Current Affairs


“I can only show you the door. You’re the one that has to walk through it.”

This morning – As Q1 wends to a close the threat of global recovery and higher rates overhang markets! Meanwhile, the market has spawned a whole new class of stocks: Trend Stocks – based on what we collectively believes about the future. Non Fungible Tokens (NFTs) look set to benefit from Trend Stock status!

And what an interesting week that was… Imminent vaccine wars, the “threat” post-pandemic economic recovery triggers rate rises thus undoing unsustainable P/E stock price multiples, and regulators seeking to regulate the vim out of the big dogs of Big Tech. Money is flowing back into cyclicals and fundamental stocks – but it seems based largely on what looks cheap to today’s already grossly inflated market. If it all looks like the ingredients for a corrective burst – well who knows?

There are a couple of victims out there. I feel most sorry for AstraZeneca and Oxford University – despite all their good intentions to produce a fast vaccine at zero profit and get it out there, they are on everyone’s solids list. The Europeans are using them as the sacrificial lamb for their botched rollout, and the Americans are being all high & mighty about numbers – although the good Dr Fauci did say “It’s still a very good vaccine.” I got the AZ jab and I ain’t dead yet. Good on them!

Pity the pilot and captain of the container ship Ever Given. How embarrassing. How dangerous to the global economy?

Next week will be slow ahead of the Easter Break and quarter-end. There is a deal of account balancing underway, so we may yet see some moves. It might be an opportunity to take stock of where markets are.

What’s going to happen in Q2?

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Nearly $10 billion worth of global shipping traffic per day is being disrupted


This morning – Global Supply Chains could be stressed by the boat jammed in the Suez Canal. The lessons from the Pandemic offer an opportunity to rethink Global Infrastructure Spending – and mop up much of the money glut currently funding financial asset inflation!

It’s the No-See-Ums that create the biggest speedbumps for markets. Earlier this week I was talking about supply-chain finance breaking down. This morning it’s a rogue gust of wind that’s set actual real global supply chains a’tingle.

When a whale gets stranded on a beach what kills it is its own weight crushing its internal organs and the lungs. When a massive container ship jams itself across the Suez Canal, after a freak wind grounded it on a sandbar, it’s not as simple as just dragging it off – were that even possible. It’s the weight of the ship bearing down on its keel and internal structure that’s the killer. What would be worse than a ship blocking the canal would be a broken ship and containers and fuel spilling out of it. It took years to remove the wrecks of the Arab-Israeli wars from the Canal.

With luck and a good wind raising the water level, they may clear the Ever Given, but don’t make assumptions. Hope – as I keep reminding readers – is seldom an effective strategy. The authorities will be hoping, but it may take some time to lighten the ship, refloat it, drag it back down the waterway to unload and inspect it. It blocked the Canal at its very narrowest bottleneck point.

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March Madness Gamblers Expected To Break $8.5 Billion Record Thanks To Mobile Sports Betting

With online gambling now legal in 25 states, the 2021 NCAA tournament will be a slam dunk for gaming sites—and the friendly office pool may never rebound.

Bob, a 34-year-old gambler from Illinois who works in logistics, has bet in his office March Madness pool for the last five years. With about 75 colleagues and a $25 buy-in, the pot will be just under $2,000 for this year’s NCAA men’s basketball tournament—but he’s not filling out a bracket.

For gamblers, the office pool has lost its luster. “It’s boring—I’d rather gamble other ways,” says Bob, who did not want to give his last name. “For Betty Sue, who runs the front desk, does she like the office bracket? Of course, she does; she’s not a gambler.”

March Madness is always big action for Bob, who says he lays out about 25% of his annual $20,000 bankroll during the three-week long, a single-elimination, seven-round college basketball tournament. This year, he’s placing bets on mobile betting services like DraftKings and Barstool Sports. Bob will also wager with his go-to bookie, a longstanding relationship he has decided to keep despite his access to legal options.

He is not alone. According to a study published by the American Gaming Association this week, the number of Americans—36.7 million—filling out a bracket is down 8% compared to the last NCAA Tournament in 2019. (March Madness was cancelled in 2020 due to the Covid-19 outbreak.) About 31 million Americans are placing more traditional bets on this year’s tournament, up from nearly 18 million in 2019.

“Brackets bring in about $2 million,” says DraftKing’s Johnny Avello. “I can’t tell you what March Madness will bring, but it will be exponentially bigger.”

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Chinese Military Bans Tesla Vehicles Over Camera Concerns


Could there be trouble brewing in Elon Musk’s communist paradise?

(Reuters) – The Chinese military banned Tesla cars from entering military housing complexes, citing security concerns over the cameras installed on the vehicles, according to two people who saw notices of the directive.

The order issued by the military advises Tesla owners to park their cars outside of military property, Bloomberg had earlier reported, adding that the ban was notified to residents of military housing this week.

Separately, the Wall Street Journal reported that China’s government was restricting the use of the company’s cars by personnel at military, state-owned enterprises in sensitive industries and key agencies, as they could be a source of national security leaks.

It was not immediately clear whether the measure applied to all such facilities.

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Greensill Capital was headed for a $40B IPO before imploding. What happened?


Meet Lex Greensill.

He founded Greensill Capital to disrupt supply-chain finance, an industry that supports $7T in global trade activity.

As reported by the Wall Street Journal, Greensill — with a big investment from SoftBank — was potentially headed for a $40B IPO last year. Instead, it just declared bankruptcy, sending shock waves through global finance.

First, what is supply-chain finance (SCF)?

Imagine you are a manufacturer that sells widgets to a car company (CarCo). Typically, you will give CarCo 90-120 days to pay off its goods invoice.

Waiting for money sucks, though.

Enter a supply-chain financier, usually big banks. Let’s say the invoice is $1k. The financier offers to buy it from you for $990 upfront and — when CarCo pays the bill later on — it profits $10.

This type of financing is low margin and reserved for big business

The JPMorgans of the world will do it as a way to upsell other services.

From a young age, Lex Greensill was obsessed with making SCF more accessible. He grew up on his family’s Australian melon farm and saw how long (sometimes 1yr+) it took his parents to turn crops into money.

After doing SCF lending at Morgan Stanley, he launched Greensill Capital in 2011 to create a platform that would make such financing available to more people.

To break into the industry, he cut corners…

… by giving lax lending terms and providing money to nontraditional clients (skyscraper builders, plane leasing companies).

His most controversial deals included:

  • Opaque loans to UK steel magnate Sanjeev Gupta
  • Self-dealing with other SoftBank portfolio companies

Greensill’s portfolio was filled with time bombs

It all imploded on March 1, when a required insurance policy lapsed and the insurer refused to renew it. A week later, Greensill declared the business insolvent.

Here are some of those taking the biggest Ls:

  • German citizens: 26 towns across Germany linked to a Greensill-owned bank may lose $300m+ in deposits.
  • SoftBank: After a scorching hot run of investments (Coupang, DoorDash), Masayoshi Son has another WeWork on his hands and will write down its $2B investment.
  • Citi: The global bank has assets in a $10B supply-chain fund related to Greensill frozen.

Regulators, investors, and borrowers are only now starting to dig through the mess (a coal company owned by West Virginia’s governor just sued).

Keep an eye on this space… there’s sure to be more news to come.



The Top 20 Countries for Ultra High Net Worth Individuals


Despite the global hardships of the COVID-19 pandemic, the world’s ultra high net worth (UHNW) population increased by 2.4% in 2020, reaching an all-time high of 521,653.

In this chart, we’ve used data from The Wealth Report 2021 by Knight Frank to list the 20 countries with the most UHNW individuals.

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