Intersting thoughts

[Bozzie]

Global Market Comments June 11, 2021 Fiat Lux Featured Trade: (HOW TO FIND A GREAT OPTIONS TRADE)

​ How to Find a Great Options TradeYou’ve spent vast amounts of time, money, and effort to become an options trading expert. You know the difference between bids and offers, puts and calls, exercise prices, and expiration days. And you still can’t make any money. Now what? Where do you apply your newfound expertise? How do you maximize your reward while minimizing your risk? It is all very simple. Stick to five basic disciplines and you will suddenly find that the number of your new trades that are winners takes a quantum leap, and money will start pouring into your trading account. It’s really not all that hard to do. So here we go! 1) Know the Macro Picture If you have a handle on whether the economy is growing or shrinking, you have a major advantage in the options market. In a growing economy, you only want to employ bullish strategies, like calls, call spreads, and short volatility plays. In a shrinking economy, you want to execute bearish plays, like puts, put spreads, and long volatility plays. Remember, the only thing that is useful for your options trading is a view on what the economy is going to do NEXT. The government only publishes historical economic data, which is for the most part useless in predicting what is going to happen in the future. The options market is all about discounting what is going to happen next. And how do you find that out? Well, you could hire your own in-house staff economist. Or you could rely on economic research from the largest brokerage houses. Even the Federal Reserve puts out its own forecasts for economic growth prospects. However, all of these sources have notoriously poor track records. Listening to them and placing bets on their advice CAN get you into a world of trouble. For the best possible read on the future of the US and the global economy, there is no better place to go than Global Trading Dispatch, published by me, John Thomas, the Mad Hedge Fund Trader. This is where the largest hedge funds and brokers go to find out what really is going to happen to the economy. Do you want to give yourself another valuable edge? There are over 100 different industries listed on US stock markets. However, only about 5 or 10 are really growing decisively at any particular time. The rest are either going nowhere or are shrinking. In fact, you can find a handful of sectors that are booming, while others are in outright recession. If you are a major hedge fund, institution, or government, you may want to cover all 100 of those industries. Good luck with that. If you are a small hedge fund, or an individual working from home, you will want to conserve your time and resources, skip most of US industry, and only focus on a handful. Some traders take this a step further and only concentrate on a single high growing, volatile industry, like technology or biotech, or even a single name, like Netflix (NFLX), Tesla (TSLA), or Amazon (AMZN). How do you decide which industry to trade? Brokerage houses pump out more free research than you could ever read in a lifetime. Government reports tend to be stodgy, boring, and out of date. Big hedge funds keep their in-house research confidential (although some of it leaks out to me). The Mad Hedge Fund Trader solves this problem for you by limiting its scope to a small number of benchmark, pathfinder industries, like technology, banks, energy, consumer cyclical, biotech, and cybersecurity. In this way, we gain a handle on what is happening in the economy as a whole, while lining up rifle shots on the best options trades out there. We want to direct you where the action is, and where we have a good handle on future earnings prospects. It doesn’t hurt that we live on the edge of Silicon Valley and get invited to test out many new technologies before they are made public. My Tesla Model S1 is a perfect example. That encourages me to recommend Tesla stock at $16 before it began its historic run to $295. It was the best short squeeze ever. 2) The Micro Picture is Ideal Once you have a handle on the economy and the best industries, it’s time to zero in on the best company to trade in, or the “MICRO” selection. It’s always great to find a good target to trade in because positions in single companies can deliver double or even triple the returns compared to stock indexes. That's because the market will pay a far higher implied volatility for a single company than a large basket of companies. Remember also that you are taking greater risks in trading individual companies. The options market will pay you for that extra risk. If the earnings come through as expected, everything is hunky-dory. If they don’t, the shares can drop by half in a heartbeat. Large indexes buffer this effect, which is why they have far lower volatility. Of course, there are gobs of market research about individual companies out there from brokers. Some of it is right, some of it is wrong, but all of it is conflicted. Recommendations are either “BUY” or “HOLD”. Brokers are loath to issue a “SELL” recommendation for a stock because it will eliminate any chance of that firm obtaining new issue business. Who wants to hire a broker to sell new stock when their analyst has already dissed the company? And brokerage firms don’t make their bread and butter on those piddling little discount commissions you have been paying them. They make it on highly lucrative new issues business. In fact, a new issue can earn as much as $100 million for one firm. I know because I’ve done it. I have been following about 100 companies in the leading market sectors for nearly half a century. Some of the management of these firms have become close friends over the decades. So, I get some really first-class information. When markets rotate to sectors and companies that I already know, I have a huge advantage. Needless to say, this gives me a massive head start when selecting individual names for options Trade Alerts. 3) The Technicals Line Up I have never been a huge fan of technical analysis. Most technical advice boils down to “if it’s gone up, it will go up more” or “If it’s gone down, it will go down more.” Over time, the recommendations are accurate 50% of the time or is about equal with a coin toss. However, the shorter the time frame, the more useful technical analysis becomes. If you analyze intraday trading, almost all very short-term movements can be explained in technical terms. This is entirely how day traders make their livings. It’s a classic case of if enough people believe something, it becomes true, no matter how dubious the underling facts may be. So it does behoove us to pay some attention to the charts when executing your trades. Talk to old-time investors and you will fund that they use fundamentals for long-term stock selection and technicals for short-term order execution. Talk to them some more and you find the best fundamentalists sound like technicians, while savvy technicians refer to underlying fundamentals. Get the technicals right, and you can provide one additional reason for your trade to work. 4) The Calendar is Favorable There is one more means of assuring your trades turn into winners. I am a big fan of buying straw hats in the dead of winter and umbrellas in the sizzling heat of the summer. There IS a method to my madness. Have you heard of “Sell in May and go away?” According to the Stock Trader’s Almanac, $10,000 invested at the beginning of May and sold at the end of October every year since 1950 would be showing a loss today. This is despite the fact that the Dow Average rocketed from $409 to $18,300 during the same time period, a gain of 44.74 times! Amazingly, $10,000 invested every November and sold at the end of April would today be worth $702,000, giving you a compound annual return of 7.10%. It gets better. Of the 62 years under study, the market was down in 25 of the May to October periods, but negative in only 13 of the November to April periods. What’s more, the market has been down only three times during the November to April in the last 20 years! There have been just three times when the "good 6 months" have lost more than 10% (1969, 1973, and 2008), but with the "bad six months" time period, there have been 11 losing losses of 10% or more. So it’s clear that trading according to the calendar can have a significant impact on your profitability. Being a long-time student of the American, and indeed, the global economy, I have long had a theory behind the regularity of this cycle. It’s enough to base a pagan religion around, like the ones practicing Druids at Stonehenge. Up until the 1920s, we had an overwhelmingly agricultural economy. Farmers were always at maximum financial distress in the fall when their outlays for seed, fertilizer, and labor were the greatest, but they had yet to earn any income from the sale of their crops. So they had to borrow all at once, placing a large cash call on the financial system as a whole. This is why we have seen so many stock market crashes in October. Once the system swallows this lump, it’s nothing but green lights for six months. After the cycle was set and was easily identifiable by computer algorithms, the trend became a self-fulfilling prophecy. Yes, it may be disturbing to learn that we ardent stock market practitioners might in fact be the high priests of a strange set of beliefs. But hey, some people will do anything to outperform the market. It is important to remember that this cyclicality is not 100% accurate, and you know the one time you bet the ranch, it won’t work. Benefits of the Tailwinds So there we have it. Adopt these five simple disciplines and you will find your success rate on trades jumps from a mere coin toss to 70%, 80%, or even 90%. In other words, you convert your trading from an endless series of frustrations to a reliable source of income. If a potential trade meets only four of these five criteria, please do it with your money and not mine. Your chances of making money have just declined. And I bet a lot of you poor souls execute trades all the time that meet NONE of these criteria. No wonder you’re losing money hand over fist! Get the tailwinds of the economy, your industrial call, your company pick, the market technicals, and the calendar working for you, and all of a sudden you’re a trading genius. It only took me half a century to pull all this together. Hopefully, you can learn a little bit faster than me. I hope it all works for you. ​ [h=2]Your Guide to Winning Trades[/h]​ ​

Quote of the Day“In a social democracy with a fiat currency, all roads lead to inflation,” said legendary hedge fund manager Bill Fleckenstein.

This is not a solicitation to buy or sell securities The Mad Hedge Fund Trader is not an Investment advisor For full disclosures click here at: http://www.madhedgefundtrader.com/disclosures The "Diary of a Mad Hedge Fund Trader"(TM) and the "Mad Hedge Fund Trader" (TM) are protected by the United States Patent and Trademark Office The "Diary of the Mad Hedge Fund Trader" (C) is protected by the United States Copyright Office

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[Bozzie]

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Top News Shutterstock​ ​ Stocks ended the day and the week modestly higher Friday, as investors shrugged off a report showing inflation in the U.S. rising 5%, its fastest pace since 2008. The benign reaction in the bond market seemed to reflect agreement with the Federal Reserve's contention that the current burst of inflation is only transitory. The benchmark 10-year Treasury yield dropped to as low as 1.43% on Friday before finishing flat at 1.46%, still its lowest level in three months and down nearly 12 basis points this week. The major stock market averages posted a mixed showing, with the Nasdaq up 1.9% for its fourth straight weekly gain, the S&P 500 eking out a 0.4% gain, and the Dow Jones falling 0.8% for the week. ​ Events Global tax deal​ ​ Ahead of another weekend summit, G7 nations reached an agreement on a global minimum tax following years of discussions at the OECD. At a basic level, the framework would prevent companies from shifting profits to low tax jurisdictions and ensure the biggest multinationals pay more tax in the countries in which they operate. In return, the U.S wants European nations and others to drop their Digital Service Taxes that target American Big Tech companies, but many negotiations still await. Bigger picture: In its current form, the deal would require that companies pay at least a 15% tax on income, regardless of where they are based, making it less advantageous to relocate operations to countries with lower tax rates. The rules would apply to multinationals that have a profit margin of at least 10%, while governments would share the right to tax 20% of profits above that threshold. For example, an online company that has no physical presence in a country, but has significant sales there via digital advertising, would be obligated to pay some taxes to the government of that nation. The debate touches on the ongoing friction in international taxation: whether to tax companies based on the location of their income or the location of their headquarters. While administration officials like Treasury Secretary Janet Yellen said the new framework will halt a global "race to the bottom" on corporate taxes, others feel that it could be hard to enact and enforce on an international scale. The fine print is also in question, such as accounting rules, subsidies and exemptions for R&D and capital investment. More hurdles: The new tax rules would have to apply globally, meaning the support from other large economies like China and India. Treasury chiefs are hoping for breakthroughs at the G20 and OECD by mid-year, as well as the backing of over a hundred countries that have been negotiating the new rules as part of the so-called Inclusive Framework. Some big obstacles also lie ahead, like in Ireland, which has a low tax rate to encourage foreign investment, and in China, which wants to retain control over its tax policy, but if the effort picks up speed it may be hard not to bow to the pressure. Go Deeper: The new tax approach could run into opposition in the U.S., where Janet Yellen needs to sell the deal to Congress. The changes could require the U.S. Senate to alter existing tax treaties, which would take a two-thirds vote and at least some GOP support. Republicans have already expressed opposition to any rise in taxes, while some lawmakers have condemned the idea of ceding taxing authority to other governments. Business groups have also complained that higher taxes could threaten the economic recovery as American companies navigate their way out of the coronavirus pandemic. (10 comments) ​ Sponsored By VantagePoint How do A.I. algorithms predict a market crash?​ ​ ​ This is a message that our free A.I. live training will be expiring soon. When you enter the room, please have some ticker symbols ready so we can demonstrate our artificial intelligence algorithms for you. The theme of today’s class is how A.I. can warn you of an approaching market crash. You will learn about global intermarket analysis, how to better time your exits before a crash, and even have the opportunity to chat one on one with an A.I. expert at the end of the class. This invite expires at the end of the day. Click here to sign up.​ Healthcare Memorable approval​ ​ The FDA cleared the first new treatment for Alzheimer's in nearly two decades on Monday, sending shares of maker Biogen (BIIB) up 38% and adding $16.5B in market value. The company claims that Aduhelm, which has the molecular name aducanumab, slows down the memory-robbing disease by breaking up clumps of plaque formed on the brain called amyloid. The approval came just in time for Biogen, which is dealing with declining sales and the loss of patent protection for its top-selling drug, Tecfidera, which is used to treat multiple sclerosis. Wall Street sees a blockbuster: Despite the drug's questionable efficacy, Biogen said it would charge about $56,000 a year per patient (and wouldn't hike prices for four years). Clinical trials also included people suffering from only mild to moderately severe Alzheimer's, though the drug will be available to anyone that has been diagnosed with the disease. The global Alzheimer's treatment market is meanwhile forecast to grow at a compound annual growth rate of 12.8% between 2020 and 2027, reaching more than $5.6B by 2027, according to Acumen Research and Consulting. "We ultimately decided to use the Accelerated Approval pathway - a pathway intended to provide earlier access to potentially valuable therapies for patients with serious diseases where there is an unmet need, and where there is an expectation of clinical benefit despite some residual uncertainty regarding that benefit," said Patricia Cavazzoni, Research Director for the FDA Center for Drug Evaluation. Additional details: Unlike other Alzheimer's drugs that come in pills, Aduhelm requires monthly infusions. Before prescribing the drug, doctors will first make sure their patient's brain has amyloid buildup, which typically requires an imaging scan or spinal tap. Patients will also need to be monitored with MRIs, to guard against small brain bleeds, hemorrhages, or an accumulation of fluid. About 6M people are suffering from Alzheimer's in the U.S., and as many as 1.4M could be eligible to take Aduhelm, per estimates from Cigna. (143 comments) ​ Global Countering China​ ​ It could be one of the last major bipartisan bills of 2021, but the Senate got it over the line. Late Tuesday, the chamber approved the U.S. Innovation and Competition Act, a $250B package aimed at challenging China's technological ambitions. While the bill passed 68-32 in the Senate, it still needs approval in the House, which has been weighing some different approaches but is likely to see wide support. The measure is one of the biggest government interventions in industrial policy in decades, which trounced traditional party differences over economic policy. What's in the bill? About $190B would be directed at U.S. technology and research to better compete globally, including money for cutting-edge science and artificial intelligence via the National Science Foundation. Another $54B would increase U.S. production and research into semiconductors and telecom equipment, as well as design and manufacturing initiatives. The Commerce Department will also get $10B in funding to designate regional technology hubs for R&D and will be able to match financial incentives offered by states and local governments to chipmakers who expand or construct new factories. According to some estimates, federal R&D spending in recent years has totaled less than 1% of U.S. GDP, as well as less than 3% of total government spending, the lowest level since the space race in the 1960s. With regards to semiconductor manufacturing, it's been even worse. The Semiconductor Industry Association says the U.S. share of global chip-making capacity has tumbled from 37% in 1990 to 12% at the present. "We are in a competition to win the 21st century and the starting gun has gone off. We cannot risk falling behind," President Biden declared, while Commerce Secretary Gina Raimondo said the funding could result in seven to 10 new U.S. semiconductor plants. Response from China: While Beijing has long-embraced a top-down approach to investing in favored sectors, it expressed "strong indignation and resolute opposition" to the U.S. bill, which showed "paranoid delusion of wanting to be the only winner." The measure also banned downloads of Chinese-owned TikTok (BDNCE) on all government devices (not only military and Homeland Security phones) and will block purchases of drones manufactured and sold by companies backed by the Chinese government. It further expanded mandatory sanctions on Chinese entities engaged in American cyberattacks or the theft of intellectual property, while reviewing export controls on items that could be used to support human rights abuses. (335 comments) ​ On The Move Meme madness​ ​ To the moon! The meme trade is transforming into something new as retail traders continue to make waves in the broader markets. The ability to pool together their collective research or sentiment is lending credence to a new investment strategy, generating widespread buzz that brokerages and hedge funds didn't see coming. With more stocks being added to the category by the day, volatility is even affecting rebalancing decisions of market indexes like the Russell 2000 (NYSEARCA:IWM), which was once considered a stable benchmark for mutual funds before all the action. The old meme list that headlined favorites AMC (NYSE:AMC), BlackBerry (NYSE:BB) and GameStop (NYSE:GME) is changing. Over the past week, we've seen big run-ups and falls in names like Clover Health (NASDAQ:CLOV), Clean Energy Fuels (NASDAQ:CLNE), GEO Group (NYSE:GEO), World Wrestling Entertainment (WWE) and even Wendy's (NASDAQ:WEN). The fast-food chain was added to the group on Tuesday, which marked a notable departure from the classic meme mold that featured high short interest in order to squeeze a stock. Backdrop:The meme trade began with GameStop back in January and was partly a strategy (short squeeze), partly a gamble (remember binary options?) and partly a middle finger to Wall Street (little guy vs. the suits). The strategy was an outgrowth of the YOLO trade, which was popularized on the WallStreetBets forum to reach financial freedom overnight. Retail bros would throw all of their savings into one stock without caring about risk management or diversification. The method was compounded by waves of swarm trading, as well as gamification of stock apps and access to commission-free trading. Remember the Hertz (OTCPK:HTZGQ) bankruptcy bid-up that occurred last summer and the Kodak (NYSE:KODK) craze that followed? What about Tesla (NASDAQ:TSLA) once being worth more than every carmaker on Earth despite a fraction of their sales? Do we dare mention Bitcoin (BTC-USD), Dogecoin (DOGE-USD) or other cryptos? Go deeper: If meme trading is the new casino gambling, then timing is everything until the last trader is left holding the bag. Some still swear by the technicals, which have created countless day trading channels and messaging platforms. Others are quick to point to the eye-popping fortunes being posted online, but don't forget the whopping losses that get far less coverage. It also leads one to wonder about the broader public markets, where every share is only worth as much as people are prepared to pay for it. With the meme trade spreading to new sectors and industries, will stock fundamentals still hold water? Did they ever? (262 comments) ​ Economy The inflation debate​ ​ A higher-than-expected inflation print in the U.S. on Thursday showed prices soaring by 5% in May compared with a year ago, marking the biggest increase since the Great Recession. While it was somewhat distorted by the pandemic, dueling narratives are taking shape to what this will mean for the economy going forward. The Consumer Price Index also showed a gain of 4.2% back in April, calling into question current fiscal policies and the direction of interest rates. The bulls: The Fed is sticking to its "transitory" inflation thesis, which maintains that supply shocks and production bottlenecks have led to recent price pressures. Many are also quick to point out that the recent inflation print was once again driven by a jump in the cost of used cars and trucks, which accounted for about a third of the CPI's monthly advance. Meanwhile, the Biden administration argues that rising inflation is not only temporary, but it is also a feature of a rebounding economy. A broad vaccine rollout and lower COVID-19 case counts have seen Americans return to their old habits by spending months of pent-up savings. The bears: Many Republicans and some economists acknowledge the post-pandemic supply problems and surging demand, but also flag the cost of the $1.9T stimulus package President Biden signed in March. They further point to coming proposals from the White House, like spending $4T on infrastructure, as a possible risk that could trigger a full-blown recession. While a large share of May's CPI came from the auto market, prices are jumping for many other categories like furniture, airfare and apparel, while labor costs, transport and raw materials are also skyrocketing. Outlook: Will inflation be here for the long haul? It could take months before it's clear whether the current upsurge is temporary. As the economy reopens, both sides predict that rising costs will continue until supply chains and consumer demand recalibrate, but the real question is how prices will fare after that against a backdrop of massive fiscal and monetary policy support. (22 comments) ​ TOGETHER WITH ​ U.S. Indices Dow -0.8% to 34,480. S&P 500 +0.4% to 4,247. Nasdaq +1.9% to 14,069. Russell 2000 +1.9% to 2,331. CBOE Volatility Index -4.7% to 15.65. S&P 500 Sectors Consumer Staples -0.7%. Utilities +1.1%. Financials -2.4%. Telecom +0.8%. Healthcare +1.9%. Industrials -1.7%. Information Technology +1.4%. Materials -2.%. Energy -0.6%. Consumer Discretionary +1.6%. World Indices London +0.9% to 7,134. France +1.3% to 6,601. Germany flat at 15,693. Japan +0.% to 28,949. China -0.1% to 3,590. Hong Kong -0.2% to 28,870. India +0.7% to 52,475. Commodities and Bonds Crude Oil WTI +1.7% to $70.81/bbl. Gold -0.7% to $1,879.3/oz. Natural Gas +6.% to 3.284. Ten-Year Treasury Yield -0.2% to 132.9. Forex and Cryptos EUR/USD -0.46%. USD/JPY +0.17%. GBP/USD -0.34%. Bitcoin +0.2%. Litecoin -9.6%. Ethereum -12.6%. Ripple -11.7%. Top Stock Gainers Aethlon Medical (NASDAQ:AEMD) +193%. Novan (NASDAQ:NOVN) +88%. Orphazyme (NASDAQ:ORPH) +85%. Baosheng Media Group Holdings (NASDAQ:BAOS) +77%. NextDecade (NASDAQ:NEXT) +75%. Top Stock Losers Recon Technology (NASDAQ:RCON) -49%. Curis (NASDAQ:CRIS) -44%. Splash Beverage (NYSE:SBEV) -42%. Hookipa Pharma (NASDAQ:HOOK) -41%. Jiuzi Holdings (NASDAQ:JZXN) -38%. Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section.​

 

[Bozzie]

Great short,,even with the drop Friday.
This company is a wild swinging door and they've always had problems with data and done some ugly capital raises.

Sorta in the same field as EDT...Long time follower.

Aethlon Medical (NASDAQ:AEMD) +193%.

 

[Bozzie]

Great short,,even with the drop Friday.
This company is a wild swinging door and they've always had problems with data and done some ugly capital raises.

Sorta in the same field as EDT...Long time follower.

Aethlon Medical (NASDAQ:AEMD) +193%.

Price today 6.49 This company has no intention of bringing product to market.

AEMD did a direct offering on the news/ Reddit rumor that the filter could be a covid treatment. (@ 9.00 $.. 1,300,000 on a 12 million float ..announced Friday)

https://www.nbcsandiego.com/news/lo...-promising-results-in-covid-patients/2629619/

it's a fishy company data wise and this data looks thin at best company, also the stock has been reversed a few times ..trading @ 2.25 last week.

 

[Bozzie]

June 14, 2021 Continue reading the main story SUPPORTED BY

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Private equity firms like Henry Kravis’s KKR used accounting tactics like “fee waivers” to reduce their tax bills.Krista Schlueter for The New York Times

[h=2]Private equity has conquered the American tax system[/h]

The $4.5 trillion buyout industry “has perfected sleight-of-hand tax-avoidance strategies so aggressive that at least three private equity officials have alerted the Internal Revenue Service to potentially illegal tactics,” according to a new investigation by The Times. These previously unreported whistle-blower claims involved dozens of private equity firms, Jesse Drucker and Danny Hakimreport.

I.R.S. audits of private equity firms are “almost nonexistent,” said Michael Desmond, who stepped down this year as the I.R.S.’s chief counsel. The Times reviewed 10 years of annual reports filed by the five largest publicly traded private equity firms, which contained no sign of the firms ever having to pay the I.R.S. extra money.

“If the I.R.S. started staffing up now, it would take them at least a decade to catch up,” said Monte Jackel, a former I.R.S. attorney. Because buyout firms deploy vast webs of partnerships to collect their profits, untangling these structures’ tax liabilities is notoriously tricky for tax inspectors. “They are so grossly overmatched it’s not funny,” Jackel said.

The U.S. loses $75 billion a year from investors in partnerships failing to report their income accurately, according to one recent estimate. But people earning less than $25,000 are at least three times more likely to be audited than partnerships.

Lawmakers have tried unsuccessfully to make private equity pay more taxes for years, especially when it comes to the so-called carried interest loophole, in which partners treat the money they receive in performance fees as capital gains rather than income. The whistle-blowers’ claims addressed a technique known as a “fee waiver” that results in lower capital gains tax rates applying to recurring management fees as well as performance fees. The Obama administration barred the most aggressive fee waivers, thereby legitimizing the rest.

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When the Trump administration imposed a three-year waiting period before firms could reap preferential tax treatment for carried interest, the industry created the “carry waiver” to circumvent the rule.

Is something about to change? After ProPublica’s recent revelation that some of America’s richest men paid little or no federal taxes, the push to tax private equity may gain new momentum. President Biden has proposed enlarging the I.R.S.’s enforcement budget and closing loopholes. Like those before him, his ability to increase private equity’s tax burden will face resistance in the form of the industry’s formidable lobbying operations, which have derailed many past efforts.

[h=3]HERE’S WHAT’S HAPPENING[/h]

The G7 summit ends with a renewed focus on China. President Biden rallied allies to push back more forcefully against Beijing and Moscow. But cracks emerged in the group, including a failure to agree on ending the use of coal and a lack of concrete steps to ban Western participation in forced labor in China.

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Tech giants are embroiled in Trump-era subpoenas. Apple disclosed that, in response to Justice Department requests in 2018, it turned over information about users like the former White House counsel Don McGahn and people linked to Democratic members of the House Intelligence Committee. Such responses raise questions about Silicon Valley companies’ stated commitment to customer privacy.

Novavax announces strong results for its Covid-19 vaccine. The small drugmaker, which has received considerable support from the U.S. government, said that its treatment was 90 percent effective in a clinical trial. Its future in the U.S. — which is already awash in vaccines — is unclear, though some experts say it may become an effective booster shot.

An Alzheimer drug’s approval highlights the F.D.A.’s lack of a permanent leader. The agency continues to be led by Dr. Janet Woodcock on an interim basis, a situation that has raised concerns after it approved Biogen’s treatment despite F.D.A. advisers’ criticisms of its efficacy and cost.

A pricey ticket to fly with Jeff Bezos into space. An unidentified winner bid $28 million (plus a $2 million buyer’s commission) to travel on the maiden flight of Bezos’s Blue Origin reusable rocket next month. The winner will fly with Bezos on an 11-minute ride to the edge of space.

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[h=2]The trust-busting upswing[/h]

There is a marked uptick in antitrust activity by Democratic and Republican officials at the state and federal levels. Competition policy needs an update, many of them say, and in the past week they made forceful moves that could reshape the business landscape, especially for big technology firms.

Lawmakers and regulators are getting creative. A bipartisan group of House lawmakers introduced five sweeping antitrust bills on Friday, all aimed at restraining Big Tech, representing the most aggressive effort to remake antitrust law in a century. If passed — a big if, but the bipartisan nature of the push gives some of the proposals a chance — the bills would make it easier to break up businesses, create new hurdles for mergers and give antitrust enforcers more funds to police companies. This came at the end of a week with noteworthy antimonopoly actions at the state level:

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The New York Senate passed legislation that would significantly alter the definition of market dominance and introduce a 60-day premerger notification requirement for many deals, the first of its kind at the state level. The notice period could have “severe timing consequences” for deals, wrote lawyers at White & Case. The Republican attorney general of Ohio, Dave Yost, filed a novel lawsuitseeking to declare Google a “common carrier” — that is, a public utility subject to government regulation like the railroads of yore. If it’s successful, Google could no longer prioritize its own products, services and websites in search results.

This antitrust push at all levels of government “marks the next phase” in the debate over the future of competition law, Robyn Shapiro, a spokesperson for the progressive nonprofit American Economic Liberties Project, told DealBook. The nonprofit group is launching an “Access to Markets” initiative that connects people with officials to discuss competition concerns. In a new report, A.E.L.P. contends that a few big players abuse their dominance to block competition, resulting in “an insidious form of private regulation.”

“This isn’t about being anti-business,” said Denise Hearn, a fellow at the nonprofit group and co-lead of the initiative. “We love the ability of markets to produce great outcomes for all. We want a future where markets are fair and democratic, ones that actually allow the best ideas to flourish.”

[h=2]Elon Musk moves crypto markets, again[/h]

Elon Musk proved once more this weekend that he can shift the price of digital currencies with just a tweet, as he suggested Tesla could resume accepting Bitcoin as payment. The price of Bitcoin jumped overnight, bringing it close to $40,000. Other crypto prices went up as well.

Bitcoin would need to become greener first. Tesla said in February it would accept the cryptocurrency for payment, before reversing itself in May over concerns about how much energy is consumed to create new coins and process transactions, tanking the market. (The company continues to own Bitcoin in its corporate treasury.) In a tweet yesterday, Musk said Tesla would reverse course“when there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”

Measuring the environmental impact of Bitcoin processing has always been tricky. Some estimates place the use of renewables in Bitcoin mining at nearly 75 percent, while others put it at closer to 39 percent.

[h=2]Companies ask employees: What’s your status?[/h]

As many companies prepare for workers to return to the office in earnest after Labor Day, nearly a third have yet to develop any vaccine policy. They want their workers vaccinated, but don’t want to require it. For now, they’re doing everything they can do short of a mandate — and keeping track of the results.

More than a third of employers are tracking employees’ vaccination status, according to a forthcoming survey from Willis Towers Watson. (Last week, Goldman Sachs became one of the first major firms to require employeesto disclose their vaccination status.) What are companies doing with this data? For the most part, they’re seeing if their vaccine incentives — like paid time off or on-site clinics — are working.

If 70 percent of the workforce is vaccinated, some executives may view a mandate as more palatable, said Johnny Taylor, the head of the Society for Human Resource Management. If 90 percent are vaccinated, “it’s going to be hard to argue that getting the last 10 percent of people vaccinated is what’s necessary to create a safe workplace,” said Dr. Jeff Levin-Scherz, a physician who is leading the coronavirus response at Willis Towers Watson.

“Everyone wants cover,” said Dr. Ezekiel Emanuel, the former Obama administration health policy adviser, about employers trying to “avoid controversial decisions.” Dr. Emanuel argued for mandates at his workplace, the University of Pennsylvania, which is one of many universities that now require employees to be vaccinated. Schools have more experience with vaccine mandates, as least as it pertains to students, but that distinction shouldn’t matter for other types of institutions, Dr. Emanuel said. “Goldman has meetings,” he said. “Goldman has people in close proximity to each other.”

Vaccinating all employed adults “could probably get us pretty close to herd immunity,” he said.

A federal judge dismissed a lawsuit by employees of a Houston hospital over its vaccine mandate. The decision this weekend was one of the first in favor of employer-mandated vaccinations. The judge said that the plaintiff could “freely choose to accept or refuse a Covid-19 vaccine,” but if she refuses, “she will simply need to work somewhere else.”

Thank you for your support. Want to share The New York Times? Friends and family can enjoy unlimited digital access to our journalism with this special offer.

[h=3]THE SPEED READ[/h]

Deals

Royal Dutch Shell is said to be weighing the sale of some or all of its holdings in the Permian Basin in the U.S., which could fetch more than $10 billion. (CNBC) Thrasio, which buys private-label businesses that sell on Amazon, is reportedly in talks to go public by merging with a SPAC run by the financier Michael Klein. (Bloomberg) Flagship Pioneering, the venture capital firm run by the founder of Moderna, has raised $3.4 billion for its newest fund, one of the biggest in the biotech industry. (FT)

Politics and policy

European governments are feeling strains from the debt they took on to aid pandemic-stricken businesses. (WSJ)

Companies that publicly committed to supporting L.G.B.T.Q. rights have donated more than $10 million to politicians who undermine that position. (Popular Information)

Tech

E-commerce platforms like Amazon and Etsy are lobbying against bills that would require them to publicly disclose more information about third-party sellers. (Axios) Britain’s top cyberdefense official said ransomware attacks are a bigger worry for U.K. companies than spying by hostile nations. (FT)

Best of the rest

Take The Times’s 20-day money challenge, with tips and tasks on banking, investing and more. (NYT) “Warren Buffett and the Myth of the ‘Good Billionaire’” (Times Opinion) How just a little more remote work could drastically transform rush-hour commutes. (NYT Upshot)

Thanks for reading! We’ll see you tomorrow.

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Continue reading the main story

Andrew Ross Sorkin, Founder/Editor-at-Large, New York @andrewrsorkin

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Michael J. de la Merced, Reporter, London @m_delamerced

Lauren Hirsch, Reporter, New York @LaurenSHirsch

Ephrat Livni, Reporter, Washington D.C. @el72champs

 

[Bozzie]

Global Market Comments June 14, 2021 Fiat Lux Featured Trade: (MY 20 RULES FOR TRADING FOR 2021)

​ My 20 Rules for Trading in 2021Nothing like starting the new year with going back to basics and reviewing the rules that worked so well for us last year. Call this the refresher course for Trading 101. I usually try to catch three or four trend changes a year, which might generate 100-200 trades, and often come in frenzied bursts. Since I am one of the greatest tightwads that ever walked the planet, I only like to buy positions when we are at the height of despair and despondency, and traders are raining off the Golden Gate Bridge like a heavy winter downpour. Similarly, I only like to sell when the markets are tripping on steroids and ecstasy and are convinced that they can live forever. ​ Some 99% of the time, the markets are in the middle, and there is nothing to do but deep research and looking for the next trade. That is the purpose of this letter. Over the five decades that I have been trading, I have learned a number of tried and true rules which have saved my bacon countless times. I will share them with you today. 1) Don’t over trade. This is the number one reason why individual investors lose money. Look at your trades of the past year and apply the 90/10 rule. Dump the least profitable 90% and watch your performance skyrocket. Then aim for that 10%. Over trading is a great early retirement plan for your broker, not you. 2) Always use stops. Risk control is the measure of the good hedge fund trader. If you lose all your capital on the lemons, you can’t play when the great trades set up. Consider cash as having an option value. 3) Don’t forget to sell. Date, don’t marry your positions. Remember, hogs get fed and pigs get slaughtered. My late mentor, Barton Biggs, told me to always leave the last 10% of a move for the next guy. 4) You don’t have to be a genius to play this game. If that was required, Wall Street would have run out of players a long time ago. If you employ risk control and stops, then you can be wrong 40% of the time, and still make a living. That’s little better than a coin toss. It you are wrong only 30% of the time, you can make millions. If you are wrong a scant 20% of the time, you are heading a trading desk at Goldman Sachs. If you are wrong a scant 10% of the time, you are running a $20 billion hedge fund that the public only hears about when you pay $100 million for a pickled shark at a modern art auction. If someone says they are never wrong, as is often claimed on the Internet, run a mile, because it is impossible. By the way, I was wrong 12% of the time in 2019. That’s what you’re paying me for. 5) This is hard work. Trading attracts a lot of wide eyed, naïve, but lazy people because it appears so easy from the outside. You buy a stock, watch it go up, and make money. How hard is that? The reality is that successful investing requires twice as much work as a normal job. The more research you put into a trade, the more comfortable you will become, and the more profitable it will be. That’s what this letter is for. 6) Don’t chase the market. If you do, it will turn back and bite you. Wait for it to come to you. If your miss the train, there will be another one along in minutes, hours, days, weeks, or months. Patience is a virtue. 7) Limit Your Losses. When I put on a position, I calculate how much I am willing to lose to keep it. I then put a stop just below there. If I get triggered, I just walk away. Emotion never enters the equation. Only enter a trade when the risk/ reward is in your favor. You can start at 3:1. That means only risk a dollar to potentially make three. 8) Don’t confuse a bull market with brilliance. I am not smart, just old as dirt and have seen everything ten times over. I only hve to decide which movie they’re replaying. 9) Tape this quote from the great economist and early hedge fund trader of the 1930s, John Maynard Keynes, to your computer monitor: "Markets can remain illogical longer than you can remain solvent." Hang around long enough, and you will see this proven time and again (ten-year US Treasuries at 1.45%?!). 10) Don’t believe the media. I know, I used to be one of them. Look for the hard data, the numbers, and you’ll see that often the talking heads, the paid industry apologists, and politicians don’t know what they are talking about (the Gulf oil spill will create a dead zone for decades?) Average out all the public commentary, and half are bullish and half bearish at any given time. The problem is that they never tell you which one is right (that is my job). When they all go one way, the markets usually go the opposite direction. ​ 11) When you are running a long/short portfolio, 80% of your time is spent managing the shorts. If you don’t want to do the work, then cash beats a short any day of the week. 12) Sometimes the conventional wisdom is right. 13) Invest like a fundamentalist, execute like a technical analyst. This is what all the pros do. 14) Use technical analysis only, and you will buy every rally, sell every dip, and end up broke. That said, learn what an “outside reversal” is, and who the hell is that Italian guy, Leonardo Fibonacci. 15) The simpler a market approach, the better it works. Everyone talks about “buy low and sell high”, but few actually do it. All black boxes eventually blow up, if they were ever there in the first place. 16) Markets are made up of people. Understand and anticipate how they think, and you will know what the markets are going to do. 17) Understand what information is in the market and what isn’t and you will make more money. 18) Do the hard trade, the one that everyone tells you that you are “Mad” to do. If you add a position and then throw up on your shoes afterwards, then you know you’ve done the right thing. This is why people started calling me “Mad” 40 years ago. (What? Tech stocks were a huge buy the first week of January?). 19) If you are trying to get out of a hole, the first thing to do is quit digging and throw away the shovel. Sell everything. A blank position sheet can be invigorating and illuminating. 20) Making money in the market is an unnatural act, and fights against the tide of evolution. We humans are predators and hunters evolved to track game on the horizon of an African savanna. If you don’t believe me, just check out how sharp your front incisor teeth are. They’re for tearing raw meat. Modern humans are maybe 5 million years old, but civilization has been around for only 10,000 years. Our brains have not had time to make the adjustment. In the market, this means that if a stock has gone up, you believe it will continue to do so. This is why market tops and bottoms see volume spikes. To make money, you have to go against these innate instincts. Some people are born with this ability, while others can only learn it through decades of training. I am in the latter group. With all that said, good luck and good trading. ​ [h=2]Great Hunter, Lousy Trader[/h] ​ ​

Quote of the Day“Just because you paid more for a company doesn’t mean it’s earning more,” said Oracle of Omaha Warren Buffet.

This is not a solicitation to buy or sell securities The Mad Hedge Fund Trader is not an Investment advisor For full disclosures click here at: http://www.madhedgefundtrader.com/disclosures The "Diary of a Mad Hedge Fund Trader"(TM) and the "Mad Hedge Fund Trader" (TM) are protected by the United States Patent and Trademark Office The "Diary of the Mad Hedge Fund Trader" (C) is protected by the United States Copyright Office

​

 

[Bozzie]

Read in Browser​ LISTEN TO TODAY'S PODCAST AVAILABLE AT 8AM ON: ​ ​ ​ Top News Another infrastructure proposal​ ​ ​ Shutterstock​ ​ At a G7 summit over the weekend, President Biden pressed world leaders to take concrete steps to counter China's rising influence and put a heavy focus on the path toward decarbonization. The result? A global infrastructure project called "Build Back Better for the World" that would kill two birds with one stone. It calls for spending $100B per year to help developing nations' climate change transitions, while sticking to climate standards and labor practices. Bigger picture: The plan would specifically create a "higher quality" alternative to China's Belt and Road Initiative, which has been criticized for its leverage in creating political goodwill, massive debt and a way to spread Beijing's influence. The new G7 plan, dubbed by some as the "Green Belt and Road" or the "Green Marshall Plan," would be funded by multilateral development banks like the IMF and World Bank, as well as the private sector (think wind farms, railways and other low-carbon projects). The Biden administration also plans to work with Congress to increase U.S. contributions to the G7's Development Financing Toolkit. Quote: "As the G7, we are united in our vision for a cleaner, greener world. A solution to the problems of climate change," said U.K. Prime Minister Boris Johnson, who chaired the conference. "I think that is what the peoples of our countries now want us to focus on... and that we're building back better together." Response from China: "Those fanning confrontation are definitely on an ill-advised path... Ganging up, pursuing bloc politics and forming small cliques are unpopular and doomed to fail," Chinese foreign ministry spokesman Wang Wenbin declared. "The days when global decisions were dictated by a small group of countries are long gone," added a spokesman for the Chinese embassy in London. "We always believe that countries, big or small, strong or weak, poor or rich, are equals, and that world affairs should be handled through consultation by all countries." Other headlines at the G7 summit: Leaders vowed to phase out gas and diesel cars and shut down coal plants that do not apply emissions-capturing technology as soon as possible. They also promised to protect 30% of the planet's land and oceans by 2030. On an interesting note, NATO, which includes many G7 nations, are set to agree on a climate action plan today that would make their armed forces carbon-neutral by 2050. (318 comments) ​ Stocks Extending gains​ ​ Traders are beginning the week with the Fed on their minds as the FOMC meets Tuesday and Wednesday to discuss policy monetary. An accompanying press conference from Jerome Powell is likely to reiterate that recent price increases will be "transitory," though it will be interesting to watch if the concerns will have any effect on the central bank's forecasts. Another area of note is quantitative easing, and if tapering talk even makes it into the conversation. Bigger picture: Investors have so far shrugged off inflation concerns, with equities ending at highs last week despite the CPI expanding at a blistering 5% Y/Y in May. Stock futures inched higher overnight, with the Dow and S&P 500 up 0.1%, respectively, and the Nasdaq ahead by 0.3%. "Because the S&P 500 Index reached yet another new record high last week, investors will be watching to see if this signals even higher levels near term," added Jim Paulsen, chief investment strategist at the Leuthold Group. Another post-pandemic milestone was notched before the weekend, with more than 2M people passing through U.S. airport security checkpoints on Friday. That's the first time screenings hit that figure since March 2020 and represents a big turnaround for the travel industry. While still losing money, airlines are recalling employees from voluntary leave and planning to hire small numbers of pilots later this year. How will the meme trade fare this week? Usual suspects AMC (NYSE:AMC), BlackBerry (NYSE:BB) and GameStop (NYSE:GME) are all up in premarket trade, as well as newcomers Clover Health (NASDAQ:CLOV), Clean Energy Fuels (NASDAQ:CLNE) and GEO Group (NYSE:GEO). While sentiment changes quickly in the sector, WallStreetBets founder Jaime Rogozinski is defending the trade. "I mean what is market manipulation? You have people that are buying and you have people that are selling, right? If you have a fraudulent intent - if somebody goes up there and lies and says oh, BlackBerry has this new hologram cellphone that does whatever and it's a lie, that is market manipulation. But people coming together and saying let's just push this price to the moon and being really transparent and no defrauding taking place, that is absolutely what the market is." ​ Sponsored Hedge funds started buying Bitcoin at $500.​ ​ We don’t need to tell you what followed. Now they’re pouring millions of dollars into the next untapped asset class: blue-chip art. What do they know that you don’t? Check out these juicy stats:​ Contemporary art prices outperformed S&P 500 returns by 174% from 1995 through 2020 The $1.7 trillion art asset class is projected to grow by $900 billion over the next 5 years Over two-thirds of billionaires allocate more than 20% of their overall portfolio to art. But unless you have $50,000,000 to build an art collection yourself, you’ve been locked out of this under-the-radar investment. Until now. Masterworks lets you invest in multi-million dollar artworks by artists like Banksy, Basquiat, and Picasso at a fraction of the entry price. With over 160,000 users, Masterworks is the premier platform for art investing. Get in before the rush to skip their 35,000 person waitlist with this special Wall Street Breakfast link today.* *See disclaimer ​ Cryptocurrency Elon & Bitcoin​ ​ Bitcoin (BTC-USD) is on the move again, soaring 10% above $39,000 over the past 24 hours, after Elon Musk confirmed Tesla (TSLA) would resume transactions using the cryptocurrency. The catch? The automaker will only restart customer payments once the crypto "is greener." According to Musk, that will happen "when there's confirmation of reasonable (~50%) clean energy usage by miners with positive future trend." Backdrop: Tesla disclosed a purchase of $1.5B worth of Bitcoin in February and announced that it would begin accepting the crypto as a payment method for its products. Fast forward to May... Musk expressed concerns over how crypto mining contributes to climate change. While the topic is controversial and under intense scrutiny, Tesla subsequently stopped car purchases via Bitcoin and sold roughly 10% of its holdings. The move helped Tesla reduce its Q1 operating losses by $101M, though Musk said it was "to confirm BTC could be liquidated easily without moving market." Musk was responding to a comment made by Magda Wierzycka, a fellow South African billionaire and former CEO of financial services firm Sygnia. On a recent podcast called Money Show with Bruce Whitfield, she highlighted Elon's outsized influence on Bitcoin prices, likening his tweets to "price manipulation." Wierzycka even went as far as saying Musk knowingly pumped up prices, then "sold a big part of his exposure at the peak." Outlook: Last month, Michael Saylor, who heads up business analytics firm MicroStrategy (MSTR), said he met with Elon Musk and some of America's largest Bitcoin miners to spearhead an effort on promoting "energy usage transparency and accelerate sustainability initiatives worldwide." Dubbed the Bitcoin Mining Council, the effort would require participants to publish their renewable energy usage. Some are skeptical, however, with nearly 92% of Bitcoin mined outside the United States, including in countries like China, Russia, Kazakhstan and Iran. (199 comments) ​ Covid 1B vaccines​ ​ At the weekend G7 summit, world leaders also pledged 1B vaccines to developing countries over the next year, while backing U.S.-led calls for a probe into the origins of the pandemic and pressing China on human right reforms. The jabs would be distributed directly, or through COVAX, the global vaccine buying system backed by the World Health Organization and Gavi, the Vaccine Alliance. The U.S. will donate nearly half of the shots, with 500M doses of Pfizer's (NYSE:PFE) vaccine set to be distributed internationally. "Our values call on us to do everything that we can to vaccinate the world against COVID-19," President Biden said of the decision. "It's also in America's self-interest. As long as the virus rages elsewhere, there's a risk of new mutations that could threaten our people." By the numbers: Digging a little deeper into the vaccine figure, G7 officials included pledges that started back in February. So far, the countries have promised 613M truly new doses, according to Bloomberg, including some funded in part by previously announced aid. Go deeper: In late May, the WHO urged wealthier countries to contribute more to COVAX and requested at least 1B excess doses by the end of 2021. The facility estimates that it will need 11B doses to vaccinate at least 70% of the world's population, but has only shipped around 85M shots to date. Whether to waive vaccine patents, or whether it would increase production, was also a debate at the G7, and a similar dispute has played out across government and business in the U.S. ​ Global Change in Israel​ ​ It's the end of an era for Israel's longtime leader, Benjamin Netanyahu, who was replaced on Sunday by Naftali Bennett's "change coalition." Netanyahu has been at the helm for a record 12-year run, as well as a 3-year stint in the late 90s, making him the longest-serving Israeli prime minister in history. Also known by his nickname Bibi, Netanyahu has championed a free market economy, security issues and Israel's diplomacy on the international stage, though many parties have increasingly felt isolated by his grip on power, pointing to divisive rhetoric, underhanded political tactics and ongoing corruption trials. In order to form a ruling coalition, Israel's parliament, or Knesset, requires a simple majority for the 120 available seats. The current "change government" is the most fragile in the country's history, with 60 in favor and 59 opposed (with one abstention). Members of Knesset, otherwise known as MKs, can break ranks over hot-button issues, so this time around, even losing one seat could bring down the entire government. Making the matter worse, the razor-thin coalition is made up of eight parties that span the political spectrum (including an Arab party for the first time), that agree on little beyond their opposition to Netanyahu and another round of elections. Who is Naftali Bennett? He heads up the right-wing Yamina party and has served as former Minister of Defense, Minister of Education and Minister of Diaspora Affairs (before a rift with Netanyahu). The 49-year-old also served as a commander in the elite IDF Sayeret Matkal and Maglan units, and comes from the tech sector, where he founded and sold anti-fraud software company Cyota for $145M in 2005. He later helped lead cyber software developer Soluto, which was sold for $130M in 2009, and some economists say the experience will help shape his economic policies. "It gives him a close understanding of the tech world, which is very important for Israel's economy," said Daphna Aviram-Nitzan, Council Director of the Israeli Economic Association. "That means he understands the nation's economic issues from first-hand experience, and that he has a deep understanding of the world of scientists and engineers. That will give him greater strength to push forward on Israel’s economic development." Fine print: Due to the fragility of the coalition, the "change government" will attempt to avoid delicate issues such as policy toward the Palestinians, and instead focus on domestic concerns. Those include the education system, lowering housing costs and cutting red tape for businesses, as well as a two-year budget that will help stabilize the country's finances following the coronavirus pandemic. Under a rotational deal (if the coalition lasts that long), Bennett will be replaced by alternate prime minister Yair Lapid in 2023, a former television host who founded the Yesh Atid party ("There Is a Future") a decade ago. "The government will work for all the Israeli public - religious, secular, ultra-Orthodox, Arab - without exception, as one," Bennett said in a statement. "We will work together, out of partnership and national responsibility, and I believe we will succeed." ​ What else is happening... Here's what to expect at the Fed meeting this week. Shell (NYSE:RDS.A) weighs sale of holdings in largest U.S. oil field - reports. Exxon (NYSE:XOM) shares beating Big Oil peers even after losing board fight. Washington Prime (NYSE:WPG) files for Chapter 11. Space interest... Virgin Orbit looks to go public via SPAC path. Blue Origin (BORGN) auctions off seat on first spaceflight for $28M. Bipartisan group unveils antitrust reform with Big Tech in crosshairs. Rare cases of heart inflammation linked to all COVID-19 vaccines. Qualcomm (NASDAQ:QCOM) would invest in ARM if Nvidia (NASDAQ:NVDA) deal falls apart. Sector Watch: Watch out for the next 'oil crisis.'​ Today's Markets In Asia, Japan +0.7%. Hong Kong closed. China closed. India +0.2%. In Europe, at midday, London +0.5%. Paris +0.3%. Frankfurt +0.2%. Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.3%. Crude +0.8% to $71.45. Gold -1.1% at $1858.20. Bitcoin +10.3% to $39237. Ten-year Treasury Yield unchanged at 1.46% ​

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[Bozzie]

Price today 6.49 This company has no intention of bringing product to market.

AEMD did a direct offering on the news/ Reddit rumor that the filter could be a covid treatment. (@ 9.00 $.. 1,300,000 on a 12 million float ..announced Friday)

https://www.nbcsandiego.com/news/lo...-promising-results-in-covid-patients/2629619/

it's a fishy company data wise and this data looks thin at best , also the stock has been reversed a few times ..trading @ 2.25 last week.

10% drop today and it will continue...Easy short.

https://finance.yahoo.com/quote/AEMD?.tsrc=applewf


https://finance.yahoo.com/news/aethlon-medical-announces-12-425-131000063.html

​

 

[Bozzie]

10% drop today and it will continue...Easy short.

https://finance.yahoo.com/quote/AEMD?.tsrc=applewf


https://finance.yahoo.com/news/aethlon-medical-announces-12-425-131000063.html

History says they will juice the news again..it'll bounce up then get crushed... hopefully they follow the normal pattern..$$$
No chance they get an approval on data as thin as this...Shelf offering gets pulled at 9$ on reddit news....Question is who bought?​

 

[CoachCB]

How's that reno project going, Boz?

 

[Bozzie]

How's that reno project going, Boz?

Good good..working away.
Been spending a lot of time regrading the road up the the house with a box blade..I sorta love driving a tractor.
Guy wouldn't deliver gravel till it was graded for drainage...Pretty funny. he likes it so I get gravel this week... maybe.

When do you go south for good? and I guess you got the mobile work Okay from the gov?..
GF was in DC last week and never questioned leaving DC.

 

[Bozzie]

good read...

[h=2]Everything is seating charts[/h]I could not possibly have enjoyed this Bloomberg profile of Morgan Stanley co-president Ted Pick more. It is hard to pick a favorite bit but I suppose I have to go with this one, from Pick’s time as head of equities: Along the way, he gained notoriety for a unique style of leadership. After getting worked up about the size of another executive’s office, feeling it was too big for his position, Pick called in a construction crew over the weekend and had the walls moved to shrink the room. ​ All investment-bank management should work like that. All the walls should be on sliding tracks, and each morning you come in and see how you’re doing by how big your office is.[1] Bring in a big deal and you can fit a couch. Lose a big client and there’s no room for your family photos. Keep losing money for a while and eventually you will be crushed in your office like that “Star Wars” trash compactor scene. But there is much else to love. Pick sometimes reads like an investment-bank stereotype, hard-charging and sweary, “known on the trading floor for his outsized personality and a fanatical devotion to Morgan Stanley.” There is this: One underling recalled briefly entertaining a job offer from a rival firm after failing to make managing director. Pick snuck up behind his workstation and whispered: “If I hear you speak to them again, I’m going to crack your head.” When the startled trader turned around, Pick was already strolling away, smiling. The message, the employee said, was that the boss knew he had turned down more money to stay at Morgan Stanley. He took it as motivating. ​ Yes well right threats of physical violence, but in a joking way, are a standard tool of investment-bank motivation. “He cracked my skull because he cared.” Also here’s the time Pick matched wits with Lloyd Blankfein: He’s also recounted the time, more than a decade ago, when he was at a New York Rangers game -- his lifelong team -- and crossed paths with Lloyd Blankfein, then CEO of Goldman. Pick introduced himself as working for a small firm that Blankfein had probably never heard of. When Blankfein took the bait, Pick delivered: “Morgan Stanley.” “If he met me that way, I would have gotten the last word,” Blankfein assured when asked if he recalled the exchange. “Like telling him I never heard of Morgan Stanley or asking if they made power tools.” ​ I think I’m going to award that one to Blankfein. (Disclosure: I used to work at Goldman and may be biased by loyalty here?) I like that he doesn’t remember the exchange but nonetheless is happy to make fun of Morgan Stanley hypothetically. “Hmm, Ted Pick, doesn’t ring a bell, but if he had said that I’d go to my bag of Morgan Stanley insults, would you like to hear them?” That’s what it takes to succeed in this ruthless business. Also, any good investment banker has to make a choice — a series of choices really — about whether to win over clients using (1) impressive prowess in rich-people activities or (2) charming haplessness in those activities. I mean, Option 1 is the only way to go with golf; terrible golfing is not charming. But here’s an anecdote from Blackstone Group Inc.’s Tony James: Pick was the reason Blackstone tapped Morgan Stanley to lead the initial public offering in 2007, said James. He illustrated that point by describing how he invited Pick to join a fly-fishing expedition after the deal, flying to the jungles of Brazil in pursuit of the famed peacock bass. Much of the group was filled with hardcore anglers wearing special gear while Pick, armed with a last-minute lesson at New York’s Central Park, showed up on the boat in the Amazon decked out in leather loafers. “You’ve never seen anyone throw their whole body into the cast like Ted Pick,” James said. ​ I honestly don’t know if throwing your whole body into a cast is good or bad fly-fishing technique, I am not going to Google it to find out, and please don’t email to tell me. I am definitely never going fly-fishing with Tony James in the Amazon so it doesn’t matter, and I suppose not knowing can be part of my appeal too. Look at me, I’m bad at fly-fishing, I’d probably wear loafers in the Amazon, hire me to run your IPO, etc. Elsewhere in investment-bank seating, Goldman is back at the office today: A leading proponent of getting people back to the office quickly, as well as an amateur DJ, Goldman Chief Executive Officer David Solomon marked the end of his bank’s work-from-home era on Friday by releasing a new single titled “Learn to Love Me.” His bank, which has been ramping up in-person staffing for months, told employees who hadn’t yet returned that they had until Monday to figure out how they’re coming back. Early this morning, employees high-fived and hugged each other as they streamed into Goldman’s Manhattan office in the drizzling rain. They’ll be greeted by free food in the cafeteria and an array of food trucks with music blaring all week. ​ [h=2]Oops[/h]I don’t get it? A multipronged bet on AMC Entertainment Holdings Inc. boomeranged this month on Mudrick Capital Management LP, the latest hedge fund to fall victim to swarming day traders. Mudrick’s flagship fund lost about 10% in just a few days as a jump in AMC’s stock price unexpectedly triggered changes in the value of derivatives the fund held as part of a complex trading strategy, people familiar with the matter said. … Jason Mudrick, the firm’s founder, had been trading AMC stock, options and bonds for months, surfing a surge of enthusiasm for the theater chain among individual investors. But he also sold call options, derivative contracts meant to hedge the fund’s exposure to AMC should the stock price founder. Those derivative contracts, which gave its buyers the right to buy AMC stock from Mudrick at roughly $40 in the future, ballooned into liabilities when a resurgence of Reddit-fueled buying recently pushed AMC’s stock to new records, the people said. ​ Basically the trade was (1) long stock plus (2) short out-of-the-money calls. Buying the stock gives you exposure to the upside; selling the calls caps your upside — but at $40, and what were the odds of AMC going to $40? — and cheapens the position. Good, fine. But then Mudrick … sold the stock and … did not close out the short calls? On June 1, AMC disclosed that Mudrick Capital had agreed to buy $230.5 million of new stock directly from the company at $27.12 apiece, a premium over where it was then trading. Mudrick immediately sold the stock at a profit, a quick flip that was reported by Bloomberg News and that sparked backlash on social media. ... Inside Mudrick, executives were growing apprehensive as the AMC rally gained steam. The firm’s risk committee met on the evening of June 1 after the stock closed at $32 and decided to exit all debt and derivative positions the following day. It was a day too late. ​ The stock closed at $62.55 on June 2, oops oops oops. I said at the time that Mudrick got the trade right, buying stock from AMC and immediately flipping it, but, uh, I didn’t realize that after flipping the stock Mudrick was actually short. “But he kept the derivative contracts outstanding as an insurance policy,” reports the Wall Street Journal, and I am not sure that that's how insurance works? [h=2]It’s good to be bad[/h]We talked the other day about what I called “the meme-stock cycle.” A company falls on hard times, hedge funds sell its stock short, Redditors get aggrieved, they buy the stock, the short sellers get squeezed, the stock rockets to the moon, everything is weird, etc. I said that, if you are the chief executive officer of a public company, a “plan of ‘I will do stuff to attract short sellers, and then try to get Redditors to squeeze the shorts, and my stock will rally to all-time highs and I’ll be able to raise infinite money and become an internet folk hero’ seems like a crazy strategy,” but one that … can … work … now? There is a literature. Here is “How Can Bad News Increase Price? Short Squeezes After Short-Selling Attacks,” by Lorien Stice-Lawrence, Yu Ting Forester Wong and Wuyang Zhao: We examine market returns following short-selling attacks, where short sellers publicly disclose the negative information that led them to short their targets. Counterintuitively, we find that for a significant proportion of these attacks (about 30%), the initial market reactions are positive. Consistent with short squeezes being a major driver of these positive returns, we demonstrate that about half of initially positive returns fully reverse over the following quarter, relative to about a third of initially negative returns, and this asymmetric reversal pattern cannot be explained by short sellers profitably covering their positions, by misleading disclosures, or by market attention. Further, short covering levels are high for target firms with initially positive returns that reverse, further suggesting that price pressure from short sellers forced to close their positions explains some of these positive returns. We find that short squeezes are difficult to predict ahead of time but may be triggered by conditions on the day of the attack, including insider purchases, highlighting the difficulty short sellers face in avoiding this risk. Lastly, short squeezes impose substantial costs on short sellers, leading to an average loss of $70 million per suspected squeezed campaign relative to estimated profits of $35 million per successful campaign. ​ I have mentioned a couple of times that, if you are a hedge fund, you could use this to your advantage. Schematically the trade is: Go long a potentially meme-y stock. Make people think you are short (by releasing a negative research report, going partially short “against the box” and disclosing the short position, or just posting on Reddit “hey I hear XYZ Capital is short this stock, let’s get ’em”). Profit as the stock goes up. In a world where stocks go up on bad news, you gotta buy the bad companies and then highlight the bad news. To be fair, Stice-Lawrence, Wong and Zhao find “that short squeezes are difficult to predict ahead of time,” but maybe that is changing. [h=2]SPAC SPAC SPAC Shaq[/h]If you are a celebrity, the bad news is that the window for you to start a special purpose acquisition company has probably closed. Six months ago you could totally have gotten paid to slap your name on some SPAC; SPACs were launching every day, and having some actor or rapper or sports star associated with a SPAC was a good way to raise money from retail investors. Now the SPAC market is ice cold; nobody is going to go out and raise $200 million and give you a cut. The good news is that most of those SPACs are still chasing deals, the competition is fierce, and the SPACs mostly don’t have good ways to differentiate themselves. Startup founders are getting an endless flood of emails saying “hi, we’re Just Some SPAC, we have a pool of money that we would like to hand you, would you like our money?” The founders are not impressed. You know what would be impressive? An actor, rapper or sports star: Jedidiah Yueh, chief executive of Delphix, a data infrastructure company in Redwood City, Calif., has experienced the interest firsthand. Mr. Yueh, who founded Delphix 13 years ago, said SPACs began reaching out last summer as his business picked up in the pandemic. ... Mr. Yueh said he had met with some SPACs out of curiosity. But he quickly got the sense that sponsors were telling him whatever they thought he wanted to hear. Once they learned that Delphix was profitable, “they just switch gears and talk about how easy they are to work with,” he said. He said he had stopped responding to cold pitches and created a canned response to ward off others. The investors he met with weren’t the kind of long-term backers that Delphix wanted, he said. But in a nod to the trend of celebrity-backed SPACs, he added, “I would have taken a meeting with Shaq.” ​ I just feel like there ought to be a booming secondary market for SPAC celebrities. Like if you are a big-name celebrity and you don’t have a SPAC, any SPAC that doesn’t have a big-name celebrity should be desperate to hire you. Some Random SPAC Inc. raised $300 million in January and is running out of time to make a deal. Its sponsor is a former executive you’ve never heard of. If he makes a deal, he gets stock worth 20% of $200 million. If he doesn’t make a deal, he gets nothing and eats the startup costs of the SPAC. He keeps emailing startups and saying “please take this $200 million off my hands,” and they keep sending him back automated emails saying “we are not taking calls from SPACs right now unless you can get us a meeting with George Clooney.” As far as I know, George Clooney does not have a SPAC. Surely it is worth … $30 million? … to the founder of Some Random SPAC to put George Clooney on its board of directors? The sponsor writes a check to Clooney, Clooney takes some meetings with some founders, they agree to a deal, the SPAC sponsor gets his 20% and pays off the loan he took out to pay Clooney. It just feels like some liquidity in the celebrity-sponsor market could unlock a lot of value in the underlying SPAC market, you know? Honestly. I wrote about celebrity SPACs back in March — when they were still a live thing — and my view was that random celebrities are excellent middlemen. If you attach a bucket to Shaquille O’Neal, retail investors will happily fill the bucket with money (“ooh Shaq SPAC”), and tech-company founders will happily meet with O’Neal (“I would have taken a meeting with Shaq”) to hear a pitch about taking the money. That first advantage — raising money — is probably gone now, but the second one — spending the money — is more urgent than ever. [h=2]Bad dentist[/h]In America, the stereotypical victim of an investment scam is a dentist, so it’s nice to see this guy (allegedly) turning the tables: SEC Charges Dentist-Turned-Investment Adviser for Three Separate Frauds Washington D.C., June 11, 2021 — The Securities and Exchange Commission today charged Edgar M. Radjabli of Boca Raton, Florida, and two entities he controlled for engaging in three separate securities frauds of escalating size. ​ It’s a whole random pile of stuff. He allegedly “conducted a fraudulent offering of Apis Tokens, a digital asset representing tokenized interests in” his investment fund. He had a fund called “My Loan Doctor” and “falsely represented that investor funds raised by Loan Doctor would be used to originate loans to healthcare professionals which then would be securitized and sold to large institutional investors,” but actually “invested the bulk of the investor funds in unsecured and uninsured loans to digital asset lending firms.” Also, fake tender offer: In the second scheme, Radjabli manipulated the securities market for Veritone, Inc. (“Veritone”), a publicly-traded artificial intelligence company, in which Apis Capital and an affiliated investment fund owned shares. On December 10, 2018, Radjabli and Apis Capital issued a press release announcing an unsolicited cash tender offer to acquire Veritone at an 82% premium. The announced tender offer, and the related forms that Radjabli and Apis Capital filed with the Commission, contained a number of materially false and misleading misrepresentations. Specifically, Radjabli and Apis Capital falsely represented that they had well in excess of the $200 million offer price and beneficially owned a 5.03% stake in Veritone. In truth, the defendants lacked the financing, or any reasonable prospect of obtaining the financing, necessary to complete the deal, and Radjabli and Apis Capital owned only a 4.6% stake in Veritone. The defendants’ misrepresentations were material. Following the pre-market announcement and Commission filings, Veritone’s stock price opened at $7.96 a share, a 41.4% increase from the prior day’s close. Radjabli then capitalized on the scheme by selling Veritone securities and purchasing put options on behalf of Apis Capital and its affiliated fund. Ten days later, Radjabli and Apis Capital withdrew the supposed tender offer. As a result of this scheme, Radjabli generated illicit profits of approximately $162,800 for Apis Capital and its affiliated fund. ​ I feel like the usual way to do a fake tender offer is to put out a fake press release or SEC filing under a fake name. Like you say “Blarkrock Group has announced that it will buy Veritone at an 82% premium,” and people bid up the stock and you sell yours, and (you hope) the SEC never figures out that you were the person behind Blarkrock Group. But here Radjabli did a real SEC filing using his real name and the name of his investment firm; if he was doing it just to pump the stock that seems like a mistake. [h=2]Elon Musk’s magic Bitcoin lamp[/h]I guess technically these sentences are not logically equivalent: Tesla will not accept Bitcoin until it is greener. Tesla will start accepting Bitcoin when it is greener. I suppose sentence 1 allows Tesla to refuse to accept Bitcoin when it is greener, while sentence 2 allows it to accept Bitcoin before it is greener. Still in normal usage they are about the same. Sentence 1 means that Tesla is not accepting Bitcoin now, but will start when Bitcoin is greener. Sentence 2 means the same thing. But Sentence 1 sounds negative; it has a “not” in it; it feels like a criticism of Bitcoin. Sentence 2 sounds positive; it doesn’t have a “not”; it sounds like a promise to Bitcoin. I think it’d be funny if Elon Musk just alternated tweeting out those two sentences every few days to see what happened to the price of Bitcoin? Intuitively I feel like Musk could tweet “Tesla will not accept Bitcoin until it is greener” and the price of Bitcoin would go down, and then he could tweet “Tesla will start accepting Bitcoin when it is greener” and the price would go up, and then he could keep alternating forever and we’d get the maximum possible financial drama with the minimum possible information. I have suggested before that Musk has a magic lamp and he can rub it and whisper “price go up” or “price go down” and it will magically move the Bitcoin price; this is one stupid way to do it. Anyway a month ago Elon Musk tweeted that Tesla would stop accepting Bitcoin for cars, but that “we intend to use it for transactions as soon as mining transitions to more sustainable energy,” and Bitcoin went down. This weekend he said the same thing and Bitcoin went up: Elon Musk said Tesla Inc. would allow transactions in Bitcoin once mining is done with more clean energy. … Bitcoin jumped 9% on Sunday and traded at $39,580, near a two-week high, as of 8 a.m. in London on Monday. “Elon’s stance seems to be moderating and providing a target that’s not far away,” said Jonathan Cheesman, head of over-the-counter and institutional sales at crypto derivatives exchange FTX. ​ Is his stance moderating? I feel like he said the same thing in May but people just forgot? I hope he will keep saying it to test out my theory. [h=2]Lunch valuation[/h]Would you pay more to have lunch with Warren Buffett or to be fired into space on a rocket with Jeff Bezos? I personally would pay a large fraction of my net worth not to be fired into space on a rocket with anyone; if I had to be fired into space I’d prefer to do it with Jeff Bezos (he’s probably got people making sure it's safe?) but mostly I’d rather just pass. Whereas lunch with Warren Buffett would probably be fine, I don’t know, it’s not really my thing but I wouldn’t mind it exactly. But the market has spoken; a terrestrial lunch with Buffett goes for around $4.6 million, while a space trip with Bezos is worth $28 million: A ticket to go into space next month with Jeff Bezos went for almost $30 million, including the commission, in a charity auction Saturday, said Blue Origin LLC, the space company founded by the billionaire. The winner of the live phone auction wasn’t revealed Saturday—Blue Origin said it had to complete final paperwork—but is expected to be named in two weeks. The successful bidder will be among the passengers on the New Shepard vehicle’s first crewed launch planned for July 20 and spend a few minutes in space with Mr. Bezos, his brother Mark Bezos and an unnamed fourth would-be astronaut. Bidding opened Saturday at $4.9 million and rose quickly to $10 million before four participants competed to ultimately raise the price to $28 million. A 6% buyers’ commission is added to the winning bid, taking the final cost to $29.7 million. Blue Origin said 7,600 bidders from 159 countries registered for the event. ​ Okay. It would be funny if the winning bidder is going to spend the cramped 10-minute flight pitching Bezos on cryptocurrency, like the last Buffett winner did. Buffett can always get up from the lunch if it gets too intense; it’s not like Bezos is going to eject into the upper atmosphere. [h=2]Things happen[/h]Lordstown Motors Sinks on CEO Exit, Inaccurate Statements. Hedge-Fund Manager Who ‘Came Undone’ Is Headed to Prison. Credit Suisse’s 30-Year-Old Trading Prodigy Goes It Alone. The Hedge-Fund Manager Who Did Battle With Exxon—and Won. U.S. Father-Son Duo Charged With Helping Ghosn Flee Plead Guilty. Four at Toshiba Resign Over Campaign to Thwart Foreign Shareholders. Catching Rides on Meme-Mafia Trades May Boil Down to Models. CLOs draw in new support after showing resilience. Wannabe Bitcoin ETFs Are Mushrooming and Getting More Creative. Goldman Sachs ramps up cobalt trading. High-Speed Trader Virtu Fires Back at Critics Amid Meme-Stock Frenzy. Here Come the Teens: They Can’t Vote, but They’re Old Enough to Buy Stocks. Elon Musk Says He’s Putting Last Remaining House on the Market. Handy chart. Lobster diver says he was swallowed by humpback whale near Cape Cod. Cape Cod lobsterman’s whale of a tale sounds fishy, experts say. Congrats Wasabi! If you'd like to get Money Stuff in handy email form, right in your inbox, please subscribe at this link. Or you can subscribe to Money Stuff and other great Bloomberg newsletters here. Thanks!

​

 

[CoachCB]

Good good..working away.
Been spending a lot of time regrading the road up the the house with a box blade..I sorta love driving a tractor.
Guy wouldn't deliver gravel till it was graded for drainage...Pretty funny. he likes it so I get gravel this week... maybe.

When do you go south for good? and I guess you got the mobile work Okay from the gov?..
GF was in DC last week and never questioned leaving DC.

Sounds like you're making good headway on the project. Getting gravel is good! Are you living in this place?

No, I haven't gotten the 100% confirmation - but I anticipate it (hopefully!). I should know more this week or next, but either way, I'm leaving DC. I'll stay here and geo-bachelor for a few months if I have to (live here, travel to Florida once a month or so), but if that happens I'll look for another job. I have a few options available w/ some Coast Guard buddies who have started their own business working as contractors for FEMA (they're making $800-$1100/day plus per diem doing Covid stuff and border stuff, and w/ hurricane season starting they are on retainer to respond to any area impacted). I did a lot of this emergency management type work when I was active duty. It would be 60-90 day rotations - and at that rate, 90 days would be plenty for me and I'd take the rest of the year off!

Yes, DC sucks! It was fun when I was younger, but 13+ years later I'm ready to get back home!

 

[Bozzie]

Sounds like you're making good headway on the project. Getting gravel is good! Are you living in this place?

No, I haven't gotten the 100% confirmation - but I anticipate it (hopefully!). I should know more this week or next, but either way, I'm leaving DC. I'll stay here and geo-bachelor for a few months if I have to (live here, travel to Florida once a month or so), but if that happens I'll look for another job. I have a few options available w/ some Coast Guard buddies who have started their own business working as contractors for FEMA (they're making $800-$1100/day plus per diem doing Covid stuff and border stuff, and w/ hurricane season starting they are on retainer to respond to any area impacted). I did a lot of this emergency management type work when I was active duty. It would be 60-90 day rotations - and at that rate, 90 days would be plenty for me and I'd take the rest of the year off!

Yes, DC sucks! It was fun when I was younger, but 13+ years later I'm ready to get back home!

We're so happy we left both DC and Los Angeles ...LA turned into a complete shit hole the homeless population exploded over the past 5 years.
That FEMA job sounds the the ticket..Day rate jobs are great...I made 1200 a day doing what I did and never worked more that 200 days a year.. got great health insurance and was still considered freelance. The time off was everything plus picking decent projects was what it was about in the end... I was never in a serious 9 to 5 job
Its a hot job market for sure CB..you'll crush it.

 

[Bozzie]

June 15, 2021

Good morning. (Was this newsletter forwarded to you? Sign up here.)

Or not. Megan Jelinger/Agence France-Presse — Getty Images

[h=2]Could the S.E.C. have stopped the Lordstown implosion?[/h]

Lordstown Motors’ founder and C.E.O., Steve Burns, as well its C.F.O., Julio Rodriguez, abruptly resigned yesterday. The departures came as the electric vehicle manufacturer, which went public via a SPAC last year, said a board investigation had found “issues with the accuracy” of claims about orders for its yet-to-be-released electric truck. Shares of Lordstown fell sharply.

The Securities and Exchange Commission is looking into SPAC regulations, but last week said the review wasn’t due until April 2022. In the meantime, what, if anything, can be done to stop this from happening again?

SPACs allow companies to go public earlier than traditional I.P.O.s, in large part because they can rely on projections to tell a story they probably couldn’t by strictly relying on past numbers. (Such projections are not allowed in I.P.O.s.) That can be good for a biotech firm that needs capital for promising research, for example. But it can be dangerous for investors, by allowing start-up execs to spin stories about the demand for, say, electric flying taxis, even if the chance that those vehicles will be widely available is remote.

Continue reading the main story

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SPACs are structured such that sponsors are incentivized to get a deal done quickly, even if the company they’re buying may not be ready for public market scrutiny. With electric-vehicle SPAC deals alone, we’ve seen Trevor Milton step down as chairman of Nikola and Ulrich Kranz step down as C.E.O. of Canoo. Both companies have been unable to live up to their rosy projections and, like Lordstown, attracted S.E.C. investigations.

“You’re going to see more of this, frankly,” Tony Aquila, Canoo’s new C.E.O., told DealBook. “That’s the power of the SPAC right?” he said. “You can get to the public markets sooner — but that means you have to grow up in front of the public.”

The S.E.C. could have helped with some of the issues at play here. The commission has said it’s looking at how SPACs treat their projections. If projections weren’t allowed, or if rules forced executives to make more judicious promises, perhaps a company like Lordstown would not have made it into the public market so soon via a SPAC.

But SPACs aren’t the whole problem. Lordstown had disclosed that its pre-orders were nonbinding in its SPAC merger proxy. The S.E.C. didn’t questionthose orders in an inquiry into Lordstown’s disclosures at the time of its SPAC deal. Would it have been different if the company went public in a traditional I.P.O.? “There are a lot of gray areas with the way I.P.O.s and public companies report orders,” Jay Ritter of the University of Florida, an I.P.O. expert, told DealBook. The order quality issue at Lordstown “is not something that typically gets caught by auditors or in the I.P.O. process,” he said.

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[h=3]HERE’S WHAT’S HAPPENING[/h]

The U.S. and the E.U. reach a truce on airplane subsidies. The two sides will end a 17-year dispute over government support to Boeing and Airbus, a fight that led to a $12 billion tariff battle. As part of the deal, the two companies will develop future aircraft without subsidies.

Expectations for inflation rise. Consumers expect higher and faster inflationover the next several years, a new survey found, a potentially important signal as Fed officials meet this week to set policy. The hedge fund mogul Paul Tudor Jones recommended going “all in on the inflation trades” if the Fed stays its dovish course.

Investors bet that green energy’s rise will lead to higher oil prices. Some traders and analysts think that greater demand for cleaner energy will lead to less oil drilling, depressing supply and pushing up prices, The Wall Street Journal reports. Crude oil hit its highest level in over two years yesterday.

England postpones its “Freedom Day” as a new coronavirus variant spreads. Prime Minister Boris Johnson delayed the end of pandemic restrictions by four weeks. (Good news: Vaccines appear to protect against the variant, Delta, that is spreading in the country.)

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Goldman Sachs plans to relocate traders to Florida. The Wall Street titan is in the early stages of moving more than 100 people — including veteran executives — to a new office in West Palm Beach, Insider reports. As with other financiers flocking to the Sunshine State, Goldman executives are drawn to lower taxes and warmer weather.

[h=2]PwC gets into the trust-building business[/h]

This morning, PwC announced a series of investments and a major shift in strategy. The most eye-catching move is the professional services giant’s ambition to profit from teaching corporate executives how to be more trustworthy, DealBook’s Michael de la Merced writes for The Times.

PwC’s U.S. arm is founding the Trust Leadership Institute as part of a $300 million initiative to focus its business around the concept of “trust.” It is meant to teach clients how to handle issues such as transparency, ethics, data security, corporate governance, and politics and policy — without prescribing specific solutions. “Trust will define the next 10 years,” much as technology defined the past decade, Tim Ryan, PwC’s U.S. chairman and senior partner, told Michael.

PwC’s U.S. arm also plans to commit $125 million to give 25,000 Black and Latino college students career coaching and mentoring, with a goal of hiring up to 10,000 of them at the firm itself. On a global basis, PwC will combine its accounting and tax services into a new division called — what else? — “trust solutions.”

It’s capitalizing on corporate America’s push to focus on more than profits. Ryan noted that the firm’s clients are increasingly open about feeling pressure to speak out on issues like the environment and social justice. Since many business leaders learn softer skills on the job, it leaves them in need of help to make decisions in a way that maximizes trust.

Professional services firms have some experience with the need to rebuild trust, given their legal run-ins over issues like international tax shelters and the mixing of auditing and consulting services.

[h=2]“If you can go into a restaurant in New York City, you can come into the office.”[/h]

— James Gorman, Morgan Stanley’s C.E.O., on his firm’s preference that employees return to the office by Labor Day. More broadly, Wall Street is grappling with remote work: Most Goldman Sachs employees in New York City were required to return to the office yesterday, while Citigroup is leaning toward a hybrid model.

[h=2]Exclusive: Mexican fintech Credijusto is buying a bank[/h]

Credijusto, the Mexico-based fintech company, is acquiring the domestic bank Banco Finterra. The deal, which will create a company with a combined asset base of about $300 million, is the first time a Mexican fintech has acquired a bank in the country.

Buying a bank can be quicker than obtaining a fresh bank license, allowing a fintech to tap the lower cost of capital that banks enjoy. Similar deals elsewhere include LendingClub’s acquisition of Radius Bank last year and SoFi’s takeover of Golden Pacific Bancorp this year. John Mack, the former Morgan Stanley chief who invested in Credijusto, said that his advice in buying a bank was twofold: Be “pristine with regulations,” and impose “real discipline.”

Credijusto has the U.S. in its sights. The 2020 North America trade deal, combined with geopolitical tensions with China, has bolstered trade ties between the U.S. and Mexico. Creditjusto, which caters to small businesses, is looking to take advantage with a new service financing invoices for the sale of Mexican products to U.S. buyers.

The company may also open operations in the U.S. — initially as a non-bank player — and would consider buying a bank in the country, said David Poritz, one of Creditjusto’s chief executives.

[h=2]Investing in political influence pays[/h]

The battle over ballot access is heating up this week as Texas Democrats who blocked a restrictive voting law meet with federal lawmakers in Washington to talk politics, money and law. Specifically, they are there to discuss the For the People Act, sweeping federal legislation that would expand voting rights nationwide and change campaign finance laws to reduce the influence of money in politics.

Most small-business owners support expanding voting access and restricting political spending, according to a new survey by the trade group Small Businesses for America’s Future. The poll, shared first with DealBook, was conducted in April and May after hundreds of mostly big business leaders signed statements opposing voting restrictions. Three-quarters of respondents to the survey supported expanding voting access. Notably, 86 percent also said political spending should be restricted. Big donors and recipients may beg to differ.

Every dollar spent on political influence yields a $20 return in future earnings, according to a new study of lobbying, PAC and trade group spending at more than 2,750 companies. This return is much higher than money spent on R&D or advertising, the study found. “No one has any interest in getting this out,” said Shivaram Rajgopal of Columbia Business School, one of the study’s authors. He said he believed that more disclosure would help everyone better understand how companies and politicians operate.

Case in point? The corporate money flowing to Senator Joe Manchin of West Virginia — a centrist Democrat who is key to clinching a majority in the Senate — is under scrutiny after he voiced opposition to the For the People Act.

PAC donations are crucial for the Republican lawmakers who opposed certifying the presidential election results. A new analysis by the Leadership Now Project, which DealBook is first to report, examined 2020 campaign donations for 145 of the objectors and found that more than half received a quarter of their funding from corporate PACs. “If there’s one message to take away,” said Daniella Ballou-Aares, Leadership Now’s C.E.O., “it’s that business giving is one of the most powerful levers when it comes to safeguarding our democracy.”

Thank you for your support. Want to share The New York Times? Friends and family can enjoy unlimited digital access to our journalism with this special offer.

[h=3]THE SPEED READ[/h]

Deals

Pandemic borrowing has left U.S. nonfinancial companies with $11.2 trillion in debt — nearly half the size of the American economy. (WSJ) Dan Loeb’s Third Point has amassed a stake in Vivendi as the French media company prepares to spin out Universal Music Group, in part to fellow hedge fund mogul Bill Ackman. (Bloomberg)

Politics and policy

Which states are eliminating pandemic unemployment benefits, and when. (NYT) Two Republican senators introduced a bill that would ban most mergers that give a company a market share above 66 percent. (CNBC)

Tech

A major investigation into conditions for workers at an Amazon fulfillment center in New York during the pandemic. (NYT) Here are the Didi Chuxing executives who could become billionaires after the I.P.O. of the Chinese ride-hailing giant. (Bloomberg) Britain is the latest country to probe the power that Apple and Google exert over their app stores. (Competition and Markets Authority)

Best of the rest

The push for companies to take stands on social issues is putting pressure on their lawyers. (FT) Surveys show that up to 40 percent of workers are considering quitting, either to find a new postpandemic career or to seek an employer with better remote-work policies. (Axios) Country-hopping remote work could saddle workers with headache-inducing tax issues. (Bloomberg)

Thanks for reading! We’ll see you tomorrow.

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Continue reading the main story

Andrew Ross Sorkin, Founder/Editor-at-Large, New York @andrewrsorkin

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Michael J. de la Merced, Reporter, London @m_delamerced

Lauren Hirsch, Reporter, New York @LaurenSHirsch

Ephrat Livni, Reporter, Washington D.C. @el72champs

 

[Bozzie]

Good to see lumber falling..Home builders rejoice

Scroll back up to restore default view.​

Lumber is showing us the future


Myles Udland·Anchor

Tue, June 15, 2021, 3:05 AM·2 min read




This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Tuesday, June 15, 2021
A transitory surge cools off.

Two months ago it took only one thing to be rich.
And that was a piece of lumber.
Through the spring, the surge in lumber prices became the market narrative as it covered every pandemic-related trend: Labor shortages, shipping constraints and housing demand — all in one place.
But now it looks like the latest mini-bubble to hit the market has started to pop, and offers us a preview of what's to come across the economy.
On Monday, the lumber futures contract traded back below $1,000 per thousand board feet for the first time since late March. A level that is still elevated to be sure, but back in line with pandemic-era peaks seen in late summer 2020, and the early winter of 2021 (before the spring's epic short squeeze).

Lumber futures are down almost 40% from their record high hit in mid-May as the latest mini-bubble within the economy cools off. (Source: Yahoo Finance)
​

During the housing bubble, the futures contract for random length lumber never traded above $500 per board feet. But by early May, lumber futures were trading hands for more than $1,600 per board feet. This surge was adding as much as $36,000 to the cost of a new home; on average, new homes sell for around $400,000.
So while Cathie Wood may have become the face of the pandemic stock marketrally, actual wood had become the market's hottest trade.
We've called this recovery the "not enough" economy as demand for almost everything — workers, vacations, dinner reservations, and so on — outstrips supply. Another way to slice this narrative is, as Bloomberg's Joe Weisenthal has argued, to call this an economy facing a series of short squeezes.
Used car prices, for instance, have been ripping higher as demand rises and supply is constrained. The used car market is, in essence, facing a short squeeze.
So too is the global shipping market, as Insider's Rachel Premack outlined in a piece last week. And on the housing side, economist Ali Wolf told Bloomberg recentlythere's been something of a "buyer's protest" in the market as prices for single-family homes in the U.S. have exploded over the last year.
But each of these markets — autos, shipping, housing, among others — has become imbalanced, because of one-time surges related to a dramatic and synchronized shutdown, and then re-opening the world's largest economy.
When the Fed says inflation pressures will be "transitory," what they mean is that prices across each of these categories facing short squeezes right now will start to make more sense. It just so happens that lumber is just showing us the way.
By Myles Udland, reporter and anchor for Yahoo Finance Live. Follow him at @MylesUdland

Scroll back up to restore default view.​

 

[Bozzie]

Price today 6.49 This company has no intention of bringing product to market.

AEMD did a direct offering on the news/ Reddit rumor that the filter could be a covid treatment. (@ 9.00 $.. 1,300,000 on a 12 million float ..announced Friday)

https://www.nbcsandiego.com/news/lo...-promising-results-in-covid-patients/2629619/

it's a fishy company data wise and this data looks thin at best company, also the stock has been reversed a few times ..trading @ 2.25 last week.

waiting on the offer to close (Today)..this should pop up.. then a sell off should follow.

Bought a little for closure to sell..very risky and I could be wrong.

 

[Bozzie]

Heed Jamie Dimon ..he's the real deal

Read in Browser​ TOGETHER WITH ​ LISTEN TO TODAY'S PODCAST AVAILABLE AT 8AM ON: ​ ​ ​ Top News Worker shortage ​ ​ ​ Shutterstock​ ​ Statistic: Job openings soared to a record 9.3M in April as the economy reopened, according to the latest JOLTS report, but 3.5M Americans are still on weekly jobless benefits and more than 9M remain unemployed. Go figure... While the numbers sound somewhat contradictory due to the ways they are collected and measured, they mean the U.S. is experiencing high unemployment at the same time as a labor shortage. While there are many reasons for the hiring scarcity like shifting employment choices, Republicans have mainly pointed to programs such as enhanced unemployment benefits, while Democrats have flagged items like childcare responsibilities, lingering COVID-19 worries and the need to raise wages. "Look, this is the biggest economic challenge of our time," U.S. Chamber of Commerce CEO Suzanne Clark declared. "I went to Rehoboth [Delaware] over the weekend, took my teenager to the beach. And the number of restaurants, the number of small businesses that have restricted their hours, that aren't serving lunch, or aren't open at all because of the workforce shortage is tragic." Making moves: As a result, Clark is launching an initiative to address the worker shortage called "Operation Warp Speed for Jobs." It will advocate for "federal and state policy changes that will help train more Americans for in-demand jobs, remove barriers to work, and double the number of visas available for legal immigrants." The U.S. Chamber Foundation is also expanding its "most impactful employer-led workforce and job training programs and launching new efforts to connect employers to undiscovered talent." ​ Stocks Fresh records​ ​ The growth trade could be returning as bond yields keep falling, with the rate on the 10-year Treasury falling another 2 bps to 1.48%. The moves helped propel the Nasdaq Composite upward on Monday, closing at a record high as cyclicals took the back seat. Overnight, contracts linked to the index inched higher, while Dow and S&P 500 futures were hovering around the flatline. This all comes ahead of the Fed's two-day policy meeting. The gathering kicks off today and will be the focal point of the week for the markets. While the central bank is not expected to take any action, investors will be hanging on to every word that mentions interest rates, tapering plans, and of course - inflation. Transitory? Speaking of inflation: The Producer Price Index - which measures the average price changes received by domestic producers - is set to be published this morning. The index is forecast to have climbed 0.5% in May, while the core PPI, which excludes volatile items like food and energy, is also estimated to increase 0.5%. Stay on the lookout for retail sales data as well, which will also be released at 8:30 a.m. ET. On the global front: President Biden is continuing his tour through Europe after meeting with the G7 and NATO leaders. Today, he'll sit down with Vladimir Putin in Geneva, marking the first time an American president has met with a Russian president in almost three years. As the Biden administration attempts to focus on its domestic agenda, it may look to contain Russia on the global stage, though that may not come easy. Biden has previously called Putin "a killer," Moscow just categorized the U.S. as an "unfriendly nation" and neither has an ambassador in each other's country. ​ Sponsored by Northern Trust The Tax Policy Resource Center​ ​ ​ Gain insight at the intersection of changing tax policy and managing complex wealth from The Northern Trust Institute.​ Financials JPMorgan is stockpiling cash​ ​ While Fed Chair Jerome Powell sees current inflation as transient, as supply shocks and reopening demand level out, Jamie Dimon is preparing JPMorgan (JPM) for a different environment. Quote: "We have a lot of cash and capability and we're going to be very patient, because I think you have a very good chance inflation will be more than transitory. If you look at our balance sheet, we have $500B in cash, we've actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates. I do expect to see higher rates and more inflation, and we're prepared for that." Go deeper: Dimon also signaled that the pandemic-era trading boom could be coming to a close, While predicting a 38% decline from a year ago, revenues from fixed-income and equities trading would still be "something a little bit north of $6B." Net interest income was also pared down to $52.5B (from $55B) following muted loan demand, though investment banking revenue "could be one of the best quarters you’ve ever seen" due to surging M&A activity. (32 comments) ​ Aviation Trade truce​ ​ Transatlantic relations are getting a boost with the U.S. and EU on the cusp of a deal to resolve a 17-year dispute over aircraft subsidies. The breakthrough, set to be finalized today during President Biden's first European meeting in Brussels, would lift the threat of billions of dollars in punitive tariffs via a multiyear accord on subsidy limits. It would also remove a sizable shadow that's been hanging over the planemaking industry, as well as threats that other consumer goods could be targeted with retaliatory levies. Backdrop: The dispute is one of the longest-running battles at the World Trade Organization. It started in 2004 when the U.S. withdrew from a 1992 aircraft subsidy pact, alleging that Airbus (OTCPK:EADSF) had managed to equal Boeing's (NYSE:BA) share of the jet market due to subsidized government loans, while the EU counter-sued over unfair R&D support and subsidized tax incentives. The case wound through the WTO over the years, but in 2019, it awarded partial victories to both planemakers. While they attempted to work things out over the coming years, billions of dollars in tariffs were progressively imposed by each side, until the two suspended the duties in March 2021, setting a four-month deadline to work out a deal. The current standstill agreement would likely include a five-year suspension of tariffs and remove claims for compensation. The U.S. would also withdraw a demand that would see it get advanced notice of any future public loans to Airbus. Another critical detail is the benchmark to be used when determining whether the interest on a future loan is market compatible. Competition is rising: The arrangement would arrive as President Biden pledges to reset relations with European partners, while taking a hard-line stance on China. Beijing has its own ambitions to become a global player in commercial aircraft and even plans on delivering its C919 to its first client at the end of 2021. "There's no question that the rise of China's aircraft industry is... on everybody's proverbial radar," U.S. Chamber of Commerce Senior Vice-President Marjorie Chorlins told reporters on Monday, noting the country's "heavy subsidization" of its industries and threats posed by its state-driven economic model. ​ Trending Making inroads​ ​ Mixed reviews are pouring in for The Boring Company's first operational tunnel, which opened last week under the sprawling Las Vegas Convention Center. Teslas shuttle visitors from one end of the complex to the other, reducing a 45-minute walk to a two-minute underground ride that's surrounded by glitzy lighting. The 1.7-mile stretch (each tunnel is less than a mile) was built at a cost of $47M, plus another $5.5M paid to third-party inspectors. The project could eventually expand along the Las Vegas Strip, and to Allegiant Stadium and McCarran International Airport. Flashback: The Boring Company started from Elon Musk's grand vision of revolutionizing transit. In 2016, he got fed up with the gridlock in Los Angeles, tweeting he was "going to build a tunnel boring machine and just start digging." The idea was to design intra-city transit systems (Loop) for passenger vehicles, which could eventually transition to autonomous cars or Hyperloop-based transportation for longer inter-city routes. The Boring Company was initially formed as a subsidiary of SpaceX, before becoming an independent business in 2018. When first announced, Musk said the Las Vegas Convention Center (LVCC) Loop system would be able to transport people from Point A to Point B at 125 miles per hour, with no restrictions. However, at launch this past week, the network was transporting cars at around 35 mph. "We simplified this a lot," Musk said last October. "It's basically just Teslas in tunnels at this point, which is way more profound than it sounds." At maximum capacity, Boring hopes to bring in a fleet of 62 Teslas capable of holding five people each, with a transport capacity of about 4,400 people per hour. Outlook: Projects from The Boring Company have been highly publicized, but many of them have gone up in smoke. Those include the Chicago Express Loop (linking downtown Chicago with O'Hare Airport) and the Baltimore–Washington Loop (linking the two cities with future plans to connect NYC), as well as the Westside tunnel concept in LA (parallel to Interstate 405) and the Dugout Loop (bringing Los Angeles Dodgers fans to the ballpark). Other negotiations and discussions are still underway in Fort Lauderdale, Miami, San Jose and San Bernardino. While The Boring Company is not yet publicly traded, there are a number of tunneling companies that are listed, including Tutor Perini (NYSE:TPC), Granite Construction (NYSE:GVA), Primoris (NASDAQ:PRIM), EMCOR Group (NYSE:EME) and Great Lakes Dredge & Dock (NASDAQ:GLDD). ​ What else is happening... AMC shares surge on #AMCDay; Morgan Stanley warns of 'recipe for disaster.' MicroStrategy (NASDAQ:MSTR) completes $500M junk bond offering to buy more Bitcoin. Lordstown Motors (NASDAQ:RIDE) sinks as leaders depart company after board probe. Palantir (NYSE:PLTR), Snowflake (NYSE:SNOW) join the Russell 3000. U.K. analysis shows COVID vaccines are effective against Delta variant. Novavax (NASDAQ:NVAX) jab more than 90% effective in U.S. trial. Oatly (NASDAQ:OTLY) stumbles as analyst ratings include some coolish views. Citi still confident 10-year yield will hit 2% this year. Uranium stocks slammed as China nuke plant leak hits sentiment.​ TOGETHER WITH ​ Today's Markets In Asia, Japan +1%. Hong Kong -0.7%. China -0.9%. India +0.4%. In Europe, at midday, London +0.2%. Paris +0.4%. Frankfurt +0.4%. Futures at 6:20, Dow flat. S&P +0.1%. Nasdaq +0.2%. Crude +0.5% to $71.22. Gold flat at $1865.20. Bitcoin +2.2% to $40027. Ten-year Treasury Yield -2 bps 1.48% ​ Today's Economic Calendar FOMC meeting begins 8:30 Producer Price Index 8:30 Retail Sales 8:30 Empire State Mfg Survey 8:55 Redbook Chain Store Sales 9:15 Industrial Production 10:00 Business Inventories 10:00 NAHB Housing Market Index 1:00 PM Results of $24B, 20-Year Bond Auction 4:00 PM Treasury International Capital Companies reporting earnings today »​

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[Bozzie]

The Brutal Truth About Bitcoin


June 14, 2021

Credit...Illustration by Frank Augugliaro, Photograph via Getty Images




By Eswar Prasad
Mr. Prasad is a professor at Cornell University and a senior fellow at the Brookings Institution.




Bitcoin, the original cryptocurrency, has been on a wild ride since its creation in 2009. Earlier this year, the price of one Bitcoinsurged to over $60,000, an eightfold increase in 12 months. Then it fell to half that value in just a few weeks. Values of other cryptocurrencies such as Dogecoin have risen and fallen even more sharply, often based just on Elon Musk’s tweets. Even after the recent fall in their prices, the total market value of all cryptocurrencies now exceeds $1.5 trillion, a staggering amount for virtual objects that are nothing more than computer code.
Are cryptocurrencies the wave of the future and should you be using and investing in them? And do the massive swings in their prices — nearly $1 trillion was wiped off the their total value in May — portend trouble for the financial system?
Bitcoin was created (by a person or group that remains unidentified to this day) as a way to conduct transactions without the intervention of a trusted third party, such as a central bank or financial institution. Its emergence amid the global financial crisis, which shook trust in banks and even governments, was perfectly timed. Bitcoin enabled transactions using only digital identities, granting users some degree of anonymity. This made Bitcoin the preferred currency for illicit activities, including recent ransomware attacks. It powered the shadowy darknet of illegal online commerce much like ****** helped the rise of eBay by making payments easier.
As it grew in popularity, Bitcoin became cumbersome, slow, and expensive to use. It takes about 10 minutes to validate most transactions using the cryptocurrency and the transaction fee has been at a median of about $20 this year. Bitcoin’s unstable value has also made it an unviable medium of exchange. It is as though your $10 bill could buy you a beer on one day and a bottle of fine wine on another.

​

Moreover, it has become clear that Bitcoin does not offer true anonymity. The government’s success in tracking and retrieving part of the Bitcoin ransom paid to the hacking collective DarkSide in the Colonial Pipeline ransomware attack has heightened doubts about the security and nontraceability of Bitcoin transactions.
While Bitcoin has failed in its stated objectives, it has become a speculative investment. This is puzzling. It has no intrinsic value and is not backed by anything. Bitcoin devotees will tell you that, like gold, its value comes from its scarcity — Bitcoin’s computer algorithm mandates a fixed cap of 21 million digital coins (nearly 19 million have been created so far). But scarcity by itself can hardly be a source of value. Bitcoin investors seem to be relying on the greater fool theory — all you need to profit from an investment is to find someone willing to buy the asset at an even higher price.
Despite their high valuations on paper, a collapse of Bitcoin and other cryptocurrencies is unlikely to rattle the financial system. Banks have mostly stayed on the sidelines. As with any speculative bubble, naïve investors who come to the party late are at greatest risk of losses. The government should certainly caution retail investors that, much like in the GameStop saga, they act at their own peril. Securities that enable speculation on Bitcoin prices are already regulated, but there is not much more the government can or ought to do.
Bitcoin is not innocuous. Transactions are processed by “miners” using massive amounts of computing power in return for rewards in the form of Bitcoin. By some estimates, the Bitcoin network consumes as much energy as entire countries like Argentina and Norway, not to mention the mountains of electronic waste from specialized machines used for such mining operations that burn out rapidly.
Whatever Bitcoin’s eventual fate, its blockchain technology is truly ingenious and groundbreaking. Bitcoin has shown how programs running on networks of computers can be harnessed to securely conduct payments, within and between countries, without relying on avaricious financial institutions that charge high fees. For migrant workers sending remittances back to their home countries, for instance, such fees are a major burden. Technologies that make payments cheaper, quicker and easier to track would benefit consumers and businesses, facilitating both domestic and international commerce.

​

The technology is not without risks. Facebook plans to issue its own cryptocurrency called Diem intended to make digital payments easier. Unlike Bitcoin, Diem would be fully backed by reserves of U.S. dollars or other major currencies, ensuring stable value. But, as with its other ostensibly high-minded initiatives, Facebook can hardly be trusted to put the public’s welfare above its own. The prospect of multinational corporations one day issuing their own unbacked cryptocurrencies worldwide is deeply disquieting. Such currencies won’t threaten the U.S. dollar, but could wipe out the currencies of smaller and less developed countries.
Variants of Bitcoin’s technology are also making many financial products and services available to the masses at low cost, directly connecting savers and borrowers. These developments and the possibilities created by the new technologies have spurred central banks to consider issuing digital versions of their own currencies. China, Japan, and Sweden are already conducting trials of their digital currencies.
Ironically, rather than truly democratizing finance, some of these innovations may exacerbate inequality. Unequal financial literacy and digital access might result in sophisticated investors garnering the benefits while the less well off, dazzled by new technologies, take on risks they do not fully comprehend. Computer algorithms could worsen entrenched racial and other biases in credit scoring and financial decisions, rather than reducing them. The ubiquity of digital payments could also destroy any remaining vestiges of privacy in our day-to-day lives.
While Bitcoin’s roller-coaster prices garner attention, of far more consequence is the revolution in money and finance it has set off that will ultimately affect every one of us, for better and worse.

 

[Bozzie]

TECHChina is kicking out more than half the world’s bitcoin miners – and a whole lot of them could be headed to Texas


PUBLISHED TUE, JUN 15 20212:12 PM EDTUPDATED 42 MIN AGO


MacKenzie Sigalos@KENZIESIGALOS




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KEY POINTS

• In May, Beijing called for a severe crackdown on bitcoin mining and trading, setting off what’s being dubbed in crypto circles as “the great mining migration.”
• Texas is an ideal destination for miners, thanks to its abundance of solar and wind power, its unregulated market, and its crypto-friendly political stance.

Technicians make repairs to bitcoin mining machines at a mining facility operated by Bitmain in Ordos, Inner Mongolia, China, on Friday, Aug. 11, 2017.
Qilai Shen | Bloomberg | Getty Images



China has long been home to more than half the world’s bitcoin miners, but now, Beijing wants them out ASAP.
In May, the government called for a severe crackdown on bitcoin mining and trading, setting off what’s being dubbed in crypto circles as “the great mining migration.” This exodus is underway now, and it could be a game changer for Texas.


Mining is the energy-intensive process which both creates new coins and maintains a log of all transactions of existing digital tokens.
Despite a lack of reserves that caused days-long blackouts last winter, Texas often has some of the world’s lowest energy prices, and its share of renewables is growing over time, with 20% of its power coming from wind as of 2019. It has a deregulated power grid that lets customers choose between power providers, and crucially, its political leaders are very pro-crypto – dream conditions for a miner looking for a kind welcome and cheap energy sources.
“You are going to see a dramatic shift over the next few months,” said Brandon Arvanaghi, previously a security engineer at crypto exchange Gemini. “We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible.”

China’s mining dominance

2021 data for the global distribution of mining power is not yet available, but past estimates have shown that 65% to 75% of the world’s bitcoin mining happened in China – mostly in four Chinese provinces: Xinjiang, Inner Mongolia, Sichuan, and Yunnan. Sichuan and Yunnan’s hydropower make them renewable energy meccas, while Xinjiang and Inner Mongolia are home to many of China’s coal plants.
The drawdown in miners has already begun in Inner Mongolia. After failing to meet Beijing’s climate targets, province leaders decided to give bitcoin miners two months to clear out, explicitly blaming its energy misses on crypto mines.

Castle Island Ventures founding partner Nic Carter says that while it’s not totally clear how China will handle next steps, it a phased rollout is likely. “It seems like we’re going from policy statement to actual implementation in relatively short order,” he said.
The way this exodus is measured is by looking at hashrate, an industry term used to describe the computing power of all miners in the bitcoin network.
“Given the drop in hashrate, it appears likely that installations are being turned off throughout the country,” continued Carter, who also thinks that probably 50 to 60% of bitcoin’s entire hashrate will ultimately leave China.
Although China’s announcement hasn’t been cemented in policy, that isn’t stopping miners like AlejandroDe La Torre from cutting their losses and making an exit.
“We do not want to face every single year, some sort of new ban coming in China,” said De La Torre, vice president of Hong Kong-headquartered mining pool, Poolin. “So we’re trying to diversify our global mining hashrate, and that’s why we are moving to the United States and to Canada.”
One of bitcoin’s greatest features is that it is totally location agnostic. Miners only require an internet connection, unlike other industries that must be relatively close to their end users.
“The cool thing about bitcoin that is under appreciated by a lot of the naysayers is that it’s a portable market; you can bring it right to the source of energy,” explained Steve Barbour, founder of Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities.
That said, the exodus won’t be instantaneous, in part, because it will take miners some time to either move their machines out of China or liquidate their assets and set up shop elsewhere.
​

Where they’re going

Because miners at scale compete in a low-margin industry, where their only variable cost is typically energy, they are incentivized to migrate to the world’s cheapest sources of power.
“Every Western mining host I know has had their phones ringing off the hook,” said Carter. “Chinese miners or miners that were domiciled in China are looking to Central Asia, Eastern Europe, the U.S., and Northern Europe.”
One likely destination is China’s next-door neighbor, Kazakhstan. The country’s coal mines provide a cheap and abundant energy supply. It also helps that Kazakhstan has a more lax attitude to building, which bodes well for miners who need to construct physical installations in a short period of time.
Didar Bekbauov runs Xive, a company that provides hosting services to international miners. Xive also sells the specialized equipment needed for mining.
Bekbauov says that he’s stopped counting the number of Chinese miners who have called him to ask about relocation options, ranging from operations with 15 rigs to thousands.
“One miner told us that only government electricity plants have restricted mining and private ones will continue to service miners,” Bekbauov told CNBC.
“But most of the electricity is generated by government power plants, so miners will have to move. That makes them uncertain and desperate to find other locations,” he said.
Whether Kazakhstan is a destination or simply a stopover on a longer migration west remains to be seen.
Arvanaghi is bullish on North America and thinks the hashrate there will grow over the next few months.
“Texas...has some of the cheapest [electricity] in the globe,” he said. “It’s also very easy to start up a mining company...if you have $30 million, $40 million, you can be a premier miner in the United States.”
Wyoming has also trended toward being pro-bitcoin and could be another mining destination, according to Arvanaghi.
There are, however, a few major limitations to the U.S. becoming a global mining destination.
For one, the lead time to build the actual physical infrastructure necessary to host miners is likely six to nine months, Carter told CNBC. “The U.S. probably can’t be as nimble as other countries in terms of onshoring these stray miners,” he said.
The move logistics may also prove difficult. There is a shipping container shortage, thanks to the tailwinds of the Covid pandemic.
But perhaps the biggest question is the reliability of the Texas power grid. A storm that devastated large swaths of the state in 2020 has reignited a debate over whether Texas should winter-proof its systems, a potentially costly project that might affect taxes or other fees for those looking to tap into the state’s power grid. More recently, ERCOT, the organization that operates Texas’ grid, asked consumers to conserve energy amid what officials called an unusual number of “forced generation outages” and an upcoming heat wave.

Answering the Musk critique

Tesla CEO Elon Musk has bashed bitcoin mining, claiming that it is bad for the environment. It’s not a new criticism.
For years, skeptics have maligned the world’s most popular digital token for polluting the planet, while supporters have extolled the virtues of bitcoin and its role in accelerating the rise of renewable energy.
It is unclear whether the China mining exodus will make or break the case for bitcoin enthusiasts in the debate around the token’s carbon footprint. The dominant narrative, to date, has been that much of the world’s bitcoin is mined with Chinese goal.
“From a narrative perspective, it’s definitely an improvement,” said Carter. “But China also has the most abundant stranded hydro resources in the world.”
The country offers significant energy vectors from wind, solar, and especially hydropower in the south. Xinjiang’s grid, for example, is 35% powered by wind and solar energy inputs.

If all the miners do end up leaving China, it will mean less fossil fuel-powered mining, but it will also mean that the network’s share of renewable energy-powered mining will drop. This is why the question of where these migrant miners end up could prove critical to bitcoin’s future. “It’s the biggest story of the year for bitcoin,” said Carter.
De La Torre says they’re looking to expand operations using green energy, a trend that is already years in the making. He says that hydro plants are generally cheaper than fossil fuels in most parts of the world.
“Mining is price sensitive, so as to seek out the lowest cost power and the lowest cost power tends to be renewable because if you’re burning fossil fuels...it has extraction, refinement, and transport costs,” explained Blockstream CEO Adam Back.

Lazard

Each year, investment bank Lazard releases a breakdown of energy costs by source. Its 2020 report shows that many of the most common renewable energy sources are either equal to or less expensive than conventional energy sources like coal and gas. And the cost of renewable power keeps going down.
But there are limitations to running crypto mines purely on renewable energy.
Though solar and wind are now the world’s least expensive energy sources, both power supplies face limitations at scale, so there is concern over the viability of miners turning exclusively to wind or solar energy.

Next six months

For the time being, there isn’t that much mining capacity worldwide that is ready to absorb the Chinese miner diaspora. While they scramble to find a new home, we could see hashrate go offline – and stay offline.
In practice, that would mean all the remaining miners are more profitable for a period of time.
Having more geographic dispersion would even out the global balance of power, and it would also reduce the ability of any one sovereign nation to co-opt or control the network.
We may also see special crypto economic zones pop up in the next few months.
“You will see jurisdictions adopting a very favorable stance and creating the equivalent of special zones to encourage miners to host locally,” said Carter. “We’re seeing it at the state level here. You’re also gonna see it at the country level, you might even see subsidized electricity for mining.”