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The week in bankruptcies: Texas Grease Enterprises, Hardy Alloys and more

San Antonio area bankruptcy courts recorded three business filings - including one with total debt above $1 million - during the week that ended October 8, 2021. Year to date through October 8, 2021, the court recorded 54 Chapter 7 or Chapter 11 business bankruptcy filings, a 4 percent increase from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business’ assets to satisfy creditor claims, while Chapter 11 protection enables a business….....»»

Category: topSource: bizjournalsOct 14th, 2021

Women exposed to cleaning products at work are more likely to give birth to kids with asthma - even if the exposure was long before conceiving

Chemicals from cleaning products could impact the health of future generations before they're even conceived. A mother helps her son use an inhaler. Roberto Jimenez Mejias/Getty Images Kids whose mothers were exposed to cleaning products at work were more likely to develop asthma than other kids, a study found. That was true even for mothers exposed to the products up to 2 years before giving birth. That means cleaning products could impact the health of future generations before they're conceived. A mother's exposure to cleaning products at work could hurt the health of her future child - even if the exposure comes before that child is ever conceived.That's the conclusion of a study published last week, which showed that children whose mothers were exposed to cleaning products at work before or around the time they got pregnant were more likely to develop asthma than the children of moms with minimal exposure to these products.Scientists have long understood that frequent exposure to chemicals in cleaning products can lead some people to develop asthma or make asthma symptoms worse. But the new research shows how that health risk can be passed from mother to child. The study relied on data from two generations: around 3,300 people born between 1962 and 1998, and their mothers, who were born between 1945 and 1973. Each mom had a job that put her at a high or medium level of exposure to cleaning products for at least six months. That included work as professional cleaners for offices, hotels, or homes, as well as positions as housekeepers, restaurant workers, embalmers, or hair dressers.Within that group of mothers, 150 were exposed to cleaning products at least two years before their kids were born, but not during or after pregnancy. Their children were more likely to develop asthma before age 10 than any other kids included in the study. Children whose moms were exposed during pregnancy, up to a year after giving birth, or 3 to 15 months before they conceived were also more likely to develop asthma before age 10.The study "adds a new dimension to the growing concern about health effects of cleaning agents," the researchers wrote. The products we use now may pose harm to future generations, they said.Chemicals in detergents and disinfectants are linked to asthma symptoms A worker cleans a room at the Hotel Claris in Barcelona on November 4, 2020. David Zorrakino/Europa Press/Getty Images The study looked at mothers across Northern Europe, Spain, and Australia who'd been exposed to indoor cleaning products - mostly detergents and disinfectants. The results showed that their kids' asthma risk was consistent regardless of whether the mothers smoked or had asthma before having children.But the study didn't look more specifically at particular cleaning products, or the chemicals found in those products. A 2015 study, however, found that bleach, glass cleaner, detergents, and air fresheners all worsened asthma symptoms for professional cleaners.Many of those products contain ammonia, a potent chemical that breaks down grease and mildew. Several studies have suggested that frequent exposure to ammonia may cause asthma symptoms. Cleaning products can also release volatile organic compounds, a group of colorless (and often odorless) fumes. Scientists have found that indoor exposure to these chemicals may be associated with asthma, but more research is needed to assess the risk they might pose.Exposure to cleaning chemicals could alter a mother's reproductive cells A woman in a delivery room at Tatarstan's Republican Clinical Hospital in Kazan, Russia on August 5, 2021. Yegor Aleyev/TASS/Getty Images The researchers weren't able to determine exactly why children in the study developed asthma. One theory is that cleaning chemicals cross the placenta during pregnancy, so transfer from mother to unborn child. The chemicals might then alter the development of a child's airways inside the womb, leading to asthma symptoms in early childhood.But that theory doesn't explain why children were most likely to develop asthma when their mothers had been exposed to cleaning products well before pregnancy.So the researchers offered another hypothesis: Exposure to cleaning chemicals might alter a mother's germ cells - the cells responsible for passing genes to the next generation. In that case, even if a mother isn't exposed to cleaning chemicals during pregnancy, her child could still inherit a set of genetic instructions that hinders their breathing once they're born.Prior research has also found that the compounds a mother - or even grandmother - is exposed to can influence a child's asthma risk.Last year, a study found that children had a higher risk of asthma if their mothers had been exposed to air pollution when they were kids. Amd a 2018 study found that children under age 6 had an increased risk of asthma if their grandmothers had smoked during early pregnancy - regardless of whether their mothers had also smoked. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 26th, 2021

Beijing Tells Evergrande"s Billionaire Founder To Repay The Insolvent Company"s Debts

Beijing Tells Evergrande's Billionaire Founder To Repay The Insolvent Company's Debts Hui Ka Yan, founder of China Evergrande Group, had once amassed a fortune of $42.5 billion, placing him at the top of the wealth rankings for all of Asia. But 73% of that immense fortune has now evaporated, and the tycoon will almost certainly lose even more as anxious creditors, suppliers and homebuyers besiege Evergrande’s offices. Hui Ka Yan But that's not nearly enough for Beijing. In a new twist of how China may soon conduct corporate bankruptcies, Chinese authorities told Hui Ka Yan to use his personal wealth to "alleviate" China Evergrande Group’s deepening debt crisis, Bloomberg reported according to people familiar with the matter. Beijing’s "directive" - which to us sounds just a bit m,more forceful than merely "urging" - to the Evergrande founder came after his company missed an initial Sept. 23 deadline for a coupon payment on a dollar bond, and takes place as local governments across China are monitoring Evergrande’s bank accounts to ensure company cash is used to complete unfinished housing projects and not diverted to pay creditors, the people said. According to Bloomberg, the demand that Hui to breach the corporate veil and "tap his own fortune to pay Evergrande’s debt adds to signs that Beijing is reluctant to orchestrate a government rescue, even as the property giant’s crisis spreads to other developers and sours sentiment in the real estate market." Our read is slightly different: Beijing will still have to orchestrate a government rescue because while Yan's fortune has shrank to "just" $7.8 billion from its 2017 peak of $42 billion, that would be a tiny fraction of the $300+ billion in debt and other liabilities the company owes. As such, Beijing's demand is merely a warning to other oligarchs: if your company became over indebted and is suddenly no longer viable, your own fortune will be at risk. Bloomberg's notes as much, saying that it was unclear whether Hui’s fortune is big and liquid enough to make a sizable dent in Evergrande’s liabilities, which swelled to more than $300 billion as of June. The developer’s dollar bonds are trading at deep discounts to par value as investors brace for what could be one of China’s largest-ever debt restructurings. To be sure, Beijing won't have much trouble bringing its case to the people, especially those people who lost their life savings on Evergrande Wealth Management Products: Hui’s fortune is derived from his controlling stake in Evergrande and the cash dividends he’s received from the company since its 2009 listing in Hong Kong. Hui has pocketed about $8 billion over the past decade thanks to Evergrande’s generous payouts, according to Bloomberg calculations. So, flipping Beijing's new paradigm of "shared prosperity" on its head to "shared misery", it only makes sense for Yan to lose everything as his company slowly goes under. While Evergrande surprised some China watchers by pulling back from the brink of default, paying a $83.5 million coupon to international bondholders before the grace period expired Oct. 23, the next big test will come as soon as this Friday when the 30-day grace period on another dollar coupon payment comes due. A hefty wall of maturing debt awaits in 2022, with some $7.4 billion of onshore and offshore bonds coming due. It wasn't clear where Evergrande's debt repayment funds came from. Separately, Reuters reported that Hui agreed to put his own money into a Chinese residential project tied to a bond to ensure it’s completed and bondholders get paid. Unfortunately for Evergrande's lenders, even if the billionaire backstops the debt with his personal funds, it won't make much of a difference. The property giant's operations have effectively frozen, as sales collapsed 97% in the most recent period, while there has been very little help from asset sales in recent months even after Hui put stakes in once-prized arms such as his electric vehicle and bottled water units on the block. Evergrande said last Wednesday it scrapped talks to offload a stake in its property-management arm. The deal fell apart even after officials in Evergrande’s home province of Guangdong helped broker the talks. If Yan ultimately goes along with Beijing's directive he has nobody to blame but himself... and Xi Jinping of course: Evergrande and its affiliated companies were built through an aggressive mix of debt issuance, share sales, bank loans and shadow financing - funding avenues that have been largely cut off under Beijing's recent debt crackdown. As Bloomberg notes, the Ministry of Housing and Urban-Rural Development instructed local subsidiaries across China in August to supervise funds for Evergrande’s property projects in special escrow accounts, people familiar said. Under the heightened oversight, the developer’s funds must first be used for construction to ensure project delivery. Evergrande has yet to finish homes for 1.6 million buyers who have already put down deposits. Its real estate sales plunged about 97% during peak home-buying season, further crimping its ability to generate funds. Ultimately, Yan may be lucky if he can get away from his troubles by just parting with all his money: his firm’s troubles are infecting the broader housing market, and the outcome could spark widespread popular anger which Beijing will be quick to redirect at the likes of Yan. For now this dire outcome seems unlikely: China’s banking regulator last week vowed to keep its curbs on the nation’s property market, even though the policies have weighed on indebted developers. While officials have told banks to speed up mortgage lending again, the central bank has indicated that contagion risks from Evergrande are “controllable” and unlikely to spread.Then again, that's what regulators said about Lehman too... Tyler Durden Tue, 10/26/2021 - 09:35.....»»

Category: blogSource: zerohedgeOct 26th, 2021

5 Technology Bigwigs Set to Beat Earnings Estimates This Week

Five technology bigwigs (market capital > $100 billion) are slated to release earnings results this week. These are: AMD, GOOGL, TXN, AAPL and NOW. The third-quarter earnings season is in full swing, with more than 900 companies set to report their quarterly numbers this week. Out of these companies, market participants’ focus will be predominantly on the technology behemoths.The third-quarter earnings results are pretty encouraging so far. This is in contrast to the view of a section of economists and financial experts that the momentum of the U.S. economic recovery slipped last quarter owing to prolonged supply-chain disruptions, labor shortage, higher inflationary pressure and the resurgence of the Delta variant of the novel coronavirus.In fact, it is primarily the robust third-quarter earnings results that led Wall Street to a bull ride in October after a tumultuous September. Nevertheless, earnings results of the tech sector, especially, the technology giants, will set the course for U.S. stock markets in the near term.Technology Sector in Q3 At a GlanceThe technology sector faced two major macro-economic headwinds in last quarter. The lingering global supply-chain disruptions led by the acute shortage of chipset affected the overall technology sector. Moreover, the lack of skilled labor resulted in a higher wage rate. These two factors together raised input costs for the industry players.Second, inflation rates skyrocketed in the third quarter compelling the Fed to think about tapering ithe existing quantitative easing program that the central bank adopted to maintain sufficient liquidity in the economy during the pandemic era.  The anticipation of the Fed’s tapering of $120 billion per month bond-buy program resulted in a spike in the yield curve of government bonds. Higher market risk-free returns are detrimental to growth-oriented sectors, especially, technology stocks. A higher discount rate will reduce the net present value of investment in technology stocks.Despite these hindrances, the Technology Select Sector SPDR (XLK), one of the 11broad sectors of the market’s benchmark — the S&P 500 Index — gained 1.3% in the third-quarter.Stocks in FocusFive technology bigwigs (market capital > $100 billion) are slated to release earnings results this week. Each of these stocks carries either a Zacks Rank#2 (Buy) or 3 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.The chart below shows the price performance of five stocks mentioned below in the last quarter.Image Source: Zacks Investment ResearchAdvanced Micro Devices Inc. AMD is riding on robust performance from the Computing and Graphics, and Enterprise Embedded and Semi-Custom segments. It is benefiting from strong sales of its Ryzen and EPYC server processors, owing to the increasing proliferation of AI and Machine Learning in industries like cloud gaming and the supercomputing domain.Moreover, the growing clout of 7-nanometer products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst. Management raised its 2021 guidance for revenues and gross margin on the back of strong growth across all businesses.This Zacks Rank #2 company has an Earnings ESP of +2.31%. It has an expected earnings growth rate of 94.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.4% over the last 30 days. It recorded earnings surprises in the last four reported quarters, with an average beat of 14.9%. The company is set to release third-quarter 2021 earnings results on Oct 26, after the closing bell.Alphabet Inc. GOOGL has been showing increased appetite in the Home Assistant space. The company is focused on innovation, launching products and services for multiple industries. Alphabet's robust cloud division is aiding substantial revenue growth.Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in its search segment are enhancing the search results. Additionally, Google’s mobile search is gaining solid momentum. Further, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term. Also, its deepening focus on the wearables category remains a tailwind.This Zacks Rank #2 company has an Earnings ESP of +7.71%. It has an expected earnings growth rate of 73.8% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.01% over the last 30 days. It recorded earnings surprises in the last four reported quarters, with an average beat of 47.2%. The company is set to release third-quarter 2021 earnings results on Oct 26, after the closing bell.2Texas Instruments Inc. TXN is benefiting from growth in the personal electronics market owing to the coronavirus-led work-from-home trend. Additionally, solid momentum across the Analog segment owing to robust signal chain and power product lines, is benefiting the top line.  The continued rebound in the automotive market is a tailwind for the company. Solid growth in the industrial market is another positive. Strategic investments in new growth avenues and competitive advantages should also reap results in the long term. Its portfolio of long-lived products and efficient manufacturing strategies are the other catalysts.This Zacks Rank #2 company has an Earnings ESP of +9.22%. It has an expected earnings growth rate of 32.7% for the current year. The Zacks Consensus Estimate for current year-earnings improved 0.8% over the last 30 days. It recorded earnings surprises in the last four reported quarters, with an average beat of 20.3%. The company is set to release third-quarter 2021 earnings results on Oct 26, after the closing bell.ServiceNow Inc. NOW is benefiting from robust growth in subscription revenues driven by the digital transformation of enterprises. As enterprises continue to cloudify their infrastructure, the company is poised to boost uptake of its Now platform. Its workflow solutions have been winning customers on a regular basis.Further, ServiceNow’s expanding global presence, a solid partner base and strategic buyouts are expected to bolster growth prospects. Based on the strong adoption of its digital workflow solutions, ServiceNow expects 2021 subscription billings to grow year over year. Also, strategic alliances with various technology behemoths remain tailwinds.This Zacks Rank #3 company has an Earnings ESP of +4.32%. It has an expected earnings growth rate of 25.5% for the current year. The Zacks Consensus Estimate for current year-earnings improved 0.2% over the last 30 days. It recorded earnings surprises in the last four reported quarters, with an average beat of 14.9%. The company is set to release third-quarter 2021 earnings results on Oct 27, after the closing bell.Apple Inc. AAPL is benefiting from continued momentum in the Services segment, driven by App Store, Cloud Services, Music, advertising and AppleCare. The company’s near-term prospects are bright, driven by new iPhones that support 5G, revamped iPad and Mac line-up of devices, healthcare-focused Apple Watch, and an expanding App Store ecosystem.Apple’s ability to attract small developers has been a key catalyst. Moreover, its devices continue to gain traction among enterprises. Its focus on autonomous vehicles and augmented reality/virtual reality technologies presents growth opportunities in the long haul. These are fast emerging as lucrative business opportunities.This Zacks Rank #3 company has an Earnings ESP of +5.69%. It has an expected earnings growth rate of 2.5% for the current year (ending September 2022). It recorded earnings surprises in the last four reported quarters, with an average beat of 23.7%. The company is set to release fourth-quarter fiscal 2021 earnings results on Oct 28, after the closing bell. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Texas Instruments Incorporated (TXN): Free Stock Analysis Report Apple Inc. (AAPL): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report ServiceNow, Inc. (NOW): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 25th, 2021

Millions Of Jobs At Risk As Europe Faces Magnesium Shortage

Millions Of Jobs At Risk As Europe Faces Magnesium Shortage Europe purchases 95% of its magnesium from China, will run out of the industrial metal used to strengthen aluminum by the end of November that could threaten millions of jobs in sectors from automobiles to aerospace to defense and much more, according to Bloomberg.  Three trade groups, including European Aluminium, Eurometaux, and industriAll, warn shipments from China are dwindling quick due to power cuts to energy-intensive magnesium smelters. They said if reserves of the industrial metal aren't increased in the near term, it may result in trade production shortages, factory closures, and job losses.  "Supply of magnesium originating from China has either been halted or reduced drastically since September 2021, resulting in an international supply crisis of unprecedented magnitude," the trade groups said. They urged Brussels "to urgently work toward immediate actions with their Chinese counterparties to mitigate the short-term, critical shortage issue, as well as the longer-term supply effects on European industries." Magnesium, which is used extensively in the aerospace industry, is a metal for producing aluminum alloys in the automotive industry and could compound issues for European carmakers already dealing with crippling chip shortages.  Morgan Stanley's Amy Sergeant and Ioannis Masvoulas told clients last week that Europe stands out as the most exposed region to magnesium shortfalls from China. They said Europe shuttered its last magnesium smelter in 2001. This means that there's no way for Europe to domestically increase magnesium supplies and hinges all on China's output.  Days ago, Barclays analyst Amos Fletcher warned clients, "there are no substitutes for magnesium in aluminum sheet and billet production." He said if "magnesium supply stops," the entire auto industry will grind to a halt.  European Aluminium, whose members include Norsk Hydro, Rio Tinto, and Alcoa, said, "the current magnesium supply shortage is a clear example of the risk the EU is taking by making its domestic economy dependent on Chinese imports. The EU's industrial metals strategy must be strengthened."  Morgan Stanley warns: "Should magnesium shortages persist through to 2022, there is a growing risk of downstream demand destruction as smelters may be unable to produce specific aluminum alloys for the automotive, building, and packaging sectors. In that scenario, we could see a shift towards commodity-grade standard ingot."  The unintended consequences of European officials deciding decades ago to rely entirely on China for magnesium could spell disaster for millions of jobs if reserves aren't replenished soon.  Tyler Durden Mon, 10/25/2021 - 02:45.....»»

Category: blogSource: zerohedgeOct 25th, 2021

Michigan State University is so short on dining staff its asking professors and staff to volunteer

Colleges, like others, are in need of more workers. Michigan State University is asking faculty and staff to come help out at the dining halls. wellesenterprises/Getty Images Michigan State University's dining halls need more workers. It has asked over 100 full-time residential and hospitality services administrative employees to work a few hours a week. But now the university's residential and hospitality services is seeing if faculty and staff are willing to pitch in their time. Michigan State University is just one of many places needing more workers. The university is seeking faculty and staff who are willing to help with the shortage of workers in the dining halls. According to reporting from the Lansing State Journal, part of the staffing issue is because of the fewer student workers. Usually there would be almost ​​4,000 students working in the dining halls; there were 1,200 as of the end of September per Lansing State Journal.Vennie Gore, senior vice president for residential and hospitality services and auxiliary enterprises, sent out an email to deans, directors, and chairs that they're looking for staff and faculty members to assist in the dining halls and to spread the word with their departments, according to Lansing State Journal. Gore noted in the email "We have specific needs during evenings and weekends," the report said. The email notes that the school already asked 132 full-time administrative employees of residential and hospitality services to work at the dining halls for eight hours a week.Despite the need for more people working in the dining halls, Kat Cooper, director of communications for the division of residential and hospitality services at the university, told The Detroit News that the situation in the dining halls is getting better as they hire more. They have also increased starting wages in the dining services to attract workers. Not everyone was thrilled with the call for staff and faculty volunteers. Richard Davila, a research specialist at the university, told The Detroit News that the email was "tone-deaf" and added "MSU is having a hard time competing to get people to come work in culinary services," but isn't the faculty and staff's fault."If they want to be more competitive, they need to make their compensation and benefit package more competitive," Davila told The Detroit News. The leisure and hospitality industry is especially having a hard time finding and retaining workers. Restaurants and other food businesses are competing to fill open roles. Workers in food service are quitting for other better paying opportunities as well. The quit rate for accommodation and food services in particular was at a high of 6.8% in August. Restaurants and other businesses have increased pay and are offering incentives like sign on bonuses to attract new workers. Other sectors looking for workers are offering sign on bonuses as well, such as some childcare centers and places looking to hire more bus drivers.Michigan State University isn't the only college desperate for workers, specifically in dining services.A worker for University of Georgia's dining services told Yahoo Finance that "everybody's overworked.""Mad rush describes it pretty well - staffing shortages, supply chain shortages, a rush of students coming in who are new to campus," the employee told Yahoo Finance. Other colleges like Indiana University and UC San Diego are among those feeling the strains of the labor shortage with more students back on campuses this academic year. Students at these schools said they're facing long wait times. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 23rd, 2021

The week in Twin Cities bankruptcies: 10193 Flanders LLC.

Minneapolis area bankruptcy courts recorded one business filing - including zero with total debt above $1 million - during the week that ended October 15, 2021. Year to date through October 15, 2021, the court recorded 29 Chapter 7 or Chapter 11 business bankruptcy filings, a -19 percent decrease from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business’ assets to satisfy creditor claims, while Chapter 11 protection enables a business….....»»

Category: topSource: bizjournalsOct 21st, 2021

The week in bankruptcies: Sunset Delivery LLC

Seattle area bankruptcy courts recorded one business filing during the week that ended Oct. 15. Year to date through Oct. 15, the court recorded 32 Chapter 7 or Chapter 11 business bankruptcy filings, a 41% decrease from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business's assets to satisfy creditor claims, while Chapter 11 protection enables a business to restructure its creditor obligations with the goal to remain a going concern. Sunset….....»»

Category: topSource: bizjournalsOct 21st, 2021

Transcript: Soraya Darabi

     The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This… Read More The post Transcript: Soraya Darabi appeared first on The Big Picture.      The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Her name is Soraya Darabi. She is a venture capital and impact investor who has an absolutely fascinating background working for, first with the New York Times Social Media Group then with a startup that eventually gets purchased by OpenTable, and then becoming a venture investor that focuses on women and people of color-led startups which is not merely a way to, quote-unquote, “do good” but it’s a broad area that is wildly underserved by the venture community and therefore is very inefficient. Meaning, there’s a lot of upside in this. You can both do well and do good by investing in these areas. I found this to be absolutely fascinating and I think you will also, if you’re at all interested in entrepreneurship, social media startups, deal flow, how funds identify who they want to invest in, what it’s like to actually experience an exit as an entrepreneur, I think you’ll find this to be quite fascinating. So with no further ado, my conversation with TMV’s Soraya Darabi. VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. My special guest this week is Soraya Darabi. She is the Co-Founder and General Partner of TMV, a venture capital firm that has had a number of that exits despite being relatively young, 65 percent of TMV’s startups are led by women or people of color. Previously, she was the cofounder of Foodspotting, an app named App of the Year by Apple and Wire that was eventually purchased by OpenTable. Soraya Darabi, welcome to Bloomberg. SORAYA DARABI; GENERAL PARTNER & FOUNDER; TMV: My goodness, Barry, thank you for having me. RITHOLTZ: I’ve been looking forward to this conversation since our previous discussion. We were on a Zoom call with a number of people discussing blockchain and crypto when it was really quite fascinating and I thought you had such an unusual and interesting background, I thought you would make a perfect guest for the show. Let’s start with your Manager of Digital Partnerships and Social Media at the “New York Times” when social media was really just ramping up. Tell us about what that was like. Tell us what you did in the late aughts at The Times. DARABI: Absolutely. I was fresh faced out of a university. I had recently graduated with mostly a journalism concentration from Georgetown and did a small stint in Condé Nast right around the time they acquired Reddit for what will soon be nothing because Reddit’s expecting to IPO at around 15 billion. And that experience at Reddit really offered me a deep understanding of convergence, what was happening to digital media properties as they partnered for the first time when nascent but scaling social media platforms. And so the “New York Times” generously offered me a role that was originally called manager of buzz marketing. I think that’s what they called social media in 2006 and then that eventually evolved into manager of digital partnerships and social media which, in essence, meant that we were aiming to be the first media property in the world to partner with companies that are household names today but back in the they were fairly unbalanced to Facebook and Twitters, of course, but also platforms that really took off for a while and then plateaued potentially. The Tumblers of the world. And it was responsibility to understand how we could effectively generate an understanding of the burgeoning demographics of this platform and how we could potentially bring income into The Times for working with them, but more importantly have a journalist that could authentically represent themselves on new media. And so, that was a really wonderful role to have directly out of University and then introduce me to folks with whom I still work today. DARABI: That’s quite interesting. So when you’re looking at a lot of these companies, you mentioned Facebook and Twitter and Tumbler, how do you know if something’s going to be a Facebook or a MySpace, so Twitter or a Tumbler, what’s going to survive or not, when you’re cutting deals with these companies on behalf of The Times, are you thinking in terms of hey, who’s going to stick around, wasn’t that much earlier that the dot-com implosion took place prior to you starting with The Times? DARABI: It’s true, although I don’t remember the dot-com implosion. So, maybe that naivete helped because all I had was enthusiasm, unbridled enthusiasm for these new companies and I operated then and now still with a beta approach to business. Testing out new platforms and trying to track the data, what’s scaling, what velocity is this platform scaling and can we hitch a ride on the rochet ship if they will so allow. But a lot of our partnerships then and now, as an investor, are predicated upon relationships. And so, as most, I think terrific investors that I listen to, who I listen to in your show, at least, will talk to you about the importance of believing and the founder and the founder’s vision and that was the case back then and remains the case today. RITHOLTZ: So, when you were at The Times, your tenure there very much overlapped the great financial crisis. You’re looking at social media, how did that manifest the world of social media when it looked like the world of finance was imploding at that time? DARABI: Well, it was a very interesting time. I remember having, quite literally, 30-second meetings with Sorkin as he would run upstairs to my floor, in the eighth floor, to talk about a deal book app that we wanted to launch and then he’d ran back down to his desk to do much more important work, I think, and — between the financial crisis to the world. So, 30-second meetings aside, it was considered to be, in some ways, a great awakening for the Web 2.0 era as the economy was bottoming out, like a recession, it also offered a really interesting opportunity for entrepreneurs, many of whom had just been laid off or we’re looking at this as a sizeable moment to begin to work on a side hustle or a life pursuit. And so, there’s — it’s unsettling, of course, any recession or any great awakening, but lemonade-lemons, when the opening door closing, there was a — there was a true opportunity as well for social media founders, founders focusing on convergence in any industry, really, many of which are predicated in New York. But again, tinkering on an idea that could ultimately become quite powerful because if you’re in the earliest stage of the riskiest asset class, big venture, there’s always going to be seed funding for a great founder with a great idea. And so, I think some of the smartest people I’d ever met in my life, I met at the onset of the aftermath of that particular era in time. RITHOLTZ: So you mentioned side hustle. Let’s talk a little bit about Foodspotting which is described as a visual geolocal guide to dishes instead of restaurants which sounds appealing to me. And it was named App of the Year by both Apple and Wired. How do you go from working at a giant organization like The Times to a startup with you and a cofounder and a handful of other coders working with you? DARABI: Well, five to six nights a week after my day job at the “New York Times,” I would go to networking events with technologists and entrepreneurs after hours. I saw that a priority to be able to partner from the earliest infancy with interesting companies for that media entity. I need to at least know who these founders were in New York and Silicon Valley. And so, without a true agenda other than keen curiosity to learn what this business were all about, I would go to New York tech meetup which Scott Heiferman of meetup.com who’s now in charge LP in my fund would create. And back then, the New York Tech Meetup was fewer than 40 people. I believe it’s been the tens of thousands now. RITHOLTZ: Wow, that’s … DARABI: In New York City alone. And so, it was there that I met some really brilliant people. And in particular, a gentleman my age who’s building a cloud-computing company that was essentially arbitraging AWS to repopulate consumer-facing cloud data services for enterprises, B2B2C play. And we all thought it would be Dropbox. The company ultimately wasn’t, but I will tell you the people with whom I worked with that startup because I left the “New York Times” to join that startup, to this day remain some of the most successful people in Silicon Valley and Alley. And actually, one of those persons is a partner at our firm now, Darshan. He was the cofounder of that particular company which is called drop.io. but I stayed there very quickly. I was there for about six months. But at that startup, I observed how a young person my age could build a business, raise VC, he was the son of a VC and so he was exceptionally attuned to the changing landscape of venture and how to position the company so that it would be attractive to the RREs of the world and then the DFJs. And I … RITHOLTZ: Define those for us. RREs and BFJs. DARABI: Sorry. Still, today, very relevant and very successful venture capital firms. And in particular, they were backing a lot of the most interesting ideas in Web 2.0 era when I joined this particular startup in 2010. Well, that startup was acquired by Facebook and I often say, no, thanks to me. But the mafia that left that particular startup continues to this day to coinvest with one another and help one another’s ideas to exceed. And it was there that I began to build the confidence, I think, that I really needed to explore my own entrepreneurial ideas or to help accelerate ideas. And Foodspotting was a company that I was advising while at that particular startup, that was really taking off. This was in the early days of when Instagram was still in beta and we observed that the most commonly posted photos on Instagram were of food. And so, by following that lead, we basically built an app as well that activity that continues to take place every single day. I still see food photos on Twitter every time I open up my stream. And decided to match that with an algorithm that showed folks wherever they were in the world, say in Greece, that might want spanakopita or if I’m in Japan, Okinawa, we help people to discover not just the Michelin-rated restaurants or the most popular local hunt in New York but rather what’s the dish that they should be ordering. And then the app was extremely good was populating beautiful photos of that particular dish and then mirroring them with accredited reviews from the Zagats of the world but also popular celebrity shots like Marcus Samuelsson in New York. And that’s why we took off because it was a cult-beloved app of its time back when there were only three geolocation apps in the iTunes apparently store. It was we and Twitter and Foursquare. So, there was a first-mover advantage. Looking back in hindsight, I think we sold that company too soon. OpenTable bought the business. A year and a half later, Priceline bought OpenTable. Both were generous liquidity events for the founders that enabled us to become angel investors. But sometimes I wish that that app still existed today because I could see it being still incredibly handy in my day-to-day life. RITHOLTZ: To say the least. So did you have to raise money for Foodspotting or did you just bootstrapped it and how did that experience compare with what that exit was like? DARABI: We did. We raised from tremendous investors like Aydin Senkut of Felicis Ventures whom I think of as being one of the best angel investors of the world. He was on the board. But we didn’t raise that much capital before the business is ultimately sold and what I learned in some of those early conversations, I would say, that may have ultimately led to LOIs and term sheets was that so much of M&As about wining and dining and as a young person, particularly for me, you and I discussed before the show, Barry, we’re both from New York, I’m not from a business-oriented family to say the least. My mom’s an academic, my father was a cab driver in New York City. And so, there are certain elements of this game, raising venture and ultimately trying to exit your company, that you don’t learn from a business book. And I think navigating that as a young person was complicated if I had to speak economically. RITHOLTZ: Quite fascinating. What is purposeful change? DARABI: Well, the world purpose, I suppose, especially in the VC game could come across as somewhat of a cliché. But we try to be as specific as possible when we allude to the impact that our investment could potentially make. And so, specifically, we invest in five verticals at our early stage New York City-based venture fund. We invest in what we call the care economy, just companies making all forms of care, elder care to pet care to health care, more accessible and equitable. We invest in financial inclusion. So this is a spin on fintech. These are companies enabling wealth creation, education, and most importantly literacy for all, that I think is really important to democratization of finance. We invest in the future of work which are companies creating better outcomes for workers and employees alike. We invest in the future of work which are companies creating better outcomes for workers and employers alike. We invest in purpose as it pertains to transportation. So, not immediately intuitive but companies creating transparency and efficiency around global supply chain and mobility. I’m going to talk about why we pick that category in a bit. And sustainability. So, tech-enabled sustainable solutions. These are companies optimizing for sustainability from process to product. With these five verticals combined, we have a subspecies which is that diverse founders and diverse employee bases and diverse cap table. It is not charity, it’s simply good for business. And so, in addition to being hyper specific about the impact in which we invest, we also make it a priority and a mandate at our firm to invest in the way the world truly look. And when we say that on our website, we link to census data. And so, we invest in man and women equally. We invest in diverse founders, almost all of the time. And we track this with data and precious to make sure that our investments reflect not just one zip code in California but rather America at large. RITHOLTZ: And you have described this as non-obvious founders. Tell us a little bit about that phrase. DARABI: Well, not obvious is a term you hear a lot when you go out to Silicon Valley. And I don’t know, I think it was coined by a well-known early PayPal employee turned billionaire turned investor who actually have a conference centered around non-obvious ideas. And I love the phrase. I love thinking about investment PC that are contrary because we have a contrary point of view, contrarian point of view, you often have outlier results because if you’re right, you’re taking the risk and your capturing the reward. When you’re investing in non-obvious founders, it should be that is the exact same outcome. And so, it almost sort of befuddled me as a person with a hard to pronounce name in Silicon Valley, why it was that we’re an industry that prides itself on investing in innovation and groundbreaking ideas and the next frontier of X, Y, and Z and yet all of those founders in which we were investing, collectively, tended to kind of look the same. They were coming from the same schools and the same types of families. And so, to me, there was nothing innovative at all about backing that Wharton, PSB, HBS guy who is second or third-generation finance. And what really excites me about venture is capturing a moment in time that’s young but also the energy is palpable around not only the idea in which the founder is building but the categories of which they’re tackling and that sounded big. I’ll be a little bit more speficic. And so, at TMV, we tried to see things before they’re even coming around the bend. For instance, we were early investors in a company called Cityblock Health which is offering best in class health care specifically for low income Americans. So they focus on the most vulnerable population which are underserved with health care and they’re offering them best in class health care access at affordable pricing because it’s predominantly covered through a payer relationship. And this company is so powerful to us for three reasons because it’s not simply offering health care to the elite. It’s democratizing access to care which I think is absolutely necessary in term out for success of any kind. We thought this was profoundly interesting because the population which they serve is also incredibly diverse. And so when you look at that investment over, say, a comparable company, I won’t name names, that offers for-profit health care, out-of-pocket, you can see why this is an opportunity that excites us as impact investors but we don’t see the diversity of the team it’s impact. We actually see that as their unfair advantage because they are accessing a population authentically that others might ignore. RITHOLTZ: Let me see if I understand this correctly. When you talk about non-obvious find — founders and spaces like this, what I’m hearing from you is you’re looking at areas where the market has been very inefficient with how it allocates capital … DARABI: Yes. RITHOLTZ: … that these areas are just overlooked and ignored, hey, if you want to go on to silicon valley and compete with everybody else and pay up for what looks like the same old startup, maybe it will successful and maybe it won’t, that’s hypercompetitive and hyper efficient, these are areas that are just overlooked and there is — this is more than just do-goodery for lack of a better word. There are genuine economic opportunities here with lots of potential upside. DARABI: Absolutely. So, my business partner and I, she and I found each other 20 years ago as undergrads at Georgetown but we went in to business after she was successful and being one of the only women in the world to take a shipping business public with her family, and we got together and we said we have a really unique access, she and I. And the first SPV that we collaborated on back in 2016 was a young business at the time, started by two women, that was focused on medical apparel predominantly for nurses. Now it’s nurses and doctors. And they were offering a solution to make medical apparel, so scrubs, more comfortable and more fashionable for nurses. I happen to have nurses and doctors in my family so doing due diligence for this business is relatively simple. I called my aunt who’s a nurse practitioner, a nurse her life, and she said, absolutely. When you’re working in a uniform at the hospital, you want something comfortable with extra pockets that makes you look and feel good. The VCs that they spoke to at the time, and they’ve been very public about this, in the beginning, anyway, were less excited because they correlated this particular business for the fashion company. But if you look back at our original memo which I saved, it says, FIGS, now public on the New York Stock Exchange is a utility business. It’s a uniform company that can verticalize beyond just medical apparel. And so, we helped value that company at 15 million back in 2016. And this year, in 2021, they went public at a $7 billion market cap. RITHOLTZ: Wow. DARABI: And so, what is particularly exciting for us going back to that conversation on non-obvious founders is that particular business, FIGS, was the first company in history to have two female co-founders go public. And when we think of success at TMV, we don’t just think about financial success and IRR and cash on cash return for our LPs, of course we think about that. But we also think who are we cheerleading and with whom do we want to go into business. I went to the story on the other side of the fence that we want to help and we measure non-obvious not just based on gender or race because I think that’s a little too precise in some ways. Sometimes, for us non-obvious, is around geography, I would say. I’m calling you from Athens, as you know, and in Greece, yesterday, I got together with a fund manager. I’m lucky enough to be an LP in her fund and she was talking about the average size of a seed round in Silicon Valley these days, hovering around 30 million. And I was scratching my head because at our fund, TMV, we don’t see that. We’re investing in Baltimore, Maryland, and in Austin, Texas and the average price for us to invest in the seed round is closer to 5 million or 6 million. And so, we actually can capture larger ownership of the pie early on and then develop a very close-knit relationship with these founders but might not be as networked in the Valley where there’s 30 VC funds to everyone that exist in Austin, Texas. RITHOLTZ: Right. DARABI: And so, yes, I think you’re right to say that it’s about inefficiencies in market but also just around — about being persistent and looking where others are not. RITHOLTZ: That’s quite intriguing. Your team is female-led. You have a portfolio of companies that’s about 65 percent women and people of color. Tell us how you go about finding these non-obvious startups? DARABI: It’s a good question. TMV celebrates its five-year anniversary this year. So the way we go about funding companies now is a bit different than the way we began five years ago. Now, it’s systematic. We collectively, as a partnership, there are many of us take over 50 calls a month with Tier 1 venture capital firms that have known us for a while like the work that we do, believe in our value-add because the partnership comprised of four more operators. So, we really roll up our sleeves to help. And when you’ve invested at this firms, enough time, they will write to you and say I found a company that’s a little too early for us, for XYZ reason, but it resonates and I think it might be for you. So we found some of our best deals that way. But other times, we found our deal flow through building our own communities. And so, when I first started visit as an EM, an emerging manager of a VC firm. And roughly 30 percent of LP capital goes to EM each year but that’s sort of an outsized percentage because when you think about the w-fix-solve (ph) addition capital, taking 1.3 billion of that pie, then you recognize the definition of emerging manager might need to change a bit. So, when I was starting as an EM, I recognize that the landscape wasn’t necessarily leveled. If you weren’t, what’s called the spinout, somebody that has spent a few years at a traditional established blue-chip firm, then it’s harder to develop and cultivate relationships with institutional LPs who will give you a shot even though the data absolutely points to there being a real opportunity in capturing lightning in a bottle if you find a right EM with the right idea in the right market conditions which is certainly what we’re in right now. And so, I decided to start a network specifically tailored around helping women fund managers, connecting one another and it began as a WhatsApp group and a weekly Google Meet that has now blown into something that requires a lot of dedicated time. And so we’re hiring an executive director for this group. They’re called Transact Global, 250 women ex-fund managers globally, from Hong Kong, to Luxembourg, to Venezuela, Canada, Nigeria, you name it. There are women fund managers in our group and we have one of the most active deal flow channels in the world. And so two of our TMV deals over the last year, a fintech combatting student debt and helping young Americans save for retirement at the same time, as an example, came from this WhatsApp deal flow channel. So, I think creating the community, being the change, so to speak, has been incredibly effective for us a proprietary deal flow mechanism. And then last but not least, I think that having some sort of media presence really has helped. And so, I’ve hosted a podcast and I’ve worked on building up what I think to be a fairly organic Twitter following over the years and we surprise ourselves by getting some really exceptional founders cold pitching us on LinkedIn and on Twitter because we make ourselves available as next gen EMs. So, that’s a sort of long-winded answer to your question. But it’s not the traditional means by any means. RITHOLTZ: To say the least. Are you — the companies you’re investing in, are they — and I’ll try and keep this simple for people who are not all that well-versed in the world of venture, is it seed stage, is it the A round, the B round? How far into their growth process do you put money in? DARABI: So it is a predominantly seed fund. We call our investments core investments. So, these are checks that average, 1 and 1.5 million. So for about 1.25 million, on average, we’re capturing 10-15% of a cap payable. And in this area, that’s called a seed round. It will probably be called a Series A 10 years ago. RITHOLTZ: Right. DARABI: And then we follow on through the Series A and it max around, I think, our pro rata at the B. So, our goal via Series B is to have, on average, 10% by the cap. And then we give ourselves a little bit of wiggle room with our modeling. We take mars and moonshot investments with smaller checks so we call these initial interest checks. And initial interest means I’m interested but your idea is still audacious, they won’t prove itself out for three or four years or to be very honest, we weren’t the first to get into this cap or you’re picking Sequoia over us, so we understand but let’s see if we can just promise you a bit of value add to edge our way into your business. RITHOLTZ: Right. DARABI: And oftentimes, when you speak as a former founder yourself with a high level of compassion and you promise with integrity that you’re going to work very hard for that company, they will increase the size of their round and they will carve out space for you. And so, we do those types of investments rarely, 10 times, in any given portfolio. But what’s interesting in looking back at some of our outliers from found one, it came from those initial interest checks. So that’s our model in a nutshell. We’re pretty transparent about it. What we like about this model is that it doesn’t make us tigers, we’re off the board by the B, so we’re still owning enough of the cap table to be a meaningful presence in the founder’s lives and in their business and it allows us to feel like we’re not spraying and praying. RITHOLTZ: Spraying and praying is an amusing term but I’m kind of intrigued by the fact that we use to call it smart money but you’re really describing it as value-added capital when a founder takes money from TMV, they’re getting more than just a check, they’re getting the involvement from entrepreneurs who have been through the process from startup to capital raise to exit, tell us a li bit about how that works its way into the deals you end up doing, who you look at, and what the sort of deal flow you see is like. DARABI: Well, years ago, I had the pleasure of meeting a world-class advertiser and I was at his incredibly fancy office down in Wall Street, his ad agency. And he described to me with pride how he basically bartered his marketing services for one percent of a unicorn. And he was sort of showing off of it about how, from very little time and effort, a few months, he walked away with a relatively large portion of a business. And I thought, yes, that’s clever. But for the founder, they gave up too much of their business too soon. RITHOLTZ: Right. DARABI: And I came up with an idea that I floated by Marina back in the day where our original for TMV Fund I began with the slide marketing as the future of venture and venture is the future of marketing. Meaning, it’s a VC fund where the position itself more like an ad agency but rather than charging for its services, it’s go-to-market services. You offer them free of charge but then you were paid in equity and you could quantify the value that you were offering to these businesses. And back then, people laughed us even though all around New York City, ad agencies were really doing incredible work and benefiting from the startups in that ecosystem. And so, we sort of changed the positioning a bit. And now, we say to our LPs and to our founders, your both clients of our firm. So, we do think of ourselves as an agency. But one set of our marketplace, you have LPs and what they want is crystal clear. The value that they derive from us is through a community and connectivity and co-investment and that’s it. It’s pretty kind of dry. Call me up once a year where you have an exceptional opportunity. Let me invest alongside you. Invite me to dinners four times a year, give me some information and a point of view that I can’t get elsewhere. Thank you for your time. And I love that. It’s a great relationship to have with incredibly smart people. It’s cut and dry but it’s so different. What founders want is something more like family. They want a VC on their board that they can turn to during critical moments. Two a.m. on a Saturday is not an uncommon time for me to get a text message from a founder saying what do I do. So what they want is more like 24/7 services for a period of time. And they want to know when that relationship should start and finish. So it’s sort of the Montessori approach to venture. We’re going to tell them what we’re going to tell them. Tell them what they’re telling them. Tell them what we told them. We say to founders with a reverse pitch deck. So we pitch them as they’re pitching us. Here’s what we promise to deliver for you for the first — each of the 24 months of your infancy and then we promise you we’ll mostly get lost. You can come back to use when your business is growing if you want to do it tender and we’ll operate an SPV for you for you or if you simply want advice, we’re never going to ignore you but our specialty, our black belt, if you will, Barry, is in those first 24 months of your business, that go-to-market. And so, we staffed up TMV to include, well, it’s punching above our weight but the cofounder of an exceptionally successful consumer marketing business, a gross marketer, a recruiter who helps one of our portfolio companies hire 40 of their earliest employees. We have a PR woman. You’ve met Viyash (ph), she’s exceptional with whom, I don’t know, how we would function sometimes because she’s constantly writing and re-editing press releases for the founders with which we work. And then Anna, our copywriter who came from IAC and Sean, our creative director, used to be the design director for Rolling Stone, and I can go on and on. So, some firms called us a platform team but we call it the go-to-market team. And then we promise a set number of hours for ever company that we invest into. RITHOLTZ: That’s … DARABI: And then the results — go ahead. RITHOLTZ: No, that’s just — I’m completely fascinated by that. But I have to ask maybe this is an obvious question or maybe it’s not, so you — you sound very much like a non-traditional venture capital firm. DARABI: Yes. RITHOLTZ: Who are your limited partners, who are your clients, and what motivates them to be involved with TMV because it sounds so different than what has been a pretty standard model in the world of venture, one that’s been tremendous successful for the top-tier firms? DARABI: Our LP set is crafted with intention. And so, 50% of our investors are institutional. This concludes institutional-sized family offices and family offices in a multibillions. We work with three major banks, Fortune 500 banks. We work with a couple of corporate Fortune 500 as investors or LPs and a couple of fund to funds. So that’s really run of the mill. But 50 percent of our investors and that’s why I’m in Athens today are family offices, global family offices, that I think are reinventing with ventures like, to look like in the future because wealth has never been greater globally. There’s a trillion dollars of assets that are passing to the hands of one generation to the next and what’s super interesting to me, as a woman, is that historically, a lot of that asset transferred was from father to son, but actually, for the first time in history, over 50 percent, so 51% of those asset inheritors are actually women. And so, as my business partner could tell because she herself is a next gen, in prior generations, women were encouraged to go into the philanthropic or nonprofit side of the family business … RITHOLTZ: Right. DARABI: And the sons were expected to take over the business or the family office and all of that is completely turned around in the last 10 years. And so, my anchor investor is actually a young woman. She’s under the age of 35. There’s a little bit of our firm that’s in the rocks because we’re not playing by the same rules that the establishment has played by. But certainly, we’re posturing ourselves to be able to grow in to a blue-chip firm which is why we want to maintain that balance, so 50 percent institutional and 50 percent, I would call it bespoke capital. And so, the LPs that are bespoke, we work at an Australian family office and Venezuelan family office and the Chilean family office and the Mexican family office and so on. For those family offices, we come to them, we invite them to events in New York City, we give them personalized introductions to our founders and we get on the phone with them. Whenever they’d like, we host Zooms. We call them the future of everything series. They can learn from us. And we get to know them as human beings and I think that there’s a reason why two thirds of our Fund I LPs converted over into Fund II because they like that level of access, it’s what the modern LP is really looking for. RITHOLTZ: Let’s talk a little bit about some of the areas that you find intriguing. What sectors are really capturing your attention these days? What are you most excited about? DARABI: Well, Barry, I’m most excited about five categories for which we’ve been investing for quite some time, but they’re really being accelerated due to the 2020 pandemic and a looming recession. And so, we’re particularly fascinated by not just health care investing as has been called in the past but rather the care economy. I’m not a huge fan of the term femtech, it always sounds like fembot to me. But care as it pertains to women alone is a multitrillion dollar opportunity. And so, when we think of the care economy, we think of health care, pet care, elder care, community care, personal care as it pertains to young people, old people, men, women, children, we bifurcate and we look for interesting opportunities that don’t exist because they’ve been undercapitalized, undervalued for so long. Case in point, we were early investors Kindbody, a reproductive health care company focused on women who want to preserve their fertility because if you look at 2010 census data, you can see that the data has been there for some time that women, in particular, were delaying marriage and childbirth and there are a lot of world-famous economists who will tell you this, the global population will decline because we’re aging and we’re not necessarily having as many children as we would have in the past plus it’s expensive. And so, we saw that as investors as a really interesting opportunity and jumped on the chance to ask Gina Bartasi who’s incredible when she came to us with a way to make fertility preservation plus expenses. So she followed the B2C playbook and she started with the mobile clinic that helps women freeze their eggs extensively. That company has gone on to raise hundreds — pardon me — and that company is now valued in the hundreds of million and for us, it was as simple as following our intuition as women fund managers, we know what our peers are thinking about because we talk to them all the time and I think the fact that we’re bringing a new perspective to venture means that we’re also bringing a new perspective to what has previously been called femtech. We invest in financial inclusion. Everyone in the world that’s investing fintech, the self-directed financial mobile apps are always going to be capitalized especially in a post Robin Hood era but we’re specifically interested in the democratization of access to financial information and we’re specifically interested in student debt and alleviating student debt in America because not only is it going to be one of the greatest challenges our generation will have to overcome, but it’s also prohibiting us from living out the American dream, $1.7 trillion of student debt in America that needs to be alleviated. And then we’re interested in the future of work, and long have been, that certainly was very much accelerated during the pandemic but we’ve been investing in the 1099 and remote work for quite some time. And so, really proud to have been the first check into a company called Bravely which is an HR chatbot that helps employees inside of a company chat a anonymously with HR representatives outside of that company, that’s 1099. That issue is like DEI, an inclusion and upward mobility and culture setting and what to do when you’re all of a sudden working for home. So that’s an example of a future of work business. And then in the tech-enabled sustainable solutions category, it’s a mouthful, let’s call that sustainability, we are proud to have been early investors of a company called Ridwell, out of Seattle Washington, focused on not just private — privatized recycling but upcycling and reconnaissance. Where are our things going when we recycle them? For me, it always been a pretty big question. And so, Ridwell allows you to re and upcycle things that are hard to get rid of out of your home like children’s eyeglasses and paints and battery, single-use plastic. And it shows you where those things are going which I think is super cool and there’s good reason why it has one of the highest NPS scores, Net Promoter Scores, of any company I’ve ever worked with. People are craving this kind of modern solution. And last but not least, we invest in transportation and part because of the unfair advantage my partner, Marina, brings to TMV as she comes from a maritime family. And so, we can pile it, transportation technology, within her own ecosystem. That’s pretty great. But also, because we’re just fascinated by the fact that 90 percent of the world commodities move on ship and the biggest contributor to emissions in the world outside of corporate is coming from transportation. SO, if we can sort of figure out this industry, we can solve a lot of the problems that our generation are inheriting. Now, these categories might sound massive and we do consider ourselves a generalist firm but we stick to five-course sectors that we truly believe in and we give ourselves room to kick out a sector or to add a new one with any given new fund. For the most part, we haven’t needed to because this remain the categories that are not only most appealing to us as investors but I think paramount to our generation. RITHOLTZ: That’s really intriguing. Give us an example of moonshot or what you called earlier, a Mars shot technology or a company that can really be a gamechanger but may not pay off for quite a while. DARABI: We’ve just backed a company that is focusing on food science. Gosh, I can’t give away too much because they haven’t truly launched in the U.S. But maybe I’ll kind of allude to it. They use crushed produce, like, crush potato skins to make plastic but biodegrades. And so, it’s a Mars shot because it’s a materials business and it’s a food science business rolled off into both the CPG business and an enterprise business. This particular material can wrap itself around industrial pellets. Even though it’s audacious, it’s not really a Mars shot when you think about the way the world is headed. Everybody wants to figure out how do we consume less plastic and recycle plastic better. And so, if there are new materials out there that will not only disintegrate but also, in some ways, feed the environment, it will be a no-brainer and then if you add to the equation the fact that it could be maybe not less expensive but of comparable pricing to the alternative, I can’t think of a company in the world that wouldn’t switch to this solution. RITHOLTZ: Right. So this is plastic that you don’t throw away. You just toss in the garden and it becomes compost? DARABI: Yes, exactly. Exactly. It should help your garden grow. So, yes, so that’s what I would call a Mars shot in some ways. But in other ways, it’s just common sense, right? RITHOLTZ: So let’s talk a little bit about your investment vehicles. You guys run, I want to make sure I get this right, two funds and three vehicles, is that right? DARABI: We have two funds. They’re both considered micro funds because they’re both under 100 million and then we operate in parallel for SPVs that are relatively evergreen and they serve as opportunistic investments to continue to double down on our winners. RITHOLTZ: SPV is special purpose investment … DARABI: Vehicles. Yes. RITHOLTZ: Right. DARABI: And the PE world, they’re called sidecars. RITHOLTZ: That’s really interesting. So how do these gets structured? Does everything look very similar when you have a fund? How quickly do you deploy the capital and typically how long you locked for or investors locked up for? DARABI: Well investors are usually in private equity are VC funds locked up for 10 years. That’s not usual. We have shown liquidity faster, certainly, for Fund I. It’s well in the black and it’s only five years old less, four and a half years old. So, how do we make money? We charge standard fees, 2 on 20 is the rubric of it, we operate by. And then lesser fees for sidecars or direct investments. So that’s kind of how we stay on business. When you think about an emerging manager starting their first fund, management fees are certainly not so we can live a lavish rock and roll life on a $10 million fund with a two percent management fee, we’re talking about 200K for the entire business to operate. RITHOLTZ: Wow. DARABI: So Marina and I, not only anchored our first fund with their own capital but we didn’t pay ourselves for four years. It’s not glamorous. I mean, there’s some friends of mine that thing the venture capital life is glam and it is if you’re on Sand Hill Road. But if you’re an EM, it’s a lot more like a startup where you’re burning the midnight oil, you are bartering favors with your friends, and you are begging the smartest people you know to take a chance on you to invite you on to their cap table. But it somehow works out because we do put in that extra effort, I think, the metrics, certainly for Fund I have shown us that we’re in this for the long haul now. RITHOLTZ: So your fund 1 and Fund 2, are there any plans of launching Fund III? DARABI: Yes. I think that given the proof points between Fund I and Fund II and a conversation that my partner and I recently had, five years out, are we in this? Do we love this? We do. OK. This is our life’s work. So you can see larger and more demonstrable sized funds but not in an outsized way, not just because we can raise more capital now but because we want to build out a partnership and the kind of culture that we always dreamed of working for back when we were employees, so we have a very diverse set of colleagues with whom we couldn’t operate and we’ll be adding to the partnership in the next two or three years which is really exciting to say. So, yes, the TMV will be around for a while. RITHOLTZ: That’s really interesting. I want to ask you the question I ask any venture capitalist that I interview. Tell us about your best and worst investments and what did you pass on that perhaps you wish you didn’t? DARABI: Gosh. The FOMO list is so long and so embarrassing. Let me start with what I passed on that I regret. Well, I don’t know she really would have invited me to invest, but certainly, I had a wonderful conversation a peer from high school, Katrina Lake, when she was in beta mode for Stitch Fix. I think she was still at HBS at the time or had just recently graduated from Harvard. When Katrina and I had coffee in Minneapolis were we went to high school and she was telling me about the Netflix for clothing that she was building and certainly I regret not really picking up on the clues that she was offering in that conversation. Stitch Fix had an incredible IPO and I’m a proud shareholder today. And similarly, when my friend for starting Cloudflare which luckily they did bring me in to pre-IPO and I’m grateful for that, but when they were starting Cloudflare, I really should have jumped on that moment or when my buddy Ryan Graves whom I still chat with pretty frequently was starting out Uber in beta with Travis and Garrett, that’s another opportunity that I definitely missed. I was in Ireland when the Series A term sheet assigned. So there’s such a long laundry list of namedropped, namedropped, missed, missed, missed. But in terms of what I’m proud of, I’d say far more. I don’t like Sophie’s Choice. I don’t like to cherry pick the certain investments to just brag about them. But we’ve talked about someone to call today, I’d rather kind of shine a light — look at my track record, right? There’s a large realized IRR that I’m very proud of. But more on the opportunity of the companies that we more recently backed that prevent damages (ph) of CRM for oncology patient that help them navigate through the most strenuous time of their life. And by doing so, get better access to health care. And we get to wrote that check a couple of months ago. But already, it’s becoming a company that I couldn’t be more excited about because if they execute the way I think Shirley and Victor will, that has the power to help so many people in a profound way, not just in the Silicon Valley cliché way of this could change the world but this could actually help people receive better care. So, yes, I’m proud of having been an early investor in the Caspers of the world. Certainly, we’re all getting better sleep. There’s no shame there. But I’m really excited now today at investing in financial inclusion in the care economy and so on. RITHOLTZ: And let’s talk a little bit about impactful companies. Is there any different when you’re making a seed stage investment in a potentially impactful company versus traditional startup investing? DARABI: Well, pre-seed and seed investing isn’t a science and it’s certainly not a science that anyone has perfected. There are people who are incredibly good at it because they have a combination of luck and access. But if you’re a disciplined investor in any asset class and I talk to my friends who run hedge funds and work for hedge funds about 10 bets that they take a day and I think that’s a lot trickier than what I do because our do due diligence process, on average, takes an entire quarter of the year. We’re not making that many investments each year. So even though it sounds sort of fruity, when you look at a Y Combinator Demo Day, Y Comb is the biggest accelerator in Silicon Valley and they produce over 300 companies, three or four times a year. When you look at the outsized valuations coming out of Y Comb, it’s easy to think that starting company is as simple as sort of downloading a company in a Box Excel and running with it. But from where we sit, we’re scorching the earth for really compelling ideas in areas that have yet to converge and we’re looking for businesses that may have never pitched the VC before. Maybe they’re not even seeking capital. Maybe it’s a company that isn’t so interested in raising a penny eventually because they don’t need to. They’re profitable from day one. Those are the companies that we find most exciting because as former operators, we know how to appeal to them and then we also know how to work with them. RITHOLTZ: That’s really interesting. Before I get to my favorite question, let me just throw you’re a curveball, tell me a little bit about Business Schooled, the podcast you hosted for quite a while. DARABI: So, Synchrony, Sync, came to me a few years ago with a very compelling and exciting opportunity to host a podcast with them that allowed me a fortunate opportunity to travel the country and I went to just under a dozen cities to meet with founders who have persevered past their startup phase. And what I loved about the concept of business school is that the cities that I hosted were really focused on founders who didn’t have access to VC capital, they put money on credit card. So I took SBA loans or asked friends and family to give them starter capital and then they made their business work through trying times and when you pass the five-year mark for any business, I’m passing it right now for TMV, there’s a moment of reflection where you can say, wow, I did it. it’s incredibly difficult to be a startup founder, more than 60 percent of companies fail and probably for good reason. And so, yes, I hosted business school, Seasons 2 and 3 and potentially there will be more seasons and I’m very proud of the fact that at one point we cracked the top 20 business podcasts and people seem to be really entertained through these conversations with insightful founders who are vulnerable with me about what it was like to build their business and I like to think they were vulnerable because I have a good amount of compassion for the experience of being founder and also because I’m a New Yorker and I just like to talk. RITHOLTZ: You’re also a founder so there’s going to be some empathy that’s genuine. You went through what they’re going through. DARABI: Exactly. Exactly. And so, what you do, Barry, is quite similar. You’re — you host an exceptionally successful business podcast and you’re also an allocator. You know that it’s interesting to do both because I think that being an investor is a lot like being a journalist. In both professions, you won’t succeed unless you are constantly curious and if you are having conversations to listen more than you speak. DARABI: Well, I’ll let you in on a little secret since it’s so late in the podcast and fewer people will be hearing this, the people I invite on the show are essentially just conversations I want to have. If other people come along and listen, that’s fantastic. But honestly, it’s for an audience of one, namely me, the reason I wanted to have you on is because I’m intrigued by the world of venture and alternatives and impact. I think it’s safe to say that a lot of people have been somewhat disappointed in the results of ESG investing and impact investing that for — it’s captured a lot more mindshare than it has captured capital although we’re seeing signs that’s starting to shift. But then the real question becomes, all right, so I’m investing less in oil companies and more in other companies that just happen to consume fossil fuels, what’s the genuine impact of my ESG investing? It feels like it’s sort of de minimis whereas what you do really feels like it has a major impact for people who are interested in having their capital make a positive difference. DARABI: Thank you for saying that. And I will return the compliment by saying that I really enjoyed getting to know you on our one key economist Zoom and I think that you’re right. I think that ESG investing, certainly in the public markets has had diminished returns historically because the definition has been so bizarre and so all over the place. RITHOLTZ: Right. DARABI: And I read incredible books from people like Antony Bugg-Levine who helps coin the term the Rockefeller Foundation, who originally coined the term you read about, mortgage, IRR and IRS plus measurement and it’s so hard to have just standardization of what it means to be an impact investor and so it can be bothered but we bother. Rather, we kind of come up with our own subjective point of view of the world and we say what does impact mean to us? Certainly, it means not investing in sin stocks but then those sin stocks have to begin somewhere, has to begin with an idea that somebody had once upon a time. And so, whether we are investing in the way the world should look from our perspective. And with that in mind, it doesn’t have to be impact by your grandpa’s VC, it can be impact from modern generation but simply things that behave differently. Some folks with their dollars. People often say, well, my ESG portfolio is underperforming. But then if you dig in to the specifics, are you investing in Tesla? It’s not a pretty good year. Did you back Beyond Meat? Had a great year. And so, when you kind of redefine the public market not by a sleeve and a bank’s version of a portfolio, but rather by company that you think are making demonstrable change in the world, then you can walk away, realizing had I only invested in these companies that are purpose driven, I would have had outsized returns and that’s what we’re trying to deliver on at TMV. That’s the promise. RITHOLTZ: Really, really very, very intriguing. I know I only have you for a few minutes so let’s jump to my favorite questions that I ask all of our guests starting with tell us what you’re streaming these days. Give us your favorite, Netflix, Amazon Prime, or any podcast that are keeping you entertained during the pandemic. DARABI: Well, my family has been binging on 100 Foot Wave on HBO Max which is the story of big wave surfer Garrett McNamara who is constantly surfing the world’s largest waves and I’m fascinated by people who have a mission that’s sort of bigger than success or fame but they’re driven by something and part of that something is curiosity and part of it is insanity. And so not only is it visually stunning to kind of watch these big wave surfers in Portugal, but it’s also a mind trip. What motivates them to get out of bed every day and potentially risk their lives doing something so dangerous and so bananas but also at the same time so brave and heroic. So, highly recommend. I am listening to too many podcasts. I listen to, I don’t know, a stream of things. I’m a Kara Swisher fan, Ezra Klein fan, so they’re both part of the “New York Times” these days. And of course, your podcast, Barry. RITHOLTZ: Well, thank you so much. Well, thank you so much. Let’s talk a little bit about who your early mentors were and who helped shape you career? DARABI: It’s going to sound ungrateful but I don’t think, in like a post lean in definition of the word, I ever truly had a mentor or a sponsor. Now, having said that, I’ve had people who really looked at for me and been incredibly gracious with their time and capital. And so, I would absolutely like to acknowledge that first and foremost. I think about how generous Adam Grant has been with his time and his investments for TMV in Fund I and Fund II and he’s a best-selling author and worked on highest-rated business school professor. So shout out to Adam, if he’s listening or Beth Comstock, the former Vice Chair of GE who has been instrumental in my career for about a decade and a half now. And she is also really leaning in to the TMV portfolio and has become a patient of Parsley Health, an early investment of ours and also an official adviser to the business. So, people like Adam and Beth certainly come to mind. But I don’t know, I just — I’m not sure mentors really exist outside of corporate America anymore and part of the reason why we started Transact Global is to kind of foster the concept of the peer mentor, people who are going through the same thing as you at the same time and allowing that hive mentality with an abundance mentality to catalyze people to kind of go further and faster. RITHOLTZ: Let’s talk about some of your favorite books and what you might reading right now. DARABI: OK, so in the biz book world, because I know your listeners as craving, I’m a big fan of “Negotiation Genius.” I took a crash course with one of the authors, Max Bazerman at the Kennedy School and it was illuminating. I mean, he’s one of the most captivating professors I’ve ever had the pleasure of hearing lecture and this book has really helped me understand the concept of the ZOPA, the Zone of Possible Agreement, and how to really negotiate well. And then for Adam whom I just referenced, of all of his incredible books, my favorite is Give and Take because I try to operate with that approach of business. Give more than you take and maybe in the short term, you’ll feel depleted but in the long term, karma pays off. But mostly, Barry, I read fiction. I think the most interesting people in the world or at least the most entertaining at dinner parties are all avoid readers of fiction and history. So I recently reread, for instance, all of my favorite short stories from college, from Dostoyevsky’s “A Gentle Creature” to “Drown” Junot Diaz. “Passing” by Nella Larsen, “The Diamond as Big as the Ritz” by Fitzgerald. Those are some of my very favorite stories of all time. And my retirement dream is to write a book of short stories. RITHOLTZ: Really, really quite intriguing. Are they all available in a single collection or these just, going back to your favorites and just plowing through them for fun? DARABI: Those are just going back to my favorites. I try to re-read “Passing” every few years which is somehow seems to be more and more relevant as I get older and Junot Diaz has become so incredibly famous when I first read “Drown” about 20 years ago which is an original collection of short stories that broadened my perspective of why it’s important to think about a broader definition of America, I guess. And, yes, no, that’s just — that was just sort of off the top of my head as the offering of a few stories that I really love, no collection. RITHOLTZ: That’s a good collection. And we’re down to our final two questions. What sort of advice would you give to a recent college grad who was interested in a career in either venture capital or entrepreneurship? DARABI: Venture capital or entrepreneurship. Well, I would say, learn as early as possible how to trust your gut. So, this could mean a myriad of things. As an entrepreneur, it could mean under the halo effect of an institution, university or high school or maybe having a comfortable day job, tinker with ideas, get feedback on that idea, don’t be afraid of looking or sounding dumb and build that peer network that I described. People who are rooting you on and are also insatiably curious about wonky things. And I would say that for venture capital, similar play on the same theme, but whether it’s putting small amounts of money into new concept, blockchain investing, or whether it’s meeting with entrepreneurs and saying maybe I only have $3,000 save up but I believe in you enough to bet amongst friends in Brooklyn on your concept if you’ll have me as an investor. So, play with your own money because what it’s really teaching you in return is how to follow instincts and to base pattern recognition off your own judgement. And if you do that early on, overtime, these all become datapoints that you can point to and these are lessons that you can glean while not taking the risk of portfolio management. So, I guess the real advice to your listeners is more action, please. RITHOLTZ: Really very, very intriguing. And our final question, what do you know about the world of venture investing today that you wish you knew 15 or 20 years ago when you first getting started? DARABI: Twenty years ago, I was a bit of a Pollyanna and I thought every wonderful idea that simply is built by smart people and has timed the market correctly will work out. And I will say that I’m slightly more jaded today because of the capital structure that is systematically allowing the biggest firms in the world to kind of eat up a generous portion of, let’s call it the LP pie, which leaves less capital available to the young upstart VC firms, and of course I’m biased because I run one, that are taking outsized risks on those non-obvious ideas that we referenced. And so, what I wish for the future is that institutional capital kind of reprioritizes what it’s looking for. And in addition to having a bottom line of reliable and demonstrable return on any given investment, there are new standards put into play saying we want to make sure that a portion of our portfolio goes to diverse managers. Because in turn, we recognize that they are three times more likely to invest in diverse founders or we believe in impact investing can be broader than the ESG definitely of a decade ago, so we’re coming up with our own way to measure on sustainability or what impact means to us. And if they go through those exercises which I know is hard because, certainly, I’m not trying to add work to anyone’s plate, I do think that the results will more than make up for it. RITHOLTZ: Quite intriguing. Thank you, Soraya, for being so generous with your time. We have been speaking with Soraya Darabi who is the Co-Founder and General Partner at TMV Investments. If you enjoy this conversation, well, be sure and check out any of the prior 376 conversations we’ve had before. You can find those at iTunes or Spotify, wherever you buy your favorite podcast. We love your comments, feedback, and suggestions. Write to us at MIB podcast@bloomberg.net. You can sign up for my daily reads at ritholtz.com. Check out my weekly column at bloomberg.com/opinion. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team that helps me put these conversations together each week. Tim Harrow is my audio engineer. Paris Walt (ph) is my producer. Atika Valbrun is our project manager, Michael Batnick is my head of research. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~     The post Transcript: Soraya Darabi appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureOct 20th, 2021

The week in bankruptcies: Timeshare Termination Team LLC, SEP Software Corp. and more

Denver area bankruptcy courts recorded three business filings - including three with total debts above $1 million - during the week that ended Oct. 8, 2021. Year to date through October 8, 2021, the court recorded 48 Chapter 7 or Chapter 11 business bankruptcy filings, a -47% decrease from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business's assets to satisfy creditor claims, while Chapter 11 protection enables a business to restructure….....»»

Category: topSource: bizjournalsOct 18th, 2021

Best Single Trading Day in Months for Dow, Nasdaq, S&P

The indexes had been trying to turn around a steep drop to the start of the week, and finally managed on Thursday. Market indexes posted their best single day of trading in months, up a percentage point and a half or more on strong economic data and Q3 earnings reports. The Dow managed its strongest regular session since July, +534 points or +1.56%. The S&P 500 put up its strongest trading day since early March, +1.71%, and now within 2% of its all-time highs reached earlier this year. The Nasdaq outdid even that, posting +1.73% gains, +251 points, for its best single session since May 20th.The indexes had been trying to turn around a steep drop to the start of the week, following flight cancellations announced at Southwest LUV, helping send airlines lower only a couple days from Delta’s DAL Q3 earnings report. But when Delta’s results came out and doubled earnings expectations, this helped set in motion some positive outlooks for not only airlines and travel, but other industries as well.Solutions are now being provided by the U.S. Dept. of Transportation to alleviate supply chain bottlenecks ahead of the upcoming holiday shopping season, with the help of private enterprises and unions to provide round the clock dockworking and moving of goods. Now that Covid rates have begun to ebb once again and overseas suppliers come back online, it’s created a backlog of deliveries. It won’t be cheap bringing everything to market in time for the holidays, but availability ought to alleviate worse price spikes going forward.Speaking of Covid rates, the U.S. is now seeing a 7-day average of new cases below 90K per day. While still much higher than optimum, it represents the lowest rate we’ve seen since the beginning of August, before the Delta variant began to sweep through the country — even infecting (though rarely hospitalizing) people who’d gotten their two-shot vaccinations. And now Moderna MRNA has gotten a unanimous recommendation for its Covid vaccine booster, following that of Pfizer PFE/BioNTech BNTX.Further, the labor market provided encouraging jobless claims data this morning, posting fresh post-Covid lows both for initial and continuing claims. In fact, it was the first time we saw under 3 million longer-term claims made for the first time since before the pandemic take hold. And on the inflation front, September’s Producer Price Index (PPI), while still +0.5%, did not build on the previous month’s spike, which had been 20 basis points higher.And we now expect that at the next Federal Open Market Committee (FOMC) meeting — held 2 1/2 weeks from now, on November 2nd and 3rd — will enact a tapering of asset purchases, currently being made at a rate of $120 billion between Treasury and mortgage-backed securities. While it will begin to stem the flow of liquidity in the market, inflation running hotter than the optimum 2% and employment ratcheting down toward pre-pandemic levels makes this a decision poised to firm up economic conditions.For tomorrow, in addition to earnings reports from Goldman Sachs GS, Prologis PLD and J.B. Hunt Transport JBHT, we’ll get plenty more economic data as well, including Retail Sales, Imports and Exports, the Empire State Index and Consumer Sentiment. What’s more, we’re just getting started. Perhaps good news can beget further good news?Questions or comments about this article and/or its author? Click here>> 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Prologis, Inc. (PLD): Free Stock Analysis Report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Southwest Airlines Co. (LUV): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report Moderna, Inc. (MRNA): Free Stock Analysis Report BioNTech SE Sponsored ADR (BNTX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.....»»

Category: topSource: zacksOct 15th, 2021

The week in Twin Cities-area bankruptcies: Qalitix Inc..

Minneapolis area bankruptcy courts recorded one business filing - including zero with total debt above $1 million - during the week that ended October 8, 2021. Year to date through October 8, 2021, the court recorded 28 Chapter 7 or Chapter 11 business bankruptcy filings, a -20 percent decrease from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business’ assets to satisfy creditor claims, while Chapter 11 protection enables a business….....»»

Category: topSource: bizjournalsOct 15th, 2021

NATO"s Plans To Hack Your Brain

NATO's Plans To Hack Your Brain Authored by Ben Norton via TheGrayZone.com, Western governments in the NATO military alliance are developing tactics of “cognitive warfare,” using the supposed threats of China and Russia to justify waging a “battle for your brain” in the “human domain,” to “make everyone a weapon.” NATO is developing new forms of warfare to wage a “battle for the brain,” as the military alliance put it. The US-led NATO military cartel has tested novel modes of hybrid warfare against its self-declared adversaries, including economic warfare, cyber warfare, information warfare, and psychological warfare. Now, NATO is spinning out an entirely new kind of combat it has branded cognitive warfare. Described as the “weaponization of brain sciences,” the new method involves “hacking the individual” by exploiting “the vulnerabilities of the human brain” in order to implement more sophisticated “social engineering.” Until recently, NATO had divided war into five different operational domains: air, land, sea, space, and cyber. But with its development of cognitive warfare strategies, the military alliance is discussing a new, sixth level: the “human domain.” A 2020 NATO-sponsored study of this new form of warfare clearly explained, “While actions taken in the five domains are executed in order to have an effect on the human domain, cognitive warfare’s objective is to make everyone a weapon.” “The brain will be the battlefield of the 21st century,” the report stressed. “Humans are the contested domain,” and “future conflicts will likely occur amongst the people digitally first and physically thereafter in proximity to hubs of political and economic power.” The 2020 NATO-sponsored study on cognitive warfare While the NATO-backed study insisted that much of its research on cognitive warfare is designed for defensive purposes, it also conceded that the military alliance is developing offensive tactics, stating, “The human is very often the main vulnerability and it should be acknowledged in order to protect NATO’s human capital but also to be able to benefit from our adversaries’s vulnerabilities.” In a chilling disclosure, the report said explicitly that “the objective of Cognitive Warfare is to harm societies and not only the military.” With entire civilian populations in NATO’s crosshairs, the report emphasized that Western militaries must work more closely with academia to weaponize social sciences and human sciences and help the alliance develop its cognitive warfare capacities. The study described this phenomenon as “the militarization of brain science.” But it appears clear that NATO’s development of cognitive warfare will lead to a militarization of all aspects of human society and psychology, from the most intimate of social relationships to the mind itself. Such all-encompassing militarization of society is reflected in the paranoid tone of the NATO-sponsored report, which warned of “an embedded fifth column, where everyone, unbeknownst to him or her, is behaving according to the plans of one of our competitors.” The study makes it clear that those “competitors” purportedly exploiting the consciousness of Western dissidents are China and Russia. In other words, this document shows that figures in the NATO military cartel increasingly see their own domestic population as a threat, fearing civilians to be potential Chinese or Russian sleeper cells, dastardly “fifth columns” that challenge the stability of “Western liberal democracies.” NATO’s development of novel forms of hybrid warfare come at a time when member states’ military campaigns are targeting domestic populations on an unprecedented level. The Ottawa Citizen reported this September that the Canadian military’s Joint Operations Command took advantage of the Covid-19 pandemic to wage an information war against its own domestic population, testing out propaganda tactics on Canadian civilians. Internal NATO-sponsored reports suggest that this disclosure is just scratching the surface of a wave of new unconventional warfare techniques that Western militaries are employing around the world. Canada hosts ‘NATO Innovation Challenge’ on cognitive warfare Twice each year, NATO holds a “pitch-style event” that it brand as an “Innovation Challenge.” These campaigns – one hosted in the Spring and the other in the Fall, by alternating member states – call on private companies, organizations, and researchers to help develop new tactics and technologies for the military alliance. The shark tank-like challenges reflect the predominant influence of neoliberal ideology within NATO, as participants mobilize the free market, public-private partnerships, and the promise of cash prizes to advance the agenda of the military-industrial complex. NATO’s Fall 2021 Innovation Challenge is hosted by Canada, and is titled “The invisible threat: Tools for countering cognitive warfare.” “Cognitive warfare seeks to change not only what people think, but also how they act,” the Canadian government wrote in its official statement on the challenge. “Attacks against the cognitive domain involve the integration of cyber, disinformation/misinformation, psychological, and social-engineering capabilities.” Ottawa’s press release continued: “Cognitive warfare positions the mind as a battle space and contested domain. Its objective is to sow dissonance, instigate conflicting narratives, polarize opinion, and radicalize groups. Cognitive warfare can motivate people to act in ways that can disrupt or fragment an otherwise cohesive society.” NATO-backed Canadian military officials discuss cognitive warfare in panel event An advocacy group called the NATO Association of Canada has mobilized to support this Innovation Challenge, working closely with military contractors to attract the private sector to invest in further research on behalf of NATO – and its own bottom line. While the NATO Association of Canada (NAOC) is technically an independent NGO, its mission is to promote NATO, and the organization boasts on its website, “The NAOC has strong ties with the Government of Canada including Global Affairs Canada and the Department of National Defence.” As part of its efforts to promote Canada’s NATO Innovation Challenge, the NAOC held a panel discussion on cognitive warfare on October 5. The researcher who wrote the definitive 2020 NATO-sponsored study on cognitive warfare, François du Cluzel, participated in the event, alongside NATO-backed Canadian military officers. The October 5 panel on cognitive warfare, hosted by the NATO Association of Canada The panel was overseen by Robert Baines, president of the NATO Association of Canada. It was moderated by Garrick Ngai, a marketing executive in the weapons industry who serves as an adviser to the Canadian Department of National Defense and vice president and director of the NAOC. Baines opened the event noting that participants would discuss “cognitive warfare and new domain of competition, where state and non-state actors aim to influence what people think and how they act.” The NAOC president also happily noted the lucrative “opportunities for Canadian companies” that this NATO Innovation Challenge promised. NATO researcher describes cognitive warfare as ‘ways of harming the brain’ The October 5 panel kicked off with François du Cluzel, a former French military officer who in 2013 helped to create the NATO Innovation Hub (iHub), which he has since then managed from its base in Norfolk, Virginia. Although the iHub insists on its website, for legal reasons, that the “opinions expressed on this platform don’t constitute NATO or any other organization points of view,” the organization is sponsored by the Allied Command Transformation (ACT), described as “one of two Strategic Commands at the head of NATO’s military command structure.” The Innovation Hub, therefore, acts as a kind of in-house NATO research center or think tank. Its research is not necessarily official NATO policy, but it is directly supported and overseen by NATO. In 2020, NATO’s Supreme Allied Commander Transformation (SACT) tasked du Cluzel, as manager of the iHub, to conduct a six-month study on cognitive warfare. Du Cluzel summarized his research in the panel this October. He initiated his remarks noting that cognitive warfare “right now is one of the hottest topics for NATO,” and “has become a recurring term in military terminology in recent years.” Although French, Du Cluzel emphasized that cognitive warfare strategy “is being currently developed by my command here in Norfolk, USA.” The NATO Innovation Hub manager spoke with a PowerPoint presentation, and opened with a provocative slide that described cognitive warfare as “A Battle for the Brain.” “Cognitive warfare is a new concept that starts in the information sphere, that is a kind of hybrid warfare,” du Cluzel said. “It starts with hyper-connectivity. Everyone has a cell phone,” he continued. “It starts with information because information is, if I may say, the fuel of cognitive warfare. But it goes way beyond solely information, which is a standalone operation – information warfare is a standalone operation.” Cognitive warfare overlaps with Big Tech corporations and mass surveillance, because “it’s all about leveraging the big data,” du Cluzel explained. “We produce data everywhere we go. Every minute, every second we go, we go online. And this is extremely easy to leverage those data in order to better know you and use that knowledge to change the way you think.” Naturally, the NATO researcher claimed foreign “adversaries” are the supposed aggressors employing cognitive warfare. But at the same time, he made it clear that the Western military alliance is developing its own tactics. Du Cluzel defined cognitive warfare as the “art of using technologies to alter the cognition of human targets.” Those technologies, he noted, incorporate the fields of NBIC – nanotechnology, biotechnology, information technology, and cognitive science. All together, “it makes a kind of very dangerous cocktail that can further manipulate the brain,” he said. Du Cluzel went on to explain that the exotic new method of attack “goes well beyond” information warfare or psychological operations (psyops). “Cognitive warfare is not only a fight against what we think, but it’s rather a fight against the way we think, if we can change the way people think,” he said. “It’s much more powerful and it goes way beyond the information [warfare] and psyops.” De Cluzel continued: “It’s crucial to understand that it’s a game on our cognition, on the way our brain processes information and turns it into knowledge, rather than solely a game on information or on psychological aspects of our brains. It’s not only an action against what we think, but also an action against the way we think, the way we process information and turn it into knowledge.” “In other words, cognitive warfare is not just another word, another name for information warfare. It is a war on our individual processor, our brain.” The NATO researcher stressed that “this is extremely important for us in the military,” because “it has the potential, by developing new weapons and ways of harming the brain, it has the potential to engage neuroscience and technology in many, many different approaches to influence human ecology… because you all know that it’s very easy to turn a civilian technology into a military one.” As for who the targets of cognitive warfare could be, du Cluzel revealed that anyone and everyone is on the table. “Cognitive warfare has universal reach, from starting with the individual to states and multinational organizations,” he said. “Its field of action is global and aim to seize control of the human being, civilian as well as military.” And the private sector has a financial interest in advancing cognitive warfare research, he noted: “The massive worldwide investments made in neurosciences suggests that the cognitive domain will probably one of the battlefields of the future.” The development of cognitive warfare totally transforms military conflict as we know it, du Cluzel said, adding “a third major combat dimension to the modern battlefield: to the physical and informational dimension is now added a cognitive dimension.” This “creates a new space of competition beyond what is called the five domains of operations – or land, sea, air, cyber, and space domains. Warfare in the cognitive arena mobilizes a wider range of battle spaces than solely the physical and information dimensions can do.” In short, humans themselves are the new contested domain in this novel mode of hybrid warfare, alongside land, sea, air, cyber, and outer space. NATO’s cognitive warfare study warns of “embedded fifth column” The study that NATO Innovation Hub manager François du Cluzel conducted, from June to November 2020, was sponsored by the military cartel’s Allied Command Transformation, and published as a 45-page report in January 2021 (PDF). The chilling document shows how contemporary warfare has reached a kind of dystopian stage, once imaginable only in science fiction. “The nature of warfare has changed,” the report emphasized. “The majority of current conflicts remain below the threshold of the traditionally accepted definition of warfare, but new forms of warfare have emerged such as Cognitive Warfare (CW), while the human mind is now being considered as a new domain of war.” For NATO, research on cognitive warfare is not just defensive; it is very much offensive as well. “Developing capabilities to harm the cognitive abilities of opponents will be a necessity,” du Cluzel’s report stated clearly. “In other words, NATO will need to get the ability to safeguard her decision making process and disrupt the adversary’s one.” And anyone could be a target of these cognitive warfare operations: “Any user of modern information technologies is a potential target. It targets the whole of a nation’s human capital,” the report ominously added. “As well as the potential execution of a cognitive war to complement to a military conflict, it can also be conducted alone, without any link to an engagement of the armed forces,” the study went on. “Moreover, cognitive warfare is potentially endless since there can be no peace treaty or surrender for this type of conflict.” Just as this new mode of battle has no geographic borders, it also has no time limit: “This battlefield is global via the internet. With no beginning and no end, this conquest knows no respite, punctuated by notifications from our smartphones, anywhere, 24 hours a day, 7 days a week.” The NATO-sponsored study noted that “some NATO Nations have already acknowledged that neuroscientific techniques and technologies have high potential for operational use in a variety of security, defense and intelligence enterprises.” It spoke of breakthroughs in “neuroscientific methods and technologies” (neuroS/T), and said “uses of research findings and products to directly facilitate the performance of combatants, the integration of human machine interfaces to optimise combat capabilities of semi autonomous vehicles (e.g., drones), and development of biological and chemical weapons (i.e., neuroweapons).” The Pentagon is among the primary institutions advancing this novel research, as the report highlighted: “Although a number of nations have pursued, and are currently pursuing neuroscientific research and development for military purposes, perhaps the most proactive efforts in this regard have been conducted by the United States Department of Defense; with most notable and rapidly maturing research and development conducted by the Defense Advanced Research Projects Agency (DARPA) and Intelligence Advanced Research Projects Activity (IARPA).” Military uses of neuroS/T research, the study indicated, include intelligence gathering, training, “optimising performance and resilience in combat and military support personnel,” and of course “direct weaponisation of neuroscience and neurotechnology.” This weaponization of neuroS/T can and will be fatal, the NATO-sponsored study was clear to point out. The research can “be utilised to mitigate aggression and foster cognitions and emotions of affiliation or passivity; induce morbidity, disability or suffering; and ‘neutralise’ potential opponents or incur mortality” – in other words, to maim and kill people. The 2020 NATO-sponsored study on cognitive warfare The report quoted US Major General Robert H. Scales, who summarized NATO’s new combat philosophy: “Victory will be defined more in terms of capturing the psycho-cultural rather than the geographical high ground.” And as NATO develops tactics of cognitive warfare to “capture the psycho-cultural,” it is also increasingly weaponizing various scientific fields. The study spoke of “the crucible of data sciences and human sciences,” and stressed that “the combination of Social Sciences and System Engineering will be key in helping military analysts to improve the production of intelligence.” “If kinetic power cannot defeat the enemy,” it said, “psychology and related behavioural and social sciences stand to fill the void.” “Leveraging social sciences will be central to the development of the Human Domain Plan of Operations,” the report went on. “It will support the combat operations by providing potential courses of action for the whole surrounding Human Environment including enemy forces, but also determining key human elements such as the Cognitive center of gravity, the desired behaviour as the end state.” All academic disciplines will be implicated in cognitive warfare, not just the hard sciences. “Within the military, expertise on anthropology, ethnography, history, psychology among other areas will be more than ever required to cooperate with the military,” the NATO-sponsored study stated. The report nears its conclusion with an eerie quote: “Today’s progresses in nanotechnology, biotechnology, information technology and cognitive science (NBIC), boosted by the seemingly unstoppable march of a triumphant troika made of Artificial Intelligence, Big Data and civilisational ‘digital addiction’ have created a much more ominous prospect: an embedded fifth column, where everyone, unbeknownst to him or her, is behaving according to the plans of one of our competitors.” “The modern concept of war is not about weapons but about influence,” it posited. “Victory in the long run will remain solely dependent on the ability to influence, affect, change or impact the cognitive domain.” The NATO-sponsored study then closed with a final paragraph that makes it clear beyond doubt that the Western military alliance’s ultimate goal is not only physical control of the planet, but also control over people’s minds: “Cognitive warfare may well be the missing element that allows the transition from military victory on the battlefield to lasting political success. The human domain might well be the decisive domain, wherein multi-domain operations achieve the commander’s effect. The five first domains can give tactical and operational victories; only the human domain can achieve the final and full victory.” Canadian Special Operations officer emphasizes importance of cognitive warfare When François du Cluzel, the NATO researcher who conducted the study on cognitive warfare, concluded his remarks in the October 5 NATO Association of Canada panel, he was followed by Andy Bonvie, a commanding officer at the Canadian Special Operations Training Centre. With more than 30 years of experience with the Canadian Armed Forces, Bonvie spoke of how Western militaries are making use of research by du Cluzel and others, and incorporating novel cognitive warfare techniques into their combat activities. “Cognitive warfare is a new type of hybrid warfare for us,” Bonvie said. “And it means that we need to look at the traditional thresholds of conflict and how the things that are being done are really below those thresholds of conflict, cognitive attacks, and non-kinetic forms and non-combative threats to us. We need to understand these attacks better and adjust their actions and our training accordingly to be able to operate in these different environments.” Although he portrayed NATO’s actions as “defensive,” claiming “adversaries” were using cognitive warfare against them, Bonvie was unambiguous about the fact that Western militaries are developing these tecniques themselves, to maintain a “tactical advantage.” “We cannot lose the tactical advantage for our troops that we’re placing forward as it spans not only tactically, but strategically,” he said. “Some of those different capabilities that we have that we enjoy all of a sudden could be pivoted to be used against us. So we have to better understand how quickly our adversaries adapt to things, and then be able to predict where they’re going in the future, to help us be and maintain the tactical advantage for our troops moving forward.” ‘Cognitive warfare is the most advanced form of manipulation seen to date’ Marie-Pierre Raymond, a retired Canadian lieutenant colonel who currently serves as a “defence scientist and innovation portfolio manager” for the Canadian Armed Forces’ Innovation for Defence Excellence and Security Program, also joined the October 5 panel. “Long gone are the days when war was fought to acquire more land,” Raymond said. “Now the new objective is to change the adversaries’ ideologies, which makes the brain the center of gravity of the human. And it makes the human the contested domain, and the mind becomes the battlefield.” “When we speak about hybrid threats, cognitive warfare is the most advanced form of manipulation seen to date,” she added, noting that it aims to influence individuals’ decision-making and “to influence a group of a group of individuals on their behavior, with the aim of gaining a tactical or strategic advantage.” Raymond noted that cognitive warfare also heavily overlaps with artificial intelligence, big data, and social media, and reflects “the rapid evolution of neurosciences as a tool of war.” Raymond is helping to oversee the NATO Fall 2021 Innovation Challenge on behalf of Canada’s Department of National Defence, which delegated management responsibilities to the military’s Innovation for Defence Excellence and Security (IDEaS) Program, where she works. In highly technical jargon, Raymond indicated that the cognitive warfare program is not solely defensive, but also offensive: “This challenge is calling for a solution that will support NATO’s nascent human domain and jump-start the development of a cognition ecosystem within the alliance, and that will support the development of new applications, new systems, new tools and concepts leading to concrete action in the cognitive domain.” She emphasized that this “will require sustained cooperation between allies, innovators, and researchers to enable our troops to fight and win in the cognitive domain. This is what we are hoping to emerge from this call to innovators and researchers.” To inspire corporate interest in the NATO Innovation Challenge, Raymond enticed, “Applicants will receive national and international exposure and cash prizes for the best solution.” She then added tantalizingly, “This could also benefit the applicants by potentially providing them access to a market of 30 nations.” Canadian military officer calls on corporations to invest in NATO’s cognitive warfare research The other institution that is managing the Fall 2021 NATO Innovation Challenge on behalf of Canada’s Department of National Defense is the Special Operations Forces Command (CANSOFCOM). A Canadian military officer who works with CANSOFCOM, Shekhar Gothi, was the final panelist in the October 5 NATO Association of Canada event. Gothi serves as CANSOFCOM’s “innovation officer” for Southern Ontario. He concluded the event appealing for corporate investment in NATO’s cognitive warfare research. The bi-annual Innovation Challenge is “part of the NATO battle rhythm,” Gothi declared enthusiastically. He noted that, in the spring of 2021, Portugal held a NATO Innovation Challenge focused on warfare in outer space. In spring 2020, the Netherlands hosted a NATO Innovation Challenge focused on Covid-19. Gothi reassured corporate investors that NATO will bend over backward to defend their bottom lines: “I can assure everyone that the NATO innovation challenge indicates that all innovators will maintain complete control of their intellectual property. So NATO won’t take control of that. Neither will Canada. Innovators will maintain their control over their IP.” The comment was a fitting conclusion to the panel, affirming that NATO and its allies in the military-industrial complex not only seek to dominate the world and the humans that inhabit it with unsettling cognitive warfare techniques, but to also ensure that corporations and their shareholders continue to profit from these imperial endeavors. Tyler Durden Fri, 10/15/2021 - 03:30.....»»

Category: dealsSource: nytOct 15th, 2021

The week in bankruptcies: R&S REI LLC and G&R Transit Solutions LLC

Sacramento area bankruptcy courts recorded two business filings — including zero with total debt above $1 million — during the week that ended Oct. 8. Year to date through Oct. 8, the court recorded 37 Chapter 7 or Chapter 11 business bankruptcy filings, a 21% decrease from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business’ assets to satisfy creditor claims, while Chapter 11 protection enables a business to restructure its creditor….....»»

Category: topSource: bizjournalsOct 14th, 2021

Oracle Corporation Looks to Continue to Trade Above its Annual-High Share Price Today

Shares of Oracle Corporation (NYSE: ORCL) traded today at $97.35, eclipsing its 52-week high. So far today approximately 2.9 million shares have been exchanged, as compared to an average 30-day volume of 13.3 million shares. In the past 52 weeks, Oracle Corporation share prices are bracketed by a low of $55.14 and a high of $97.35 and are now at $95.54, 73% above that low price. Oracle provides database technology and enterprise resource planning, or ERP, software to enterprises around the world. Founded in 1977, Oracle pioneered the first commercial SQL-based relational database management system. Today, Oracle has 430,000 customers in 175 countries, supported by its base of 136,000 ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaOct 14th, 2021

The week in bankruptcies: Texas Grease Enterprises, Hardy Alloys and more

San Antonio area bankruptcy courts recorded three business filings - including one with total debt above $1 million - during the week that ended October 8, 2021. Year to date through October 8, 2021, the court recorded 54 Chapter 7 or Chapter 11 business bankruptcy filings, a 4 percent increase from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business’ assets to satisfy creditor claims, while Chapter 11 protection enables a business….....»»

Category: topSource: bizjournalsOct 14th, 2021

The week in bankruptcies: TKO Electric LLC

Pittsburgh area bankruptcy courts recorded one business filing during the week that ended October 8, 2021. Year to date through October 8, 2021, the court recorded 38 Chapter 7 or Chapter 11 business bankruptcy filings, a 19 percent increase from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business’ assets to satisfy creditor claims, while Chapter 11 protection enables a business to restructure its creditor obligations with the goal….....»»

Category: topSource: bizjournalsOct 14th, 2021

Palo Alto Networks Inc.: The Winning Streak Continues

Palo Alto Networks Inc. (NYSE: PANW) traded today at a new 52-week high of $508.41. This new high was reached on below-average trading volume as 467,000 shares traded hands, while the average 30-day volume is approximately 1.2 million shares. In the past 52 weeks, Palo Alto Networks Inc. share prices are bracketed by a low of $219.34 and a high of $508.41 and are now at $507.52, 131% above that low price. Palo Alto Networks Inc. is currently priced 1.5% above its average consensus analyst price target of $499.87. Palo Alto Networks is a pure-play cybersecurity vendor that sells security appliances, subscriptions, and support to enterprises, government entities, and service providers. The company’s product portfolio includes ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaOct 12th, 2021

Transcript: Chamath Palihapitiya

     The transcript from this week’s, MiB: Chamath Palihapitiya on Venture Investing, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the… Read More The post Transcript: Chamath Palihapitiya appeared first on The Big Picture.      The transcript from this week’s, MiB: Chamath Palihapitiya on Venture Investing, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast, man, strap yourself in. This is really one of the old-time greats. Chamath Palihapitiya, Founder of Social Capital, very successful venture capitalist, part-owner of the Golden State Warriors, and all-around insightful investor social critic, and tech wonk. If you’re interested in anything from technology to social media, to venture investing, startups, entrepreneurship, I don’t know what else to say other than strap yourself in. This is a great one. With no further ado, my conversation with Chamath Palihapitiya. VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Chamath Palihapitiya. He is the Founder of Social Capital, one of the more interesting and successful venture capitalist out in Palo Alto. He is also an Engineer and Team Leader working at places like AOL, Facebook, and Slack. He has been known as the SPAC King for his numerous successful deals in that space. And he is also a 10 percent owner of the Golden State Warriors. Chamath Palihapitiya, welcome to Bloomberg. PALIHAPITIYA: Barry, thanks. RITHOLTZ: I’ve been looking forward to having this conversation for a while. Let’s — normally, I start with people’s backgrounds and we go chronologically, but you have some quotes that I love, and I want to ask you about them and let you run wild with them, “Starting with venture capital properly deployed can solve the biggest problems filling the void left by the shrinking scientific ambitions of governments, foundations, and international organizations. Explain. PALIHAPITIYA: Well, if you look at what’s happening in California or what’s happening at the federal level of the United States currently, there’s a really interesting thing that’s happened, which is we have effectively single-party rule. You have a, you know, elected leader that’s of one party. You have a Senate that’s of that same party, a House and then, you know, in the case of California, mayors as well, all democratic in this case. And what’s interesting is it also happens to be a moment in time where the societal problems that we’ve been facing are the worst they’ve ever been. Climate change is worse than it’s ever been. We have a water crisis. We have an impending food crisis, homelessness, crime. And you have to ask yourself, well, if a single party like — you know, when you have a typical normal, you know, political set-up, you have these two opposing forces and you have to find common ground. And each party says the exact thing, which is, well, if we had complete control, this would all be fixed. And it turns out that two examples where you have complete control, in fact, nothing gets fixed, even less gets fixed than what got fixed before. So why is that? It’s that the toolkit of policy and the toolkit of societies has changed. It’s no longer as much about laws necessarily, but it’s about technology. It’s about code. It’s about very specific inventions of science. And the problem with that then, well, then you would say, “Well, great. Well, that’s the solution to all of our problems. If we go in and figure out how to actually, you know, just have more of all of that stuff, everything will be solved.” OK, well, then — then you go in and you decompose that problem to first principles. And what you find is, for example, in places like core scientific research, people care more about citations, and papers, and research, and it’s also highly politicized and infested with all kinds of infighting. And so, foundations can’t fund the work that they used to. Universities aren’t nearly as good and actually promoting massive breakthroughs. So more and more of this responsibility gets put on for-profit enterprises, but to be very specific, they have to be for profit and they have to be technical. And when you see it that way, the venture capitalist all of a sudden has this critical role in society that they didn’t have before because they are a translator. They are, you know, in a technical meeting the smartest business person, but in a business meeting the smartest technical person. And they’re able to put these things together to solve problems. And so, that’s what I was trying to get across, which is we need more people building for-profit technical businesses, organizing resources against problems. RITHOLTZ: So — so let’s stay with the concept of — of venture capital being organized to solve problem and talk a little bit about Social Capital. Tell us about your first couple of venture investments and who were your first limited partners. PALIHAPITIYA: So, I was a Facebook at the time, and I had been doing a bunch of angel investing. And this is maybe 2008 or ’09, but I was the first solo G.P., I think, in many ways. I was putting some money to work of my own money, small checks, Barry, $10,000, $15,000. RITHOLTZ: Early seed round, right? PALIHAPITIYA: Early seed rounds in, you know, 2007 and ’08, basically all the money that I had. And I had to win. I met a guy named Rick Thompson, an amazing entrepreneur, who started a gaming company. And I jumped in with two feet. I invested my money. I spent a little bit of time there helping him, you know, sort of — I mean, as a — as a part-timer, obviously, because I was working at Facebook at the time. And the company gets bought by Disney for like 750 million bucks and I made a few million bucks. And I thought, “This is it.” I have my — I have my escape velocity. And at the time at Facebook, they were all these people that were trying to invest in the company. And Zuck basically said to me, “Hey, can you help sort out whose money we should take?” I mean, I was running Facebook platform, I was building Facebook Mobile, I was doing all of these products so — but I was like, “Yeah, sure, I guess.” And I met the guys at Tiger Global, Chase Coleman specifically, and we built a relationship and then, you know, Tiger ended up investing in the business. And along the way, you know, I said, “Hey, I’m thinking of, you know, investing a little bit of capital on the side.” And he goes, “Well, if you organize a little LLC, you know, I’m happy to kick in a, you know, a few shovels.” And so, all of a sudden, I had this little group of me and my friends, and I just organized about 11 million bucks, you know, and I was like three or four of it and like, you know, other couple of folks jumped in for 50K there, 500K there, a million there, whatever. And so, while I was a full-time employee at Facebook, I was a part-time investor. And that’s how I started and so those are my first LPs, wonderful guys, Reid Hoffman, you know, a whole list of kind of like … RITHOLTZ: Who — who’s the rest of that list because already I am loving this group? PALIHAPITIYA: The list was pretty impressive. I want to say it was like Peter Thiel, Reid Hoffman, Chase Coleman. I’d have to look at the slides, I can’t … RITHOLTZ: But it’s a murderous row pretty much. PALIHAPITIYA: Yeah, Dave Goldberg, you know, Zander Lurie who is the CEO of Momentum A.I., so a bunch of really great entrepreneurs, and CEOs, and investors. Anyways, I put the money to work and, you know, it was non-obvious that that fund was good. I was learning. And most of the investments I made were way too ambitious, and I was deeply undercapitalized, right? So, you — in 2008 and ’09, in hindsight, it was really dumb to make a bunch of deep tech investments. Now, some of them have come home to roost, and that fund has now (inaudible), but we got very lucky and it did very well, but it took an enormously long period of time. So, I put the money to work and I learned. I learned, hey, portfolio construction is important. I didn’t get that right. I was way undercapitalized, like, hey, wait a minute, like I needed way more reserves to defend these companies. And I had to think about duration, meaning I can’t solve 20 of your problems in a 10-year fund. I need to solve five of your problems in a 10-year fund if I want to be in the fund business. And, you know, that obviously changed in 2016 and ’17 when I just basically consolidated with my own money. But so – then I left Facebook in 2011 and I went back to these same folks. And I said, “Guys, let’s go much bigger. I think I know what I’m doing.” And we created — my first fund was 250 or 60 million bucks. I put up 60, and then it was really like, you know, John Doerr, Peter Thiel, Reid Hoffman, Li Ka-shing, you know, just — I ran the table of Jorge Paulo Lemann like incredible people. And a handful of really great institutions, Mayo Clinic, you know, folks that I was really proud to make money for. And I said, “This is like a great intersection of entrepreneurs and, you know, investors, and philanthropists, and foundations.” And, you know, I’m going to go and try to find great businesses, and that’s how it started. RITHOLTZ: So, from there, what was the subsequent funds that came out of that because that, you know, funds that run a seven or a 10-year lifespan. And some companies, some VCs will just do Fund 2, Fund 3, Fund 4, you didn’t exactly go in that direction. PALIHAPITIYA: You know, I can tell you — so like the returns as of this last quarter because I just — I had a — I had a little advisory board meeting, you know, I put about a billion one in the ground. That is worth today just a little under $5 billion. RITHOLTZ: And this was the 2016? PALIHAPITIYA: No. So, yeah, this was … RITHOLTZ: Or 2011? PALIHAPITIYA: I — I raised about $1 billion over four funds — over five funds, sorry, in the first five years basically, so a $260 million fund, another $260 million, a $500 million, and then I had a small $100 million fund and then a $30 million opportunities fund kind of — so about $1.1 billion. And, you know, so far, we’ve returned a little — almost a little under 2X of capital, so cash-on-cash, we’ve returned about two some odd billion. The curing value is a little under $5 billion. And I think that, you know, when I look in the next — in the next few years that will turn one more time. So basically, you know, one billion will turn into $10 billion and the returns are, you know, probably — well, right now they’re in the high 20’s nets. RITHOLTZ: That’s great. PALIHAPITIYA: And it’ll be in the — probably the low 30’s. That’s when it’s all … RITHOLTZ: So, as all that comes up, are you just going to roll that over into another fund or … PALIHAPITIYA: So … RITHOLTZ: … are you looking to spread this into different spaces because I am aware you are a man of many interests. You’re not just — I — I find the world … PALIHAPITIYA: Right. RITHOLTZ: … really fascinating and curious. And — and looking at what you invest in, I can tell you approach the universe the same way. PALIHAPITIYA: Right. So, along the way, I think in 2016 what I realized was running funds doesn’t accomplish my goal. And it took me some number of years to figure that out. I loved working inside of these companies. I loved trying to make some of these businesses work. I loved taking really big moon shots on technical problems that I wanted to solve. I didn’t like the constraints of a fund. I didn’t like managing L.P. relations because by that point, you know, as you know, Barry, when you’re in the fund to business, then it’s all about quantity of LPs. And so, the LPs had grown beyond my cohort of people, right, because it’s not as if their money is infinite either. RITHOLTZ: Right. PALIHAPITIYA: Right? And so, then we have fund of funds and other organizations who are in the business of, you know, being investors in these organizations. And it became very administrative. And a lot of my time was spent fundraising and managing those relationships as opposed to investing or starting companies. And so, that was one big error of judgment that I felt I needed to fix. The other one was I was looking at myself thinking like, well, am I going to be able to defend the ownership of these best companies? And think about what happens in a fund. If you make an investment and it’s working, you have all this pressure to double down. But when there’s something smaller and more technical where there’s way more asymmetric risk, it’s much harder to convince others that you should continue to invest in that as well. RITHOLTZ: So, let’s stay with that a second because that’s — there’s some really interesting things. When I hear someone like you say double down, what I’m usually thinking of is, hey, we made a small investment in the seed round and now it’s the A or the B round, and we’re going to have to step-up. And $500,000 is now a $50 million or $2 million becomes $100 million. Is that what you mean by double down versus … PALIHAPITIYA: No, I mean, the following decision, which is very hard. So, let’s just say — and — and we use explicit examples because it’s easier. So, let’s just say we invested in the crypto business and the software-as-a-service start up on the same day. $10 million in each. The SaaS business has a much higher probability of short-term progress. I sold, you know, X amount of software, here’s my bookings, here’s my revenue. RITHOLTZ: High probability of modest success. PALIHAPITIYA: High probability of modest success. Most people are, you know, enraptured with that. RITHOLTZ: That’s what — well, that’s what the S&P 500 is for. If you want a high probability amount of success, go by the spiders. But I … PALIHAPITIYA: Sure. RITHOLTZ: … imagine people come to venture because — hey, I have all my … PALIHAPITIYA: No. RITHOLTZ: … conservative stuffs. PALIHAPITIYA: No, not true. RITHOLTZ: I’m looking for you to … PALIHAPITIYA: Not true. RITHOLTZ: … hit me the 100X. PALIHAPITIYA: It’s not true. It … RITHOLTZ: Really? PALIHAPITIYA: … it may be — listen. So there — there are two conundrums here. The conundrum number one is if you’re a limited partner. If you’re a limited partner right now sitting inside of a foundation or a pension fund and you have to return capital, and you have to get over your hurdle, you need an allocation into venture, but those allocations are minuscule. Nobody is getting, you know, huge allocations into Sequoia, right? RITHOLTZ: Because the capacity is that’s limited as it is. PALIHAPITIYA: Nobody — nobody is getting huge allocations in the benchmark. You know, these are $500 million funds, you know. And I — you know, in my example, I was 30 percent of all the capital, so there’s just not a lot of room for other. RITHOLTZ: Right. PALIHAPITIYA: Number one. And then the more insidious problem is actually the human capital inside the funds themselves. And what I mean by that is not that they’re bad people, they are wonderful people, but they are products of a very specific and very rigid hierarchy. You know, they typically went to a handful of schools. RITHOLTZ: Right. PALIHAPITIYA: They typically are educated in exactly the same way. They typically, you know, have the exact same kind of risk tolerance as a result of all those things. And so, when the rubber meets the road, this Harvard MBA or the Stanford MBA, they want to treat the venture capital organization as their version of the S&P 500. Very predictable, Steady Eddie. Let me make, you know, a good salary. Don’t rock the boat. So, what happens? Crypto stuff gets underfunded until it’s obvious. You know, hard tech and — and, you know, life sciences get underfunded until it’s obvious. SaaS gets overfunded until it’s obvious. And that’s the whipsaw that you face now. Now, there are a handful of organizations that have fought against that and have done it brilliantly. So, when you look, for example, like Founders Fund, I’ll pick an example. Incredible set of investors who are iconoclasts to the one. Atypical in every dimension. There’s not a single drop of real pedigree amongst them, except they are all incredible entrepreneurs. If you look at Coastal Ventures, same situation. Incredibly atypical in their intellectual makeup, and the way they think, and what they value. And to a one, they’re generally great entrepreneurs, so you see this recurring theme. So, you know, for me, what I’ve tried to do is recalibrate my time around that realization. I have a fixed amount of capital. If I surround myself with these good — they’re good people, it will lead me astray because I will get risk off. And the whole goal of this business, as you exactly well put it, is to be 100 percent massively risk on. And so, that’s how I live my life. I have a small allocation of capital in case all of this goes to zero, but otherwise 99 percent of my net worth and wealth is massive risk on. RITHOLTZ: That’s quite, quite fascinating. I — I keep wanting to go to some of my questions, but you keep saying things that make me have to respond. I’m still kind of struck by your LPs, meaning management. And what I mean by that is someone runs a successful fund. There’s a very limited amount of slots for money to come in. I just imagine it’s like here’s the deal. I have a slot for 100 for you. I’ll send you the annual updates, we’ll have an annual meeting, and I don’t want to hear from you the rest of the year. PALIHAPITIYA: You can’t take — it’s not … RITHOLTZ: It’s the approach. It doesn’t work that way? PALIHAPITIYA: … it’s not that — well, it’s not that easy even for the best organizations. You know, when you’re dealing with these large pools of capital, they are large bureaucracies. And in fairness to these bureaucracies, there’s — there’s really important guardrails of risk management, right, and legal and operational due diligence that they have to do because again, it’s the fireman’s pension, it’s the teachers’ pension, it’s the … RITHOLTZ: Right. PALIHAPITIYA: … you know, it’s the foundation. It’s the — they’re all doing good work, right? So, it’s not like, you know, they have a right to be cavalier, but it creates an infrastructure of folks that approach their job in a very specific way that, for me, didn’t make sense. For others, I think it does make a ton of sense because, you know, they — look, there’s a tradeoff. Today, that tradeoff, by the way, has rewarded them more than me. And what is the tradeoff? When you’re a successful investor, you’ll get to a fork in the road at a certain level of assets where you have to go on the path well-traveled or the path less traveled. The path less traveled is what I’ve taken. You’re alone … RITHOLTZ: Meaning …by yourself, more risk … PALIHAPITIYA:  you’re by yourself … all your own money, all risk gone. The path well-traveled says syndicate the risk, let the — let the returns decay, build an AUM machine, monetize the fee income, sell a percentage to dial or to whomever, and then eventually sell the G.P. to somebody and you’re done. And, you know, if you have enough capital at some point, you’re like, well, what do I need any more money? This is a safer route to take. RITHOLTZ: Right. PALIHAPITIYA: I am of this different view, which is I want very specific kinds of progress that will not happen unless I am a tip of the spear on a bunch of things that I want to change. And I’m using my money as a mechanism of showing the change that I want to see in the world with the idea that if free markets are ultimately efficient, other money will follow. And it will unlock and create change. SPACs are a perfect example. RITHOLTZ: We’re going to talk about SPACs in a little bit. I’m fascinated by the path less traveled. And I — I’m kind of reminded of an old joke a friend used to say, what’s the difference between having $1 billion or having $2 billion? And the answer is really nothing. PALIHAPITIYA: Nothing. RITHOLTZ: Right, there’s not — what is the difference? PALIHAPITIYA: Nothing. RITHOLTZ: So — so once you wrap your head around that, why build an AUM machine? Why take a G.P. and do all the things you don’t want to do just so you can sell it in the road? PALIHAPITIYA: Well, look, I mean — I think there’s something very valiant in building a company of any kind. I don’t care what it is because you end up hiring people, you end up creating your own little economy. You know, by hiring good people and paying them, you’re giving them a path. You’re giving them, you know, some amount of purpose in their lives. So, you know, any form of company building, I think, is heroic, the person that uses to build a company. I don’t care what it is. It could be a garbage business, an AUM business. You know, they’re all to me where I look at the founders of those things like you, and you’re in a class of hero for me. Everybody may not be with the same, you know, sometimes now founders, unfortunately, sometimes can get vilified for being an entrepreneur. But in general, I think they’re heroic. But again, that’s not what I was trying to do. My returns in society, I wanted to be expressed by a different kind of change and a different kind of purpose, which was a practical problem solved. You know, I want reforestation to be, you know, done differently. I want a gene editing solution to be so cheap and so fast the available we can eradicate, you know, the 32,000 inherited Mendelian diseases. You know, I want to figure out how to get, you know, sub $100 solar on everybody’s roof and to build a massive distributed energy utility in America. It turns out I’m doing all those things. Now, I can do that with my capital and that’s really great. That capital may go to zero … RITHOLTZ: But you’re saying … PALIHAPITIYA: … but it may not … RITHOLTZ: … you couldn’t do that if you had these institutional endowments and other … PALIHAPITIYA: Maybe not. RITHOLTZ: … large more conservative investors who are more concerned about IRR than moving the needle. PALIHAPITIYA: Short-term IRR because, you know, again they have a job to do. They have pension obligations to make. They have, you know, other things that they’re funding. They have the lifestyle they want to pay for. They have their own annual reviews and bonuses and things. So, you know, it’s not to debate the validity of it, it just exists, and I’m not willing to sign up for that because duration. And, by the way, you can see that certain funds have realized that that durational limitation doesn’t work in tech anymore, right, so now you’re seeing these 15-year funds, right? Some of these climate funds are really long-dated so that they can take huge long risk with very sticky money. I think that’s moving.....»»

Category: blogSource: TheBigPictureOct 12th, 2021

The week in bankruptcies: KDA Properties LLC, Premier Services Inc. and more

Denver area bankruptcy courts recorded four business filings - including two with total debts above $1 million - during the week that ended Oct. 1, 2021. Year to date through Oct. 1, 2021, the court recorded 45 Chapter 7 or Chapter 11 business bankruptcy filings, a -49 percent decrease from the same span the prior year. Chapter 7 bankruptcy protection typically provides for the liquidation of a business's assets to satisfy creditor claims, while Chapter 11 protection enables a business to restructure….....»»

Category: topSource: bizjournalsOct 11th, 2021

Europa Scorned And Forsaken

Europa Scorned And Forsaken Authored by Alasdair Crooke via The Strategic Culture Foundation, Does Europe possess the energy and the humility to look itself in the mirror, and re-position itself diplomatically? Two events have combined to make a major inflection point for Europe: The first was America’s abandonment of the Great Game ploy of attempting to keep the two Central Asian great land powers – Russia and China – divided and at odds with each other. This was the inexorable consequence to the US’ defeat in Afghanistan – and the loss of its last strategic foothold in Asia. Washington’s response was a reversion to that old nineteenth century geo-political tactic of maritime containment of Asian land-power – through controlling the sea lanes. However America’s pivot to China as its primordial security interest has resulted in the North Atlantic becoming much less important to Washington – as the US security crux compacts down to ‘blocking’ China in the Pacific. The Establishment-linked figure, George Friedman (of Stratfor fame), has outlined America’s new post-Afghan strategy on Polish TV. He said tartly: “When we looked for allies [for a maritime force in the Pacific] on which we could count – they were the British and the Australians. The French weren’t there”. Friedman suggested that the threat from Russia is more than a bit exaggerated, and implied that the North Atlantic NATO and Europe are not particularly relevant to the US in the new context of ‘China competition’. “We ask”, Friedman says, “what does NATO do for the problems the US has at this point?”. “This [the AUKUS] is the [alliance] that has existed since World War II. So naturally they [Australia] bought American submarines instead of French submarines: Life goes on”. Friedman continued: “The NATO countries don’t have force enough to help us. It has been weakened by the Europeans. To have a military alliance, you have to have a military. The Europeans are not interested in spending the money”. “Europe”, he said, “has left us with no choice: It is not a case of the US adopting this strategy [AUKUS], it is the strategy of Europe. First, there is no Europe. There is a bunch of countries in Europe, pursuing their own interests. You can only be bilateral [perhaps working with Poland and Romania]. There is no ‘Europe’ to work with”. A storm in a tea-cup? Possibly. But the French went apoplectic. Expressions such as ‘stab in the back’ and ‘betrayal’ were flung around. It was Europa scorned. She is bitter and angry. Biden has made a groveling apology to President Macron over cutting out France from the submarine contract, and Blinken has been in Paris smoothing feathers. George Friedman’s blunt account of the ‘new strategy’ may not be Biden ‘speak’, but it is Military Industrial think-tank conceptualisation. How do we know that? Firstly, because Friedman is one of their spokesmen – but simply because… continuity. The incumbents of the White House come and go, but US security objectives do not alter so readily. When Trump was in the White House, his views on NATO were very similar to those just repeated by Friedman. Incumbents may change, but military think-tank perspectives evolve to a different and slower cycle. The ‘multilateral dimension’ of relations with France would be viewed as a largely Biden preoccupation. Friedman expressed the continuity of a US slow-burn focus to seeing China as the threat to US primacy. NATO won’t disappear, but it will play a narrower role (especially in the wake of its’ Afghan débacle). But the EU, Friedman has made ruthlessly clear, is not viewed by the US security élite as a serious global player – or really as much more than one ‘punter’, amongst others, buying at the US weapons supermarket. The submarine contract with Australia however, was a centrepiece to Paris’s strategy for European ‘strategic autonomy’. Macron believed France and the EU had established a position of lasting influence in the heart of the Indo-Pacific. Better still, it had out-manoeuvred Britain, and broken into the Anglophone world of the Five Eyes to become a privileged defence partner of Australia. Biden dissed that. And Commission President von der Leyen told CNN that there could not be “business as usual” after the EU was blindsided by AUKUS. One factor for the UK being chosen as the ‘Indo-Pacific partner’ very probably was Trump’s successful suasion with ‘Bojo’ Johnson to abandon the Cameron-Osborne outreach to China; whereas the big three EU powers were perceived in the US security world as ambivalent towards China, at best. The UK really did cut links. The grease finally was Brexit, which opened the window for strategic options – which otherwise would have been impossible to the UK. There may be a heavy price to pay though further down the line – the US security establishment are really pushing the Taiwan ‘envelope’ to the limit (possibly to weaken the CCP). It is extremely high risk. China may decide ‘enough is enough’, and crush the AUKUS maritime venture, which it can do. The second ‘leg’ to this global inflection point – also triggered around the Afghan pivot into the Russo-Chines axis – was the SCO summit last month. A memorandum of understanding was approved that would tie together China’s Belt and Road Initiative to the Eurasian Economic Community, within the overall structure of the SCO, whilst adding a deeper military dimension to the expanded SCO structure. Significantly, President Xi spoke separately to members of the Collective Security Treaty Organisation (of which China is not a part), to outline its prospective military integration too, into the SCO military structures. Iran was made a full member, and it and Pakistan (already a member), were elevated into prime Eurasian roles. In sum, all Eurasian integration paths combined into a new trade, resource – and military block. It represents an evolving big-power, security architecture covering some 57% of the world’s population. Having lifted Iran into full membership – Saudi Arabia, Qatar and Egypt may also become SCO dialogue partners. This augurs well for a wider architecture that may subsume more of the Middle East. Already, Turkey after President Erdogan’s summit with President Putin at Sochi last week, gave clear indications of drifting towards Russia’s military complex – with major orders for Russian weaponry. Erdogan made clear in an interview with the US media that this included a further S400 air defence system, which almost certainly will result in American CAATSA sanctions on Turkey. All of this faces the EU with a dilemma: Allies who cheered Biden’s ‘America is back’ slogan in January have found, eight months later, that ‘America First’ never went away. But rather, Biden paradoxically is delivering on the Trump agenda (continuity again!) – a truncated NATO (Trump mooted quitting it), and the possible US shunning of Germany as some candidate coalition partners edge toward exiting from the nuclear umbrella. The SPD still pays lip service to NATO, but the party is opposed to the 2% defence spending target (on which both Biden and Trump have insisted). Biden also delivered on the Afghanistan withdrawal. Europeans may feel betrayed (though when has US policy ever been other than ‘America First’? It’s just the pretence which is gone). European grander aspirations at the global plane have been rudely disparaged by Washington. The Russia-China axis is in the driving seat in Central Asia – with its influence seeping down to Turkey and into the Middle East. The latter commands the lions’ share of world minerals, population – and, in the CTSO sphere, has the region most hungry and ripe for economic development. The point here however, is the EU’s ‘DNA’. The EU was a project originally midwifed by the CIA, and is by treaty, tied to the security interests of NATO (i.e. the US). From the outset, the EU was constellated as the soft-power arm of the Washington Consensus, and the Euro deliberately was made outlier to the dollar sphere, to preclude competition with it (in line with the Washington Consensus doctrine). In 2002, an EU functionary (Robert Cooper) could envisage Europe as a new ‘liberal imperialism’. The ‘new’ was that Europe eschewed hard military power, in favour of the ‘soft’ power of its ‘vision’. Of course, Cooper’s assertion of the need for a ‘new kind of imperialism’ was not as ‘cuddly’ liberal – as presented. He advocated for ‘a new age of empire’, in which Western powers no longer would have to follow international law in their dealings with ‘old fashioned’ states; could use military force independently of the United Nations; and impose protectorates to replace regimes which ‘misgovern’. This may have sounded quite laudable to the Euro-élites initially, but this soft-power European Leviathan was wholly underpinned by the unstated – but essential – assumption that America ‘had Europe’s back’. The first intimation of the collapse of this necessary pillar was Trump who spoke of Europe as a ‘rival’. Now the US flight from Kabul, and the AUKUS deal, hatched behind Europe’s back, unmissably reveals that the US does not at all have Europe’s back. This is no semantic point. It is central to the EU concept. As just one example: when Mario Draghi was recently parachuted onto Italy as PM, he wagged his finger at the assembled Italian political parties: “Italy would be pro-European and North Atlanticist too”, he instructed them. This no longer makes sense in the light of recent events. So what is Europe? What does it mean to be ‘European’? All that needs to be thought through. Europe today is caught between a rock and a hard place. Does it possess the energy (and the humility) to look itself in the mirror, and re-position itself diplomatically? It would require altering its address to both Russia and China, in the light of a Realpolitik analysis of its interests and capabilities. Tyler Durden Mon, 10/11/2021 - 02:00.....»»

Category: smallbizSource: nytOct 11th, 2021