Tag: Real Estate

December 13, 2017

Perspective

Bloomberg Businessweek – The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market – Olga Kharif 12/8

  • “Among the coins people invest in, bitcoin has the least concentrated ownership, says Spencer Bogart, managing director and head of research at Blockchain Capital. The top 100 bitcoin addresses control 17.3% of all the issued currency, according to Alex Sunnarborg, co-founder of crypto hedge fund Tetras Capital. With ether, a rival to bitcoin, the top 100 addresses control 40% of the supply, and with coins such as Gnosis, Qtum, and Storj, top holders control more than 90%. Many large owners are part of the teams running these projects.”

WEF – This is every US state’s biggest trading partner – Andy Kiersz 11/16

Worthy Insights / Opinion Pieces / Advice

Bloomberg Businessweek – What Happens When the Government Uses Facebook as a Weapon? – Lauren Etter 12/7

  • “Internet.org was just one part of a decade-long campaign of global expansion for Facebook. In countries such as the Philippines, the efforts have been so successful that the company is able to tout to its advertisers that its network is, for many people, the only version of the internet they know. Repressive governments originally treated Facebook, and all social media, with suspicion—they saw how it could serve as a locus for dissidents, as it had in the Arab Spring in 2011. But authoritarian regimes are now embracing social media, shaping the platforms into a tool to wage war against a wide range of opponents—opposition parties, human-rights activists, minority populations, journalists.”
  • Maria Ressa, co-founder of the country’s leading online news site “recalled that she started as a journalist in the Philippines in 1986, the year of the People Power Revolution, an uprising that ultimately led to the departure of Ferdinand Marcos and the move from authoritarian rule to democracy. Now she’s worried that the pendulum is swinging back and that Facebook is hastening the trend. ‘They haven’t done anything to deal with the fundamental problem, which is they’re allowing lies to be treated the same way as truth and spreading it,’ she says. ‘Either they’re negligent or they’re complicit in state-sponsored hate’.”

Bloomberg Businessweek – Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back, With a Vengeance – Zeke Faux 12/6

  • “The concept is centuries old: Inmates of a New York debtors’ prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope. But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.”
  • Americans are currently late on more than $600 billion in bills, according to Federal Reserve research, and almost one person in 10 has a debt in collectors’ hands. The agencies recoup what they can and sell the rest down-market, so that iffier and iffier debt is bought by shadier and shadier individuals. Deception is common. Scammers often sell the same portfolios of debt, called ‘paper,’ to several collection agencies at once, so a legitimate IOU gains illegitimate clones. Some inflate balances, a practice known as ‘overbiffing.’ Others create ‘redo’ lists—people who’ve settled their debt, but will be harassed again anyway. These rosters are actually more valuable, because the targets have proved willing to part with money over the phone. And then there are those who invent debts out of whole cloth.”

The Guardian – Former Facebook executive: social media is ripping society apart – Julia Carrie Wong 12/11

Markets / Economy

WSJ – Daily Shot: Bloomberg – Prime-age male labor-force participation 12/11

Real Estate

FT – New Zealand looks to ban foreigners from buying houses – Jamie Smyth 12/9

FT – Unibail-Rodamco sees 100m annual synergies in $24.7bn Westfield takeover – Jamie Smyth 12/11

FT – Hong Kong investors go defensive in $3bn property auction – Henny Sender 12/11

Finance

WSJ – Daily Shot: Bitcoin 12/11

  • “Bitcoin’s volatility is on the rise as the cryptocurrency hit new highs.”

Health / Medicine

NYT – A Nasty, Nafta-Related Surprise: Mexico’s Soaring Obesity – Andrew Jacobs and Matt Richtel 12/11

  • “Mexico began lifting tariffs and allowing more foreign investment in the 1980s, a transition to free trade given an exclamation point in 1994, when Mexico, the United States and Canada enacted the North American Free Trade Agreement. Opponents in Mexico warned that the country would lose its cultural and economic independence.”
  • “But few critics predicted it would transform the Mexican diet and food ecosystem to increasingly mirror those of the United States. In 1980, 7% of Mexicans were obese, a figure that tripled to 20.3% by 2016, according to the Institute for Health Metrics and Evaluation at the University of Washington. Diabetes is now Mexico’s top killer, claiming 80,000 lives a year, the World Health Organization has reported.”

China

WSJ – China’s Clean Energy Future Has a $1.2 Trillion Problem – Nathaniel Taplin 12/11

  • “China’s enormous coal-power debt overhang limits its ability to shift rapidly to cleaner fuels.”

Europe

WEF – Which countries feel they’ve benefitted from the EU? – Niall McCarthy 11/6

Other Interesting Links

Bloomberg Businessweek – This Crowdfunding Site Runs on Hate – Adam Popescu 12/4

December 11, 2017

If you were only to read one thing…

A Wealth of Common Sense: How Does Something Like Bitcoin Happen? – Ben Carlson 12/7

  • The best synopsis of the cryptocurrency I’ve read to date.
  • A taste: “Anyone who tells you they know where this thing is heading, how to value it, where it ends, etc. is nuts. No one has a clue. This is everything you’ve ever read about the markets all wrapped into one — FOMO, supply & demand, human nature, behavioral biases, volatility, booms, busts, uncertainty about the future, etc.”

Perspective

WEF – California is the world’s sixth largest economy. Now is the perfect time for it to step up – Rodrigo Tavares 12/7

WP – Americans are drowning in debt. Here’s where they have it the worst. – Christopher Ingraham 12/8

Worthy Insights / Opinion Pieces / Advice

Be Inspired: The Power of Morning Routine – Jim Kwik 11/26 (YouTube Video)

Bloomberg – HNA Warning Signs Keep Sprouting Up Over Mounting Debt Costs – Judy Chen and Dong Lyu 12/6

Farnam Street – Maker vs. Manager: How Your Schedule Can Make or Break You – Shane Parrish 12/9

Fortune – Inside Elliott Management: How Paul Singer’s Hedge Fund Always Wins – Jen Wieczner 12/7

FT – Self-driving finance could turn into a runaway train – Gillian Tett 12/7

  • “…at a recent financial technology conference at Michigan Law School, regulators and academics estimated that computers are now generating around 50-70% of trading in equity markets, 60% of futures and more than 50% of treasuries. Increasingly, machine learning and artificial intelligence are being added to the mix, to analyze data, trade securities and offer investment advice.”
  • “What we are seeing, in other words, is the rise of self-driving investment vehicles, matching the auto world. But while the sight of driverless cars on the roads has sparked public debate and scrutiny, that has not occurred with self-driving finance.”

FT – $400m for a Leonardo da Vinci. Has the art world gone mad? – Jan Dalley 12/7

Investment News – Stripped of fat commissions, nontraded REIT sales tank – Bruce Kelly 12/7

  • “The Department of Labor’s fiduciary standard, and new securities industry account statement rules for greater clarity in the prices of products, have forced nontraded real estate investment trusts to slice their commissions. Since then, sales of the product have collapsed.”
  • “No fat commissions on REITs means poor sales by brokers.”
  • “REIT managers and broker-dealer executives are likely reluctant to make the connection, at least publicly. But there is no denying that brokers’ appetite for the product disappeared almost overnight once upfront commissions were cut from 7% on an A share to 3% for a T share.”
  • “When REIT sales were booming a few years ago, the product’s pitch was simple: real estate kicks off an income stream of 6% to 7% annually, real estate is an asset class that is not correlated to the stock market, and with interest rates at record lows, investors needed the yield.”
  • “Those conditions haven’t changed dramatically, but nontraded REIT sales have tanked regardless.”
  • InvestmentNewsreported last month that Robert A. Stanger & Co. expects nontraded REIT sales this year to reach just $4.4 billion, about $100 million less than last year and the lowest levels since 2002.”
  • “If the ‘income, diversify and interest rate’ pitch was accurate back in 2012 and 2013, when REIT sales were booming, why isn’t it working today? There is little change in the narrative.”
  • “Interest rates have risen only marginally, and with the stock market roaring, wouldn’t it make sense for a broker to peel off some clients’ gains and invest in commercial real estate, a hard asset not correlated to stocks?”
  • “With brokers no longer getting juicy commissions for REIT sales, they simply don’t appear interested in selling the product.”
  • “Most brokers who still sell nontraded REITs no longer earn the eye-popping 7% commission, the standard rate paid to brokers who sold the product back in 2013, when REIT sales hit their all-time high and brokers sold $19.6 billion of the product.”
  • “The Financial Industry Regulatory Authority Inc. recently put into place a new rule, known as 15-02, that makes pricing of illiquid securities like nontraded REITs more transparent to investors. In the past, client account statements showed illiquid securities like REITs at the value they were bought by the client and did not subtract commissions, which were high.”
  • “‘Now that REITs are getting priced on statements, with Finra 15-02, advisers are having to consider these positions from a total return standpoint, not just income,’ Mr. Rooney said. ‘They are re-evaluating the client’s perception of the product.'”

Markets / Economy

WSJ – Daily Shot: FRED – US Treasury Securities Held by the Federal Reserve 12/8

  • “And so it begins… Quantitative tightening is finally here.”

Real Estate

Business Insider – Here’s where the future of retail is headed in 2018 – Stephanie Pandolph 12/5

  • Industry to top $5.5tn by 2020.

FT – Norway’s oil fund makes first Asian property investment – Richard Milne 12/7

  • “Sovereign wealth fun takes stake in 5 buildings in Tokyo and plans more deals.”

Finance

WSJ – Daily Shot: WP – Bitcoin Rising 12/7

  • “Bitcoin blasts past $15k, $16k, $17k in less than 24 hours.”

WSJ – Bitcoin’s Wildest Rise Yet: 40% in 40 Hours – Paul Vigna and Steven Russolillo 12/7

  • “Bitcoin mania reached new highs Thursday as the price of the digital currency jumped about 40% in 40 hours, smashing through five separate $1,000-barriers and surging past $16,000.”

NYT – Bitcoin’s Price Has Soared. What Comes Next? – Nathaniel Popper 12/8

China

WSJ – Jailed for a Text: China’s Censors Are Spying on Mobile Chat Groups – Eva Dou 12/8

  • If only George Orwell could see the tools at Big Brother’s disposal now.

FT – International investors chase the red dragon – Chris Flood 12/9

December 8, 2017

Perspective

Economist – America’s flat-Earth movement appears to be growing 11/28

  • “I am constantly forced to remind myself that while we may one day hope to conquer ignorance, there will never be a cure for stupid.”Barry Ritholtz

WSJ – Daily Shot: Moody’s – US States that challenged the Clean Power Plan 12/5

WSJ – Daily Shot: Natixis Investment Management – Global Portfolio Risks 12/7

Worthy Insights / Opinion Pieces / Advice

FT – Lawsuit shows China losing patience with Venezuela – Jonathan Wheatley 12/6

  • “Subsidiary of state-owned Sinopec files case against PDVSA over unpaid debt.”

FT – US tax reform will benefit shareholders more than workers – Michael Moritz 12/5

  • “During the past year the nation’s 20 largest technology companies have gained $900bn in value in a favorable business climate. As a group, at the end of September, they had about $90bn more cash than they did one year earlier — the bulk being accumulated at Apple, Alphabet, Microsoft, Oracle, Qualcomm and Priceline. “
  • “But the increase in their cash balances tells less than half the story. There is nothing to suggest in the rest of the data that, if their taxes were cut, they would build more factories, hire more employees or buy more equipment. Quite the contrary.”
  • “Crunch through the data, available through sources such as Bloomberg, and you will gain some remarkable insights on the financials of the giants of the tech sector. Through the first nine months of 2017 these 20 companies paid just over $27bn in taxes. At the same time, they invested almost $55bn in what the accountants label ‘capital expenditures’ — buildings and equipment. But the real message lies elsewhere.”
  • “They generated so much cash that, over and above increasing the cash they held on their balance sheets, they distributed almost $39bn in dividends to shareholders and spent almost $52bn on stock buybacks. That is about $190bn of cash, dividends and stock buybacks compared to $55bn of investment in the sort of areas that might result in more jobs and increased productivity. Even Intel, which operates in the semiconductor industry — an activity which sucks up more cash than internet and software businesses — spent $7.1bn on dividends and stock buybacks during the first three quarters compared to $7.7bn on capital expenditures.”
  • “If someone makes the argument that the corporate tax cuts are likely to change the spending habits of start-ups or emerging companies, forget about it. Investors from around the world are standing in line waiting to invest in young companies, which have all the cash they need. In addition, since most of these companies are losing money, tax payments are irrelevant.”

WP – The world produces more than 3.5 million tons of waste a day – and that figure is growing – Kadir van Lohuizen 11/21

Markets / Economy

Real Estate

NAR – In Which States Do REALTORS Expect Highest Home Price Growth in the Next 12 Months? 12/5

WSJ – Daily Shot: Moody’s – Changes in US Property Values 2007 – 2016 12/7

Energy

WSJ – Daily Shot: US Crude Oil Production 12/6

WSJ – Wall Street Tells Frackers to Stop Counting Barrels, Start Making Profits – Bradley Olson and Lynn Cook 12/7

Finance

WSJ – Daily Shot: Bitcoin 12/6

  • “The cryptocurrency blasted past, $12k, $13k, and $14k in 24 hours.”

WSJ – Daily Shot: Meritocracy Capital – CAPME Chart 12/7

  • “Cyclically adjusted price to median earnings (CAPME) and the percentile rank.”

China

Economist – Chinese cities should stop expelling Chinese migrants – Leaders 11/30

India

Economist – India’s new bankruptcy code takes aim at delinquent tycoons 11/30

  • “Defaulters will no longer be able to cling on to ‘their’ companies.”

Middle East

Economist – How-and why-to end the war in Yemen – Leaders 11/30

  • “A pointless conflict has caused the worst humanitarian crisis in the world.”

November 30, 2017

Perspective

WSJ – Daily Shot: BMO Wealth Management – How I met your Mother 11/28

Worthy Insights / Opinion Pieces / Advice

Business Insider – It takes $1.7 million to get your kid into an elite college, according to rich people – Abby Jackson 11/28

  • Clearly this is not the only, or even necessarily the best way. But some people take it to this level.
  • “American families pay more to send their kids to college than anywhere else in the world. “
  • “But for wealthy families, the costs start long before that very first college-tuition payment, according to Town & Country.” 
  • “T&C published a list of expenses for getting a child from birth through college based on education costs. The story was a refresh of a 1973 article where the magazine conducted the same analysis and came to a figure of  $300,000.”
  • “The 2017 version tallied to an eye-popping $1.7 million per child. The analysis aimed to show how wealthy families approach the competition to get their kids into the Ivy League.”

Real Estate

WSJ – Daily Shot: BMO Wealth Management – US Cities Housing Price Change from Pre-Crisis Peak 11/29

Tech

FT – Uber accused of running secret competitive intelligence unit – Chloe Cornish and Leslie Hook 11/28

  • “Judge says ride-hailing group withheld evidence in Waymo trial.”

South America

FT – Venezuela accused of ‘systematic’ abuse of prisoners – Gideon Long 11/28

  • “Human Rights Watch says severity of crackdown under Maduro is unprecedented.”

November 28, 2017

Perspective

FT – Tesla truck will need energy of 4,000 homes to recharge, research claims – Peter Campbell and Nathalie Thomas 11/27

  • “One of Europe’s leading energy consultancies has estimated that Tesla’s electric haulage truck will require the same energy as up to 4,000 homes to recharge, calculations that raise questions over the project’s viability.” 
  • “The US electric carmaker unveiled a battery-powered lorry earlier this month, promising haulage drivers they could add 400 miles of charge in as little as 30 minutes using a new ‘megacharger’ to be made by the company.”
  • “John Feddersen, chief executive of Aurora Energy Research, a consultancy set up in 2013 by a group of Oxford university professors, said the power required for the megacharger to fill a battery in that amount of time would be 1,600 kilowatts.”
  • “That is the equivalent of providing 3,000-4,000 ‘average’ houses, he told a London conference last week, ten times as powerful as Tesla’s current network of ‘superchargers’ for its electric cars.” 

Bloomberg Technology – Telsa’s Newest Promises Break the Laws of Batteries – Tom Randall and John Lippert 11/24

  • “Elon Musk touted ranges and charging times that don’t compute with the current physics and economics of batteries.”

NYT – If Americans Can Find North Korea on a Map, They’re More Likely to Prefer Diplomacy – Kevin Quealy 7/5

  • “Just 36% got it right.”

Worthy Insights / Opinion Pieces / Advice

NYT – Initial Coin Offerings Horrify a Former S.E.C. Regulator – Nathaniel Popper 11/26

NYT – Myths of the 1 Percent: What Puts People at the Top – Jonathan Rothwell 11/17

  • “Dispelling misconceptions about what’s driving income inequality in the U.S.”

WSJ – Samsung’s Tumble Sounds a Warning for Tech Stocks – Jacky Wong 11/27

  • “The fall in Samsung shares Monday followed a mild analyst report – a sign of the market’s current high state of nervousness.”

Zero Hedge – Demographic Dysphoria: Swiss Village Offers Families Over $70,000 To Live There 11/25

Zero Hedge – There Is Just One Thing Preventing Elon Musk’s Vision From Coming True: The Laws of Physics 11/26

Markets / Economy

WSJ – The Economy Is Humming, but Businesses Aren’t Borrowing – Christina Rexrode 11/26

FT – In charts: how US retailers fared as Amazon powered ahead – John Authers and Lauren Leatherby 11/22

Real Estate

NYT – How Much Income Do You Need to Buy a Home? – Michael Kolomatsky 11/23

WSJ – Wealthy Asian Buyers Scoop Up Trophy Properties in London – Olga Cotaga 11/21

  • “Pressured by low yields and political issues at home, cash-rich private investors from China and Hong Kong are snapping up trophy buildings in the U.K. capital. Often prepared to spend whatever it takes, these wealthy investors are pricing institutional investors out of the market. And because they don’t need to borrow to buy, U.K. lenders are feeling the pinch.”
  • “Of the £12.2 billion ($16.1 billion) spent on central London offices in the first three quarters this year, almost half came from private Chinese and Hong Kong buyers, according to real-estate consultant Knight Frank. That is a big jump from last year, when the group accounted for just less than a quarter of overall spending, and from 2015, when the figure was 7%.”
  • “By borrowing money at home, Chinese and Hong Kong investors have also pushed down property lending in London. According to a report by De Montfort University, the volume of new loans in the U.K. has fallen 18% year-over-year in the first half of 2017 due to a ‘slowdown in purchasing activity of new properties requiring debt during 2017’.”
  • “U.K. institutional investors such as asset managers are also dialing back. In all, they have bought £880 million of central London real estate so far this year, out of a total £15.68 billion spent by all investors, according to www.propertydata.com. Two years ago, U.K. institutions bought £2.89 billion worth of property.”
  • “’London is a two-tier market right now—the Asian investors and everybody else,’ said Joe Valente, head of research and strategy of European real estate at J.P. Morgan Asset Management, adding that the firm is waiting for the prices to fall before entering the market again.”

Finance

WSJ – Daily Shot: FRED – Commercial and Industrial Loan Growth 11/27

Visual Capitalist – Visualizing the Journey to $10,000 Bitcoin – Jeff Desjardins 11/27

FT – ICO regulation inconsistent as cryptocurrency bubble fears grow – Caroline Binham 11/23

  • “US scrutiny of cryptocurrency offerings could mean criminal penalties are looming.”

Africa

WSJ – Mugabe’s Reign Ushered In Zimbabwe’s Economic Decline – Matina Stevis-Gridneff 11/22

China

FT – Alibaba’s finance arm bans high-interest consumer loans – Gabriel Wildau 11/23

WSJ – Beijing is Making Its Most Serious Effort Yet to Tackle Its Financial-System Issues – Anjani Trivedi 11/27

Japan

FT – Corporate Japan hit by severe labor shortages – Robin Harding 11/26

  • “Japanese companies are scouring the country for workers and offering more attractive permanent contracts as they struggle to overcome the worst labor shortages in 40 years.”
  • “Companies across a range of sectors — from construction to aged care — have warned in recent days that a lack of staff is starting to hit their business.”
  • “The hiring difficulties highlight Japan’s declining population and the strength of its economy after five years of economic stimulus under Prime Minister Shinzo Abe.”
  • “’Delays to construction projects are becoming chronic,’ said Motohiro Nagashima, president of Toli Corporation, one of Japan’s biggest makers of floor coverings.”
  • “One way companies are tackling shortages is by offering more generous permanent contracts, which provide job security and pension benefits. That policy has broken a decades-long trend towards more part-time and contract work.”
  • “The way companies are responding — using every means other than wage increases — suggests that shortages will not yet turn into higher inflation.”
  • “Irregular work has risen relentlessly from about 19% of total employment when Japan’s bubble burst in 1990, to a peak of 37.9% in 2015.”
  • “But there are now signs of stabilization, with the percentage of irregular staff falling to 37.4% in the third quarter of this year.”

Middle East

FT – Saudi elite start handing over funds in corruption crackdown – Simeon Kerr 11/24

Other Interesting Links

WSJ – The Rise and Fall of a Law-School Empire Fueled by Federal Loans – Josh Mitchell 11/24

November 20, 2017

Perspective

VC – Walmart Nation: Mapping the Largest Employers in the U.S. – Jeff Desjardins 11/17

NYT – A Great Migration From Puerto Rico Is Set to Transform Orlando – Lizette Alvarez 11/17

  • “More than 168,000 people have flown or sailed out of Puerto Rico to Florida since the hurricane, landing at airports in Orlando, Miami and Tampa, and the port in Fort Lauderdale. Nearly half are arriving in Orlando, where they are tapping their networks of family and friends. An additional 100,000 are booked on flights to Orlando through Dec. 31, county officials said. Large numbers are also settling in the Tampa, Fort Lauderdale and West Palm Beach areas.”
  • “With so many arriving so abruptly, the migration is expected to transform Orlando, a city that has already become a stronghold of Puerto Ricans, many of them fleeing the island’s economic crisis in recent years. The Puerto Rican population of Florida has exploded from 479,000 in 2000 to well over one million today, according to the Pew Research Center, with the better part settling in Orlando.”

WSJ – Daily Shot: Moody’s – Global Demographic Shifts 11/17

Worthy Insights / Opinion Pieces / Advice

A Teachable Moment – If You Are Reading This, You Already Won the Genetic Lottery – Anthony Isola 11/16

A Teachable Moment – 6 Ways to Foil a Financial Predator – Dina Isola 11/17

CNBC – Homeownership doesn’t build wealth, study finds – Diana Olick 11/16

  • Essentially, depends where you live and how disciplined you are with your savings. Further, if you live in a part of the world where home price appreciation has lagged, there is value in having flexibility to move to parts of the country where it hasn’t (which of course further builds on that trend).

FT – Donald Trump’s silence over Roy Moore speaks volumes – Edward Luce 11/16

  • “…Then there is the evangelical vote. Mr Trump appears single-handedly to have changed their moral position. In 2011, 70% of white evangelicals said bad private behavior should disqualify an individual from public office, according to the Public Religion Research Institute. That had dropped to just 28% last year. It is perhaps the most astonishing sea change among any group of voters in recent years. It is also a good example of ‘negative partisanship’ — no matter how bad your candidate might be, he or she could not possibly be worse than the other party’s.”

FT – Prepare to bet against bitcoin as it becomes civilized – Gillian Tett 11/16

  • “If the cryptocurrency ceases to be a ringfenced product, the normal rules of investing will apply.”

NYT – Middle-Class Families Confront Soaring Health Insurance Costs – Robert Pear 11/16

WSJ – Upbeat Moody’s Misses the Mark on India – Anjani Trivedi 11/17

  • “Ratings company’s upgrade is its first in more than a decade, but still looks premature.”

Finance

FT – Investors sue Monte dei Paschi over cancelled bonds – Rachel Sanderson, Robert Smith, and Thomas Hale 11/16

China

Bloomberg – China’s Outbound Investment Plunges as Irrational Deals Curbed – Jeff Kearns and Jessica Sui 11/15

WSJ – Daily Shot: China 5yr AAA Average Corporate Bond Yield 11/16

FT – China tightens rules on asset management to rein in risky lending – Tom Mitchell 11/17

  • “China’s central bank outlined sweeping new regulations aimed at curbing financial risk in the asset management industry on Friday, in the latest signal of its determination to rein in the country’s runaway shadow banking sector.”
  • “The new rules, affecting $15tn of asset-management products, are aimed at unifying regulatory practices across the financial industry and will come into force in June. They will prohibit asset managers from promising investors a guaranteed rate of return, while also requiring them to set aside 10% of the management fees they collect for provisioning purposes.”
  • “Fears about the potential impact of regulatory tightening have contributed to a recent spike in Chinese sovereign bond yields, with the China 10-years rising through 4% this week for the first time since 2014.”
  • “On Thursday the PBoC injected almost $50bn into the financial system to calm investor fears, its largest intervention in almost a year. But Friday’s regulations indicated that Mr Xi’s administration will not back away from the more stringent approach it has adopted towards risk management.”
  • “In a party congress speech last month that marked the beginning of his second five-year term in office, Mr Xi indicated that his administration was prepared to accept lower rates of economic growth in order to defuse financial risks.”
  • “In August the International Monetary Fund warned that non-financial sector debt was poised to exceed 290% of GDP by 2022, compared with 235% at the end of last year.”

South America

WSJ – Daily Shot: Venezuelan Household Purchasing Power 11/17

FT – Exodus the only answer for thousands of Venezuelans – Gideon Long and John Paul Rathbone 11/17

November 17, 2017

Perspective

WSJ – Leonardo da Vinci Painting ‘Salvator Mundi’ Smashes Records With $450.3 Million Sale – Kelly Crow 11/16

  • “Leonardo da Vinci’s rediscovered portrait of Jesus Christ sold at auction for $450.3 million, making it the most expensive work of art ever sold.”
  • “The estimate for the work was around $100 million. But before Wednesday night’s sale in New York, dealers had wagered the image of an enigmatic Christ dressed in a blue robe and holding a crystal orb could sell for far more—given that da Vinci is a household name, fewer than 20 of his paintings survive and this is the last one deemed by him in private hands.”
  • “The price more than doubled the $179.4 million spent two years ago for Pablo Picasso’s 1955 ‘Women of Algiers (Version O),’ as well as an earlier record of $170.4 million for Amedeo Modigliani’s 1917-18 ‘Reclining Nude.’ In private sales, paintings by Paul Cézanne and Paul Gauguin have commanded as much as $250 million and $300 million, respectively.”
  • “Alex Rotter, chairman of Christie’s postwar and contemporary art department, fielded the winning telephone bid after a 19-minute bidding war with at least five rivals in which bids were initially lobbed in $10 million increments. Billionaire collectors in the saleroom watched with their cellphone cameras held aloft as though they were at a rock concert.”
  • “’I’ve been going to auctions for decades, and I’ve never heard that room let out a collective gasp like they did when it sold,’ said Joanne Heyler, founding director of the Broad, a Los Angeles museum. ‘It’s hard for me to even comprehend that level of bidding.’”
  • “’Salvator Mundi’ isn’t instantly recognizable, like da Vinci’s ‘Last Supper’ or ‘Mona Lisa.’ This painting was considered a plum for its rarity. Auction records show only a trio of da Vinci’s 2,500 drawings have ever even come up for sale—the highest fetched $11.4 million in 2001—and no authenticated paintings have entered the market in at least a century.”
  • “Da Vinci painted the portrait around 1500, and it bounced among European royals for hundreds of years before shoddy cleaning efforts and overpainting rendered it almost unrecognizable.”
  • “When it surfaced in 1958 at Sotheby’s, it sold as a ‘school of da Vinci’ work for only £45 (about $125 at the time). But in 2005 a group of Old Master dealers and a conservator took a closer look and campaigned for its reauthentication. Ultimately, they won validation from museums and da Vinci scholars.”
  • “’Salvator Mundi’ comes from the collection of Dmitry Rybolovlev, a Russian fertilizer billionaire.”

Bloomberg – Billionaires Stunned as Da Vinci’s Christ Sells for $450 Million – Katya Kazakina 11/16

  • More information on the seller. Rybolovlev purchased the painting for $127.5 million in 2013, part of his $2 billion art collection. Which he has been in the process of trimming.

WSJ – Daily Shot: RadioFreeEurope – Where Do IS Foreign Fighters Come From 11/16

Economist – The rich get richer, and millennials miss out 11/16

  • “Buoyant financial markets meant that global wealth rose by 6.4% in the 12 months to June, the fastest pace since 2012. And the ranks of the rich expanded again, with 2.3m new millionaires added to the total, according to the Credit Suisse Research Institute’s global wealth report.”
  • “The report underlines the sharp divide between the wealthy and the rest. If the world’s wealth were divided equally, each household would have $56,540. Instead, the top 1% own more than half of all global wealth. The median wealth per household is just $3,582; if you own more than that, you are in the richest 50% of the world’s population.”
  • “America continues to dominate the ranks of millionaires with 43% of the global total. Both Japan and Britain had fewer dollar millionaires than they did in June 2016, thanks to declines in the yen and sterling. Emerging economies have been catching up in the millionaire stakes; they now have 8.4% of the global total, up from 2.7% in 2000.”
  • “In the 12 months covered by the report, the biggest proportionate gains in wealth occurred in Poland, Israel and South Africa, thanks to a combination of stock market and currency gains. Egypt is by far the biggest loser, having lost almost half its wealth in dollar terms. Switzerland is still the country with the highest mean and median wealth per person.”
  • “There is a wide generational gap: millennials (those who reached adulthood in the current millennium) have a lot of catching up to do in the wealth stakes. Americans currently aged between 30 and 39 years of age are calculated to have amassed 46% less wealth on average in 2017 than the equivalent cohort had gathered in 2007.”
  • “Higher student debts and the difficulty of getting on the housing ladder have made it harder for millennials to build a nest-egg. That disparity might come back to bite the baby-boomer generation, who are fast moving into retirement. When baby-boomers want to cash in their assets, they may find millennials can’t afford to buy them at current prices.”

Worthy Insights / Opinion Pieces / Advice

A Teachable Moment – Insanely Expensive Life Insurance – Anthony Isola 11/15

Civil Beat – Here’s What It Really Takes To Survive in Hawaii – Neal Milner 11/16

  • “Hate them if you must, but homelessness, vacation rentals and unlicensed care homes are natural responses to problems plaguing the islands.”

FT – The Zuckerberg delusion – Edward Luce 11/15

  • “Talking about values has the collateral benefit of avoiding talking about wealth.”

NYT – Deception and Ruses Fill the Toolkit of Investigators Used by Weinstein – Matthew Goldstein and William Rashbaum 11/15

Real Estate

WSJ – Daily Shot: Moody’s – Housing Market Valuations 11/16

Finance

WSJ – Daily Shot: Bitcoin 11/15

  • And there it goes again.

Entertainment

WSJ – The Music Industry’s New Gatekeepers – Neil Shah 11/15

  • “Playlist professionals have replaced radio DJs as the new power brokers, as streaming services’ ready-made song lists become hitmakers.”

China

Reuters – Beijing hits brakes on subway boom over debt concerns – Brenda Goh 11/14

  • “China has been in the grips of a metro-building binge with more than 50 cities working on over 1 trillion yuan ($150.8 billion) worth of projects, after population restrictions were loosened last year to allow more cities to have metro systems.”
  • “Such infrastructure spending has helped to shore up economic growth but is now being scrutinized more closely after the government pledged to clamp down on financial risks.”
  • “China has hit the brakes on subway projects in at least three cities and Beijing is asking others to slow down their plans, local governments and media have reported, indicating concerns over high debt from city-level infrastructure spending.”

FT – China’s laid-off workers pose daunting welfare challenge – Emily Feng 11/15

  • “Early retirement for 1.8m in coal and steel sectors imposes heavy burden on state.”

India

Bloomberg – A Dud Diwali For Developers This Year – Purva Chitnis 11/16

  • “Developers hoping for a Diwali revival were left disappointed. Enquiries surged to their highest since demonetization during the festival season. Sales didn’t.”
  • “Fewer apartments were sold in the top eight cities in the quarter ended September, according to property research company PropEquity. Sales declined 13-60% in the three months, according to its data. Sales haven’t picked up since January even as initial cash crunch after the note ban began to ease. New launches that contribute the bulk of the demand plunged as well.”
  • “The housing market continues to hurt from Prime Minister Narendra Modi’s decision to outlaw old high-value bills and a new housing law. Demonetization had hit real estate the hardest as buyers had to pay up to 40% cash upfront – unaccounted. The Real Estate Regulation Act that followed protects customers against false promises and bars builders from shifting funds from one project to another (a good thing). A combination of the two triggered a cash crunch, bringing down demand and new launches.”

Japan

WSJ – Daily Shot: Topdown Charts – Japan Labor Force Participation 65yrs and older 11/16