Tag: Auto Industry

March 7, 2018


Bloomberg Businessweek – Asian Cities Dominate Expat Salary Rankings – Andy Hoffman and Zoe Schneeweiss 2/26

US Census Bureau – Stats for Stories – Academy Awards 3/4

Worthy Insights / Opinion Pieces / Advice

Bloomberg Businessweek – Anbang Out With a Whimper – Nisha Gopalan 2/22

FT – How the Middle East is sowing seeds of a second Arab spring – Andrew England and Heba Saleh 3/4

NYT – State Dept. Was Granted $120 Million to Fight Russian Meddling. It Has Spent $0. – Gardiner Harris 3/4

Markets / Economy

Bloomberg Businessweek – KFC’s Big Screw-Up Left Restaurants Without Chicken – Christopher Jasper and Eric Pfanner 2/28

WSJ – Big Banks Enter Branch Warfare – Aaron Back 3/5

  • “Banks are entering a new period of growth, bolstered by healthy capital levels, less burdensome regulation and higher interest rates. Branch openings will remain a key competitive tactic for banks. As for Wells Fargo, with the Federal Reserve capping its growth and new sales controversies still emerging, it looks like a sitting duck to rivals.”

Real Estate

WSJ – Daily Shot: BofAML – Genworth Mortgage Insurance: US First-time homebuyers 3/6

WSJ – Daily Shot: BofAML – NAR: US Home Affordability and Mortgage Payment Components 3/6

WSJ – Daily Shot: John Burns RE Consulting – Home Price Relative Values 3/6


WSJ – Daily Shot: John Burns RE Consulting – Changes in American Debt 3/6

Environment / Science

Economist – The known unknowns of plastic pollution 3/3

Economist – Only 7% of the world’s plastic is recycled – Daily Chart 3/6

WEF – The Arctic is sending us a powerful message about climate change. It’s time for us to listen – Jennifer Francis, Jeremy Wilkinson, and Gail Whiteman 3/5


Bloomberg Businessweek – The Car of the Future Will Sell Your Data – Gabrielle Coppola and David Welch 2/20

  • “As smarter vehicles become troves of personal information, get ready for coupon offers at the next stoplight.”


WSJ – China Spends More on Domestic Security as Xi’s Powers Grow – Josh Chin 3/6

South America

Bloomberg – Venezuelans, Go Home: Xenophobia Haunts Refugees – Ezra Fieser and Matthew Bristow 3/5

March 6, 2018


FT – Shadow banking grows to more than $45tn assets globally – Caroline Binham 3/5

  • “’Shadow banking’ grew by nearly 8% globally to more than $45tn on a conservative measure after international rule makers were able to include detailed data from China and Luxembourg for the first time.”
  • “Shadow banking — the parts of the financial system that perform bank-like functions such as lending but do not have the same safeguards — accounted for 13% of total global financial assets, according to the Financial Stability Board, the international group of policymakers and regulators that makes recommendations to the G20.”
  • “The report covers 2016 figures. But since then China has launched a continuing crackdown on its shadow-banking sector.”
  • “China contributed $7tn, or 15.5%, of the $45tn assets comprising the FSB’s conservative definition of shadow banking, while Luxembourg contributed $3.2tn, or 7.2%.”
  • “But defining shadow banking can be a slippery business. The FSB’s exercise starts with looking at the assets of anything that is not a bank, including pension funds, insurers, and ‘other financial institutions‘, or OFIs. That wider ecosystem accounts for $160tn assets worldwide, compared with $340tn total financial assets globally.”
  • “Meanwhile, OFIs grew by 8% to $99tn; a faster level than banks, insurers and pension funds. OFIs now account for 30% of the entire financial system’s assets; the highest level since 2002.”

Worthy Insights / Opinion Pieces / Advice

A Wealth of Common Sense – The Winners Write the History Books – Ben Carlson 3/4

  • “Coming up with explanations for past successes is easy but figuring out who the winners will be going forward never is.”

FT – Venezuela is the one to watch on oil – Nick Butler 3/4

  • “This is Opec’s most unstable country and Maduro could escalate the dispute with Guyana.”

FT – Reports of oil demand’s death have been greatly exaggerated – Chris Midgley 3/2

MIT Technology Review – If you’re so smart, why aren’t you rich? Turns out it’s just chance. – Emerging Technology from the arXiv 3/1

  • “The most successful people are not the most talented, just the luckiest, a new computer model of wealth creation confirms. Taking that into account can maximize return on many kinds of investment.”

Markets / Economy

WSJ – Credit-Card Losses Surge at Small Banks – AnnaMaria Andriotis 3/4

  • “Concerns have been mounting in the broader credit-card industry about the recent trend of rising delinquencies. While overall card losses are still relatively low—below the historical average of the last 30 years, for instance—they’ve been slowly climbing in the last two years.”
  • “But they’ve especially surged at smaller banks, those outside the 100 largest by assets that have less than around $10.4 billion in assets. There, the average charge-off rate is near an eight-year high, while the 3.5% loss rate at large banks remains well below the 10.6% seen in 2010.”

Real Estate

MarketWatch – Over a million Americans may have just lost their shot at refinancing – Andrea Riquier 3/5

  • “Approximately 1.4 million Americans lost the interest rate incentive to refinance their mortgages in the first six weeks of 2018, according to an analysis from real estate data provider Black Knight.”
  • “The benchmark 30-year fixed-rate mortgage averaged 4.43% during the week ending March 1, according to Freddie Mac’s weekly survey. That was up three basis points from the prior week and leaves rates nearly half-a-percentage point higher than the level at which they started the year.”


NYT – California Scraps Safety Driver Rules for Self-Driving Cars – Daisuke Wakabayashi 2/26

  • “The state’s Department of Motor Vehicles said Monday that it was eliminating a requirement for autonomous vehicles to have a person in the driver’s seat to take over in the event of an emergency. The new rule goes into effect on April 2.”


FT – China hedge funds suffer in debt crackdown – Gabriel Wildau and Yizhen Jia 3/4


FT – Yen strengthening and trade rhetoric hit Japan exporters – Leo Lewis 3/4

  • “Currency jumps after Kuroda hints BOJ may exit its massive stimulus in 2019.”

WSJ – Daily Shot: USD / JPY Inverted) 3/4

WSJ – Daily Shot: Nikkei 225 3/4


February 15, 2018


WEF – Norway’s Central Bank has recommended oil and gas holdings are removed from its sovereign wealth fund – Thomas Colson 11/20/17

Worthy Insights / Opinion Pieces / Advice

Bloomberg Businessweek – Ten Years After the Crisis, Banks Win Big in Trump’s Washington – Robert Schmidt and Jesse Hamilton 2/9

Economist – As California’s fires died down, fraudsters arrived 2/8

  • “David Passey, a spokesperson for FEMA, says that more than 200,000 applications for relief related to the hurricanes and northern California wildfires are suspected to be fraudulent.”

Economist – China is in a muddle over population policy 2/8

Economist – The merits of revisiting Michael Young – Bagehot 2/8

  • “A book published 60 years ago predicted most of the tensions tearing contemporary Britain apart.”

Markets / Economy

Bloomberg – Teslas Are Finally Replacing Porsches on the Autobahn – Elisabeth Behrmann 2/12

WSJ – Daily Shot: NY Fed – US Consumer Debt Balance 2/14

WSJ – Daily Shot: NY Fed – US Consumer Delinquent Debt Percentage 2/14

WSJ – Brace Yourself for Higher Cellphone Bills This Year – Drew FitzGerald 2/8

Real Estate

Economist – How a brothel owner created the world’s biggest industrial park 2/10

  • “Google, eBay, Tesla and dozens of other tech firms have bought nearly all of the Tahoe Reno Industrial Center’s vast tract of land.”


Bloomberg Gadfly – OPEC’s Oil Price Nightmare Is Coming True – Julian Lee 2/11


NYT – The Autonomous Selfie Drone Is Here. Is Society Ready for it? – Farhad Manjoo 2/13

  • “Autonomous drones have long been hyped, but until recently they’ve been little more than that. The technology in Skydio’s machine suggests a new turn. Drones that fly themselves — whether following people for outdoor self-photography, which is Skydio’s intended use, or for longer-range applications like delivery, monitoring and surveillance — are coming faster than you think.”

Environment / Science

Economist – Antidepressants are finding their way into fish brains 2/8


Bloomberg Businessweek – China Takes a Hard Look at Corporate Borrowers – Enda Curran 2/6

  • “China’s total debt equaled 162% of gross domestic product in 2008. By 2016 it had climbed to 259%, an increase of more than $22 trillion, in large part because of massive corporate borrowing. And even with the current push to deleverage, it could reach 327% by 2022, according to Bloomberg Economics.”

  • “China’s banking regulator last summer ordered lenders to examine their exposure to private conglomerates, which was a way to slow borrowing by corporations without raising benchmark interest rates. In China, the amount of lending, rather than official interest rates, is the best indicator of how tight or loose government monetary policy is. And the picture is pretty clear: Broad-based money supply growth slowed to 8.2% in December, the weakest since data became available in 1998. ‘They are tightening,’ says Chetan Ahya, chief Asia economist at Morgan Stanley. ‘China has always relied more on actually controlling the flow of credit through direct measures’.”

Bloomberg – China’s War on Risk Has Banks Fleeing Shadowy Wealth Products – Jun Luo 2/7

  • “Chinese regulators appear to be winning their war against risk in one of the more dangerous corners of the country’s shadow banking industry — the so-called wealth management products that banks buy from each other in a search for easy profits.”
  • “Interbank holdings of WMPs more than halved last year, to 3.25 trillion yuan ($514 billion) in December from 6.65 trillion yuan a year earlier, according to the annual report of China Central Depository & Clearing Co., an industry body. That suggests higher interest rates and increased scrutiny by regulators are deterring Chinese banks from their previous practice of using cheap interbank borrowing to invest in each others’ higher-yielding WMPs.”
  • “The interbank WMP market will continue to contract this year, as China keeps interest rates high as part of its campaign against financial-sector risk, according to analysts from Shenwan Hongyuan Group Co. and Macquarie Group Ltd. Higher rates make it less profitable to use interbank borrowings to invest in WMPs. And many were deterred after the China Banking Regulatory Commission (CBRC) ordered banks to ‘self-review’ their interbank and shadow banking exposures in April, widely seen as a move to rein in the lenders.”
  • “The CBRC and other regulators are working closely in an unprecedented campaign to curb the $16 trillion shadow banking industry, of which WMPs issued by banks are the largest component. Another risky area that is contracting rapidly is some $3.8 trillion of so-called trust products, which have been a popular way for debt-ridden property developers and local governments to raise funds. That market has been hit by delayed payments as wealthy Chinese savers turn sour on the products.”
  • “Despite the retreat in the interbank sector, the wider WMP market continued to grow last year, albeit at a slower pace, according to the industry body. Strong appetite among individual investors helped the outstanding balance of WMPs rise 1.7% to 29.5 trillion yuan in December from a year earlier. Still, the escalating clampdown on all types of asset management products slowed the growth rate markedly from an average compound rate of about 50% between 2013 and 2015.”

Economist – Creditors call time on China’s HNA 2/8

  • “Analysts had foreseen an unravelling for some time, before even the regulatory wrist-slapping. A Chinese business expert calls HNA’s empire-building ‘a classic case of overextending’. For five years it has only been able to service its debts by taking on new ones. Returns on its investments have not exceeded 2% in almost a decade, according to calculations by Bloomberg, a data provider. As a result, HNA’s ratio of debt to earnings before interest, depreciation and amortization is around a lofty ten, estimates Standard & Poor’s, a ratings agency. Bond investors have grown nervous, and the firm’s financing costs have soared.”

South America

WSJ – Daily Shot: Venezuela Official Exchange Rate VEF/USD 2/13

  • “Venezuela has devalued its official exchange rate to be closer to the levels seen in the black market. This chart shows how many (bags of) bolivares are needed to buy one dollar – the official rate.”

  • “This move eliminated a major source of corruption.”
    • “BMI Research: – The move to … devalue the … official exchange rate is a positive step, as it will help to correct some of the extreme distortions in the market for foreign exchange. The massive discrepancy between the official and black market exchange rates has been a major source of corruption and arbitrage over recent years. Those with access to the subsidized exchange rate typically re-sell dollars on the black market at a substantial profit, rather than using the currency to import goods that must be sold at artificially low prices due to the country’s system of price controls. The market has reacted positively to the news of the devalued exchange rate, with the black market value of the bolivar rising to VEF233,531.1/USD as of February 6, up from a low of VEF266,630.7/USD on January 28.”

WSJ – Daily Shot: BMI Research – Venezuela Black Market Exchange Rate VEF/USD 2/14


February 12, 2018


WSJ – Tech Wealth Turns Attention to Affordable Housing in Seattle – Nour Malas 2/7

WSJ – Why Even ‘Ordinary’ Homes Sell for $500,000 Over the List Price – Nancy Keates 2/8

  • “Nowhere is demand more pent up than in the San Francisco Bay Area. In the past four months, 39 homes in Silicon Valley have sold for $500,000 or more over the listing price, says Mark Wong, a real-estate broker with Alain Pinel Realtors, based in Saratoga, Calif..”
  • “That figure includes a ‘lovingly cared for and well maintained home’ (read: not updated). The 53-year-old, three-bedroom, one-story house on 0.197 acre in West San Jose got 15 offers and sold to an all-cash buyer for $2.5 million—$815,000 over asking. A three-bedroom, 2,040-square-foot house in the Glen Park neighborhood sold in October for $2.6 million—nearly $1 million over its listing price of $1.675 million.”
  • “Seattle is another hot spot. Over the past year, the city has seen the greatest increase in the country in the share of sales above the asking price, surging to 52% of home sales in 2017 from 20% of sales in 2012, according to Zillow.”

Worthy Insights / Opinion Pieces / Advice

NYT – One Cause of Market Turbulence: Computer-Driven Index Funds – Landon Thomas Jr. 2/9

WSJ – BlackRock’s New Ambition Is a Sign of Froth – Aaron Back 2/8

  • “One can’t begrudge BlackRock for putting out its hand for a small slice of the money on offer. Even if the experiment somehow goes awry, it won’t make much of a dent in a company with $6.3 trillion of assets under management.”
  • “But the sheer imbalance between the supply of investable funds and suitable outlets for investment that gave rise to this move should ring some alarm bells for investors generally. At market tops when money is desperate to find a home, it often winds up in places it shouldn’t.”

WSJ – When Investing in Stock Makes You Feel Like Throwing Up and You Do It Anyway – Jason Zweig 2/9

Markets / Economy

Bloomberg Businessweek – The Breakneck Rise of China’s Colossus of Electric-Car Batteries – Jie Ma, David Stringer, Yan Zhang, and Sohee Kim 1/31

Real Estate

WSJ – Gig Economy Grows Up as Lenders Allow Airbnb Income on Mortgage Applications – Laura Kusisto 2/8

  • “Homeowners soon will be able to count income they earn from Airbnb Inc. rentals on applications for refinance loans.”
  • “A new program—expected to be announced on Thursday by Airbnb, mortgage giant Fannie Mae and three big lenders—will allow anyone who has rented out property on Airbnb for a year or longer to count some or all of that money as income.”
  • “The mortgages will be backed by Fannie Mae, an acknowledgment that Americans today increasingly are earning money through the ‘gig economy,’ such as renting out rooms or ride-sharing.”
  • “Initially, three lenders, Quicken Loans, Citizens Bank and Better Mortgage, will participate in the program. Fannie will evaluate the initiative and could decide over time to back mortgages from any lender that chooses to count Airbnb income in a refinancing, as long as the short-term rentals aren’t against local laws.”
  • “Still, the move raises worries about encouraging homeowners to borrow more based on the unpredictable tourism industry.”
  • “Executives at the three lenders said one crucial difference between the housing bubble and today is technology, which makes it easy to keep track of how much income homeowners are earning from Airbnb.”

WSJ – eBay Finds Unlikely Fans in Luxury-Home Sellers – Leigh Kamping-Carder 2/8


WSJ – Venezuela’s Pain is OPEC’s Gain – Spencer Jakab 2/9

  • “The cut in oil production engineered by OPEC and Russia is now in its second year, defying skeptics and helping to boost crude prices. But the cartel’s compliance owes a big debt these days to a single member: Venezuela.”
  • “A founding member of the Organization of the Petroleum Exporting Countries, Venezuela pumped only 1.64 million barrels a day last month, well below its 1.97 million barrel a day allocation, according to estimates by S&P Global Platts. That gap of 330,000 barrels a day is marginally more than the amount that the entire cartel is undershooting its 32.73 million barrel-a-day target.”
  • “Calling even the decline so far in Venezuela’s petroleum industry historic is almost an understatement. Just last year, output was down by almost 30%. In percentage terms, that is worse than in major producing countries that broke apart and saw their economies collapse, such as the former Soviet Union, and Iraq in 2003.”


FT – Investors resume their bets against market volatility – Robin Wigglesworth and Joe Rennison 2/8


WSJ – Bitcoin’s Plunge Weighs on Coin Offerings – Paul Vigna 2/7


Economist – Wooden skyscrapers could be the future for cities – 2/1

  • Video


Bloomberg Businessweek – For China’s Wealthy, Singapore Is the New Hong Kong – Chanyaporn Chanjaroen, Keith Zhai, and Cathy Chan 2/6

  • “Hong Kong is starting to be eclipsed by Singapore as the favorite destination for the wealth of China’s rich.”
  • “At stake for banks in both cities is a huge pile of money. China’s high-net-worth individuals control an estimated $5.8 trillion—almost half of it already offshore, according to consulting firm Capgemini SE. For some, the city-state of Singapore is preferable because it’s at a safer distance from any potential scrutiny from authorities in Beijing, according to interviews with several wealth managers. Multiple private banking sources in Singapore, who would not comment on the record because of the sensitivity of the subject, report seeing increased flows at the expense of Hong Kong.”
  • “The rich may be feeling exposed by changing banking practices. Hong Kong has signed tax transparency agreements that for the first time last year required all banks to report their account holders’ information to Hong Kong tax officials, in preparation for giving that information to 75 jurisdictions, including mainland China. Singapore will have similar agreements with 61 jurisdictions. But they don’t include either Hong Kong or Beijing, meaning its accounts and account holders aren’t visible to the Chinese government.”
  • “Overall, Hong Kong remains the primary destination for China’s offshore money, according to a Capgemini survey, followed by Singapore and New York. Yet the number of Chinese high-net-worth individuals who view Hong Kong as their preferred overseas place of investment is down to 53%, from 71% two years ago, according to a survey in July by Bain & Co. More than 20% favor Singapore, up from 15% two years ago.”
  • “‘We see Singapore, not Hong Kong, as the bridgehead of China’s investment overseas,’ says Li Qinghao, co-founder of NewBanker Tech Consulting, which organized the Sentosa conference last year. About 78% of S$2.7 trillion ($1.9 trillion) in assets under management in Singapore comes from overseas sources.”

FT – Wealthy Chinese push racing pigeon prices skywards – Tom Hancock 2/8

  • “An elite group of Chinese pigeon fanciers have pushed the prices of racing birds to record highs, reflecting a mood of exuberance among China’s wealthy following a pick-up in economic growth and asset prices that has buoyed luxury spending.”
  • “Xing Wei, a property tycoon, paid €400,000 ($490,000) to purchase a Belgian pigeon called Nadine, in what is thought to be the largest deal on record. He followed that with a Rmb3m ($475,000) purchase of a champion bird called Extreme Speed Goddess at a Beijing auction in December.”
  • “Soaring pigeon prices are matched by bigger prizes for pigeon-racing competitions. China’s premier 500km ‘Iron Eagle’ race series held by the Pioneer International club in Beijing boasts a prize pot of Rmb450m ($71.2m).” 
  • “Higher property and equities prices helped the wealth of China’s 2,000 richest people increase nearly 13% last year, according the country’s top rich list. The number of people known to possess assets above $300m grew faster last year than any other in the previous decade, said Rupert Hoogewerf, the compiler of the list.”
  • “After years of declines following the anti-corruption campaign launched by President Xi Jinping in 2012, sales of luxury goods in China grew 20% last year, according to business consultancy Bain. Art auction sales in Shanghai saw 42% growth last year, according to consultancy ArtTactic.”
  • “Pigeon industry insiders say just half a dozen enthusiasts are responsible for largest sales. ‘Five years ago Rmb300-Rmb400 ($47 – $63) was a very high price for a pigeon,’ said Zhang Wangbin, who runs a club in the central city of Wuhan whose auctions this winter saw several birds sell for 10 times that amount. ‘It’s the result of economic development,’ he added.”
  • “Pigeons are not the only animals to catch the eye of China’s business elite, with Japanese Koi carp prices also seeing a China effect. Kentaro Sakai, president of the Sakai Fish Farm, Japan’s biggest Koi breeder, said a single fish could sell for up to ¥42m ($380,000).”


Bloomberg Quint – SBI Posts Surprise Loss A Provisions Surge, Treasury Income Falls – Vishwanath Nair and Azman Usmani 2/9

  • “State Bank of India Ltd. reported a quarterly loss for the first time in at least 17 years as its treasury operations turned unprofitable and provisions for bad loans increased. The public lender reported a significant divergence in bad loans from RBI’s assessment which weighed on the bottom line.”

Other Interesting Links

WSJ – Daily Shot: Number of Times a State has Hosted a Super Bowl 2/8

WSJ – CMO Today: Super Bowl Ratings Slump – Lara O’Reilly 2/6

January 29, 2018


BLS – TED: The Economics Daily – Union Membership Rates in each State, 2017 1/25

  • “New York continued to have the highest union membership rate (23.8%), while South Carolina continued to have the lowest (2.6%).”

statista – The Countries Most Optimistic About 2018 – Niall McCarthy 1/22

Visual Capitalist – Visualizing a Global Shift in Wealth Over 10 Years – Jeff Desjardins 1/26

WSJ – Daily Shot: US Upward Mobility 1/26

Worthy Insights / Opinion Pieces / Advice

A Wealth of Common Sense – Some Lessons For Living From Older Generations – Ben Carlson 1/25

Project Syndicate – Blockchain’s Broken Promises – Nouriel Roubini 1/26

WSJ – My 10-Year Odyssey Through America’s Housing Crisis – Ryan Dezember 1/26

Markets / Economy

Bloomberg – Worthless Auto Trade-Ins Signal Riskier Loans – Claire Boston 1/25

  • “A growing share of the trade-ins that U.S. auto dealers and lenders accept for car-purchase financing are worthless on paper, a sign that banks and finance companies are making riskier loans to keep up revenue as vehicle sales slow.”
  • “Almost a third of cars traded in last year were worth less than the loans that had been financing them, according to car-shopping website Edmunds. That’s up from about a quarter a decade earlier, said Edmunds, which looked at cars traded in as part of financing packages for new auto purchases in the U.S.”
  • “Underwater trade-ins are just one example of the greater risks that lenders are taking now. New vehicle sales fell 1.8% to 17.2 million in 2017, but lending volume for new and used car purchases was on track to be higher than ever, according to data from the Federal Reserve Bank of New York and consumer credit bureau Experian. The growth in the average amount financed for a new car outpaced median income growth between 2013 and 2016, Moody’s said, suggesting borrowers are getting more strained.”
  • “Any pain from car-loan trouble will likely be just a shadow of the housing bubble collapse, because the auto debt market is much smaller. There were around $9 trillion of mortgages outstanding at the end of the third quarter, compared with $1.2 trillion of auto debt, the New York Fed said. And so far, many of the bonds backed by subprime auto loans are performing well thanks to built-in protections for investors. Wells Fargo analysts said in a note Wednesday that bonds issued by two of the biggest subprime auto lenders — Santander Consumer USA Holdings Inc. and General Motors Co.’s finance arm — have room to reach prices not seen since before the financial crisis.”
  • “The higher percentage of underwater loans on trade-ins may be a sign that car owners are trading in their vehicles sooner than they had previously. A consumer is often the most underwater on his or her auto loan in the first few years of ownership, because the value of the vehicle drops fastest over that time.”
  • “For borrowers who do trade in their underwater cars, lenders are essentially giving them the money to pay down their loan. The dealer sells the used car, and whatever balance remains on the old loan is folded into the new loan. The borrower might get a longer-term loan than he or she had before to help keep monthly payments manageable.”

Real Estate

Commercial Property Executive – REIT Gets SEC OK for St. Regis Aspen Resort IPO – Gail Kalinoski 1/26

  • “Aspen REIT Inc. has been given approval by the Securities and Exchange Commission for a $33.5 million initial public offering allowing investors to buy shares in the luxury St. Regis Aspen Resort in Colorado.”
  • “Upon closing of the IPO, Aspen REIT will be the first single-asset REIT to list on a national securities exchange in the U.S., according to the company.”
  • “Aspen REIT is offering 1,675,000 shares at $20 per share in the Regulation A+ IPO. The REIT applied to list its common stock on the NYSE American stock exchange under the ticker symbol AJAX. Aspen REIT intends to use substantially all of the net proceeds from the IPO, together with equity in Aspen REIT’s subsidiary operating partnership, to acquire the St. Regis Aspen Resort, a full-service, 179-key luxury hotel at the base of Aspen Mountain in the Rocky Mountains.”
  • Well that’s another way to ‘crowd source’ / syndicate funds.


Topdown Charts – ChartBrief 182 – Bond Yield Outlook – Callum Thomas 1/24

  • “There has been a lot of talk lately about trendlines, key levels and breakouts by some of the big names… Ray Dalio, Jeffrey Gundlach, Bill Gross.  But anyway, you don’t need to be a famous hedge fund manager to see the writing slowly showing up on the wall here across the major global sovereign bond markets.  The charts below show US and German 10-year bond yields have already broken out, and Japan/UK are getting close.”

WSJ – Daily Shot: US 3 Month LIBOR Rate 1/24


Bloomberg – Coincheck Says It Lost Crypto Coins Valued at About $400 Million – Yuji Nakamura and Andrea Tan 1/26

Environment / Science

Yale News – 2018 Environmental Performance Index: Air quality top public health threat 1/23


Reuters – Mexico’s drug cartels, now hooked on fuel, cripple the country’s refineries – Gabriel Stargardter 1/24

Puerto Rico

NYT – Hurricane-Torn Puerto Rico Says It Can’t Pay Any of Its Debts for 5 Years – Patricia Mazzei and Mary Williams Walsh 1/24

  • “The devastation wrought by Hurricane Maria has made Puerto Rico’s already dire financial situation even worse: The island’s leaders acknowledged late Wednesday that they will not be able to pay down any portion of their more than $70 billion debt for the next five years because of the damage.”
  • “Just before the hurricane, Puerto Rico had made plans to pay creditors a total of $3.6 billion through 2022. That was a fraction of the amount due, had the island, a United States territory, not gone into default.”
  • “Now, Puerto Rico expects its budget to be $3.4 billion in the red this year — a deficit that will take five years to close — because of the storm’s toll.”
  • “Nearly a third of customers remain without electricity, more than four months after the storm.”
  • “The government projects its population will shrink by 19.4% over the next five years, with a total exodus of over 600,000 people.”


January 10, 2018


Howmuch.net – Credit Scores & Household Incomes in America – Raul 1/8

Pew – Most dads say they spend too little time with their children; about a quarter live apart from them – Gretchen Livingston 1/8

WSJ – Daily Shot: Deutsche Bank – Road Quality by US State 2016 1/9

Worthy Insights / Opinion Pieces / Advice

A Teachable Moment – Will Wealth Inequality Slay the Bull Market? – Anthony Isola 1/8

  • “Revolution is the ultimate Black Swan.”
  • “Thirty percent of U.S. households have zero or negative non-home wealth. One thing is certain; this is not the location of the ‘cash on the sidelines’.” 
  • “Unfortunately, wealth inequality is a feature, not a bug, of democracy and capitalism.”
  • “’According to research from the New York University economist Edward Wolff, the top 10 percent of American households now own 84% of all stocks. That’s up from 77% ownership in 2001′.”
  • “90% of America barely participated in the massive bull market the last several years.”
  • “’The majority of middle-class wealth is tied to homes, as more than 60% of investible assets are in a primary residence. Stock ownership makes up less than 10% of total assets for the middle class’.” 
  • But do you have the fortitude to suffer the draw-downs…
  • “The men who can manage men manage the men who can manage only things, and the men who can manage money manage all.” – Will and Ariel Durant

Bloomberg View – Stock Investors Will Benefit Most From Corporate Tax Overhaul – Ben Carlson 1/5

NYT – Amway Made China a Billion-Dollar Market. Now It Faces a Crackdown. – Ryan McMorrow and Steven Lee Myers 1/8

WSJ – China’s Strategy to Psych Out the West Is Paying Off – Andrew Browne 1/9

  • “The China scholar Perry Link once called the party ‘the anaconda in the chandelier’.”
  • “Just by hovering, it induces self-censorship and subtle behavioral changes.”
  • “‘Normally the great snake doesn’t move. It doesn’t have to,’ Mr. Perry wrote in a 2002 essay in the New York Review of Books.”
  • “‘Its constant silent message is ‘You yourself decide.””

Markets / Economy

WSJ – The Price Gap That’s Squeezing the Auto Market – Stephen Wilmot 1/8

WSJ – Daily Shot: US Consumer Credit Net Change 1/8

  • “Consumer credit balances saw the greatest monthly increase in 16 years.”

WSJ – Daily Shot: FRED – Total US Consumer Credit Relative to Disposable Personal Income 1/8

WSJ – Daily Shot: Piper Jaffray – US Consumers living beyond their means 1/8

WSJ – Daily Shot: FRED – Total Consumer Loans by Credit Unions 1/8

WSJ – Daily Shot: FRED – Total US Student Loan Balance 1/8

WSJ – Daily Shot: US Financial Accounts Q3 2017 1/8

WSJ – Daily Shot: Piper Jaffray – Consumer Confidence & Savings Rate Gap 1/8

  • “There is a widening gap between consumer sentiment and the savings rate. In the past, this divergence was a precursor to the end of the economic cycle.”

WSJ – Daily Shot: Market Ethos – US Output Gap 1/8

  • “The disappearance of the output gap also indicates that we are in the late stage of the cycle.”

Economist – Daily Chart: The fastest-growing and shrinking economies in 2018 1/5


WSJ – Daily Shot: Bitcoin 1/8

  • “Bitcoin appears to be range-bound, unable to breach the $17k level again.”

WSJ – Daily Shot: Investing.com – Ripple 1/8

  • “Ripple took a massive hit on Monday before recovering partially.”

Environment / Science

NYT – These Billion-Dollar Natural Disasters Set a U.S. Record in 2017 – Kendra Pierre-Louis 1/8

South America

FT – Smuggled cattle and petrol join exodus from Venezuela – Gideon Long 1/8

  • “Criminal gangs seize opportunity posed by hyperinflation and a plunging bolivar.”

WSJ – Daily Shot: Bloomberg – Venezuela 10yr USD Bond Price 1/8

January 9, 2018

Worthy Insights / Opinion Pieces / Advice

GMO – Bracing Yourself for a Possible Near-Term Melt-Up – Jeremy Grantham 1/3

LinkedIn: Why Bitcoin is the largest Ponzi scheme in human history – Vivek Wadhwa 12/29

Vanity Fair: “Oh My God, This is so F—ed Up”: Inside Silicon Valley’s Secretive, Orgiastic Dark Side – Emily Chang – Feb. 2018

Markets / Economy

Bloomberg – Electric Car Drivers Are Too Smart to Own Electric Cars – Kyle Stock 1/3

  • “U.S. drivers now lease almost 80% of battery electric vehicles and 55% of plug-in hybrids, according to Bloomberg New Energy Finance. The lease rate for the country’s entire fleet hovers around 30%. (There’s one blank spot in the data: Tesla does not divulge how many of its vehicles are leased, and since it sells its cars directly rather than through dealerships, the company doesn’t have to.)”
  • “The lopsided consumer preference for leases is fueled by the meager demand for battery-powered vehicles on the used market. Partly this is a consequence of public policy meant to spur electric vehicle adoptions: buyers of pre-owned cars can’t grab thousands of dollars in federal and state incentives.”
  • “The high lease rate is also fueled by the bet Jablansky (Jeffrey Jablansky – car journalist) and others like him are making that upcoming models will far exceed today’s in value and capabilities. ‘When there’s new technology coming out, and it’s coming out so rapidly, and you’re improving on it so constantly, typically people only want to lease it,’ Steve Center, a vice president of American Honda Motor Co., said in an interview at the 2017 New York Auto Show. The hydrogen fuel cell version of the Honda Clarity isn’t available for purchase; it can only be leased. ‘Think of your cell phone,’ Center explained.”
  • “Perhaps electric vehicles will truly arrive when they are no longer compared to smartphones, which become obsolete after three years.”
  • “The bet on fast-paced improvements makes sense. In the past five years, battery prices have fallen by an annual average of 20%, according to BNEF, as factories scale up and engineers perfect the packaging of cells. ‘If you look at what can happen across the lifetime of a lease, you’re really talking about doubling the range of these vehicles,’ said Edmunds analyst Jeremy Acevedo.”
  • “Not surprisingly, a dated plug-in car is a pariah. Electric compact cars that were sold in 2014 are now worth only 23% of their original sticker price, compared with 41% for comparable combustion vehicles, according to Black Book, an auto analytics firm.”
  • “Part of the problem is that nobody—including auto engineers—really knows how well the first wave of these plug-in cars will age.”
  • “There are strong arguments to be made for a secondhand electric car. For one, a used plug-in should be far more reliable than a gas-fueled car because plug-ins have fewer moving parts and aren’t powered by small explosions. Consumer prices for electricity are far more stable than for gasoline, and even older models can have their efficiency enhanced through remote software updates.”
  • “Car companies aren’t overly worried about cultivating a secondary market for electric cars, particularly when the market for new models remains so lackluster. Sales of new models are all that matter when it comes to hitting fleetwide efficiency mandates. That’s one of the reasons most automakers are less than forthcoming about the cost of replacing a battery.”
  • “If there is a tipping point in which the electric car market stops behaving like the market for flat-screen televisions, it likely won’t be for two more years. The first Chevy Bolts will come off lease in 2020—roughly 12,000 of them—and analysts expect those cars still to be capable of going about 200 miles on a charge. The market will also start being seeded by a rash of new models: The Tesla Model 3 will be on the road in larger numbers by then, as will the Volkswagen e-Golf and Hyundai Ioniq.”

Business Insider – The Chevy Bolt is crushing the Tesla Model 3 – Matthew DeBord 1/3

Real Estate

FT – US retail’s turbulent relationship with private equity – Eric Platt and Anna Nicolaou 12/29

  • “More than half of the largest leveraged retail buyouts completed since 2007 have either defaulted, gone bankrupt or are in distress, according to a Financial Times analysis.”
  • “At least 50 US retailers — including Toys R Us, children’s retailer Gymboree, shoe store Payless and jean maker True Religion — have filed for bankruptcy this year, the most in six years, with analysts describing it as a ‘day of reckoning’, for companies that rolled over their debt refinancing for years. Observers warn that the distress is likely to accelerate in 2018 with nearly $6bn in high-yield retail debt set to mature.”
  • “Among the private equity owned retailers who have fallen into distress over the past decade are luxury goods brands including Barneys and Neiman Marcus, specialty apparel retailers such as J Crew and Claire’s, and the country’s largest pet suppliers, Petsmart and Petco.”
  • “The FT analysis focused on 31 deals with a price tag of more than $500m. In total, 19 leveraged buyouts worth a combined $43bn have run into trouble. While private equity groups have had success with a number of retailers since 2007, including Dollar General, Party City and BJ’s Wholesale Club, the majority struggled with the debt levels assumed in their buyouts. Investors in their bonds and loans have been dealt billions of dollars in losses.”
  • “’We are at historic highs [for distress], and we are not even in a recession,’ says Charlie O’Shea, retail analyst at Moody’s. ‘If you’re a CAA rated retailer [a deep-junk rating by Moody’s], you have no flexibility at all. If you’re highly leveraged with a product mix that goes head to head against Walmart and Amazon, and you are looking to refinance right now, what reception do you think you’re going to get? It’s tough out there’.”
  • “Mr O’Shea says he is looking to the first quarter of 2018 to see which ‘shoes are going to drop next’.”
  • “Neiman Marcus, the luxury department store that owns Bergdorf Goodman, is also on his radar. The Texas-based company was one of many buyout deals struck at the top-of-the-market. Neiman was taken private by TPG Capital and Warburg Pincus for $5.1bn in 2005, and eight years later was sold to private equity firm Ares Management and Canada Pension Plan Investment Board for $6bn.”
  • “But after weathering the recession better than other retailers, Neiman has succumbed to the explosive secular shifts that are wreaking havoc in bricks and mortar stores. Like-for-like sales have dropped for eight of the past nine quarters. This year Neiman scrapped both an IPO and a possible sale to rival Hudson’s Bay. With $4.9bn in debt, which S&P calls ‘unsustainable’, investors have grown nervous. Bonds sold by Neiman have tumbled below 60 cents on the dollar, from 80 cents a year ago.”


WSJ – Daily Shot: Investing.com – Bitcoin & Ripple 1/8


Bloomberg – How a Melting Arctic Changes Everything – Eric Roston 12/29

Other Interesting Links

WSJ – Daily Shot: Pal, bro, buddy, fella, or dude? 1/8