Juicero spent $120M over two years to build a complex supply chain and perfectly engineered product that is too expensive for their target demographic."
https://techcrunch.com/2017/04/24/juicero-may-be-the-absurd-avatar-of-silicon-valley-hubris-but-boy-is-it-well-engineered/
Sunday, April 30, 2017
Greenspan on Trump's Budget, Growth and Regulation - Bloomberg
Greenspan on Trump's Budget, Growth and Regulation - Bloomberg
On the impact of the increase in social spending as a % of GDP (10% increase) and its impact on less growth and good jobs (since savings is going into social spending not investment) VERY SIGNIFICANT.
Social benefit spending in the US having gone up at 9% per year since 1965. Slight slowdown in the increase recently but demographics (aging population) working against it.
To spur growth, social benefits need to be cut along with tax rates.
On Obama's rejection of bipartisan Simpson-Bowles and the unfortunate consequences.
On the impact of the increase in social spending as a % of GDP (10% increase) and its impact on less growth and good jobs (since savings is going into social spending not investment) VERY SIGNIFICANT.
Social benefit spending in the US having gone up at 9% per year since 1965. Slight slowdown in the increase recently but demographics (aging population) working against it.
To spur growth, social benefits need to be cut along with tax rates.
On Obama's rejection of bipartisan Simpson-Bowles and the unfortunate consequences.
Saturday, April 29, 2017
The Risks of Businesses Learning How Consumers Think - Bloomberg View
The Risks of Businesses Learning How Consumers Think - Bloomberg View
...Behavioral scientists have established, for example, that people are greatly affected by “default rules,”....
...people have limited attention, that they dislike losses far more than they like equivalent gains,....
...In cases of this kind, behaviorally informed nudges deserve a big round of applause. But other uses of the same techniques, exploiting people’s behavioral biases, should make us a lot more nervous....
...“negative option marketing,” which means that unless consumers actually take action, they will be assumed to continue to want some good or service ...
...Behavioral scientists have established, for example, that people are greatly affected by “default rules,”....
...people have limited attention, that they dislike losses far more than they like equivalent gains,....
...In cases of this kind, behaviorally informed nudges deserve a big round of applause. But other uses of the same techniques, exploiting people’s behavioral biases, should make us a lot more nervous....
...“negative option marketing,” which means that unless consumers actually take action, they will be assumed to continue to want some good or service ...
Microsoft's Black Box Magic Works on Investors - Bloomberg View
Microsoft's Black Box Magic Works on Investors - Bloomberg View
Microsoft continues to aggregate its businesses into three segments -- "Productivity and Business Processes," "Intelligent Cloud" and "More Personal Computing"
Microsoft continues to aggregate its businesses into three segments -- "Productivity and Business Processes," "Intelligent Cloud" and "More Personal Computing"
Thursday, April 27, 2017
Fund Conflicts and Tax Napkins - Bloomberg View
Fund Conflicts and Tax Napkins - Bloomberg View
...An obvious set of winners is corporations, whose top tax rate would drop from 35 to 15 percent. But through the magic of accounting, some of these winners would look like losers:
...An obvious set of winners is corporations, whose top tax rate would drop from 35 to 15 percent. But through the magic of accounting, some of these winners would look like losers:
Banks like Citigroup and Bank of America would have to take some sour with the sweet: A lower tax rate would mean they will have to take billions of dollars in charges against earnings to write down the value of their giant piles of “deferred tax assets.”
Next time someone complains that companies that report non-GAAP earnings are using "fantasy numbers," let's all remember that GAAP would require Citigroup and Bank of America to report billions of dollars of losses solely because they will pay lower taxes in the future. Under this tax plan, Citi and BofA would have the same amount of money now, and more money in the future, but under U.S. generally accepted accounting principles they would have to report a huge loss anyway.
Wells Fargo, JPMorgan Wary of Auto Loans, But Pack Them in Bonds - Bloomberg
Wells Fargo, JPMorgan Wary of Auto Loans, But Pack Them in Bonds - Bloomberg
...General Motors Co. expects car prices to drop 7 percent this year and auto lender Ally Financial Inc. reported last month that prices fell that much during its first quarter
...General Motors Co. expects car prices to drop 7 percent this year and auto lender Ally Financial Inc. reported last month that prices fell that much during its first quarter
Wednesday, April 26, 2017
Education Startup EverFi Raises $190 Million: Exclusive | Fortune.com
Education Startup EverFi Raises $190 Million: Exclusive | Fortune.com
...Based in Washington, D.C., EverFi has about 200 employees. The company sells software subscriptions to schools and businesses that help teach financial literacy (understanding mortgages and credit, for example), responsible college behavior (involving hazing and alcohol consumption), corporate compliance (like sexual harassment and diversity training), and other programs. Among the firm's customers are Google, Oracle (ORCL, +0.56%), Whole Foods (WFM, +0.87%), and Airbnb, as well as universities such as Harvard, MIT, and Stanford and 20,000 K-12 schools.
...Based in Washington, D.C., EverFi has about 200 employees. The company sells software subscriptions to schools and businesses that help teach financial literacy (understanding mortgages and credit, for example), responsible college behavior (involving hazing and alcohol consumption), corporate compliance (like sexual harassment and diversity training), and other programs. Among the firm's customers are Google, Oracle (ORCL, +0.56%), Whole Foods (WFM, +0.87%), and Airbnb, as well as universities such as Harvard, MIT, and Stanford and 20,000 K-12 schools.
Tuesday, April 25, 2017
China Robots - Bloomberg
At startup E-Deodar, a human-looking droid serves coffee to employees who are building $15,000 industrial bots that are about a third cheaper than foreign brands and are being used to automate assembly lines across the Pearl River Delta manufacturing hub.
...a broader strategic goal: dominating emerging markets for artificial intelligence, driver-less vehicles and digitally-connected appliances and homes....
... China has three big advantages--scale, growth momentum and money....Guangdong province, for example, announced in 2015 plans to offer 943 billion yuan ($137 billion) in subsidies to about 2,000 local companies,
...In 2016, China installed 90,000 new robots. That’s one-third of the world total and 30 percent more than the year before....China had only 49 robots per 10,000 workers in 2015, versus 176 for the U.S., Germany’s 301 and South Korea’s world-leading 531.
https://www.bloomberg.com/news/articles/2017-04-24/resistance-is-futile-china-s-conquest-plan-for-robot-industry
...a broader strategic goal: dominating emerging markets for artificial intelligence, driver-less vehicles and digitally-connected appliances and homes....
... China has three big advantages--scale, growth momentum and money....Guangdong province, for example, announced in 2015 plans to offer 943 billion yuan ($137 billion) in subsidies to about 2,000 local companies,
...In 2016, China installed 90,000 new robots. That’s one-third of the world total and 30 percent more than the year before....China had only 49 robots per 10,000 workers in 2015, versus 176 for the U.S., Germany’s 301 and South Korea’s world-leading 531.
https://www.bloomberg.com/news/articles/2017-04-24/resistance-is-futile-china-s-conquest-plan-for-robot-industry
Monday, April 24, 2017
Leaving California? After slowing, the trend intensifies
http://www.ocregister.com/2017/04/23/leaving-california-after-slowing-the-trend-intensifies/
...The apparent growing appetite for suburban living presents a unique challenge to California. The state policy is aggressively anti-suburban, placing ever-higher hurdles on any development on the periphery. This, over time, is slowing construction in the interior and forcing housing prices unnaturally up, even in these areas.
...The apparent growing appetite for suburban living presents a unique challenge to California. The state policy is aggressively anti-suburban, placing ever-higher hurdles on any development on the periphery. This, over time, is slowing construction in the interior and forcing housing prices unnaturally up, even in these areas.
Some so-called progressives hail these trends, as forcing what they seem to see as less desirable elements — that is, working- and middle-class people — out of the state. They allege that this is balanced out by a surge of highly educated workers coming to California. Essentially, the model is that of a gated community, with a convenient servant base nearby.
Yet, in reality, this may prove to be wishful thinking. A dive into Internal Revenue Service data shows distinctly that, while poor people are, indeed, leaving, the largest group of outmigrants tends to be middle-aged people making between $100,000 and $200,000 annually. They may not be ideal algorithm creators for Facebook, but they do constitute the solid middle ranks critical to any healthy economy.
Indeed, since 2010, the Golden State has seen an overall net outflow of $36 billion from these migrants (and that counts only the first year of income). The biggest gainers from this exchange are where Californians are moving, to such places as Texas, Arizona and Nevada. That some California employers are joining them in the same places should be something of a two-minute warning for state officials.
But California leaders have other things on their minds that do not include accommodating the aspirations of residents who refuse to abandon suburban homes, or who are unwilling to desert their cars for the pleasures of mass transit. Until Californians demand a government that reflects their aspirations, too many people will continue to have to seek their futures elsewhere, to the detriment to those who remain behind.
The Electric Car Revolution Tesla Began Faces Its Biggest Test - Bloomberg
The Electric Car Revolution Tesla Began Faces Its Biggest Test - Bloomberg
...Unlike the Leaf and the BMW i3, the Tesla Model S is quicker than similarly priced gasoline cars, has a long driving range, extensive fast-charging network, and is packed with unrivaled tech advances like Autopilot and wireless software updates.
As a result, the Model S is now the best-selling large luxury vehicle in America. ...
... If you take that away, electric cars are much cheaper to produce and maintain than internal combustion vehicles. (That’s why French carmaker Renault sells its popular Zoe without a battery, which customers pay a monthly fee to lease.)...
...battery prices must come down further. Fortunately, prices are falling fast—by roughly 20 percent a year. The manufacturing cost of electric cars will fall below their gasoline counterparts across the board around 2026,...
... In 2018, Volkswagen plows into electrification with an Audi SUV and the first high-speed U.S. charging network to rival Tesla’s Superchargers. Jaguar and Volvo both have promising cars on the way too, and by 2020, the avalanche really begins, with Mercedes, VW, General Motors and others releasing dozens of new models. ...
...smart ones will compete aggressively on pricing in the short-term in order to establish market share for the long haul.
...Unlike the Leaf and the BMW i3, the Tesla Model S is quicker than similarly priced gasoline cars, has a long driving range, extensive fast-charging network, and is packed with unrivaled tech advances like Autopilot and wireless software updates.
As a result, the Model S is now the best-selling large luxury vehicle in America. ...
... If you take that away, electric cars are much cheaper to produce and maintain than internal combustion vehicles. (That’s why French carmaker Renault sells its popular Zoe without a battery, which customers pay a monthly fee to lease.)...
...battery prices must come down further. Fortunately, prices are falling fast—by roughly 20 percent a year. The manufacturing cost of electric cars will fall below their gasoline counterparts across the board around 2026,...
... In 2018, Volkswagen plows into electrification with an Audi SUV and the first high-speed U.S. charging network to rival Tesla’s Superchargers. Jaguar and Volvo both have promising cars on the way too, and by 2020, the avalanche really begins, with Mercedes, VW, General Motors and others releasing dozens of new models. ...
...smart ones will compete aggressively on pricing in the short-term in order to establish market share for the long haul.
Sunday, April 23, 2017
Space May Be Next Frontier for Earth's Crude Oil Giants: Analyst - Bloomberg
Space May Be Next Frontier for Earth's Crude Oil Giants: Analyst - Bloomberg
...Navitas expects companies to launch satellites searching for rare gases and metals in asteroids within five years, with actual mining happening within eight. ..
...Navitas expects companies to launch satellites searching for rare gases and metals in asteroids within five years, with actual mining happening within eight. ..
Alarm Bells Start Ringing for U.K. Economy - Bloomberg View
Alarm Bells Start Ringing for U.K. Economy - Bloomberg View
the U.K.'s external deficit narrowed sharply at the end of last year. But this was due to a sudden increase in gold bought in China from the London Bullion Market.
the U.K.'s external deficit narrowed sharply at the end of last year. But this was due to a sudden increase in gold bought in China from the London Bullion Market.
Digital Disruption - McKinsey (April 2017)
http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-strategy-and-corporate-finance-blog/think-digital-is-a-big-deal-you-aint-seen-nothing-yet?cid=reinventing-eml-alt-mip-mck-oth-1704&hlkid=a392bc6844d5492c86d86913d2625b7d&hctky=3200528&hdpid=08fcf9d6-8466-444c-bd58-8609402719b9
– All the talk of digital disruption turning incumbents into dinosaurs and unicorns into masters of entirely new domains might lead you to think this is already an old narrative—so 2016. In fact, digitization has barely started, and so has the accompanying upheaval.
Digital technologies and processes have penetrated only about 35% of the way into the average industry,...Globally, digital disruption is shaving 45% off incumbent companies’ revenue growth and 35% off their earnings before interest and taxes (EBIT). As digitization accelerates, the hit to revenues and profits of digital laggards will grow significantly, even as the digital leaders capture disproportionate gains.
...he most widely discussed dimension is the way digitization enables new entrants using disruptive models to penetrate existing industries. Today, our research finds, those digital newcomers own about 17% of total revenue worldwide...
...customers linked via crowd-sourcing platforms and middlemen eliminated.
...incumbent companies have rarely ventured to disrupt their own markets: only 9% ... Rather, incumbents’ digital strategies have focused primarily on digital distribution and marketing, ...it’s really “table stakes” for staying in the game.
... digitizing supply chains—a mere 2% are focusing their digital strategies on that...Amazon and Alibaba...
...media and high tech are the most digitally advanced of the 10 major sectors we studied, while automotive and consumer packaged goods (CPG) are the least digitized. ... the more digitally advanced an industry is, the larger the negative impact on incumbents that fail to act.
Friday, April 21, 2017
Ken Langone Full Interview Part 1 Dodd Frank Donald Trump - YouTube
Ken Langone Full Interview Part 1 Dodd Frank Donald Trump - YouTube
Here he talks about Barney Frank's responsibility for the housing crisis and lending issues.
Trump on solving problems (buffet example).
Pro-border adjustment tax to get more growth.
https://www.youtube.com/watch?v=T7d8Gj3pOzc
On income inequality, it is not business paying more money to workers but workers being qualified to be paid more money.
Here he talks about Barney Frank's responsibility for the housing crisis and lending issues.
Trump on solving problems (buffet example).
Pro-border adjustment tax to get more growth.
https://www.youtube.com/watch?v=T7d8Gj3pOzc
On income inequality, it is not business paying more money to workers but workers being qualified to be paid more money.
Airlines, Algorithms, and Accidents | Connecting the Dots Investment Newsletter | Mauldin Economics
Airlines, Algorithms, and Accidents | Connecting the Dots Investment Newsletter | Mauldin Economics
...United Airlines had a rough week, but not as rough as one of its passengers. Dr. David Dao received a concussion, a broken nose, and two broken teeth after airport police forcibly dragged him off the plane he had boarded only a short while earlier.
...United Airlines had a rough week, but not as rough as one of its passengers. Dr. David Dao received a concussion, a broken nose, and two broken teeth after airport police forcibly dragged him off the plane he had boarded only a short while earlier.
As you have probably heard by now, the airline needed to get four crew members from Chicago, IL to Louisville, KY for a flight the next day and decided to boot four passengers off the plane after nobody volunteered to give up their seat. In light of the ensuing publicity disaster, it would have been cheaper and better for United to buy four Porsches and let the crew members drive to their destination.
Courts will sort out who owes what to whom—however, I have a different angle....
Complex Machinery
An airline is an incredibly complicated machine with a zillion moving parts: planes, passengers, crew, luggage—and all of it must be in certain places at certain times, or the whole thing will fall apart. It’s remarkable when you think about it.
Modern airlines operate at the scale and speed they do by automating all those little details. Computer algorithms make many of the decisions; people just execute them.
The computer knows the rules, but it’s not perfect. One of those one-in-a-million scenarios will arrive eventually—or worse, several consecutive ones.
I suspect that’s what happened with United.
Several different processes converged. Computers issued instructions and people responded. No one wanted violence, but a series of flawed decisions produced it.
Things like that happen when you don’t build an adequate error margin into a complex system. Occasionally, conditions will combine to create results no one wants or expects.
Here’s the scary part.
Airlines aren’t the only industry to depend on complex algorithms. So do banks, brokerages, utility companies, hospitals, pharmacies, health insurers, governments, and more.
All these organizations let their algorithms make complex decisions in rapidly changing conditions. They work fine… until they don’t.
Yet we all constantly agree to contracts we don’t understand, then submit ourselves to algorithms that follow them to ludicrous extremes.
See the problem?
ETFs vs. ETNs - Connecting the Dots
Connecting the Dots - Airlines, Algorithms, and Accidents - btbirkett@gmail.com - Gmail
Maybe you own one or more exchange-traded notes (ETNs). They look a lot like exchange-traded funds (ETFs). What most people don’t know: aside from the fact that ETFs and ETNs both trade on exchanges, they’re entirely different species.
- An ETF is an “investment company,” a corporation or trust legally separate from the company that sponsors and sells it. If the sponsor goes bankrupt, the ETF survives under new management.
- An ETN, on the other hand, is a kind of bond. Instead of owning a slice of a big portfolio, you have loaned your money to a bank. The bank promises to repay you based on an index. They explain all this in the disclosure documents, but few people read them.
Thursday, April 20, 2017
Rising Sea Levels
https://www.bloomberg.com/news/features/2017-04-19/the-nightmare-scenario-for-florida-s-coastal-homeowners
...Relative sea levels in South Florida are roughly four inches higher now than in 1992. The National Oceanic and Atmospheric Administration predicts sea levels will rise as much as three feet in Miami by 2060. By the end of the century, according to projections by Zillow, some 934,000 existing Florida properties, worth more than $400 billion, are at risk of being submerged....
...A few months after Russo, a partner at a law firm in Miami, moved to Key Largo in 2015, the big fall tides brought 18 inches of water onto the road in front of their house. Unlike previous tidal floods, this one lasted 34 days.
...Relative sea levels in South Florida are roughly four inches higher now than in 1992. The National Oceanic and Atmospheric Administration predicts sea levels will rise as much as three feet in Miami by 2060. By the end of the century, according to projections by Zillow, some 934,000 existing Florida properties, worth more than $400 billion, are at risk of being submerged....
...A few months after Russo, a partner at a law firm in Miami, moved to Key Largo in 2015, the big fall tides brought 18 inches of water onto the road in front of their house. Unlike previous tidal floods, this one lasted 34 days.
“When we bought, there hadn’t been a flood like that for years,...
Monday, April 17, 2017
Angst in America, Part 4: Disappearing Pensions | Thoughts from the Frontline Investment Newsletter | Mauldin Economics
Angst in America, Part 4: Disappearing Pensions | Thoughts from the Frontline Investment Newsletter | Mauldin Economics
"....Many of my Baby Boomer peers think a secure retirement should be normal because it’s what we saw in our formative years. In the early 1980s, about 60% of companies had defined-benefit plans. Today it’s about 4% ...
...Such pensions are all but gone from US private-sector employers. They’re still common in government, particularly state and local governments; and they are increasingly problematic. They are another source of angst for retirees, government workers who want to retire someday, and the taxpayers and bond investors who finance those pensions...
...ERISA also created the Pension Benefit Guaranty Corporation (PBGC) to insure pension plans from default and malfeasance.
"....Many of my Baby Boomer peers think a secure retirement should be normal because it’s what we saw in our formative years. In the early 1980s, about 60% of companies had defined-benefit plans. Today it’s about 4% ...
...Such pensions are all but gone from US private-sector employers. They’re still common in government, particularly state and local governments; and they are increasingly problematic. They are another source of angst for retirees, government workers who want to retire someday, and the taxpayers and bond investors who finance those pensions...
...ERISA also created the Pension Benefit Guaranty Corporation (PBGC) to insure pension plans from default and malfeasance.
Many experts believe the PBGC will run out of money in as little as 10 years at its current funding levels. The PBGC is not taxpayer-funded (yet) but exists as a classical insurance fund into which each retirement plan pays roughly $27 per year per covered employee. That figure would need to increase to $156 per year per person just to give the PBGC a 90% chance of staying solvent over the next 20 years...
... if your plan goes bankrupt and you fall into the gentle hands of the PBGC, your pension funding is likely to be cut by 50% or more. Plans that were at one point quite generous could see their beneficiaries lose as much as 75–80%...
...State and local governments can’t run endless deficits the way the federal government does.
....That’s all obvious; yet, for some reason, two things happened in recent decades:
State and local politicians kept raising pension benefits.
State and local workers believed the promises...
...we can’t expect city council members and firefighters to be financial experts. But they have access to experts. The unions that negotiate most public pension contracts have their own lawyers, accountants, and actuaries. They should know whether they are being offered unrealistic projections and promises...
[Example]
...Narvaez, 77, got a union certificate upon retirement in 2003 that guaranteed him a lifetime pension of $3,479 a month....
...in February of last year. It said monthly pensions had to be slashed by more than a third. It was an emergency move to try to keep the dying fund solvent. That dropped Narvaez from nearly $3,500 to about $2,000....
...Local 707’s pension fund fell off the financial cliff this month. With no money left, it turned to Pension Benefit Guaranty Corp. ...Narvaez now gets $1,170 a month – before taxes...
Saturday, April 15, 2017
Pension Plan Underfunding and Collapse - Outside the Box - The Influence of Affluence - btbirkett@gmail.com - Gmail
Outside the Box - The Influence of Affluence - btbirkett@gmail.com - Gmail
...Therefore, a better indication of American wealth than total household wealth would be per-capita wealth. Lastly, as I explained above, the largest component of US household wealth
is pension fund reserves, currently valued at US$22 trillion. But there are some question marks over these assets and whether they are really worth this amount. Last October, my friend Fred Sheehan (frederick.sheehan@verizon. net) explained just how underfunded pension funds were, citing (among other examples) the Commonwealth of Massachusetts Funded Ratios (see Table 2).
...Therefore, a better indication of American wealth than total household wealth would be per-capita wealth. Lastly, as I explained above, the largest component of US household wealth
is pension fund reserves, currently valued at US$22 trillion. But there are some question marks over these assets and whether they are really worth this amount. Last October, my friend Fred Sheehan (frederick.sheehan@verizon. net) explained just how underfunded pension funds were, citing (among other examples) the Commonwealth of Massachusetts Funded Ratios (see Table 2).
In this respect, it’s interesting to note that The New York Daily News recently carried an article about
 the Teamster Local 707’s pension fund (see February 26, 2017), which has encountered serious financial problems. According to the Daily News, one trucker reported: “It’s a nightmare, it has just devastated all of our lives. I’ve gone from having $48,000 a year to less than half that.” Again according to the Daily News, another Teamster pensioner, Narvaez, explained that:
...like 4,000 other retired Teamster truckers, [he] got a letter from Local 707 in February of last year. It said monthly pensions had to be slashed by more than a third. It was an emergency move to try to keep the dying fund solvent. That dropped Narvaez from nearly $3,500 to about $2,000.
The stopgap measure didn’t work – and after years of dangling over the precipice, Local 707’s pension fund fell off the financial cliff this month. With no money left, it turned to Pension Benefit Guaranty Corp., a government insurance company that covers pensions.
Pension Benefit Guaranty Corp. picked up Local 707’s retiree payouts – but the maximum benefit it gives a year is roughly $12,000, for workers who racked up at least 30 years. For those with less time on the job, the payouts are smaller.
Narvaez now gets $1,170 a month – before taxes. Ex-trucker Edward Hernandez, 67, went from $2,422 a month to $1,465 last year. As of this month, his gross check is $902. After federal taxes, it’s $721 – but he still has to pay state and city taxes.
“We have guys on Long Island who are losing their houses,
the taxes are so high out there,” Hernandez said. Milton Acosta, 75, was a dockworker in Local 707. He retired at age 62, figuring his union pension of $2,300, coupled with his Social Security, would keep him and his wife afloat. Now his pension is $760 a month after taxes, he said.
As heartbreaking as their stories are, they are not new to Thomas Nyhan, executive director and general counsel of the Central States Pension Fund.
The same crisis now hitting Local 707 has been stewing among numerous Teamster locals around the country for the past decade, he said, and that includes in upstate New York. The trucking industry
– almost uniformly organized by Teamsters – has suffered enormous financial losses in its pension and welfare funds due to a crippling combination of deregulation and stock market crashes, Nyhan said.
“This is a quiet crisis, but it’s very real. There are currently 200 other plans on track for insolvency – that’s going to affect anywhere from 1.5 to 2 million people,” said Nyhan. “The prognosis is bleak minus some new legislative help.” And it’s not just private-sector industries that are suffering, he added.
“Municipal and state plans 
are the next to go down – that’s a pension tsunami that’s coming,” he said. “In many states, those defined benefit plans are seriously underfunded – and at the end
of the day, math trumps the statutes.” [Emphasis added in each instance.]
Thursday, April 13, 2017
Buyout Firms Are Magically -- and Legally -- Pumping Up Returns - Bloomberg
Buyout Firms Are Magically -- and Legally -- Pumping Up Returns - Bloomberg
short-term bank loans to boost IRR
"...The strategy’s effectiveness is a matter of simple math. Investors in buyout funds typically are required to pony up at the time a deal is struck to buy a company. But now, private equity firms increasingly refrain from calling investors’ money for months at a stretch and instead tap credit lines to complete an acquisition.
short-term bank loans to boost IRR
"...The strategy’s effectiveness is a matter of simple math. Investors in buyout funds typically are required to pony up at the time a deal is struck to buy a company. But now, private equity firms increasingly refrain from calling investors’ money for months at a stretch and instead tap credit lines to complete an acquisition.
Only later does the firm ask for investors’ money. That means the firm uses it for a shorter period -- inflating the fund’s annualized results. A 100 percent return looks better on an annual basis when divided by three years instead of five, for instance."
Wednesday, April 12, 2017
The $7 Trillion Hazard That Lies Beneath the M&A Boom
https://www.bloomberg.com/gadfly/articles/2017-04-11/the-7-trillion-hazard-that-lies-beneath-the-m-a-boom
...In the past two years, takeover targets have sold for a median of 11 times Ebitda -- essentially 11 years of profit -- whereas the multiple was only about 7-9 times in the years leading up to the recent merger frenzy. Transactions are getting ever-bigger and more expensive, pushing total goodwill to $6.9 trillion...
...In the past two years, takeover targets have sold for a median of 11 times Ebitda -- essentially 11 years of profit -- whereas the multiple was only about 7-9 times in the years leading up to the recent merger frenzy. Transactions are getting ever-bigger and more expensive, pushing total goodwill to $6.9 trillion...
Monday, April 10, 2017
Nothing Normal About the Weather
https://www.bloomberg.com/news/features/2017-04-10/there-was-nothing-normal-about-america-s-freakish-winter-weather
Saturday, April 8, 2017
On GAMING from Tech Digest - The Game of Science - btbirkett@gmail.com - Gmail
Tech Digest - The Game of Science - btbirkett@gmail.com - Gmail
Unlike passive television viewing, first-person shooter video gaming has been shown to enhance various aspects of cognition (including problem solving and decision making). Young women and girls seem to derive particular benefit. The reason is that these types of games increase rotational abilities that contribute to success in math and other STEM disciplines. Video games are also being used therapeutically to counter dementia and cognitive decline in older patients.
I suspect that attacks on gamers and gaming are more about generational tensions caused by the changing demographics. It’s certainly not about science because most older people would be better off if they turned off their televisions and picked up a game controller. Gaming is not only healthier from a cognitive perspective, it’s a more interesting and interactive art form.
Gaming is already bigger than the movie and music industries combined. It’s also pushing the boundaries of art into realms of cognitive fitness.
Thursday, April 6, 2017
The 10th Man - The Long-Term Effects of Negative Real Interest Rates - btbirkett@gmail.com - Gmail
The 10th Man - The Long-Term Effects of Negative Real Interest Rates - btbirkett@gmail.com - Gmail
I can tell you one thing. If interest rates were at 6%, Amazon and Tesla would not be where they are today. The cost of capital would be higher, and there would be more compelling opportunities elsewhere, with lower risk.
I can tell you one thing. If interest rates were at 6%, Amazon and Tesla would not be where they are today. The cost of capital would be higher, and there would be more compelling opportunities elsewhere, with lower risk.
WSJ TECHNOLOGY ALERT: Spotify Finally Readies an IPO...That's Not an IPO - btbirkett@gmail.com - Gmail
https://www.wsj.com/articles/spotify-finally-readies-an-ipo-thats-not-an-ipo-1491476403?mod=djemalertTECH
Spotify Finally Readies an IPO...That's Not an IPO
Music-streaming service Spotify is readying an initial public offering that is expected by year-end. The rub is this: It may not really be an IPO.
Spotify is seriously considering a direct listing, in which the company would simply register its shares on a public exchange and let them trade freely, according to people familiar with the matter. The company wouldn't raise any new money or use underwriters to place new blocks of stock.
That would mark a departure from the typical IPO, in which new investors buy shares from the company or its early investors, or both, the night before they start trading.
College Grads Stuck With Low Wages as Hiring in U.S. Heats Up - Bloomberg
College Grads Stuck With Low Wages as Hiring in U.S. Heats Up - Bloomberg
...the chronic underemployment of college graduates points to a need to continue to stimulate growth, according to some analysts....“The reversal in demand for cognitive skills” following the information-technology boom of the 1990s is one likely explanation for the high underemployment among the college-educated,...
...the chronic underemployment of college graduates points to a need to continue to stimulate growth, according to some analysts....“The reversal in demand for cognitive skills” following the information-technology boom of the 1990s is one likely explanation for the high underemployment among the college-educated,...
Wednesday, April 5, 2017
Amazon launches Amazon Cash, a way to shop its site without a bank card | TechCrunch
Amazon launches Amazon Cash, a way to shop its site without a bank card | TechCrunch
...Amazon this morning announced the launch of Amazon Cash, a new service that allows consumers to add cash to their Amazon.com balance by showing a barcode at a participating retailer, then having the cash applied immediately to their online Amazon account. The service will support adding any amount between $15 and $500 in a single transaction,...
...This “cash customer” (the unbanked or “underbanked) accounts for around 27 percent of consumers, said a 2015 report from the FDIC....
...There are also no fees – something that can’t be said of all the prepaid cards on the market.
...barcode...
...Amazon this morning announced the launch of Amazon Cash, a new service that allows consumers to add cash to their Amazon.com balance by showing a barcode at a participating retailer, then having the cash applied immediately to their online Amazon account. The service will support adding any amount between $15 and $500 in a single transaction,...
...This “cash customer” (the unbanked or “underbanked) accounts for around 27 percent of consumers, said a 2015 report from the FDIC....
...There are also no fees – something that can’t be said of all the prepaid cards on the market.
...barcode...
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