Tag: Cannabis

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

Advertisements

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