customer and has now built out the different services to provide customers any of the real estate services that they may need, whether that is one or a combination of brokerage services, mortgage underwriting, title forward, iBuying, or rental search. Being able to monetize each customer that it has already acquired by offering them any of these services provides Redfin with a better return on customer acquisition costs that no other competitor is able to do to the same extent. Additionally, these real estate services work better when they are integrated under the same company. One does not have to dig very deep to see how attractive Redfin’s shares are currently priced. Shares are now selling around all-time historic lows since its IPO in August 2017. The prior all-time lows were reached during the COVID crash which was a time the world was facing an unknown pandemic that would shut down the economy and potentially put us through a great depression. At its current $1.2 billion market cap, Redfin is selling for 3x expected 2022 real estate gross profits, or 4x its current $1.7 billion enterprise value (excluding asset-based debt). Both are far below the historic average of 15x (which excludes peak multiples reached towards the end of 2020 and early 2021), or the previous all-time low of 6x reached in the depths of March 2020. If we assume Redfin can raise brokerage commissions by 30%, in line with traditional brokerage commission rates, and it does not lose business, Redfin would be able to provide ~20% operating margins. If we take a more conservative view and say Redfin can earn 10% net margins on its 2022 expected real estate revenues of $990 million, it would provide $99 million in net profits, providing a current 12x price-to-earnings ratio. This is for a company that has a long track record of being able to grow 20%+ a year on average, consistently gains market share each quarter, and has barely monetized its significant upfront investments and fixed costs with a long runway to continue to scale. This also does not place any value on its mortgage or iBuying segments which are now contributors to gross profits. There may be macro risks as well as other concerns today, however Redfin’s business and relative competitive advantage have never been stronger. The net losses reported are not representative of Redfin’s true underlying earning power. Redfin has untapped pricing power, an increasingly attractive customer value proposition, and a growing competitive advantage compared to alternative brokerages, which will help Redfin to continue to grow and take market share in what is a very large market. Conclusion Of course, the future can look scary, as it often does when headlines jump from one risk to the other. Despite what may be happening in the macro environment, our companies on average are stronger than they have ever been and are now selling for what we believe are the most attractive prices we have seen relative to their intrinsic value. I have no idea what shares will do in the near-term and I never will. Stock prices can swing wildly for many reasons, and sometimes seemingly for no reason at all. They can diverge, sometimes significantly from their true underlying value. I have no idea when sentiment will shift from optimism to pessimism and then back to optimism. This is what keeps us invested in both good times and in bad. The current selloff can continue further, but assuming our companies continue to execute over the coming years by winning market share and earning attractive returns on their investment spending, the market’s sentiment surrounding our portfolio companies will eventually reflect their underlying fundamentals. I will continue to look towards the longer-term operating results of our companies and not to the movements in their stock price as feedback to whether our initial investment thesis is playing out as expected. While the market can ignore or misjudge business success for a certain period, it eventually has to realize it. During times of greater volatility and periods of large drawdowns, I am reminded of how truly important the quality of our investor base is. It is completely natural to react in certain ways to rising or declining stock prices. It takes a very special investor base to look past near-term volatility and to trust us to make very important decision on their behalf as we continually try to increase the value of the Saga Portfolio over the long-term. As always, I am available to catch up or discuss any questions you may have. Sincerely, Joe Frankenfield Saga Partners Updated on May 16, 2022, 4:44 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: valuewalkMay 17th, 2022

Futures Slide After China"s "Huge" Data Miss Sparks "Broad-Based Recession Talk"

Futures Slide After China's "Huge" Data Miss Sparks "Broad-Based Recession Talk" Friday's bear market rally dead-cat bounce appears to be over, and global stocks have started the new week in the red with US equity futures lower after a "huge miss", as Bloomberg put it, in Chinese data fueled concerns over the impact of a slowdown in the world’s second-largest economy. As reported last night, China’s industrial output and consumer spending hit the worst levels since the pandemic began, hurt by Covid lockdowns. And even though officials took another round of measured steps to help the economy by cutting the interest rate for new mortgages over the weekend to bolster an ailing housing market, even as they left the one-year policy loan rate was left unchanged Monday, few believe that any of these actions will have a tangible impact and most continue to expect much more from Beijing.  As such, after a weekend that saw even Goldman's perpetually optimistic equity strategists slash their S&P target (again) from 4,700 to 4,300, and amid growing fears that a recession is now inevitable, Nasdaq 100 futures slid as much as 1.2%, before paring losses to 0.4% as of 730 a.m. in New York. S&P 500 futures were down 0.3%. 10Y Treasury yields were flat at 2.91% and the dollar dipped modestly while bitcoin traded just above $30,000 dropping from $31,000 earlier in the session. Among notable moves in premarket trading, Spirit Airlines jumped as much as 21% following a report that JetBlue Airways is planning a tender offer at $30 a share in cash. Major US technology and internet stocks were down after rebounding on Friday, while Tesla shares dropped, with the electric-vehicle maker set to recall 107,293 cars in China over a potential safety risk. Twitter shares fall 3.4% in premarket trading on Monday, on course to wipe out all the gains the stock has made since billionaire Elon Musk disclosed his stake in the social media platform. Twitter fell to as low as $37.86 -- below the the April 1 close of $39.31, before Musk disclosed his stake. US stocks have been roiled this year, with the S&P 500 on tick away from a bear market as recently as last Thursday, on worries of an aggressive pace of rate hikes by the Federal Reserve at a time when macroeconomic data showed a slowdown in growth. Data from China on Monday highlighted a massive toll on the economy from Covid-19 lockdowns, with retail sales and industrial output both contracting. Although lower valuations sparked a rally in stocks on Friday, strategists including Morgan Stanley’s Michael Wilson warned of more losses ahead as equity markets also price in slower corporate earnings growth. Goldman Sachs strategists led by David Kostin cut their year-end target for the S&P 500 on Friday to 4,300 points from 4,700.  "The broad-based recession talk is the major catalyzer this Monday,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “Activity in US futures hint that Friday’s rebound was certainly nothing more than a dead cat bounce” just as we said at the time.  The risk of an economic downturn amid price pressures and rising borrowing costs remains the major worry for markets. Goldman Sachs Group Senior Chairman Lloyd Blankfein urged companies and consumers to gird for a US recession, saying it’s a “very, very high risk.” Traders remain wary of calling a bottom for equities despite a 17% drop in global shares this year, with Morgan Stanley warning that any bounce in US stocks would be a bear-market rally and more declines lie ahead. In Europe, the Stoxx Europe 600 index fell as much as 0.8% before paring losses, with declines for tech and travel stocks offsetting gains for basic resources as industrial metals rallied. The Euro Stoxx 50 falls 0.4%. IBEX outperforms, adding 0.3%. Tech, personal care and consumer products are the worst performing sectors. Here are some of the biggest European movers today: Basic Resources stocks outperformed with broad gains among mining and steel companies; ArcelorMittal +3.5%; SSAB +2.6%; Glencore +2.1%; Voestalpine +3.1%. Sartorius AG and Sartorius Stedim shares gain as UBS upgrades both stocks to buy following a “significant de-rating” for the lab-equipment companies, seeing supportive global trends. Carl Zeiss Meditec gains as much as 4.9% after HSBC raised its recommendation to buy from hold, saying the medical optical manufacturer is “well-equipped to deal with supply chain challenges.” Interpump rises as much as 7.6%, extending winning streak to five days, as Banca Akros upgrades the stock to buy from accumulate following Friday’s 1Q results. Casino shares jump as much 5.8% after the French grocer said it’s started a process to sell its GreenYellow renewable energy arm, confirming a Bloomberg News report from Friday. Ryanair shares decline as much as 4.3% on FY results, with analysts focusing on the low-budget carrier’s recovery outlook. They note management is cautiously optimistic about summer travel. Vantage Towers shares decline after the company posted FY23 adjusted Ebitda after leases and recurring free cash flow forecasts that missed analyst estimates at mid- points. Unilever falls after a 13-F filing from Nelson Peltz’s Trian shows no position in the company, according to Jefferies, damping speculation after press reports earlier this year that the fund had built a stake. Michelin shares fall as much as 3.7% after being downgraded to neutral from overweight at JPMorgan, which says it writes off any chance of seeing a recovery in volume production growth in FY22. Earlier in the session, Asian stocks eked out modest gains as surprisingly weak Chinese economic data spurred volatility and caused traders to reassess their outlook on the region. The MSCI Asia-Pacific Index was up 0.1%, paring an earlier advance of as much as 0.9%  on stimulus hopes. The region’s information technology index rose as much as 1.5%, with TMSC giving the biggest boost. A sub-gauge on materials shares fell the most. Equities in China led losses, as Beijing’s moves to cut the mortgage rate for first-time home buyers and ease lockdown restrictions in Shanghai failed to reverse the downbeat mood. Asian stocks were trading higher early Monday, building on Friday’s rally, only to trim or reverse gains as data showed a sharper-than-expected contraction in Chinese activity in April. Signs of an earnings recovery in China are needed for investors to come back, Arnout van Rijn, chief investment officer for APAC at Robeco Hong Kong Ltd., said on Bloomberg Television. “It looks like China is not going to meet the 15% earnings growth that people were looking for just a couple of months ago. So now we’re looking for five, 10, maybe it’s even going to fall to zero.”   Meanwhile, JPMorgan analysts, who had called China tech “uninvestable” in March, upgraded some tech heavyweights including Alibaba in a Monday report, citing less regulatory uncertainties. Benchmarks in Japan, Australia, India and Taiwan maintained gains while Hong Kong also recovered some ground later in the day. Markets in Singapore, Thailand, Malaysia and Indonesia were closed for holidays.      Japanese equities were mixed, with the Topix closing slightly lower after worse-than-expected Chinese economic data amid the impact from virus-related lockdowns. The Topix fell 0.1% to close at 1,863.26, with Honda Motor contributing the most to the decline after its forecast for the current year missed analyst expectations. The Nikkei advanced 0.5% to 26,547.05, with KDDI among the biggest boosts after announcing its results and a 200 billion yen buyback. “Though the lockdowns in China are pushing down the economy and causing supply chain difficulties, there’s a positive outlook since the weekend that there could be a gradual easing of the lockdowns as it seems that virus cases have peaked out,” said Masashi Akutsu, chief strategist at SMBC Nikko Securities. In Australia, the S&P/ASX 200 index rose 0.3% to 7,093.00, trimming an earlier advance of as much as 1.1% after soft Chinese economic data stoked concerns about global growth. Read: Aussie, Kiwi Slump After Weak China Data: Inside Australia/NZ Brambles was the top performer after confirming it’s in talks with private equity firm CVC Capital Partners on a takeover proposal. Qube also climbed after completing a A$400 million share buyback.  In New Zealand, the S&P/NZX 50 index fell 0.1% to 11,157.66. In rates, Treasuries were steady with yields within 1bp of Friday’s close. US 10-year yield near flat ~2.91% with bunds cheaper by ~5bp, gilts ~3.5bp amid heavy. German 10-year yield up 5 bps, trading narrowly below 1%. Italian 10-year bonds underperform, with the 10-year yield up 8 bps to 2.93%. Peripheral spreads are mixed to Germany; Italy and Spain widen and Portugal tightens. The Italy 10-year was cheaper by more than 6bp on the day amid renewed ECB jawboning. Core European rates are higher, pricing in ECB policy tightening. During Asia session, Chinese data showed industrial output and consumer spending at worst levels since the pandemic began. The dollar issuance slate includes CBA 3T covered SOFR; $30b expected for this week as syndicate desks seek opportunities for pent-up supply. Three-month dollar Libor +1.13bp at 1.45500%. In FX, the Bloomberg Dollar Spot Index was little changed while the greenback advanced against most of its Group-of-10 peers. Treasuries inched lower, led by the front end, and outperformed European bonds. The euro inched up against the dollar. Italian bonds dropped, leading peripheral underperformance against euro- area peers, while money markets showed increased ECB tightening wagers after policy maker Francois Villeroy de Galhau said a consensus is “clearly emerging” at the central bank on normalizing monetary policy and that June’s meeting will be “decisive.” He also signaled that the weakness of the euro is focusing the minds of ECB policy makers at a time when the currency is heading toward parity with the dollar. The euro may resume its rally versus the pound in the spot market as options traders pile up bullish wagers. The pound fell against both the dollar and euro, staying under selling pressure on concerns that high UK inflation will weigh on the economy. Markets await testimony from Bank of England Governor Andrew Bailey and other central bank officials later in the day, ahead of a reading of April inflation later in the week. Australian and New Zealand dollars fell after Chinese industrial and consumer data fanned concerns of a further slowdown in the world’s second-largest economy. In commodities, WTI drifts 0.4% lower to trade above $110. Spot gold pares some declines, down some $6, but still around $1,800/oz. Most base metals trade in the green; LME tin rises 3.4%, outperforming peers. Bitcoin falls 4.6% to trade below $30,000 Looking ahead, we get the US May Empire manufacturing index, Canada April housing starts, March manufacturing, wholesale trade sales. Central bank speakers include the Fed's Williams, ECB's Lane, Villeroy and Panetta, BOE's Bailey, Ramsden, Haskel and Saunders. We get earnings from Ryanair, Take-Two Interactive. Market Snapshot S&P 500 futures down 0.3% to 4,008.75 STOXX Europe 600 little changed at 433.33 MXAP up 0.2% to 160.34 MXAPJ up 0.2% to 523.32 Nikkei up 0.5% to 26,547.05 Topix little changed at 1,863.26 Hang Seng Index up 0.3% to 19,950.21 Shanghai Composite down 0.3% to 3,073.75 Sensex up 0.6% to 53,119.79 Australia S&P/ASX 200 up 0.3% to 7,093.03 Kospi down 0.3% to 2,596.58 German 10Y yield little changed at 0.98% Euro up 0.1% to $1.0424 Brent Futures down 1.4% to $109.98/bbl Gold spot down 0.8% to $1,797.30 US Dollar Index little changed at 104.46 Top Overnight News from Bloomberg NATO members rallied around Finland and Sweden on Sunday after they announced plans to join the alliance, marking another dramatic change in Europe’s security architecture triggered by Russia’s war in Ukraine The euro area’s pandemic recovery would almost grind to a halt, while prices would surge even more quickly if there are serious disruptions to natural-gas supplies from Russia, according to new projections from the European Commission UK energy regulator Ofgem plans to adjust its price cap every three months instead of every six. Changing the level more often would help consumers to take advantage of falling wholesale prices more quickly, it said in a statement Monday. This would also mean higher prices filter through bills quicker Boris Johnson has warned Brussels that the UK government will press ahead with unilateral changes to parts of the Brexit agreement if it does not engage in “genuine dialogue” While debt bulls on Wall Street have been crushed all year, market sentiment has shifted markedly over the past week from inflation fears to growth. That theme gathered more strength Monday, when data showing China’s economy contracted sharply in April set off fresh gains for Treasuries China’s economy is paying the price for the government’s Covid Zero policy, with industrial output and consumer spending sliding to the worst levels since the pandemic began and analysts warning of no quick recovery. Industrial output unexpectedly fell 2.9% in April from a year ago, while retail sales contracted 11.1% in the period, weaker than a projected 6.6% drop Japanese manufacturers are increasingly looking to move offshore operations to their home market, according to a Tokyo Steel Manufacturing Co. executive. The rapidly weakening yen, global supply-chain constraints, geopolitical risks and shifting wages patterns are prompting the switch, Kiyoshi Imamura, a managing director of the steelmaker, said in an interview in Tokyo last week A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded mixed after disappointing Chinese activity data clouded over the early momentum from Friday’s rally on Wall St. ASX 200 was higher as tech stocks were inspired by US counterparts and amid M&A related newsflow with Brambles enjoying a double-digit percentage gain after it confirmed it had talks with CVC regarding a potential takeover by the latter. Nikkei 225 kept afloat as earnings releases provided the catalysts for individual stocks but with gains capped by a choppy currency. Hang Seng and Shanghai Comp initially gained with property names underpinned after China permitted a further reduction in mortgage loan interest rates for first-time home purchases and with casino stocks also firmer in the hope of a tax reduction on gaming revenue. However, the mood was then spoiled by weak Chinese data and after the PBoC maintained its 1-year MLF rate. Top Asian News PBoC conducted a CNY 100bln in 1-year MLF with the rate kept unchanged at 2.85% and stated the MLF and Reverse Repo aim to keep liquidity reasonably ample, according to Bloomberg. Beijing extended work from home guidance in several districts and announced three additional rounds of mass COVID-19 testing in most districts including its largest district Chaoyang, according to Reuters. Shanghai will gradually start reopening businesses including shopping malls and hair salons in China's financial and manufacturing hub beginning on Monday following weeks of a strict lockdown, according to Reuters. Shanghai city official said 15 out of the 16 districts achieved zero-COVID outside quarantine areas and the city's epidemic is under control but added that risks of a rebound remain and they will need to continue to stick to controls. The official said the focus until May 21st will be to prevent risks of a rebound and many movement restrictions are to remain, while they will look to allow normal life to resume in Shanghai from June 1st and will begin to reopen supermarkets, convenience stores and pharmacies from today, according to Reuters. Chinese financial authorities permitted a further reduction in mortgage loan interest rates for some home buyers whereby commercial banks can lower the lower limit of interest rates on home loans by 20bps based on the corresponding tenor of benchmark Loan Prime Rates for purchases of first homes, according to Reuters. China's stats bureau spokesman said economic operations are expected to improve in May and that China is steadily pushing forward production resumption in COVID-hit areas, while they expect China's economic recovery and rebound in consumption to quicken but noted that exports face some pressure as the global economy slows, according to Reuters. Macau is reportedly considering a tax cut for casinos amid a decline in gaming revenue in which a cut could be as much as 5% off the current 40% levied on casino gaming revenue, according to Bloomberg. European bourses are mixed, Euro Stoxx 50 -0.6%, following a similar APAC session with impetus from Shanghai's reopening offset by activity data and geopolitics. Stateside, futures are lower across the board, ES -0.4%, with the NQ marginally lagging as yields lift; Fed's Williams due later before Powell on Tuesday. US players are focused on whether the end-week bounce is a turnaround from technical bear-market levels or not. China's market regulator says Tesla (TSLA) has recalled 107.3k Model 3 & Y vehicles, which were made in China. JetBlue (JBLU) is to launch a tender offer for Spirit Airlines (SAVE); JetBlue is to offer USD 30/shr, but prepared to pay USD 33/shr if Spirit provides JetBlue with requested data, WSJ sources say. Elon Musk tweeted that Twitter’s (TWTR) legal team called to complain that he violated their NDA by revealing the bot check sample size and he also tweeted there is some chance that over 90% of Twitter’s daily active users might be bots. Top European News UK PM Johnson is reportedly set to give the green light for a bill on the Northern Ireland protocol, according to the Guardian. UK PM Johnson said he hopes the EU changes its position on the Northern Ireland protocol and if not, he must act, while he sees a sensible landing spot for a protocol deal and will set out the next steps on the protocol in the coming days, according to Reuters. UK PM Johnson is expected to visit Northern Ireland on Monday for talks with party leaders in an effort to break the political deadlock at Stormont, according to Sky News. Irish Foreign Minister Coveney says the EU is prepared to move on reducing checks on goods coming into the region from Britain, via Politico. UK Cabinet ministers have turned on the BoE regarding rising inflation, whereby one minister warned that the Bank was failing to "get things right" and another suggested that it had failed a "big test", according to The Telegraph. Group of over 50 economists warned that the UK's post-Brexit plans to boost the competitiveness of its finance industry risk creating the sort of problems that resulted in the GFC, according to Reuters. European Commission Spring Economic Forecasts: cuts 2022 GDP forecast to 2.7% from the 4.0% projected in February. Click here for more detail. Central Banks ECB's Villeroy expects a decisive June meeting and an active summer meeting, pace of further steps will account for actual activity/inflation data with some optionality and gradualism; but, should at least move towards the neutral rate. Will carefully monitor developments in the effective FX rate, as a significant driver of imported inflation; EUR that is too weak would go against the objective of price stability.   ECB’s de Cos said the central bank will likely decide at the next meeting to end its stimulus program in July and raise rates very soon after that, while he added that they are not seeing second-round effects and are monitoring it, according to Reuters. FX Euro firmer following verbal intervention from ECB’s Villeroy and spike in EGB yields EUR/USD rebounds from sub-1.0400 to 1.0435 at best. Dollar up elsewhere as DXY pivots 104.500, but Yen resilient on risk grounds as Chinese data misses consensus by some distance; USD/JPY capped into 129.50. Franc falls across the board after IMM specs raise short bets and Swiss sight deposits show SNB remaining on the sidelines; USD/CHF above 1.0050 at one stage. However, HKMA continues to defend HKD peg amidst CNY, CNH weakness in wake of disappointing Chinese industrial production and retail sales releases. Norwegian Crown undermined by pullback in Brent and narrower trade surplus, EUR/NOK over 10.2100. SA Rand soft as Gold retreats to test support around and under Usd 1800/oz. Loonie slips with WTI ahead of Canadian housing starts, manufacturing sales and wholesale trade, Sterling dips before BoE testimony; USD/CAD 1.2900+, Cable sub-1.2250. Fixed income EGBs rattled by ECB rhetoric inferring key policy meetings kicking off in June and extending through summer. Bunds down towards 153.00 and 10 year yield back up around 1%, Gilts almost 1/2 point adrift and T-note erasing gains from 12/32+ above par at best. Eurozone periphery underperforming with added risk-off angst following much weaker than expected Chinese data. In commodities WTI and Brent are pressured, but well off lows, and torn between China's lockdown easing and poor activity data amid numerous other catalysts Specifically, the benchmarks are around USD 110/bbl and USD 111/bbl respectively, Saudi Aramco Q1 net income rose 82% Y/Y to INR 39.5bln for its highest quarterly profit since listing, according to Sky News. Saudi Energy Minister says they are going to get to 13.2-13.4mln BPD, subject to what is done in the divided zone, by end-2026/start-2027; can maintain production when there, if the market demands this. OPEC+ to continue with monthly output increases, according to Bahrain's oil minister via Reuters. Iraqi state-run North Oil Company said Kurdish armed forces took control of some oil wells in northern Kirkuk, according to Reuters. Iraq oil minister says they aim to increase oil production to 6mln BPD by end-2027, OPEC is targeting a energy market balance not a price; adding, current production capacity is 4.9mln BPD, will reach 5mln BPD before the end of 2022. China is to increase fuel prices from Tuesday, according to China's NDRC; gasoline by CNY 285/t and diesel by CNY 270/t. US Event Calendar 08:30: May Empire Manufacturing, est. 15.0, prior 24.6 16:00: March Total Net TIC Flows, prior $162.6b DB's Jim Reid concludes the overnight wrap Markets managed a big bounce on Friday but the mood has soured again in the Asian session after a weak slew of data from China as covid lockdowns had an even worse impact than expected. Industrial production (-2.9% vs +0.5% expected), retail sales (-11.1% vs -6.6% expected) and property investment (-2.7% vs -1.5% expected) all crashed through estimates by a large margin. The slump in retail sales and industrial production was the weakest since March 2020. The latter also had the lowest print on record, with the worst decline coming from auto manufacturing (-31.8%). The surveyed jobless rate (6.1% vs estimates of 6.0%) also ticked up by more than expected from 5.8% in March and is now close to the high of 6.2% in February 2020. Although the 1-year policy loan rate was left unchanged today, the PBoC did ease the rate on new mortgages this weekend. In other data releases, Japan’s April PPI (+10.0%) came in above estimates of +9.4%, the highest since 1980. Amid this, the Shanghai Composite (-0.51%) and the Hang Seng (-0.43%) are in the red, and outperformed by the KOSPI (-0.21%) and the Nikkei (+0.46%). The sentiment has soured in American markets too, with S&P 500 futures also trading lower (-0.68%) and the US 10y yield declining by -2.2bps. Oil (-1.48%) is edging lower too on growth concerns. After last week’s meltdown in crypto markets, Bitcoin is back at above $30k this morning – a jump since the lows of nearly $26k last Thursday but way short of the $38k it traded at in the beginning of the month and $68k early last November. The infamous TerraUSD, the stablecoin that fuelled the crypto slide, is at $0.18. It is supposed to trade at $1 at all times. Looking forward now and there's not a standout event to focus on this week but they'll be plenty to keep us all occupied. US retail sales (tomorrow) looks like the highlight alongside Powell's speech the same day. There will also be US housing data smattered across the week and UK and Japanese inflation on Wednesday and Friday respectively. Let's start with US retail sales as it will be a good early guide for Q2 GDP. Our US economists are anticipating a +1.7% print, up from +0.7% in March. Rebounding auto sales should help the headline number. For more on the consumer, Brett Ryan put out this chartbook last week on the US consumer (link here). US industrial production is out the same day. We have a long list of central bank speakers this week headed by Powell and Lagarde (tomorrow) and BoE Bailey today. There are many more spread across the week and you can see the list in the day by day event list at the end. We do have the last ECB meeting minutes on Thursday but the subsequent push towards a July hike might make these quite dated. US housing will be a big focus next week. It's probably too early for the highest mortgage rates since 2009 to kick in but with these rates around 220bps higher YTD, some damage will surely soon be done after the highest YoY price appreciation outside of an immediate post WWII bounce, in our 120 year plus housing database. On this we will see the NAHB housing market index (tomorrow), April’s US building permits and housing starts (Wednesday), and existing home sales (Thursday). Turning to corporate earnings, it will be another quiet week after 457 of the S&P 500 companies and 368 of the STOXX 600 companies have reported earnings this season so far. Yet, it will be an important one to gauge how the US consumer is faring amid inflation at multi-decade highs, including reports such as Walmart, Home Depot (tomorrow), Target and TJX (Wednesday). Results will also be due from China's key tech and ecommerce companies like JD.com (tomorrow), Tencent (Wednesday) and Xiaomi (Thursday). Other notable corporate reporters will include Cisco (Wednesday), Applied Materials, Palo Alto Networks (Thursday) and Deere (Friday). A quick recap of last week’s markets now. Fears that global growth would slow due to the tightening task at hand for central banks sent ripples across markets, without a clear specific catalyst. Equities declined, credit spreads widened, the dollar rallied, and sovereign yields declined. The S&P 500 fell for the sixth consecutive week for the first time since 2011, falling -13.0% over that time. Even with a +2.39% rally on Friday, it fell -2.41% last week. Large cap technology firms underperformed, with the NASDAQ falling -2.80% (+3.82% Friday), while the FANG+ index fell -3.48% (+5.45% Friday). Volatility was elevated, with the Vix closing above 30 for 6 straight days for the first time since immediately following the invasion, narrowly avoiding a 7th straight day above 30 by closing the week at 28.8. European equities outperformed, with the STOXX 600 climbing +0.83% after a banner +2.14% gain Friday. The Itraxx crossover ended the week at 446bps, its widest level since June 2020. Crypto assets sharply declined, with Bitcoin down -12.51% and Coinbase -34.58% over the week, with a number of so-called ‘stablecoins’ breaking their pledged parity, forcing some to stop trading. The growth fears drove a flight to quality. The dollar index increased +0.87% (-0.27% Friday) to its highest levels since 2002. Only the yen outperformed the US dollar in the G10 space. Sovereign yields rallied significantly, with 10yr Treasuries, bunds, and gilts falling -19.3bps (+8.5bps Friday), -23.0bps (+6.2bps Friday), and -28.7bps (+4.7bps Friday), respectively. Reports that the EU was considering softening their oil-related sanctions due to member resistance combined with growth fears to send oil prices much lower at the beginning of the week, with Brent crude futures almost breaking $100/bbl. When all was said and done, a gradual rally over the back half of the week saw Brent merely -1.04% lower (+3.82% Friday). On the back of disappointing data from China it is down -1.48% this morning. There was a lot of high-profile central bank speak to work through, as there will be this week. The main takeaways included Fed officials aligning behind a series of +50bp hikes the next few meetings, downplaying the chances of +75bp hikes until September at the earliest. Meanwhile, momentum in the ECB is growing toward a July policy rate hike, with policy rates breaching positive territory by the end of the year. In terms of data Friday, the University of Michigan survey of inflation expectations for the next five years was unchanged at 3 percent, though inflation has weighed on consumers’ perception of the current situation. Tyler Durden Mon, 05/16/2022 - 08:02.....»»

Category: blogSource: zerohedgeMay 16th, 2022

No One Understands The Monetary System, And That"s Not OK

No One Understands The Monetary System, And That's Not OK Authored by Joakim Book via BitcoinMagazine.com, Bitcoin is freedom money for a century of liberty. But to truly grasp why that is, you need to see what’s wrong with the system it attempts to overthrow... Understanding the monetary system is foundational to seeing what’s wrong with the current system and to have a true grasp of Bitcoin and its importance. “If you want to make an apple pie from scratch, you must first invent the universe.”  – Carl Sagan Among the first objections that arise for anyone who has just learned about Bitcoin is “this is too complicated to understand.” And it’s true; private keys, block times, difficulty adjustments, UTXOs, uncensorable CoinJoin transactions, hash-something — the learning curve is steep and, for most, the reasons to ascend it seem few and far between. The first time I was introduced to Bitcoin in practice (not in theory — techno-babbling libertarians had unsuccessfully pitched me the idea for years), the intimidatingly tech-savvy guy who did so botched the process. First, he had me download some shady-looking app — which I didn’t have space for on my phone, and so, ironically, I first had to remove a few podcasts on monetary economics. Second, he had the app generate some random words, and in the absence of pen and paper, had me type them into my phone’s (cloud-saved!) note-taking app. Third, he tried to send me 100,000 sats, but the spotty internet on his phone kept interrupting the process. Clearly, I wouldn’t become a convinced Bitcoiner that evening; the hardships of the process seemed altogether useless — the cure worse than the central banking disease it supposedly tried to solve. After he had gotten his shit together, and my polite patience having run out a half-dozen times, he finally managed to send the sats — and triumphantly expressed “See, see! This transaction happened without anybody knowing! And nobody could stop it!” Not impressed, I pulled out a $5 dollar bill, handed it to him and mockingly imitated his triumph: “See, see! That happened without anybody knowing, and nobody could stop us from doing it!” Bearer assets are nothing new in the history of money and all he had convinced me of was that bitcoin was some complicated digital way of doing that. But if the tech-raptured can’t effortlessly do it, what hope is there for you and me? And you’re disintermediating a banking system, the purpose of which is to efficiently and securely make payments, and to make lending and borrowing possible. Nobody was trying to stop anybody’s payments — what was this guy on about? It would be years before I would see those troubles of the current fiat payment networks.  WHAT’S AMAZING ABOUT BITCOIN IS NOT THAT IT’S DIGITAL On the Bitcoin 2021 stage, Alex Gladstein wanted to illustrate the simplicity of using bitcoin by sending sats in real time to Strike’s fundraising campaign for Bitcoin development. It was eerily similar to the Bitcoin zealot I described above: Gladstein: “So I’m on the Strike page, right here, and I’m going to go ahead and donate, you know, two dollars’ worth of bitcoin, to Strike ... It is going to go ... and it’s gone. That’s a bearer asset that has just moved instantly around the world. And, I didn't ask permission from anybody.”  Gladstein succeeded much better in illustrating a (Lightning) payment than the guy who first tried to send me bitcoin all those years ago. Naturally, the audience “woah”-ed and applauded, but the informed critic could equally well have responded with “Yes, and? Venmo does that too.” In an episode for the “Bitcoin Magazine Podcast,” Mark Maraia explained his approach to “onboarding boomers” — that demographic with money, time and a healthy fear of government overreach, yet not exactly known for their advanced technological know-how. “Forget all the theory,” Maraia says, pointing to everyday items like computers or iPhones — do you honestly know how they work? “I have absolutely no clue," he says, and adds crucially that “That’s OK!” His quip is nice and comforting: nobody understands technology X, and that’s fine, because we see what technology X does and we can use it. Similarly, if you don’t understand Bitcoin, that’s still OK. Except that it’s not. Understanding what Bitcoin can do for you — its use case — requires you to understand the incumbent monetary system. Unlike a phone, a car or a computer, there is no visible value-add in using bitcoin for a middle-of-the-road Westerner who has never been sanctioned, never done anything illegal, never tried to buy goods or services that a payment processor or government disapproves of, has their salaries (and savings!) indexed to inflation, don’t understand why recessions happen and (on a government payroll at least) don’t suffer from them, or what central banks do or where money comes from. I don’t need to understand any of the underlying tech in a phone to see how I might use it and how it could assist my life. In contrast, Bitcoin’s value-add is tied up with its “compared-to-what” alternative in the incumbent monetary system that 99% of us never think about, never cause us any payment-related troubles and we consequently pay no attention to. (Source) A Visa card in Apple Pay can “instantly” pay for things halfway across the world too. For international transfers, Wise or Revolut or a plethora of fintechs can move bank money across the world in seconds. Tech is not the thing. Digital is not the value-add. Of course, most Bitcoiners know that the Visa-Wise-Apple-Pay analogy is faulty. And my guy could have made Saifedean Ammous’ argument that bitcoin has salability across space, which my $5 bill lacks. But to understand much of what sets bitcoin apart you need to go well into the monetary plumbing weeds. What happens when we make a bank payment? What is money? International transfers or bank-issued Visa cards require identification in a way bitcoin doesn’t; they don’t provide final settlement (payments can be revoked later); bank transfers are often deferred net settlements (though real-time gross settlement payments are rolled out in more and more central bank payment networks). Funds in Venmo or PayPal or other lower layers of the dollar banking system are permissioned, in the sense that any of the half-dozen entities required for a payment to be successful could block it — for innocent technical reasons or more malign control/authoritarian reasons. Thinking that an effortless Venmo payment is akin to an on-chain bitcoin transfer because they look and “feel” the same, is a rather elementary error to make. They’re both digital; they both involve “money,” whatever that means; they both allow for transfer of value from one place to another. But in order to understand why they are different, you — like the Carl Sagan quote above — must first explain the whole monetary system: where it can go wrong, what it relies on, how new money enters into it, what banks do, which entities have the power to block, delay, inspect or charge fees for transactions, what you’re risking by passively holding a constantly depreciating currency. To Gladstein’s credit, he has an understanding of the banking realities of the bottom billion that dwarfs any payment troubles that most Westerners have ever encountered. But the average nocoiner doesn’t. Which is why we routinely get news articles where some clever-by-half financial journalist lumps together bitcoin with stablecoins, with non-fungible tokens (NFTs) and central bank digital currencies (CBDCs). Or when the chairman of the Federal Reserve Board says that CBDCs make the need for bitcoin or stablecoins obsolete: they’re all the same, really — new, hip, digital ways of storing and moving what seems to be valuable things. The Fed is here to help steward the dollar system, so once its own fancy-sounding technical solution is in place, there could be no need for private options. And “programmable money” sounds amazing — at least until the programming of the not-so-kind programmer stops you from purchasing what you require. (Source) From Gita Gopinath at the IMF, we learn that the Russia-Ukraine debacle “would also spur the adoption of digital finance, from cryptocurrencies to stablecoins and central bank digital currencies.” What about the conflict could possibly spur anything but bitcoin? Finance is already digital. Fiat bank money is already digital. The Fed adjusts the monetary base, digitally, through purchases and sales of assets via its New York Fed branch. The dollar is already discretionary and permissioned, controlled, regulated and surveilled. What does a central bank digital currency (CBDC) bring to the table? If anything, it would make the politicization of banking-related problems on both sides of the Donetsk battlefield worse, with even more control by authoritarians who want to mandate what people may or may not do with “their” money. You don’t need a blockchain or a token to do 99% of what cryptocurrency projects attempt to do — and the ones that appear to do something useful, don’t do that better than Bitcoin. Beyond the first few hours and days, before international transfers could comfortably arrive to Ukraine’s banks in bulk, there was nothing that “cryptocurrencies” broadly speaking could do for Ukraine; its problem was real, not monetary. Help fleeing refugees smuggle out their savings against a hostile banking system? Sure, bitcoin always excelled at that, but how would a CBDC, issued and governed by the National Bank of Ukraine fare? Or worse, Ripple, whose CEO proudly stated: “To clear any confusion – RippleNet (while being able to do much more than just messaging a la SWIFT) abides by international law and OFAC sanctions. Period, full stop.”  Instead of being the permissionless, uncensorable, F-U money that bitcoin aspires to, its cryptocurrency “competitors” proudly uphold censorship and government sanctions:  “RippleNet, for example, has always been - and remains today - committed to NOT working with sanctioned banks or countries that are restricted counterparties. Ripple and our customers support and enforce OFAC laws and KYC/AML.” Complying with authoritarian sanctions is the opposite of what freedom money does. I repeat: Tech is not the thing. Digital is not the value-add. The value-add of Bitcoin is the liberty and independence that comes with holding your own money outright — unencumbered by a bank, a payment processor, a financial regulator or a tax man. It’s no longer being subject to the whimsical demands of your authoritarian ruler, democratically-elected or not. It’s to no longer suffer the asinine consequences of the monetary excesses that the dollar’s current stewards have so catastrophically botched. Bitcoin is freedom money for a century of liberty. But to truly grasp why that is, you need to see what’s wrong with the system it attempts to overthrow. Understanding how the fiat monetary system works is fundamental to understanding Bitcoin. Tyler Durden Thu, 05/12/2022 - 19:00.....»»

Category: blogSource: zerohedgeMay 12th, 2022

Democrats Silent As Republicans Rip Into Secret Royalty Checks To Fauci, Hundreds Of NIH Scientists

Democrats Silent As Republicans Rip Into Secret Royalty Checks To Fauci, Hundreds Of NIH Scientists Authored by Mark Tapscott via The Epoch Times, Top Democratic leaders with oversight of the National Institutes for Health (NIH) are keeping quiet about the $350 million in secret payments to agency leaders like Dr. Anthony Fauci and hundreds of its scientists. The Epoch Times received no responses from multiple requests to Sen. Patty Murray (D-Wash.) and Rep. Frank Pallone (D-N.J.) for comment on a report by a non-profit government watchdog estimating that Fauci, former NIH director Francis Collins, and hundreds of NIH scientists got as much as $350 million in undisclosed royalty payments from pharmaceutical and other private firms between 2010 and 2020. The revelations from Open the Books, which were first reported on May 9 by The Epoch Times, are based on thousands of pages of documents the group obtained from NIH in a Freedom of Information Act (FOIA) lawsuit in federal court. The suit was filed by Judicial Watch on behalf of Open the Books. Open the Books is a Chicago-based nonprofit government watchdog that uses the federal and state freedom of information laws to obtain and then post on the internet trillions of dollars in spending at all levels of government. House Committee on Energy and Commerce Chairman Frank Pallone (D-N.J.) speaks at a hearing in Washington, on June 23, 2020. (Kevin Dietsch-Pool/Getty Images) Pallone is chairman of the House Committee on Energy and Commerce, while Murray is chairman of the Senate Committee on Health, Education, Labor and Pensions. Their panels are the main congressional oversight tools for NIH. A spokesman for NIH also did not respond to multiple requests from The Epoch Times for comment. Because NIH hands out $32 billion in research grants to medical institutions and researchers annually the undisclosed royalty payments, which are usually for work on a new drug, may indicate the presence of massive and widespread conflicts of interest or the appearance of such conflicts, both of which violate federal ethics laws and regulations. Collins resigned as NIH director in December 2021 after 12 years of leading the world’s largest public health agency. Fauci is the longtime head of NIH’s National Institute for Allergies and Infectious Diseases (NIAID), as well as chief medical adviser to President Joe Biden. Lane is the deputy director of NIAID, under Fauci. NIH Director Dr. Francis Collins holds up a model of the coronavirus as he testifies before a Senate Appropriations Subcommittee looking into the budget estimates for the National Institute of Health (NIH) and the state of medical research, on Capitol Hill in Washington on May 26, 2021. (Sarah Silbiger/Pool via AP) Fauci received 23 royalty payments during the period, while Collins was paid 14. Clifford Lane, Fauci’s deputy, got eight payments, according to Open the Books. While Pallone and Murray were silent on the secret NIH payments, Republicans expressed outrage at what they see as serious conflicts of interest. Sen. Marsha Blackburn (R-Tenn.) told The Epoch Times, “the NIH is a dark money pit. They covered up grants for gain of function research in Wuhan, so it is no surprise that they are now refusing to release critical data regarding allegations of millions in royalty fees paid to in-house scientists like Fauci. “If the NIH wants to keep spending taxpayer dollars, they have a responsibility to provide transparency.” Sen. Ted Cruz (R-Texas) said, “This report is disturbing and if it is true that some of our country’s top scientists have conflict of interest problems, the American people deserve to have all the answers.” Sen. Ted Cruz (R-Texas) asks questions during a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, at the U.S. Capitol in Washington on Sept. 21, 2021. (Ken Cedeno/AFP via Getty Images) Similarly, Rep. Greg Steube (R-Fla.) called for an investigation, noting that, “Of course it’s a direct conflict of interest for scientists like Anthony Fauci to rake in $350 million in royalties from third-parties who benefit from federal taxpayer-funded grants. “Anthony Fauci is a millionaire that has gotten rich off taxpayer dollars. He is a prime example of the bloated federal bureaucracy. This royalty system should be examined to ensure it isn’t making matters worse.” Rep. Buddy Carter (R-Ga.) said the latest revelations are further evidence that Fauci should be fired. “Fauci and the NIH have repeatedly abused the trust of the American people. “From lying about gain of function research to walking back claims about COVID-19, this latest allegation is just another nail in the coffin of the integrity of our public health system. “Dr. Fauci should have been fired a long time ago, and that remains true today,” Carter told The Epoch Times. Rep. Buddy Carter (R-Ga.) is seen during a hearing in Washington in a file photograph. (Greg Nash/Pool/Getty Images) Mike Howell, a veteran congressional counsel and investigator who is now senior adviser on government relations at the Heritage Foundation, told The Epoch Times he thinks NIH could be in for trouble on the Hill in 2023 if voters return Republicans to majority control of the Senate and House in November’s mid-term elections. “This Congress has not only failed to perform any serious oversight of the Biden administration, but is in many cases complicit in covering for them. “When new majorities take over next over year, they will have a mandate to get to the bottom of scandals like this.” Another Heritage expert, Douglas Badger, pointed to the need for a systematic re-examination of federal ethics statutes and an oversight investigation of the NIH royalties by Congress. “Government scientists who are collecting royalties in connection with work they did in the course of their official duties must disclose this information to the public. The potential for conflict of interest is obvious,” Badger said. The US Department of Health and Human Services (HHS) building is seen in Washington, on July 22, 2019. (Alastair Pike/AFP via Getty Images) “The Department of Health and Human Services (HHS) should revise its ethics guidance to require such disclosure, federal agencies should respond fully and promptly to freedom of information act requests concerning these royalties, and Congress should conduct an oversight investigation to assure that royalties paid by private companies to government scientists do not compromise the integrity of executive branch agencies.” Badger is a senior fellow in Heritage’s Center for Health and Welfare Policy. Rick Manning, president of Americans for Limited Government, also pointed to the potential seriousness of the apparent conflicts of interest, and the need for a congressional probe. “The obvious conflict of interest for the public health scientist recipients of the hundreds of millions of dollars in royalty payments calls into question who they have been working for,” Manning asked. “Congress must demand a full, non-redacted accounting of these payments along with the projects these public employees have been involved in and stakeholder interests in those projects. “At a time when the truthfulness of public officials like Dr. Fauci, have come under intense scrutiny, it is critical for these relationships to be fully disclosed,” he said. In a related development earlier this week, Rep. Brett Guthrie told a meeting of an energy and commerce subcommittee examining Biden’s 2023 budget proposal for HHS that the department that includes NIH needs much more congressional oversight. “Oversight is especially important given the huge increases in funding requested by the Biden administration. The HHS budget before us today calls for a 12 percent increase in discretionary spending at HHS for Fiscal Year 2023,” Guthrie told the subcommittee. “The budget specifically gives more than a $6 billion combined boost in funding to the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health, both of which have come under fire recently over controversial masking guidance and COVID-19 research funded by NIH using American taxpayer dollars,” Guthrie continued. “We need to hold NIH accountable and ensure taxpayer dollars are not going to labs engaging in risky gain-of-function research and ensure researchers are transparent about how they are spending taxpayer funded research grants,” the Kentucky Republican said. Tyler Durden Thu, 05/12/2022 - 15:01.....»»

Category: blogSource: zerohedgeMay 12th, 2022

A (Brief) History Of Big Banks" Propaganda War On Bitcoin

A (Brief) History Of Big Banks' Propaganda War On Bitcoin Authored by Emmanuel Awosika via Bitcoin Magazine, It’s no coincidence that as the greatest threat to banking, Bitcoin is constantly under fire from the industry and its beneficiaries... Each year, Bitcoin continues to grow in stature. Bitcoin is going mainstream by every metric — financial value, adoption rates, transaction volume, you name it. But not everyone’s happy Bitcoin adoption is growing. In particular, the banking industry feels threatened by bitcoin’s rise and continues to wage war on the cryptocurrency. That banks don’t like Bitcoin shouldn’t be a surprise. Satoshi Nakamoto’s invention is the greatest disruption to the age-old monetary system in decades. As a peer-to-peer network for creating and exchanging value, Bitcoin may render banks useless. To protect their position, banking institutions have resorted to the classic tool of warfare: propaganda. By spreading misinformation, banks hope to discredit Bitcoin — reducing public adoption and encouraging stricter regulation. A (BRIEF) HISTORY OF BIG FINANCE’S PROPAGANDA WAR ON BITCOIN From the onset, Big Finance must have realized Bitcoin could potentially disrupt the banking system. But they chose to believe its use would remain restricted to drug dealers, computer geeks, cypherpunks, libertarians and other fringe elements. But as cryptocurrency adoption grew, especially among institutional investors, panic spread in the banking system. For the first time, the possibility that this “magic internet money” may displace banks was real. Thus, banks launched a coordinated effort to discredit cryptocurrencies. Bitcoin was and is a favorite target, given its status as the world’s first and most popular cryptocurrency. In 2014, Jamie Dimon, billionaire President and CEO of JPMorgan Chase, America’s largest bank, declared Bitcoin “a terrible store of value” at the World Economic Forum in Davos, Switzerland. However, that didn’t stop the state of New York from issuing licenses to Bitcoin exchanges the following year. Dimon followed up with his criticism of bitcoin in 2015, saying the cryptocurrency would never receive approval from governments. In his words, “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls.” Not satisfied, the JPMorgan Chase supremo launched his biggest attack on Bitcoin yet at the 2015 Barclays Global Financial Services Conference. Not only did he call Bitcoin a fraud similar to Tulipmania, but he also threatened to fire anyone who traded Bitcoin via his company. Dimon isn’t the only Big Finance stalwart who has tried to undermine Bitcoin. President of the European Central Bank Christine Lagarde has also been critical of Bitcoin in the past. At a Reuters Next Conference, Lagarde branded bitcoin “a highly speculative asset,” adding that it has been used to conduct “some funny business and some interesting and totally reprehensible money laundering activity.” This is even as the European Central Bank was considering launching its digital currency called the digital euro at the time. The ECB, too, has often lent itself to the anti-Bitcoin propaganda campaign. In its 2021 Financial Stability Review, the apex banker compared surges in bitcoin’s price to the infamous South Sea Bubble. “[Bitcoin’s] exorbitant carbon footprint and potential use for illicit purposes are grounds for concern,” it added in the report. Even the world’s largest financial institutions have also joined in on the anti-Bitcoin party. For example, the World Bank refused to support El Salvador’s plan to adopt bitcoin as legal tender, adducing “environmental and transparency shortcomings” of the cryptocurrency. The International Monetary Fund (IMF) also urged the Latin American nation to drop Bitcoin early this year. Of course, there are many, many more instances of old-money institutions sowing doubt and spreading misinformation about Bitcoin. Nevertheless, these statements all point to the same conclusion: banks hate Bitcoin and will stop at nothing to discredit it. “BITCOIN IS BAD, BLOCKCHAIN IS GOOD” Some financial players have taken another tack in their disinformation campaign. This involves criticizing Bitcoin but praising the underlying blockchain technology that powers the system. Banks see the potential of blockchain technology to revolutionize payments and want to co-opt the technology for their benefit. For example, JPMorgan Chase, the avowed Bitcoin critic, has created a cryptocurrency called “JPMCoin” running on its Quorum blockchain. Central banks have also touted blockchain’s capability to power central bank digital currencies (CBDCs) — cryptocurrencies issued and backed by governments. Such assets are pegged to a fiat currency, like the dollar or euro, much like a stablecoin. The Bank for International Settlement (BIS) ripped into cryptos in a June 2021 report, describing them as speculative assets used to facilitate money laundering, ransomware attacks and other financial crimes. “Bitcoin, in particular, has few redeeming public interest attributes when also considering its wasteful energy footprint,” the report declared. Ironically, the BIS advocated for CBDCs in the same report. Here’s an excerpt: “Central bank digital currencies represent a unique opportunity to design a technologically advanced representation of central bank money, one that offers the unique features of finality, liquidity, and integrity. Such currencies could form the backbone of a highly efficient new digital payment system by enabling broad access and providing strong data governance and privacy standards based on digital ID.” The “Bitcoin bad, blockchain good!” line has become the favorite refrain of banks and fintech operators in response to Bitcoin’s popularity. As always, this argument misses the point. Without Bitcoin’s decentralized architecture, blockchain-based payment monetary systems are useless. Permissioned blockchains like Quorum suffer from centralization and single points of failure — problems Nakamoto sought to correct by creating Bitcoin. The same issues plague CBDCs. As I explained in a recent article, centralized control of a digital dollar or pound causes the same problems witnessed with fiat currencies. With central banks controlling every inflow and outflow of money, it’d be all-too-easy to conduct financial surveillance, implement unpopular monetary policies and conduct financial discrimination. A bigger problem with this line of argument is that it fails to consider Bitcoin’s biggest strength: cryptoeconomics. Satoshi’s greatest contribution was a novel combination of economic incentives, game theory and applied cryptography necessary for keeping the system secure and useful in the absence of a centralized entity. Centralized blockchains with poor incentives are open to attack just like any other legacy system. WHY ARE BANKS SCARED OF BITCOIN? Traditional banks have long made money by charging users to store and use their money. The average account holder pays account maintenance fees, debit fees, overdraft fees and a plethora of charges designed to profit the bank. All the while, the bank loans out the money sitting in the account, while giving users only a fraction of the earned interest. Bitcoin, however, poses a threat to the banking industry’s revenue model. With cryptocurrencies, there are no institutions helping users to store, manage or use their money. The owner remains completely in control of their bitcoins. But, wait, there’s more. BETTER AND CHEAPER TRANSACTIONS Bitcoin makes it possible to transfer money to anyone, instantly, irrespective of the amount involved or the recipient’s location. And users can do that without relying on an intermediary like their local bank. On average, Bitcoin-powered transactions are faster and cheaper than transactions through banks. Consider how much time it takes to process an international transfer and the hefty fees that banks charge. Except for miner fees, people are not paying anyone else to process transactions on the Bitcoin blockchain. And amounts of any size, large or small, can be moved without the usual red tape. In less than 10 minutes, Bitcoin processes an irreversible money transfer. Banks simply cannot match that. STORE OF VALUE Banks help customers arrange long-term investments in gold, bonds and other assets, to secure the value of their money. And they charge a fee for custodianship, investment consulting and portfolio management. But what happens when people figure out they don’t have to rely on banks to store value? Due to its intrinsic properties, Bitcoin is rapidly emerging as a preferred store of value. Bitcoin is scarce (only 21 million units will ever be produced), but also fungible and portable. This makes it even better than traditional stores of values like gold. Because anyone can easily buy bitcoin and HODL, banks can no longer make money off shilling asset management plans. Banks, like JPMorgan, have adapted by selling bitcoin-based investments such as futures — but that won’t save them. RESISTANCE TO MANIPULATION Banks have long survived by manipulating the financial system for private gains. The 2008 financial crisis resulted from underhanded dealings by some of the world’s biggest banks, including Lehman Brothers, which later declared bankruptcy. For instance, banks always lend out more money than they own in what’s called leveraging. Should everyone decide to withdraw their money from banks, the entire industry would inevitably crash. Bitcoin allows people to be their own banks. Money in a Bitcoin wallet cannot be manipulated or used by anybody apart from the holder. For the first time, people now have the power to control their money. BANKS CANNOT KILL BITCOIN The intensity of the banking industry’s information war shows just how much they fear Bitcoin — as they should. It’s only a matter of time before bitcoin permeates every financial sector — offshore settlements, escrow, payments, asset investments and more. When that happens, banks will become the latest victims of technological disruption. Just as Netflix replaced video rentals and Amazon replaced bookstores, Bitcoin will replace banks. And no amount of doubt-sowing and misinformation will reverse that. Tyler Durden Mon, 05/09/2022 - 14:25.....»»

Category: blogSource: zerohedgeMay 9th, 2022

How to mine cryptos including bitcoin and ether: Your complete guide to the technical setups, profits, and risks involved

Crypto mining is a way to continue acquiring tokens when the market is down. We've interviewed nearly a dozen miners about how they do it. iStock; Insider Crypto mining is one way to acquire more digital currencies when the market is down.  Miners are essential to crypto because they help maintain blockchains and record transactions. Insider regularly interviews miners of various cryptos to detail their setups, earnings, and costs. You can read all about it by subscribing to Insider. The cryptocurrency boom of 2021 attracted interest from people looking for how to profit from the nascent asset class. Apart from buying tokens directly, crypto mining remains one of the most viable ways to amass digital currencies and participate in their upside. In practice, miners' computers compete by solving complex mathematical equations that help verify digital currency transactions and update the shared ledger called the blockchain. Their reward for solving these problems is a share of the cryptocurrency that's associated with the blockchain they are part of. Since crypto was designed to be decentralized, meaning that no single intermediary owns the transaction data, miners are essential to keeping the crypto ecosystem alive. But mining is not without roadblocks. The environmental impact of its electricity usage is a persistent concern. In 2021, miners fled China after the government banned mining in some provinces. And, the infrastructure bill that proposed more stringent tax-reporting requirements for miners showed that more regulatory firestorms could come.   Additionally, mining is not a golden ticket to crypto riches. Payouts vary and are subject to the volatility that's synonymous with this budding asset class. Equipment and electricity costs can also bite off any earnings. Despite these hurdles, crypto mining could continue to grow as digital currencies stretch further into the mainstream. The global market-research firm Technavio estimated that the market for ASIC hardware and graphic processing units (GPUs) will grow by $2.80 billion at a compounded annual rate of over 7% from 2020-2024.Insider has interviewed several miners who explained their processes from start to finish. We learned how they initially got smart on cryptocurrencies, the specific equipment they got started with, how they manage electricity costs, the amount of crypto they earn as rewards for maintaining the blockchain, and much more.  BitcoinMining the world's most popular cryptocurrency is one way to earn it at a potentially lower cost while participating in its upside.The practice may conjure up images of long LED-lit rows of computers, similar to the high-frequency trading systems that are out of the financial reach of most retail investors. But these facilities do not represent the full spectrum of bitcoin mining.  Insider has interviewed mining experts who run the gamut, from the founder of a company with facilities in three states to a TikToker who went viral for his $875 mini rig.      Read more:Mining $140 worth of bitcoin a month: A miner explains how he started by using his work computer and then scaling to a GPU rig. He also shares the software he used to increase hash rates.A 19-year-old receives about $887 worth of bitcoin a month by mining in his tiny studio apartment. He explains how he uses a GPU mining rig — and shares 2 additional miners with lower barriers to entry.How to mine bitcoin: The founder of a mining farm breaks down the costs of electricity and equipment, how to pool, and the profits he earns in the processA key bitcoin lightning network developer shares how he makes $4,500 a month just in fees from running a node. He and 3 other crypto experts lay out how to run profitable nodes.An $875 mini bitcoin-mining rig is viral on TikTok. The video's creator told us 3 reasons why it's an appealing alternative for crypto traders, and explained its limitations.Ether The second-largest crypto by market cap recently underwent a software upgrade called the London hard fork that contained five Ethereum Improvement Proposals, or code changes. The most important one for miners was arguably EIP-1559, which mandated a minimum base fee that all users must pay to execute their transactions. Under the new system, these fees will be burned from the network instead of being rewarded to miners. In short, the upgrade means that ether miners, whose revenues had surpassed that of bitcoin miners, will be paid less. We're tracking the unfolding impact of this new development, as well as how ether miners continue to earn passive income. Read more:A 25-year-old receives about $1,118 a month mining ethereum out of his house. He breaks down the graphics cards he bought, how much he paid, and key lessons learned.How to mine ethereum: A 25-year-old who pays $42 a month in exchange for half an ether monthly explains how he does it — and an expert breaks down the effect of the blockchain's recent upgrade on minersHow to mine ether for maximum profits: The CEO of a company that operates 7 mining farms breaks down how to pick the right equipment and manage electricity costs for optimal gainsOther altcoins: Doge and heliumAltcoin mining has become a hobby for people like Dason Thomas, who became interested after seeing TikTok videos of others and recognizing mining as an avenue to build wealth. Thomas' equipment includes 12 Antminer l3+'s that mine scrypt algorithms, a type of cryptography used in hashing various altcoins including dogecoin and litecoin. He also has a mini dogecoin miner that he bought for $699. This relatively cheap entry point illustrates how easy it can be to get started earning cryptos without buying them directly.Read more:How to mine shiba inu for free: A college student used his old laptop to download software that rakes in the crypto dailyHow to mine doge: An 18-year-old TikTok influencer shares his process for earning crypto without directly buying via a $700 rig — and explains how it works for other altcoins including litecoinHelium mining is surging in popularity as people clamor to get into crypto. A software engineer who bought 100 miners at $350 apiece explains how he set up his system, how much he's earning, and how to maximize gains.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 6th, 2022