August 3, 2017

If you were to read only one thing…

WSJ – Indexers Push Back Against Wall Street – Ken Brown 8/1

  • “Give a small cheer to the index nerds at S&P. Their decision to ban companies that have different classes of stock is a rare instance of Wall Street protecting investors.”
  • “S&P said Monday that it would no longer consider companies with multiple share classes for its main U.S. stock indexes. The one that matters is the S&P 500, which is tracked by about $2.2 trillion worth of assets and which serves as a benchmark for more than $7.8 trillion of investments. The share structures S&P is targeting usually grant insiders control of the company by giving their shares far more votes than shares held by outside investors.”
  • “FTSE Russell, another big index provider, issued a proposal last month that requires a minimum amount of shares be in public hands, a step in the same direction as S&P.”
  • “The shift mainly targets Silicon Valley, where companies from Facebook to Google and, most recently, Snap , have sold shares while giving investors virtually no say in how the companies are run. Snap, now down more than 20% from its IPO price, was seen as the tipping point because it gave investors no say at all. Companies already in the index will be allowed to stay.”

Perspective

Knoema – World’s Most Visited Cities – 7/24

NYT – Debt-Ridden Chinese Giant Now a Shadow of Its Former Size – Keith Bradsher 8/1

  • Basically, at some point businesses and real estate development need to make money on their own accord… Ordinarily, lenders and investors don’t fund on the strategy of ‘if you build it, they will come.’

Worthy Insights / Opinion Pieces / Advice

Forbes – The Good Times For The Bulls May Be Coming To A Close, Here’s Why – Bert Dohmen 8/1

Markets / Economy

WSJ – Daily Shot: FRED – US Total Construction Spending YoY Change 8/2

WSJ – Daily Shot: FRED – US Total Nonresidential Construction Spending YoY Change 8/2

Real Estate

WSJ – Luxury Condos on ‘Billionaire’s Row’ Are Slow to Sell Out – Josh Barbanel 8/2

Finance

Economist – Bitcoin divides to rule – 8/2

  • “On August 1st, without much agonizing or awkward negotiation, a group of Bitcoin activists and entrepreneurs managed to create a second version of the crypto-currency. It immediately gained a following: in less than a day of existence, the value of a unit of ‘Bitcoin Cash’ jumped to over $600, and tokens worth more than $10bn were in circulation (although that is still much smaller than Bitcoin classic, which stood at about $2,700 and nearly $45bn).”
  • “This ‘fork’, as such events are called, came earlier than foreseen. But it is broadly how insiders had expected a two-year-old conflict over the future of Bitcoin to end. At the heart of this ‘civil war’ was the question of how to increase the capacity of the system, which can only handle up to seven transactions per second. The new version is able to process 56 per second, but otherwise works much like the original one.”
  • “This week’s fork has made bitcoin holders richer: they get an amount of the new version equal to their holdings of the old sort; and at least for now, both together are worth more than the old one alone. For this reason only, expect another split in November when an upgrade of the old Bitcoin system will kick in.”  

Environment / Science

NYT – Blistering Heat Wave Threatens Seattle, Where Only a Third Have Air-Conditioning – Maggie Astor 8/1

Health / Medicine

NYT – In Breakthrough, Scientists Edit a Dangerous Mutation From Genes in Human Embryos – Pam Belluck 8/2

South America

WSJ – Venezuelan Officials Tampered With Election, Voting-Software Firm Says – Kejal Vyas 8/2

  • “Based on the robustness of our system, we know, without any doubt, that the turnout of the recent election for a National constituent assembly was manipulated.” – Antonio Mugica, Smarmatic’s CEO

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