Month: May 2018

May 29, 2018

If you were only to read one thing…

WSJ – The Tragedy of Venezuela – Anatoly Kurmanaev 5/24

  • “Last weekend, Venezuela’s President Nicolás Maduro dragged his Socialist government into a third decade in power by winning elections that were boycotted by the opposition, ignored by most of his countrymen and rejected by the international community. As sluggish voting drew to a close, a smiling and confident Mr. Maduro posted a video of himself waving not to throngs of adoring supporters but to a largely empty public square.”
  • “By the end of 2018, it will have shrunk by an estimated 35% since 2013, the steepest contraction in the country’s 200-year history and the deepest recession anywhere in the world in decades. From 2014 to 2017, the poverty rate rose from 48% to 87%, according to a survey by the country’s top universities. Some nine out of 10 Venezuelans don’t earn enough to meet basic needs. Children die from malnutrition and medicine shortages. An estimated three million Venezuelans, 10% of the population, have left the country in the two decades of Socialist rule, almost half of them in the past two years, according to Tomás Páez, a researcher at the Central University of Venezuela.”
  • “If Mr. Maduro didn’t know when to stop the music, the idea for the endless party came from his predecessor, Hugo Chávez, who died just a month before I arrived in 2013. The strongman charmed his countrymen with a silver tongue, his love of dancing and singing and his disdain for the hated austerity packages imposed by previous Venezuelan presidents. As oil prices shot up in his last decade, Mr. Chavez not only failed to save any of the windfall but buried the country in debt.”
  • “Along the way, he imposed capital controls to try to stop money from fleeing the country. The arbitrary exchange rate system suffocated private enterprise and investment, but the poor got subsidized food and free housing. The middle class got up to $8,000 of almost-free credit card allowances a year for travel and shopping. And the rich and politically connected siphoned off up to $30 billion a year of heavily subsidized dollars through shell companies, according to the planning minister at the time.”
  • “The currency and price controls implemented by Mr. Chávez broke the basic link between supply and demand, creating surreal economic distortions. A business-class Air France return ticket from Caracas to my hometown in Siberia would cost me $400, yet a 15-year-old Suzuki jalopy with no air conditioning and 150,000 miles set me back $4,600.”
  • “Caracas in 2013 reminded me of a tropical version of the Soviet periphery. Basic goods like flour and aspirin had fixed prices and were so cheap that companies had no incentive to make them. When you did find them, it made sense to grab as much as you could carry. Who knew when you would find them again? Like Russia in the 1980s, people dealt with shortages by resorting to the black market, hoarding goods and trading perks of their jobs, like bureaucratic stamps of approval or access to car batteries, for other favors or products.”
  • “But Venezuela’s collapse has been far worse than the chaos that I experienced in the post-Soviet meltdown. As a young person, I was still able to get a good education in a public school with subsidized meals and decent free hospital treatment. By contrast, as the recession took hold in Venezuela, the so-called Socialist government made no attempt to shield health care and education, the two supposed pillars of its program. This wasn’t Socialism. It was kleptocracy—the rule of thieves.”
  • “In Venezuela, I saw children abandon schools that had stopped serving meals and teachers trade their lesson books for pickaxes to work in dangerous mines. I saw pictures of horse carcasses on the grounds of the top university’s veterinary school—killed and eaten because of the lack of food.”
  • “Hyperinflation, set to reach 14,000% this year, has transformed the most basic transactions into Kafkaesque trials. Cash is extremely scarce, card payment networks are overloaded, cell phone coverage is worse than in Syria, and online banking systems constantly crash because of underinvestment. Paying for a cup of coffee can take an hour.”
  • “The crisis has even made it harder for the ruling elite to enjoy its privileged status. Despite access to official dollars and the protection of security details, top apparatchiks now avoid the best restaurants, the plushest resorts and business-class lounges, where they fear encountering the hatred of their compatriots. Sanctions and fears of corruption probes have barred many of them from trips to the U.S. and much of Europe.”
  • “After 2016, I no longer had to travel to report on the toll of the economic crisis. It was visible all around me: in the sagging skin of neighbors, the dimming eyes of janitors and security guards, the children’s scuffles for mangos from a nearby tree. It is profoundly depressing to watch people you know grow thinner and more dejected day by day, year after year. When I look back at my five years in Venezuela, it’s not the time I spent covering riots, violent street protests or armed gangs that stirs the most feeling. It’s the slow decay of the people I encountered every day.”
  • “For most ordinary Venezuelans I know, Mr. Maduro’s foreordained victory last weekend snuffed out the last glimmer of hope that their lives can improve through democratic and peaceful means. What’s left is exile or further misery.”

Perspective

WSJ – Daily Shot: CNN – Global School Shootings Since 2009 5/25

Slate – Eighties Babies Are Officially the Brokest Generation, Federal Reserve Study Concludes – Jordan Weissmann 5/23

Worthy Insights / Opinion Pieces / Advice

A Teachable Moment – When Fees Go Up in Seconds, It’s Time to Go – Dina Isola 5/25

FT – New York property jitters herald declines elsewhere – Gillian Tett 5/24

  • “Clouds are hovering over New York’s housing market. A couple of years ago, property prices were spiraling ever higher — much like the new luxury skyscrapers now springing up in midtown Manhattan.”
  • “But estate agents say that sales volumes in the first quarter of 2018 were at their lowest level for six years. Meanwhile the median price per square foot was 18% lower than a year earlier, according to some reports.”
  • For those of you not living in Manhattan and that don’t own property there, you think, so what? The thing is … “last month the IMF published its first comprehensive analysis of global property and this suggests that real estate is becoming prone to synchronization too. Two decades ago, only 10% of property price movements could be blamed on global — not local — factors. Now it is 30%.”
  • “…What is striking is that this real estate synchronization is affecting urban centers in both emerging and advanced economies. Or as the report notes: ‘House prices in major cities outside the United States — Beijing, Dublin, Hong Kong SAR, London, Seoul, Shanghai, Singapore, Tokyo, Toronto and Vancouver — are positively associated with US house price dispersions’.”
  • “This might seem unsurprising. After all, the global elite hop across borders at dizzying speed. So does financial capital, and sentiment-shaping news. Meanwhile, the market capitalization of the real estate investment trust sector has tripled in the past 15 years, and large asset managers allocate on average of 11% of their portfolios to property.”
  • “This has made the housing market more ‘financialized’, since some investors are treating housing more like a tradeable asset, chasing yields around the world. No wonder that a decade of ultra-loose monetary policy in the west has lifted so many geographically dispersed real estate boats.”
  • “…the key point is this: if (or when) global financial conditions eventually become less benign, there will probably be downward movement in housing markets too, with some unexpected spillover effects.”
  • “Indeed, the most intriguing point in the IMF report is that ‘heightened synchronicity of house prices can signal a downside tail risk to real economic activity, especially when taking place in a buoyant credit environment’.”
  • “In plain English, this means that a correlated boom in global real estate markets can signal trouble ahead. We should keep a close eye on those estate agents’ reports in New York — as well as London or Hong Kong. The Big Apple’s jitters might yet be a canary in the coal-mine.”

FT View – A wise autocrat knows what he does not control 5/23

  • “Turkey’s president risks losing his fight with the financial markets.”

The Irrelevant Investor – Never Begin With the End in Mind – Michael Batnick 5/25

NYT – Elon Musk, the Donald of Silicon Valley – Bret Stephens 5/25

WSJ – Banks Won Big in Washington. What It Means for Investors – Jason Zweig 5/25

Real Estate

WSJ – Daily Shot: US Existing Homes Sales 5/24

WSJ – Daily Shot: NAR US Existing Homes Months Supply 5/25

WSJ – Daily Shot: Change in US Single-Family Homes Sales 5/25

WSJ – Daily Shot: Bloomberg – Zillow – Rise in Home Sales – Select markets 5/25

Energy

WSJ – Daily Shot: eia – US Average regular gasoline price 5/25

Shipping

FT – Maersk raises shipping rates as oil price spike bites – Joe Leahy and Richard Milne 5/24

  • “The world’s biggest container shipping group Maersk Line told customers it is raising prices in response to increased marine fuel costs, showing how the surge in oil prices to their highest levels in four years is rippling through the global supply chain.” 
  • “Bunker prices, as marine fuel is known, have risen more than 20% since the start of the year, and in Europe have hit $440 per metric ton, the highest since 2014. That has forced Maersk to introduce an ’emergency bunker surcharge’, the company told customers in a note.” 

Education

WSJ – Mike Meru Has $1 Million in Student Loans. How Did That Happen? – Josh Mitchell 5/25

  • “Due to escalating tuition and easy credit, the U.S. has 101 people who owe at least $1 million in federal student loans, according to the Education Department. Five years ago, 14 people owed that much.”
  • “More could join that group. While the typical student borrower owes $17,000, the number of those who owe at least $100,000 has risen to around 2.5 million, nearly 6% of the borrowing pool, Education Department data show.”
  • “For graduate-school students especially, there is little incentive for universities to help put the brakes on big borrowing. The government essentially allows grad students to borrow any amount to cover tuition and living costs, with few guardrails on how the final sum will be repaid.”
  • “More than a third of borrowers from one of the government’s main graduate school lending programs have enrolled in some form of federal loan-forgiveness plan.”
  • “Dental school is the costliest higher-education program in the U.S. Private nonprofit schools during the 2015-2016 school year charged an average of $71,820 a year, the Urban Institute found. The USC program now costs $91,000 a year, and $137,000 when living expenses are included.”
  • “Mr. Meru’s financial records—provided to The Wall Street Journal—show he borrowed $601,506 to attend USC—a debt swelled to more than $1 million by fees and interest.”

Asia – excluding China and Japan

FT – Malaysia police seized $28.6m cash in 1MDB probe raid – Ben Bland 5/25

  • “The cash confiscated last week from a luxury Kuala Lumpur apartment linked to the 1Malaysia Development Berhad investigation was worth RM114m ($28.6m), Malaysian police said on Friday.”
  • “The hoard, composed of Malaysian ringgit, US dollars and 24 other currencies, was seized alongside 284 luxury handbags and 37 other bags full of jewelry and watches from an empty apartment at the Pavilion Residences condominiums.”
  • We’re talking liquid-hard currency…
  • “Amar Singh, the head of the commercial crime unit, said it took police and 21 officers from Malaysia’s central bank three days to count the stash, which is now being held in the bank’s vaults.”

Japan

WSJ – In Booming Japan, the Phillips Curve Is Dead – Greg Ip 5/23

May 25, 2018

Worthy Insights / Opinion Pieces / Advice

WSJ – Turning GE’s Sacred Cows Into Hamburger – Spencer Jakab 5/23

Real Estate

WSJ – Why Home Sales Are Weak – Justin Lahart 5/23

  • “There were just 2.6 new homes sold annually for every thousand people aged 16 and over living in the U.S. last month. That compares with a peak rate of 6.1 in July 2005 and an average rate of 3.5 during the 1990s.”
  • “In the years immediately following the financial crisis, when household balance sheets were still in tatters, tepid new home sales came down to a lack of buying power. More recently, the problem has been supply—there are far fewer new homes on the market than there tended to be before the crisis.”
  • “Builders can’t easily step up construction. Labor availability has become a persistent concern. One reason that Toll Brothers shares fell sharply following its results Tuesday is that it said labor costs had eaten into margins. Raw materials are costlier too, with framing lumber fetching 39% more than a year ago, according to lumber industry newsletter Random Lengths. Last, but not least, 30-year mortgage rates just hit a seven-year high.”

WSJ – Daily Shot: FRED – Average Sales Price for New Homes Sold in the US 5/24

WSJ – Daily Shot: FRED – Percent of New Homes Sold in the US Between $300k-$399k 5/24

WSJ – Daily Shot: FRED – Percent of New Homes Sold in the US $750k and Over 5/24

WSJ – Daily Shot: Goldman Sachs – Commercial RE Pricing to Rent Increases 5/24

Automotive

WSJ – Daily Shot: Calculated Risk – Light Vehicle Sales Percentage of Total 5/24

May 24, 2018

If you were only to read one thing…

FT – Era of ‘lower for longer’ oil prices is dead – Amrita Sen and Yasser Elguindi (Energy Aspects) 5/22

  • “When oil collapsed in 2014 under the weight of US shale production, it ushered in a new-found belief that prices would remain ‘lower for longer’.”
  • “The rampant new source of crude supplies was seen to be capable of meeting rising world demand almost single-handedly, obviating the need for extra Opec barrels ever again.”
  • “As such, the concept of a ‘shale price band’ emerged of roughly $40 to $55 per barrel, reflecting the range within which the majority of US shale producers could turn a profit without the risk of the industry growing so fast that it would again flood the market. And for the better part of three years, from 2015 to 2017, oil prices traded in this range.”
  • “But in 2018, this narrative has been slowly picked apart and is now in the process of disintegrating.”
  • “While there has been breathless attention paid to prompt Brent prices climbing to $80 a barrel for the first time since 2014, what has received less attention is that the entire Brent forward curve is now trading above $60, including contracts for delivery as far out as December 2024.”
  • “This development is an important psychological milestone for the oil market. The market is, in effect, saying that ‘lower for longer’ is dead.”
  • “The reality is that US shale has been unable to meet rising global oil demand, which has averaged 1.7m b/d per year since 2014 — double the level at the start of this decade — and inventories have drawn down as a consequence, eliminating the buffer that had been built up.”
  • “This inventory fall has been helped by strong demand growth and the Opec/non-Opec deal to curtail output since January 2017, which has since been superseded by rapid declines in Venezuelan and Angolan production and, more recently, non-Opec production outside of the US.”
  • “The inevitable supply deficit is very worrying, with very limited spare production capacity available globally.”
  • “Two main themes are now starting to impact investor thinking and drive the new-found interest in exposure to energy.”
  • “First, recent supply data are finally reflecting the ill effects from under-investment due to the collapse in capital expenditure since 2015. The data are now showing accelerating decline rates across important suppliers such as Brazil, Norway and Angola.”
  • “Second, the impressive strength in demand has been overshadowed in the past two years by the narrative dominated by electric cars.”
  • “But slowly this has given way to a recognition that while electric cars will undoubtedly alter the trajectory for global oil demand in the long term, this trend will not reach critical mass in the medium term (the next five years) to sufficiently make up for the expected fall in oil supplies due to the lack of investment.”
  • “So, even though expectations are for oil demand growth to slow from current levels, consumption will still be robust enough that — barring a major recession — the market will need new supplies to meet that growth.”
  • “The physical oil market is only going to face greater strain ahead of the marine fuel specification change in 2020, which is set to boost demand for products such as diesel and ultra-low sulphur fuel oil by 2m to 3m b/d.”
  • “As a result, we believe that oil prices may spike to above $100 per barrel, a price forecast we have held for the latter half of 2019 for three years now.”
  • “The shale price band has been decisively broken and 2018 will be a watershed year: the market will realize that US shale alone cannot meet the world’s incremental demand growth and future prices must rise to re-incentivize long-cycle investments (or curtail demand).”
  • “Nothing ever moves in a straight line, but the broader oil market is perhaps not prepared for what will happen to oil prices over the next couple of years.”

Perspective

Economist – Weather and violence displace millions inside borders every year – The Data Team 5/22

Worthy Insights / Opinion Pieces / Advice

Boston Globe – Gas and mortgages are getting expensive again. Welcome to a normal economy – Evan Horowitz 5/22

CNBC – Silicon Valley tech bubble is larger than it was in 2000, and the end is coming – Keith Wright 5/22

  • “The age of the unicorn likely peaked a few years ago. In 2014 there were 42 new unicorns in the United States; in 2015 there were 43. The unicorn market hasn’t reached that number again. In 2017, 33 new U.S. companies achieved unicorn status from a total of 53 globally. This year there have been 11 new unicorns, according to PitchBook data as of May 15, but these numbers tend to move around, and I believe the 279 unicorns recorded globally in late February by TechCrunch was the peak, where the start-up bubble was stretched to its limit.”
  • “A recent study by the National Bureau of Economic Research concludes that, on average, unicorns are roughly 50% overvalued. The research, conducted by Will Gornall at the University of British Columbia and Ilya Strebulaev of Stanford, examined 135 unicorns. Of those 135, the researchers estimate that nearly half, or 65, should be more fairly valued at less than $1 billion.”
  • “Don’t let the few recent successes in the 2017 IPO market fool you. After two years of stagnation in terms of the number of IPOs being filed in the United States — 275 IPOs (2014), 170 IPOs (2015) and 105 IPOs (2016) — deal counts have dropped to their lowest figure since 2012.”
  • “Seventy-six percent of the companies that went public last year were unprofitable on a per-share basis in the year leading up to their initial offerings, according to data compiled by Jay Ritter, a professor at the University of Florida’s Warrington College of Business, and recently featured in The New York Times. This is the largest number since the peak of the dot-com boom in 2000, when 81% of newly public companies were unprofitable.”
  • “The current volatility and correction evolving in the private market will be amplified for companies that have yet to make money and are burning cash faster than they’re bringing it in. Growth at all costs will not weather an economic storm.”
  • “Since the Snap IPO in March 2017 at $17 a share, when its shares surged 44% during its first day of trading, they have now declined to $11. Dropbox also went public. It had a first-day pop of 36%; however, with only 200,000 paying customers compared to its 500 million users, I would be hesitant to rush in to buy, even as it comes off that year-to-date high considerably. Another highly valued start-up, Blue Apron, went public at $10 a share in June and is now trading at $3. Remember Fitbit was a $45 stock in 2015 — it’s currently trading at just over $5.”

Economist – Markets may be underpricing climate-related risk 5/23

FT – Tanking currencies are bad news all round – Jonathan Wheatley 5/22

  • “Currency wars give no edge to exporters but do cause economic harm.”

Fortune – Retail Reckoning: How Private Equity Is Boosting Some Brands and Crushing Others – Phil Wahba 4/24

WSJ – Daily Shot: Bianco Research – Google Search Trends – Consumer Spending 5/23

WSJ – Daily Shot: Bianco Research – Google Search Trends – Consumer Difficulties 5/23

Markets / Economy

CNBC – Inflation is coming to the US economy on an 18-wheel flatbed – Jeff Cox 5/22

  • “Multiple signs of inflation in freight-related industries are at or near historical highs, in what could be an early sign that price pressures are building and ready to reverberate around the economy.”
  • “Freight marketplace DAT keeps track of supply and demand in the freight industry through a bulletin board that matches companies with loads to be delivered to the vehicles that will take the goods to the marketplace. The measures are in the spot market, where vendors that don’t contract their deliveries find drivers for their products.”
  • “Recent readings show demand for vehicles skyrocketing, a sign that generally points to inflationary pressures building up in the supply chain.”
  • “Loads on the spot market in general are up 100% from the same period a year ago. Another measure, the flatbed load-to-truck comparison, which tracks the amount of vendors looking for flatbeds and is generally the highest of all truck types, is up 142%.”
  • “The numbers by themselves, though, don’t indicate that inflation is ready to strike soon. Indeed, the most recent readings, such as the consumer and producer price indexes, show inflation pressures rising though relatively benign.”
  • “But they do jibe with some other indicators showing inflation is rising beneath the surface.”

FT – US has more than 5,600 banks. Consolidation is coming – Ben McLannahan 5/22

  • “The US’s banks have largely sat out the mergers and acquisitions wave of recent years. While deal records have fallen in almost every other sector, big banks have done almost nothing, shrinking rather than expanding. And merger activity among small and mid-sized banks — some 5,607 of them, at last count — has been subdued.”
  • “But when Fifth Third Bancorp of Cincinnati revealed its $4.7bn swoop for Chicago’s MB Financial on Monday morning, shares in other Chicago-area banks began to move, too. Wintrust, a similar-sized bank based in Rosemont, Illinois, ended the day up almost 4%, while First Midwest of Itasca closed up 3%.”
  • “The implications were obvious: after years of thin activity in bank M&A, this deal could mark a turn.” 
  • “The conditions for dealmaking look better than at any time since the financial crisis. Higher interest rates and lower taxes have pumped up bank profits, giving management teams stronger platforms from which to contemplate doing something radical.”

WSJ – Rising Dollar Sparks Tumult in Emerging Markets – Ira Iosebashvili, Josh Zumbrun, and Julie Wernau 5/21

  • “U.S. currency’s rally puts spotlight on weaknesses in a broad range of emerging-market assets.”

Real Estate

WSJ – Who Needs a Down Payment? Trade In Your Old Home Instead – Laura Kusisto 5/22

  • “Opendoor offers to take the hassle out of selling an old home to buy a new one.”

WSJ – Daily Shot: John Burns RE – Home Builder Land Acquisitions 5/23

Energy

FT – The geopolitics of electric cars will be messy – Henry Sanderson 5/22

  • “Oil has had a leading role in geopolitics over the past 100 years, sucking western powers into an often disastrous dependence on the Middle East.”
  • “While black gold, as oil is sometimes known, is not always the overt cause of conflict, it is linked to between one quarter and a half of all interstate conflicts globally between 1973 and 2012, according to a 2013 study by Jeff Colgan of Brown University.”
  • “But it would be a mistake to assume that geopolitical tensions will miraculously ease in a future in which renewable energy sources dominate. Building wind turbines and creating lithium-ion batteries requires metals and raw materials from those countries which are blessed, or potentially cursed, with them.”
  • “And for some of these commodities, their high concentration in particular parts of the world sharpens the risks.”
  • “A clean energy economy will require a staggering volume of metals to be prized from the ground.”
  • “For example, Olivier Vidal of the University Grenoble Alpes estimates that to build the infrastructure for clean energy the amount of copper needed amounts to almost half the total mined since 1900.”
  • “There is also the real risk that the age of the electric car will generate corporate monopolies, echoing those of Standard Oil whose founder John D Rockefeller cornered the oil market more than a century ago as the combustion engine took off.”
  • “Glencore, the Switzerland-based and London-listed miner, is expanding its production of cobalt which is set to give it a 40% share of global supply by 2020.”
  • “The production of lithium, a key ingredient for batteries in electric cars as well as smartphones, is controlled by just five companies.”
  • “However, rather than tensions with the Middle East, the advent of the electric car will usher in greater friction with China. Beijing’s ambitions in clean energy are enormous.”
  • “As part of the ‘Made in China 2025’ plan to advance high-end manufacturing, the government wants to establish a grip on the production of electric cars and clean energy technology.”
  • “The rest of the year will provide further signs of the capital and scale that China is bringing to this competition.”
  • “No one is giving China a free run at the metals that have emerged as central to electric cars.”
  • “Trade tensions with US President Donald Trump are already brewing. This month his administration released a list of 35 minerals, including lithium and cobalt, that are ‘considered critical to the economic and national security of the United States.’”
  • “Chile, which has the world’s largest lithium reserves, is looking to build battery components, while South Africa, a producer of vanadium, wants to produce electrolytes for vanadium batteries, which are used to store energy for the electric grid.”
  • “Europe, too, is beginning to build its own giant battery factories to supply Germany’s car companies and the UK’s innovation agency has backed a study that uses satellites to look for lithium in Cornwall.”
  • “The geopolitics of the era of the electric car are in their infancy. While it is unlikely to lead to military conflict, the tensions, especially with China, over who will control the resources and technologies that will underpin electric cars will be heightened.”
  • “Over the long term, the winners are likely to be those countries and companies that can develop battery technology that relies on materials that are abundant rather than scarce. It might even help make the geopolitics a little less fraught.”

Finance

FT Alphaville – ‘Some of the worst covenants that we’ve ever seen’ – Alexandra Scaggs 5/21

Cryptocurrency / ICOs

WSJ – Buyer Beware: Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud – Shane Shifflett and Coulter Jones 5/17

Environment / Science

Axios – Next climate challenge: A/C demand expected to triple – Ben Geman 5/15

Construction

WSJ – Daily Shot: CME Lumber (Jul) Futures 5/22

Asia – excluding China and Japan

FT – Malaysia says it has been ‘bailing out’ 1MDB – Alice Woodhouse and Harry Jacques 5/22

  • “Malaysia has paid almost RM7bn ($1.8bn) to service debt owed by 1MDB, the south-east Asian nation’s finance ministry said on Tuesday, as investigators ratcheted up their probe into the state investment fund from which $4.5bn is alleged to have gone missing.”
  • “Two weeks after voters ousted the government of Najib Razak, the finance ministry said it had been ‘bailing out’ the 1Malaysia Development Berhad fund since April 2017, adding that another RM144m interest payment was due on May 30.”
  • “The revelation ‘confirms the public suspicion that 1MDB had essentially deceived Malaysians by claiming that [the payments] have been paid via a ‘successful rationalization exercise’,’ the ministry said in a statement. ‘All the while it has been the MoF [ministry of finance] who has bailed out 1MDB.'”
  • “Earlier on Tuesday, Malaysia’s new anti-corruption chief said he had been harassed and received a death threat after he pursued a 2015 investigation into 1MDB.”

India

FT – Oil price rise puts heat on Narendra Modi’s government – Amy Kazmin 5/22

  • “In 2016 — as global crude oil prices fell to about $40 per barrel — India, which imports nearly 80% of its petroleum, levied new excise duties on petrol and diesel to stabilize prices and prevent a surge in demand.” 
  • “Since then, New Delhi has come to depend heavily on those revenues to shore up its fragile public finances, especially as receipts from the goods and services tax introduced last year have failed to stabilize at expected levels.” 
  • “But after global crude oil prices hit a four-year high of more than $80 per barrel last week, India’s fuel pump prices — for decades subsidized by the government and held artificially low — have jumped to among the highest in south Asia.”
  • “Industry groups are pressing New Delhi to pare back excise duties on fuel, warning that the high prices will undermine an economy only now recovering from the successive disruption of a dramatic cash ban and the introduction of the goods and services tax.”
  • “But any meaningful rollback to ease pressure on consumers will raise doubts over the ability of Mr Modi’s administration to meet its target of cutting the fiscal deficit to just 3.3% of gross domestic product.”
  • “’India’s reliance on oil revenue has now surpassed the Malaysian government’s reliance on oil revenues — and Malaysia is an oil exporter,’ said Vikas Halan, senior vice-president at Moody’s Investors Service, the rating agency. ‘The government can always roll back excise duty — there is no one stopping them — but the issue is, how will they compensate for the loss of revenue?’”
  • “Last year, excise duties on petroleum products, which are about a quarter of the retail price of petrol and diesel, accounted for 17% of New Delhi’s total revenue collection. For every R1 that the government pares back these excise duties, it will lose an estimated $1.8bn in revenues, or about 0.1% of annual GDP.” 
  • “Adding to the overall pressure is the recent weakening of the Indian rupee, which has fallen 6% this year to a 16-month low of Rs68.1 per dollar. Further depreciation will mean even higher local fuel prices. Bond markets are also jittery, with yields rising.”

South America

WSJ – Daily Shot: Black Market Exchange Rate – USD / Venezuelan Bolivar 5/23

WSJ – After Venezuela Strongman’s Victory, Isolated Nation Faces Growing Chaos – Kejal Vyas, Ryan Dube, and Juan Forero 5/21

Other Interesting Links

CNBC – The richest person in every state, according to Forbes – Emmie Martin 5/22

May 23, 2018

Perspective

MarketWatch – Utah and Georgia residents enjoy biggest income gains in U.S. How did your state do? – Jeffrey Bartash 5/17

Worthy Insights / Opinion Pieces / Advice

MarketWatch – Millennials haven’t saved two years’ salary – they’ve saved one week’s worth – Rex Nutting 5/18

WSJ – Is Tesla Abandoning the Mass Market? – Charley Grant 5/21

WSJ – In Trade War With U.S., China Gets the Upper Hand – Greg Ip 5/22

Markets / Economy

WSJ – Daily Shot: Consumer Staples SPDR ETF – S&P 500: Relative Performance 5/22

  • “The consumer staples underperformance over the past two years has been unprecedented. Is the selloff overdone?”

Energy

WSJ – Oil Is Above $70, but Frackers Still Struggle to Make Money – Christopher M. Matthews and Bradley Olson 5/17

  • “American shale drillers are still spending more money than they are making, even as oil prices rise.”
  • “Of the top 20 U.S. oil companies that focus mostly on fracking, only five managed to generate more cash than they spent in the first quarter, according to a Wall Street Journal analysis of FactSet data.”
  • “Shale companies have helped propel U.S. oil output to all-time highs, surpassing 10 million barrels a day and rivaling Russia and Saudi Arabia. But the top 20 companies by market capitalization collectively spent almost $2 billion more in the quarter than they took in from operations, largely due to bad bets hedging crude prices, as well as transportation bottlenecks, labor and material shortages that raised costs.”

Cryptocurrency / ICOs

FT – Tax havens take the ICO lead – Don Weinland 5/21

May 22, 2018

Perspective

howmuch.net – Hourly Wage Required to Rent a Two-Bedroom Home in Every State – Raul 5/13

Worthy Insights / Opinion Pieces / Advice

A Wealth of Common Sense – Do Long-Term Investors Need Bonds? – Ben Carlson 5/20

Economist – America must use sanctions cautiously – Leaders 5/17

  • “The dollar gives the Treasury extraordinary power over global finance. It should not be used lightly.”

FT – Batteries are the next frontier of industrial competition – Nick Butler 5/20

  • “Why the race is on to host the factories that will serve the electric vehicle market.”

FT – Tech lessons from Amazon’s battle in Seattle – Gillian Tett 5/17

Markets / Economy

FT – Ant Financial valued at $150bn in offering – Henny Sender and Louise Lucas 5/20

  • “The enthusiasm for Ant Financial is partly a reflection of the scale of the company’s operations in China, as well as the need among investors to deploy huge funds being raised.”
  • “’If you are too conservative, you lose a lot of opportunities,’ said one mainland Chinese investor, who is also involved in the transaction. ‘In the last few years, we were not gung-ho enough and left too much money on the table’.”

WSJ – Daily Shot: Moody’s – Youth Unemployment Rate – European Countries 5/21

Real Estate

FT Alphaville – Retail is not dead – Jamie Powell 5/20

This is one of the few instances when I’ve posted the article in its entirety…

  • “Readers may have seen a few articles about the ‘DEATH OF RETAIL’ (add exclamation marks where appropriate) recently. To say it’s been a popular meme in US economic commentary would be, well, quite an understatement. Courtesy of CBInsights, here’s a timeline of retail bankruptcies up to March 2018:”
  • “Bogey men blamed for the decline range from Amazon to pesky private equity to, erm, tourists. To get a feel for the distressed nature of the sector, as of March 2018, retailers make up nearly 20% of the companies which Standard & Poor’s awards a they-may-not-make-it CCC credit rating. In short, defaults are still coming.”
  • “Yet is it all doom and gloom for bricks and mortar retail? Adam Ozimek, of Moody’s Analytics, begs to differ — laying out his case in a blogpost yesterday. Let’s take a look at his reasoning.”
  • “First Mr Ozimek points to retail payrolls running at a near historical high at 15.3m jobs, only 22,000 positions short of the peak reached in 2017:”
  • “The hiring boom is despite physical retail having a relatively smaller share of the economy from its peak in the credit-fueled boom years under Ronald Reagan:”
  • “So retail is a touch less influential in the US economy, but it still a key supplier of jobs. Looking at the first chart, however, the doubling of retail jobs in absolute terms isn’t quite as impressive when you consider retail employment also came close to peaking in 2000, and since then the US economy has nearly doubled according to the St. Louis Federal Reserve:”
  • “As physical retail’s share of the economy has fallen, there has been a bleeding of the value which used to be captured by the sector. However a lot of this shift can be explained by employment moving to e-commerce, according to Mr Ozimek:”
    • “Employment gains in e-commerce are visible in warehousing and nonstore retailers, the latter of which includes e-commerce sellers like Amazon. Over the last decade, nonstore retailers have added 157,000 jobs and warehousing has added almost 369,000, which combined more than offset the job losses of 392,000 in department stores.”
  • “So why are people so obsessed with the ‘Death of Retail’ meme?”
  • “Perhaps one reason is the vast retail space left behind in the recent consolidation in the sector. Cowan Research recently found the US has circa 49 square feet of retail space per capita, double the UK’s 22 square feet and almost four times Canada’s 13 square feet.”
  • “So in any retail contraction, the empty units left behind will be more noticeable to the naked eye than say in, Canada, thanks to the sheer amount of constructed retail space. This may give the impression of the death of retail, even if the facts don’t back it up.”
  • “Public struggles for big brand names like Sears and JC Penny, which last year closed 141 stores, may also help re-enforce the impression of decrepitude.”
  • “In fact, the former bastion of the mall, the department store, seems to be the only form of retail really struggling.”
  • “Last year research house IHL published a compelling report titled ‘Debunking the Retail Apocalypse‘ (get a copy for free here) in which they helpfully chartered store openings versus closures across different types of retailer:”
  • “We know this data is a little old, but department stores were the only group not to plan to open new stores in 2017, re-enforcing the idea that the collapse of famous brands, such as Radioshack, has driven the idea of bricks and mortar stores struggling.”
  • “Our readers may be asking – who is doing well in this environment to offset the struggles of Sears, Kmart and Radioshack?”
  • “The answer, perhaps unsurprisingly given trends in inequality, is any retailer shifting merchandise at bargain basement prices. Think Primark and Aldi in the UK, or aptly named Dollar General and Dollar Tree in the US. Here’s another neat chart from IWC showing store openings in 2017:”
  • “Not exactly a sign of a healthy US consumer, right? This trend is also repeated across restaurants, with the cheap, convenient and filling providers of processed goodness leading the way:”
  • “Regardless of the evident collapse in both diet and spending power, this data is not indicative of retail dying a death.”
  • “A month ago, we published a piece examining the pivot many online only retailers, such as Warby Parker, are making to bricks and mortars stores. The reason? Stores are a surprisingly cheap way of acquiring affluent customers and building brand familiarity, compared with internet advertising.”
  • “Given the data above perhaps the death of retail is more a misunderstanding of a sector adapting to demand not just from the internet, but also a lopsided societal structure. A country where affluent urbanites shop for luxury hand luggage in LCD lit stores, while the masses get by on Dunkin Donuts and Dollar General.”

Energy

Bloomberg Businessweek – Solar Beats Coal on U.S. Jobs – Brian Eckhouse 5/16

WSJ – Solar-Panel Makers Ramp Up U.S. Manufacturing Plans – Erin Ailworth 5/11

WSJ – Daily Shot: Moody’s – Clean Energy Initiatives by US State 5/21

Finance

FT – The great Maryland pension fees gap – Chris Flood 5/20

  • However, in this case, it appears the drag is coming from elsewhere in the portfolio.

WSJ – U.S. Government Bonds Pay More Than Debt From Other Developed Nations – Daniel Kruger 5/20

WSJ – Daily Shot: Italy – Germany 10yr Government Bond Spread 5/18

Insurance

Economist – The life-insurance industry is in need of new vigor 5/17

  • “As the rich world ages and retires, total life-insurance premiums are flat or falling…”

Australia

FT – Australia divided over ‘Brazilian-scale’ land clearance – Jamie Smyth 5/20

  • “Pristine eucalyptus forest near Great Barrier Reef becomes political battleground.”

Other Interesting Links

Cannabis Benchmarks – State Price Delta to US Spot Index 5/18

May 21, 2018

Perspective

WSJ – U.S. Births Hit Lowest Number Since 1987 – Janet Adamy 5/17

  • “The figures suggest that a number of women who put off having babies after the 2007-09 recession are forgoing them altogether. Kenneth M. Johnson, senior demographer at the University of New Hampshire, estimates 4.8 million fewer babies were born after the recession than would have been born had fertility rates stayed at prerecession levels.”
  • “One bright spot in Thursday’s figures, which are preliminary, is a continued sharp decline in teen births, which fell 7% last year. Since 2007, the teen birthrate has declined by 55%, and is down 70% since its peak in 1991. Children born to adolescents are more likely to have poorer educational, behavioral and health outcomes throughout their life.”
  • “Mr. Johnson estimates that lower teen fertility accounts for about one-third of the overall decline in births among U.S. women.”
  • “The increase in women attending college is another force behind the birth decline, researchers say. Those with more skills face a greater trade-off if they interrupt their careers to have children.”

Worthy Insights / Opinion Pieces / Advice

A Wealth of Common Sense – Thinking Outside the Box – Ben Carlson 5/18

Markets / Economy

WSJ – Daily Shot: US Continuing Jobless Claims 5/17

  • “The number of Americans receiving unemployment benefits hit the lowest level since 1973. Layoffs are becoming increasingly rare as the job market tightens further.”

WSJ – Daily Shot: FRED – US Job Vacancy Duration 5/18

WSJ – When It Comes to Tech, Venture Capital Grows Less Venturesome – Jacky Wong 5/18

  • “More big deals for already large private companies means less left for early-stage startups.”

Real Estate

FT – Young left out of US boom in housing wealth – Sam Fleming 5/17

  • “America’s housing wealth has staged a complete recovery since the financial crisis, but the holdings are increasingly skewed towards older borrowers and those with strong credit ratings and away from the young, the Federal Reserve Bank of New York said.” 
  • “Home ownership rates among those under 45 have slid sharply since the previous boom. As a result, many younger Americans have missed out in a house price resurgence that has taken values up by 50% from the crisis-era trough.”
  • “The New York Fed’s finding suggest that, on an aggregate level, America’s stores of wealth have fully rebounded from the crash, buoyed by a recovery that has now been running for 106 months, one of the longest on record. Financial wealth, which includes stocks and other financial assets, now stands at more than $80tn, more than 75% above the 2009 trough.”
  • “Yet the prosperity boom has been concentrated in a relatively small sliver of the population. The top 10% of households own 84% of stock market wealth, for example.”
  • “Housing wealth tends to be more widely distributed, but here too there are signs that larger sections of the population are missing out, in part because mortgage lending standards are far tighter than before the crisis.”

WSJ – Mortgage Rates Hit Seven-Year High as Ultracheap Era Ends – Laura Kusisto and Christina Rexrode 5/18

Finance

WSJ – Daily Shot: NY FED – US Non-Housing Debt Balance 5/18

WSJ – More Than 200 China-Listed Stocks to Join MSCI’s Indexes – Joanne Chiu 5/15

Asia – excluding China and Japan

FT – Malaysian police seize 284 boxes of handbags in ex-PM probe – Alice Woodhouse and Harry Jacques 5/18

  • “Malaysian police said they had seized 284 boxes of luxury handbags and more than 70 bags of jewelry from properties in the country’s capital as part of the new government’s probe into billions of dollars missing from the country’s 1MDB fund.”

 

May 18, 2018

Worthy Insights / Opinion Pieces / Advice

Economist – Surging numbers of Chinese people going abroad should be welcomed 5/17

Real Estate

FT – New York surpasses London on luxury housing market index – Lindsay Fortado 5/16

  • “New York has surpassed London as the second-most luxurious major housing market in the world after Hong Kong as the effects of the UK’s vote to leave the EU chipped away at the price of top British real estate.” 
  • “’In New York, luxury price increases and robust sales volumes, particularly at the low-end of the luxury market, bolstered the city’s index position’ last year, Christie’s International Real Estate said in a report.” 
  • “Hong Kong, which saw two residential sales above $100m — including one at $360m — and the highest price per square foot of any city, held the top spot for the second year in a row.” 
  • “The city rankings are based on seven factors collected by Christie’s, including record sales price, average price per square foot for homes that sold for more than $1m, the number of sales above $1m, the number of sales over $1m relative to total sales, the percentage of local and non-local buyers, and the percentage of secondary and additional homeowners.” 
  • “Top 10 cities for luxury real estate, 2017 
    1. Hong Kong 
    2. New York 
    3. London 
    4. Singapore 
    5. San Francisco 
    6. Los Angeles 
    7. Sydney 
    8. Paris 
    9. Toronto 
    10. Vancouver” 
  • “Christie’s said the ‘hottest’ market for new homes, based on the greatest rise in year-on-year increases in both luxury sales volumes and prices, was Victoria, British Columbia; followed by San Diego and Orange County, California; Washington DC; and Paris. The hottest markets for second homes were Santa Fe, New Mexico; Muskoka, Ontario; Sarasota, Florida; Sun Valley, Idaho; and the Bahamas.” 

Tech

NYT – Google’s File on Me Was Huge. Here’s Why It Wasn’t as Creepy as My Facebook Data. – Brian X. Chen 5/16

May 17, 2018

Worthy Insights / Opinion Pieces / Advice

FT – How the west should judge a rising China – Martin Wolf 5/15

  • “Advanced countries are hobbled by their inability to manage their own affairs.”

Japan

FT – How Japan’s ageing population is shrinking GDP – Valentina Romei 5/16

  • “With a rapidly ageing population and a shrinking workforce, Japan is one of the world’s oldest societies. Now analysts fear that these demographics are hampering economic growth.” 
  • “Japan’s economy contracted by 0.2% in the first three months of this year over the previous quarter, ending eight consecutive quarters of growth, Japan’s longest period of uninterrupted growth since 1989. It is now the only major economy to start 2018 with a shrinking economy.” 
  • “With the second-weakest performance of major economies last year — Italy had the poorest — Japan is now set to be the slowest growing of the G7 economies this year.”
  • “Japan cannot keep up with the growth rates seen in other advanced economies because ‘Japan’s demographics weaken its GDP growth,’ said Rob Carnell, head of research and chief economist for Asia-Pacific at ING. ‘A rapidly ageing population and shrinking labor force are hampering growth,’ warned the IMF in its latest country’s report.” 
  • “In a separate document, the IMF calculated that ‘the impact of ageing could potentially drag down Japan’s average annual GDP growth by 1 percentage point over the next three decades’.”
  • “Since Japan’s population began its decline in 2010, the country’s population has shrunk by about 1.3m people.”
  • “By 2065, the UN expects Japan’s population to fall by an additional 28m people, corresponding to a 22% drop. Over the same period, the population in advanced economies is expected to rise by 3%.”
  • “Not only is Japan’s population shrinking, but it is also ageing rapidly.”
  • “A shrinking population means a smaller domestic market with fewer people buying goods and services.” 
  • “In 2016, there were about 2,300 fewer kindergartens than seven years earlier as the number of pupils dropped by 18%. Nearly 2,000 primary schools have been shut over the same period while the number of children of primary school age dropped by 8%.”
  • “Far fewer houses are being built as the population, and demand, falls.” 
  • “The shrinkage in Japan’s population means that even with flat productivity growth there would be ‘steady declines in GDP output from one year to another,’ said Mr Carnell. Assuming all other factors remained similar, an economy with an expanding population would see positive GDP growth. ‘A better way of looking at Japan would be as per capita GDP,’ added Mr Carnell.” 
  • “When looking at GDP growth rate per person of working age — which takes into account ageing trends as well as population shrinkage — Japan is in fact the second-best performing G7 country after Germany over the past 20 years.” 
  • “Unless demographic trends are corrected, this is unlikely to be the last time Japan will see negative GDP growth, analysts say. But, given its shrinking labor force, its economy is performing strongly, they add.”

South America

FT – Kellogg latest company to pull out of Venezuela – Gideon Long 5/15

May 16, 2018

Perspective

FT – Anbang: the downfall of China’s global dealmaker – Henny Sender and Don Weinland 5/13

  • “The Wu Xiaohui who appeared in a Shanghai court in late March on fraud and embezzlement charges was a far cry from the man who rapidly turned a modest provincial car insurance business into an investment conglomerate with Rmb2tn ($316bn) in assets.”
  • “Tie-less and wearing a rumpled suit, the founder of Anbang ‘expressed deep self-reflection, understanding of and regret for the crimes and expressed deep remorse’, according to a post on the court’s social media account. But to no avail. On Thursday, he was sentenced to 18 years in prison.”
  • “At the time of his detention in February, Anbang controlled 58 companies directly or indirectly. As well as New York hotels, its holdings included rescue financings of troubled European financial institutions, control of a South Korean insurer and substantial equity stakes in about 20 major listed companies in China.”
  • “The charges that Wu was convicted of relate to the way the finances of the group were managed, including the shifting of billions of dollars of funds between different entities that he allegedly oversaw. His sister, who was officially head of Anbang Hong Kong, has also been detained.”
  • “Prosecutors accused Wu of using ‘false material’ in 2011 to get regulatory approval to sell insurance products. They also said that he had oversold Rmb724bn of insurance products and had diverted Rmb65bn to another company he controlled, which he had partly used for ‘lavish personal spending’.”
  • “In addition, Wu was accused of using the proceeds from insurance sales to inject capital back into Anbang in order to give the impression that the company was more financially stable than it was.”
  • “Analysts say Anbang was bound to attract the attention of Chinese regulators because of the nature of its business model. The group relied on issuing wealth management products for its funding. These risky investments were sold to ordinary people seeking higher returns than they could get from bank deposits. Given the nature of the investors, the Chinese authorities worried that any failure to pay out on the products could lead to social friction.”
  • “At the same time, the group took huge risks on how it invested the funds. Two months before Wu was detained, the company had 19% of its long-term investments in stocks, presenting a high level of risk should the market be hit by a downturn. Most insurance companies in China have less than 5% of their assets invested in the stock market. Another 19% was invested in redeemable short-term loans provided through trusts, an opaque area of shadow banking in China in which risk is almost impossible to assess with available public information.”

Maps on the Web – World’s Largest Metropolitan Populations Mapped onto the U.S. 5/10

Worthy Insights / Opinion Pieces / Advice

FT – The challenges of a disembodied economy – Martin Wolf 11/28/17

  • “Policymakers must reckon with a world in which companies invest in intangible assets.”

FT – How to make sense of the volatile natural gas market – Nick Butler 5/13

  • “Rising prices in Asia seem to suggest we are at the start of a new super cycle.”

Pragmatic Capitalism – Putting the Rise in Yields in Perspective – Cullen Roche 5/15

Project Syndicate – Managing the Risks of a Rising Dollar – Mohamed A. El-Erian 5/14

  • “Some may view the US dollar’s appreciation as consistent with a long-term rebalancing of the global economy. But, as Argentina’s recent request for IMF financing starkly demonstrates, a sharp and sudden dollar appreciation risks unbalancing things elsewhere.”

WSJ – Here Comes the Sports Gambling Apocalypse – Jason Gay 5/14

  • “A Supreme Court ruling has the potential to radically change sports in America. But will it?”

Energy

FT – Collapsing Venezuela oil exports seen to be pushing prices higher – Anjli Raval, Jonathan Wheatley, David Sheppard, John-Paul Rathbone, and Gideon Long 5/14

WSJ – Daily Shot: Morgan Stanley Research – Gasoline Expenditures by Income Quintile 5/15

Environment / Science

WSJ – Recycling, Once Embraced by Businesses and Environmentalists, Now Under Siege – BoB Tita 5/13

South America

WSJ – Daily Shot: USD / ARS (Argentine Peso) 5/14

WSJ – Daily Shot: Black Market Exchange Rate for USD / Venezuelan Bolivares 5/15

May 15, 2018

Worthy Insights / Opinion Pieces / Advice

Economist – Faced with a housing crisis, California could further restrict supply 5/10

  • “Rent control sounds appealing but is counter-productive.”

Economist – The meaning of the Vision Fund – Leaders 5/12

  • “Succeed or fail, Masayoshi Son is changing the world of technology investing.”
  • “The fund is the result of a peculiar alliance forged in 2016 between Mr Son and Muhammad bin Salman. Saudi Arabia’s thrusting crown prince handed Mr Son $45bn as part of his attempt to diversify the kingdom’s economy. That great dollop of capital attracted more investors—from Abu Dhabi, Apple and others. Add in SoftBank’s own $28bn of equity, and Mr Son has a war chest of $100bn. That far exceeds the $64bn that all venture capital (VC) funds raised globally in 2016; it is four times the size of the biggest private-equity fund ever raised.”
  • “The fund has already spent $30bn, nearly as much as the $33bn raised by the entire American VC industry in 2017. And because about half of its capital is in the form of debt, it is under pressure to make interest payments. This combination of gargantuanism, grandiosity and guaranteed payouts may end up in financial disaster. Indeed, the Vision Fund could mark the giddy top of the tech boom.”

Economist – Will Argentina’s woes spread? – Leaders 5/12

  • “Argentina has much in common with yesterday’s emerging markets, but little in common with today’s.”

FT – Apple sows seeds of next market swing – Rana Foroohar 5/13

  • “Rapid growth in debt levels is historically the best predictor of a crisis. And this year the corporate bond market has been on a tear, with companies issuing a record $1.7tn last year, and over half a trillion already this year. Even mediocre companies have benefited from easy money. But as the rate environment changes, perhaps more quickly than is imagined, many could be vulnerable.” 

WSJ – In a Dollarized World, a Rising Dollar Spells Pain – Greg Ip 5/9

  • “Even as U.S. economic influence shrinks, the dollar’s clout in global trade and borrowing is growing, magnifying impact of its rise in value.”

Markets / Economy

Bloomberg – U.S. Tariffs Lead to Record Increase in Washing Machine Prices – Alexandre Tanzi 5/10

Bloomberg Businessweek – No, the U.S Economy Isn’t Overheating – Peter Coy 5/11

  • “Some indicators are flashing red, but there’s still a little slack in the system.”

WSJ – Company Costs Are Rising, but Getting Shoppers to Pay More Is Hard – Eric Morath, Heather Haddon, and Jacob Bunge 5/9

WSJ – Daily Shot: Bloomberg – Relative Hard Currency Reserves 5/14

Real Estate

WSJ – WeWork, the Workspace Giant, Wants to Be Its Own Landlord, Using Other Investors’ Money – Eliot Brown 5/13

  • “WeWork’s new investment fund aims to buy buildings where the company would become a tenant, raising conflict-of-interest questions.”

Energy

WSJ – Daily Shot: AAA Daily National Average Gasoline Prices 5/13

Finance

FT – Landmark bond sales hit by emerging markets downturn – Kate Allen 5/14

  • “Investors who bought some of the riskiest emerging market sovereign bond sales in the past year have been left nursing paper losses as a strengthening dollar has rattled sentiment for emerging markets.”
  • “JPMorgan’s emerging markets bond index has lost 5.1% since the start of this year.”

WSJ – Daily Shot: FRED – BOJ Assets YoY Change 5/13

Cryptocurrency / ICOs

howmuch.net – The Biggest Cryptocurrency Hacks and Scams – Raul 5/9

Agriculture

Bloomberg Businessweek – These Shipping Containers Have Farms Inside – Adam Popescu 5/9

Construction

WSJ – Daily Shot: CME Lumber (JuL) 5/11

  • “Lumber futures blasted past $600 per 1,000 board feet (mbf).”

Education

NYT – Education Department Unwinds Unit Investigating Fraud at For-Profits – Danielle Ivory, Erica L. Green, and Steve Eder 5/13

South America

Economist – How chavismo makes the taps run dry in Venezuela 5/10

  • “Plentiful rains plus Bolivarian socialism equals water shortages.”

WSJ – Venezuela’s Oil Meltdown Is Getting Worse – Spencer Jakab 5/13

  • “A rush of creditors trying to seize assets has disrupted Venezuela’s oil exports at a time when they already are plunging.”

Other Interesting Links

Cannabis Benchmarks – Weekly Report 5-11-18