Tag: Beer

January 25, 2018

Perspective

AZ Central – USA Today: Budweiser falls from top three U.S. beer favorites – Mike Snider 1/23

NYT – School Shooting in Kentucky Was Nation’s 11th of Year. It Was Jan. 23. – Alan Blinder and Daniel Victor 1/23

WSJ – Daily Shot: Vox – US Marijuana Laws 1/24

Worthy Insights / Opinion Pieces / Advice

The Mission – Why The Smallest Steps Towards Your Goals Become Giant Strides of Momentum – Tony Fahkry 1/23

Markets / Economy

WSJ – Price War Pressures Consumer-Goods Giants – Sharon Terlep 1/23

  • “Procter & Gamble said average prices fell for first time since 2011; rival Kimberly-Clark to slash jobs.”

Real Estate

WSJ – What’s a House Worth? Wall Street Turns to Drive-By ‘Appraisals’ – Ryan Dezember and Peter Rudegeair 1/22

WSJ – Big Landlords Pile Into Co-Working as WeWork’s Ascent Continues – Peter Grant 1/23

Cryptocurrency

Economist – Daily Chart: Crypto-currencies are in a tailspin 1/22

Bloomberg – Bitcoin May Split 50 Times in 2018 as Forking Craze Mounts – Olga Kharif 1/23

Construction

FT – US ‘constructech’ start-up raises $865m in SoftBank-led round – Richard Waters 1/24

  • “Katerra aims to transform homebuilding by applying precepts of electronics outsourcing.”
  • “The company, which operates from a factory in Arizona, already has $1.3bn of committed orders from developers and hopes to build another four or five facilities by the end of next year…”
  • “Katerra hopes to drive down costs by ordering materials for multiple developments at once, giving it negotiating leverage over suppliers, and by developing manufacturing techniques to lower overall construction costs.”
  • “In one sign of its ambition, Katerra recently broke ground on an $85m factory in the US state of Washington that it said would be the world’s biggest maker of cross-laminated timber, a more ecologically friendly building material that is increasingly being used instead of concrete and steel.”
  • “The investment, which lifts the total amount Katerra has raised to almost $1.2bn, values the company at more than $3bn, including the latest round…”

November 6, 2017

If you were only to read one thing…

FT – Venezuela debt restructuring could unleash crisis – John Paul Rathbone 11/3

  • “President Nicolás Maduro’s decision to restructure Venezuela’s $89bn of debt is likely to unleash a debt crisis of a size not suffered in Latin America since Argentina’s massive 2001 default, and a bond restructuring that lawyers say would be the world’s most complex yet.”
  • “In a televised address on Thursday, Mr Maduro said state oil company PDVSA would make one more $1.1bn debt payment on a bond due in 2017 and then restructure its remaining obligations with banks and investors.”
  • “Economists have long-predicted Venezuela would eventually make such a move as funds drained from the socialist government’s vaults to pay bondholders, forcing an 80% cutback in imports over the past five years. Indeed, Venezuelan bonds already trade at default prices, and foreign reserves of $10bn are near 20-year lows.”
  • “Yet despite a recession worse than the Great Depression, hyperinflation and falling oil production, debt restructuring was a move Mr Maduro long-rejected. In large part, that was because it could lead to default, and creditors would then seize Venezuelan oil shipments and foreign assets, including PDVSA’S US refinery, Citgo. “
  • “As a result, the $7bn that Venezuela might save in 2018 from not servicing its debts would be offset by lost oil exports, and there would be no net gain.”
  • “That calculus still holds. Indeed, a desire to remain on good terms with creditors may explain Mr Maduro’s apparently nonsensical decision to restructure debts after making a particularly large bond payment this week — more than $1bn that instead could be used to import desperately-needed medicine and food. (A more cynical rumor is that the money went to government insiders who own the paid 2017 bond.)”
  • “Venezuelan imports are forecast to be just $13bn this year. Against that, the country has $63bn of traded debt, owes another $5bn to international lenders such as InterAmerican Development Bank, $17bn to China and another $3bn to Russia.
  • One reason why Mr Maduro may feel he can get away with it is that he feels empowered politically at home.”
  • “Although Mr Maduro may feel in control domestically, abroad is another matter. Any debt restructuring is complicated by US sanctions imposed in August, which block US-regulated institutions and investors from buying new Venezuelan bonds, as would be issued in a typical debt restructuring.”
  • “Adding to the difficulties, vice-president Tareck El-Aissami, who will lead the process, has been sanctioned by the US for alleged drug-trafficking and money laundering.”
  • “Furthermore, even if Venezuela seeks to get around the US sanctions by issuing restructured bonds in other currencies, authority for that would come from the Constituent Assembly — which Canada, the EU, the US, and 11 of Latin America’s biggest countries, including Brazil and Mexico, do not recognize.”
  • “Renowned economists such as Ricardo Hausmann have long said Venezuela should restructure its debt, as they consider paying bondholders while Venezuelans go hungry to be immoral. But they recommend it as part of a broader economic restructuring backed by the International Monetary Fund.”
  • “Indeed, the IMF has already crunched the numbers on the amount of help — upwards of $30bn annually — that could accompany such an approach. But international institutions will not extend such help to a government that has become a by-word in corruption and economic mismanagement — and is now near-bankrupt despite the world’s largest energy reserves.”
  • “Government insiders stole $300bn of the $1tn windfall that Venezuela received during the oil price boom of the 2000s, according to disaffected former ministers. Meanwhile, a socialist government that claims to help the poor presides over a country where 82% of households live in poverty — twice as high as when it came to power in 1999.”

Perspective

Business Insider – Tens of millions of Americans are being left out of the economic recovery – and it’s easier than ever to see who they are – Pedro Nicolaci da Costa 10/18

  • “A new online interactive tool helps Americans visualize just how economically divided the nation has become — and it’s not a pretty picture.”
  • “The country’s deep income and wealth inequalities, which match levels not seen since before the Great Depression, have been widely reported.”
  • “But the Distressed Communities Index, published by a Washington-based nonprofit called Economic Innovation Group (EIG), adds some startling new detail and localized specificity to the widening and persistent gap between the country’s rich and poor, the worst of any ‘advanced’ economy.”
  • “The US economy has, on paper, been recovering from the Great Recession since the summer of 2009. Recently, growth has hovered around 2% a year, and the unemployment rate has fallen to just 4.4%.”
  • “Still, many have yet to feel the gains of this rebound, which is among the longest in modern history but also the weakest.”
  • “‘It is fair to wonder whether a recovery that excludes tens of millions of Americans and thousands of communities deserves to be called a recovery at all,’ EIG says in its Distressed Communities Index report.”
  • “Here are some depressing findings from the EIG report, which finds that more than 52 million Americans are living in distressed ZIP codes:”
    • “Job growth in distressed ZIP codes was negative on average from 2011 to 2015, trailing the average prosperous ZIP code by more than 30 percentage points.”
    • “Distressed ZIP codes were the only group in which the number of both jobs and business establishments declined during the national recovery.”
    • “Most distressed ZIP codes contain fewer jobs and places of business today than they did in 2000.”
    • “Distressed ZIP codes contain 35% of the country’s ‘brownfield’ sites marked by ‘the presence or potential presence of a hazardous substance, pollutant, or contaminant.'”
    • “58% of adults in distressed ZIP codes have no education beyond high school.”

  • “Meanwhile, on the right side of the tracks:”
    • “88% of prosperous ZIP codes experienced job growth from 2011 to 2015, and 85% saw rising numbers of business establishments.”
    • “Prosperous ZIP codes have dominated the recovery, generating 52% of the country’s new jobs and 57% of its net new business establishments from 2011 to 2015.”
    • “Adults with any level of postsecondary education are more likely to live in a prosperous ZIP code than any other type of community.”
    • “45% of those with advanced degrees live in prosperous ZIP codes, more than in the bottom three quintiles of ZIP codes combined.”
  • “For the poorest Americans, ‘stagnation and decline were the rule, not the exception.'”

NYT – Six Charts That Help Explain the Republican Tax Plan – Alicia Parlapiano 11/2

Pew – More Americans are turning to multiple social media sites for news – Elizabeth Grieco 11/2

  • This is crazy.

WSJ – America’s Most Popular Type of Beer Is in Free Fall – Jennifer Maloney 11/1

  • “The big three U.S. light-lager brands—Bud Light, Coors Light and Miller Lite—are all losing volume as consumers shift to craft and Mexican import beers as well as to wine and spirits.”
  • “Retail store sales of Bud Light, Coors Light and Miller Lite are down 5.7%, 3.6% and 1.6%, respectively, this year through Oct. 21, according to Nielsen data compiled by Beer Marketer’s Insights. From 2010 through 2016, overall volumes in the light-lager category fell 14% to 65 million barrels.”
  • “The silver lining, at least for Molson Coors, is that both Miller Lite and Coors Light are gaining share on market leader Bud Light.”
  • “Meanwhile, Denver-based Molson Coors has a team looking at the potential impact legalized cannabis could have on its beer sales, as well as possible opportunities for investment, Mr. Hunter (Mark Hunter, CEO of Molson Coors) said. Constellation Brands said earlier this week that it is taking a 9.9% stake in Canadian cannabis company Canopy Growth Corp. and plans to develop nonalcoholic, marijuana-infused beverages.”

WSJ – Daily Shot: J.D. Power – American Awareness of the Equifax Data Breach 11/3

Worthy Insights / Opinion Pieces / Advice

FT – The challenge of Xi Jinping’s Leninist autocracy – Martin Wolf 10/31

  • “Democracies have to recognize their failures to counter a China that sees itself as an ideological rival.”

FT – A way to poke Facebook off its uncontested perch – Tim Harford 11/2

  • “The new tech titans need serious competition. For a social network, serious competition needs new rules to enable it.”

NYT – What Donald Trump Thinks It Takes to Be a Man – Jill Filipovic 11/2

South China Morning Post – The bubble economy is set to burst, and US elections may well be the trigger – Andy Xie 10/8

WSJ – Who Will Rein In Facebook? Challengers Are Lining Up – Christopher Mims 10/29

Markets / Economy

WSJ – Daily Shot: Bitcoin 11/2

Real Estate

FT – Li Ka-shing to sell stake in HK skyscraper for record $5.2bn – Don Weinland 11/2

  • While I already covered this from a Jacky Wong article in the WSJ, here are some more details.
  • Li Ka-shing’s “CK Asset stands to make a gain of HK$14.5bn ($1.88bn)  on the sale of The Center, according to a stock exchange filing.”
  • And this was only on a portion of the building…
  • “CK Asset owns 48 floors of office space in the 73-story building, as well as shopping space, car parks, basements and the entrance hall. The sale of those properties equates to HK$33,000 ($4,269) per square foot.”
  • For the buyer, CHMT Peaceful Development Asia Property Limited (majority controlled by China Energy Reserve & Chemicals Group), “the investment yield on the building was about 2.5%, according to Mr Cheng” (Raymond Cheng, an analyst at CIMB Securities).

China

FT – Beijing moves to tighten oversight of Chinese companies investing offshore – Gabriel Wildau 11/2

  • “China’s state planning agency issued draft guidelines on outbound investment on Friday that require companies to seek approval for some foreign deals even if they are conducted through an offshore entity, an effort to assert greater control over even some foreign activities that don’t involve cross-border fund flows.”
  • “In an explanatory notice accompanying the new rules issued for public comment, the National Development and Reform Commission said that ‘some foreign investment activities have drifted outside the boundaries of current supervision, and definite hidden risks exist.’”
  • “Deals that don’t involve investment by mainland Chinese entities or cross-border fund movements are generally not subject to regulation by Chinese authorities. But the latest rules from NDRC require that a Chinese parent company get the agency’s approval for deals worth more than $300m in ‘sensitive’ sectors, even if the deal is conducted purely through offshore subsidiaries.”

Japan

WSJ – Daily Shot: Japan Household Confidence 11/2

WSJ – Daily Shot: Nikkei-225 Stock Average 11/2

Middle East

FT – Saudi Arabia arrests princes, ministers and tycoons in purge – Ahmed Al Omran and Simeon Kerr 11/4

  • “Global investor (and one of the world’s richest people) Prince Alwaleed among those detained as Prince Mohammed consolidates power.”
  • The official aim is to weed out corruption.

September 25, 2017

Perspective

BBC – ‘Monster’ fatberg found blocking east London sewer 9/12

  • “A 250-metre long fatberg weighing 130 tons has been found blocking a sewer.”
  • “The solid mass of congealed fat, wet wipes, nappies, oil and condoms formed in the Victorian-era tunnel in Whitechapel, London.”
  • “Thames Water described it as one of the largest it had seen and said it would take three weeks to remove.”
  • “The company says fatbergs form when people put things they shouldn’t down sinks and toilets.”

VC – Which Cities are Fueling America’s Craft Beer Boom? – Nick Routley 9/23

Worthy Insights / Opinion Pieces / Advice

WSJ – Americans Are Richer; Why Are They Still Cautious? – Justin Lahart 9/21

  • “Getting richer doesn’t make people spend like it used to. That should give the Federal Reserve less to worry about when it comes to consumers, but more to worry about when it comes to asset prices.”
  • “Lifted by rising home prices and a buoyant stock market, U.S. household net worth reached a record $96.2 trillion in the second quarter, the Fed reported Thursday, up $1.7 trillion from the first quarter. That compared with $68.2 trillion a decade earlier, just before the recession hit. The wealth-to-income ratio hit a new high of 670%.”
  • “But if households are feeling flush they aren’t acting like it. Consumer spending has been tepid, and people have been far less willing to tap wealth to fuel spending than they used to be. Bank of America Merrill Lynch estimates that for each dollar gain in housing wealth, people increase their spending by just two cents, versus five cents in the mid-1990s. For stock gains, the figure has slipped to one cent from four cents.”
  • “There are few likely reasons for the change in behavior. First, people don’t put as much trust in the staying power of wealth gains. The big stock market drops following the dot-com bust and the financial crisis are hard to forget, and the housing bubble ended the old notion that home values are safe. Second, a greater share of U.S. stock market and housing wealth is concentrated in the hands of the rich, who don’t boost their spending in response to wealth gains as much as other people do. Finally, tighter lending standards have made it more difficult to tap into housing wealth than it was before the financial crisis.”

Finance

WSJ – Daily Shot: Goldman Sachs – BOJ Slowing Purchase of JGBs 9/22

China

WSJ – Daily Shot: Natixis – Relative Scale of China Investment in the Middle East 9/22

WSJ – Daily Shot: Natixis – China Capital Projects in the Middle East 9/22

June 7, 2017

If you were to read only one thing…

WSJ – Chinese Banks Face Up to Funding Squeeze – Anjani Trivedi 6/5

  • “Household deposits—long the backbone of China’s economy, funding inexorable loan growth—are fleeing: Around 1.2 trillion yuan ($176 billion) left the banking system last month. Meanwhile, growth in corporate deposits has slowed, reducing the rise in deposits overall to a crawl.”
  • “The exodus is proving a double whammy for China’s banks. Not only are they losing a stable source of funding, they are also bearing the brunt of higher costs to raise cash as financial conditions tighten.”
  • “Much of the money pulled out of conventional deposits is being invested in the rapidly multiplying population of investment funds, which offer higher rates. Yu’e Bao, run by Alibaba-backed Ant Financial, has become one of the world’s biggest money-market funds—with $165 billion under management—offering investors a 7-day annualized rate of over 4%.”
  • “Ironically, it and other funds are achieving such returns by investing in financing tools issued by banks. When China liberalized deposit rates in 2015, banks started churning out new investment products, including so-called negotiable certificates of deposit. Issuance of these short-term products in April totaled $180 billion, up 60% from a year earlier. Their relatively high rates—up to 4% or 5%—have made them attractive to money-market funds like Yu’e Bao.”
  • “But the upshot for banks is that stable deposits on which they pay just 1.5%—the benchmark rate—are being converted into flighty funds on which they must pay up to 5%. And even this source of funding may dry up. Last month, Yu’e Bao capped the size of new investments, likely under pressure from regulators alarmed at its rapid growth.”

Perspective

FT – Beer sales slide as global alcohol consumption falls – Scheherazade Daneshkhu 6/3

  • “The global market for alcoholic drinks contracted 1.3% last year, which was steeper than the average fall of 0.3% in the previous five years, according to figures from the International Wine and Spirits Research, the London-based industry group.”
  • “Alexander Smith, editor of IWSR magazine, said the drop was surprising given an improving global economy and the usually close correlation between global growth rates and drinking alcohol.”
  • “Global gross domestic product rose 3.1% last year, according to the International Monetary Fund, which forecasts a further improvement to 3.6% this year.”
  • “Beer sales fell 1.8%, compared with a five-year average decline of 0.6%. This was mainly because of weakness in China, the world’s biggest beer market by volumes, though sales in other large beer markets, such as Brazil and Russia which have both been in recession, were down.”
  • “In the US, ‘2017 is shaping up to be the worst year for beer volumes since 2009, when total industry volumes were down 2%’, according to Trevor Stirling, analyst at Bernstein.”
  • However, “the IWSR said it expected the alcohol industry to return to growth this year, predicting a rise in consumption of 0.8% until 2021, driven by whisky.”

Worthy Insights / Opinion Pieces / Advice

The Irrelevant Investor – Satisfaction Yield – Michael Batnick 6/6

  • “The utilitarian benefit of two investments are identical when they yield an identical return, but the satisfaction yield, reflecting expressive and emotional benefits, varies by the paths of identical returns.”
  • “The fact that the return of principal under different scenarios can evoke such different emotions tells us a lot about why investor behavior is the most important factor in determining success or failure.”

Real Estate

WSJ – Daily Shot: Wells Fargo – Origin of Foreign Capital buying US Real Estate 6/5

Bloomberg – Americans Are Pouring Money Into Their Homes Like It’s the 1990s – Vince Golle 6/6

Energy

Bloomberg – ‘Gas Apocalypse’ Looms Amid Power Plant Construction Boom – Naureen Malik and Brian Eckhouse 5/23

  • “The Marcellus Shale formation has added lots of supply to a major power grid, but demand is growing slowly.”

NYT – The Biggest, Strangest ‘Batteries’ – Diane Cardwell and Andrew Roberts 6/3

Africa

NYT – Nigeria’s Afrobeats Music Scene Is Booming, but Profits Go to Pirates – Dionne Searcey 6/3

  • “Artists across the world battle illegal sales of their work. But Nigeria’s piracy problem is so ingrained that music thieves worry about rip-offs of their rip-offs, slapping warning labels on pirated CDs to insist that ‘lending is not allowed.'”

Canada

FT – Toronto house price fall signals market is cooling – Ben McLannahan 6/5

  • “According to sales data released on Monday by the Toronto Real Estate Board, the average sale price for all home types in the Greater Toronto Area was C$863,910 ($640,674) in May, a drop of 6.2% from C$920,791 in April. The number of home sales fell by 12% over the month, while listings were up 19%.”
  • “Talk of tackling rapid price appreciation appears to have ‘changed market psychology’, said Jean-François Perrault, chief economist at Scotiabank in Toronto. ‘The benefits of holding on to a property, if you’re a speculator, have probably peaked. I think we’re moving to a healthier market.’”
  • A change from one month to the next does not make a trend. Keep your eye on this.

China

Economist – A provincial shuffle shows the power of China’s president 5/27

WSJ – Here’s How a Chinese Tech Firm Borrowed $2.1 Billion in a Hurry – Ryan McMorrow 6/3

  • “LeEco, a catchall name for a variety of businesses controlled by the internet tycoon Jia Yueting, poses little threat by itself to China’s financial system. But a review of the company’s finances shows the extent of the opaque ways Chinese firms can use to raise money — and how failures could ripple through the system.”

FT – China’s new graduates hit by falling wages – Tom Hancock 6/4

India

FT – India Inc walks a banking tightrope – Simon Mundy and Amy Kazmin 6/4

  • “A wave of defaults by struggling infrastructure companies, and others that borrowed heavily during much of the past decade, has left India’s public-sector banks saddled with a huge and growing bad loan burden that represents one of the most serious long-term threats to the country’s economic growth.”
  • “Even after the 1990s liberalization that allowed the entry of new private-sector banks, the state-owned lenders still hold more than two-thirds of banking sector assets. Impaired loans now account for 17.8% of assets, and well over 20% at several banks. As these banks now reel under the weight of $186bn in stressed assets, loan growth in the country has fallen dramatically, to 5.1% in the financial year ending in March — the slowest pace for 63 years — while corporate investment fell in three out of four quarters last year.”

South America

Economist – Bello: Argentina’s new, honest inflation statistics 5/25

  • “The end of bogus accounting.”

Other Links

BBC – How air conditioning changed the world – Tim Harford 6/5