Operating at the Intersection of Technology and the Capital Markets
Month: November 2022
"Did Powell just say that the pace of Fed Funds Rate increases may slow? Let's run stocks higher through year-end, fundamentals be damned!" I've never seen a more lazy equity market in my life. Fundamentals have not mattered since the COVID lockdowns and Fed policy matters far too much. The market is to blame as … Continue reading Stocks To The Moon, Fundamentals Be Damned
AWS is Amazon's (AMZN) most profitable business unit (26% operating margin in the September quarter), and is subsidizing other Amazon business units. While AWS allocates capital to other AMZN business units, competing cloud platforms Azure and Google Cloud are capital allocation recipients. While AWS touts its new, high-end Graviton chips - these chips will compete … Continue reading AWS vs. Azure vs. Google Cloud
The debt crisis is America's greatest threat. Not China. Not nuclear war. Not identity politics. Larger than the U.S. Economy and growing. Public Debt outstanding is approximately $31.4 trillion, significantly larger than the U.S. economy as fiscal spending far outpaces Real GDP growth. Public Debt outstanding will almost certainly continue to grow as fiscal deficits … Continue reading Debt Crisis
The Monetary Base (currency in circulation plus bank reserve balances), continues to shrink, declining to its lowest level in October since January of 2021 (see charts below). The Monetary Base is down approximately 17% from its peak in December 2021, driven by lower bank reserves (down 27% in October from their high in September 2021), … Continue reading The Shrinking Monetary Base
The Fed reduced its Treasury and Government Agency security holdings by $4.8 billion over the week-ended November 23rd - essentially no change. The Fed has reduced its balance sheet holdings by $80.7 billion over the last 4 weeks as it modestly tightens monetary policy by shrinking the money supply (QT) and raising its Fed Funds … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
Live sports still captures the most eyeballs across traditional content categories (certain video game title releases capture more eyeballs). If Apple (AAPL), Amazon (AMZN), Disney (DIS), Google (GOOGL), WarnerBrosDiscovery (WBD), Fox (FOXA), Comcast (CMCSA), Netflix (NFLX) or another large media player was to announce a deal that it was acquiring a sports franchise, I generally … Continue reading Live Sports Remains The Traditional Content King
It is outrageous that online tax preparation services have been sending personally identifiable information (PII data), to Meta Platforms (ticker: META). PII data such as Full Name and Gross Income is being shared without consent. To not disclose this fact to customers is criminal in our view. If META wants this PII data, it should … Continue reading META, Taxes & Intuit
Approximately 1.2 million residential mortgages in Great Britain are adjustable rate mortgages (ARMs). As the Bank of England (BOE), continues to move interest rates higher (3% rate today and likely moving to 3.5% on December 15th), the average ARM holder will have to absorb significantly higher monthly payments which translates to commensurately less disposable income. … Continue reading ARMs Will Drag Great Britain and The U.S.
Coinbase (COIN), is a walking bankruptcy absent an immediate, dramatic recovery in Retail customer sentiment. The probability of an imminent resurgence in Retail enthusiasm for Crypto is close to zero given 2022's various Crypto failures including the recent FTX fraud (FTX founder Sam Bankrun Fraud needs to be arrested ASAP). It hardly bodes well for … Continue reading Coinbase Is A Bankruptcy Waiting To Happen
Tiger Global paid Bain & Co. $100 million to perform due diligence, yet Bain somehow missed that FTX was a fraud. Helpful hint: check the bank statement next time. Then, work your way backwards through the cash flow chain. I can understanding hiring industry experts or functional specialists to assist with your internal investment due … Continue reading Saying “No” To Deals Avoids Blowups
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