• Sep, 2023
  • Sep 18, 2023

  • Marijuana is legal in NY, at least the legal version (which provides dosage and ingredients info on the pack, since plants can contain harmful ingredients). However, it's very expensive, maybe the most regulated industry, so something costs $100 but you can buy from an illegal marijuana shop for $25.

    Another issue is that the illegal shops packages are more attractive, but often use themes and images familiar to kids.


    Left's solution to housing: take the profit out - YouTube 

    Housing as an instrument of profit versus a right.

    More stores leaving California. Businesses have leases, and have to wait for the lease to complete.

    Inflation Re-Accelerates - YouTube 

    Energy Sector the culprit for everything this week. Auto workers on strike, EV transition plans by Biden, Airlines removing routes because of fuel prices.

    Demand destruction price might be much higher than $4 (currently at $3.80).

    However, weak growth in China.

    Lots of movements in labor, labor strikes, as a result of the pandemic, said Bianco. But we were expecting a recession before the pandemic, right?

    In 2021 PnG raised prices with much fanfare, warning, a white paper. Today, we just go ahead and raise prices.


    Blancpain X Swatch collaboration draws crowds for $400 watch - YouTube 

    Could be yearly a collab? Rev the hype machine, get it going again.

    That you can only buy in stores, creating a mania outside retail outlets. That you can have and no one else can have, limited edition. ‘The plastic Blancpain’?


    Chinese police arrest Evergrande staff | DW Business - YouTube 
  • Sep, 2023
  • Sep 13, 2023
  • September in the stock market




  • Sep, 2023
  • Sep 04, 2023

  • All of the economic momentum is pointing to the downside, says top economist Joe Lavorgna - YouTube 

    The yeild curve is still very inverted (not as much, but that's what typically happens, that when the recession comes the curve starts to steepen.

    Mortgage rates risen way above 7%, high credit card rates, high auto rates, tightening lending standards. Inertia pointing to downside. Lags, you can't pin down when.

    Employment prints right before a recession are often good, GDP too.

    Claims are up (only a little but up), payrolls are slowing, the revisions are downward.

    He's looking at the unemployment rate, which usually rises 50basis points from its low when a recession is coming.

    J Powell buys flexibility.

    $2.1t in excess savings in US households during pandemic period, due to stimulus. March there was $500b. June $190b. By October, all excess savings predicted to be spent, due to inflation.

    The anchoring effect of the inflation target rate of 2%. That's why we can't just change to 2.5%. The economy would become a bit unanchored.

    “The sacrifice ratio” - What an economy gives up to get inflation down. Usually you have to give up employment.

    NFLX expected that with limiting password to one household, they'd increase subs, but subs decreased a little bit. Were people paying based on an account for several households, which wasn't worth the same money once it was reduced to one household?

    Also, it's easy to sub, watch a bunch of series, and cancel the sub, and go to another streamer. Churn. It might not be about price, but rather just about what shows they have. Cable might be cheaper when compared to having 5 or 6 streaming services. Sports is a big consideration. But you can't get all the games from the same service. Amazon jas Thursday nights.

    Estimated cost to US economy of Hollywood writers' strike is $5b.



    Arrogance? A pretentcus hope for the need for more military?

    EM XChina funds outperformed those with China, so there are more popping up.

  • Aug, 2023
  • Aug 21, 2023











  • No one seems to talk about company quality going up or down. They talk about sentiment, for Meta, Nvidia, Tesla. They talk about multiples relative. But like PayPal, Amazon's product isn't getting better. It's possibly getting worse, as reviews are not as reliable, as they compete with their clients, as there are no new products on their site really (plus they have competition more now, since their only really strong point was cheap, fast shipping).
  • Maybe people aren't just putting it all in index funds anymore, because some stocks and sectors are making highs and other are making lows.

    'There's too much money. They're buying things before they even get cheap. I don't know what we do about that.' Josh Brown

    iPhones are a replacement business as much as they used to be a growth business. Still selling phones. Said JB, that every year one of 4 people in his house is getting a phone, replacement style. ‘That’s just how it is.'

    These companies (Microsoft, Apple, etc), they're not ‘growth companies anymore. They’re decent growers but all of a sudden started to trade at hefty growth-like multiples. And earnings were as always a nice reality-check that earnings were just OK. - Boockvar

    Everyone didn't want to miss the the-Fed-is-done trade. But now OK the Fed is almost done maybe, but the 10 year is now trading at 4.20. And the 30-year mortgage rate, which is priced off the 10 year, according to bank rate, is at the highest level since 2000. - Boockvar



    Consumer still strong.


    We could have 0 or negative inflation for a while anyway, suggested Tom Lee as just a possibility, given house prices. Everyone on CNBC panel surprised by this.

    Growth is strenthening, x energy S&P up for the quarter 3% the first time in six quarters. If only one more hike the market can absorb that maybe. Interest rates could stabilize and then the cash gets put to work.


    Rates could move higher. All the treasury buyers have become sellers (the Fed, Japan, China). Global demand for treasuries has shifted from hot to cold. Stocks are doing all the right things. Consumer and corporate balance sheets are considered healthy given the amount of inflation. Most economists on Wall Street have dialed back their recession forcasts. Services starting to weaken (?because people are going back to school?) - Subramanian

    When Fed reaches peak rates, they usually hold for 6 or 7 months. We've just reached what may be peak.

    2024 as a year of tepid recovery. Moderate growth year, earnings recovery due to circumstances (prolonged rates reduce demand for labor) . ... Overall trend is good for bonds and good for stocks. - Bailin

    There is still vast demand in China. Scale.

    Second-hand markets. Treasures, something special, they generally find it. And something they can afford. And creates social value (non-profit thrift store).

    The stuff that comes in, you can get a tax-credit now, reportedly.

    They sort it and put some online, and some in the store. They go through every single item. Online store:


    Maybe markets dominated right now by momentum traders rather than fundamentals traders/investors, because after good earnings, DHI went up like 4% and then dropped to -3%.

    Bonds might drift up to 5%. "And ironically it might be because the Fed has backed off of tightening that the bond market is starting to get nervous. If the Fed's not going to fight the inflation fight, the bond market will, by selling off bonds.

    We were at ‘the Fed’s almost done,' but after the Bank of Japan move and widening yield curve control,' all of a sudden the yield of the 10-year spikes. The rise now of higher interest rates. Longer period of time with higher rates, and every day someone's getting caught by it and can't make their business loan which came due. How does the stock market eventually react to this longer higher rates? - Bookvar

    The I-dont-want-to-miss-the-Fed-is-done-hiking rally. Days after Fed did its last 75bps hike, the market bottomed. The dollar bottomed also. After that there was AI and whatever.

    For a CEO, ‘My business starts to slow. Let me slow down the hiring and wait to see how things go.’ Then 3 months go by and business is not getting better, and actually its ticking down. Then you have to make a decision, well, my profit margins are falling, sales are falling. Then I may start laying off people. Then unemployment starts to tick up. Then we don't know if it cascades or not.

    In Tech they overhired, so they understandably made that decision. What if it happens after Revenge Travel?

    Bank managers, you don't want to be the one that makes a bad loan in this environment.

    Compounding deleveraging, a freezing in credit.

    China isn't bailing out Country Garden, Evergrande. Allowing developers, who are the main vulnerable part (not buyers of homes, although they will experience decilne in net worth with their assets), allowing them to fail. China doesn't want people to be dependent on the State, they haven't sent out cheques, although they call themselves ‘communist.’

    They still have the effects of what the government did to them during the pandemic, nailing them into their homes.

    Smartphone market is shrinking. Everyone is looking for a bottom in PCs. Those two take the most semiconductors. Autos.

    Federal Reserve Weighs In On Taylor Swift's Eras Tour - YouTube 
  • Aug, 2023
  • Aug 14, 2023


  • In a couple years, interest will surpass defense as the #1 expenditure of the US government. “And what do we get for interest? Nothing.”

    He wants a Constitutional amendment, to limit the amount Congress can spend as a percentage of GDP, absent extraordinary situations.

    Last fiscally responsible pres was Clinton. Congress was when Gingrich wa Speaker, he said.

    R. Empire referenced. Fiscal irresponsibility, political instability, decline in moral values, overextended military, and failure to protect its borders. That's what he said, but we have no consensus of why the RE fell.


    Happened since June. Basically 100% in on puts for SPY and QQQ.

    Although he was early when he predicted the GFC.



    Will they be motivated voters now?

  • Niles

    Commodity prices are under pressure because costs are up.

    Copper is going to run out. There's only a handful of pure copper plays, and everyone's looking at them. The big guys would love to have that copper, but shareholders don't want that copper to disappear under the umbrella of iron ore.




    Calm down FTC scrutiny. Expected an FTC antitrust suit.

    Amazon used product data of sucessful retailers who used Amazon to make copies or whatever, and those sold well. Felt to be unfair. Have to compete with Amazon, who owns the platform. Scrutiny. Stopped doing this, reportedly.


    From 45 inhouse brands, 250k products, to under 20.

    Who made the decision at Amazon to do this?

    Amazon's 2-day shipping isn't the amazing service it was before. Now others do this too, and they have to compete.

    AI, if everybody has it, nobody has it - Damodaran
  • Index funds, which were at first ridiculed and called un-American for setting mediocrity as a goal, now control 20-30% of the US equities market. They're now more to provide a list of stocks for index funds to invest in than to inform on how the overall market is doing. First index fund in 1971. Boyle

    Imports to US dropped over recent months.

    Older workers (55+) who have left the workforce have not come back in, as usually is the case with this cohort. Supply story in labor.

    88% of S&P companies, the largest shareholder is either State Street, Blackrock, or Vanguard. Their influence in defense contracts. - Bet-David

    Do they want more wars?

    Is 88% a form of monopoly?

    Blackrock is $10t under management. Only 2 countries, US and China, have a bigger GDP.

    58% of Americans have an iPhone. Is that a monopoly (US says 50% is a monopoly)?

    We don't have competition today. The companies aren't broken up.

    Usually when China announces a whole raft of 15 measures it means they don't have one they think will work. But one of the measures in there is

    Asking the private sector, especially Tech, to give them case studies of how the private sector has helped the economy and helped society. The CCP isn't bound by that, but if they're convinced by it, they might say Oh we didn't know that, Why don't you guys do more of that.

    Chinese stock market was in 2007. It's dominated by companies that don't honestly report earnings etc.

  • Aug, 2023
  • Aug 05, 2023
  • The ecosystem is everything with Apple. Revenue has slowed down again. Might be nothing. But I've never heard people who ‘want’ to own an iPhone talk so much about hating their iPhone and how it broke after 2 years or is spying on them. It's not everyone, but I never really heard any iPhone user really talk like this before.

    All Amazon's 3 main businesses beat expectations. But $134b versus $131 expected, is that good? Shouldn't it be at least the rate of inflation?

    The yeild curve is the big story this week. 2022 and into 23 was ‘the short end of the yield curve’ and now it's the long end. The 30 year has taken off over the past month. Jap 10 year also has gone up this year. Jap stock market has performed best this year, followed by Europe, then US.

    Money has very little value right now, say some. Supply and demand. There is someone who wants to pay that amount for that thing.

    Now, unlike markets of the past 100 or 150 years, most of people's income goes automatically into Mutual Funds, which is invested automatically into the S&P. The money doesn't get to think, it's dumb, it's rule-based.

    Money printing redistributed the same sized pie (of the economy), maybe hoping it would cause some kind of economic activity/growth, but maybe it didn't.

    Empries trend toward centralized cronyism.

    Enemployment rate down from 3.5 to 3.6%. Earnings up month over month, 4.4% YoY. About to move into a period where base effects will be working against us, harder to print good numbers.

  • (Note chart isn't logscale)

  • Aug, 2023
  • Aug 03, 2023

  • US downgraded to AA+ (second time ever)

    ... because Congress messes with the economy by not agreeing on a budget. But no one adjusted their portfolios. Some criticism of rating agencies over the past 20 years.

    3-year and less down, 5-year and more up.

    Everyone talking Soft Landing and optimism growing. Like 9 days of higher closes in one of the markets (NASDAQ?), them lots of red for a couple red days.

    Companies are reporting earnings beats, but they're not up after that always. Companies that miss often go up more.

    Political advertising will be $14b in 2024 up from $2.5b, so advertising, TV companies will get a share. Paramount, Disney may examine keeping the Network and spinning off the TV stations.

    Investors ‘nervous about good news.’ Don't want a strong jobs report etc, because that bri3ngs a September rate hike.

    A day of most stocks up, but Utilities quite red. Bing said it was because bond yields are rising. First use of Bing. Google couldn't do it.
  • Won't see Buy and Hold in stocks again until around 2030, say some. Bear market rally since December. Rotating.

    Home buying demand is low numerically but supply is lower. Bidding wars have returned, despite high mortgage rates. Prices won't go down, but number of homes sold will go down.

    Vast majority of home owners have low rates from before. Won't be selling, except to move. Some people have adjustable rate mortgages, so those will come up in the next couple years.

    Migration to low-tax states like Arizona is a long-term trend.

    Rents expected to go down, though, because rental until construction is coming online.

    Household construction lower, as more people live in basements.

    So called ‘excess savings’ will run out by Fall.

    Current valuations ‘make no sense.' Carvana at $9b valuation, twice Macy's. Short interest at 40%. Microsoft launched an AI chatbot or something and added like $150b in market cap.

    Without optimism, you might look at the growing debt burden and say that collapse is coming.

    James Gormon (MorganStanley) thinks M&A and trading is starting to bottom out.

    Start to get used to the new rates. Underwrite risk and new opportunities and cost of capital.

    IPOs. A few coming soon, and more in the next year. The soon ones are strong companies with good stories, that are able to come out now. Demand for them, and then other companies will say it's an exciting time to come out.

    NASDAQ 100 will do a rules-based reweighting. 5% of the components can't represent more than 50% of the AUM. They'll cap some companies. They've done this before.

    ...

    NFLX is a growth story, and they posted slightly negative guidance for the first time. They did a bunch of things (ads, password sharing) over the past year, and those worked, but now no more things. They noted TikTok as a negative for engagement in their content, the creator economy content. With almost no cost, people can create content. That was the moat before, cost. Hyper-focussed content. Gaming also. And Netflix is considered the best positioned media stock right now, because it has massive content and will be less affected by writers/actors strike.

    ...

    During the pandemic no one cared about financing costs, 1%, 2%. Now that money has a cost people are going to care about this, and buy a new car rather than used.

    The average car on the road is 13 years old.

    ...

    https://www.youtube.com/watch?v=wjLttNOdRG4
    Most provinces now at $15CAD ($11USD) minimum wage. Some a bit lower. Landlord is paying how much? Higher interest rates sometimes higher rates drive down prices (house prices) and sometimes up (mortgage costs).

    ...

    Investors starting to rotate out of big 7 into stocks that have been out of favor, taking profits and buying things with better valuations.

    ...

    “The big question for Netflix is when revenue per subscriber goes up”

    ...

    Past inflation has been controlled by the Fed, but this is the first time so much has been done Fiscally, just giving everyone money, so the models won't work the same.

    ...

    Lots of people on CNBC say to trim tech (big 7, overall already up almost 100% this year, although everyone says they're still the best companies). Because it's valuation is high PE, and it's ‘priced to perfection’ and any negative company news could make for a pullback, whereas there are undervalued things which are better, and there are defensive plays, and there still might be a pullback (although sentiment is that there won't), and there still might be a recession but they don't know when maybe second half.

    ...

    https://www.youtube.com/watch?v=hfwUpftnvZs
    Tom Lee sounded a little bearish for the first time (since he did it briefly last December or something). Maybe industrials and financials in addition to Tech. S&P is up 13% meaning it's overbought, usually a sign of a strong market but also that it could react strongly to negative news. However, lots of people are calling this a top (so a pullback might be shallow).



  • Jul, 2023
  • Jul 19, 2023

  • ...



    ...



    Half the companies in Fla will cover $50k or $60k solar panels. While other companies are embracing it.

    ...



    ...

    There are going to be a lot of Chinese EVs in the US in coming years, and a lot cheaper. China also has rare earths.

    Can't really invest in these Chinese companies though, because China doesn't really care about US investors.

    ...



    Using Rico Act.

    “Using copyright infringment as the centerpiece of their business. Basically that their entire business is a fraud.”

    “Using a decentralized structure to plausibly redirect blame to third parties.”

    ...

    Still $5.5t on sidelines, $1t higher than at start of year, so still scepticism.

    ...

    Extreme silicon shortage today to a voltage transformer shortage in a year and then an electricity shortage in a year or two years. To run LOMs and other AI training. Musk suspects.

    ...

    US needs class-action lawsuit reform, said Musk. The ratio of good to bad class-actions against publicly traded companies is too large, and it ends up being a tax on consumers. Public corporations fear embarassment, etc.

    ...



    Any risk to stability?

    ...

    The $20,000 new car might not be possible from here-on. Car prices up. But lots of used car delinquincies, particularly sub prime auto loans (credit score 600 or below). Inventory building up as more supply comes. Consumer demand currently still strong. High interest rates, and so a lot of the new car sales were from the first half of this year. Some brands are doing well (Toyota, Kia, Honda) while others are struggling (and so have to reduce prices and incentivize).



    ...

    Limited supply and scarcity are not the same thing. Scarcity is when demand exceeds supply at the price of zero. - Ben McKenzie

    ...

    Inflation base effects. Inflation seems low right now. Bianco sees 3 or 4% inflation, and if real rates return to positive higher than 4%.


    ...

    Loan applications, rejection rates highest since 2013.

    People saying ‘Goldilocks’.

    Most people basically have been won over to soft landing thesis.

    ...

    China bond distress. These were the companies people were sure their bonds would be alright short term.

    ...

    July 19, first time I head an analyst mention Utilities. "More defensive equities now on sale Health Care and Utilites."
  • Jul, 2023
  • Jul 14, 2023

  • ...


    He thinks 2% in 6-9months possible.

    ...






    ...

    Valuation ceilings

    Companies early reporting, doing fine, but their stocks didn't go up.

    ...

    Cash Stuffing Envelopes Money Trend is Going Viral - Should You Do it? - YouTube 
  • Jul, 2023
  • Jul 03, 2023

  • Are banks becomming coopted to monitor people in ways IRS is prohibited from doing, the way social media and communication apps are used?
  • Airlines have de-commoditized. A seat is a seat is a seat, no longer. Customers have a choice. The premium market is up.
  • Nike and China

    Nike reported first miss in 3 years, and earnings were a bit higher in China than expected, causing some to feel more favorable about China reopening.
  • Because the Fed was late, inflation has gotten embedded in the Service Sector, and to treat inflation in the Service Sector via Interest Rate, you undermine the Goods Sector. - El-Erian

    Now the Fed has paused to keep optionality.

    El-Erian thinks if they change their 2% target to 3 or 4 percent, they can maintain this growth.
  • 3 distinct tech rallies so far.

    January effect, those stocks that vastly underperformed in 2022.

    March, investors maintained positions by selling financials and buying big market cap tech.

    March, April, May, Ai move, earnings expectation in tech sector.
     
  • The equity market is now 160% of USgdp. 40 years ago, the last time the US had this type of inflation problem, it was not even 40%. Wealth effect. It makes it more challenging for Fed to control inflation. - David Bianco

  • 1 in 50 jobs in the US has something to do with ports in LA. 1 in 9 jobs in Southern California.

    Investment in the south and east of the country is $11b to the west's $1b over the past several years. The west used to have 80% of shipping, now it's like 60%.

    One of the challenges they face is a railroad bottleneck, maybe now dealt with.

    He doesn't see a recession coming next year. Lots of products and also parts for US manufacture are coming in.

  • #1 reason people move is something changes, a job, a baby, and they need to move.

    House prices seem to be gaining a bit.

    Homebuilders are buying down mortgage rates, allowing buyers to not have that 6 or 7%, and instead they're buying into that 5% rate which gives them a year or two of cushion.
  • Jun, 2023
  • Jun 26, 2023

  • “This is really a people business.”
  • We're several month in now, and still all the headlines are just like A.I. To Radically Change Future & NVDA Is Taking Us There, but still no story on any way AI will do anything productive

  • Some of this Fed versus talk this week.

  • Uber's model of private drivers was not legalized in Japan. Need a taxi licence. Lobbying. Backend pressure against taxi company owners who started to partner with Uber. Go grabs 70% of ridehailing market in Japan, and about 1/3 split between Uber and other rivals. Uber is popular with tourists in Japan, and tourism has recently seen a big influx.

    Uber lost out to local players in China and SEAsia also. Skorea had its own app, lobbying so laws only allowed Uber to be used by people with a taxi license. Uber has done well in Latam.
  • Jun, 2023
  • Jun 17, 2023
  • Tom Lee, Gormond at MorganStanley, feel economy (earnings) has bottomed.

    10% of the S&P are making 52-week highs, highest since April 2022. Average 14-day RSIs are at about 60 (normal is 50), highest since summer 2022, which means the average stock is in breakout mode. Russel is performing. - Josh Brown

    Interest rates are peaking (maybe 2 more 25basisPoint hikes left, but market sort of seems to not think so).

    Income growth remains high at 5-6 percent. Unemployment low.

    Manufacturing is growing a bit. Housing seems to be rebounding a bit.

    Regional banks are picking up their lending - Bob Elliott

    Gundlach said that although jobs were up, hours worked were somewhat down. He also thinks that be cause Fed went 25 50 75 50 25 and this time 0, they're unlikely to bounce. But they're basically projecting two more 25 point hikes (and perhaps break something).

  • Taxpayers to pay $1t ?
  • Japan has been cheap, but there's also structural earnings growth opportunity, said Carl Vine. In the last decade, Japanese EPS has grown about 10% compound, beating the S&P, and it could do the same for the next decade. Plus dividend, buybacks, reratings. Might go down short term because it's gone up so much in the past month, but for the next few years there could be big returns.
  • $70 is the new $50 as a breakeven point for oil prices - Kate Richard
  • NY offices reaches 50% of pre-pandemic occupancy (regular rate is around 70%).

    In SF, famous brands/malls are pulling out due to crime.
  • Jun, 2023
  • Jun 13, 2023




  • Investopedia: "Lowest level of pessimism seen in 2023"

    Lots of people talking about FOMO bull market possibly starting. Technical bull market started yesterday.

    The first part of the year, it was just 5 tech stocks. But recently it's 'broadening out', some think. Russel2000 is an indicator for this (that little move upward at the very end).


     

  • Just the idea of tops and bottoms.




  • Money market funds.


  • Rent booms.



  • Overpriced versus underpriced.

  • Jun, 2023
  • Jun 11, 2023
  • China exports down more than expected (phones and garnments). To all trading partners down, except Russia way up (lots of energy trade).

    Weak global demand.
  • GM will also use Tesla charging standard. Ford announced it would do this 2 weeks ago.
  • Jun, 2023
  • Jun 04, 2023
  • Luxury stocks fall as concerns grow about consumer spending - YouTube 
  • How Congress Gets Rich from Insider Trading - YouTube 

  • Stocks just 23% of portfolio. In preservation mode.
  • Some cities seeking a spike in evictions, and in empty rental locations.

    Investors aren't buying properties, which could bring prices back down for regular buyers. Mortgage rate (7%) is higher than the cap rate (4.6%), so if you buy with debt (most investors do) you're losing money on a property investment bought in the past few months. And cash is paying 4 or 5%.

    But he thinks people will float their losses, thinking the economy will improve (everyone's talking about this), and the only thing that would trigger investment and owner property sales is significant unemployment rate.

    Blackrock has STOPPED BUYING HOMES (2023 Firesale Coming?) - YouTube 

  • Probably his most important market

  • It costs too much to hold a barrel of oil. You make too much money if you just hold cash. Prices would have to go up in equities to make it worthwhile holding a barrel of oil.

    IEA has raised oil demand forcasts every month since last November.
  • Jun, 2023
  • Jun 01, 2023
  • Tesla's Model Y becomes world's first best-selling EV car - YouTube 
  • May, 2023
  • May 30, 2023
  • Japanese companies seeing interest from foreign investors for first time in a long time. Fundamentals are there, but there is also good performance and low valuations. A lot has to do with people just don't/didn't understand the companies.
  • Fitch placed US on Rating Watch Negative (might be downgraded from AAA)

  • Former AG Barr backs DeSantis in Disney battle - YouTube 

  • No one knows how to value NVDA now. It had been up from its lows over 100% already, and today they guided higher and after hours it went up 25% or 30%. All their competitors didn't impress with their reports, but NVDA showed it has ‘all the picks and shovels’ in this current AI goldrush.

    People had rated it around or below where it was before the report, and didn't know whether they would have to downgrade or raise their forecast.

    It opened at like 27% up and went to like 25% up. Everyone talking about their quarter.

  • May, 2023
  • May 24, 2023

  • Small and medium sized businesses who aren't eligible (often) to meet the lending requirements at the banks. Because the businesses are more complicated, they don't have the rigorous reporting that a larger public company might have.

    The work that goes into making these loans is considerable, more complex, you have to get collateral, even private personal collateral. More personalized lending.
  • AI companies that will be valuable will be those that have a valuable dataset (the AI itself less so).

    Bigger, existing companies who already understand well their domain, will be advantaged compared with smaller startup companies. The enterprise will eat their lunch.

    These datasets, the companies didn't appraise them as highly before this tool came to show how well it could use these big datasets.

    People are now locking down their datasets (Google Analytics?). Before, they would make them public, allow Google Search to use them because that meant traffic for them.

    So far, even according to the Databricks CEO, chatbots seem the #1 use. Also analyzing customer data (medical records, ‘anonymously’) to find patterns. In insurance, there a long piles of papers to sign, but how does that apply to a particular case, and that can be asked. Also in finding sentiment about a product.

  • May, 2023
  • May 22, 2023
  • China bans Micron chips from Taiwan (for government purposes)

    META fined record-breaking $1.3b for not complying with EU data privacy laws (Facebook continued to transfer data from European accounts to US servers). META seemed unaffected or barely.

    META made a $39b in 2021 and $23b in 2022 profit (revenue for 2022 was like $115b). They had been investing in metaverse also.



    Accepting basically any cargo. Might get ‘worse’ than GFC. Boom-bust cycle, pricing had gone up a lot. Capacity has gone up also. It's easy to start a trucking company. There's no moat. It's very accessible.

    Freight market might be 6-month forcast of broader market. (So slowing more than what is recognized.) People are not buying as many goods, anecdotally.

    Banks control new entrants into economy (new businesses). Banks slowing lending might not be good for broad economy, but might be good for trucking economy.
  • May, 2023
  • May 20, 2023
  • Why Rich People Buy Raw Land - YouTube 
  • Why Oil Is In A Multi-Year Bull Market | Interview With Eric Nuttall - YouTube 
  • "Why would a politician use very scarce tax dollars to go rebuy oil, send the price up, increase inflationary pressures on the Fed ... There's a very strong correlation between gasoline price and presidential approval ratings. ... We do not expect any politician to refill that reserve ever." - Eric Nuttall

    Others expect US will begin to refill the SPR soon, given the strike price (they buy at a fixed price).

    Biden used the strategic reserve of gas (which was supposed to be for emergencies) for political reasons, to get the price at the pump down. - Rafi Tahmazian

    Putin cut off gas to Europe. They panicked (logically) and bought gas from everywhere they could for exorbitant prices. And they had a warm winter and didn't need it so much.

    China shut down and this cut 1.3m bpd from demand (3%).

    Things that cooled the energy market. It cooled inflation. A softer landing.

     
  • May, 2023
  • May 18, 2023
  • Sideways, no trend for entire market. Which companies and which sectors are trending?

    Jim Bianco thinks inflation will bottom for the year in the next 60 days, because there's a large base effect coming with the inflation numbers. Last year may was .9, June 1.2. When we replace those with .4, we should be in the low 3's for inflation numbers by July (when we get the June number), and then start drifting higher.

    Most people are employed by companies under 500 employees, and those companies rely on small and medium sized banks. If those banks are impaired in giving them financial services or loans, that is going to chip away at the economy. And those banks are currently unsure about their deposits and their ability to give loans.

    He expects a post-Pandemic economy, with an inflation rate of 3 or 4%. It has more friction and pricing problems.

    Walmart revenues are up, but they're customers are also up. More wealthy shoppers are turning to less expensive options because they just can't/don't want to pay for what they get elsewhere.


  • What companies bigger companies want to buy these days are, no question, business services, said Sinha Haldea. Anything where there's an automation mode for something.
     
    Also generative old school businesses (generate regular income). Products.
  • May, 2023
  • May 17, 2023
  • Bears turning bullish

    Maybe the old guard of investors is retired, and the new guard looks though everything, since the market goes up 90% of the time. Why play for the 10%?
  • Hollywood writers strike have for years been working more and receiving less, so the fight is a warranted one this time, some say.

    They are just 1 of the 3 unions.

    Netflix still doesn't have sports. ESPN and DIS do. So not attracting big advertisers in the same way.
  • New house builds

    Costs of building are still high, and some areas are not desirable to own in.

    New listings down 40% some places over last year. People aren't upsizing. Mortgage rate effect also.

    Detached homes, even luxury homes, are selling quickly, compared with like condos.
     
    In a regular housing market, there's no negative amortization like there is now, where the cost doesn't even cover the interest on the mortgage. So it'll be after that plays out that we might see a change (sellers, capitulation).
  • MMFs down versus ETFs, because people want to sell their MMFs which is bringing them down relatively.
  • Lending (who is doing it?) is being done with high rates of return for the lender.
  • May, 2023
  • May 16, 2023
  • Top 2 companies for engineers wanting to work, once again, Tesla and SpaceX.

    Tesla gets like 3.5m applications per year (not sure if that's all engineers)
  • May, 2023
  • May 15, 2023
  • At some point you're gonna deplete your cash (using credit cards instead), the movement of money out of deposits into MMFs will complete - Tony Dwyer

    When there's availability of money you're a permabull, and when there's not, like now, you just wanna stay on the sidelines.
  • Apple bigger than entire Russell2000 ($2.7t)
  • Binance pulled out of Canada
  • May, 2023
  • May 13, 2023
  • "Imagine if SF was a city of 6m people, or 9m people. Think about the glomeration effects. Think about the depth of industry that could be developed. Having a lab and a manufacturing facility and everything  be in driving distance, maybe even the same building." - Samo Burja


  • Some are selling below asking, but not many. But it's not like during the pandemic when people were getting above asking price.
  • Authorities saying the banking problem (in Sweden now at SBB after they soldoff at a loss an asset to raise cash) is due to depositors wanting higher yield on their deposits (since MFFs give like 5% apparently in US), and short sellers.

    However, if banks are selling off assets at losses, which is like the thing they definitely don't want to ever do, is is just a case of shortsellers speculating, or something actually being there?

    Why can't banks pay more for deposits (temporarily)? Why are they unable to do this? Funds are available to banks as long as they have collateral. They may have to pay a bit more than they want to to depositors but they don't have to lose them.


     
  • May, 2023
  • May 11, 2023

  • Eurodollar U chart

    "Deflationary money is the interruption in the natural or necessary flow of money in currency through the economy. It's NOT rate hikes."

    It makes even minimal economic activity that much harder. It can lead to a deflationary economy.

    A deflationary economy is joblessness going up.


  • More people are putting basics like groceries on credit cards.

    CC rates are higher than ever, 20.5%, in accordance with the FedFunds rate.

    Groceries are more expensive.
  • Blackrock. Asset management. A top 3 holder in 99% of US-listed names. It should, therefore, look like the S&P, but it doesn't. It has departed and is heading down relative to the S&P. Why?

    Goldman and MorganStanley. Brokerages.
     



  • To insure ALL deposits. Normally FDIC just insures up to $250k. $15.8b is the cost of doing so.
  • May, 2023
  • May 09, 2023
  • BRK's insurance part is up.

    Everything in the economy is worth more, and so insurance value is up.
  • Banks are loaning less, so family offices are stepping in to do loans

    Double digit returns.

    A whole new class of investors are filling the space.

  • Now we watch the delinquency cycle. We've already seen some defaults in auto loans.

    Real estate to watch.
  • May, 2023
  • May 08, 2023
  • Americans asking if they will in 5 years have 4 or 5 'basically government institutions' banks, like Canada or Australia

    They have thousands of local banks. And they have 4 or 5 giant banks. So why do people go to the small regional banks?

    Is it just 'romance'? Is it 'nostalgia for pioneer days'?
  • When you hike rates, you reduce production.

    To decrease inflation, you need more inflation, to balance supply and demand. Some say.
  • Energy companies have been returning capital to shareholders, and some people want them to do even more of that. US has a lot of gas and oil for now, but there should be some more production, but how can energy companies really invest a lot in that if the government is stymieing projects?

  • May, 2023
  • May 07, 2023
  • Buffet described the float, the amount of cash that comes in through their insurance business, like we have a bank with no customers, no employees, and nobody can pull their deposits out.
  • What gives you opportunities, even in a market where 'everyone is making less' is people doing dumb things (overbuying or overselling)
  • Bank clients with lots of Twitter followers may be understood as higher-risk clients.
  • Will bank consolidation lead to higher prices? (less competition)
  • Fintech has taken the easier part of banking away, possibly.
  • Signature Bank was already on the 'red list' for dabbling in crypto and not responding to regulatory requests. 90% of its deposits were not insured.

    FR was wealthy clientelle. These are the type of depositors who will most quickly withdraw funds in signs of problems. (These deposits are not insured.)

    Non-sticky or sensitive deposits.
    Faster growth is difficult for banks.

    Regional banks, concentration, may be less sticky than more national banks.






    Biggest-losing banks in 8-9the decile. Not the smallest banks. Also the fastest-growing recently were more recently the fastest-losing (stickiness?).


     
  • SVB is a start-up bank 10 years ago. It's niche grew during that period.

    But it was just SF and just tech, mostly. Those people were a circle of people (virally connected), so they talk and act together. (A broader, more disconnected 'society' rather than 'community' provides stability through disconnection/slow diffusion/disagreement.) Also younger, wealthier (contrast with the responses of older, poorer clientele.) 

    In 2021 deposits doubled (VC was under threat, putting money to side, more down rounds, less willingness to invest in new tech (which was also very overpriced), so they deposited this money instead). I wonder about examples of conversations that took place deciding what to do with that money and why? If the CEO decided to ignore the risk of rising rates (is it possible he didn't have access to knowledge that was a possibility?), what was he thinking was going to be a better attitude with their cash?

    Future deposits would be even higher?
    SVB invested (like 60% of their holdings) in longer term bonds to get 1 or 1.5%, which was more than 0 that they would have got from short term bills.

    They had to sell in 2022 to raise cash, but this plan leaked (most virally connected depositor base) and there was a run (fast because done on their phones).


     

  • Almost always requires a macro crisis for people to know there are bad banks.

    Recessions test banks because more people default collectively. Banks without buffers can fail. They have to sell assets to get their money back to cover withdrawals.

    Banks 'should' loan against earning power of assets, but banks frequently instead loan against the 'value' of the assets. Asset classes become overvalued, and the banks loan on that value, and that corrects.
     
  • New refineries in US, is something Kevin O'Leary is pursuing

    Ones that cost a few billion (under EPA threshold so doesn't have to deal with them). Says he can do it in about 3 states. On a bipartisan basis. The states will contribute towards the feasibility studies, and Oleary will fund the debt and the equities on a sovereign wealth basis.

    His headline project is for $14b.
  • You don't have a totally broad improving economy. You have winners and losers. Tech sector up more that 20%. Banks down, consumer.

    Some think the strong performing ones will lead, but Carter Worth said that never happens. The weak ones are telling the real story and the strong ones ultimately succumb. (Why?)

    The market has had a lot thrown at it to the downside (banks, geopolitical), and hasn't really gone down. But it hasn't gone up yet either, and can't without real earnings growth or multiple expansion, Worth said.

    The market has gone up or down 15% for 2 years.
     
  • May, 2023
  • May 05, 2023
  • SingleB and higher, almost exclusively, for bonds. - Gundlach, on the 'unusual' current market (he's in Europe, and warming to EM like Asia-X-China and parts of Latam.
  • "What good is a debt ceiling that isn't a ceiling? What good is a cap on insurance that isn't really a cap?" - Gundlach

    They've raised the debt ceiling almost 98 times in its 106 years.

    It's basically unlimited.
  • Gundlach thinks 'they raised rates too slowly. And the fact that they have to leave them high now for a long time ... is not good for the banking system. The short rates are so high above the bank rates.'
     
    "People leaving their money in banks when they're getting half what they would with MMFs is nonsensical."
  • May, 2023
  • May 04, 2023
  • US weaponizing the reserve currency USD against Russia (this is not Iran or Venezuela. This is Russia.), gave a pretext many were looking for, and galvanized different countries into a solidary movement.
     
    Saudis can transact in Yuan and hedge with gold.

    Or a BRICS basket of currencies.

    And the USD became too expensive.
  • "The Fed needs inflation to inflate away debt." - Piepenburg

    They need it higher than the 10year. They want to debase the currency.

    Wall Street socialism. By the Fed. The 10% get 90% of inflation in risk assets. It gets politicians elected. It's completely distorted capitalism, because we don't have natural supply and demand. Fed directed.
  • Talk (blame) of 'the shortsellers' began in earnest today

    Their plan is very clear. Push a bank over the brink. Find another one.
     
    Talk of a (temporary) ban on short selling.
  • Bank supervision should be taken from the Fed, says Brookings' Aaron Klein - YouTube 
  • The recession coming might not solve the banking problem, but rather exacerbate (compound) it - Marenzi

    They have severe pressure in terms of their net interest margins. People pulling out funds, so they have to find other funding, but people are unwilling to put their money there. People want 3, 4, 5% return on their money.

    One good point. Loan quality has remained high. Defaults are low. That would come under fire in a recession.
  • Investors can't buy the dip in bank stocks (speculatively down 30 or 40% for some) because they haven't published their losses to market, so you can't read their book value really.

    You have to read between the lines, and read the footnotes.

    Shareholders in the big banks that have gone bankrupt have lost all their investments. So you can see why people might be reluctant to hold stock in others.
  • Banks are being used as weapons of destruction, says Janney's Christopher Marinac - YouTube 
  • TD pulled back on buying FH.

    "They really have their pick of the bunch. If you're in the market to pick up a regional bank, you should wait."

    Moral hazard. People waiting for receivership. There's no auction.