Intersting thoughts

[CoachCB]

Boz, I went to the Alabama/UF game over the weekend. Great time - but too bad Florida shit the bed in the 1st quarter. Florida played a lot tougher than I expected and The Swamp was rocking! My first home UF game in 13 years.

I added some AAPL yesterday & S&P 500 index fund. I'm probably going to sell some of my losers and take the L though before things get out of whack w/ this whack administration.

 

[Bozzie]

Great game..I watched the second half....I was pulling for yea.
Tough day yesterday...20 days now till word on AVDL's next step.
It's been great summer here had a lot of friends out to the coast for golf fishing and a few good parties.

Glad you're well pal.!

September 21, 2021

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“What to make of this?”Andrew Kelly/Reuters

Evergrande is only part of the story

The global stock market drop yesterday — the S&P 500 recorded its biggest one-day plunge since May — was seemingly induced by the troubled Chinese real estate firm Evergrande. And when a single, large, teetering firm with extensive debt rattles the entire market, some reach for the “L” word: Lehman Brothers.

With markets regaining ground today, worries that one firm’s collapse could lead to a full-blown financial crisis appear to have waned. But Evergrande’s travails are far from over, and there are plenty of other concerns hanging over the market. First, about that Chinese property developer with $300 billion in debt …

What would an Evergrande default look like? The impact of the developer’s potential collapse — it doesn’t seem to have the cash for interest payments due this week — depends on how China’s leadership responds. Although Beijing hasn’t moved conclusively toward a bailout, it has ways to stop a financial disaster, namely by controlling banks and the flow of money in and out of the country. The authorities can also manage news coverage and quell any public unrest.

On top of Evergrande, a number of other Chinese property developers also appear “highly distressed,” said Jenny Zeng of AllianceBernstein. Goldman Sachs strategists estimate that an Evergrande collapse could cut China’s G.D.P. by $350 billion in the next year. But for now, the global repercussions of Evergrande’s troubles aren’t considered on the same scale as those that followed Lehman’s collapse, even if some of the debt owed by Chinese developers is held by foreign firms, who could get burned if the cash isn’t there.

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Investors have plenty of other concerns, as shown by the rout yesterday in U.S. stocks that had little connection to the Chinese economy. Those worries include the spread of the Delta variant of the coronavirus, which continues to weigh on activity (but may be turning a corner); the end of pandemic emergency spending programs; the fraught negotiations over trillions of dollars in new spending; the looming fight over the government debt limit; and a potential start in the reduction of monetary stimulus by the Fed, to name a few.

More sell-offs like Monday’s could imperil a busy I.P.O. pipeline, although the blockbuster debut of Universal Music today — more on that below — may give others confidence to go ahead with their plans to list. And some market watchers say they think the trouble will mostly be contained to China, which could lead to money flowing out of the country and into other markets. “The continued regulatory issues and other concerns coming out of China will over the next year just drive more investment dollars into U.S. tech stocks,” wrote Daniel Ives of Wedbush in a research note after yesterday’s market close.

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HERE’S WHAT’S HAPPENING

The U.S. prepares to lift its travel ban on foreign tourists. Starting in November, the Biden administration will lift restrictions for fully vaccinated travelers from 33 countries, including members of the E.U., Britain, China and India. The White House was under increasing pressure to halt the 18-month ban, which had squeezed the tourism industry and separated families across borders.

Justin Trudeau remains Canada’s prime minister, but his attempt to gain a majority by calling an early election appeared to fail, according to unofficial results of yesterday’s vote. He is set to continue leading a minority government, with his party’s seat count in Parliament little changed. Trudeau’s move was intended to capitalize on high approval ratings for his handling of the pandemic, but many voters apparently saw political opportunism instead.

Shell sells off a big oil field. A $9.5 billion deal will transfer Shell’s 225,000-acre site in the Permian Basin, the biggest American field, to ConocoPhillips. It’s the latest sign that Shell is accelerating its push toward producing cleaner energy, responding to concerns about climate change from investors and other stakeholders. Proceeds from the sale will be distributed to shareholders and will also help fund the company’s “energy transition,” Shell said.

Investment firms in the U.S. fret about the fine print of the Democrats’ carried-interest plans. The tax break for private-equity managers and firms wasn’t eliminated, as first proposed, by lawmakers as part of their $3.5 trillion spending package. But tweaks to the practice in the bill are more restrictive than the industry initially thought, especially on minimum holding periods before the tax break kicks in, Bloomberg reports.

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Steven Mnuchin raises $2.5 billion for his new private equity firm. The former Treasury secretary in the Trump administration is getting some of the money from sovereign wealth funds in the Middle East, including Saudi Arabia, where he traveled extensively while in government.

Universal Music goes solo

Vivendi spun off Universal Music on the Amsterdam stock exchange today, and investors liked the sound of it: Shares jumped around 40 percent at the open, valuing the record label at more than $50 billion. Universal is by far the world’s largest music company, holding a 31 percent market share and boasting a roster of major stars, including Taylor Swift, Drake and Billie Eilish.

The successful debut of a player in a once unloved industry, defying a jittery market, could change the tune for others in the wider entertainment world.

The music industry had been all but written off not that long ago, with digital downloads (and piracy) eroding lucrative physical sales. But Universal, led by the power broker Lucian Grainge, leaned in to the trends and made big bets on streaming, social media and other areas:

A 2013 deal with Apple helped the tech giant launch its music service two years later. Its 2017 deal with Spotify put the streaming pioneer on the path to going public. Universal was the first major music company to sign with Facebook, also in 2017. The label has recently shored up its publishing library, buying Bob Dylan’s back catalog for about $300 million last year.

The bets have paid off: Universal Music has averaged double-digit growth in sales and profits over the past two years, and expects this to continue in 2021. The company now generates nearly 70 percent of its revenue from streaming and publishing.

There was some drama in the spinoff process, mostly coming from Bill Ackman. The billionaire’s hedge fund, Pershing Square, is a 10 percent investor in Universal Music, though not in the way he originally hoped. His plan to invest in Universal via his SPAC fell through when the S.E.C. took issue with its structure — his logic, however, was validated by the big pop in the company’s value. (That’s good for Pershing Square’s hedge fund investors, but not for its SPAC shareholders.) Other major investors in Universal Music include the Chinese gaming firm Tencent (20 percent) and the French billionaire Vincent Bolloré (18 percent).

China is a part of Universal’s growth plan and is one of the reasons that the label brought in Tencent as an investor. The risks of doing business in the country have become more stark lately, and the authorities there have made clear that Tencent is under scrutiny in a broader tech crackdown. In 2019, Universal Music was contacted by Chinese officials investigating market competition in the music industry.

“I’d heard that seeing the Earth from space changes one’s point of view of the world, but I was not prepared for just how much that was true.”

— Jeff Bezos, announcing plans to spend $1 billion on environmental conservation projects, part of his $10 billion Bezos Earth Fund. The Amazon founder took a brief trip to space in July on a mission run by his rocket company, Blue Origin.

The S.E.C. scores a victory in crypto battle

The cryptocurrency exchange Coinbase quietly backed down in its recent feud with the S.E.C., dropping contentious plans for an interest-generating financial product called Lend. Not long ago, Coinbase made a big fuss about the agency’s threat to sue if it introduced the product, which would have been based on stablecoins.

Coinbase did not mention the S.E.C. in its retreat. Lend would have allowed customers to earn up to 4 percent interest on USD Coin, a stablecoin tied to the dollar that Coinbase created with the payments company Circle. When it first heard about the S.E.C.’s qualms — the agency, unlike Coinbase, considered Lend a security — Coinbase’s chief, Brian Armstrong, called out the agency for “sketchy” behavior in a long tweet thread. But there was no explanation for its decision to pull the Lend product. “We continue our work to seek regulatory clarity for the crypto industry as a whole,” Coinbase said in a one-paragraph blog update. It declined a request for comment.

There are many reasons not to fight a federal agency. But one possible explanation for Coinbase opting not to call extra regulatory attention to itself may be because all eyes in Washington’s policymaking circles seem to be now turning to crypto. Officials at several agencies, including the S.E.C., have been convening to consider new rules for crypto, probably starting with stablecoins, in which Coinbase is deeply invested.

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THE SPEED READ

Deals

WeWork’s shares are set to begin trading in October. (Bloomberg) Brookfield, a Canadian asset manager, made a $7 billion takeover bid for the Australian energy group AusNet. (FT) SoftBank led an investment round in Sorare, a fantasy sports start-up with a side business in N.F.T.s, at a $4.3 billion valuation. (FT) A consortium led by the automaker Volkswagen offered $3.4 billion to acquire the car rental company Europcar. (Reuters)

Policy

How the F.T.C. chief, Lina Khan, spends her days. (WaPo) After allegations about workplace misconduct, the S.E.C. is investigating the video game maker Activision Blizzard. (NYT) “Uber Risks Death by a Thousand Court Cases.” (Politico) Twitter settled a 2016 class action lawsuit that accused it of publishing misleading user growth numbers by paying more than $800 million. (NYT)

Best of the rest

Johnson & Johnson claims that an extra shot of its vaccine substantially raises protection against Covid, based on a clinical trial. (NYT) For the first time, the world has more than 3,000 billionaires. (Insider) Online shopping is about to become more expensive, with FedEx and UPS raising shipping rates. (WSJ) As the Washington Post beefs up its editing team, The Daily News gets an “as needed” editor in chief. (NYT) Restaurants struggling to recruit workers are doing away with the tipped minimum wage, currently $2.13 per hour. (NYT)

Anna Schaverien contributed reporting.

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

Stephen Gandel, News Editor, New York @stephengandel

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 September 21, 2021 Fiat Lux Featured Trade: (WHAT EVER HAPPENED TO THE GREAT DEPRESSION DEBT?), ($TNX), (TLT), (TBT)

​ Whatever Happened to the Great Depression Debt?When I was a little kid during the early 1950s, my grandfather used to endlessly rail against Franklin Delano Roosevelt. The WWI veteran, who was mustard gassed in the trenches of France and was a lifetime, died in the wool Republican, said the former president was a dictator and a traitor to his class, who trampled the constitution with complete disregard. Republican presidential candidates Hoover, Landon, and Dewey would have done much better jobs. What was worse, FDR had run up such enormous debts during the Great Depression that, not only would my life be ruined, so would my children’s lives. As a six-year-old, this disturbed me deeply, as it appeared that just out of diapers, my life was already going to be dull, brutish, and pointless. Grandpa continued his ranting until a three-pack-a-day Lucky Strike non-filter habit finally killed him in 1977. He insisted until the day he died that there was no definitive proof that cigarettes caused lung cancer, even though during his war, they referred to them as “coffin nails.” He was stubborn as a mule to the end. And you wonder whom I got it from? What my grandfather’s comments did do was spark in me a lifetime interest in the government bond market, not only ours, but everyone else’s around the world. So, what ever happened to the despised, future destroying Roosevelt debt? In short, it went to money heaven. And here I like to use the old movie analogy. Remember, when someone walked into a diner in those old black and white flicks? Check out the prices on the menu on the wall. It says “Coffee: 5 cents, Hamburgers: 10 cents, Steak: 50 cents.” That is where the Roosevelt debt went. By the time the 20 and 30-year Treasury bonds issued in the 1930s came due, WWII, Korea, and Vietnam happened, and the great inflation that followed. The purchasing power of the dollar cratered, falling roughly 90%. Coffee is now $1.00, a hamburger at McDonald’s is $5.00, and a cheap steak at Outback costs $12.00. The government, in effect, only had to pay back 10 cents on the dollar in terms of current purchasing power on whatever it borrowed in the thirties. Who paid for this free lunch? Bond owners, who received minimal and often negative real, inflation-adjusted returns on fixed-income investments for three decades. In the end, it was the risk avoiders who picked up the tab. This is why bonds became known as “certificates of confiscation” during the seventies and eighties. This is not a new thing. About 300 years ago, governments figured out there was easy money to be had by issuing paper money, borrowing massively, stimulating the local economy, creating inflation, and then repaying the debt in devalued future paper money. This is one of the main reasons why we have governments, and why they have grown so big. Unsurprisingly, France was the first, followed by England and every other major country. Ever wonder how the new, impoverished United States paid for the Revolutionary War? It issued paper money by the bale, which dropped in purchasing power by two-thirds by the end of the conflict in 1783. The British helped too, by flooding the country with counterfeit paper Continental money. Bondholders can expect to receive a long series of rude awakenings sometime in the future. No wonder Bill Gross, the former head of bond giant, PIMCO, says he will get ashes in his stocking for Christmas next year. The scary thing is that eventually, we will enter a new 30-year bear market for bonds that lasts all the way to 2049. However, after last month’s frenetic spike up in bond prices, and down in bond yields, that is looking more like a 2022 than a 2019 position. This is certainly what the demographics are saying, which predicts an inflationary blow-off in decades to come that could take short-term Treasury yields to a nosebleed 12% high once more. That scenario has the leveraged short Treasury bond ETF (TBT), which has just cratered down to $23, double to $46, and then soaring all the way to $200. If you wonder how yields could get that high in a decade, consider one important fact. The largest buyers of American bonds for the past three decades have been Japan and China. Between them, they have soaked up over $2 trillion worth of our debt, some 12% of the total outstanding. Unfortunately, both countries have already entered very negative demographic pyramids, which will forestall any future large purchases of foreign bonds. They are going to need the money at home to care for burgeoning populations of old-age pensioners. So who becomes the buyer of last resort? No one, unless the Federal Reserve comes back with QE IV, V, and VI. QE IV, in fact, has already started. There is a lesson to be learned today from the demise of the Roosevelt debt. It tells us that the government should be borrowing as much as it can right now with the longest maturity possible at these ultra-low interest rates and spending it all. With real, inflation-adjusted 10-year Treasury bonds now posting negative yields, they have a free pass to do so. In effect, the government never has to pay back the money. But they dohave the ability to reap immediate benefits, such as through stimulating the economy with greatly increased infrastructure spending. Heaven knows we need it. If I were king of the world, I would borrow $5 trillion tomorrow and disburse it only in areas that create domestic US jobs. Not a penny should go to new social programs. Long-term capital investments should be the sole target. Here is my shopping list: $1 trillion – new Interstate freeway system $1 trillion – additional infrastructure repairs and maintenance $1 trillion – conversion of our energy system to solar $1 trillion – construction of a rural broadband network $1 trillion – investment in R&D for everything The projects above would create 5 million new jobs quickly. Who would pay for all of this in terms of lost purchasing power? Today’s investors in government bonds, half of whom are foreigners, principally the Chinese and Japanese. Notice that I am not committing a single dollar in spending on any walls. How did my life turn out? Was it ruined, as my grandfather predicted? Actually, I did pretty well for myself, as did the rest of my generation, the baby boomers. My kids did OK too. One son just got a $1 million, two-year package at a new tech startup and he is only 30. Another is deeply involved in the tech industry, and my oldest daughter is working on a Ph.D. at the University of California. My two youngest girls became the first-ever female eagle scouts. Not too shabby. Grandpa was always a better historian than a forecaster. But he did have the last laugh. He made a fortune in real estate, betting correctly on the inflation that always follows big borrowing binges. You know the five acres that sits under the Bellagio Hotel in Las Vegas today? That’s the land he bought, in 1945 for $500. He sold it 32 years later for $10 million. Not too shabby either. 30 Years of 30-Year Bond Yields​ ​ Not Too Shabby for $500 ​ ​

Quote of the Day"There is no more powerful thing than a free market that changes its mind," said Art Cashin, UBS Director of Floor Operations.

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]

September 22, 2021

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Have you seen the good news?Dado Ruvic/Reuters

[h=2]No more apologies[/h]

Whether on privacy, misinformation, hate speech or changes to its News Feed, Facebook has been embroiled in controversy for most of its existence. Its playbook, no matter the perceived misstep, has remained relatively consistent: Apologize and promise to do better.

In January, though, the company’s executives decided to be more aggressive. That has included using its own powerful information-spreading algorithms to respond to criticism, The Times’s Ryan Mac and Sheera Frenkel report. This is part of a multipronged effort to change the narrative about the company by distancing the founder Mark Zuckerberg from scandals, reducing outsiders’ access to internal data, burying a potentially negative report about its content and increasing its own advertising to showcase its brand.

One of the most visible actions is code-named “Project Amplify.” The initiative promotes positive stories about Facebook on users’ feeds. These articles, like one about ​​“Facebook’s Latest Innovations for 2021,” are displayed with a Facebook logo and in some cases written by Facebook itself. A Facebook spokesman said that Project Amplify was “similar to corporate responsibility initiatives people see in other technology and consumer products.”

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Facebook has also cut back on apologies in recent months.Its executives have said, for example, that the storming of the U.S. Capitol had little to do with Facebook and that misinformation on the platform was not the reason for missed vaccination goals. “They’re realizing that no one else is going to come to their defense, so they need to do it and say it themselves,” said Katie Harbath, a former Facebook public policy director.

The company may find it hard to go on the offensive. On Sunday, Facebook responded to an investigative series by The Wall Street Journal, which reported that the company knew more about the harms caused by its platform than it had acknowledged in public. In a blog post, Facebook called the paper’s reporting a mischaracterization of the facts. Late yesterday, the Facebook Oversight Board announced it would review Facebook’s special treatment of V.I.P. users in enforcement actions, one of the policies surfaced by the report.

[h=3]HERE’S WHAT’S HAPPENING[/h]

The House approves a bill raising the debt limit. The legislation would lift the federal debt limit until the end of 2022, fund the government through early December and provide money for Afghan refugees and natural disaster recovery. The measure now heads to the Senate, where Republicans have warned they will block any increase to the debt ceiling. Government funding lapses next week, and the Treasury Department could reach the limits of its borrowing authority next month.

China’s Evergrande says it can repay at least some of its debts, noting in a filing today that a $36 million interest payment due this week was “settled through negotiations.” But the cash-crunched property developer, which owes creditors $300 billion, could miss other payments this week, with prospects for a bailout unclear. Hedge funds have been buying Evergrande’s bonds and hiring advisers in an attempt to make money off the company’s potential collapse.

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The Fed updates its bond-buying plans. The U.S. central bank, which wraps up its latest policy meeting today, is expected to signal that it will soon slow its bond-buying program, a first step in reducing its emergency pandemic support. The Fed chair, Jay Powell, is also likely to face questions about the personal stock and bond trading of top central bank officials, after calling for a review of those trades last week.

Google spends $2.1 billion on a Manhattan office building.It’s one of the highest prices paid for an office building in the U.S. in recent years, and a psychological boost for New York City’s commercial property market, which is struggling with record-high vacancy rates. The tech giant has 12,000 employees in the city, and plans to hire 2,000 more.

The Treasury Department targets cryptocurrency’s role in ransomware attacks. As part of a series of actions to prevent cybercrime, the department placed sanctions on Suex, a crypto exchange based in Russia that it said facilitated payments in multiple attacks. In 2020, ransomware payments topped $400 million, four times larger than the year before, according to officials.

[h=2]The D.O.J. takes aim at “de facto merger” of airlines[/h]

The Justice Department filed an antitrust lawsuit yesterdayagainst American Airlines and JetBlue, arguing that a growing alliance between the two carriers hurts consumers. In bringing the suit, officials called the cooperation a “de facto merger” between the carriers in the New York and Boston markets. Attorneys general in six states and the District of Columbia joined the action. The airlines said they planned to fight the suit in court.

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It’s the latest effort by the Biden administration to limit corporate power through antitrust actions. The airline industry’s troubles during the pandemic, which crushed carriers’ revenue, didn’t appear to factor into the decision to sue. “Neither airline is failing; they received billions of dollars in subsidies from American taxpayers over the course of the pandemic,” the charge noted, underlining that playing the failing-firm card would not lower the antitrust standards set by the White House. (Propping up the industry with more than $50 billion in grants was itself contentious.)

“American has relentlessly pursued a strategy of industry consolidation,” the suit said. “Unable to combine with foreign airlines through formal mergers, American has instead pursued consolidation through a series of international joint ventures.” American is the world’s largest airline and it, along with Delta, United and Southwest, controls over 80 percent of domestic U.S. air travel. JetBlue’s reputation for challenging bigger rivals, forcing them to lower their fares from hubs like Boston, is a “critical source of competition” eliminated by its partnership with American, according to Richard Powers, an acting assistant attorney general in the Justice Department’s antitrust division.

The government’s move could dash any plans for future airline deals. Shares of one of the last remaining targets of a takeover that might pass muster, Alaska Airlines, closed more than 1 percent down yesterday and dropped a bit more in after-hours trading.

In other news, the Justice Department is investigating Zoom’s $15 billion deal to buy Five9, citing potential risks to national security.

[h=2]Seen and heard[/h]

► “My generation was promised colonies on the moon. Instead we got Facebook.”

— Peter Thiel, a venture capitalist and an early investor in Facebook, told employees of the social media company in what was supposed to be a motivational speech but turned into a critique of the company, according to “The Contrarian,” a new book about Thiel out this week.

► “We’ve found that eliminating pre-employment testing for cannabis allows us to expand our applicant pool.”

— Beth Galetti, the head of human resources at Amazon, which announced yesterday that it was lobbying the federal government to legalize marijuana.

► “The future of gender equality hangs in the balance, putting our families, communities, businesses and economy at risk.”

— More than 50 companies, including Yelp and Lyft, signed a group letter saying that a new law in Texas that severely restricts abortions made it hard to do business in the state.

[h=2]Exclusive: A big change at Change.org[/h]

Change.org, the tech company known for hosting online petitions and fund-raisers, will announce today that it’s transferring its ownership to a nonprofit foundation. As part of the change, more than 90 percent of the company’s investors are donating their equity, including Reid Hoffman, Bill Gates, Richard Branson, Ray Dalio and Arianna Huffington. (Hoffman, Change.org’s largest individual investor, made a $30 million investment in 2017.)

Change.org’s C.E.O., Ben Rattray, will become the executive chairman of the Change.org Foundation, while the former chief product officer, Nick Allardice, will become C.E.O.

Change.org was already registered as a B Corp, a designation for businesses that focus on social and environmental goals, in addition to financial ones. It will stay as such, and the new structure will allow the organization to focus on Change.org’s mission exclusively, Rattray said. That means it can make new investments that might take longer to play out, like election-focused products between election seasons and initiatives in new markets like Asia. Change.org has been evaluating its corporate governance structure for the past 18 months.

Change.org generates about $70 million annually and is “fully covering” its expenses, Rattray said. The company makes money in two main ways: promoted petitions, where users can pay to get their campaigns highlighted, and monthly subscriptions. Rattray said a “slight majority” of revenue comes from petitions. Change.org won’t be looking for philanthropic donations for its current platform, though it is possible that it will run separate philanthropic projects in the future.

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

Deals

Toast, the restaurant technology vendor, priced its I.P.O. above its recently raised range, valuing the company at $20 billion. (CNBC) Netflix bought the Roald Dahl Story Company, acquiring the full catalog of works by the author of “Charlie and the Chocolate Factory” and “Matilda.” (Deadline) The sports betting firm DraftKings made an offer of more than $20 billion to acquire the gambling company Entain. (Reuters) JPMorgan Chase has acquired Frank, a platform that helps college students with financial planning. (Reuters) SoftBank is among the investors in the former Treasury secretary Steven Mnuchin’s $2.5 billion private equity fund. (FT)

Policy

President Xi Jinping of China told the U.N. General Assembly that his country won’t help build any more coal plants abroad. (NYT) The Secret Service, the F.B.I. and the Defense Department all bought surveillance drones from DJI, a Chinese company the Pentagon deemed a security threat. (Axios) More than 30 companies, including Amazon and UPS, joined a coalition founded by the Chobani C.E.O., Hamdi Ulukaya, to hire and train Afghan refugees in the U.S. (AP) Rohit Chopra’s nomination to lead the C.F.P.B. moved out of committee, where it has been stuck for months, and he now faces a full Senate vote. (WSJ) “Republicans, Don’t Skip Out on America’s Bills,” writes Michael Bloomberg. (Bloomberg Opinion)

Best of the rest

One of the junior bankers at Goldman Sachs who created a widely circulated slide deck about brutal working conditions is the son of the vice chairman of TPG, a major Goldman client. (Bloomberg) “Forever C.E.O.s” are dominating Wall Street. (FT) Six workers who didn’t have the option to work from home during the pandemic share their stories. (NYT) John and Jenny Paulson are divorcing after more than 20 years of marriage, the latest split of a couple with a multibillion-dollar fortune. (NY Post) “Apple iPhone 13 Review: The Most Incremental Upgrade Ever” (NYT)

Will international freight make a comeback, or is the era of cheap mobility over? Join The Times tomorrow, Sept. 23, at 1:30 p.m. Eastern, as our climate reporter Brad Plumer is joined by experts from FedEx, Ikea and more to explore the ways in which business models are changing as people, goods and data move toward a net-zero world. R.S.V.P. here.

Anna Schaverien contributed reporting.

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

Stephen Gandel, News Editor, New York @stephengandel

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 September 22, 2021 Fiat Lux Featured Trade: (THE GOVERNMENT’S WAR ON MONEY) (TESTIMONIAL)

​ The Government’s War on MoneyWhen I lived as a student in West Berlin during the 1960s, I had a nice little side business. I organized weekend walking tours through the Berlin Wall at Checkpoint Charlie to visit East Berlin for other American students too afraid to go alone. To pay for it, I smuggled in my boots Ostmarks, the currency of East Germany, which I could buy at a 75% discount to the official price in West Berlin. I then covered lunch, museum visits, the opera, and all my other bills very cheaply, booking a nice profit on the day. That would be much more difficult to pull off today as governments around the world have launched a war on cash that will not end until its ultimate demise. The truth is, governments hate cash. This became clearly apparent when the government of India withdrew from circulation its two largest banknotes in 2019. Some 50% of Indian GDP is thought to take place in the underground economy in cash only. The move caused a financial panic as consumers sold gold (GLD) and other hard assets to meet bills because they were unable to settle accounts with the large denomination notes they had hoarded. As we move towards an all-electronic economy, the few remaining purposes where cash is essential are largely illegal. Waitresses, babysitters, and bookies don’t report income to the IRS. Nor do drug dealers or hookers. As for the now all-digital financial industry, the IRS already knows so much about me they can even recite my inside leg measurement. From 2021, they will also know about all of my Bitcoin and Ethereum transactions. This is a big deal because 18 states have legalized marijuana. Since banks are still banned from handling pot proceeds, this booming business has to take place entirely in cash. Tales about dealers making their runs with gym bags full of $100 bills are rampant. The IRS estimates that $460 billion in tax revenue is lost every year through unreported income which is largely earned in cash. Some half of the entire US paper money supply is held by foreigners where it is used to evade taxes, bribe foreign officials, and finance terrorism. The US government’s war on cash is not a new thing. In 1929, it cut the size of US banknotes by one-third to save money on the cost of high-grade paper. In 1970, the US Treasury banned the circulation of the $10,000, $5,000, $1,000, and $500 bills to halt mafia money laundering. Since then, the IRS has been the biggest beneficiary of the move. Large denomination US bills are now solely the domain of collectors. The US government would love to get out of the cash business entirely as it is so expensive to run. It spends about $737.4 million a year just to print American $1, $2, $5, $10, $20, $50, and $100 notes. Paper dollar bills which are actually made of 75% cotton and 25% linen are completely worn out and have to be returned in only 18 months. Coins are even a bigger loser. It costs more than two cents to make a penny. Since the advent of color printers, counterfeiting has exploded. North Korea runs almost its entire economy on fake $100 bills which are said to be the best in the world. Only a handful of specialists at the US Treasury can identify them under a high-powered microscope. No felt pens here. Today, some 80% of the entire $19.4 trillion M1 notes and coins in circulation in America are in the form of $100 dollar bills. That works out to $58.8 million per person. Where has all that money gone? The US is now considering eliminating even this convenient denomination. While $1 million in $100s can fit into a tote bag, that quantity of $10 bills would weigh 220 pounds, a quantity much more difficult to sneak around. An all-electronic economy would certainly pose some privacy problems as it would leave a massive paper trail on everything you do. When you get audited by the IRS, the first thing they do is obtain your past three years of bank and credit card records detailing your every transaction. If the inspection goes criminal, they go back six years. State authorities will pursue phone records to establish your physical presence to verify residency. So how long did you really spend in tax-free Florida last year? It would also pare back illegal immigration as this is another industry that runs entirely on cash. Once here, undocumented workers are often paid in cash in restaurants and on construction sites. There is truly no place to hide. Other countries are already well ahead in the war of cash. In Belgium, some 93% of all financial transactions take place electronically. Sweden has also been pushing hard on this front, taking the M1 money supply there down by 27% over the past two years. Many small businesses there now post signs saying they don’t accept cash to prevent the spread of Covid-19. The goal is to move to an all-electronic economy. The preferences of Millennials are also moving us towards the cashless economy. Have you ever been in line at Starbucks and noticed that the kid in front of you just paid $5 for a cup of coffee with his credit card? Or maybe he swiped his Apple Pay account on his iPhone? The last time I handed them a ten-dollar bill they said, “Oh, dinosaur money.” Whatever that means, it is clear that hard cash is about to become extinct, just like the Brontosaurus and the Tyrannosaurus Rex. ​ [h=3]Before[/h] ​ [h=3]After[/h] [h=2] [/h] ​ ​

​ TestimonialThe confidence you have given me to enter the USD:JPY spot positions have returned me in excess of $1,500,000 in the last few weeks. I'll be in California next year. Can't wait to catch up. Dinner is on me, both times! I know you said you aren’t retiring until you’re well into your seventies. Why so soon? You're welcome to use this as a testimonial. Cheers! Peter, Australia ​ ​

Quote of the Day"Sometimes we stare so long at a door that is closing that we see too late the one that is open," said Alexander Graham Bell, inventor of the telephone.

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[Bozzie]

	Read in Browser
Top News Fed meeting finesse Shutterstock​ The Federal Reserve takes center stage, but the decision could well be a dud for a market that's been hyping up big macro events lately. This is certainly the most important FOMC meeting since, well, the last FOMC meeting. But if Chairman Jay Powell and company avoid taper talk and keep rate forecasts steady, Wall Street could shrug it off, like recent jobs and inflation reports. While nobody expects a rate hike when the statement arrives, there's plenty for the FOMC to try and finesse in its statement and for Powell to address at his Q&A. The "Fed has to navigate desire to taper asset purchases through land mines of uncertainties about the economy and the risks posed by variants, debt ceiling politics, China & inflation," Diane Swonk, chief economist at Grant Thornton, tweeted yesterday. Stock index futures are higher after dip-buying faded yesterday and the broader market closed lower again. The 10-year Treasury yield is up 1 basis point to 1.33%. There is some speculation that the recent market selloff, with the S&P looking at its worst monthly performance in a year, could make Fed members gun-shy about a hawkish tilt. But Renaissance Macro Research says the current selloff is "not even close to having the Fed shift course." The "S&P 500 (SP500) (NYSEARCA:SPY) is basically flat since the Fed’s July 28 confab," RenMac tweets. "When we think about the last few times China was the source of the concern 2015/2016, the US equity decline was far more pronounced." Asset purchase tapering: Calls for the Fed to trim its $120B per month in asset purchases are growing as inflation heats up. But the consensus is that there will be no official announcement today. Two-thirds of 52 economists surveyed by Bloomberg expect a November announcement, with more than half expecting the Fed to start the taper in December. Still, Powell has been adamant he will give ample notice for any moves. The August jobs report gave "the doves on the Federal Reserve’s board, essentially where we think the Chair resides today, some fodder for postponing a tapering of the QE asset purchase program, though we think this would be a mistake," BlackRock's Rick Rieder writes. "Yet, we do believe that we will learn more details in September from the FOMC meeting, relative to what the Fed’s schedule for tapering will be." A change in the wording of the statement may be where the market gets that signal. "If the Fed signals any change, expect different language in the third paragraph of its statement, where the committee may update the risk to the outlook as balanced, which may signal tapering before the end of the year," economist Joseph Brusuelas writes in his Real Economy Blog. "In 2013, before its previous round of tapering, the Fed used its statement to signal coming policy action, so it may choose to take that approach this week." Mohamed El-Erian says the Fed needs to act as the window to tapering is closing. Dissecting the dot plot: The latest dot plot chart of Fed member interest rate projections, which caused a stir last time, will also be closely watched, much to the chagrin of Powell. The "sole purpose" of the "fabled dot plot ... is to increase confusion and misunderstanding in financial markets," UBS Chief Economist Paul Donovan writes. The dot plot is meant to illustrate where individual members see rates going, but not where they will or necessarily want them to go and the Fed chief has said it is not a great forecaster. But if three members raise their 2022 dots, the new median will be for a quarter-point hike that year, and Wall Street banks have been aggressively marketing short-term interest rate derivatives that would pay off with tightening pulled forward, Bloomberg reports. "Watch the dots - likely will see initial rate hike pulled into 2022 with more in 2023," Kathy Jones, chief fixed income strategist for Schwab, tweets. "Look out for (jobless) projections - (that) will indicate what Fed sees as 'full employment.'" Ethics questions: Beyond monetary policy, Powell may face some difficult questions about the recent controversy of the asset portfolios of Fed governors. Dallas Fed President Robert Kaplan's trading in individual stocks last year, including several megacaps that tend to benefit from lower interest rates, prompted the Fed chairman to open an ethics review. And Powell and two other Fed members owned securities that the central bank was buying last year. (8 comments) Energy Permian purchase ConocoPhillips (NYSE:COP) will become the second-largest oil and gas producer in the Lower 48 U.S. states following its $9.5B acquisition of Shell's assets in the Permian Basin, as the pecking order is reshuffled among top U.S. shale drillers. Adding an estimated 200K boe/day will put Conoco within striking distance of leader Exxon Mobil (NYSE:XOM), which is expected to produce about 1M boe/day from the Lower 48 this year. Conoco's deal will propel it past Chevron (NYSE:CVX), EQT Corp. (NYSE:EQT), Occidental Petroleum (NYSE:OXY) and EOG Resources (NYSE:EOG), according to consulting firm Rystad Energy. (20 comments) Consumer Cashing in on shorts AMC Entertainment (NYSE:AMC) and Blackstone (NYSE:BX) top the list of stocks that short sellers might be tempted to cash in on. S3 Partners' Ihor Dusaniwsky breaks down the one-day return for stocks with a short interest level of over $1B as he factors in the gains on a percentage basis. The mark-to-market gains are seen making those stocks more likely to be cashed in by short sellers. (29 comments) Sponsored By VantagePoint Educate Yourself, Beat Wall Street Hardworking retail investors are finally being looked at as a major force in the market. They are beating the billionaires and hedge fund elites and it feels good. We are on the right side of this radical shift…and we make it our duty to help traders continue to grow their portfolio successfully. That’s why we made our live masterclass “Find the Next Big Stock Movers Using A.I.” available for FREE for anyone who wants it. Click here to secure your seat.Room will automatically close at 200 guests. You will be shown a free A.I. forecast to see what’s next for the markets. Keep your investments safe and your trades profitable. Knowledge is power! Earnings Adobe earnings Adobe (NASDAQ:ADBE) fell in extended-hours trading after it reported fiscal third-quarter earnings where it beat consensus on top and bottom lines and guided above expectations for the current quarter. Revenue rose 22% to a record $3.94 billion, with gains spread broadly. Gross profit jumped to $3.47 billion from $2.8B, a year ago. Non-GAAP operating income came to $1.81 billion. (25 comments) IPOs Toast IPO Toast (NYSE:TOST), a restaurant-specific software platform priced its IPO of 21.7M common shares at $40/share, significantly above its expected range of $34-$36, upped from the previous price of $30-$33. The company will raise $869.6M for a valuation of about $20B. Shares are set to begin trading Wednesday on NYSE. Founded in 2011, Toast makes software for restaurants to manage functions like business operations, online ordering and delivery, and integrated payments. (1 comment) Trending Evergrande interest payments Bloomberg reports that Hengda Real Estate - the main unit of troubled Chinese property developer Evergrande - will make its Thursday bond coupon payment. This hardly means Evergrande is out of the woods. Indeed, a restructuring at some point still remains likely. But a disorderly unwind seems off the table at the moment. (68 comments) ​ Today's Markets In Asia, Japan -0.67%. Hong Kong Closed. China +0.4%. India -0.13%. In Europe, at midday, London +1.17%. Paris +1.10%. Frankfurt +0.58%. Futures at 6:20, Dow +0.59%. S&P +0.55%. Nasdaq +0.34%. Crude +1.59% at $71.61. Gold +0.1% at $1775. Bitcoin -3.1% at $42103. Ten-year Treasury Yield +1.2 bps to 1.336% Today's Economic Calendar 7:00 MBA Mortgage Applications 10:00 Existing Home Sales 10:30 EIA Petroleum Inventories 11:30 Results of $26B, 2-Year FRN Auction 2:00 PM FOMC Announcement 2:30 PM Chairman Press Conference Companies reporting earnings today » What else is happening... Morgan Stanley (NYSE:MS) eyes a correction, S&P 500 (SP500) falling as much as 20%. QuantumScape (NYSE:QS) soars after another deal with 'top ten' automaker. Freshworks (FRSH) prices 28.5M-share IPOabove range at $36. U.S. nat gas (NG1:COM) slides to two-week low on more bearish weather outlook. Facebook (NASDAQ:FB) debuts new portable Portal video device. AT&T's (NYSE:T) Stankey: HBO Max deserved value unlock; Cost cuts one-third complete. DOJ, six states sue American Airlines (NASDAQ:AAL), JetBlue (NASDAQ:JBLU)over alleged anticompetitive partnership. Office REIT stocks make headway after Google's (GOOG, GOOGL) $2.1B office deal reported. Seeking More Seeking Alpha’s Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.​

​

 

[Bozzie]

September 23, 2021

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Built on shaky financial foundations.Aly Song/Reuters

[h=2]The Evergrande trade[/h]

Fears of the fallout from Evergrande’s potential collapse faded somewhat as Chinese regulators reportedly instructed the embattled property developer to repay some of its debts and China’s central bank injected money into the country’s financial system. Evergrande’s stock jumped nearly 20 percent today, even as large holders said that they might dump their stakes and doubts swirled around an $83 million interest payment on a dollar bond due today.

Market watchers are assessing the implications of a potential restructuring of Evergrande’s $300 billion in debts. A full-blown bailout is unlikely, analysts say, but Beijing has the means to limit the damage if the company fails. “We believe that Evergrande is an exceptional case that is unlikely to lead to a broader systemic crisis in the property sector,” Houze Song of the Paulson Institute wrote in a recent report.

International investors in Evergrande’s bonds are preparing for turmoil — and in some cases buying more. Evergrande’s debt is in the portfolios of many major investment firms, and some hedge funds have been adding more to their holdings as prices have tumbled. A group of bondholders has tapped restructuring advisers at Kirkland & Ellis and at Moelis. For its part, Evergrande has hired the firms Houlihan Lokey and Hong Kong Admiralty Harbour Capital. How might the negotiations play out?

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U.S. institutional investors are largely invested in Evergrande’s offshore bonds, which are worth a relatively small portion of the company’s overall debt. Those securities are linked to various private and public companies separate from Evergrande’s property business, such as an electric-vehicle division. The units could still have value even if the real-estate business defaults, and bonds issued by Evergrande’s Cayman Islands-based units are governed by different rules than the debt issued in mainland China.

Beijing’s intentions are unclear, especially when it comes to prioritizing debt holders at home and abroad. In the bankruptcy of Dubai World, in which confidence in a country’s financial system was similarly wrapped up in a single company, the company managed to pay back its creditors. But Dubai is a big borrower that relies on international credit markets, quite unlike China, which has recently discouraged local companies from listing abroad, among related measures. Despite all the uncertainty, with prices on some of Evergrande’s offshore dollar bonds that mature within months trading below 30 cents on the dollar, bargain hunters with a big appetite for risk see a bet worth taking.

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[h=3]HERE’S WHAT’S HAPPENING[/h]

Boosters for some, but not for all. The F.D.A. approved an extra dose of the Pfizer-BioNTech coronavirus shot for people 65 and older and for those at risk of becoming severely ill from Covid. Separately, President Biden said that the U.S. would purchase 500 million more doses of the Pfizer vaccine to donate abroad.

Facebook’s chief technology officer is leaving. In a rare change to the company’s top ranks, Mike Schroepfer will departas the tech giant faces scrutiny for issues as varied as toxic speech, misinformation and privacy.

Lawmakers take aim at key SPAC sponsors. Senator Elizabeth Warren and other Democrats sent letters to serial backers of blank-check investment vehicles, including Michael Klein and Chamath Palihapitiya, expressing concern about “misaligned incentives.” They asked the financiers to respond to a list of questions about how their SPACs work by Oct. 8.

The next U.S. comptroller of the currency could be a Bitcoin skeptic. President Biden is reportedly set to nominate Saule Omarova, a law professor who has criticized cryptocurrencies and said that regulators (like the office of the comptroller) should oversee fintech firms as closely as banks.

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The White House moves to limit a major driver of climate change. The E.P.A. is expected to announce today a rule that would reduce the use of hydrofluorocarbons, or HFCs, which are widely used in air-conditioners and refrigerators. Experts said that the change would be a major step in cutting the country’s greenhouse gas emissions.

[h=2]For the Fed, is now the time?[/h]

The Federal Reserve said yesterday that it could soon slow the large-scale bond purchases that have propped up the economy during the pandemic. “It’s time for us to begin to taper them,” Jay Powell, the Fed chair, said. With that end in sight, DealBook asked some experts whether it was the right time to pull the plug on the extra support.

Adam Posen, the president of the Peterson Institute for International Economics and a former top adviser to the Bank of England, said that before the pandemic, Powell promised he would allow inflation to rise to make the economy more inclusive. Now, the Fed has reverted to worrying about inflation when millions are still out of work and price increases are the result of supply-chain problems, Posen said. “If inflation comes in higher than expected, the Fed is going to tighten faster than it should want, and that is a mistake,” he said.

Vincent Deluard, the global macro strategist at StoneX, said that the Fed’s pledge to get the official unemployment rate back down to where it was before the pandemic had led it to take too long to taper. “The idea that we are going back to something where people are as tied to a full-time employer as they were before is probably something that is impossible to achieve,” he said. Robert Eisenbeis, a former top Fed staffer who is now the chief monetary strategist for Cumberland Advisors, is critical of the ambiguity around the Fed’s plan, which could stoke market volatility. Powell said that a specific timeline for tapering had not been set, and that at least one more month of solid job growth was necessary. “Powell has said the Fed has a ‘wonderful framework for communication,’” Eisenbeis said. “It’s garbage.”

[h=2]Seen and heard[/h]

► “There just came a point where I didn’t know what to believe about Theranos anymore.”

— The former Theranos director Jim Mattis, giving testimony at the trial of Elizabeth Holmes. The retired four-star general and former defense secretary said that he had been misled by the claims made by Holmes, the founder of Theranos.

► “It’s clear that you think AMC should accept Dogecoin. Now we need to figure out how to do that. Stay tuned!”

— Adam Aron, the C.E.O. of AMC Entertainment, the theater chain and meme-stock darling, after conducting a poll on Twitter.

► “The hard-working warehouse employees who have helped sustain us during these unprecedented times should not have to risk injury or face punishment as a result of exploitative quotas.”

— Gov. Gavin Newsom of California, who signed a bill yesterday that restricts warehouse operators from setting certain productivity quotas, which could alter Amazon’s labor practices. Business groups said that it would lead to litigation and supply-chain disruptions.

[h=2]Toast’s I.P.O. pops up[/h]

Shares of Toast, a company that makes technology for restaurants, jumped more than 50 percent yesterday in its first day of trading. It closed the day with a market capitalization of more than $30 billion, up from an $8 billion private valuation in November. DealBook spoke with Chris Comparato, Toast’s C.E.O., about the company’s debut — and about what’s in store.

“We had a great roadshow, there was a ton of investor interest,” Comparato said. The company priced its I.P.O. above an already raised target range, giving it a market cap of $20 billion going into the start of trading yesterday. “We felt like we priced where the business was valued,” Comparato said. “At that point, we said, ‘Pens down.’”

Toast had to lay off about half of its staff early in the pandemic as restaurants closed during lockdowns. But helping restaurants adapt to delivery and takeout orders — what Comparato calls “an omnichannel, off-premise experience” — has become a boon for Toast, which brought in $703 million in revenue in the first half of 2021, more than in all of 2019.

[h=2]A look inside Robinhood during meme-stock mania[/h]

The trading app Robinhood has grown explosively, gone publicand, for good measure, is now getting into crypto wallets. But internal exchanges between company managers revealed in a new legal filing — featuring Robinhood’s C.E.O., Vlad Tenev — highlight the tensions between fast growth and consumer protection.

A class-action lawsuit brought by Robinhood users alleges that the company was negligent during a period of extreme market volatility in late January, knowing it had insufficient capital to handle all the trading by new and existing users. That ultimately led the company to impose limits on trading in meme stocks like GameStop and AMC, the subject of subsequent congressional hearings.

Here’s a glimpse inside Robinhood in the days before it limited trading in meme stocks:

Jan. 23: As Robinhood discussed how to manage the risks of the frenzied trading in GameStop, a company insider wrote that “the process outlined above covers firm risk well, but from a public perception POV, we may want to consider the risks our customers face. Is there a comms need or other action we should consider?”

Jan. 25: Company engineers and executives chatted about surging trading volumes. “There are internal things that are starting to buckle under pressure,” a software engineer wrote. An engineering executive noted that a “code yellow” could be declared, putting all other work at the company on hold. “Only the paranoid survive,” Tenev responded. “One who panics first panics best,” added the company’s head of data science. “Joy,” said Tenev.

Jan. 28: Robinhood limits trading in meme stocks during the peak of the short squeeze, facing inquiries from the National Securities Clearing Corporation about whether it had enough capital to cover the trading risk. In an internal chat, Robinhood’s chief operating officer, David Dusseault, wrote that the company was “to [sic] big for them to actually shut us down.”

Maurice Pessah, attorney for the plaintiffs, said that the communications showed that Robinhood executives had been willing to put investors and markets at risk to advance their own interests. In a statement, a Robinhood spokeswoman told DealBook that the company stood by its decisions and that “communications cited by the plaintiffs are entirely consistent with Robinhood’s communications and actions on Jan. 28.”

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

Deals

Veritas Capital and Elliott Management, the owners of Athenahealth, are reportedly considering a sale or I.P.O. that could value the health tech firm at more than $20 billion. (Bloomberg) The trading platform eToro delayed to the fourth quarter its plan to list via a SPAC merger. (CoinDesk) Deutsche Bank’s C.F.O., James von Moltke, said that the banking industry in Europe needed to prepare for more consolidation. (Reuters)

Policy

The E.U. unveiled a plan to require a standard charging port for all smartphones, tablets and other devices sold in the bloc. (NYT) “It’s Not Really a ‘$3.5 Trillion’ Bill” (Times Opinion) The wealthiest 400 households in the U.S. pay an effective federal income tax rate of just over 8 percent, White House economists say. (NYT)

Best of the rest

Automakers will lose out on more than $200 billion in sales because of the global chip shortage. (Bloomberg) Apple is not letting Fortnite back on the App Store until the verdict in its court case with Epic Games is final. (WaPo) Male C.E.O.s with “manly” voices get paid more, a study shows. (Quartz)

Anna Schaverien contributed reporting.

Thanks for reading! We’ll see you tomorrow.

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

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

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Stephen Gandel, News Editor, New York @stephengandel

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 September 23, 2021 Fiat Lux Featured Trade: (THE MAD HEDGE TRADERS & INVESTORS SUMMIT VIDEOS ARE UP!) (WHY WARREN BUFFET HATES GOLD), (GLD), (GDX), (ABX), (GOLD)

​ The Mad Hedge Summit Videos are UpThe Mad Hedge Summit videos are up from the September 14-16 confab. Listen to 27 speakers opine on the best strategies, tactics, and instruments to use in these volatile markets. It is a true smorgasbord of investment strategies. Find the best one to suit your own goals. The product discounts offered last week are still valid. Start, stop, and pause the videos at your leisure. Best of all, access to the videos is FREE. Access them all by clicking here at www.madhedge.com, click on CURRENT SUMMIT REPLAYS in the upper right-hand corner, and then chose the speaker of your choice. ​ ​ ​

​ Why Warren Buffet Hates GoldThose in the investment business are well used to the Armageddon crowd. These are the guys who are perennially predicting the collapse of the dollar, the default of the US government, hyperinflation, and the end of the world. Maybe after 11 years of rising, stocks are finally expensive on a relative basis? Their perennial recommendations are to keep all your assets in gold and silver, store at least a year’s worth of canned food, and keep your untraceable guns well-oiled and supplied with ammo, preferably in high capacity magazines. If you followed their advice, you lost your shirt. I have broken many of these wayward acolytes of their money-losing habits. But not all of them. There seems to be an endless supply emanating from the hinterlands. The “Oracle of Omaha” Warren Buffet often goes to great lengths to explain why he despises the yellow metal. The sage doesn't really care about the gold, whatever the price. He sees it primarily as a bet on fear. I imagine he feels the same about Bitcoin, the modern tulips of our age. If investors are more afraid in a year than they are today, then you make money on gold. If they aren't, then you lose money. The only problem now is that fear ain’t working. If you took all the gold in the world, it would form a cube 67 feet on a side, worth $5 trillion. For that same amount of money, you could own other assets with far greater productive earning power, including: *All the farmland in the US, about 1 billion acres, which is worth $2.5 trillion. *Two Apple’s (AAPL), the largest capitalized company in the world at $2.1 trillion. Instead of producing any income or dividends, gold just sits there and shines, making you feel like King Midas. I don't know. With the stock market at an all-time high, and oil trading at $70.49/barrel, a bet on fear looks pretty good to me right now. I'm still sticking with my long-term forecast of the old inflation-adjusted high of $2,300/ounce. But it might be very long term. It is just a matter of time before emerging market central bank buying pushes it up there. And who knows? Fear might make a comeback too. ​ ​ ​ ​ ​

Quote of the Day“Every recession sows the seeds for the next business recovery, and every recovery sows the seeds of the next recession,” said hedge fund manager Leon Cooperman of Omega Advisors.

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]

September 24, 2021

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Behind closed doors, the Treasury Department is devising new crypto rules.Stefani Reynolds for The New York Times

[h=2]Making the case for stablecoins[/h]

Financial regulators are racing to regulate stablecoins. These digital currencies pegged to a stable asset like the dollar are used in crypto trading, banking and decentralized finance, addressing the problem of price volatility that plagues Bitcoin and others. Stablecoins have become an important bridge between digital currencies and the traditional financial system.

But despite their name, stablecoins may be shaky. The urgency among regulators to rein in the industry has, in turn, generated a flurry of crypto industry lobbying all over Washington, Eric Lipton, Jeanna Smialek and DealBook’s Ephrat Livni report.

From boom to bank run? In their short history, lightly regulated stablecoin issuers have shown that they don’t always have the cash reserves they claim. Tether, the company behind the most popular stablecoin, settled an investigation by the New York attorney general this year that alleged that it had obscured what it held in reserve. Officials fear a digital-era bank run may loom if new rules aren’t created soon for the booming stablecoin sector.

“Regulators really start to care more when risks get greater for society,” said Jeremy Allaire, the C.E.O. of Circle, a payments and digital currency company that helped create the fast-growing stablecoin USD Coin with the crypto exchange Coinbase. Collectively, dollar-tied stablecoins have jumped from $30 billion in circulation in January to about $125 billion as of mid-September.

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Executives are pushing their perspectives. Ahead of a Treasury Department report on stablecoins expected this fall, crypto businesses have in recent weeks held dozens of meetings with cabinet members, White House staff members, federal lawmakers and financial regulators. Tight regulations could drive innovation abroad, hamper financial inclusion, risk the dollar’s primacy and kill the promise of digital finance, the industry argues. And each company is advancing a view on regulation that, if embraced, would put them ahead of the competition.

“If we think back on the 20th century, first you had key innovations like aviation or automobiles,” said Tomicah Tillemann, a onetime aide to Joe Biden when Mr. Biden was a senator but who now works for Andreessen Horowitz, the venture capital firm that’s a major crypto investor. “And then you have investments in regulatory frameworks that helped to bring the benefits of those technologies to larger numbers of people.”

In other crypto news, government agencies in China today reiterated that all cryptocurrency-related activities are illegalin the country, vowing harsher crackdowns. Prices are falling.

[h=3]HERE’S WHAT’S HAPPENING[/h]

A government cash crunch is weeks away. In a report today, the Bipartisan Policy Center said that the U.S. government could run out of cash and start missing payments on things like Social Security checks as soon as Oct. 15, but no later than Nov. 4. The White House has started to advise federal agencies to prepare for the first government shutdown since 2019.

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Workers in risky jobs can also get a coronavirus booster shot, the C.D.C. director says. Dr. Rochelle Walensky overruled her agency’s advice by recommending an additional Pfizer vaccine dose for health care workers, teachers and others whose jobs put them at increased risk. The agency had recommended boosters only for people over 65 and those with underlying medical conditions.

New York City sets new rules for delivery workers. The first-of-its-kind legislation requires app-based delivery companies like Grubhub to disclose their tipping policies, gives delivery workers more control over where they work and requires restaurant owners to make bathrooms available to delivery workers.

The S.E.C. flexes its muscles on market abuse. The commission in the past week has charged 14 individuals, across eight different cases, of multimillion-dollar frauds. Yesterday, a former Oppenheimer Funds trader was charged with placing more than 3,000 illegal trades, generating $8.5 million in gains, in a “front running” scheme.

Delta Air Lines calls for a national “no fly” list of unruly passengers. The company said in a memo to other airlines that it had banned 1,600 people, and it called for carriers to combine their internal lists. A congressional panel yesterday heard that the F.A.A. had logged 4,284 “unruly passenger reports” since January, with about three-quarters related to mask wearing.

Continue reading the main story

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[h=2]What’s going on at Evergrande?[/h]

Evergrande, the beleaguered Chinese property developer, left investors wondering yesterday about the fate of an $83 million interest payment due on a dollar-denominated bond. One bondholder told DealBook they had not been paid, but the covenants provide a 30-day grace period before a default.

Shares of Evergrande dropped more than 10 percent today, but they are still up on recent lows. Global markets are also giving back some, but not all, of their recent gains. How worried should investors be about Evergrande’s potential collapse? Here’s a refresher on where we are and what might happen next.

How did Evergrande get so big? The company’s billionaire founder, Xu Jiayin, is affiliated with the Chinese Communist Party, most likely giving creditors more confidence to keep lending money as Evergrande rode the country’s epic property boom. Eventually, though, Evergrande amassed more debt — some $300 billion — than it could seemingly pay back. Now, Chinese regulators are cracking down on the aggressive borrowing habits of developers as China’s property market cools.

Could its troubles hurt the Chinese economy? A messy restructuring or default could hit confidence, drag down property prices and dent household wealth. It could also make it harder for other Chinese companies to finance their businesses with foreign investments. Avoiding that fate and containing the fallout could force China to backstop Evergrande, directly or indirectly.

How exposed are international investors? Ralph Hamers, the C.E.O. of UBS, said Evergrande’s troubles had “not been keeping me up at night.” (UBS is an Evergrande bondholder, but the bank’s direct exposure is “immaterial,” Hamers said.) Noel Quinn, the C.E.O. of HSBC, also an Evergrande bondholder, said the situation was “concerning” but that the bank hadn’t changed its approach to commercial real estate in China. On Wednesday, the Fed chair, Jay Powell, described Evergrande’s troubles as “particular to China.”

[h=2]“The name of the game for these old guys is to show they are like her.”[/h]

— The Times’s Christopher Schuetze on how the two leading candidates to become Germany’s next chancellor, Armin Laschet and Olaf Scholz, have pitched themselves to voters ahead of Sunday’s election. Angela Merkel is stepping down after 16 years, and much is at stake for the next leader of Europe’s largest economy. Listen to “The Daily” for more on Germany after Merkel, and here’s what else you need to know about the vote.

[h=2]A push to keep annual meetings virtual[/h]

Last year, roughly 2,000 public companies in the U.S. held their annual shareholders meetings virtually, according to Broadridge Financial Solutions. That was up from about 300 in 2019. Now, a group of shareholder activists are pushing companies to keep those meetings virtual, or add a remote option, permanently. They are having some success.

This week, the S.E.C. ruled that two companies, Brinker International and Campbell Soup, had to allow a shareholder vote on whether the remote option for meetings would continue. The companies had asked the S.E.C. to allow them to exclude the proposals at their upcoming meetings. After the ruling, Brinker decided to make its meeting open to remote attendees. Campbell will hold a vote on the matter at its next meeting.

Shareholder meetings have traditionally been in-person affairs. Companies generally prefer that format because it limits attendees — and with it questions board members might face. Shareholder advocates have long said that virtual meetings level the playing field for smaller investors who might not have the resources to travel to a meeting.

Virtual meetings “fundamentally change the scope of shareholder engagement and accessibility,” Matthew Prescott, a shareholder advocate and senior director at the Humane Society, told DealBook. His group sponsored the proposals about virtual meetings at Brinker and Campbell.

Shareholders have long had the ability to vote remotely before a meeting. A study this year found that meetings held virtually didn’t tend to generate more shareholder engagement than in-person meetings. “These shareholder proposals will not garner any meaningful support,” said Douglas Chia, a corporate governance expert and the author of the study.

Harper​

[h=2]Weekend reading: Maximum resiliency[/h]

The pandemic hasn’t changed everything about how we live and work, but it has changed a lot. And there is more change to come, argues the former F.D.A. commissioner Dr. Scott Gottlieb in his new book, “Uncontrolled Spread.” DealBook spoke to Dr. Gottlieb, who is a Pfizer board member, about doing business in the new world that Covid is creating. The interview has been edited and condensed.

DealBook: What does the previous pandemic tell us about the future after this one?

Dr. Gottlieb: The 1918 flu pandemic was an inflection point in history. Very clearly, this pandemic has changed the course of history. In terms of culture and society, it’s early to say what the effects will be. But Covid has exposed the vulnerabilities in many aspects of society — essential workers, people with lower incomes, older populations and minorities. We’ll be forced to change.

How will workplaces change?

A workplace needs to be made impervious to viral threats. There are no clear lines demarcating phases, but at some point, Covid will become a persistent threat, like the flu. We need to think about de-densifying spaces, better airflow, changing commutes and businesses voluntarily requiring vaccination.

What about conferences?

Events will have to be moved outdoors and held in specific seasons. Conferences could become more bespoke, and there will be hybrid approaches, both live and virtual.

How else will our thinking change, in the big picture?

We’ll have to look systematically at our entire system of government and business, the way we operate in the world, how we evaluate risks globally and, from that, create a new framework based on a need for preparedness. We will have to think about maximum resiliency versus maximum efficiency, taking a view of public health as a priority — an economic and national security issue.

Want to share The New York Times with your friends and family? Invite them to enjoy unlimited digital access to our journalism with this special offer.

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

Deals

Barry Diller’s IAC is reportedly in talks to buy the magazine publisher Meredith for $2.5 billion. (WSJ) Daimler is teaming up with Stellantis to produce battery cells at new gigafactories in France and Germany. (FT) Vitalize is the latest venture fund to start an angel investing program for non-accredited investors. (Twitter) Gorillas, a European grocery delivery start-up, raised funds at a $3 billion valuation. (The Information)

Policy

New federal flood insurance rules that reflect the real risks of climate change will make the premiums for waterfront homes soar. (NYT) EQT, the largest listed private equity firm in Europe, is being investigated for market abuse in Sweden. (Bloomberg) The F.E.C. rejected complaints about election interference made by Representative Matt Gaetz and former President Donald Trump against Twitter and Snapchat. (Insider)

Best of the rest

The wealth gap between Black and white Americans is so enormous that only reparations can fix it, an economist argues. (NYT) “When You ‘Ask App Not to Track,’ Some iPhone Apps Keep Snooping Anyway.” (WaPo) A memoir from a well-connected businessman in China gives a rare insight into the interplay between money and power in the country. (NYT) Rihanna, the pop star turned fashion mogul, on becoming a billionaire. (NYT)

Anna Schaverien contributed reporting.

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

Stephen Gandel, News Editor, New York @stephengandel

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

Lauren Hirsch, Reporter, New York @LaurenSHirsch

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

 

[CoachCB]

What's your thoughts on GLD?

 

[Bozzie]

What's your thoughts on GLD?

Did you read this today CB?

https://www.cnbc.com/2021/09/24/is-gold-an-inflation-proof-investment.html

I'm in WB's corner

 

[Bozzie]

Global Market Comments September 24, 2021 Fiat Lux Featured Trade: (TESTIMONIAL) (SEPTEMBER 22 BIWEEKLY STRATEGY WEBINAR Q&A), (TLT), (TBT), (V), (AXP), (MA), (FSLR), (SPWR), (USO), (UNG), (PFE), (JNJ), (MRNA), (MS), (JPM), (FCX), (X), (FDX), (GLD), (UPS), (SLV), (AAPL), (VIX), (VXX), (UAL), (DAL), (ALK), (BRK/B), (BABA), (BITCOIN), (ETHEREUM), (YELL)

TestimonialAll my friends tell me that I’m the smartest person they know. All I’m doing is repeating back to them what I read in your newsletter, Thanks for all you do. Tim Lafayette, CA ​ ​

September 22 Biweekly Strategy Webinar Q&ABelow please find subscribers’ Q&A for the September 22 Mad Hedge Fund Trader Global Strategy Webinar broadcast from the safety of Silicon Valley. Q: When’s the United States US Treasury bond fund (TLT) going to go down? A: When J. Powell tapers, which will be either today or in 6 weeks. That's the time frame we’re looking at now, and people are positioning now for the taper—that's why financials are taking off like a rocket. Buy those financials and don't expect too much from your tech stocks for the next few months. Q: What do you think of adding corporate or municipal bonds to my portfolio? A: Don’t do that on pain of death please; you will lose money. Corporate bonds will get slaughtered the second interest rates turn because they have the most exposure from a credit point of view to any downgrades resulting from rising interest rates. Better to keep your money in cash than buy bonds here. It was a great idea 10 years ago, but a terrible idea today. Just buy cash or buy extremely deep-in-the-money LEAPS which will get you a 10-20% per year return. Q: What are the chances that the government defaults? A: Zero, because corporate profits this year will increase from $2 trillion to $10 trillion, spinning off massive tax revenues for the government. The deficit will come down substantially in the future as a result. Keep expecting upwards surprises in profits and taxable revenues. That may be why the (TLT) is staying so high. Q: I need a customized LEAPS on a stock. A: We do those for our concierge customers. If you’re interested, then email Filomena at customer support at support@madhedgefundtrader.com. Q: What brand of shot did you get? A: Pfizer (PFE). Q: The Government is showing no sign of balancing a budget and the hole will only get deeper; what are your thoughts? A: I agree, and that’s why I'm short the (TLT). All we need is a taper to really get some juice under that trade; we really don’t need that much. Ten-year US Treasury yields are now around 1.30% and we only need the yield to get up to about 1.70% for us to make a maximum profit on our positions. One taper hint and it could get us up to those levels. Q: Why is Visa (V) dropping so much? A: Fear of being replaced by Bitcoin. This is the big thing dragging all three credit card companies down, including American Express (AXP) and master Card (MA). That's why I have not added a Visa position among my financials in this go around. Q: How can the Fed unwind their balance sheet and normalize interest rates to a historical average of 4-5%? A: Quite easily: quit buying bonds. They’re still buying $120 billion/month worth. Technology has accelerated with the pandemic and we all know this is highly deflationary. I expect the next peak in interest rates to be only 3% or 3.5%, not the 6% we saw in the last peak in interest rates in the 2000s. So yeah, bonds are going to go down but not back to 2000’s level. Q: Thoughts on the Johnson & Johnson (JNJ) shot? A: No thank you. If you get to choose, Moderna (MRNA) is now producing the best immunity data on a year-to-date basis if you’re starting out from scratch. Some people are mixing, they start out with Pfizer and then get Moderna. They get a worse reaction because the Moderna initial reaction shot sees the Pfizer vaccine as a new virus, so you may get a small flu as a result of that. Q: What is the put spread you’re recommending on the TLT? A: The May 2022 $150-$155 vertical put spread. That is the sweet spot now on the short side on (TLT) LEAPS. You should earn a 115% profit in eight months on this trade if interest rates remain unchanged or fall. Q: Do you expect the ProShares Ultra Short 20 year+ Treasury ETF (TBT) to make it to $20 this year? A: Yes, I do; $16 to $20 isn’t that much of a move. Remember, the (TBT) is a two times short ETF. Q: Are you recommending bank stocks? A: Yes, Morgan Stanley (MS) and JP Morgan (JPM) are two of the best. They will lead the yearend rally starting from here. Q: When do you expect the semiconductor shortage to end? A: End of next year, or maybe even 2023, because what all the analysts keep underestimating is that the end of shortages is based on companies getting the chips they want today. The actual issue is that companies are designing billions of chips into their products at an exponential rate, and what they’ll need in a year from now is far higher than most people realize. The semiconductor shortage is much more structural than people realize—that's my theory. They don’t throw up a $2 billion fab overnight. So, this will keep going on for a while and be a drag on economic growth. Q: Are you sure we won’t see $100 oil (USO)? A: With oil, you're never sure about anything, although I highly doubt it. We’d have to have monster economic growth in China to get oil up to $100 a barrel. Right now, China is going the other way. Q: What’s your view on the debt ceiling? Will it give us a good buying opportunity? A: Probably not, our good buying opportunity was yesterday or Monday. These debt crises are always one minute before midnight solutions. They always get solved. Never underestimate the ability of Congressmen to spend money in their own district. So, I don’t think that would create a stock market crash like it might have done 20 years ago. Q: What about Freeport McMoRan (FCX)? A: It’s taking a dip here because of a possible real estate crash in China, and of course China is the world’s largest buyer of copper for apartment construction. I’m kind of taking a break here on Freeport McMoRan and US Steel (X) until we learn a little more about the China situation. They did move to start a bailout today. Let’s see if that continues. Q: When will the airlines come back? A: They’ll come back when business travel returns, which I think could be next year. If you eliminate the virus completely, these things double easily. That's the bet you’re making. Let’s see if the covid boosters work, the childhood shots work, and then you can take another look at Delta (DAL) and Alaska (ALK). Q: If Bitcoin gains mass adoption, does that put banks out of business just like electric vehicles are making oil obsolete? A: No, not if the banks go into the Bitcoin business. And the banks actually have the cash, resources, and infrastructure to take over the Bitcoin area once the technology matures. And the corollary to that is that the oil industry is that the majors have the infrastructure, the manpower, and the capital to take over the alternative energy business if they choose to do so and oil goes to zero, which it eventually will. The proof of that is the largest investor in all the Silicon Valley energy startups are Saudi Arabian venture capital funds. They’re huge investors in solar here. If Saudi Arabia has a lot of oil, they have even more solar. Believe me, I’ve been there. Q: Will a lack of inventory and rising interest rates end the bidding wars on houses soon? A: Only if you consider 10 years soon. That is how long it will take for the sizes of different generations to come into balance, the Millennials (85 million) versus the Gen Xers (45 million). That’s when the housing bubble will end, but that won’t be for another decade. We still have a structural shortage of new home construction (about 5 million units a year) because all the home builders who went bust in the financial crisis in 2008/2009 and never came back—all of that new construction is still missing. And the surviving ones haven’t increased production to meet that shortfall because they want to manage their risk. Eventually, they will and that probably will be the next top, but that’s really 2030 type business. Q: What about Federal Express (FDX)? A: Labor shortages. It's hitting (UPS), (FDX), the Post Office, and DHL too—all the couriers. Q: When do you think gold (GLD) and silver (SLV) rise back to 2,000? A: I am avoiding gold and silver as long as Bitcoin has buyers. The action in Bitcoin is 10x the movement you get in gold and that’s attracted all the speculative capital in the market, draining all interest from gold, which hit a new six-month low just last week. Q: What’s your buy target for Apple (AAPL)? A: I would say if you can get it at $135, that would be a gift. We did get close to $140 at the lows this week; that’s when you start nibbling, and then you double up again at $135. I doubt Apple is going down more than 10% in this cycle. There are too many people still trying to get into it. And they’re still the largest buyer of stock in the world. They only buy one stock, their own. Q: I never got any IPath Series B S&P 500 VIX Short Term Futures ETN (VXX) alerts. A: That's because we never sent any out. (VIX) has become an incredibly difficult game to play, accumulating positions for months and then trying to get out on a one-day spike that lasts a few minutes. The insiders have too much of a house advantage here, who only play from the short side. There are too many better fish to fry. Q: What about the Apple electric vehicle? A: I’ll believe it when I see it; I've been hearing about this for something like seven years. My guess is that Apple is more likely to supply consoles and parts to other EV makers and help them get into the game with software and so on. I think that will be Apple's role in all of this. Q: How much has China Evergrande Group stock fallen? A: It’s a really illiquid stock in China so we never got involved in it. I think it’s down more than half. Even the professional short-sellers like Jim Chanos and Kyle Bass, have been targeting that stock for 10 years are now screaming they’re vindicated. Of course, they lost fortunes in the meantime. So, I'll pass on that one. Q: What about stop losses on LEAPS trades? A: I don’t really run LEAPS portfolios or issue stop losses. The idea is to run these into expiration, and we’ve never had one expire out of the money, although I may break that record if TLT doesn’t turn around in the next three months. Q: How would autonomous trucking impact rail transportation? A: They’re two totally different things. Trucking companies like Yellow Corporation (YELL) carry smaller cargo for local deliveries or small long-distance deliveries. 7Some 70% of all railroad traffic is coal going to China, and the rest is bulk commodities like wood chips, iron ore, etc. Trucks don’t carry any of that, so they’re totally separate businesses. But, if we went totally autonomous on trucking, it would make all the main trucker companies massively profitable, as they get rid of their drivers. Right now, every trucking company in the US has a driver shortage. Q: United Airlines (UAL) pilots are now ordered to get vaccinated. A: I think within months to hold a job anywhere in the US, you will have to get vaccinated. They do not want you in the office without a vaccination. Jobs are not worth risking lives, and we hit 2,000 deaths again yesterday. The corporations are taking the lead, not the government. The exception will be the politically motivated companies, like the My Pillow Guy; I doubt they'll ever require vaccinations at My Pillow. And there are a few other companies such as Hobby Lobby that are also anti-vaxers. But all public transport companies, hospitals, etc., are going to say get vaccinated or get out—it’s very simple. Q: Should I buy Berkshire (BRKB) here? A: Yes, it’s a great entry point, even if you can't get my price. Go higher in the strikes or go farther out in maturity. Q: Is copper metal (CPER) a buy here? A: Probably long term, but short term will be subject to the whims of the Chinese real estate crisis if there is one. Q: Won’t Natural Gas (UNG) outperform in the power grid since all EVs must be charged? A: Not if the grid is 100% electric. Natural gas still has carbon in it, although only half as much as oil or gasoline. I think even natural gas eventually gets phased out because you can expect solar panels to improve by 80% over the next ten years. At that point, any other energy source won’t be able to compete—oil, natural gas, you name it. And that is why you don’t see any long-term money going into carbon energy sources. Q: Iron ore has just gone from $200 to $100, why are you bullish? A: Yes, Because it has just gone from $200 to $100. Eventually, China recovers, despite a short-term financial and housing crisis. Buy low, sell high—that’s my revolutionary new strategy. Q: What are your thoughts on Bitcoin vs Ethereum? A: I think Ethereum will outperform Bitcoin because it has a more modern technology. It’s only six years old, vs 12 years for Bitcoin. It’s also more efficient, using less energy in its production. In fact, we did get a double in Ethereum in August as opposed to only a 50% move in Bitcoin. Q: Do you have any concerns on holding the financials through earnings in October? A: No, I think the results will be fantastic, and I want to be long going into those. Q: What does the current situation with China mean for Alibaba (BABA)? A: Keep your stocks, you’ve already taken the hit—down 53%. The next surprise is that China quits beating up on capitalism and these things will all recover bigtime. However, any options you may have could expire before that happens. So, keep the stocks, get rid of the options, salvage whatever time value you can, and then wait for China to start doing the right thing. Q: What are the best solar stocks? A: First Solar (FSLR) and SunPower (SPWR), which have both done great. Q: If bonds are a no-no, and governments are getting more indebted than ever, who will buy them? A: Governments. The only buyers of bonds now are non-economic buyers. Those would be governments, central banks, and banks who are required by law to own certain amounts of bonds to meet regulatory capital requirements. No individual in their right mind is buying any bonds here at all, nor is any financial advisor recommending them. To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, then WEBINARS, and all the webinars from the last ten years are there in all their glory. Good Luck and Stay Healthy. John Thomas CEO & Publisher The Diary of a Mad Hedge Fund Trader ​ ​

Quote of the Day?Bull markets go everywhere from 1-2 years to five years after the Fed begins tightening. We've got a long way to go before we have to worry about bonds competing against stocks,? said Professor Jeremy Siegel of the Wharton School of Business

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 Futures trading involves a high degree of risk and may not be suitable for everyone.

​

 

[Bozzie]

Semana Tres NFL entreténimiento.

TAMPA BAY -1
SD+7
ATL / NYG Under 48
Washington / Buffalo Under 46

	Read in Browser
Top News Yield signs Shutterstock​ The markets are no strangers to delayed reactions as investors digest many different influences on a post-pandemic economy. And one arrived in the bond market in earnest yesterday. Treasury yields surged back to levels last seen in the middle of the summer. After taking the Fed's hawkish tilt, telegraphing tapering and pulling forward rate liftoff expectations on the dot plot, pretty much in stride on Wednesday, traders went the other way yesterday. The curve, as measured by the gap between the 2-year Treasury and the 10-year, had flattened after Fed chief Jay Powell's press conference, with the gap narrowing about 4 basis points. Yesterday saw steepening, with the gap jumping more than 10 basis points. It now stands around 117 basis points. The 10-year yield saw its biggest one-day move since February, pushing above 1.4% for the first time since early July. It's seen a ceiling of about 1.8% this year. "Take a step back and just think about how low yields are even relative to where we were in the first quarter of this year," Zachary Griffiths, Wells Fargo macro strategist, told Reuters. "We do have very high inflation, high economic growth forecasts and it's really been kind of hard to justify where yields have been up to this point." The 30-year Treasury yield surged more than 13 basis points for its biggest one-day move since March 2020 when the Fed announced QE round one. (NYSEARCA:TBT)(NASDAQ:TLT) Real yields, the difference between nominal yields and inflation, were a driver of the move, with the 10-year TIPS now at -0.9%. (NYSEARCA:TIP). That puts the 10-year breakeven inflation expectation at 2.33%, around the lowest they've been since the highs in May. LPL Financial's Ryan Detrick says the 10-year yield could break out of its range this week, with today's trading crucial to the weekly chart. It's "on the verge of moving higher," he says. Delayed Reaction: The run-up in yields didn't really start until just before stocks opened on Thursday, underscoring the argument that investors should be wary of Fed-day moves. A lot of short and long positions are unwound in a very short space of time right after the FOMC statement is released. But by the next day, the market began to look at a global landscape where central banks, the ECB excluded, are removing historically high accommodation. "A hawkish Fed meeting, with the dots increasing and the end of QE potentially accelerated, didn’t quite have the ability to move markets but the global dam finally broke yesterday with Norway being the highest profile developed country to raise rates this cycle (expected), but more importantly a Bank of England meeting that saw the market reappraise rate hikes," Deutsche Bank's Paul Reid writes in a note. In addition, as bond prices fell, sell stops were triggered, adding to the technical impact of the move. Stocks holding up: Even with the pressure higher yields puts on megacaps and other stocks with high valuations that have underpinned the stock market, the major averages closed higher thanks to reflation plays. The S&P 500 (SP500)(NYSEARCA:SPY) is now in positive territory for the week and closed above its 50-day moving average, providing some support for today's trading. Equity investors appear to be looking at the Fed moves as a sign of confidence in the recovery and a commitment to combat inflation. “While we are far from the end of QE and near-zero rates, the tide seems to be beginning to change," Anu Gaggar, global investment strategist at Commonwealth Financial Network, told Bloomberg. "So far, the market had welcomed bad news as good news, but a market reacting to signs of an economy able to stand on its own without the monetary policy crutches is a refreshing change.” (2 comments) Earnings NIKE trips NIKE (NYSE:NKE) shares are down premarket after the company's fifth consecutive earnings beat. Revenue for the quarter ended Aug 31, 2021, was slightly below expectations at $12.2B (+16% Y/Y), missing by $220M, and down $100M sequentially due to global supply chain issues and the Vietnam lockdown. The company reports that its owned physical retail stores have surpassed pre-pandemic levels, growing 24% Y/Y. Digital sales were up 25%, led by a 43% increase in North America. Gross margin expanded 170 bps from last year and 70 bps from the prior quarter to 46.5%, driven by NIKE Direct business margin expansion and fewer promotions, offset by higher freight costs. (13 comments) Tech iFootball The NFL is leaning toward Apple (NASDAQ:AAPL) as the new home for the premium Sunday Ticket programming package, The Athletic reports. That's a report contrary to conventional wisdom, which points to Amazon.com (NASDAQ:AMZN) putting in a strong bid for the out-of-market games, or ESPN (NYSE:DIS) taking it on. And that may be due to changes the league might like to see from the traditional one-price, all-the-games menu. Apple is reportedly considering allowing fans to pay for just one team's out-of-market games - or even individual games a la carte. There's still a while to go in negotiations, but one thing that seems clear is that DIRECTV (recently divested by AT&T (NYSE:T), which maintains an interest) won't keep the Sunday Ticket rights it's held for decades. (80 comments) Industrials China plane demand Boeing (NYSE:BA) slightly raises the 20-year forecast for China's airline market, forecasting the country will need 8,700 new aircraft valued at $1.47T by 2040 to meet rising air travel demand. In its annual commercial market outlook, Boeing notes the Chinese market's resilience during COVID-19 and estimates the market opportunity for commercial aviation services in the region at nearly $1.8T. China's economic fundamentals and a middle-income demographic that is expected to double in two decades underpin the anticipated increase in air travel, Boeing says. (34 comments) Trending Buybacks rebounding "Despite remaining cautious with their buyback expenditures," S&P 500 companies' stock buybacks for Q2 rose 11.6% Q/Q to $198.8B, up 124.3% from the year-ago period, S&P Dow Jones Indices says. Buybacks are 11% off the all-time high of $223B set in Q4 2018. (18 comments) Cryptocurrency China crypto crackdown China's crackdown on cryptos is escalating, with the People's Bank of China taking aim at transactions and Beijing making more moves to curb mining, Bloomberg reports. Bitcoin (BTC-USD) is down 1.7% and Ethereum (ETH-USD) falling 6%. (2 comments) Today's Markets In Asia, Japan +2.1%. Hong Kong -1.5%. China -0.80%. India +0.30%. In Europe, at midday, London -0.16%. Paris -0.72%. Frankfurt -0.51%. Futures at 6:20, Dow -0.11%. S&P -0.23%. Nasdaq -0.40%. Crude +0.31% at $73.53. Gold +0.33% at $1756. Bitcoin +1.4% at $44493. Ten-year Treasury Yield +1 bps to 1.42% Today's Economic Calendar 8:45 Fed's Mester: “Bouncing Back in the Post-Pandemic Economy” 10:00 New Home Sales 10:00 Jerome Powell: “Fed Listens: Perspective on the Pandemic Recovery” 10:00 Fed’s Bowman: “Fed Listens: Perspective on the Pandemic Recovery” 10:00 Fed’s Clarida: “Fed Listens: Perspective on the Pandemic Recovery” 10:00 Fed’s George: U.S. Economic Outlook and Monetary Policy 12:00 PM Fed’s Bostic: “From Policy to Progress: Partnering to Create Equitable Community Development” 1:00 PM Baker-Hughes Rig Count Companies reporting earnings today » What else is happening... Twitter (NYSE:TWTR) to add Bitcoin payments in its mobile app. Costco (NASDAQ:COST) reports double-digit sales growth in all segments. Federal agency calls for more regulation of Texas power grid, natural gas. COVID-19 test maker Cue Health (NASDAQ:HLTH) prices 12.5M-share IPO at $16. Brent crude (CO1:COM) settles near three-year high; WTI (CL1:COM) best since July. HIVE Blockchain Technologies (NASDAQ:HIVE) reports full year results. Seeking More Seeking Alpha’s Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.​

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[Bozzie]

September 25, 2021

Good morning. The construction industry has hundreds of thousands of unfilled jobs — and it is likely to have more if President Biden’s infrastructure bill passes. In today’s newsletter, we examine an often overlooked issue in the industry that may prevent those jobs from getting filled — and ways to solve it.

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

Michael Reynolds/EPA, via Shutterstock

[h=2]To fill jobs, expand the labor pool[/h]

By Patrick Sisson

The Biden administration estimates that if the $1 trillion bipartisan infrastructure bill passes, it could add two million jobs per year over a decade.

But those jobs, mostly in construction, may be difficult to fill in an industry that is already experiencing labor shortages, with 321,000 unfilled jobs in July.

One way some industry leaders see to address the scarcity of skilled workers? Diversify the industry.

Nearly 90 percent of the 10.8 million people employed by the construction industry are white, and just 11 percent are women, according to the Department of Labor. Despite efforts in recent decades to make the industry more inclusive, and some progress, a long history of exclusionary hiring practices and informal recruitment networks has blocked some groups from opportunities.

If the infrastructure bill passes, the industry could be short a million and a half to two million workers by 2025, estimates Boyd Worsham, the president of the National Center for Construction Education and Research. That would create an immediate challenge, but also an opportunity to hire from communities that the industry has ignored.

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“Traditionally, heavy industries have not been diverse,” said Kevin DeGood, director of infrastructure policy at the liberal Center for American Progress. “The benefits for labor should flow to those communities where the work is going to be done and where jobs traditionally haven’t been.”

The Biden administration’s initial infrastructure proposal earmarked $100 billion for new training programs, including $12 billion specifically for workers from underserved communities. (While this funding was cut from the infrastructure bill, President Biden’s $3.5 trillion social policy package does include work force training.) And some industry leaders who are seeking to plug existing talent shortages are already focusing on broadening recruitment.

“We need diversity because it improves the outcome,” Mr. Worsham said. “Different life experiences and different ways of looking at things can apply to the work.”

Initiatives in Maryland, Louisiana, Alabama, Georgia and elsewhere show the promise of focusing on underrepresented groups — for both the construction industry and for local communities.

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In Baltimore, a pre-apprenticeship program called Project JumpStart has trained more than 800 participants, most of them formerly incarcerated, for construction jobs. Local building contractors started the program 15 years ago, when Johns Hopkins University sought to build a biotech campus in a predominantly Black neighborhood and employ residents during construction. It has placed 75 percent of its graduates in jobs.

Mike Henderson, who runs JumpStart and has testified in Congress about its success, said it had been a meaningful way to expand the work force, create middle-class jobs and dispel hurtful stereotypes about his hometown.

“Remember the Freddie Gray riots?” said Mr. Henderson, a chapter president of the Associated Builders and Contractors. “Baltimore was taking an incredible P.R. hit. The narrative was that nobody really wanted to work, that people were happy to protest. We knew that wasn’t true.”

Pushing past stereotypes has also been a driving factor for an Associated Builders and Contractors program that trains prisoners at the Louisiana State Penitentiary, known as Angola, in carpentry and electrical work.

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“When they come out of their incarceration period, they can fully re-enter society, and can better define their own long-term employment prospects,” said the local chapter president, David Helveston. About 1,400 prisoners have completed the program since it started in 2010.

Other programs, such as Power UP in Birmingham, Ala., seek to encourage, educate and place women in construction trades. Kathleen Culhane, president of Nontraditional Employment for Women, or NEW, which has been training women for jobs in construction and other trades since 1978, said the organization’s partners in trade unions now set aside 15 percent of their job slots for NEW graduates. (It was 10 percent about five years ago.)

In the early ’80s, women could show up at a construction site, tools in hand, and wouldn’t be able to find work, Ms. Culhane said. Despite progress, she said, there’s still work to be done, especially in providing access for women of color to these “life-sustaining, family-sustaining careers.” Women still fill just 3 percent of “hands on tools” jobs (as opposed to management and administrative jobs) in the construction industry, according to NEW.

To improve those disparities, other programs target a younger audience, when stereotypes about who can work in construction may be less entrenched. The Construction Education Foundation of Georgia, founded in 1993, shares construction skills and training with around 20,000 students in 175 elementary and secondary schools statewide. In districts that fully adopt the program, students encounter construction education from second grade on, including themed lesson plans in math and science classes, and even apprenticeship programs in high school to help students graduate into the field with a job.

“We’re building bridges between industry and education, and all genders and ethnicities are able to try this out,” said Zach Fields, vice president of the foundation.

Actively opening the construction industry to a broader range of people would increase the pool of recruits, allowing for more opportunities to train them to assume in-demand positions. But it wouldn’t be a silver bullet. Better wages, labor standards and benefits would also help attract more workers to long-term careers in the skilled trades, especially when wages are rising for jobs that require less training.

Andrew Garin, an economics professor at the University of Illinois, said the overall economic data didn’t point to a shortage of workers building infrastructure as much as a shortage of workers at the going rate.

“Sure, I could say there’s a shortage of affordable Ferraris,” he said, adding that policymakers should understand that the industry needs training programs with better incentives.

Mr. DeGood believes that if the final social policy bill does not include money for training, Congress will eventually appropriate more funding. It will become obvious, he said, that you can’t “snap your fingers and create a new labor force.”

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

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Stephen Gandel, News Editor, New York @stephengandel

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

Lauren Hirsch, Reporter, New York @LaurenSHirsch

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

 

[Bozzie]



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Top News Shutterstock​ Stocks flip-flopped between gains and losses Friday to end a volatile week on Wall Street, as investors appeared content to consolidate positions after worries over China Evergrande and a slowing global economy prompted traders to pull $28.6 billion from U.S. equity funds over the first three days of the week, the most since February 2018. But stocks then staged a two-day rally after the Federal Reserve signaled no removal of its easy money policy, at least for now. Tech stocks trailed Friday after a crackdown on bitcoin by China overnight hurt sentiment in the sector, but financial stocks rose as the 10-year U.S. Treasury yield reached its highest since July. For the week, the Dow gained 0.6% and the S&P 500 added 0.5% while the tech-heavy Nasdaq finished flat. Stocks China property crisis The possibility of China property company Evergrande collapsing and overall worries about China's crackdown on indebted firms took a toll on Hong Kong shares. The Hang Seng Index (HSI) fell more than 3% on Monday with China and Japan closed for a holiday. The benchmark index hit an 11-month low, with the index tracking construction and property off more than 6%. Evergrande (OTCPK:EGRNF)(OTCPK:EGRNY) sunk more than 11% and has fallen more than 80% this year as it struggles to meet debt payments. The company has more than $300B in debt and defaulted on an interest payment on a bond later in the week. Sponsored By Yieldstreet The Real Estate Market is Hot. Get Your Piece of the Action. Bidding well above asking price before even inspecting a home is becoming all too popular. Investing in real estate the old fashioned way is pricing out everyday people. Enter Yieldstreet. Yieldstreet is here to help put your savings to work, allowing you to invest in real estate debt and equity without needing to take out a new mortgage. Investment minimums start at $10k, allowing you to leverage the real estate market to generate passive returns. Less than 8.5% of opportunities reviewed this year have passed Yieldstreet’s due diligence process to be offered in the Yieldstreet marketplace. Yieldstreet’s investors have already allocated over $500M in their real estate asset class to date. Here’s The Kicker: Yieldstreet offers target annual yields typically from 7% to 18%, allowing you to shift into leisure mode while your money is positioned to work overtime. Learn more about how Yieldstreet can start your passive income journey today. Energy Permian purchase ConocoPhillips (NYSE:COP) will become the second-largest oil and gas producer in the Lower 48 U.S. states following its $9.5B acquisition of Shell's assets in the Permian Basin, as the pecking order is reshuffled among top U.S. shale drillers. Adding an estimated 200K boe/day will put Conoco within striking distance of leader Exxon Mobil (NYSE:XOM), which is expected to produce about 1M boe/day from the Lower 48 this year. Conoco's deal will propel it past Chevron (NYSE:CVX), EQT Corp. (NYSE:EQT), Occidental Petroleum (NYSE:OXY) and EOG Resources (NYSE:EOG), according to consulting firm Rystad Energy. Central Banking Fed evolution The Federal Reserve avoided a shock to equities in an already weak September, but will investors remain comfortable with the hawkish tilt? As expected from its decision yesterday, members pulled forward rate-hike expectations on the dot plot. And Fed chief Jay Powell telegraphed a tapering announcement at the next meeting in November. Tapering is expected to end around mid-2022 and liftoff could occur after that, although 2023 still seems the most likely timing for the start of rate hikes for now. "What is clear is that inflation is likely to be the determining factor for liftoff and the pace of rate hikes," Deutsche Bank Chief U.S. Economist Matthew Luzzetti writes in a note. "If inflation is at or below the Fed's current forecast next year of 2.3% core PCE, liftoff is likely to come in 2023, consistent with our view. However, if inflation proves to be higher with inflation expectations continuing to rise, the first rate increase could well migrate into 2022." Scott Ruesterholz, portfolio manager at Insight Investment, is expecting a gradual liftoff and notes the Fed "is expecting inflation to run above 2% through 2024 even as they keep rates below their neutral 2.5% estimate." "That shows how committed they are to fostering as strong of a labor market recovery as possible." But was also the discussion and debate about asset purchases and how to communicate a taper within the FOMC and the markets a waste of energy? Consumer Nike and peers fall NIKE (NYSE:NKE) shares fell hard despite the company's fifth consecutive earnings beat. Revenue for the quarter ended Aug 31, 2021, was slightly below expectations at $12.2B (+16% Y/Y), missing by $220M, and down $100M sequentially due to global supply chain issues and the Vietnam lockdown. The company reports that its owned physical retail stores have surpassed pre-pandemic levels, growing 24% Y/Y. Digital sales were up 25%, led by a 43% increase in North America. Gross margin expanded 170 bps from last year and 70 bps from the prior quarter to 46.5%, driven by NIKE Direct business margin expansion and fewer promotions, offset by higher freight costs. Investors reacted to softer guidance than anticipated from Nike and concerns over the impact of inventory all the way into spring from the supply chain disruption. Peers Adidas (OTCQX:ADDYY), Deckers Outdoor (NYSE:DECK) and JD Sports (OTCPK:JDSPY) also fell after the Nike numbers dropped. ​ U.S. Indices Dow +0.6% to 34,798. S&P 500 +0.5% to 4,455. Nasdaq +0.% to 15,048. Russell 2000 +0.8% to 2,254. CBOE Volatility Index -14.7%to 17.75. S&P 500 Sectors Consumer Staples -0.3%. Utilities -1.2%. Financials +2.2%. Telecom -0.7%. Healthcare -0.4%. Industrials +0.8%. Information Technology +1.%. Materials +0.1%. Energy +4.7%. Consumer Discretionary +0.3%. World Indices London +1.3% to 7,051. France +1.% to 6,638. Germany +0.3% to 15,532. Japan -0.8% to 30,249. China 0.% to 3,613. Hong Kong -2.9% to 24,192. India +1.8% to 60,048. Commodities and Bonds Crude Oil WTI +2.8% to $73.98/bbl. Gold -0.1% to $1,750.4/oz. Natural Gas +1.4% to 5.174. Ten-Year Treasury Yield -0.6% to 132.09. Forex and Cryptos EUR/USD -0.05%. USD/JPY +0.71%. GBP/USD -0.49%. Bitcoin -11.8%. Litecoin -15.1%. Ethereum -15.2%. Ripple -11.9%. Top Stock Gainers Zivo Bioscience (NASDAQ:ZIVO) +95%. Marin Software Inc (NASDAQ:MRIN) +80%. Aerocentury Corp (NYSE:ACY) +66%. Medirom Healthcare Technologies Inc ADR (NASDAQ:MRM) +58%. Ensysce Biosciences Inc (NASDAQ:ENSC) +52%. Top Stock Losers Eargo Inc (NASDAQ:EAR) -68%. Innovage Holding Corp (NASDAQ:INNV) -49%. Nuvalent Inc Cl A (NASDAQ:NUVL) -37%. Beyondspring Inc (NASDAQ:BYSI) -33%. China Liberal Education Holdings Ltd (NASDAQ:CLEU) -32%. Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. Seeking More Seeking Alpha’s Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.​

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[Bozzie]

NFL 8-4 on the season 2-2 week three.

September 27, 2021 Continue reading the main story SUPPORTED BY

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How big is Ozy, really?Bryan Bedder/Getty Images for Ozy Fusion Fest 2017

A meeting gone wrong

“As he spoke, however, the man’s voice began to sound strange to the Goldman Sachs team, as though it might have been digitally altered.” That is the eye-opening revelation in a new column by The Times’s Ben Smith about Ozy, a digital media company that has raised tens of millions of dollars from investors like Laurene Powell Jobs, Marc Lasry, Ron Conway, Axel Springer, LionTree, iHeart Media, the Ford Foundation and others.

When Ozy was closing in on a $40 million investment from Goldman Sachs, things got weird. On a conference call that Ozy arranged in February, members of Goldman’s asset management division were expecting to hear from a YouTube executive about the media outlet’s extensive reach on the site. After the strange audio on the call, the Goldman investors reached out to the YouTube executive. He said he wasn’t on the call.

Really weird: It turns out that Samir Rao, the co-founder and C.O.O. of Ozy, was impersonating the YouTube executive on the call, according to four people who were briefed on the meeting. Carlos Watson, the C.E.O. of Ozy, attributed the incident to a mental health crisis. Rao took time off work after the call and is now back at Ozy. (Watson and Rao both once worked for Goldman.)

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Ozy, founded in 2013, has for years raised eyebrows over its claims about its audience size. “Trying to fool the world’s most famous bank, even by the hype-ridden standards of the media business, is way over the line,” Ben writes. Watson told Ben in an email that he understood the skepticism but that Ozy’s growth “has been completely real.”

The security team at Google determined a crime might have been committed and alerted the F.B.I. Goldman Sachs has since received an inquiry from federal law enforcement officials. Watson said that Ozy had not been contacted by investigators.

Investors were split in their reaction. Lasry, a hedge fund manager, said “the board was made aware of the incident, and we fully support the way it was handled.” Darren Walker, the president of the Ford Foundation, which backed Ozy with grants, said he had confidence in the company. A spokeswoman for Powell Jobs’s Emerson Collective distanced the company from Ozy, saying that it did not participate in Ozy’s latest investment round and has not served on its board since 2019.

In April, two months after Goldman Sachs walked away, Ozy raised another round of financing, Ben writes.

Read the full column about Ozy, Goldman and the conference call gone wrong.

HERE’S WHAT’S HAPPENING

Are President Biden’s spending plans doomed? A $3.5 billion spending package and $1 trillion infrastructure bill are in trouble after Democratic lawmakers whose votes are crucial in a narrowly divided Congress, including Senator Kyrsten Sinema and three House members from Texas, expressed opposition to tax increases. Speaker Nancy Pelosi delayed a vote on the $1 trillion bill to Thursday.

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Angela Merkel’s party comes up short in Germany. In yesterday’s election, the center-left Social Democratic Party led by Olaf Scholz won 1.6 percentage points more of the vote than Merkel’s Christian Democratic Party. But with only around 26 percent of the vote, the Social Democrats will have to form a coalition to govern, which could get messy.

Britain struggles with fuel shortages and other supply disruptions. Panic buying led to long lines at gas stations over the weekend, with many saying that they are now out of fuel. An acute shortage of truck drivers is behind fuel and food shortages, leading Prime Minister Boris Johnson to issue thousands of special visas for foreign drivers and to suspend some competition rules.

Google takes on the E.U. in court. A five-day hearing starts today in which the tech giant is challenging a 2018 antitrust fine of more than $5 billion. The European Union said that Google had abused its power in the smartphone market; the penalty was the first in a number of rulings targeting U.S. tech giants in Europe.

Huawei’s long-running sanctions case is resolved. Meng Wanzhou, the Chinese company’s finance chief who had been detained in Canada since 2018, reached a deal with the U.S. Justice Department, allowing her to return to China in exchange for admitting wrongdoing in a fraud case that became symbolic of China and America’s fraying relationship. In return, two Canadians who had been imprisoned in China since Meng’s detention were freed.

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Polestar’s $20 billion SPAC deal

Polestar, the Swedish high-end electric vehicle company, has signed a deal to go public at a $20 billion valuation, via a merger with a SPAC backed by the Gores Group and Guggenheim Capital. Polestar is owned by Volvo Cars and Volvo’s Chinese parent, Geely, with other investors including Leonardo DiCaprio. Polestar’s equity owners will roll over all of their interest in the deal and ultimately retain a 94 percent stake in the company.

Polestar has two models on the road, and it wants to launch three more by 2024. It delivered approximately 10,000 vehicles in 2020, but lags far behind the market leader, Tesla. “Compared to us, Tesla is a very old company,” said Thomas Ingenlath, Polestar’s C.E.O. Rather than spend capital building out electric-charging infrastructure, as Tesla did, Polestar can take advantage of existing infrastructure, he said. (In the U.S., that may still not be enough.)

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Its valuation is conservative — for an electric car company. Lucid, which went public via SPAC in July, is valued at $41 billion. Rivian is expected to be valued at about $70 billion in its coming I.P.O. Tesla is worth nearly $770 billion. “Public markets are a little bit more challenging today, especially for SPACs,” said Mark Stone, the C.E.O. of Gores Group. The deal includes $250 million in financing, which the Gores Group chair, Alec Gores, said can be adjusted as needed, as in the case of redemptions by SPAC shareholders. (In premarket trading, the SPAC’s stock jumped above its I.P.O. price, a rarity among pre-merger SPACs these days.) The deal includes a six-month lockup period.

The deal comes amid heightened tensions between the U.S. and China. Polestar manufactures cars in China but “we are a European company,” Ingenlath said, noting that the company’s headquarters are in Sweden. The SPAC sponsors studied the “China issue” thoroughly, Gores said, adding that Polestar has manufacturing capabilities outside of China, like those it’s building in the U.S., that can be tapped as necessary.

“This is not like neurosurgery where you might want to pay a premium for someone to have years of experience.”

— Sabrina Corlette, a research professor at Georgetown who has studied coronavirus testing practices. Some start-ups charge as much as $380 per test (usually less than $20 at a drugstore). Insurers must pay certain labs whatever price they list online, which has led to court battles and calls for price caps.

The week ahead

► A debt deadline looms: Thursday is the deadline for the Senate to pass a bill that would avert a partial government shutdown the next day. And the government’s borrowing authority could run out as soon as next month. Republicans and Democrats have long sparred over the debt ceiling, but this time the odds are growing that the U.S. could default.

► Evergrande uncertainty: The property developer appeared to miss an $83 million interest payment last Thursday. Markets have steadied amid reassurances from China that it can contain a crisis, but the government’s plan to deal with the fallout for the economy has yet to take shape.

► Consumer confidence: Tomorrow, the Conference Board is set to report its consumer confidence index for September. The results for the previous month showed the index’s sharpest decline since February.

The New York Times​

From the TimesMachine: Thousands of commuters in London’s financial district experienced a moving walkway for the first time on this day in 1960, when a passageway between two subway platforms received an upgrade. The Times reported that plans for a similar conveyor belt system in New York had been abandoned a few years before, dismissed as impractical.

Tracking China’s corporate crackdown

China’s ability to blend top-down control of politics with market-based capitalism was for years seen as a source of strength. That balancing act, though, appears to be teetering. Economic growth is slowing and the country is facing a potential financial crisis in the collapse of Evergrande.

China’s reaction to its challenges is to exert greater control over its largest companies, making it clear who calls the shots in the world’s second-largest economy. This has significant implications for foreign investment, geopolitics and more, as a quick tour of some of Beijing’s recent crackdowns shows:

Cryptocurrency: On Friday, China bolstered its ban on all activity linked to digital currencies, which some saw as part of a broader effort to channel citizens away from private financial services providers, which include popular apps like AliPay and WeChat. The move could also be seen in the context of the Chinese central bank’s development of its own digital currency, which would allow it to track and control transactions.

Technology: China has been turning the screws on its largest tech companies, citing unfair competition. Officials recently limited online game playing to three hours a week for anyone under 18, denting companies like Tencent. Earlier this summer, Chinese officials stopped Didi from signing up new users days after China’s largest ride-sharing app listed its shares in the U.S. The government said it had to do with data privacy, but the timing cast a chill over Chinese companies listing abroad.

Electric vehicle manufacturers: China is putting the brakes on its homegrown electric vehicle industry, which has been fueled by government subsidies. This month, a minister declared that the country had “too many” EV companies.

For-profit education companies: In July, China banned tutoring companies from making profits and restricted foreign investment in the $100 billion sector. It is now estimated to be worth considerably less.

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THE SPEED READ

Deals

Evergrande’s electric vehicle unit pulled plans for a secondary listing in Shanghai after warning of a “serious shortage of funds.” (FT) The Chinese oil company Cnooc is planning a $5.4 billion listing in Shanghai after it was delisted from the NYSE. (Yahoo Finance) A bidding war is breaking out over the German pet food retailer Zooplus. (Bloomberg) SPAC shareholder redemptions are running at more than 50 percent, a sign that the blank-check boom may be turning to bust. (FT)

Policy

If the debt ceiling isn’t raised, the Fed has an emergency playbook that could guide its response. (WSJ) YouTube’s C.E.O. said free speech is a “core value” of the company, in her first comments since the platform removed content in response to pressure from the Russian government. (Bloomberg) Britain’s largest police force is expanding its facial recognition capabilities. (Wired)

Best of the rest

As the North Sea’s oil production wanes, can floating wind turbines offer an alternative? (NYT) “There’s Another Gender Pay Gap: Stock Options.” (WSJ) Orlando, Fla., is making a major effort to become a tech hub. (Insider) Walter Scott Jr., the Omaha businessman who made billions buying utilities with his childhood friend Warren Buffett, died at age 90. (Bloomberg) An obscure tracker of used-car prices has become Wall Street’s leading inflation indicator. (NYT)

Anna Schaverien contributed reporting.

Thanks for reading! We’ll see you tomorrow.

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

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

Jason Karaian, Editor, London @jkaraian

Sarah Kessler, Deputy Editor, Chicago @sarahfkessler

Stephen Gandel, News Editor, New York @stephengandel

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
September 27, 2021
Fiat LuxFeatured Trade:(THE MAD HEDGE SUMMIT VIDEOS ARE UP)
(MARKET OUTLOOK FOR THE WEEK AHEAD, or THE YEAREND RALLY HAS BEGUN),
(DIS), (TLT), (SPY), (GS), (JPM), (BLK), (MS), (BRKB), (GOOG)

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The Mad Hedge Summit Videos are UpThe Mad Hedge Summit videos are up from the September 14-16 confab. Listen to 27 speakers opine on the best strategies, tactics, and instruments to use in these volatile markets. It is a true smorgasbord of investment strategies. Find the best one to suit your own goals.

The product discounts offered last week are still valid. Start, stop, and pause the videos at your leisure. Best of all, access to the videos is FREE. Access them all by clicking here at www.madhedge.com, click on SEPTEMBER 14-16, 2021 REPLAYS in the upper right-hand corner, and then chose the speaker of your choice.

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The Market Outlook for the Week Ahead, or The Yearend Rally has BegunThe calls started coming in as soon as the market closed.

More than a dozen subscribers called, emailed, and texted me on Thursday to say that they just had the best day in the market this year, and for some, their entire lives.

Holding fire until you saw the whites of their eyes worked. I used both visits to the (SPY) to $430 to load the boat with financial stocks, which then took off like a tribe of scalded chimps.

Mad Hedge made 5.6% on that day alone. One Concierge client reported a breathtaking $5.3 million profit after dumping a lot of his techs and piling into banks and brokers. Suffice it to say that I am very welcome in a well-to-do suburb of Seattle, Washington.

The washout was so dramatic and the recovery so rapid I think it is safe to say that our fall correction is over. We may get some small retracements and sideways chop from here. But the writing is on the wall. We are headed to new all-time highs in stocks by the end of 2022.

I received a lot of questions about how easily I was able to spot the bottom so easily. A Volatility Index (VIX) of $29 was a big help. So was the outflow of $34 billion from equity ETFs and mutual funds the previous week, the most in six months. And when the Mad Hedge Market Timing Index hits a rare low of 19, you don’t sit on your hands very long.

The $300 billion China Evergrande Group debt crisis gave us the crisis and the final flush we needed to establish a clear bottom.

Nothing else can stop this. New Covid cases are falling off a cliff, and childhood vaccinations out next month will accelerate this trend.

A massive infrastructure budget will pass in congress. It is almost irrelevant whether it’s a $3.5 trillion or $1.5 trillion. It will be more than can be spent in any reasonable amount of time.

In the meantime, the ultimate driver of share prices, the exponential growth of post covid corporate profits, continues unabated.

The wall of money keeps getting ever larger. The Fed reported that in Q2, Household Net Worth soared by $5.9 trillion is an incredible $141.7 trillion largely through the appreciation of stock and home prices. The Fed balance sheet has exploded from $4.1 trillion to $8.4 trillion in a mere 18 months.

This will continue for another decade. Keep piling on those leveraged long-term LEAPS. Flat is the new down.

Enjoy.

Four to six Interest RatesRises by 2024 which may start as early as 2024, says Fed governor Jay Powell. The taper could start in November. Bonds rose slightly on the news, but the writing is now definitely on the wall. The Fed now expects a stratospheric 5.9% GDP for 2021 and 3.8% for 2022. Sell all rallies in the (TLT) and buy all financial stocks.

Bonds Crash, down -$3.43 points after Jay Powell’s super bearish comments from Wednesday soak in. The 50-day moving average has been smashed and the next target is the 200-day at $1344.59. Watch the 50-day rollover from here on. My final target is a 1.76% yield on the ten-year US Treasury bond by January.

Back up the Truck, it’s time to load up on stocks on the back of yesterday’s 985-point swan dive. You especially want domestic recovery ones that benefit from rising interest rates, like banks, brokers, fund managers, commodities, and steel. The taper may be only weeks away and will drive stocks to new highs by yearend. You wanted a dip to buy, so buy the dip. Don’t expect much from technology stocks for a while.

China’s Largest Real Estate Developer Goes Bust, China Evergrande Group, with $300 billion in debt. The move smashed risk markets globally, opening the Dow Average down 650. Bitcoin plunged 10%. Is this China’s Lehman moment, or just another day at the office? It does take them another step back towards real communism.

China Bans Crypto, triggering a 7% plunge in Bitcoin. Financial systems the government can’t control are forbidden in the Forbidden City. It’s all part of a flight out of a restricted Yuan into unrestricted crypto by wealthy Chinese. China used to account for 99% of all Bitcoin mining and now it is at zero. The business will flock to the US, Canada, and any other country with cheap electricity. It’s a short-term negative for crypto but a long term positive. Buy Bitcoin and Ethereum on the dip.

Pfizer Boosters for over 65 were approved by the FDA for immediate distribution. Those younger will have to wait. It turns out that the Pfizer effectiveness drops from 99% to 66% in eight months. That puts older recipients, like me, at risk. Under 12 kids to come in October. See you at Costco! Buy (PFE) on dips.

Pandemic Tops 1918 US Death Toll at 675,000, although on a per capita basis we are still only a third of the Spanish Flu. We are not even close to this ending yet. We need vaccinations for kids and booster shots for all to be dome with this, getting national immunity up to 90%.

Housing Starts for August up 3.9% with apartment buildings the big driver. Single family homes fell. Building Permits are up 6.0% and are a 50% increase from the summer lows.

Existing Home Sales Drop, by 2% in August to 5.88 million units annualized according to a signed contract basis. Only 1.29 million homes are for sale, a 2.6-month supply, down 13% YOY. The Median Price rose to an eye-popping $356,700, up 14.9% YOY. Million-dollar homes are up 40% YOY.

Google (GOOG) Buys $2.1 Billion in New York Office Space, which is why I love this company. You can forget about those end of New York City stories. Always follow the money, where companies are putting their money, and you will find great stock. Or so the chairman of JP Morgan Bank taught me 40 years ago. Buy (GOOG) on dips.

Weekly Jobless Claims Pop to 351,000 last week, up 16,000. Leading Economic Indicators jump in August, coming in at 0.9%. March saw the high for the year at 1.3%. Getting a lot of noisy and conflicting economic data points this week as delta works its way through the system.

My Ten-Year View

When we come out the other side of pandemic, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With interest rates still at zero, oil cheap, there will be no reason not to. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The American coming out the other side of the pandemic will be far more efficient and profitable than the old. Dow 240,000 here we come!

My Mad Hedge Global Trading Dispatch saw a robust +6.63% gain so far in September. My 2021 year-to-date performance soared to 85.20%.The Dow Average was up 13.60% so far in 2021. September 23 saw my biggest up day of the year, some 5.61%

I held fire until the Dow Average 1,000-point washout, then loaded the boat with financial stocks, writing the trade alerts as fast as I could. That leaves me 70% long financial stocks, 10% in cash, and 20% in short (TLT).

That brings my 12-year total return to 507.75%, some 2.00 times the S&P 500 (SPX) over the same period. My 12-year average annualized return now stands at an unbelievable 43.52%, easily the highest in the industry.

My trailing one-year return popped back to positively eye-popping 117.34%. I truly have to pinch myself when I see numbers like this. I bet many of you are making the biggest money of your long lives.

We need to keep an eye on the number of US Coronavirus cases at 43 million and rising quickly and deaths topping 688,000, which you can findhere.

The coming week will be slow on the data front.

On Monday, September 27 at 8:30 AM, Durable Goods are for August are reported.
On Tuesday, September 28 at 9:00 AM, The S&P Case Shiller National Home Price Index for July is published.
On Wednesday, September 29 at 10:00 AM, we get Pending Home Salesfor August.
On Thursday, September 30 at 8:30 AM, Weekly Jobless Claims are announced. The final report of the Q2 US GDP is disclosed.
On Friday, October 1 at 8:30 AM, we learn Personal Income and Spending for August. The September Nonfarm Payroll Report is not out for another week due to the first day of the month rule. At 2:00 PM, the Baker Hughes Oil Rig Count is disclosed.

As for me, when I first met Andrew Knight, the editor of The Economistmagazine in London 45 years ago, he almost fell off his feet. Andrew was well known in the financial community because his father was a famous WWII Battle of Britain Spitfire pilot from New Zealand.

At 34, he had just been appointed the second youngest editor in the magazine’s 150-year history. I had been reporting from Tokyo for years, filing two stories a week about Japanese banking, finance, and politics.

The Economist shared an office in Tokyo with the Financial Times, and to pay the rent, I had to file an additional two stories a week for them as well. That’s where I saw my first fax machine, which then was as large as a washing machine even though the actual electronics would fit in a notebook. It cost $5,000.

The Economist was the greatest calling card to the establishment one could ever have. Any president, prime minister, CEO, central banker, or war criminal were suddenly available for a one-hour chat about the important affairs of the world.

Some of my biggest catches? Presidents Gerald Ford, Jimmy Carter, Ronald Reagan, George Bush, and Bill Clinton, China’s Zhou Enlai and Deng Xiaoping, Japan’s Emperor Hirohito, terrorist Yasir Arafat, and Teddy Roosevelt’s oldest daughter, Alice Roosevelt Longworth, the first woman to smoke cigarettes in the White House in 1805.

Andrew thought that the quality of my posts was so good that I had to be a retired banker at least 55 years old. We didn’t meet in person until I was invited to work the summer out of the magazine’s St. James Street office tower, just down the street from the palace of Prince Charles.

When he was introduced to a gangly 25-year-old instead, he thought it was a practical joke, which The Economist was famous for. As for me, I was impressed with Andrew’s ironed and creased blue jeans, an unheard-of concept in the Wild West.

The first unusual thing I noticed working in the office was that we were each handed a bottle of whisky, gin, and wine every Friday. That was to keep us in the office working and out of the pub next door, the former embassy of the Republic of Texas from pre-1845. There is still a big white star on the front door.

Andrew told me I had just saved the magazine.

After the first oil shock in 1972, a global recession ensued, and all magazine advertising was cancelled. But because of the shock, it was assumed that heavily oil-dependent Japan would go bankrupt. As a result, the country’s banks were forced to pay a ruinous 2% premium on all international borrowing. These were known as “Japan rates.”

To restore Japan’s reputation and credit rating, the government and the banks launched an advertising campaign unprecedented in modern times. At one point, Japan accounted for 80% of all business advertising worldwide. To attract these ads, the global media was screaming for more Japanese banking stories, and I was the only person in the world writing them.

Not only did I bail out The Economist, I ended up writing for over 50 business publications around the world in every English-speaking country. I was knocking out 60 stories a month, or about two a day. By 26, I became the highest-paid journalist in the Foreign Correspondents’ Club of Japan and a familiar figure in every bank head office in Tokyo.

The Economist was notorious for running practical jokes as real news every April Fool’s Day. In the late 1970s, an April 1 issue once did a full-page survey on a country off the west coast of India called San Serif.
It warned that if the West coast kept eroding, and the East coast continued silting up, the country would eventually run into India, creating serious geopolitical problems.
It wasn’t until someone figured out that the country, the prime minister, and every town on the map was named after a type font that the hoax was uncovered.
This was way back, in the pre-Microsoft Word era, when no one outside the London Typesetter’s Union knew what Times Roman, Calibri, or Mangalmeant.
Andrew is now 82 and I haven’t seen him in yonks. My business editor, the brilliant Peter Martin, died of cancer in 2002 at a very young 54, and the magazine still awards an annual journalism scholarship in his name.
My boss at The Economist Intelligence Unit, which was modelled on Britain’s MI5 spy service, was Marjorie Deane, who was one of the first women to work in business journalism. She passed away in 2008 at 94. Today, her foundation awards an annual internship at the magazine.
When I stopped by the London office a few years ago, I asked if they still handed out the free alcohol on Fridays. A young writer ruefully told me, “No, they don’t do that anymore.”

Good Luck and Good Trading.
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

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Quote of the Day"It is fine to have the longest view in the room, as long as the thing at the end of the vista is a gigantic hill of money," said John Lanchester of The New Yorker magazine.

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
Top News Fed musical chairs Shutterstock​ Two regional Federal Reserve bank presidents are leaving their positions early in the wake of controversy over portfolio holdings. Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan will depart over the next 10 days. Rosengren announced his Sept. 30 departure early Monday, saying he needs a kidney transplant. He was due to retire in June next year and at the time of the statement there was speculation his involvement in the controversy over the portfolios and trading of Fed officials played a part in the decision. Dallas Fed President Robert Kaplan's announcement that he would leave on Oct. 8 confirmed those suspicions as he said specifically he is leaving to eliminate distractions caused by his trading. Kaplan traded millions of dollars in securities last year, including individual high-valuation megacap stocks that benefit from lower interest rates. Rosengren came under scrutiny for securities tied to real estate and securities the Fed bought last year. Neither ran afoul of any of the current Fed rules on holdings and trading. Fed Chairman Jerome Powell has opened an ethics panel over the issue and said at his recent press conference changes to current rules must happen. Powell reportedly also held securities that the Fed bought. Dot plot shuffle: While a rare occurrence, the loss of two regional presidents underscores the dangers of a market trading as though the Fed is a static entity represented by its Summary of Economic Projections rather than a fluid group where minds can change quickly. Along with the plan for asset tapering, the focus of the last FOMC was on the dot plot of rate forecasts that moved market expectations forward to an initial hike in 2022. Now two of those dots are going away. Rosengren and Kaplan are both in the hawkish camp, with Kaplan considered one of most hawkish voices for the Fed in calling for removal of accommodation. Two dovish replacements could quickly shift the dots back to liftoff in 2023. (District presidents are identified through a search committee formed by the respective bank). When it comes to FOMC voting on rates, the rotation was set to bring in three hawkish regional presidents next year: Rosengren, St. Louis President James Bullard and Kansas City Fed President Esther George, as well as hawkish-leaning Cleveland Fed President Loretta Mester. And there could be further shifts in the Fed makeup. Powell's renomination is not secured. Although it looks like the continuity would please the markets, President Joe Biden could ensure more dovish leadership with Lael Brainard (voting members turn dovish in 2023 and Kaplan now won't be part of that class). Vice Chairman Richard Clarida, a centrist, sees his term expire on Jan. 31, and Randal Quarles sees his position as vice chairman of supervision end on Oct. 13, although his term ends in 2032. Markets still see policy on track. While the game of musical chairs is going on, the bond market is still expecting a global move to tightening as yields keep climbing. The 10-year Treasury yield is up 6 basis points to 1.54% this morning. The 5-year yield, most tied to fed funds rate expectations, is setting a new high for 2020, up 3 basis points to 1.03%. The message coming from Fed speakers is still for tapering to start in November and end in the middle of next year. "Fed presidents exist to provide entertaining and extreme comments to the media, and to dissent from policy decisions only when permitted," UBS Chief Economist Paul Donovan writes. "New York Fed President Williams is the Fed president with authority (having a permanent vote on policy). Williams reiterated the market base case of a quantitative policy tightening this year, and pointed out that a US default would be less than ideal. Markets are well aware of both of these views." In what could be seen as an extreme opinion, Chicago Fed President Charles Evans, who loses a voting slot next year, argued yesterday that the Fed may need to see more inflation. (3 comments) Energy Natural gas surge U.S. natural gas prices soared to their highest level in more than seven-and-a-half years, with traders citing contagion fears as gas and other energy shortages sweep Europe and Asia, which is leading to heavier demand for U.S. liquefied natural gas. Front-month gas futures (NG1:COM) for October delivery settled up 11% to $5.706/MMBtu, the highest closing price since February 2014 and the contract's biggest daily percentage gain since this February's Texas freeze. "Spectacular prices around the world are feeding into the sentiment here," Again Capital's John Kilduff tells Reuters, adding that "gas as a commodity is getting repriced" and "now that we've hit these price heights, it will be easy to do it again." (107 comments) IPOs NordicTrack IPO NordicTrack parent iFIT Health & Fitness (IFIT) released details Monday for a planned IPO that could value the firm at up to $6.7B. iFIT said in a revised S-1 filing with the U.S. Securities and Exchange Commission that it plans to offer some 30.8M Class A shares within an $18-$21/share range. It’s also granting underwriters the option to buy as many as roughly 4.6M extra shares for overallotments. Plans call for the stock to list on the Nasdaq under the ticker symbol “IFIT.” (3 comments) Sponsored by SS&C ALPS Advisors Exposure to Master Limited Partnerships with one ETF - AMLP Energy infrastructure master limited partnerships (MLPs) play a vital role in connecting energy production with local and global demand by transporting, storing, and processing hydrocarbons, as well as facilitating exports. Do you have energy infrastructure MLPs in your portfolio? Alerian MLP ETF (AMLP), the largest*, most liquid MLP ETF, provides exposure to energy infrastructure MLPs with an emphasis on tax-advantaged income (no K-1). Explore AMLP See important disclosures. ALPS Portfolio Solutions Distributor, Inc. is the distributor for the Fund. * Based on the ETF.com peer group segment Equity U.S. MLPs: Master Limited Partnership. Automotive Ford EV bet Ford (NYSE:F) unveils plans to team with South Korean battery maker SK Innovation to spend $11.4B to build an electric F-150 assembly plant and three battery plants in the U.S., in a substantial acceleration of its push into electric vehicles. Ford will build two massive battery factories in Glendale, Ky., and a third in Stanton, Tenn., alongside a new truck factory set to begin producing electric F-series pickups by 2025, creating 11K jobs. The company says the planned $5.8B Blue Oval City complex in Tennessee "will usher in a new era for American manufacturing," comparing it to the Rouge complex in Michigan a century ago. (69 comments) Global Evergrande fallout China's central bank said it will protect consumers exposed to the housing market, though it didn't specifically name debt-laden China Evergrande (OTCPK:EGRNF, OTCPK:EGRNY), Reuters reports, giving investors some confidence that spillover effects from the developer's liquidity crisis may be manageable. Evergrande missed an $83.5M interest payment on March 2022 bonds on Sept. 23 and is scheduled to pay a $47.5M coupon on Sept. 29. In addition to the People's Bank of China statement, the Shenzhen government started investigating Evergrande's wealth management unit, Reuters reports, citing a letter to investors, another sign that authorities may take some action to contain the fallout from the real estate developer's troubles. (1 comment) ​ Today's Markets In Asia, Japan -0.19%. Hong Kong +1.20%. China +0.54%. India -1.63%. In Europe, at midday, London -0.34%. Paris -1.22%. Frankfurt -0.78%. Futures at 6:20, Dow -0.31%. S&P -0.66%. Nasdaq -1.31%. Crude +1.03% at $76.23. Gold -0.54% at $1742.50. Bitcoin -4.2% at $41866. Ten-year Treasury Yield +4 bps to 1.524% Today's Economic Calendar 8:30 International Trade in Goods (Advance) 8:30 Retail Inventories (Advance) 8:30 Wholesale Inventories (Advance) 8:55 Redbook Chain Store Sales 9:00 Fed's Evans Speech 9:00 S&P Corelogic Case-Shiller Home Price Index 9:00 FHFA House Price Index 10:00 Consumer Confidence 10:00 Richmond Fed Mfg. 1:00 PM Results of $62B, 7-Year Note Auction 1:00 PM Money Supply 1:40 PM Fed's Bullard Speech 3:00 PM Fed's Bostic Speech 7:00 PM Fed's Bullard Speech Companies reporting earnings today » What else is happening... Activision Blizzard (NASDAQ:ATVI) struck a deal with EEOCto settle discrimination claims. U.S.'s 5.2% unemployment rate is understated; Jerome Powell Senate testimony. Disney's (NYSE:DIS) 'Shang-Chi' wins fourth week, becomes top 2021 film. Aurora Cannabis (NASDAQ:ACB) CEO: Focusing on medical revenue rather than chasing recreational business. Raytheon (NYSE:RTX), Northrop Grumman (NYSE:NOC)successfully test fire hypersonic weapon. Sanofi (NASDAQ:SNY) reports positive interim results for its first mRNA COVID-19 vaccine candidate. Merck (NYSE:MRK) closing in on deal for Acceleron (NASDAQ:XLRN) - WSJ. Facebook (NASDAQ:FB) is unstoppable, even if it's toxic to our mental well-being - Loup Ventures' analyst. Seeking More Seeking Alpha’s Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.​

 

[Bozzie]

Global Market Comments September 28, 2021 Fiat Lux Featured Trade: (TESTIMONIAL), (THE DEATH OF KING COAL), (BTU), (ARCH)

​ TestimonialHi John, You have been doing this for a long time indeed. The recent bounce has been nice. How did you feel that it was going to bounce given the Fed meeting and the noise around the China Evergrande Group? Or have you seen this movie so many times that unless it was a major black swan event (like February-March 2020) that this was always buy the dip? Or does it even matter as long as you are controlling your risk given how much you have made in the market in your lifetime? For someone trying to reset and start growing their account, I don't have this luxury but have been selectively choosing the trades to take. Again, great trading. Regards, Dallas Melbourne, Australia ​ ​

​ The Death of King Coal Virtually all of the research you receive are about stocks you should buy. This report is about stocks you should sell….with both hands as fast as you can. It is perhaps the most important data release of the last several years that no one noticed. As a result, one of the best shorting opportunities in years is rearing its ugly head. US coal production hit a 41-year low in 2020. Coal as a percentage of US power output has plunged from 28% to 10% over the last decade to only 437 million short tons. Total coal production has plunged by 64% during this time. The end result will be a massive shift of wealth out of the major coal-producing regions of the US in the east. If energy has a proverbial buggy whip maker, it is king coal. And while US coal production has been in free fall, alternatives have been rising sharply, especially solar, now accounting for 20% of US energy consumption. The implications for the US economy are enormous. I used to be kept awake at night by the wailing whistles of Union Pacific (UNP) engines delivering Wyoming coal to California ports for shipment on to China. They have all disappeared. Those trains are now moving oil south from Canada and North Dakota to the oil distribution hub in Cushing, Oklahoma, or even all the way to Gulf ports, except that this time they are using a North/South rail line like Norfolk Southern (NSC) rather than the East/West running Union Pacific. Clearly, there are consequences. In recent the last year, the few listed coal names left have enjoyed a nice rally. This is because of the generalized global “RISK ON” move that has unfolded since the pandemic peaked. The Van Eck Vectors Coal ETF was shut down in 2020 for lack of interest. It also helps that the incoming Biden administration is unlikely to hammer away at China on trade front as did the previous one. China is far and away the world’s largest buyer of coal. I believe that in the coming years, the entire US coal industry will go bankrupt and get purchased by the Chinese for pennies on the dollar, or for their outstanding debt alone at a big discount. Needless to say, this makes the entire sector a great candidate for a core short. Coal is hopelessly uncompetitive with natural gas. Burning gas produces a fraction of the carbon dioxide of coal, and alternatives like wind and solar produce none whatsoever. Coal faces onerous environmental regulation, which will almost certainly get worse under a future administration. US utilities are therefore closing coal-fired power plants as fast as they can. The outgoing administration was the most pro-coal one in American history. Yet, not a single new coal-fired was built during their reign. However, coal-dependent communities are not about to turn into ghost towns. They have the great advantage of offering some of the lowest operating costs anywhere in the country. Free rent is becoming common. You'd be nuts to start a new business in the San Francisco Bay Area these days, which has become a haven of the wealthy. Throw in some decent broadband and they can handily join the global economic community. Yes, you can turn coal miners into programmers, at least the young ones. They all grew up playing video games just like the rest of us. ​ ​ ​ I Don’t See Any Future in This, Do You? ​ ​

Quote of the Day"The question is not whether Tesla will sell 80,000 or 90,000 cars this year, but whether they will sell 14 million or 15 million in 15 years. I believe they can do it," said Ron Baron of long-term value player, Baron Capital.

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 Futures trading involves a high degree of risk and may not be suitable for everyone.[FONT=&quot][/FONT]

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[Bozzie]

9.87 today....AVDL

https://www.tipranks.com/news/blurbs/avadel-pharmaceuticals-avdl-receives-a-buy-from-needham