What we’re reading (4/10)
“The Best Explanation Of Biden’s Thinking I’ve Heard” (New York Times). “With the $2 trillion American Jobs Plan, the economic theory that is Bidenomics is taking shape. It’s big. It puts climate at the center of everything. It is more worried about political risks — losing the House, giving Donald Trump a path back to power — than some traditional economic risks, like wasting money and bumping up inflation. It prefers to err on the side of spending more and making sure people know they got a bridge or a job than doing less and having people question whether government is working for them.”
“Coinbase’s Lofty Valuation Might Erode As Crypto Markets Mature” (Wall Street Journal). “Coinbase plans to go public Wednesday through a direct listing on the Nasdaq Stock Market. The company, which runs the largest U.S. exchange for bitcoin and other digital currencies, could achieve a bigger market capitalization than any of the world’s traditional exchange operators. But it faces a number of threats, including competition in the fast-evolving cryptocurrency industry, that could undermine its stock price in the long run.”
“Earnings Season Is About To Get Underway And That Could Be A Positive Catalyst For Stocks” (CNBC). “‘It isn’t what they report,’ said James Paulsen, chief investment strategist at Leuthold Group. ‘For the first time, we are going to hear more and more companies now actually making comments about the future. Are they going to upwardly revise some of their outlooks or are they not? That’s what’s really going to be key about it.’”
“The Ponzi Career” (Dror Poleg). “The future of work is a pyramid scheme, where every person sells his favorite person to the next person…[a]s more occupations become scalable, jobs that were previously stable are becoming risky. Telehealth enables superstar doctors to serve customers in markets that were previously inaccessible to them. Connected fitness devices like Peloton allow superstar instructors to serve thousands of customers at a time, making the average instructor in your local gym redundant. The same dynamic applies to many other service and knowledge jobs.”
“Inside Williston, ND, Where Men Work Hard, Make Bank And Get Into Trouble” (New York Post). “In 2008, as the US economy was in shambles and the housing market collapsed, Williston’s oil boom was just beginning, with prices peaking at $145 a barrel. Workers with little or no experience in oil drilling flocked to the state, looking for jobs. The population of Williston tripled between 2008 and 2013, from around 12,000 to a sudden influx of over 30,000 new arrivals. Between July 2012 and July 2013, ‘one new person arrived in Williston every three hours…[e]ight new people each day.’”
What we’re reading (4/8)
“Can Anything Derail The ‘Goldilocks’ Economy?” (CNN Business). “America's economy could be heading for a golden era of growth. But higher prices and the coronavirus pandemic still present risks.”
“Investors Sour On Emerging Markets As U.S. Prospects Brighten” (Wall Street Journal). “Investors say emerging markets have been upended by the improved U.S. growth outlook, which is strengthening the dollar and sending Treasury yields higher as money managers bet the Federal Reserve will raise interest rates in coming years to keep inflation tame.”
“A Large Chunk Of The Retail Investing Crowd Got Their Start During The Pandemic, Schwab Survey Shows” (CNBC). “…15% of current retail investors first began playing the market in 2020, based on analysis of about 500 investors. Schwab — which now hosts 31.5 million retail clients and $6.9 trillion in assets because of the retail investing boom — is calling the new wave of investors, ‘Generation Investor.’”
“A Tax Change Is Coming, Maybe” (DealBook). “The Biden administration has unveiled its corporate tax overhaul, intended to raise $2.5 trillion over 15 years to pay for an infrastructure program. ‘Debate is welcome. Compromise is inevitable. Changes are certain,’ President Biden said, but he stressed that ‘inaction is not an option.’”
“Biden Might Agree To A 25% Corporate Tax Rate As A Compromise With Business Groups, Rather Than The 28% He Wanted, According To A Report” (Business Insider). “Reuters spoke to more than a dozen corporate and White House officials involved in the push for the infrastructure plan, and most said they expected Biden and business groups to agree on a tax rate of 25%. This would bridge the gap between industry leaders, who generally oppose a tax hike, and Democrat lawmakers, who are overwhelmingly in favor of the 28% rate.”
What we’re reading (4/7)
“Investors Big And Small Are Driving Stock Gains With Borrowed Money” (Wall Street Journal). “As of late February, investors had borrowed a record $814 billion against their portfolios, according to data from the Financial Industry Regulatory Authority, Wall Street’s self-regulatory arm. That was up 49% from one year earlier, the fastest annual increase since 2007, during the frothy period before the 2008 financial crisis. Before that, the last time investor borrowings had grown so rapidly was during the dot-com bubble in 1999.”
“Janet Yellen Calls For A Global Minimum Tax On Companies. Could It Happen?” (The Economist). “Such a levy, Ms Yellen said, would help ‘make sure the global economy thrives based on a more level playing field’, and would help end a ‘30-year race to the bottom’. Though the idea of a minimum tax raises hackles in tax havens in the Caribbean, parts of Europe and farther afield, many other big economies will welcome America’s renewed commitment to multilateralism on tax after the prickly unilateralism of the Trump years.”
“JPMorgan’s Chief Sees A Boom Coming” (DealBook). “A combination of excess savings, deficit spending, a potential infrastructure bill, vaccinations and ‘euphoria around the end of the pandemic,’ Mr. Dimon wrote, may create a boom that ‘could easily run into 2023.’ That could justify high equity valuations, but not the price of U.S. debt, given the ‘huge supply’ soon to hit the market.”
“Morgan Stanley Dumped $5 billion In Archegos’ Stocks The Night Before Massive Fire Sale Hit Rivals” (CNBC). “The night before the Archegos Capital story burst into public view late last month, the fund’s biggest prime broker quietly unloaded some of its risky positions to hedge funds, people with knowledge of the trades told CNBC.”
“International Passenger Traffic Down 89% In February, No Sign Of Recovery: IATA” (Reuters). “Global airline industry body IATA said international passenger traffic plunged 89% in February compared to the same month last year as COVID-19 infections climbed once more, and there was no sign of an aviation recovery yet.”
What we’re reading (4/6)
“The Global Economy Will Grow 6% this Year as Vaccines Pave The Way For A Full Recovery, IMF Says” (Business Insider). “The IMF lifted its estimate for global gross domestic product growth this year to 6% from 5.5%, according to its latest economic outlook report. The improvement was largely tied to expectations for economic reopening and mass vaccination.”
“U.S. Auto Industry Calls For Government Help As It Warns Of Impact Of Chip Shortage” (Reuters). “A U.S. auto industry group on Monday urged the government to help as it warned the global semiconductor shortage could result in 1.28 million fewer vehicles built this year and disrupt production for another six months.”
“Bitcoin ETF Coming ‘In A Year Or Two,’ Analyst Says As SEC Mulls Applications” (CNBC). “The Securities and Exchange Commission formally acknowledged a bitcoin ETF proposal from VanEck just two weeks ago, starting the countdown on its 45-day approval timeline. But seeing a bitcoin ETF approved in the next 30 days isn’t that likely, according to Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research. It’s more likely that the SEC will extend its timeline, he told CNBC’s ‘ETF Edge’ on Monday.”
“Coinbase Independent Directors Have Close Company Tie” (Wall Street Journal). “Fred Ehrsam’s ties to Coinbase Global Inc. run deep: He co-founded the multibillion-dollar bitcoin exchange, was its president until 2017, owns millions of its shares and was part-owner of a company it bought last year. Under Coinbase’s plan to tap the public markets, however, the San Francisco-based company classifies Mr. Ehrsam as an independent director, securities filings show. The same goes for Fred Wilson, another Coinbase director who owns a significant stake of the company.”
“How Brexit Ruined Easter For Britain’s Chocolate Makers” (New York Times). “For the second year in a row, Easter will be a largely online affair, with socially distanced egg hunts and virtual church services. But there will be one notable difference here in Britain. Domestic chocolate makers, who should be celebrating one of their busiest times of year, are fuming instead, and all of them cite the same cause: Brexit.”
What we’re reading (4/5)
“The US Recovery Is Speeding Up But The Global Economy Isn’t Out Of Danger” (CNN Business). “The economic recovery in the United States and China is gaining steam, triggering a wave of upgraded forecasts and optimistic commentary. Meanwhile, economists watching other parts of the world are getting worried.”
“Stocks Were The Only Major Asset Class That Gained In The First Quarter, But Bank Of America Says ‘Anemic’ Returns May Be On The Horizon” (Business Insider). “According to the firm's Sell Side Indicator, a contrarian gauge of Wall Street sentiment, optimism over the past twelve months has risen three times the typical rate following bear markets since 1985. Bank of America's sentiment indicator is now at a 10-year high and the closest it's been to a contrarian ‘sell’ signal since May 2007.”
“Risky Borrowers Are Falling Behind On Car Payments” (Wall Street Journal). “A greater share of people with low credit scores has been falling behind on their car payments in recent months, a sign of stress among consumers whose finances have been hit hard by the pandemic. Some 10.9% of subprime borrowers with outstanding auto loans or leases were more than 60 days past due in February, up from 10.7% in January and 8.7% a year prior, according to credit-reporting firm TransUnion.”
“GameStop Plans $1 Billion Stock Sale, Shares Slide” (Reuters). “[GameStop] said it would sell up to 3.5 million shares and use the proceeds to speed up the shift in its business model to e-commerce in an overhaul being led by top shareholder and board member Ryan Cohen.”
“He Built A $10 Billion Investment Firm. It Fell Apart In Days.” (New York Times). “[Bill Hwang] borrowed billions of dollars from Wall Street banks to build enormous positions in a few American and Chinese stocks. By mid-March, Mr. Hwang was the financial force behind $20 billion in shares of ViacomCBS, effectively making him the media company’s single largest institutional shareholder. But few knew about his total exposure, since the shares were mostly held through complex financial instruments, called derivatives, created by the banks.”
What we’re reading (4/4)
“Individual Investors Retreat From Markets After Show-Stopping Start To 2021” (Wall Street Journal). “Individual investors kicked off 2021 at a sprinter’s pace. Now, they are finally showing signs of fatigue. Trading activity among nonprofessional investors has slowed in recent weeks after a blockbuster start to the year, with the group plowing less money into everything from U.S. stocks to bullish call options.”
“What’s Behind The Boom In Iconic Boomer Musicians Selling Their Songs” (CNBC). “A wave of boomer rock icons are selling out of their song catalogs. The moves, the latest of which was made by Paul Simon last week, point to a straightforward truth about the intersection of art and money: Music has always been a business, and one where creative genius deserved to be rewarded with riches. And it is a business that right now is seeing major changes caused by streaming, and further disruptions caused by the pandemic.”
“A Cryptocurrency Entrepreneur Just Bought The World’s Largest Painting, By Artist Sacha Jafri, For A Whopping $62 Million” (Artnet News). “Last fall, Sacha Jafri set a Guinness World Record for the world’s largest painting, titled The Journey of Humanity. Now, he’s sold it at auction for an equally large price: $62 million. The figure makes him the fourth-most expensive living artist—behind Jeff Koons, David Hockney, and digital artist Beeple.”
“Technology After The Pandemic” (DealBook). “Many companies made changes to survive the pandemic. For tech companies, the changes were also about seizing opportunities to thrive as life abruptly moved online. Few companies have juggled these risks and rewards in as many industries, across as many countries, as Prosus, an Amsterdam-based conglomerate that in 2019 was spun out of Naspers, the South African tech and media giant.”
“Hertz Selects Chapter 11 Exit Plan Backed By Centerbridge, Warburg, Dundon” (Reuters). “Hertz Global Holdings Inc said on Saturday it has selected an enhanced proposal from Centerbridge Partners, Warburg Pincus, and Dundon Capital Partners to provide the equity capital required to fund the car rental company’s exit from Chapter 11. The proposed deal, which is subject to approval by the U.S. bankruptcy court for the district of Delaware, is supported by holders of over 85% of the company’s unsecured notes, Hertz said in a statement.”
March 2021 performance update
Hi folks, here with a a performance update for March. First, the key numbers for the month:
Prime picks: +2.53%
Select picks: +4.15%
SPY S&P 500-Tracking ETF: 2.79%
Bogleheads (80% VTI + 20% BND): 1.14%
As usual, cumulative performance since since we started last May is shown in the chart below.
A few takeaways for March from my perspective:
Select appears to be coming back, substantially outperforming SPY in the month and beating it by more than 100 basis points for the second consecutive month. Over the long run, I’m expecting Select to outperform the market, but underperform Prime, and this is a step in that direction. I use the same foundational model to choose the Select picks as the Prime picks, but deliberately choose stocks for Select that don’t look quite as good as Prime (but still good relative to the modal stock). Another way of saying that is that, per unit of return the Select picks earn, they tend to exhibit a little more volatility relative to the Prime picks (or, equivalently, per unit of risk, they tend to yield a little less).
The composition of the Select portfolio was more heavily weighted toward tech last month compared to Prime (8 of 10 picks for Select; 4 of 10 for Prime). That disproportionality is interesting in light of Select’s outperformance, especially in as far as it runs counter to the popular finance media narrative that rising long-term Treasury rates should have the opposite effect on tech stocks, given their relatively longer cash flow durations and higher sensitivity to interest rate shocks.
Relatedly, one way that rising interest rates likely affected the numbers above in a way they actually would be expected to shows up in the performance of the Bogleheads portfolio. That portfolio has a 20% exposure to the bond-tracking ETF BND. Bogleheads was in positive territory in March because of its 80% equity weight on VTI, but the BND piece of the portfolio was down 1.26% as rising rates hurt bond values.
That’s all for now!
Stoney Point Total Cumulative Performance
What we’re reading (4/3)
“Travel Is Coming Back. That’s Great News For Airport Stores” (CNN Business). “Airline travel in the United States recently reached its highest level since the pandemic began, although it's still around half of what it was pre-pandemic, according to the Transportation Security Administration.”
“We (Might) Work” (Scott Galloway). “The new WeWork is a stronger company than the 2017 model. It’s still not worth $50 billion, but it might be worth $9B (or more)…[i]magine: a commercial real estate play, with properties around the world, configured as flexible office space, rentable by the hour, the day, or the month, with great community spaces, aspirational design, and strong tech. In sum, We might Work.”
“The Housing Market Is Crazier Than It’s Been Since 2006” (Wall Street Journal). “The past year has been the hottest for sales activity in 14 years. Home values are rising in practically every corner of the U.S., and median sale prices in dozens of metro areas have posted double-digit percentage increases from a year ago, according to Zillow Group Inc. In Boise, Idaho, the median sale price rose almost 25% in January from a year earlier, while in Stamford, Conn., it rose 19%.”
“Here’s Where The Jobs Are — In One Chart” (CNBC). “The Labor Department reported Friday that total nonfarm payroll employment rose by 916,000 last month, the best monthly print since August. The unemployment rate continued its steady decline to 6%.”
“I Avoided Fake Meat For Years. That Was A Big Mistake” (Wired). “If anyone needs a reminder, beef is bad for the world. You can either stick a seed in the ground, grow some food, and eat it, or grow some food and feed large quantities of it to a cow, every day for about two years, the animal farting and burping methane until you chop it up and eat it. Multiply that by the beef cravings of a few billion people and that math gets real bad, real quick.”
What we’re reading (3/31)
“Biden Set To Unveil $2 Trillion Infrastructure Plan” (Wall Street Journal). “Mr. Biden will unveil the proposal during a Wednesday afternoon speech in Pittsburgh, where he kicked off his presidential campaign. He is expected to make the case that the investments are necessary to help the U.S. compete with China and tackle climate change.”
“Goldman Sachs Is Close To Offering Bitcoin And Other Digital Assets To Its Wealth Management Clients” (CNBC). “The bank aims to begin offering investments in the emerging asset class in the second quarter, according to Mary Rich, who was recently named global head of digital assets for Goldman’s private wealth management division.”
“No Longer A ‘Lost’ Generation: Millennials Born In The 1980s Are Finally Getting Richer” (Business Insider). “Older millennials are finally getting richer. Over the past three years, they've gained serious ground in building wealth, according to a new report by the Federal Reserve Bank of St. Louis that studied data from the Survey of Consumer Finances. As of 2019, those born in the 1980s have median wealth levels 11% below where they should be if the Great Recession hadn't occured [sic].”
“Wells Fargo Plans To Bring Workers Back To Office In September” (Reuters). “Wells Fargo & Co said on Tuesday it plans to start bringing workers back to its offices after Labor Day due to the increasing availability of vaccines. The bank hopes that operations will begin to return to normalcy after Sept. 6, according to a memo circulated to the staff.”
“Corporations Are Working With Social Media Influencers To Cancel-Proof Their Racial Justice Initiatives” (Washington Post). “Companies like Procter & Gamble, Sephora and Snap are seeking help to stay ahead of cultural moments and avoid embarrassing gaffes[.]”
April Prime + Select picks available now
The new Prime and Select picks for April are available starting now, based on a model run put through today (March 30). As a note, we’ll be measuring the performance on these picks from the first trading day of the month, Thursday, March 1, 2021 (at the mid-spread open price) through the last trading day of the month, Friday, April 30 (at the mid-spread closing price).
You can check out the latest picks here.
What we’re reading (3/30)
“One of World’s Greatest Hidden Fortunes Is Wiped Out in Days” (Bloomberg). “From his perch high above Midtown Manhattan, just across from Carnegie Hall, Bill Hwang was quietly building one of the world’s greatest fortunes. Even on Wall Street, few ever noticed him -- until suddenly, everyone did. Hwang and his private investment firm, Archegos Capital Management, are now at the center of one of the biggest margin calls of all time -- a multibillion-dollar fiasco involving secretive market bets that were dangerously leveraged and unwound in a blink.”
“JPMorgan, Salesforce Join Growing List Of Firms Dumping Office Space” (Wall Street Journal). “Large companies typically sign office leases for a decade or longer, giving them few options for reducing their footprint beyond trying to sublease floors to other tenants. At the end of 2020, 137 million square feet of office space was available for sublease across the U.S., according to CBRE Group Inc. That is up 40% from a year earlier and the highest figure since 2003.”
“Millennium Management Has Been Quietly Hoovering Up London Quant Talent” (efinancial careers). “It's not only banks who are all about building out their systematic trading teams in 2021. Hedge fund Millennium Management has been surreptitiously adding quant trading staff from both banks and rival hedge funds in London too.”
“Options Traders Bet On A Big Move Higher When Lululemon Reports Earnings” (CNBC). “Lululemon is off to an uncharacteristically rough start to the year, along with many of 2020′s other high flyers. The stock, which has soared more than 250% over the last three years, is down more than 8% just since the beginning of 2021, significantly underperforming all three major indexes. Despite the recent losses, options traders are betting Tuesday’s earnings report will hold the key to a quick rebound when results cross the wire after the bell.”
“The Suez Canal Has Reopened, But Experts Say You'll Still Have To Wait 9 Months For That Couch To Be Delivered” (Business Insider). “The Suez Canal blockage may be cleared, but experts warn the impact will be seen on the supply chain for months to come. The hulking cargo ship, the Ever Given, was unmoored from the Suez Canal on Monday, nearly a week after it became stuck, allowing a massive backlog of vessels to begin their transits through the vital passageway.”
What we’re reading (3/29)
“Banks Warn Of ‘Significant Losses’ As They Exit Positions With Large U.S. Hedge Fund” (CNBC). “Credit Suisse and Nomura warned Monday of “significant” hits to first-quarter results, after they began exiting positions with a large U.S. hedge fund that defaulted on margin calls last week. While neither Credit Suisse nor Nomura named the fund, it’s been widely reported that Archegos Capital Management is the firm connected to the fire sale.”
“Coronavirus Was Supposed To Drive Bankruptcies Higher. The Opposite Happened.” (Wall Street Journal). “The number of people seeking bankruptcy fell sharply during the pandemic as government aid propped up income and staved off housing and student-loan obligations. Bankruptcy filings by consumers under chapter 7 were down 22% last year compared with 2019, while individual filings under chapter 13 fell 46%[.]”
“Larry Summers Warned About Inflation. Fed Officials Push Back.” (New York Times). “Federal Reserve officials pushed back on Thursday against concerns raised by two prominent economists — Lawrence H. Summers, the former Treasury secretary, and Olivier J. Blanchard, a former chief economist at the International Monetary Fund — that big government spending could overheat the economy and send inflation rocketing higher.”
“Ever Given Ship Freed In The Suez Canal, Authority Confirms” (CNN Business). “The Ever Given container ship has been dislodged and is now floating, after blocking the Suez Canal for almost a week, authorities said Monday. Tug boats had spent several hours on Monday working to free the bow of the massive vessel after dislodging the stern earlier in the day.”
“Congressional Stock Report: Diet Coke-Loving Debbie Dingell Buys The Competition, Environmentalist Lois Frankel Eyes Oil, And Dan Crenshaw Gets His Move On” (Business Insider). “Members of Congress routinely trade stocks, buying and selling the shares of companies that often have significant business before the federal government — and sometimes spend lots of money to lobby lawmakers. Insider dug through congressional financial disclosure records that federal lawmakers filed in recent days. Here are the latest highlights from what we've found.”
What we’re reading (3/27)
“Betsy Cohen Has Launched Nine SPACs And Is Still Going” (Wall Street Journal). “Celebrity influencers like Serena Williams, Ciara and Chamath Palihapitiya have jumped on the blank-check-company boom. One of the biggest stars in this white-hot corner of Wall Street is a 79-year-old financier who doesn’t tweet or court the Reddit daytrading crowd. What Betsy Cohen does do is deals—lots of them.”
“Wall Street’s Sleepless Nights” (DealBook). “Starting jobs at investment banks are notorious for long hours and a lot of pressure. But junior bankers say the pandemic, booming markets and other factors are making their grueling jobs even more intense. Some are near, or past, breaking point.”
“‘It's Crazy. There Is No Inventory.’ Housing industry veteran marvels at real estate boom” (CNN Business). “For wannabe buyers, the shortage of homes on the market, combined with a surge of competition from other purchasers is setting off bidding wars, all-cash offers and no end of sticker shock. But this one-two punch of very low supply and roaring demand is suiting homebuilders just fine.”
“NASA Wants Companies To Develop And Build New Space Stations, With Up To $400 Million Up For Grabs” (CNBC). “The National Aeronautics and Space Administration last year marked two decades of astronauts continuously onboard the International Space Station. But, as the floating research laboratory ages, the space agency is turning to private companies to build and deploy new free flying habitats in low Earth orbit.”
“When Hedge Fund Billionaire Thomas Sandell Paid $105 Million To Settle A Tax Fraud Case, An Anonymous Tipster Made $22 Million. Here's An Inside Look At The Crazy World Of Whistleblower Lawsuits” (Business Insider). “A whistleblower is someone who shares credible information about financial fraud, criminal activity, unsafe working conditions, or other improper conduct with a government agency. If the information leads to a settlement, whistleblowers earn a percentage of the financial penalties paid by wrongdoers. While the process can take years, tipsters stand to earn millions of dollars for their valuable information.”
April picks available soon
We’ll be publishing our Prime and Select picks for the month of April on or before 3/31. As always, we’ll be measuring SPC’s performance for the month of March, as well as SPC’s cumulative performance, assuming the sale of the March picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Wed., March 31). Likewise, performance tracking for the month of April will assume the April picks are bought at the open price (at the mid-point of the opening bid and ask prices) the first trading day of the month (Thurs., April 1).
What we’re reading (3/26)
“WeWork Agrees to SPAC Deal That Would Take Startup Public” (Wall Street Journal). “WeWork has agreed to merge with a special-purpose acquisition company in a deal that would take the shared-office provider public nearly two years after its high-profile failure to launch a traditional IPO.”
“Suez Canal Blockage Is Delaying An Estimated $400 Million An Hour In Goods” (CNBC). “The stranded mega-container vessel, Ever Given in the Suez Canal, is holding up an estimated $400 million an hour in trade, based on the approximate value of goods that are moved through the Suez every day, according to shipping data and news company Lloyd’s List.”
“Global Shipping Was In Chaos Even Before The Suez Blockage. Shortages And Higher Prices Loom” (CNN Business). “But even before the Ever Given ran aground in the Suez Canal earlier this week, global supply chains were being stretched to the limits, making it much more expensive to move goods around the world and causing shortages of everything from exercise bikes to cheese at a time of unprecedented demand.”
“Interest Rates, Earning Growth and Equity Value: Investment Implications” (Musings on Markets). “The first quarter of 2021 has been, for the most part, a good time for equity markets, but there have been surprises. The first has been the steep rise in treasury rates in the last twelve weeks, as investors reassess expected economic growth over the rest of the year and worry about inflation. The second has been a shift within equity markets, a "rotation" in Wall Street terms, as the winners from last year underperformed the losers in the first quarter, raising questions about whether this shift is a long term one or just a short term adjustment.”
“Comic Gold: The Easterner Goes West In Three Early American Comics” (Public Domain Review). “The California Gold Rush transformed the landscape and population of the United States. It also introduced a new figure into American life and the American imagination — the effete Eastern urbanite who travels to the Wild West in quest of his fortune. Alex Andriesse examines how this figure fares in three mid-nineteenth-century comic books.”
What we’re reading (3/25)
“Cargo Ship Blocking Suez Canal Could Take Weeks To Move” (CNBC). “The massive container ship that ran aground in the Suez Canal, halting traffic in one of the world’s busiest waterways, is still stuck as tug boats continued to try to dislodge the ship on Thursday. A team of expert salvors from Smit Salvage have been called in to assist with the operation.”
“Powell Says Now Is Not The Time To Focus On Reducing Federal Debt” (Wall Street Journal). “Federal Reserve Chairman Jerome Powell said that the federal government can manage its debt at current levels but that fiscal-policy makers should seek to slow its growth once the economy is stronger.”
“Who Are The Biggest Tax Cheats? The 1% — And Here’s How They Get Away With It” (Los Angeles Times). “It’s widely assumed that the biggest tax scofflaws are those with the most money. A new study by a team of IRS analysts and academic economists, however, tells us that things are much worse than anyone suspected.”
“Facebook, Twitter And Google CEOs Testify Before Congress On Misinformation” (CNN Business). “Congress is set to grill the chief executives of Facebook, Google and Twitter about misinformation and online extremism on Thursday, in the executives' first appearance before lawmakers since the Jan. 6 Capitol riots and the rollout of the coronavirus vaccine.”
“U.S. Regulator Opens Inquiry Into Wall Street's Blank Check IPO Frenzy - Sources (Reuters). “The U.S. securities regulator has opened an inquiry into Wall Street’s blank check acquisition frenzy and is seeking information on how underwriters are managing the risks involved, said four people with direct knowledge of the matter.”
What we’re reading (3/24)
“The Years of Work Behind Washington’s Best-Liked Man” (New York Times). “Mr. Powell and his team swiftly moved to put out fires on Wall Street and Main Street last spring. The efforts were imperfect, but the retirement savings of millions as well as the budgets of states and cities were saved from destruction.”
“Massive Cargo ship That Blocked Egypt’s Suez Canal Is Reportedly On The Move” (CNBC). “A cargo container ship that’s among the largest in the world turned sideways and blocked all traffic in Egypt’s Suez Canal, officials said Wednesday. The ship is now on the move, indicating a resumption of traffic in the waterway, a shipping source and witness told Reuters.”
“Elon Musk Announces On Twitter That You Can Now Buy A Tesla With Bitcoin” (Business Insider). “Tesla has begun accepting Bitcoin as a form of payment, Elon Musk announced on Twitter Wednesday…[a]dditionally, ‘bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency,’ Musk said.”
“Will This Boom Go Bust?” (DealBook). “The bull market is now a year old, with the S&P 500 up nearly 75 percent from its low point at this time last year…[t]he factors that have stoked the rally also raise questions about whether it can last.”
“Where Are Those Shoes You Ordered? Check The Ocean Floor” (Wired). “Since the end of November, this is some of what has sunk to the bottom of the Pacific Ocean: vacuum cleaners; Kate Spade accessories; at least $150,000 of frozen shrimp; and three shipping containers full of children’s clothes.”
What we’re reading (3/23)
“Credit Cards Slash $99 Billion From Spending Limits During Pandemic” (American Banker). “The notices went out to one cardholder after another, sparking complaints. Big banks were trimming credit limits by hundreds or thousands of dollars as the COVID-19 pandemic spread. None were saying how far it would go.”
“Homes Are Selling At Record Speed As Buyers Scramble To Find Properties” (CNN Business). “Finding a home to buy remains a challenge for house hunters right now. Inventory of homes for sale remained at a record low 1.03 million homes in February, the same as January, and dropped a record 30% from a year ago, according to the National Association of Realtors.”
“Tech Stocks Led The Market Rally. Now They’re Falling Behind.” (Wall Street Journal). “Recently…[the] rally has stalled, sending the tech-heavy Nasdaq Composite briefly into a correction—a 10% decline from a recent high. Since the index’s recent record on Feb. 12, growth and tech stocks have largely struggled. In contrast, other sectors have surged, including energy and financials.”
“Pension Funds Have To Buy Bonds To Rebalance Portfolios, And That Might Be Good For Stocks” (CNBC). “Pension funds and other major investors should be big buyers of bonds during the next week or so, as they rebalance their holdings to make up for the bond market’s first quarter sell-off. That could send bond yields lower, at least temporarily.”
“Miami Wants To Be The Hub For Bitcoin” (New York Times). “Mayor Francis Suarez of Miami is selling his city as the world’s cryptocurrency capital. “We want to be on the next wave of innovation,” he told DealBook. To make that happen, Mr. Suarez said he was ‘refashioning’ the city’s ‘fun in the sun’ image. Thanks in part to the mayor’s marketing efforts, tech and finance titans have flocked to Miami during the pandemic.”
What we’re reading (3/22)
“U.S. Economy Is ‘On The Brink’ Of A Complete Recovery, Says Richmond Fed’s Barkin” (CNBC). “The U.S. economy is recovering from the Covid-19 recession, but some economic “scarring” may take a long time to heal, said Richmond Federal Reserve Bank President Thomas Barkin. Economic scarring refers to damage left behind by crises that will suppress growth prospects over the medium or long term.”
“One Measure Of Debt-Market Distress Is Down 90% Since March Amid Fed Assistance And Easy Money” (Business Insider). “The US distress ratio - the proportion of speculative-grade (rated "BB+" or lower) issues with option-adjusted composite spreads of more than 1,000 basis points relative to U.S. Treasuries - continued to trend down in February 2021, hitting 4.0% after peaking at 35.2% just 11 months earlier, according to a report from S&P Global.”
“Bond Rout Hits Safest Company Debt” (Wall Street Journal). “Bonds from highly rated companies have lost more than 5.4% this year, counting price changes and interest payments, through March 18. That is their second-worst start in data going back to 1996, the worst being last year’s pandemic-fueled selling, according to Bloomberg Barclays data. That compares with a 0.2% return for high-yield bonds and a 1.7% gain in corporate loans to highly indebted borrowers.”
“States Are Out Of Excuses About Remote Work And Taxation” (Real Clear Markets). “As a result of the pandemic, many Americans switched to remote work for long periods of time in 2020. Many employees that normally cross state lines to an office (as is common in large multi-state metro areas) but instead worked from home last year may find that the state in which their office is located still expects them to pay taxes as if nothing had changed. This also opens up the possibility of double taxation, as both the resident’s home state and their prior work location’s state could allege that the work was done in that state.”
“Turkey's Lira Plunges After Erdogan Fires Central Bank Head” (CNN Business). “Turkey could be on the cusp of another currency crisis after President Recep Tayyip Erdogan abruptly fired the head of the country's central bank, putting the lira on track for its worst single day decline against the US dollar in nearly three years.”
What we’re reading (3/21)
“Easy Money? Gen Z Invests Online To Beat Coronavirus Woes” (Reuters). “From South Korea to the United States, a growing number of teens and young adults born after 1996 - dubbed Generation Z - are turning to online investment platforms that offer the chance to make a living with a swipe, but often pose unforeseen risks.”
“As Blackstone Barrels Toward Trillion-Dollar Asset Goal, Growth Is In, Value Out” (Wall Street Journal). “Blackstone Group Inc. became an investing powerhouse by making successful bets on undervalued companies. For the next leg of its expansion, the firm is focused on companies with big growth prospects, even if it has to pay up for them.”
“Cathie Wood's Ark Invest Expects Tesla To Soar To $3,000 Per Share By 2025 On Robotaxi Service” (Business Insider). “Cathie Wood's Ark Invest is out with a new eye-popping price target for Tesla, and investors are taking notice due to the accuracy of its previous price predictions on the electric vehicle manufacturer. Ark now expects Tesla to hit $3,000 per share by 2025, representing a potential upside of 359% from Friday's close and a market valuation of about $3 trillion. That's a sizable increase from its previous 2024 price target of $1,400.”
“Saudi Aramco Profit Slumps 44% After Covid-Battered Year, But Maintains Dividend” (CNBC). “Oil giant Saudi Aramco reported a 44% slump in full-year 2020 results, but maintained its $75 billion dollar dividend payout, with CEO Amin Nasser describing the last twelve months as one of the most “challenging years” in recent history…Aramco said revenues were impacted by lower crude oil prices and volumes sold, and weakened refining and chemicals margins.”
“‘MillionaireMike’, a SpaceX Engineer, Tried to Buy and Sell Inside Information on the Dark Web. He’s Now Facing Jail Time.” (Institutional Investor). “The so-called dark web is well-known as a marketplace for illicit activities such as drug dealing and arms sales. Add insider trading to the list. The Securities and Exchange Commission detailed the dark web’s use as a marketplace for insider trading tips in a complaint filed Thursday in an Indianapolis federal court against James Roland Jones, a SpaceX engineer it accused of accessing ‘an insider trading forum on the dark web in search of material non-public information (‘MNPI’) on which to trade securities.’”