Email of the day on crackpot epidemiology versus crackpot epistemology:
less crackpot epidemiology, more market analysis please
David Fuller and Eoin Treacy's Comment of the Day
Category - Fixed Income
SpaceX to be Tokenized
This article from Trustnodes.com may be of interest to subscribers. Here is a section:
They further explain if the market reaches the higher end, a new market could be opened with a new range, so making this effectively price discovery for non publicly traded companies, including McLaren, Reddit, SpaceX or OpenSea, Zapper, dYdX.
This hasn’t quite launched yet, with it to be seen what it will look like exactly once it is in hard code, but the idea is that once the company goes public, then the prePO price is settled at the company’s opening price on the first day of trading.
So in theory and perhaps even in practice this can allow for betting on startups even at the very early stages as well as mature companies that will probably go public at some point with the investor benefiting from the price appreciation that does finally settle once the company goes public.
“When the asset goes public, you can exit your position at a final settlement price, based on the price at the end of the first day of public trading for stocks, or on a time-weighted average price for tokens,” they say.
Geithner Panel Warns of More Treasuries Meltdowns Without Reform
This article from Bloomberg may be of interest to subscribers. Here is a section:
“Capital allocated to market-making by bank-affiliated dealers has not kept pace with the very rapid growth of marketable Treasury debt outstanding,” the group’s report found. That, in turn, is due in part to leverage requirements that discourage banks from allocating capital to market making, the report said.
The group’s recommendations included:
Creation of a standing repo facility by the Fed, with terms that “discourage use of the facility in normal market conditions without stigmatizing its use under stress”
All trades of Treasury securities executed on electronic inter-dealer trading platforms that offer anonymous trading should be centrally cleared
Treasury repos should be centrally cleared
The Treasury Department should lead a review of the design and operation of the Fixed Income Clearing Corporation, the only central clearinghouse for Treasuries
Banking regulators should review rules with a view to modifying those that discourage market intermediation
The TRACE reporting system should be expanded to capture all transactions in Treasury securities and Treasury repos
The Treasury should lead an inter-agency study to re-examine all exemptions of Treasury securities from U.S. securities laws, and prepare annual reports on Treasury market functioningGeithner served as chair of the working group. The project director was Patrick Parkinson, a former Fed official who’s now at the Bank Policy Institute. Parkinson co-wrote a paper last year with Nellie Liang, now the Treasury undersecretary of domestic finance, on enhancing liquidity in Treasuries. Panel members included former heads of the central banks of the U.K., Japan, Germany, Brazil and Mexico along with other ex-senior Fed officials.
China Crisis?
Variants and Volatility but Fundamentals Intact
Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section:
Bitcoin extends gain after retaking closely watched $30,000 mark
This article from mint.com may be of interest to subscribers. Here is a section:
Bitcoin, the largest digital currency, rose as much as 5.8% and was holding at about $31,450 as of 7:23 a.m. in New York on Wednesday. Other cryptos advanced too, including Ether and Dogecoin
Bitcoin extended gains after breaking above the $30,000 mark that some cryptocurrency traders view as a key support level.
The largest digital currency rose as much as 5.8% and was holding at about $31,450 as of 7:23 a.m. in New York on Wednesday. Other cryptos advanced too, including Ether and Dogecoin, while the Bloomberg Galaxy Crypto Index was also in the green.
Stock Traders Buy the Dip as Cyclicals Drive Rally
This article from Bloomberg may be of interest. Here is a section:
“We have a ways to go on the cyclical recovery here,” Levine, head of equities at the firm, said on Bloomberg TV and Radio. The U.S. has exhibited “an exceptionalism in the amount of fiscal policy, the amount of monetary stimulus and also in the way we vaccinated the population. And because of that I actually am very bullish,” she added.
For Bill Callahan, an investment strategist at Schroders, “equities just make sense right now,” and dip buyers will be rewarded as the market continues to grind higher.
On the economic front, data showed U.S. housing starts increased in June by more than forecast, suggesting residential construction is stabilizing despite lingering supply-chain constraints and labor shortages.
HELOCs
Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section:
U.S. Consumer Prices Jump Most Since 2008, Topping All Estimates
This article from Bloomberg may be of interest to subscribers. Here is a section:
Shelter costs, which are seen as a more structural component of the CPI and make up a third of the overall index, rose 0.5% last month, the most since October 2005. The gain was driven by a 7.9% jump in hotel stays.
Wage growth rose steadily through the second quarter, but higher consumer prices are taking a toll. Inflation-adjusted average hourly earnings fell 1.7% in June after slumping 2.9% a month earlier, separate data showed Thursday.
Figures out Tuesday from the National Federation of Independent Business showed 47% of small-business owners, the largest share since 1981, reported higher selling prices in June.
PE Daily: Private Equity's IPO Boom
This article from Dow Jones may be of interest to subscribers. Here is a section:
Private-equity firms are taking portfolio companies public at record levels, capitalizing on a highflying market as the economy rebounds from the pandemic-induced recession, Maria Armental reports for WSJ Pro Private Equity. In all, 105 private equity-backed companies priced initial public offerings in the U.S. in the first six months of this year, according to data provider Dealogic. The total has already surpassed the 89 U.S. IPOs by sponsor-backed companies in all of last year and is more than triple the number of such exits in 2019.
Midmarket-focused Nautic Partners aims to raise $2.5 billion for its 10th buyout fund, Preeti Singh reports for WSJ Pro Private Equity, citing a public document from Rhode Island's public pension system. If the Providence, R.I.-based firm hits its target, Nautic Partners X LP would be about 60% larger than its predecessor, Nautic Partners IX LP, which closed with almost $1.57 billion in March 2019. The fund's sponsor is expected to commit as much as $100 million to the new pool, documents from the pension system and its investment consultant said.
Ordinary people would have a way to join the wealthy as investors in private-equity funds under a proposal from two members of the House of Representatives, part of a wave of recent government efforts to expand access to alternative investments, Chris Cumming reports for WSJ Pro Private Equity. A bill introduced in the House on June 30 by Rep. Anthony Gonzalez (R., Ohio) and co-sponsored by Rep. Gregory Meeks (D., N.Y.) would amend the Investment Company Act of 1940 to prohibit limiting the amount a closed-end vehicle can invest in private funds.