In The Financial Times, Peter Oppenheimer explains how the recovery from the COVID-19 crash could be different from previous recoveries. He writes: Global equity market capitalisation has grown to $100tn, roughly 115 per cent of global GDP — the highest level since the pre-financial crisis peak in 2007. But this scale of recovery is not unprecedented and bears a remarkable resemblance to the period after the trough in 2009 that followed the financial crisis, when the MSCI World index rose 68 per cent over a similar period. Conditions at the time of the 2009 trough were, however, very … [Read more...]
Archives for December 2020
The Bastardization of American Capitalism
The U.S. became the world’s richest country, not because of government intervention, benevolent CEOs seeking to serve all stakeholders, or by investors allocating capital on the basis of what they believe is right. Nope, America became great because of free-market capitalism, or at least the closest thing to it. Today, American capitalism is being bastardized. You have a central bank that believes its job is to prevent any and every economic downturn at any cost. During the COVID-crash this spring, the Fed started buying private assets. They started with corporate bonds including high-yield … [Read more...]
Fire Yourself Up: Financial Independence Retire Early
Are you familiar with the cool movement called FIRE or Financial Independence Retire Early? As the word Early implies, it’s taken hold of a younger section of savers looking to get out of the rat race. They’re looking for their island life, if you will, and it’s a lifestyle I support a thousand percent. For one, once you start thinking about living off your savings, you become serious about SAVING—a huge part of the process. But you also think twice about SPENDING and the benefit of deferred gratification you’ll FEEL. This pandemic put FIRE strategies to the test—especially during the market … [Read more...]
The Government Should Ban Bitcoin Now Not Later
Bitcoin is enjoying another wave of investor interest this time with institutional backing. We know some of the smartest investors own Bitcoin. The technology backing bitcoin has some interesting applications in our view, but as far as bitcoin becoming legal tender, at best it looks like a long-odds gamble. No central bank in the world is going to allow a currency with a fixed supply to supplant a fiat currency. The U.S. would be bankrupt in a minute if it couldn’t print its own currency to pay its debts. So would Japan and many other countries. Rather than permitting speculation in … [Read more...]
Perhaps a Bright Future for US Manufacturing
The Wall Street Journal's Scott Davis explains some of the tailwinds that will propel U.S. manufacturing into 2021. He writes: The U.S. manufacturing industry has experienced a lifetime of trauma over the past two decades—but we believe 2020 marks the bottom of that long and high-profile decline. This past year has been particularly traumatic, as the pandemic brought with it the largest cut in industrial earnings on record in the second quarter, driven by the global shutdown that started in January in China and still exists in some form in many countries today. However, as we look out … [Read more...]
Here Comes Facebook Bank
This is just what the U.S. needs. More control in the hands of big tech firms that abuse anti-trust law. Jeff Bezos became the world’s richest man (worth an astounding $185 billion) by putting small mom and pops out of business. Amazon’s success is at least partly attributable to it not having to collect sales tax for years. Mom and pop retailers weren’t given that advantage. Amazon now must collect sales tax, but the firm’s scale is so large it doesn’t matter. Do we really want firms like Facebook that is controlled by Mark Zuckerberg in charge of your money? Apparently so says the … [Read more...]
Here’s What You Need to Get Prepared for Winter Storm Gail
Your Survival Guy is writing to you this chilly December 15th morning as all of the Northeast prepares for winter storm Gail. I've run through a "go, no go" Apollo 13 (I hope not!) checklist. The "go" are the following: Water/Food/Generator/Self-Defense/Satellite phone/Go bag/Evacuation plan. The "no go" list is usually discovered in the heart of the storm or later. But seeing that Newport, RI lost natural gas on the coldest day of the year in 2019, I'm not taking any chances. Here’s a list of what you need to prepare for a winter storm that might knock your power or gas out. … [Read more...]
The EU Drops the Hammer on Big Tech
The European Union is signaling that Big Tech companies must change their operations or risk getting broken up. Javier Espinoza reports for Financial Times: The EU will threaten on Tuesday to break up Big Tech companies if they repeatedly engage in anti-competitive behaviour. The warning comes as Brussels publishes its drafts of two major new pieces of tech regulation. A Digital Markets Act will aim to tackle unfair competition in the sector, and a Digital Services Act will force tech companies to take more responsibility for illegal behaviour on their platforms. The long-awaited … [Read more...]
New Yorkers Flee to Suburban Islands in Droves
COVID-19 and a summer of rioting and looting have driven New Yorkers to flee to the suburbs where they are creating islands of peace. The NY Post details where they left and where they went: Where they fled from Top zip codes New Yorkers exited between March 1 and Oct. 31, 2020, with the number of change of address requests for each area: 1. Upper West Side, 10023: 3,368 2. Upper West Side, 10025: 3,000 3. Murray Hill, 10016: 2,889 4. Upper West Side, 10024: 2,708 5. Chelsea/Greenwich Village, 10011: 2,520 6. Upper East Side, 10128: 2,165 7. Downtown Brooklyn, 11201: 1,836 8. … [Read more...]
Scientists Claim to Have Broken the Code on Solid State Lithium Batteries
Scientists working for QuantumScape claim to have found a breakthrough in lithium battery technology. WIRED reports: IF ELECTRIC VEHICLES are ever going to fully supplant gas guzzlers on the world’s roads, they’re going to need an entirely new type of battery. Despite steady improvements over the past decade in the energy density and lifetimes of lithium-ion batteries, the cells in new EVs still lag behind internal combustion engines on pretty much every performance metric. Most EVs have a range of less than 300 miles, it takes more than an hour to recharge their battery packs, the cells lose … [Read more...]