2022-12-27
2022-12-20
2022-12-14
2022-12-12
2022-12-07
2022-12-06
2022-12-05
2022-12-02
2022-12-01
2022-11-30
From https://www.wsj.com/articles/early-alameda-staffers-quit-after-battling-sam-bankman-fried-over-risk-compliance-concerns-11669810723
the firm's trading capital was commingled with operating cash (money dedicated to run the firm)
Jane Street Capital LLC, a firm that has extensive risk controls
risk, compliance and accounting
From https://www.wsj.com/articles/u-s-government-to-backstop-mortgages-above-1-million-mark-for-first-time-11669740331
The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac will rise to \$1,089,300 next year in a few expensive markets, from \$970,800 this year
For most parts of the country, loan limits will rise to \$726,200 from a 2022 maximum of \$647,200
By law, loan limits are calculated annually using a formula that factors in average housing prices.
about 100 counties and county equivalents, out of about 3,000 across the U.S. are designated as high-cost markets
Mortgages within the limits are called conforming loans. Mortgages that exceed the limit are known as jumbo mortgages.
Conforming loans have lower closing costs, require smaller down payments
Fannie and Freddie don’t make loans. Instead, they buy mortgages from lenders and package them into securities that are sold to investors
Fannie and Freddie backstop roughly half of the \$13 trillion mortgage market
the Housing Policy Council, a housing-industry trade group that generally favors boosting the role of private capital in the mortgage market
2022-11-20
From https://www.wsj.com/articles/sam-bankman-fried-ftx-alameda-bankruptcy-collapse-11668824201
Bughouse chess, a fast version of the game played by four players on two boards
Coinbase Global Inc.’s direct listing gave the company a blockbuster $65 billion market capitalization after its first day of trading
the red-ink phase common to startups
Sequoia Capital, the firm that has backed some of the biggest companies in Silicon Valley
the video game “League of Legends,”
retired Boston Red Sox slugger David Ortiz
CoinDesk published an article
Changpeng Zhao, the billionaire head of Binance, the world’s largest crypto exchange
rival crypto exchanges Coinbase and Kraken
On Nov. 10, WSJ reported that FTX had used customer funds to prop up Alameda
“Sam Bankman-Fried” → “Scam Bankrun-Fraud”
BlockFi halted withdrawals on Nov. 10 and is preparing to file for bankruptcy
Crypto lender Genesis paused withdrawals on Nov. 16
Mr. Bankman-Fried’s father, Stanford tax-law scholar Joseph Bankman
From https://www.wsj.com/articles/crypto-bank-silvergate-battles-ftx-contagion-fears-11668910608
crypto-trading platform FalconX is no longer using Silvergate
S3 Partners
The most shorted bank has a pending merger, and betting against it is part of an arbitrage strategy.
KBW Regional Banking Index
Customers Bancorp Inc
Signature Bank
Silvergate Capital Corp.
helps institutional investors move dollars into and out of crypto-trading platforms through its Silvergate Exchange Network
Silvergate Exchange Network links the bank accounts of investors and exchanges
was a commercial real-estate lender a decade ago
It only holds dollars. It doesn’t hold cryptocurrencies
FTX held some deposits at Silvergate in an omnibus account
keep a ledger tracking the underlying customer assets, a common setup for firms that aren’t banks themselves
2022-11-18
2022-11-17
New FTX CEO's Declaration to Bankruptcy Court
tags | FTX Bankruptcy filing
From https://www.wsj.com/articles/ftxs-unraveling-is-latest-blow-to-softening-ad-market-11668681001
Dentsu Inc., handles some ad-buying and creative-development tasks for FTX. It had required payments from FTX in advance.
30 seconds of ad time during the Super Bowl costs $7 million.
model Gisele Bündchen
FTX’s two crypto exchanges—Bahamas-based FTX Trading Ltd. and U.S.-based FTX U.S.
stadium-naming rights, league sponsorships
sports-sponsorship business
spending money hand over fist
2022-11-15
2022-11-10
2022-11-09
From https://www.wsj.com/articles/redfin-shuts-home-flipping-business-lays-off-13-of-staff-in-slumping-housing-market-11668010665?mod=hp_lead_pos10
Opendoor - the biggest home-flipping company
Redfin, Opendoor
tech-powered real-estate businesses known as iBuyers
Redfin started testing iBuying five years ago
The home-flipping business accounted for about 43% of Redfin’s total revenue in the second quarter.
the company will likely lose at least $22 million on the home-flipping operation for the full year of 2022.
From https://www.bloomberg.com/news/articles/2022-11-09/tom-brady-tiger-global-among-investors-hurt-by-ftx-fiasco
Investors in FTX.com - Tiger Global Management, Third Point and Altimeter Capital Management, Brevan Howard Asset Management’s Alan Howard, the family office of Paul Tudor Jones, Millennium Management, Gisele Bundchen,Tom Brady, the Ontario Teachers’ Pension Plan, Sequoia Capital, Lightspeed Venture Partners, Iconiq Capital, Insight Partners, Thoma Bravo, Masayoshi Son’s SoftBank Group Corp
Bankman-Fried’s empire includes proprietary trading firm Alameda Research
2022-11-06
From https://www.bloomberg.com/opinion/articles/2022-11-06/central-banks-in-emerging-markets-are-biggest-gold-buyers
Central banks bought 400 metric tons of gold in the September quarter
Gold prices plummeted in the 1990s and 2000s when some of the European central banks sold in unison
{Turkey: Lira,Egypt: Pound, Iraq: Dinar}
When a country's currency falls, its central bank buys gold.
Stacking up bullion in the central bank’s vault has long been a powerful signal to investors that a government is going to be a prudent and reliable borrower.
Iraq’s dinar is fixed against the dollar
Turkey and Egypt are key US allies
2022-11-02
2022-10-24
2022-10-19
Notes from https://www.wsj.com/articles/tesla-tsla-q3-earnings-report-2022-11666139620?mod=hp_lead_pos1
Tesla
Q3 2022 = {profit: \$3.3 billion, revenue: \$21.5 billion}
Q3 2021 = {revenue: \$13.8 billion}
Q3 results
Model Y compact SUV vehicle was rolled out in early 2020.
Elon Musk
Customers in China ordering a new Model 3 in September could expect to wait about four or five weeks to receive their car, down from around 18 weeks in July
average car sale price in Q3 2022 = \$57,000, Q3 2021 = \$49,000
average interest rate on a new-car loan in Q3 2022 = 5.7%, Q3 2021 = 4.3%
2022-10-18
Notes from https://www.wsj.com/articles/goldman-sachs-reports-43-profit-drop-confirms-reshuffling-11666094083
Notes from https://www.wsj.com/articles/what-are-i-bonds-everything-you-need-to-know-to-earn-nearly-10-interest-11650543039?mod=livecoverage_web
$22.3 billion of I Bonds were purchased this year through September
The I Bond interest rate is based on a calculation tied to the consumer-price index.
Bonds bought from May through the end of October will earn 9.62% for six months
For example, a \$10,000 I Bond bought in October 2022 would earn an annualized rate of 9.62% for 6 months. At that point, the interest earned of \$481 would be added to the original $10,000 and the new (expected) annualized rate of 6.47% would be earned on \$10,481, resulting in another \$339 in interest for a total of \$820 in interest earned over 12 months.
I bonds aren’t available in tax-sheltered vehicles such as individual retirement accounts, Roth IRAs or 401(k)s.
Brokers and financial advisers cannot purchase I bonds for you
During the time that the I Bond is held, there are no federal taxes due. Even though you’re getting the benefit of compounding interest every six months, you don’t pay any federal taxes until you actually cash out the bonds.
There are no state or local taxes on the interest earned
Traditional bank certificate of deposits (CDs) are subject to both federal and state taxes as the interest is earned
Interest is paid in a lump sum when the bond is cashed.
An I Bond earns interest monthly from the first day of the month in the issue date, so if you purchase a bond on Oct. 20, you would get interest for the entire month of October.
The interest is compounded twice a year, accrues for up to 30 years or until you cash the bond, whichever comes first.
You can cash a minimum of \$25 at a time, and must leave at least \$25 in your TreasuryDirect account when doing partial redemptions.
The annual I Bond purchase limits are based on the recipient, not the giver. The child could receive up to $10,000 in electronic I bonds.
You can add an additional $10,000 to the annual I Bond purchase limit with a properly registered trust
When you register your account at TreasuryDirect, you have the option to create an entity account, including trusts and partnerships.
Trusts require an account manager that can act alone on behalf of the trust
2022-10-17
2022-10-11
Notes from https://www.wsj.com/articles/cameco-brookfield-renewable-partners-to-buy-westinghouse-electric-co-for-7-88-billion-11665524511?mod=hp_lead_pos5
Cameco Corp. (CCJ) and Brookfield Renewable Partners (BEP) are Canada based companies.
Brookfield Business Partners LP (BBU) is an entity that Brookfield Asset Management (BAM) uses to operate the business services and industrial operations of its private-equity group.
Westinghouse services about half of the nuclear-power reactors in the world.
Cameco is the world’s largest publicly traded uranium company, based in Saskatoon, Saskatchewan, Canada.
BEP owns and operates renewable-power assets and is 60%-owned by BAM.
Westinghouse
Pittsburgh-based
was founded in 1886 by George Westinghouse
designed and built the world’s first commercial nuclear-power plant in the 1950s
fell into bankruptcy in 2017
BBU bought it in 2018 from Toshiba Corp.
2022-10-10
2022-10-07
2022-10-06
2022-10-05
2022-10-04
2022-10-02
Notes from https://www.cnbc.com/2022/08/05/-santanders-tim-wennes-a-shakeout-among-mortgage-lenders-is-coming.html
Santander left the mortgage business in Feb 2022 as part of a strategic pivot to focus on higher-return services like its auto lending franchise.
Santander
a relatively small player in the mortgage market
$154 billion in assets and 15,000 U.S. employees
is part of a Madrid-based global bank with operations across Europe and Latin America.
last year - \$4.4 trillion in loan volumes; \$2.7 trillion in refinance activity
Black Knight - mortgage data and analytics provider
the largest banks in home loans, JPMorgan Chase and Wells Fargo
nonbank players like Rocket Mortgage
Out of the top ten mortgage providers by loan volume, only three are traditional banks: Wells Fargo, JPMorgan and Bank of America.
Rocker Mortgage, United Wholesale Mortgage, Freedom Mortgage
2022-09-30
2022-09-23
2022-09-19
2022-09-18
2022-09-15
2022-09-14
2022-09-12
Notes from https://www.wsj.com/articles/new-starbucks-ceo-to-learn-role-alongside-howard-schultz-11662975000?mod=hp_lead_pos11
Laxman Narasimhan
Starbucks next chief executive
He will join Starbucks in October 2022 as “incoming CEO”
55 years old
current CEO of U.K.-based consumer-products company Reckitt Benckiser Group PLC (RBGLY)
Will take the reins from Mr. Schultz in April 2023
likes to drink a doppio espresso macchiato with milk on the side
will take 30 hours of barista training and earn the company's green apron
will become Starbucks’s fifth chief executive in its 35-year history, and the first one to come from outside the company
Target Corp. Chief Executive Brian Cornell worked with him at PepsiCo Inc.
Went to the Wharton School of the University of Pennsylvania
was a McKinsey & Co. manager, ran PepsiCo’s Latin America, Europe and sub-Saharan Africa operations before becoming CEO at Lysol maker Reckitt
Howard Schultz
Starbucks interim CEO since April 2022
bought a six-location coffee chain in 1987
69-year-old
wrote three books about lessons from his time at Starbucks
Starbucks' fifth-largest shareholder
left the CEO role twice before and held a seat on the board until 2018, when he explored a presidential run
Mellody Hobson
Messrs. Narasimhan and Schultz
Previous CEOs of Starbucks - Jim Donald, Kevin Johnson
Starbucks
Bill George, an executive fellow at Harvard Business School and former CEO of Medtronic PLC
2022-09-06
Notes from https://www.wsj.com/livecoverage/stock-market-news-today-09-06-2022/card/credit-suisse-sheds-trust-businesses-TnBntzIPue2BIB4E6J5C
N.T. Butterfield & Son will acquire Credit Suisse's trust businesses in Guernsey, Singapore and the Bahamas.
Vaduz, Liechtenstein-based Gasser Partner Trust will take over Credit Suisse's trust business in Liechtenstein.
Trusts are complex structures often held in offshore financial centers. Investors and companies use them for estate planning and to manage assets across borders.
N.T. Butterfield acquired HSBC's Bermuda-based trust unit in 2016 and Deutsche Bank's global trust-solutions business in 2018.
Credit Suisse, a 166-year-old Zurich-based lender.
Sometime back Credit Suisse acquired First Boston Corp. and Donaldson, Lufkin & Jenrette.
2022-08-31
Notes from https://www.wsj.com/articles/jackson-mississippi-water-crisis-drags-into-third-day-11661953108?mod=hp_lead_pos10
Jackson, Miss.
The main water-treatment plant should normally handle around 50 million gallons of water a day.
It pumped around 30 million gallons on Tuesday 2022-08-30.
predominantly Black city
longstanding tensions between the city’s Democratic-led government and the state’s mostly Republican leaders
Notes from https://www.eatingwell.com/article/7985928/is-sun-cooked-tomato-sauce-safe/
A solar oven or solar cooker
can be used to cook using the sun's rays.
may be available at your local camping supply store.
they are typically made with aluminum or silver
the reflective panels of the cooker are curved so the sunshine hits the top and is reflected downward onto the food
sun-dried tomatoes, dried mushrooms, jerkies, rice paper, white pepper, vanilla pods and black tea
Notes from https://neurosciencenews.com/bladness-protein-21115/
apoptosis, the process of cell death
follicles are a source of stem cells
Most cells in the human body have a specific form and function determined during embryonic development that does not change. For example, a blood cell cannot turn into a nerve cell, or vice versa. Stem cells, however, are like the blank tiles in a game of Scrabble; they can turn into other types of cells. Their adaptability makes them useful for repairing damaged tissue or organs.
The liver and stomach regenerate themselves in response to wounds.
Hair follicles are the only organ in humans that regenerates automatically and periodically, even without injury
a type of protein, TGF-beta
If the cell produces a certain quantity of TGF-beta, it activates cell division. Too much of it causes apoptosis.
Hair follicles (HFs)
Transforming growth factor beta (TGF-ββ)
probabilistic Boolean network (pBN) model
bone morphogenetic protein (BMP)
tumor necrosis factor (TNF)
Notes from https://www.wsj.com/livecoverage/stock-market-news-today-08-31-2022/card/date-set-for-swaps-auction-on-russia-default-protection-contracts-JF1POSrJdyXW17qEMzP3
2022-08-29
2022-08-17
Notes from https://www.wsj.com/livecoverage/stock-market-news-today-08-17-2022/card/crypto-lender-genesis-cleans-house-after-hedge-fund-loan-went-bad-teiYpEjTIsLQLAFqbBxh
Genesis gave a $2.4 billion loan to the hedge fund Three Arrows Capital.
Since Three Arrows went bankrupt, they liquidated its collateral.
Now Genesis is on the hook for $1.2 billion.
Genesis' parent company is Digital Currency Group (DCG).
Notes from https://www.federalreserve.gov/monetarypolicy/fomcminutes20220727.htm
advanced foreign economies (AFEs)
the exchange value of the dollar appreciated further, surpassing its March 2020 peak against advanced-economy currencies
Desk operations
The overnight reverse repurchase agreement (ON RRP) facility
money market mutual funds (MMMFs)
System Open Market Account (SOMA) redemptions
SOMA net income would likely turn negative in coming months
GDP had declined over the first half of the year
Real goods, consumer goods, capital goods
Total PCE price inflation was 6.3 percent over the 12 months ending in May
the 12‑month change in the consumer price index (CPI) was 9.1 percent
forward-looking indicators of manufacturing activity weakened broadly
Chinese economy is rebounding as the lockdowns were eased
Over the intermeeting period
nominal and real Treasury yields declined significantly
Sovereign yields in AFEs declined
Broad equity price indexes were higher, amid heightened volatility
credit spreads widened
the exchange value of the dollar continued to appreciate
One-month option-implied volatility on the S&P 500 index—the VIX—decreased
Yields on corporate bonds declined across the credit spectrum
Spreads on municipal bonds widened slightly
C&I loans
Volumes of home-purchase mortgage originations declined in May
mortgage refinance volumes continued to fall
2022-08-16
2022-08-15
2022-08-11
2022-08-10
2022-08-05
Notes from https://www.bloomberg.com/opinion/articles/2022-07-01/a-3-mortgage-leveraging-your-stocks-to-buy-a-home
Borrowers can ask their brokerage firms or banks to set up either a margin loan or a securities-backed line of credit tied to their investment account.
Raymond James requires that borrower's account size is >= $150,000.
Retirement accounts like IRAs are prohibited from this.
The mix of assets in a portfolio will determine the amount that can be borrowed
Typically, it is set as a percentage of the account
Borrowing against investments is cheaper (3% for margin loans vs. 5.8% for a 30-year mortgage)
Since there is no underwriting, it is much faster and easier process than obtaining a mortgage
Firms typically allow borrowers to tap up to 50% of the market value of their account, but sticking closer to 30% will give you more of a cushion to play it safe.
Margin-loan holders should check the mortgage rates quarterly. That way if the mortgage rates become comparable to the margin loan rate, they could switch to mortgage.
The interest you pay for a margin loan generally isn’t fully tax-deductible. You can only deduct that interest against any investment income you earn. With a traditional mortgage, you can deduct all the interest for loans up to $750,000 if you itemize your deductions.
Notes from https://www.wsj.com/articles/coinbase-launches-derivatives-product-in-crowdedand-depressedmarket-11656763202
the crypto selloff began in November 2021
Coinbase
Core business is spot-trading
reported a loss of \$429.7 million in Q1 2022. This is equal to a loss of \$1.98 per share.
Boris Ilyevsky, the head of Coinbase Derivatives Exchange
rival crypto exchanges: Binance, Bybit, and OKX
Decentralized exchanges, or DEXes, are a class of crypto exchanges that automate the functions of traditional exchanges and allow traders to invest without an intermediary.
Coinbase and Binance are centralized exchanges
Centralized exchanges are currently larger than decentralized exchanges.
Centralized crypto exchanges are essentially brokering trades, matching orders, and executing and settling the orders. They are the central intermediary, and if something goes wrong, they are the party responsible.
Decentralized exchanges aren’t actually brokering trades on behalf of their customers or facilitating the execution or settlement of the trades. All of those functions are handled through software automation. The liquidity to ensure trades get executed comes from the users, too, collected into large “liquidity pools.”
dYdX is the second-largest derivatives exchange
2022-08-01
Notes from https://www.wsj.com/articles/amgen-fights-irs-over-10-7-billion-tax-bill-11659346202?mod=hp_lead_pos4
Puerto Rico, a U.S. territory that is considered a foreign country for corporate income-tax purposes
Amgen Inc.,
based in Thousand Oaks, Calif.,
helped pioneer the biotechnology industry
is among the world’s biggest drugmakers by sales
Its drugs include arthritis treatment Enbrel and Prolia for osteoporosis
$26 billion in revenue last year
AbbVie Inc. reduces its tax payments for U.S. sales of its blockbuster medicine Humira by keeping its patent rights under a Bermuda subsidiary, where it has no employees or significant operations, and manufacturing it in Puerto Rico.
When determining the location of profits, tax law focuses on where value is created. It doesn’t require that profits match the location of sales, but they are often similar. Pharmaceutical companies, however, rely on easy-to-move patents, and have typically had larger divides between where they put profits and where they have economic activity.
transfer pricing
2022-07-29
2022-07-27
Notes from https://www.wsj.com/articles/nord-stream-inside-the-closure-of-europes-key-russian-natural-gas-pipeline-11658233177
This is a primer on Nord Stream pipeline
The Nord Stream pipeline
is 760-mile-long.
connects Russia’s prolific Siberian gas fields with Germany under the Baltic Sea.
was opened in 2011.
has a capacity of 55 billion cubic meters a year, which ~10% of the EU's annual consumption.
Gazprom is the majority shareholder of this pipeline
The Nord Stream 2 pipeline
Before Russia’s invasion of Ukraine, the EU imported about 40% of its gas from Russia.
Gas from Norway, Algeria, the U.S. and Qatar, often comes in the form of liquefied natural gas transported by ship.
2022-07-21
2022-07-19
Notes from https://www.wsj.com/articles/global-stocks-markets-dow-update-07-19-2022-11658216206?mod=hp_lead_pos2
Notes from https://www.wsj.com/articles/broke-colleges-resort-to-mergers-for-survival-11658239445?mod=hp_lead_pos5
Boston-based Northeastern
Northeastern absorbed Mills College
Mills College
a 170-year-old women’s school
began in 1852 as a women’s seminary
on a 135-acre campus
land is worth $1 billion
not far from Silicon Valley
school's endowment is $191 million
art collection includes works by Diego Rivera and Winslow Homer
liabilities $21 million
a liberal arts college with a focus on women’s rights and gender equity
Northeastern
President Joseph Aoun
provost David Madigan
was built a century ago on a work-study model
In 2021, 91,986 students applied for 2,620 spots
consulting group EY Parthenon
St. Joseph’s University in Philadelphia absorbed the crosstown University of the Sciences
Boston College announced it will absorb Pine Manor College, also in the Boston area.
the National Student Clearinghouse
2022-07-18
2022-07-11
2022-07-10
Notes from https://www.institutionalinvestor.com/article/b1r249yny49whg/At-BlackRock-New-Accusations-of-Discrimination-and-Harassment-Are-Met-With-Contrition
date published | 2021-03-22
credit product strategy group
BlackRock became the world’s largest asset manager in 2009 when it acquired BGI
BGI created iShares
BlackRock acquired BGI for $15.2 billion
Mark Wiedman is now the head of international and of corporate strategy at BlackRock
Mark Wiseman was let go in December 2019 by BlackRock. He was global head of active equities and chairman of the alternatives business.
Jeff Smith was let go in July 2019 by BlackRock. He was the global head of human resources.
San Francisco’s gritty Tenderloin neighborhood
OrbiMed, a health care–focused hedge fund
assalamu alaikum, a standard Muslim greeting.
financial markets advisory analyst
2022-07-05
2022-06-29
Notes from https://www.wsj.com/articles/behind-the-celsius-sales-pitch-was-a-crypto-firm-built-on-risk-11656498142?mod=hp_lead_pos7
The median assets-to-equity ratio for all the North American banks in the S&P 1500 Composite index was about 9:1
Regulators look at this ration as an indicator of risk.
Celsius is a crypto lender. BlockFi is one of its competitor.
digital-asset manager Galaxy Digital
institutional crypto-lending firm Genesis
Celsius used some of that collateral to borrow more money itself, a process known as rehypothecation
“staking” cryptocurrencies, which is akin to a certificate of deposit account at a bank
2022-06-23
2022-06-22
2022-06-15
2022-06-14
Notes from https://www.wsj.com/articles/fedex-adds-board-members-in-deal-with-activist-d-e-shaw-11655212122?mod=hp_lista_pos1
Fedex
under pressure from activist investor D.E. Shaw Group
slated to report its latest results next week
raising its quarterly dividend to \$1.15 per share vs. current \$0.75.
Raj Subramaniam - new CEO
Fred Smith - old CEO
lead the company for decades
stepped down on June 1st
will remain as executive chairman
he is one of FedEx’s largest individual shareholders
new board of directors - Amy Lane and Jim Vena
Jim Vena
Michael O’Mary, managing director at D.E. Shaw
As of 2022-03-31, D.E. Shaw held ~$200 million stake in FedEx
FedEx finance chief Michael Lenz
YTD S&P 500 declined 21%; Fedex declined 22%
2022-06-13
2022-06-12
Notes from https://www.wsj.com/articles/enfamil-and-smaller-baby-formula-brands-test-dominance-of-abbotts-similac-11655026203?mod=hp_lead_pos4
The market share for Abbott Laboratories' Similac, the country’s largest formula brand by sales, has been cut in half to around 20% as of last month.
The biggest rivals of Abbott Laboratories' Similac are Reckitt Benckiser Group PLC’s Enfamil and Nestlé SA’s Gerber
Similac and Enfamil have been the dominant formula brands for more than half a century, with both products accounting for nearly 80% of the $4 billion-a-year market
Both brands hold a larger chunk of the market for a single product than Coke and Pepsi have for soda, or Pampers and Huggies have for diapers
WIC
the country’s largest single buyer of formula
It is a federally funded program
known as the Special Supplemental Nutrition Program for Women, Infants, and Children
Families supported by WIC receive vouchers to get that specific formula at no cost.
Abbott's CEO Robert Ford
food giant Danone
Opening a factory cost ByHeart some $40 million
2022-06-08
2022-06-06
Notes from https://www.wsj.com/articles/tiger-global-giant-tech-bet-11654523735?mod=hp_lead_pos5
Tiger global managed $23 billion at the end of 2021, was down 52% this year.
One of its long-only funds that managed $11 billion at the end of 2021 has lost 61.7%.
money manager LCH Investments
Tiger’s venture funds were valued at $64 billion at year-end
Tiger is led by 46-year-old founder Charles “Chase” Coleman
research firm PitchBook Data Inc.
Tiger’s hedge fund rose to \$25 billion in size by late 2021, from \$9 billion two years earlier.
Bahnsen Group, a wealth-management firm based in Newport Beach, Calif.
Tiger cut its management fee by 0.5% and is allowing investors to withdraw more of their money this year than before.
Tiger's venture-capital arm, run by Scott Shleifer, 44
JD.com Inc., now a Chinese e-commerce giant
used-car website Carvana Co.
Peloton Interactive Inc. and shoe maker Allbirds Inc.
private-equity firm Apollo Global Management
cloud software company Snowflake Inc.
Historically, software firms have been valued closer to five times revenue.
nicotine-vaping company Juul Labs Inc.
investor Union Grove Venture Partners
Tiger outsources much of its background research to consultant Bain & Co., where analysts interview customers and create dossiers on prospective companies.
Tiger is one of Bain’s largest clients and pays it more than $100 million a year
Series B funding—an early round of funding
term sheet
Moonpay, a Miami-based startup that backers call the PayPal of cryptocurrency
The average early-stage startup funding round is less than $20 million
The market capitalization of cryptocurrencies has fallen by over $1.5 trillion since November, roughly halving the value
a venture fund’s performance often lags behind drops in public markets
Private companies are harder to value, and managers often rely on a company’s valuation at a prior fundraising round.
Sequoia China, the China business of venture-capital firm Sequoia Capital
2022-06-03
Notes from https://www.wsj.com/articles/the-stock-markets-drop-is-hitting-many-401-k-s-harder-this-time-11653256655
The target-date funds hold about 40% of total assets in 401(k)-style plans Vanguard Group administers. They attract 60% of new contributions to 401(k) plans.
Vanguard is the largest target-date-fund provider, with about $1 trillion in such funds.
Notes from https://www.wsj.com/articles/china-taiwan-relations-tensions-explained-11653322751
Chiayi Air Force Base in Taiwan
Taiwan
a self-ruled island of 24 million people
roughly 100 miles off China’s southeastern coast
democracy
was controlled by Japan for half a century until the end of World War II
After World War II, it became a part of the Republic of China
China’s military, the People’s Liberation Army
Mandarin is the dominant language in both China and Taiwan
fighter jets, bombers and spy planes
portable antitank and antiaircraft missiles
conscription
Since 1979, U.S. policy toward the defense of Taiwan has been governed by a law known as the Taiwan Relations Act, which holds that any attempt to determine Taiwan’s political future through anything other than peaceful means constitutes a threat to American interests.
Notes from https://www.bbc.com/news/world-asia-china-59900139
The split between China and Taiwan came about after World War Two, when there was fighting in mainland China between nationalist government forces and the Chinese Communist Party.
The communists won in 1949, and their leader, Mao Zedong, took control in Beijing.
Meanwhile, the nationalist party - known as the Kuomintang - fled to nearby Taiwan.
Currently, only 13 countries (plus the Vatican) recognise Taiwan as a sovereign country.
Taiwan
Global foundry market share:
Taiwan - TSMC, UMC, PSMC, VIS
South Korea - Samsung
China - SMIC, HHGrace
Other - Global Foundries, TowerJazz
A “foundry” is a company which makes chips designed by consumer and military customers. It is a vast industry, worth almost $100bn in 2021.
2022-06-01
2022-05-31
Notes from https://www.wsj.com/articles/eu-leaders-spar-over-russian-oil-ban-11653921289?mod=article_inline
Sberbank - the largest bank in Russia.
Germany, the EU’s biggest economy, depends heavily on imports of Russian natural gas, which flows through pipelines.
OFAC = The U.S. Office of Foreign Assets Control
Russia’s oil exports rose by 620,000 barrels to 8.1 million barrels a day
Urals - popular grade of Russian crude
India's Jamnagar and Sikka ports
Indian energy giant Reliance Industries Ltd.
Lauren II, a giant crude carrier that can hold about 2 million barrels of oil
2022-05-21
2022-05-20
Notes from https://www.npr.org/2022/05/19/1099748064/baby-infant-formula-shortages
infant formula industry
The Abbott manufacturing facility in Sturgis, Michigan
Abbott Nutrition is the firm behind it
manufactured baby formula
supplied as much as one-fifth of all the infant formula in the USA.
The formula produced by this plant was suspected to be contaminated which led to a recall
They shuttered it
It s a critical supplier of specialized formula for infants with allergies and other health conditions that require a particular diet.
JBS
FDA Commissioner Robert Califf
Formula makers are regulated by the federal government
The federal government is the biggest customer of formula makers.
About half of all formula sold in the U.S. is paid for by the Department of Agriculture, through its Special Supplemental Nutrition Program for Women, Infants and Children (WIC).
WIC contract
Abbott has the WIC monopoly in about two-thirds of all states
There are 17.5% tariffs on imported infant formula
it will take about two weeks to restart production at Abbott's Sturgis plant and another six to eight weeks to bring that plant to full capacity
market research firm IRI
Notes from https://www.reuters.com/business/sustainable-business/tesla-removed-sp-500-esg-index-autopilot-discrimination-concerns-2022-05-18/
S&P 500 ESG Index
oil refiner Phillips 66 (PSX)
Tesla pioneered EVs and expanded into battery storage for electric grids and solar-power systems
Margaret Dorn, S&P Dow Jones Indices' head of ESG indices for North America
S&P Dow Jones Indices is majority-owned by S&P Global Inc. (SPGI)
Other big ESG ratings agencies
Sustainalytics unit of Morningstar Inc
Notes from https://www.indexologyblog.com/2022/05/17/the-rebalancing-act-of-the-sp-500-esg-index/
2022-05-16
Notes from https://www.wsj.com/articles/warren-buffett-spends-big-as-stock-market-sells-off-11652589031?mod=hp_lead_pos6
Berkshire Hathaway bought 901,768 shares of Occidental Petroleum Corp (OXY)
The SEC requires all institutional investors that manage more than $100 million to file the form 13F within 45 days of the end of each quarter.
Cash is dry powder
YTD energy stocks are the best-performing group in the S&P 500
Chevron (CVX) is up 43% YTD
OccidentalPetroleum (OXY) is up 121% YTD
S&P 500 is down 16% YTD
Energy stocks are likely to be an inflation hedge
2022-05-15
2022-05-13
Notes from https://www.wsj.com/articles/warnings-from-the-crypto-currency-crash-stablecoin-liquidity-terrausd-11652390321?mod=hp_opin_pos_1
article published date | 2022-05-12
$200 billion in crypto assets have blown up in 24 hours
stablecoin TerraUSD collapsed
Stablecoins are supposed to hold a fixed peg and let investors seamlessly trade crypto assets
TerraUSD is linked to another crypto currency - the token Luna
Examples of stablecoins - TerraUSD, Tether
Coinbase, the crypto exchange
Coinbase customers would be unsecured creditors in the event of a bankruptcy
Crypto market is $2.9 trillion in Nov 2021. It was $500 billion in Nov 2020.
junk bond prices are falling as concerns mount that some companies may struggle to roll over their debt
European Central Bank recently warned banks to hold extra capital against leveraged loans, which are sensitive to interest rates, to cover potential losses.
About $800 billion in leveraged loans in the U.S. were issued last year
Debt covenants and market discipline were already deteriorating before the pandemic
the oracles of the Eccles building
Notes from https://www.wsj.com/articles/crash-of-terrausd-shakes-crypto-there-was-a-run-on-the-bank-11652371839?mod=hp_lead_pos7
TerrsUSD swelled to $18 billion.
TerraUSD's sister cryptocurrency, Luna
TerraUSD, which is known by the ticker UST
Jim Greco, a partner at crypto quantitative investment firm F9 Research, was celebrating his birthday at Manhattan’s Le Bernardin
Anchor Protocol is a crypto bank created by developers at Terraform Labs
Investors had deposited $14 billion of TerraUSD in Anchor as of late last week.
Terraform Labs - Mr. Kwon's firm
Luna lost nearly $20 billion in value
a central bank in an emerging-markets country might spend dollar reserves to protect its currency
Mr. Kwon, a Stanford University graduate who worked at Apple Inc. and Microsoft Corp.
“My dearest creation named after my greatest invention.”
Examples of stablecoins - TerraUSD, tether, and USD Coin
2022-05-12
2022-05-05
2022-05-02
2022-04-28
2022-04-27
Notes from https://www.wsj.com/articles/what-are-i-bonds-everything-you-need-to-know-to-earn-nearly-10-interest-11650543039
Notes from https://www.bloomberg.com/news/features/2021-04-08/how-bill-hwang-of-archegos-capital-lost-20-billion-in-two-days?srnd=premium
Losses from Archegos implosion
Credit Suisse Group AG lost $4.7 billion
Nomura Holdings Inc. lost $2 billion.
Mitsubishi UFJ Financial Group Inc. lost $300 million
Goldman, Deutsche Bank AG, Morgan Stanley, and Wells Fargo - no losses.
penthouse overlooking Manhattan’s Central Park
hillside chalet at the Yellowstone Club
private jets
a “Tiger cub,” an alumnus of Tiger Management, the hedge fund powerhouse that Julian Robertson founded
ViacomCBS, GSX Techedu, and Shopify
Media conglomerates ViacomCBS and Discovery
four Chinese stocks: GSX Techedu, Baidu, Iqiyi, and Vipshop
arbitrage on collateralized bundles of obscure financial contracts
popular themes such as cord cutting, virtual education, and online shopping
family, business, and charity - the Grace & Mercy Foundation
Sung Kook Hwang immigrated to the U.S. from South Korea in 1982 and took the English name Bill.
Tiger Management, run by Julian Robertson, became one of the first widely famous hedge funds. Many former Tiger employees went on to open their own shops. Hwang’s onetime colleagues at Tiger Management include: Andreas Halvorsen, Viking Global Management; Philippe Laffont, Coatue Management; and Chase Coleman, Tiger Global Management
a key lesson: to live with losses
Tiger closed in 2001
investing only in Korean, Japanese, and Chinese companies that generated all of their revenue domestically
a group called Liberty in North Korea, or Link, that has helped about 1,300 North Koreans escaping the regime.
the Financial Services Ministry, a group affiliated with New York’s Redeemer Presbyterian Church that connects Christians in finance
Paul Gojkovich, a former director at Merrill Lynch
U.S. rules prevent individual investors from buying securities with more than 50% of the money borrowed on margin. No such limits apply to hedge funds and family offices.
2x leverage = \$1 million borrowed for every \$1 million of capital
In a typical swap agreement, a bank gives its client exposure to an underlying asset, such as a stock. While the client gains—or loses—from any changes in price, the bank shows up in filings as the registered holder of the shares.
Cursing was not tolerated in Archego's offices. It is a policy borrowed from Robertson’s Tiger.
Uniqlo, the fast-fashion brand, because it’s cheap and comfortable
hedge fund running a similar strategy would lever up two to two-and-a-half times
a portfolio short, a broad bet against the stock market, often made through an options or futures contract on the S&P 500.
2022-04-26
2022-04-21
2022-04-19
2022-04-18
2022-04-06
2022-04-05
2022-04-04
Notes from https://www.bloomberg.com/news/articles/2022-04-04/elon-musk-s-passive-stake-in-twitter-belies-his-big-influence?srnd=premium
Shareholders who intend to remain “passive” – those who don’t seek to influence or change control of a company – file a shorter form with the U.S. Securities and Exchange Commission, called a 13G.
Those angling for board seats or seismic shakeups typically file a longer and more in-depth form, a 13D, within 10 days of buying their stake.
A 13D requires more disclosure – shareholders have to say what their plans are, and how they’re financing the purchase of the stock.
The rule applies to anyone acquiring 5% or more of a public company’s stock.
Musk announced his 9.2% stake in Twitter by filing the 13G
Elon Musk and Jack Dorsey are friends
Musk has 80 million followers on Twitter
Unlike Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Snap Inc., Twitter’s founders don’t have special voting control over its future
Jared Birchall, the head of Elon Musk's family office
2022-04-01
Notes from https://www.bloomberg.com/news/articles/2022-04-01/russian-bond-arbitrage-is-minting-near-guaranteed-profits?srnd=premium
relative-value trade
A negative-basis trade involves buying beaten down government or corporate bonds along with corresponding credit-default swaps, which insure the debtholder in the event of non-payment.
pay out at par quoted recently at 80 cents on the dollar
Rob Citrone’s $2.6 billion Discovery Capital Management
bought long-dated Russian government bonds at about 20 cents on the dollar, while also hedging with one-year CDS at a price of around 60 cents
position accounts for a couple percentage points of Discovery’s portfolio
Aurelius Capital Management, GoldenTree Asset Management and Silver Point Capital
H2O Asset Management has been adding to its Russian debt holdings
distressed-debt veterans - a group known for its combative personalities and aggressive tactics
Volumes in Russian corporate bonds soared to their highest levels in two years last month
trading of Russian credit-default swaps has surged, dwarfing other single-name contracts
Bond and CDS packages were being offered by sales desks for as much as 95 cents on the dollar
Marathon Asset Management’s Bruce Richards
half of Russia’s foreign-exchange reserves are frozen
Clearstream, one of the biggest clearinghouses in the world
Jay Newman, the hedge fund veteran behind Elliott Management’s 15-year battle with Argentina following that nation’s default
Specialist investors, crossover investors
hedge-fund consultant Macro Intelligence 2 Partners
setting up offshore structures in order to buy Russian assets
2022-03-27
Notes from
https://www.berkshirehathaway.com/letters/2021ltr.pdf
Warren Buffett's 2021 letter to Berkshire Hathaway's shareholders
Charlie and I are not stock-pickers; we are business-pickers.
In 2021, Berkshire's U.S.-based “infrastructure” assets are $158 billion
In 2021, Berkshire paid $3.3 billion in federal income taxes.
Compare this to $402 billion which is the total corporate income-tax receipts as reported by the U.S. Treasury.
“I gave at the office”
In 1955, Berkshire Fine Spinning and Hathaway Manufacturing agreed to merge their businesses.
Both of them are venerable New England textile companies
Fall River (Berkshire) and New Bedford (Hathaway)
The New England textile industry had silently entered an extended and non-reversible death march.
Berkshire's insurance float is \$147 billion. It increased by \$9 billion last year. In the past two years, it increased by 25%.
Ajit Jain was hired in 1986.
Marmon has more than 100 individual business operations, ranging from the leasing of railroad cars to the manufacture of medical devices.
Berkshire owns 5.55% of Apple, up from 5.39% a year earlier.
Each 0.1% of Apple's 2021 earnings amounted to $100 million.
In 2021, Apple paid $785 million of dividends to Berkshire.
BNSF had earnings of $6 billion in 2021. This figure is calculated after interest, taxes, depreciation, amortization and all forms of compensation.
Bull markets breed bloviated bull
BHE earned $4 billion in 2021.
David Sokol and Greg Abel
Berkshire’s two long-time investment managers, Todd Combs and Ted Weschler.
Pilot Corp., a leader in travel centers
Berkshire has $144 billion of cash and cash equivalents
Of this, $120 billion is held in U.S. Treasury bills with maturity < 1 year. This is 0.5% of publicly-held U.S. national debt.
Berkshire will always hold more than $30 billion of cash and cash equivalents
Warren Buffett keeps 80% of his net worth in equities but he prefers it to be 100%.
Examples of productive investments - stocks, apartments, farms, oil wells
During the past two years, Berkshire repurchased 9% of the shares that were outstanding at yearend 2019 for a total cost of $51.7 billion.
As of February 23, 2022, since yearend Berkshire repurchased additional shares at a cost of $1.2 billion.
Paul Andrews died last year. He was the founder and CEO of TTI, a Fort Worth-based subsidiary of Berkshire.
purchasing agent
distribute small electronic components
TTI now employs 8,043
John Roach - a mutual friend of Paul Andrews and Warren Buffett
Deb Bosanek - assistant of Warren Buffett
Matt Rose, CEO of BNSF
“secrets” are catnip to kids
the orangutan effect: If you sit down with an orangutan and carefully explain to it one of your cherished ideas, you may leave behind a puzzled primate, but will yourself exit thinking more clearly.
2022-03-21
Notes from https://www.bloomberg.com/news/articles/2022-03-21/china-plane-crash-update-132-people-on-boeing-737-feared-dead?srnd=premium
the Civil Aviation Administration of China
China Eastern flight
Spirit AeroSystems Holdings Inc.,
India’s Directorate General of Civil Aviation (DGCA)
India DGCA Chief Arun Kumar
Air India Express is the low-cost overseas unit of Air India Ltd.,
Air India Express and SpiceJet Ltd. operate 737 jets.
Vistara is the local affiliate of Singapore Airlines Ltd.
Vistara operate some 737 aircraft previously used by now-defunct Jet Airways India Ltd.
Aviation Safety Network
Boeing 737-800 NG model
NG = Next Generation
best safety records among all aircraft
11 fatal accidents out of more than 7,000 planes delivered since 1997
There are 4,502 Boeing 737-800 NGs in service globally, including 950 in the U.S.
Boeing 737 Max was subjected to a global grounding after two deadly crashes
The British Airline Pilots Association (BALPA)
2022-03-09
2022-03-03
Notes from https://www.bloomberg.com/news/features/2022-02-28/which-u-s-european-companies-are-pulling-out-of-russia-after-ukraine-invasion?srnd=premium
Russia’s largest foreign investor, BP Plc
state-controlled Rosneft
BP announced on Sunday that it would exit its 20% stake in Rosneft. This result in a $25 billion write-off and cut its global oil and gas production by a third.
Shell owns 50% of the Salym Petroleum Development, which last year earned the company $700 million of adjusted earnings.
state-controlled Gazprom
Sakhalin-II liquefied natural gas facility
Nord Stream 2 pipeline project
Kwasi Kwarteng, the U.K. business secretary
Shell Chief Executive Officer Ben van Beurden
Equinor ASA is Norway’s biggest energy company and majority owned by the state
France’s TotalEnergies SE is involved in major liquefied natural gas projects in Russia
Norway’s sovereign wealth fund is the largest in the world
2022-03-02
2022-03-01
2022-02-25
2022-02-22
2022-02-21
2022-02-18
Notes from https://www.wsj.com/articles/russia-ukraine-putin-nato-11643121821
Nord Stream 2 is a natural-gas pipeline that runs from Russia to Germany.
The pipeline is 764-mile long.
U.S. thinks that the pipeline will strengthen Russia’s grip on the European energy market and weaken Ukraine.
Germany is a NATO member.
Germany is the world’s biggest buyer of Russian gas.
Germany draws more than half of its gas supply from Russia
German Chancellor Olaf Scholz
2022-02-14
2022-01-19
2022-01-14
2022-01-05
2022-01-04
Notes from https://www.bloomberg.com/news/articles/2022-01-04/charlie-munger-s-daily-journal-nearly-doubles-alibaba-holding?srnd=markets-vp
Daily Journal Corp., a newspaper and software business
The Chairman of its Board of Directors is Charlie Munger
Notes from https://www.bloomberg.com/news/articles/2022-01-04/u-s-schools-close-in-droves-as-omicron-drives-staff-shortages?srnd=premium
In New Jersey, 30% of schools had switched to virtual learning as of Jan. 3.
Among 1.4 million K-12 students, infections have more than doubled in three weeks, to 11 per 1,000 pupils.
Staff positives have quadrupled, to 24 per 1,000, according to state data.
Notes from https://www.bloomberg.com/news/articles/2022-01-04/denmark-dumps-7-billion-in-kroner-on-fx-market-to-protect-peg?srnd=markets-vp
Denmark’s central bank sold 47 billion kroner ($7.1 billion) last month to protect its euro peg, the biggest monthly currency intervention to weaken the krone in seven years.
With the sale, Denmark’s foreign currency reserves jumped to 529.8 billion kroner at the end of December 2021.
The bank uses currency interventions to steer the krone in a tight band to the euro and changes its interest rates when those interventions become too great.
Its benchmark deposit rate is already at minus 0.6%.
Denmark has had negative rates longer than any other country.