Timing & trends

Who goes there?

An ongoing challenge to modern society is how best to identify who we are, and who are all those other people out there. We used to be able to carry a card in our wallet or purse that reliably identified who we are. We could carry a birth certificate, a driver’s licence, a passport, or some other government issued identification that included a photo, to assure everyone that we are who we say we are. As technology progressed so did the ability of those with nefarious intent to replicate those card or document based forms of identification. Identity theft is on the rise and it is something we all need to be aware of and take steps to prevent. Even with secret PIN codes and CHIP card readers, bank cards (credit and debit) have been criminally duplicated, and phony automated teller machines (ATM’s) have been set up to capture user info, like account numbers and PIN codes. Today, the costs of identity theft are significant – for individuals and corporations. It is very telling that in the last four months of 2019 the number of users losing secure control of financial accounts was up by…Click for full article.

Is Private Equity Having its WeWork Moment?

For the better part of a decade, institutional investors have redeemed capital from active strategies and dumped it into Private Equity (PE). What’s the benefit of PE for allocators? You get to have levered equity returns without the volatility of actually owning public equities. Unlike stocks that often fluctuate wildly, PE is marked-to-model (M-T-M), hence quarterly volatility is minimal. Then, when there’s a liquidity event, you get to see how well you did.

Or at least, that was the theory. However, by the time of the liquidity event, usually someone else is in charge of the position. Meanwhile, you’ve used the nice smooth M-T-M to earn yourself a bunch of bonuses and maybe even a promotion to somewhere else that’s ring-fenced from your allocation decisions at your prior job. In many ways, the funds and the allocators themselves are both incentivized to mark the numbers higher and hope that they’re proven right…..CLICK for complete article

Armed Troops Storm El Salvador’s Parliament

Just last year, on a day in July, impoverished El Salvador celebrated its eighth murder-free day in two decades. It’s not much cause for celebration unless you have one of the highest murder rates in the world–but you take victories where you can get them.  The 24-hour ceasefire was short-lived in more ways than one. This past weekend, upon the order of El Salvadorian President Nayib Bukele, armed police and soldiers briefly stormed the nation’s parliament, demanding increased means for fighting gang violence.

Previously, President Bukele had demanded that opposition lawmakers vote to approve a $109 million loan procurement for his Territorial Control Plan designed to fight gang violence and restore a semblance of security to the country.

The opposition right-wing ARENA and leftist FMLN parties say they want more details on the spending plan before a vote. After legislators refused to gather to vote on the loan, which would provide better equipment to police and armed forces, Bukele called on supporters to converge on parliament.

They showed up with guns, offering a show of violence to express exactly how deep the need is to better fight violence…CLICK for complete article

“SARS” Versus “Wuhan”: The Difference Between “Now & Then”

A week dominated by headlines of a spreading respiratory virus has had investors recalling pandemics past, from SARS in 2003 to the Ebola scare six years ago. While the “Wuhan” virus, or known scientifically as “nCoV,” is still in its infancy, it is closely tracking both the infection and, unfortunately, death rates of the SARS virus.

However, the question everyone wants an answer to is: “what does the virus mean for the markets?”

Will it derail the longest bull market in U.S. history? Or, is it nothing to worry about? 

If you read the mainstream media, the answer seems to be the latter. To wit:

“However, gauged by the market’s performance during the onset of other infectious diseases, including SARS, or severe acute respiratory syndrome, Ebola and avian flu, Wall Street investors may have little to fear that this disease will sicken a U.S. stock market that finished 2019 with the best annual return in years and has kicked off 2020 at or near all-time highs.” – MarketWatch

With the stock market perched near all-time highs, it is understandable investors are quick to dismiss the potential ramifications of the virus very quickly. There is also plenty of anecdotal evidence to support the bullish claims as well. The chart below is the S&P 500 index versus its exponential growth trend with a history of the more important viral outbreaks notated…CLICK for complete article

The Survival Of A $2.7 Trillion Market Rests On This Tiny Niche

The space race has begun. Private companies have exploded, soaring beyond multiple billion-dollar valuations seemingly overnight. Some of the hottest tech companies on the planet are already facing off for a piece of the pie. But there’s a looming crisis that, if not addressed, could bring the entire industry crashing down. Literally.

After over 60 years of space exploration, humankind has left a lot of trash behind. Already, hundreds of thousands of pieces of space debris are in orbit. This is a terrifying reality, especially considering just a tiny 1mm object can have a catastrophic effect on a satellite or spacecraft.

Holger Krag, head of the space debris office for the ESA, notes, “Even today we are losing satellites due to debris and it is only a matter of time before more start colliding. If we continue the way we do, 10 years from now some regions in space will be too risky to visit.”

With companies such as SpaceX, Blue Origin and Virgin Galactic eyeing commercial space flight within the next few years, and even more looking to roll out an array of new private satellites, the space debris risk has never been greater. And if Krag is correct, the more crowded our orbit gets, the more dire the threat will become. CLICK for complete article

Fresh ideas – an EV that breaks the mold?

Electrified cars are approaching mainstream acceptance and adoption, be they a hybrid or a full fledged Electric Vehicle (EV).  There is widespread concern about the continued burning of fossil fuels, and electrification can resolve a lot of that if the electric power is generated without burning fossil fuels ( hydro-electric versus coal or diesel fired power plants ).  To date, most EV manufacturers have looked to the past in designing vehicles that replicate a look …Click here for full article.