Twitter announced a pair of big upcoming features today: the ability for users to charge their followers for access to additional content, and the ability to create and join groups based around specific interests. They’re two of the more substantial changes to Twitter in a while, but they also fit snugly into models that have been popular and successful on other social platforms.

The payment feature, called Super Follows, will allow Twitter users to charge followers and give them access to extra content. That could be bonus tweets, access to a community group, subscription to a newsletter, or a badge indicating your support. In a mockup screenshot, Twitter showed an example where a user charges $4.99 per month to receive a series of perks. Twitter sees it as a way to let creators and publishers get paid directly by their fans.

Direct payment tools have become increasingly important for creators in particular in recent years. Patreon has been hugely successful, and other platforms including Facebook, YouTube, and even GitHub have all launched direct creator payment features. Twitter will presumably take a cut — the company has been hinting at subscriptions features that would offer it a new source of revenue — though it doesn’t appear to have said yet what that fee will be.

This announcement suggests Twitter is serious about starting to make money. The creation of a sales funnel so members with substantial followings can monetise that interest is a business model that has grown in popularity during the pandemic.  

This was a DATA ERROR. I spoke to Glassnode’s CTO during the cascade of liquidations and can confirm this was a wallet labelling error from an upstream data provider. (What we were actually seeing was an internal movement of coins inside Gemini exchange.) During this time, investment flows continued into Bitcoin’s network unabated with no shake-out of new investors. We can see this in the chart below where SOPR climbed against the sell off.

This is VERY unusual occurrence. SOPR can only climb against a price decline when recent buyers hold their coins, and new buyers are stepping in to buy the steady stream of coins being offered by sellers who bought a while ago carrying greater profit. In summary, new investors bought the dip while traders buying on leverage were liquidated.

An additional odd occurrence in the crypto markets is that the Grayscale Bitcoin Trust is now trading at a discount to NAV. This is not the first time the fund has traded below book value and the trust has underperformed the bitcoin price by a considerable margin since March 2020. That suggests the aggressive fee structure and increasing availability of alternative vehicles for investing in bitcoin have robbed the fund of customers.

Square Inc. said it purchased $170 million in Bitcoin, further committing to the cryptocurrency and raising its holdings to about 5% of the company’s cash and equivalents.

The announcement came Tuesday as Square reported that cryptocurrency continues to be a growing part of its business through the use of its Cash App for Bitcoin transactions. The financial payments company’s involvement with Bitcoin is a reflection of Chief Executive Officer Jack Dorsey’s belief in
cryptocurrencies and the open internet.

The investment “really comes down to the alignment with our purpose, and aligning our incentives with cryptocurrency and more broadly expanding the economic empowerment opportunities and making them acceptable more broadly in a fair way around the world,” Chief Financial Officer Amrita Ahuja said. Square also bought $50 million worth of Bitcoin in October.

“Bitcoin has the potential to be a native currency of the internet and we want to continue to participate and learn in a disciplined way,” she said.

Once a company begins to accept bitcoin and promotes its use to clients it is virtually impossible to pull back. The fate of the company becomes twinned with the outlook for the cryptocurrency.

During bull markets demand for tokens increases and requires a devotion of capital to cater to the needs of clients. During bear markets, the company is left with useless assets that are expensive to maintain and lie dormant until the next bull run.

Technology has been forced to chase investors’ expectations. In China, the world’s largest market for electric cars where sales are growing steadily, battery installations of so-called lithium iron phosphate, or LFP, batteries – the technology of the last decade – accounted for 38% of the market, up from 33% the year before. Such batteries lag behind newer ones by as much as 30% in terms of energy density.

The reality is, these powertrains are highly complex. Even as some promising advances are made, commercial viability remains a stumbling block. Chief among those hurdles is boosting energy density and along with it, safety. The more energy a battery has, the further a car can go. However, that also hastens the pace of degradation and shortens battery life. Several higher-density batteries don’t have stable chemical compositions either, leaving them dangerously vulnerable to combustion.

To get over such challenges, firms are trying to make solid-state batteries that will be safer and, eventually, cheaper. Others are intent on boosting battery density by using more nickel content, and less cobalt, which is expensive and mired in supply issues. The progress so far has been limited.
Investors and analysts, meanwhile, are honing in the improvements on to individual battery parts, like cathodes and anodes.

The flipside of these advances are often overlooked. For instance, solid-state batteries that can store more have low power density, which means their energy delivery is slow, while those with higher nickel content are less chemically stable. In addition, solid state batteries have been known to discharge
sulphides.

It feels like I see a sensational headline about a new battery innovation almost every day. The reality is that it can take a decade to proof up and commercialise a new discovery and even that timeline is ambitious. There is no denying a great deal of capital is being poured into the sector but nothing has happened to question the historical timeline of 5 years between doublings in energy density.

At Greatest Risk from Higher Bond Yields? Eoin, we have seen some sizable sell offs in recent weeks from the hottest sectors such as Green Power, and the various Innovation Funds/ETFs as well as Electric Vehicle sector. As you'd pointed out, they are benefit from super low rates as growth is essentially free. What risk for EM though, which otherwise has been on cruise control of late? Today has seen a sizeable sell off, but is this just the first shot across the bow? Which of the EMs would you be most guarded against? What else might be at greatest risk given the run ups we have had in markets over the last 12 months?

The ARK Innovation ETF has pulled back by about 20% over the last six sessions. That’s a sizable pullback but the fund was up 383% since March 2020 so it was due some consolidation. This reaction has broken the 12-month sequence of higher reaction lows so the trend is no longer as consistent as it was on the way up.

As someone who has no stake in Cryptoland, it is increasingly baffling, and frustrating to see the continued rise of virtually everything in that world. Particularly notable has been the rise of Bitcoin "Miners" RIOT in the US and ARGO in the UK, each of which has seen their share prices rise by roughly 50x in the last few months, with a notable explosion higher once Bitcoin rose through $20,000. Is it fair to say that these are like the Gold Explorers, the highest Beta plays that investors now feel comfortable owning now that Bitcoin, then Ethereum, then the other Alt Coins have roofed it?

Bitcoin miners are creating new supply and represent the only opportunity to obtain tokens below the prevailing price. That means they are heavily leveraged to price rises above the marginal cost of production. In that regard they are similar to the gold explorers. High-cost producers tend to move more as prices rise because the move into profitability is life changing for their prospects.

In short, for a while AI was covering for the inevitable failure of user moderation, and now official or outsourced moderation is supposed to be covering for the inevitable failure of AI. None are up to the task, and events such as the capital riot should put an end to the era of plausible denial of responsibility. At some point these companies need to come clean: Moderation isn’t working, nor will it.

There is an easy way to improve user conduct on social media. Insist on real name confirmation. Anyone can say or do anything on social media today and have no fear of recrimination for their actions because it is completely anonymous.

The community of trolls on Twitter has multiplied beyond recognition and they form a significant core of user engagement. If the company were to insist on real names the business model would implode. However, it is instructive that many of the newer social media sites are insisting on real name login credentials from the outset. That is a simple measure to foster a less toxic community.

A number of factors contributed to the conditions that caused Tulip Mania. To start, the coin debasement crisis of the 1620s was followed by a period of prosperity in the 1630s. This prosperity coincided with an outbreak of the plague, which caused a labor shortage and increased real wages and surplus income. At the same time, there was a strong belief that social mobility was a Dutch birthright and that there was money to be made in every profession.

Prior to the 1630s, tulip bulbs were only physically traded among growers in the summer, when they could be safely pulled from the ground, in what evolved to be an informal spot market for individual commodities where cash and real assets traded hands. By the 1630s, the market for tulips began to grow as florists started buying and selling tulip bulbs still in the ground using promissory notes. The notes provided welcome credit and liquidity to help finance planting and limited credit risk to a known borrower with the borrower’s bulbs as collateral. However, the notes created a limited opportunity to inspect bulbs or to see them flower, provided no guarantee of quality, nor proof that the bulbs actually belonged to the seller, or even existed. Because delivery of the bulb was often months away, this financial innovation ultimately encouraged speculation as florists bought and sold promissory notes, which were in turn resold, creating a futures market. A legitimate need for financing real assets led to a financial market in which people with no stake in the actual underlying bulbs could participate. As Dash points out, it was “normal for florists to sell tulips they could not deliver, to buyers who did not have the cash to pay for them and who had no desire to plant them.” Such a financial market served the liquidity and credit needs of growers and florists, but it also led to highly leveraged speculation by those who could borrow to finance their investments with little of their own capital at stake. Promissory notes quickly transformed from a credit and liquidity mechanism to an instrument of speculation.

Beers Instead of Beurs Fuel the Market
Bulbs were traded not at the exchange buildings in Amsterdam, the beurs, but rather in local pubs where each trade was celebrated with a toast. The in het ootje method of trade required the seller to pay a commission independent of the seller’s acceptance or refusal of the bid (typically the equivalent of a round or two of drinks), which placed a premium on accepting a decent bid, further fueling the market.

The mania climaxed in January 1637, which marked the greatest influx of new florists. Many of these novices leveraged savings and mortgaged their goods or tools to take part in the bulb trade, just as we saw farmers turn to coin clipping during the Kipper und Wipperzeit. The absolute speculative peak is believed to be an auction on February 5, 1637, which raised 90,000 guilders. To put this in perspective, the wealthiest merchants of the day might’ve accumulated wealth of half a million guilders.

All true manias that see prices soar to multiples of what even the most bullish early investor thought reasonable require a number of factors.

A financial innovation unleashes the fuel necessary to support price increases. Tulip investors used futures contracts, in the 1920s trading on margin was popular and options helped revolutionise trading in the 1990s. Today bitcoin is the financial innovation, although no one is quite clear how it will used.

Each turbine is expected to deliver around 80 GWh of energy per year, depending on site-specific conditions, which is said to work out as being enough to power 20,000 European homes.

The V236-15.0 MW also offers the potential to reduce the number of turbines deployed at offshore windfarm level – with Vestas calculating that the "offshore turbine offers 65 percent higher annual energy production than the V173-9.5 MW, and for a 900-MW wind park it boosts production by five percent with 34 fewer turbines."

The company expects the first V236-15.0 MW prototype to be built in 2022, with serial production following two years later. It has a design lifetime of 25 years.

“With the V236-15.0 MW, we raise the bar in terms of technological innovation and industrialization in the wind energy industry, in favor of building scale," says Anders Nielsen, Vestas CTO. "By leveraging Vestas’ extensive proven technology, the new platform combines innovation with certainty to offer industry-leading performance while reaping the benefits of building on the supply chain of our entire product portfolio. The new offshore platform forms a solid foundation for future products and upgrades.”

Boosting production and needing to build fewer towers suggests there should be cost savings in construction. The big change in renewable energy occurred in late 2019 when economies of scale improved enough that the wind and solar sectors could survive without subsidies. That has led to a complete reappraisal of the rationale for investing in the sector. More recently it has allowed the renewable energy sector focus on the subsidies provided to fossil fuel companies across the energy supply chain.

Having reached a certain age, I confess to being a Bitcoin sceptic. I thought today's piece on Twitter by Nouriel Roubini just confirms my anxiety regarding digital currencies. He's no fan!

Thank you for highlighting this article which may be of interest to subscribers. Here is a section: 

Vitalik Buterin, a co-founder of the cryptocurrency Ethereum, argues that no crypto can be at the same time scalable, safe and decentralised. Traditional financial systems are scalable and safe: if your credit card or bank account is hacked or stolen, you are made whole. But they are centralised because participants and assets are verified by trusted institutions. Right now, crypto is neither scalable nor safe. If your private key is stolen or lost, the assets are gone for good.

It isn’t even decentralised. Oligopolistic miners control most bitcoin mining. Many are out of reach of western law enforcement in places such as China, Russia and Belarus, creating a national security nightmare. About 99 per cent of bitcoin trading occurs on centralised exchanges, which may be hackable. Furthermore, the original programmers retain outsized control over their creations. In some cases they act as police, prosecutors and judges, and reverse transactions that are supposed to be immutable. Nor is crypto equitable: a small number of “whales” control much of bitcoin’s value.

This undermines claims that crypto will decentralise finance, provide banking services to the unbanked, or make the poor rich. Blockchain claims to enable cheap money transfers to refugees, but crypto is much more likely to provide cover for scam artists, conmen, tax evaders, criminals, terrorists and human traffickers.

There are a couple of points that one needs to consider with the above account. The first is that there are well understood limitations with bitcoin. It is decentralised, supply is limited and the speed of transactions is extremely slow. The need for forks every time a change is required makes it unwieldly. It stands to reason that if cryptocurrencies are eventually going to fulfil their promise it will be without bitcoin.

Firstly, thanks for the terrific service, it’s been so helpful in these turbulent times.  I was interested to read the subscriber feedback in today's comment. 

I agree with the comment that sometimes it’s quite hard to find investable ideas in some of the themes that you so accurately pick up on. 

For example, soft commodities/agricultural products, some direction as to likely beneficiaries would be really helpful.  I’m a UK based investor, so in general like to stick to our market or Europe and it has not been easy.  Perhaps Bayer?  ABF but the Primark exposure is confusing.  In the Eoin’s Favourite’s section of the chart library some of the categories do help, but there’s doesn’t seem to be one directly related to rising soft commodity prices other than farm machinery or fertilisers?

Lithium is another one where I am struggling to find the right investment, even though I looked at your collection of related companies.  As the price seems to have broken out of a long-term downtrend some suggestions as to likely beneficiaries would be really helpful, although understand that one must also do one’s own research.

With Bitcoin, which I’m not that keen to buy, but you highlighted the Greyscale Bitcoin Trust which although I’ve not invested in it was really helpful to have an idea related to the concept you were right about. 

Hope this feedback helps and thanks again.

And

I found the criticism yesterday, a bit harsh.  There are few sites that provide the breadth and depth that we get from FTM.  Here, in West Aust, I wake each morning to your market summary of the principal events.  I find it cost effective for that point alone.

The suggestion above regarding missed opportunities is one worth pursuing, not so much regarding the chartbook but for highlighting early chart indications of emerging opportunities.  I feel that perhaps FTM may report facts that are available elsewhere but the site is not fully exploiting your chart analysis skills that are not available elsewhere.  You should exploit your strengths and don't reproduce stuff that is, or soon will be, in the media. We all want to know where Eoin Treacy sees emerging or imminent changes. 

Thank you both for this feedback and your kind words. I am a firm believer in giving the people what they want. Afterall, why else would one subscribe. Let me address the challenges in the order they are outlined in the above emails.

Before the news broke on Tesla and Bitcoin, we were planning a research note on Ark Invest holdings across their five actively managed ETFs. Our motivation was driven by the fact that Ark Invest recently pushed above $50bn in asset under management (AUM) and that some holdings in the Ark Disruptive Innovation ETF were getting quite concentrated. As a result, we have dived into the numbers and can now extend our note It is time to get cautious on the Tesla-Bitcoin-Ark connection back in January.

There are two main idiosyncratic risk sources around the Ark funds if we exclude the general market risk. The first one, is the percent ownership of outstanding shares in a specific company across holdings in its five actively managed ETFs. The list below shows the company where Ark Invest owns more than 10% of the outstanding. The sharp observer will quickly note a big overlap with the new generation of biotechnology companies, that we also recently wrote about, and given Ark Invest has grown AUM from around $3bn a year ago to over $50bn gives you an indication of how big a force the investment firm has been in the bull market in biotechnology stocks. But AUM flow can reverse and thus these concentrated positions can become a liquidity issue and big risk for these stocks and Ark Invest itself.

ARK’s ETFs are actively managed. That’s something new in the space. Most people think of an ETF as a tracker and paid a premium for active management either through mutual funds or hedge funds. ARK provides the active management part at a discount but the 0.75% expense ratio on the Innovation ETF (ARKK) is chunky when compared to other similar funds.

There are two parts to most markets at present. There are the strong trends which have been in evidence for years and continue to perform. The new IPOs and SPACs also fall into this category because many of these companies have seen their values trend higher for years before they sought listings.

The other category are the catch-up plays which are only now just breaking out of their respective bases.

Tesla Inc. invested $1.5 billion in Bitcoin and signaled its intent to begin accepting the cryptocurrency as
a form of payment, sending prices to a new record after the vote of confidence from the electric-car market leader.

The Palo Alto, California-based manufacturer said in a filing Monday it made the bet on Bitcoin after updating its investment policy last month to allow the company to invest in digital assets as well as gold bullion and gold exchange-traded funds.

“We expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis,” Tesla said in the securities filing.

The leading electric-car maker’s embrace of Bitcoin lends increased legitimacy to electronic currencies, which have become more of a mainstream asset in recent years despite skepticism from some. The embrace of a digital currency fits the maverick image of Tesla Chief Executive Officer Elon Musk, who upended the automotive industry with battery-powered vehicles and disrupted the equities market with the stock’s ascension to the blue-chip S&P 500 index last year.

During the bitcoin bull market of 2017, Lamborghini began taking bitcoin as a form of payment. Sales jumped appreciably as young traders cashed in. The lure of a chance to own a marquee vehicle overcame the holdr mentality for a while. Very little was subsequently said about what Volkswagen did with the bitcoin. We can assume they were immediately turned into cash since there was no response from the share price.

On November 24th I began a series of reviews of longer-term themes which will be updated on the first Friday of every month going forward. The last was on January 8th. These reviews can be found via the search bar using the term “secular themes review”. 

Highlighting secular themes has been a hallmark of this service for as long as I have been a part of it. I first met David Fuller in Amsterdam in 2003. He was giving a talk to Bloomberg’s clients and we went out for dinner that evening. His way of looking at markets, with a focus on suspending ego to see what the market tapestry is telling us, answered all of the questions I had about how to interpret
markets. I felt honoured when he asked me to come work with him a few months later.

The easy way to find secular themes to is to look at long-term ranges. Prices can so sideways for a long time, sometimes decades, and the whole asset class can be forgotten by investors. These kinds of markets need a catalyst to reignite demand. Once that new theme gathers enough pace, prices break on the upside because the supply side is not capable to responding in a timely manner to the new phenomenon. Sometimes that’s because they don’t believe in the new trend, or it may be because they simply do not have the financial wherewithal to expand. As the power of the new catalyst gathers, it takes time for supply to respond and the market will proceed higher until there is a robust supply response. That can take a long time because demand continues to grow as the new theme increases its dominance of investor attention.

“Put buying en masse would add to dealers’ short put positioning and could create much more severe structural leverage imbalance to the downside,” said Cem Karsan, founder of Aegea Capital Management LLC and a former options market maker.

Karsan, who has 24,000 Twitter followers, floated the scenario on The Derivative podcast last week.

The Squeeze
Once an obscure dynamic in the market plumbing, gamma squeezes are the talk of both Wall Street and the amateur crowd following the GameStop drama.

It goes like this. When an investor buys a call, the dealer who sold the contract will typically hedge by purchasing the underlying stock. The more the latter rises toward the option’s strike price, the more shares the market maker will theoretically have to buy. That can supercharge stock prices as shares rise and dealers buy more.

And the dynamic works in reverse, too.

Dealers who have sold puts will hedge themselves by selling the underlying shares. As the price drops toward the option’s strike, they will sell more and more.

Mobs are emotional, extremely aggressive, thrive on contradiction but they are also fickle. They can look like the strongest army in the world until they lose cohesion. Then they fall apart and turn into the weakest. Mobs thrive as long as they are growing and the reason for that growth is still compelling. As soon as it ends, they dissolve quickly. As GameStop’s mob dissolves it might be some time for a crowd to coalesce around a new idea. There are plenty of candidates from biotech to silver to micro-caps and cryptocurrencies.

Section 1 Global Macroeconomy: State of Play and Outlook Part 1 and Part 2

Section 2: Financial Markets Part 1 and Part 2

Section 3: Best Ideas

 

I enjoyed this series of roundtables last year and this year did not disappoint. The points made are all relevant to the market environment as we see it today. Ther participants expressed a great deal of fear that we are dangerously close to a bubble peak. There is a lot of worry about valuations, social unrest and the effects on the credit worthiness of the corporate bond market, when the Fed is backstopping it.

Musk’s page on Twitter simply said #bitcoin with no further explanation, but speculation that the world’s richest man might be a Bitcoin investor was enough to set off the dramatic rally.

Prices spiked in a matter of minutes, for the biggest intraday move in almost a year.

“This huge melt-up is due to Elon’s tweet,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, which bills itself as the world’s biggest crypto lender. Musk’s
support for Bitcoin “creates a safe zone for some of the smaller companies and possibly everyone in the S&P 500 to allocate into Bitcoin,” he said.

Musk also tweeted an image of a “Dogue” magazine cover featuring a whippet in a red sweater -- a play on the fashion magazine “Vogue.” He also sent posts calling Cyberpunk a great video game and said, “In retrospect, it was inevitable.”

Binance, the world’s largest cryptocurrency exchange by volume, briefly suspended withdrawals on Friday to address a large increase in requests. Chief Executive Officer Changpeng Zhao said that user sign-ups and trades jumped to a record high. “We almost ran out of DOGE coin addresses,” Zhao told Bloomberg. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”
 

The kind of activity that has been witnessed in GameStop this week is considered normal in the completely unregulated cryptocurrency markets. Since there is no hard fundamental to base value on, the market is dependent on momentum to stoke bull markets. When an anarko-capitalist idol like Elon Musk tweets, it tends to get a lot of attention.

The variant first identified in the U.K., 50% more infectious and possibly more virulent than the original virus, is to blame for the inability so far of the vaccination campaign and the lockdown to curb the spread, Israeli health ministry officials said.

Although the vaccine is believed to work against the variant, the mutation’s more contagious nature means higher infections and hence more hospitalizations. The health ministry’s main goal now is to bring down the numbers of the seriously ill who are overwhelming hospital wards and exhausting medical teams.

The rate of infections in Israel has declined to just over 9% from 10.2% earlier this month, and people seriously or critically ill has stabilized at about 1,100. But the number of patients on respirators has hit a record, Corona Commissioner Nachman Ash has said. More than 4,600 people in Israel have died from the virus, and more than 7,600 people are being diagnosed with it daily.

Balicer said it would likely take another 10 days before the country sees critical cases decline, allowing the economy to begin to return to normal.

Israel offers a valuable preview of what the rollout of vaccines in other countries will look like. The country’s advantages in having a small population, socialised medicine and rapid vaccination program suggest it represents a best-case scenario for what other countries might hope for. As vaccinations roll out and enthusiasm that the light at the end of the tunnel is in view, the spectre of virus variants represents a brake on the pace of reopening.

This report is packed full of blue sky thinking and gels with a lot of how I see the path of technological innovation over the next decade. The simple reality is that every innovation in how we communicate has created an industrial revolution. The printing press allowed for the dissemination of information and fostered inquisitiveness. The telegraph made the world smaller and allowed even more communication. The semiconductor created the conditions for instant communication. The internet realised that potential.

Last month, the company shared that it had confidentially filed an S-1 with the SEC, we still haven’t seen those financials but we now know that they have opted out of the traditional IPO process. Direct listings have been slowly gaining popularity and given some of the most recent first day pops from tech IPOs, it’s unsurprising to see a company like Coinbase which is likely flush with cash thanks to recent gains in the cryptocurrency market opt for a path to public markets that involves less fuss.

Direct listings allow companies to skip much of the heavy-lifting of the IPO process by stripping the public debut of a release of new shares, instead giving existing shareholders like VCs and employees a path to just liquidate their equity in the company.

This has been one of the friendliest IPO windows for tech stocks ever with investors racing to back technology companies that are primed for what’s been called the “digital transformation.” Coinbase is in a pretty favorable spot with the public markets and cryptocurrency markets aligned in frothiness. Bitcoin is currently trading near $33,000 just weeks after reaching on all-time-high.

Coinbase filed confidentially with the SEC in December and the announcement of the direct listing suggests the IPO will occur shortly. Many people have been looking for an easy way to buy cryptocurrencies and Coinbase will be a popular vehicle to express a view on the sector. It also has the added benefit from coming to market with a strong likelihood of being profitable which can’t be said for many of the shares which listed over the last year.

Moderna Inc. said its vaccine will protect against two known variants of the Covid-19 virus, but it plans to start human studies of a booster shot for a strain from South Africa that may cause immunity to wane more quickly.

In laboratory tests, Moderna’s vaccine produced antibody protection against the B.1.1.7 strain first identified in the U.K. at levels comparable with older forms of the virus. But against the South Africa variant, known as B.1.351, the neutralizing antibodies produced were six-fold lower, the company said in a statement.

Despite that gap, Moderna’s shot should protect against either strain, according to the company. While the South Africa variant hasn’t been seen in the U.S., the U.K. mutation -- which British officials said last week may be deadlier -- is spreading rapidly among Americans. Both strains are thought to be more transmissible than the original virus.

“We expect that whatever immunity you get over time will wane. The question is will it wane faster if you have lower levels to begin with,” said Tal Zaks, Moderna’s chief medical officer, in an interview.

It’s a game of whack-a-mole as the virus iterates faster than vaccines are currently being produced. The challenge with a global pandemic is no two countries deploy the same response. Even between households the approach to social distancing varies widely. With news today that California has its very own new strain, similar to the UK’s, the drive to speed up both production and rollout of vaccines will become even more urgent. Meanwhile, the Israeli experience with a national rollout offers a test case for how effective, the Pfizer vaccine in particular is.

From a broader perspective, inflation results from demand exceeding supply, but since globalization commenced three decades ago, it’s been an excess supply world. Asian countries are big producers of exports they send to the West, but they’re weak consumers. China’s consumer spending is just 43% of GDP, compared with 68% for the U.S. So the resulting Asian saving glut generates price-depressing excess supply. Barring a tariff wall that seals off imports from Asia, any revival of U.S. consumer spending wouldn’t be big enough to eliminate global excess supply. And President Joe Biden is less zealous on the trade war with China than former President Donald Trump.

Finally, note that some investors aren’t anticipating surging inflation and interest rates. Technology-related and other growth stocks have low earnings yields, the inverse of price-to-earnings ratios, which are justified by low interest rates. The theory is that their present stock values equal the discounted value of future earnings, so the lower that discounting interest rate, the more their equities are worth
today.

Earnings of $10 in 10 years hence is worth $9.05 today with a 1% discounting rate, but only $5.58 at 6%. So if investors expected a leap in inflation and interest rates, they’d probably be dumping growth stocks now.

Is it different this time? That’s the big question for anyone who has been monitoring the markets for the last few decades. Every time we see a recovery from a major decline, there is evidence of inflationary pressures beginning to rise. In 40 years, they have not proved to have staying power.

GameStop (NYSE: GME) short-seller Andrew Left of Citron Research says an "angry mob" that owns the stock spent the last 48 hours committing multiple crimes against him and his family that he will turn over to the FBI, SEC, and other government agencies.

He said what he experienced is nothing short of "shameful and a sad commentary on the state of the investment community" and he will no longer be commenting on GameStop.

Left said this was not just name-calling and hacking but "serious crimes such as harassment of minor children."

Left said they are "investors who put the safety of family first and when we believe this has been compromised, it is our duty to walk away from a stock."

Crowds all share common characteristics. The most important from the perspective of monitoring markets is that as the crowd grows, only the basest of emotional responses survive. There is no room for equivocation. Only absolutes are acceptable to the mob. Estimates of future potential stretch to infinity as a result.

“Bitcoin has already achieved the fastest-ever price appreciation of any must-have asset,” wrote JPMorgan Chase & Co. strategists John Normand and Federico Manicardi in a report on Thursday. “Current prices are so far above production costs that mean-reversion lower in returns is a recurring concern.”

Bitcoin was down 10% to $31,532 as of 10:08 a.m. in New York. Prices are on track for their first back-to-back weekly decline since early October.

Adding to the anxiety, a report in a trade blog suggested that there had been what’s known as a double purchase, where the same “coin” is used in two separate transactions.

“This really will chill a lot of that relentless buying and belief that Bitcoin is a stable form of providing transactions” if a double-spend actually happened, said Edward Moya, senior market analyst at Oanda.

Talk of a double purchase went wild on social media overnight. The primary issue is that bitcoin is designed to ensure that is impossible. Bitcoin processing is slow because it is designed to ensure that a bitcoin cannot be used to make a transaction twice. People try all the time to make double purchases but in order for a transaction to be considered “secure” it needs to go through six blocks. Therefore, I believe it is unlikely that bitcoin has been hacked or that a double purchase has taken place. However, the whole issue does highlight the difficulty bitcoin has in scaling the number of transactions. It is the primary argument against it being a medium of exchange for everyday purchases.

Much about the future of China’s most famous businessman remains unclear. Yet analysts said Wednesday’s video was a sign that worst-case scenarios -- such as jail time for Ma or a government takeover of his companies –- are probably now off the table. It’s unlikely Ma would have participated in the event without at least tacit approval from Beijing; state-run media including the Global Times were among outlets that posted snippets of his talk or wrote stories about his appearance.

“There’s still a lot of uncertainty on regulators’ next moves, but this does mean the status of Jack Ma is much better than a lot of people speculated,” said Fang Kecheng, a professor at the Chinese University of Hong Kong.

There is no getting around the fact that Ant Financial prospered in the grey area between consumer finance and traditional banking. By offering a higher interest rate than banks, it grew into a massive deposit taking operation without having to submit to banking regulation. When he publicly showed distain for banking regulators, it signalled Ma had forgotten that his success was based on the ability of Ant Financial to operate outside the regulatory umbrella of the banking sector. They dropped the hammer on him and the company will now be part of the regulatory environment. It remains to be seen if the rule breaking on deposit rates will still be tolerated. 

Shares of 3D printing companies rose on Tuesday, extending their recent gains, after Stifel started
research coverage on the group with a broadly positive view.

* The firm issued buy ratings on ExOne, Stratasys and Desktop Metal
** XONE up 11%, SSYS up 7%, DM up 3.2%
* Analyst Noelle Dilts wrote that XONE is “well-positioned to benefit from increased adoption of 3D printing technology for industrial end part production,” while DM should be supported by “a dramatic increase in the use of 3D printing for end-use part production” over the coming decade
** PT $20 for XONE, $30 for DM
* On SSYS, Stifel wrote that it’s in a “mature position where it can leverage its existing infrastructure” for further growth
** The company is working to be the first choice in the polymer 3D printing marketplace, which is “expected to more than double by 2025”

Veteran subscriber might remember the initial hoopla about the promise of 3D printers in 2012 and 2013. A large number of startups entered the market on the expectation that additive manufacturing creates better materials with fewer imperfections, that it would lead to mass production as economies of scale improved and that the potential for reshoring was vastly improved by the largely automated technology.

Until the beginning of last year you often spoke on the theme of the early stages of a secular bull market. David had begun speaking about it as long as 4 years ago. But with the onset of the pandemic, you have been largely silent about it. Has it stalled or, in your view, already peaked?

Thank you for this important question. In October 2008, I remember sitting at my desk and looking at the calculation that the S&P500 was sitting on the widest overextension relative to the 200-day ever. Acceleration is always a trend ending and the crash signalled the beginning of the bottoming process. By the time Wall Street reached its nadir in March 2009 many instruments were well off their lows and by the end of the year the leaders were making new highs.

Gold, commodities, ASEAN and technology took off. Of these, technology is the only one which had uninterrupted staying power all the way through the bull market to date.  

I started writing Crowd Money in 2011. At the time a host of big international companies, with global franchises, that dominate their niches were breaking out of long-term ranges. It was a clear signal that a new secular bull market was underway. By the time the book was published in 2013, it was still a minority view that a new bull market was underway.

There is nothing in the financial markets that can’t be made better with leverage. That’s the foundation most trading operations are based on. One of the most common trade patterns is to source cheap funding in a currency which is depreciating in value. That way when it comes to paying back the loan, you get to keep the profit on the currency trade as well as any gain from the assets you invested in.

Japan’s zero interest rates made it an ideal candidate for carry trades but the propensity for the Yen to strengthen meant that short yen carry trades tended to be rather volatile. It was common in the decade up to the introduction of Abenomics in early 2012 for unwinding of carry trades to contribute to profit taking across global markets.

As interest rates have trended towards zero across the world the opportunity to access cheap funding in a wide array of currencies has never been greater. The challenge today is to find the currency most likely to decline versus assets with high growth and yield potential.

In May, Volkswagen acquired a stake in Chinese battery supplier Gotion-High Tech, one of the country's largest suppliers of LFP batteries. However, Volkswagen told Platts by e-mail that it currently does not plan to use LFP in its cars, although the company is "verifying that technology and its opportunities."

Another German automaker, BMW, recently expanded its battery plant in Tiexi, China, but reportedly to produce nickel-cobalt-manganese (NCM) batteries for the iX3 model. The company's primary goal at the moment is to increase driving range, but lowering costs will be a priority in the future, BMW told Platts by e-mail.

"In this conflict of objectives between range and cost, it is more important than ever to completely penetrate all actuators, starting with raw materials, cell chemistry, cell and module construction, and optimizing their entire interactions," BMW said, without dismissing any specific kind of cathode chemistry.

Some western market participants still argue that LFP should be restricted in the future to Chinese low-range city cars, as well as energy storage systems. Most of the investment is still flowing into NCM technology, which will maintain cobalt's relevance, sources said.

Even Tesla, despite committing to completely move away from cobalt and employing LFP in its Chinese-made Model 3 Standard Range, still uses NCM 811 (8 parts nickel, 1 part each cobalt and manganese), supplied by LG Chem, in the Model 3 Long Range version produced in Shanghai.

Every battery manufacturer is chasing economies of scale so there is a great deal of investment flowing into battery production. At the same time there is a lot of competition to come up with the most effect chemistries. Some are better for short haul city cars but long-range vehicles need different batteries.

On top of that complication there is the promise of completely new products disrupting the market. An increasing number of companies believe they have what it takes to commercialise solid state batteries. Toyota’s concept vehicle will be released this year and Quantum Scape went public on the promise of delivering a product by 2025. That suggest picking the one battery manufacturer that will break the mould is likely to be quite difficult but there are other ways to play the theme.

Technically, the polar vortex refers to a band of winds that encircle the Arctic and keep the cold locked far to the North. But with that temperature spike, known as sudden stratospheric warming, the band can buckle, allowing frigid air to head south. Gas traders used to call it the “polar pig.”

That could mean chills anywhere in the Northern Hemisphere, though this year it’s likely to end up in the U.S. according to Ryan Truchelut, president of Weather Tiger LCC. A wave of deep cold could give the Great Lakes and East Coast their first real blast of frigid winter weather, along with a storm pattern that delivers snow storms as well.

It will be a big shift for the U.S., where winter has been a bit lackluster so far. In New York, January readings have been 5.1 degrees above normal through Thursday, and Chicago has been 7.2 degrees warmer for the month.

Still, there’s no guarantee it will happen. While a sudden stratospheric warming usually leads to a burst of frigid weather, sometimes the clockwork of gears in the atmosphere doesn’t deliver.

“Many times in the past, the forecast for a cold weather event across the country resulted in a false alarm,” said Jim Rouiller, lead meteorologist with the Energy Weather Group LLC.

Weather is indeed fickle so no one can be sure that the expected wintry weather will in fact arrive. However, it is worth considering that the global economy is attempting to recover and delivery drivers are more a part of the fabric of the economy than ever before.

The market capitalization of all cryptocurrencies topped over $1 trillion for the first time, according to data from Coindesk. That came as bitcoin BTCUSD, 9.15% topped $37,000, trading up nearly 4% to $37,152. Cryptocurrencies have surged, helped by a move in the autumn by PayPal to allow transactions through their service.

Cryptocurrencies have risen to a $1 trillion market cap faster than Tesla which is no mean feat. Until quite recently Tesla’s share price advance has been outpacing even the feverish pace of bitcoin’s ascent. That all changed this week with Bitcoin’s three-day jump from $30,000 to $40,000.

As a result of the violent rioting in Washington yesterday, by thousands of people under huge stress, a super-spreader event has almost certainly been generated. I note the daily tally of deaths yesterday in the US exceeded 4000. Not good!

I totally agree and it seems like there are super-spreader events going on all the time. Since the UK variant of the virus has been found in an increasingly large number of countries, we have to assume it is much more pervasive than spotty testing highlights. Many countries now test for coronavirus but much fewer do the genetic testing necessary to identify variants. The USA for example doesn’t have a wide tracking system for mutations.

Contributing to the supply shortage, the number of major new gold discoveries by year, i.e., greater than 2 million Troy ounces, has been in a declining secular trend for 30 years including the cyclical boost between 2000 and 2007. At Crescat, we have been building an activist portfolio of gold and silver mining exploration companies that we believe will kick off a new cyclical surge in discoveries over the next several years from today’s depressed levels.

Gold mining exploration expense industrywide, down sharply since 2012, has been one of the issues adding to the supply problems today. Crescat is providing capital to the industry to help reverse this trend.

Since 2012, there has also been a declining trend of capital expenditures toward developing new mines. From a macro standpoint, gold prices are likely to be supported by this lack of past investment until these trends are dramatically reversed over the next several years. Credit availability for gold and silver mining companies completely dried up over the last decade. Companies were forced to buckle up and apply strict capital controls to financially survive during that period. Investors demanded significant reductions in debt and equity issuances while miners had to effectively tighten up operational costs, cut back investment, and prioritize the quality of their balance sheet assets.

Supply Inelasticity Meets Rising Demand was the catch call of the commodity-led bull market between the early 2000s and 2011. Once identified it represents the beginning of a new bull market.

It takes time to convince investors there is a new bull market. By the time that happens prices have been trending higher for years already. Then it takes time to find and build new mines. That can take anything up to five years. Over that time, the firmness of prices convinces more and more people that the trend of demand dominance is irreversible so miners come under a great deal of pressure to expand capital expenditure or to buy out other operations. That generally occurs around the same time that new mines come online and contributes to a triple waterfall decline. Supply increases, debt is unmanageable and prices declines destroy valuations. Such is the cyclicality of the mining sector.

I hope you are enjoying the holidays and looking forward to a better year next year.

Here’s another one of Charles Gave's excellent articles-the oil price is on the move thus starting to bear out his fear of a 1970s-type repeat.

Secondly, regarding Ethereum, have you been able to quantify any price target and if so, what technical data/events have you chosen to use?

Thank you for this interesting report which repeats Gave’s earlier call for an inflationary boom with which I agree. However, I’m not sure we are in the same kind of bull market in oil that we had in the first decade of this century. The history of secular bull markets in oil points to rising prices lasting as long as it takes new sources of supply to reach market. That is followed by decades of ranging.

Hope you have a good Xmas. Could I ask, are you aware of an ETF in which I can get exposure to Hydrogen. I live in the UK, as such, I may be restricted with my choice?

Thank you for this question which may be of interest to the Collective. To the best of my knowledge, the sector has not gained sufficient adherents, beyond the broad renewables universe, for any firm to  launch an ETF.

Here is a link to the Chart Library folder for Hydrogen companies.

Some lidar suppliers gained Tuesday after Reuters reported that Apple Inc. plans to build a self-driving car for consumers and is tapping outside partners for elements of the system as it develops its own battery technology.

Apple is approaching companies for some parts, including lidar sensors that provide autonomous cars with a real-time, 3-D view of the world, the report said, citing unidentified people familiar with the matter.

Lidar supplier Luminar Technologies Inc. rose as much as 12% on Tuesday, while Velodyne Lidar Inc. surged 16%. Blank-check firms that are bringing more lidar players to the market also advanced: InterPrivate Acquisition Corp. climbed 17%, while Collective Growth Corp. jumped as much as 24%.

Apple has been working on driverless car technology since 2014, but pared back its ambitions from a full-fledged vehicle in 2017, Bloomberg News has reported. Since then, Apple has been working on the underlying autonomous system. The company has been deciding whether to attach this system to its own car, or existing vehicles, or to partner with an established carmaker, Bloomberg News reported earlier this month.

Apple enjoys an almost 40% gross margin on its iPhones and tablets. Porsche has about a 47% gross margin on the 911 and Ferrari has a more than 50% gross margin on its cars. Tesla’s is 16.5%. Toyota’s is 18% and Volkswagen’s is 19.5%. No mass market producer has been able to achieve margins on the scale technology companies are accustomed to.

Within the company, engineers are scrambling to assess the fallout and figure out workarounds to secure the equipment it needs, much like Huawei did two years prior, another person familiar with the matter said. At issue is the administration’s focus on drawing a line at 10-nanometer technology, banning the sale of equipment intended for use in more advanced processes. SMIC could conceivably repurpose 80% of older-generation gear to crank out more advanced chips, but that tactic won’t sustain production for the longer term and much depends on how far President-elect Joe Biden decides to take the rules, a third person close to the situation said, asking not to be identified discussing sensitive matters.

“The company has already got critical equipment and materials needed to continue production,” said Xiang Ligang, Beijing-based director-general of the Information Consumption Alliance. “In the past, China wasn’t too sensitive about the technological bottlenecks it has. But now, Beijing is fully aware of the potential damage and is determined to solve these issues.”

Chinese government-backed SMIC, a manufacturer of chips for global names from Qualcomm Inc. to Broadcom Inc., relies on U.S. gear for its longer-term technology road map. While its engineers may be able to sustain research and output in the short run, the latest sanctions basically freeze its capabilities while the industry advances. If a Biden White House takes it to the max, SMIC could be blocked from 7nm or more advanced technology while overseas rivals like Taiwan Semiconductor Manufacturing Co. dominate the market. The heightened scrutiny may also discourage clients leery of dealing with the uncertainty.

Self sufficiency in semi-conductors is a central policy objective for China. It is the basis on which the country seeks to compete with the USA in future. China may be able to do without Australian coal or wine but it has no hope of competing effectively on the geopolitical front without securing the supply line for technology’s basic ingredients.

The U.K. confronted threats of food insecurity and panicked shopping days before Christmas as European nations restricted trade and travel to guard against a resurgent coronavirus, offering Britain a preview of the border chaos to come in the absence of a Brexit deal.

Fearing a fast-spreading new strain of the virus that forced a strict lockdown across England, France on Sunday suspended travel from the U.K. for 48 hours and wants a stricter testing regime before lifting the blockade. Germany and Italy halted arriving flights from Britain with Spain and Portugal following suit. The crisis gave renewed urgency to negotiations for a trade deal with the European Union that remained at a critical stage after weekend talks.

Late Sunday, the Port of Dover stopped freight moved by truck into France while allowing unaccompanied cargo to keep moving. Traffic into the U.K. is unaffected, though truckers often run supplies in both directions and the latest outbreak in the heart of England may discourage them from entering the island.

The announcement over the weekend that one of the evolved versions of the original COVID--19 virus has travelled from South Africa to the UK has caused a panicky response from European governments. The new variant appears to be more infectious but no more lethal than the last. That suggests it will quickly become the dominant form of the virus circulating the global before long. Since the newer version is now already in Italy, closing borders with the UK is unlikely to have any effect on its ability to spread inside the EU.

Coinciding with the event is Tesla Inc.’s widely-watched inclusion in the S&P 500, a development that alone is estimated to force roughly $80 billion of stock trading. While all the turbulence means headaches for traders, some market watchers view it as the final chance for investors to shuffle big holdings before liquidity thins out into Christmas and the New Year’s holidays.

“Traditionally these are outsized liquidity days, and following the rebalances we expect liquidity to dwindle into year-end,” Wells Fargo & Co. strategist Chris Harvey said. “In other words, Friday is likely the last opportunity to make major portfolio shifts before the 2020 liquidity window closes.”

Quadruple witching typically fuels trading as large derivatives positions roll over. While spikes in volume usually occur around the open and close, providing windows of robust liquidity, large price swings can happen suddenly at any time of the day.

Tesla trades at an historic P/E of more than 1000 and a forward P/E of 297. That’s a racy valuation by any definition. The fact it also has a market cap of $630 billion and will occupy a greater weighting in the S&P500 than Berkshire Hathaway is going to greatly increase the overall valuation of the Index.

President-elect Joe Biden issued a statement Thursday on “what appears to be a massive cybersecurity breach affecting potentially thousands of victims, including US companies and federal government entities.” “I want to be clear," Mr Biden wrote.

"My administration will make cybersecurity a top priority at every level of government -- and we will make dealing with this breach a top priority from the moment we take office.”

Federal investigators have been combing through networks in recent days to determine what hackers had been able to access and how much damage might have done in one of the most serious cyber attacks on the US government in recent years.

Thomas Bossert, Mr Trump's former homeland security adviser, warned that a Russian cyber attack on the US government could take more than six months to resolve and will require a “staggering effort” to rebuild existing IT systems.

The evolution of cloud computing has resulted in wonder cost savings, productivity enhancements and the ability to work remotely. It has also created additional challenges in securing information and access to databases. 

NIO, BYD and Xpeng are examples of Chinese electric-vehicle makers that have surged in value, buttressed by national targets regarding electric vehicles on the road and investors' search for the next EV titans. The American depositary receipts in these companies have surged this year and the meteoric rises put their valuations in line with large traditional car makers, such as General Motors and Ford Motor. To help cut carbon emissions, China aims for EVs to make up 20% of car sales by 2025, and 50% by 2035. Tesla's success this year has also fueled investor appetite for the technology. Investors should be aware though that most Chinese upstarts are unprofitable, The Wall Street Journal reported, and they are also selling far fewer vehicles than major automobile groups.

Tesla’s success in attracting capital has set off a global gold rush in copycats seeking to cash in on investor demand for renewable investments. Anything that has a battery in the description is doing well and a lack of income was not seen as a barrier to entry when discount rates are zero and the world is swimming in cash.

The evolution of the SPAC market has been a gateway for a pace of IPOs to rival that of the late 1990s. The number in 2020 alone has exceeded the total for all other years combined. The result is new companies have been popping up on the stock market at a dizzying pace. Advice to pursue growth at all costs, capture market share and not to worry about profits carry heavy reminiscences of the tech bubble in the late 1990s.

In a presentation to investors Thursday, the world’s largest entertainment company outlined plans for dozens of new movies and TV shows from those major brands, with an eye toward becoming a streaming behemoth in four years. The company expects its program spending to reach $14 billion to $16 billion annually by then.

Disney+, the entertainment giant’s flagship streaming platform, also is getting a price hike. The U.S. monthly rate will climb $1 to $8 in a move that executives telegraphed earlier this year. In Europe, the price will rise 29% to 9 euros ($11) a month, although there it is getting additional content aimed at adults.

Shares of Disney rose as much as 11% to a record $171 in New York trading Friday. The stock has about doubled since March on the strength of the streaming business.

“The enormous success of Disney+ inspired us to be even more ambitious,” Executive Chairman Bob Iger said at the event. “Our pipeline is much more robust than we initially anticipated,” he said, adding that the Disney+ cadence should soon hit 100 new titles per year.

Disney+ ESPN and Hulu round out Disney’s streaming portfolio. The transmission medium is no longer dependent on cable TV and or satellite connection which affords streaming companies an opportunity to retain more of their earnings. So far, this saving has been passed on to consumers in the form of low subscription fees. However, the route to profitability lies in price rises despite the highly competitive environment.

“Breakups are scary for investors because in some ways they could disrupt the business models,” said Dan Ives, an analyst at Wedbush Securities who called Instagram one of the three best business acquisitions of the past 15 years. Still, Ives thinks the chance of an actual breakup is “slim” without legislative changes from Congress, which he believes are unlikely. “It’s a noisy headline but it doesn’t massively change the situation for Facebook in the near term.”

However remote the prospects, any sign that the FTC is leaning toward a breakup is likely to weigh further on Facebook’s stock. Facebook acquired these promising rival platforms precisely
because it expected the main social network to one day fade, and it wanted to be the company deciding what apps people would turn to next. A breakup would undo most of Zuckerberg’s hedging for
Facebook’s future, just as his immense investments in Instagram and WhatsApp are starting to pay off. Facebook argues that those investments made Instagram and WhatsApp what they are today.

“Our acquisitions of Instagram and WhatsApp have dramatically improved those services and helped them reach many more people,” Zuckerberg wrote in a post to employees on Wednesday. “We compete hard and we compete fairly. I’m proud of that.”

Breaking up Facebook is a monumental challenge which could take years, if it happens at all. However, the constant haranguing of the company by politicians is likely to limit its ability to grow. It will be unable to acquire future up and coming social media platforms to appeal to younger demographics. Musical.ly, which was acquired by TikTok, is an example of how Facebook has already been limited in continuing to buy competitors.

This article, quite long but worth reading, is by one of my favourite health professionals, Jon Barron.  He is not an anti-vaxxer nor an pro-vaxxer. He provides   a very in-depth  look into the captioned  subject.  If you’re interested in the subject matter, he provides warts and all. You must read the latter part of his article where he suggests using air ionisers to kill airborne viruses. Makes sense to me.

 

Thank you for this informative article by Jon Barron which may be of interest to subscribers. Here were two particularly relevant sections on the side effects of vaccines and the relative risk of fighting an infection unaided:

The CDC reports 1.31 cases of anaphylaxis per million flu shots given and a comparable one or two people in a million will develop GBS. (About 161 million Americans get a flu shot each year.) So, we’re talking approximately 210 cases of anaphylaxis per year in the US, and since anaphylaxis has a fatality rate of between 0.25% and 0.33%, we’re talking about one death every two or three years. As for GBS, a small number of people are permanently impaired, and approximately 3% -5% die.

In other words, somewhere between 4-15 people die every year as a result of getting the flu vaccine, with maybe 300-400 suffering serious injury. Weighed against that is the fact that somewhere around 55,000 people die every year in the US from the flu itself, with most of those deaths occurring in the unvaccinated. Now, to be fair, although complications from flu vaccinations are rare given the number of flu vaccinations administered each year, if you or someone you love is the one who gets injured or dies, then rarity is probably not a mitigating factor in your mind. Incidentally, total compensation paid out over the life of the government’s National Vaccine Injury Compensation Program (NVICP) is about $3.6 billion. That’s a lot of serious side effects. And as I’ve discussed previously, the flu vaccine consistently tops the NVICP’s list of claims made and paid out for injuries and deaths resulting from the side effects of vaccination.3

The bottom line is that the flu vaccine is neither as harmful or ineffective as antivaxxers claim nor as safe or effective as the medical community pronounces. Both sides have lied to you. Unfortunately, this makes any rational discussion about vaccines impossible.

And

Having this kind of reaction to the second dose simply shows that your body is responding the way it should, that the vaccine is working, and that you are building long-term defenses against the virus.

As to any long-term side effects from the COVID vaccines, we will have to wait and see. The bottom line, though, when it comes to safety, is that getting your immunity through vaccination is probably a whole lot less risky than getting your immunity through natural infection (285,000 dead and counting, not to mention several million long haulers). Anyone who likes to gamble will understand where the better odds lie here.

On November 24th I posted a review of candidates I believe likely to prosper in the emerging post-pandemic market. It was well received by subscribers so I will post an update on my views on the first Friday of the month going forward. That way subscribers can have an expectation that long-term themes will be covered in a systematic manner and will have a point of reference to look back on.

Media hysteria about the 2nd or 3rd waves has not led to new highs in the number of deaths. The success of biotech companies in deploying vaccines means there is going to be a substantial recovery in the economic activity in 2021 and going forward.

The stay-at-home champions saw their sales growth surge in 2020. It will be impossible to sustain that growth rate in 2021. That’s particularly true for mega-caps. One-way bets on the sector are likely to work less well in the FAANGs going forward.

This is an interesting if alarming piece about China and adds weight to your observations about war.

Thank you for this interesting article which may be of interest to subscribers. Here is a section:

In the meantime, though, the distinction between Earth and space has been blurred. Geopolitics used to be Earth-bound, world war was war between continents. Now it isn’t. China is ahead on this. Clausewitz is taught in its military academies and so too is the Prussian argument for a Feldherrenhügel, the mound from which commanders can direct battles. Space is the ultimate “higher ground” from which all strands of a battle can be monitored and directed. That is why the moon is more than a sentimental prize.

A senior Chinese general was quoted in 2016 as saying “the space between the Earth and the moon will be strategically important for the great rejuvenation of the Chinese nation”. The head of the Chinese lunar mission says “if we don’t go there now, even though we are capable of it, then we will be blamed by our descendants. If others go, then they will take over.”
 

“It’s a game changer,” says Andrei Lupas, an evolutionary biologist at the Max Planck Institute for Developmental Biology in Tübingen, Germany, who assessed the performance of different teams in CASP. AlphaFold has already helped him find the structure of a protein that has vexed his lab for a decade, and he expects it will alter how he works and the questions he tackles. “This will change medicine. It will change research. It will change bioengineering. It will change everything,” Lupas adds.

In some cases, AlphaFold’s structure predictions were indistinguishable from those determined using ‘gold standard’ experimental methods such as X-ray crystallography and, in recent years, cryo-electron microscopy (cryo-EM). AlphaFold might not obviate the need for these laborious and expensive methods — yet — say scientists, but the AI will make it possible to study living things in new ways.

And

The first iteration of AlphaFold applied the AI method known as deep learning to structural and genetic data to predict the distance between pairs of amino acids in a protein. In a second step that does not invoke AI, AlphaFold uses this information to come up with a ‘consensus’ model of what the protein should look like, says John Jumper at DeepMind, who is leading the project.

The team tried to build on that approach but eventually hit the wall. So, it changed tack, says Jumper, and developed an AI network that incorporated additional information about the physical and geometric constraints that determine how a protein folds. They also set it a more difficult, task: instead of predicting relationships between amino acids, the network predicts the final structure of a target protein sequence. “It’s a more complex system by quite a bit,” Jumper says.

The sheer breadth of what we do not yet know about biology is becoming more apparent all the time. That’s the greatest benefit of advances in technology, it makes answers possible where questions were never considered.

Some economists, such as my friend Ken Rogoff, welcome the demise of cash because it will make the management of monetary policy easier and organized crime harder. But it will be a fundamentally different world when all our payments are recorded, centrally stored, and scrutinized by artificial intelligence — regardless of whether it is Amazon’s Jeff Bezos or China’s Xi Jinping who can access our data.

In its early years, Bitcoin suffered reputational damage because it was adopted by criminals and used for illicit transactions. Such nefarious activity has not gone away, as a recent Justice Department report makes clear. Increasingly, however, Bitcoin has an appeal to respectable individuals and institutions who would like at least some part of their economic lives to be sheltered from the gaze of Big Brother.

It is not (as the term “cryptocurrency” misleadingly implies) that Bitcoin is beyond the reach of the law or the taxman. When the Federal Bureau of Investigation busted the online illegal goods market Silk Road in 2013, it showed how readily government agencies can trace the counterparties in suspect Bitcoin transactions. This is precisely because the blockchain is an indelible record of all Bitcoin transactions, complete with senders’ and receivers’ bitcoin addresses.

Bitcoin’s jump to new highs over the weekend is another example of volatility in quiet weekend trading and suggests the downdraft last weekend was an attempt to influence weak holders so sell and to trigger stops.

The sell-off gathered pace late Wednesday after Coinbase Inc. Chief Executive Officer Brian Armstrong tweeted about speculation the U.S. is considering new rules that would undermine anonymity in digital transactions.

“News that the Trump administration may clamp down on crypto might have been a trigger for the drop,” said Antoni Trenchev, managing partner of Nexo in London, which bills itself as the world’s biggest digital-coin lender. “But any asset that rallies 75% in 2 months and 260% from the March lows is allowed to undergo a correction.”

Other coins including XRP tumbled as much as 27%, according to prices compiled by Bloomberg.
After garnering more support from Wall Street money managers and fund providers, the rally in cryptocurrencies had looked over-heated. The fierce retreat could stir yet another debate over their value in diversifying portfolios.

At its peak there was a question whether bitcoin would consolidate like any other asset or would its momentum take it immediately on to new highs. The answer was delivered late Wednesday with a clear downward dynamic which checked momentum. The threat of regulatory intervention in the cryptocurrency market is always a risk unfortunately.

“FOMO is slowly kicking in. We are only just beginning to see some of our retail clients borrowing against their Bitcoin to buy more Bitcoin and that will ultimately propel the rally well into the $20,000s and beyond,” said Antoni Trenchev, co-founder and managing partner of Nexo in London, which bills itself as the world’s biggest crypto lender.

Trading got so intense overnight in XRP that U.S. cryptocurrency exchange Coinbase crashed, according to media reports. That sparked a plunge in the coin after the massive rally took it to a record.

Coinbase’s official status page says that its website is operational, and that an incident on Monday at 10 p.m. has been resolved. A spokesperson from Coinbase said they are looking into Bloomberg News’ request for comment.

While Main Street investors may be dreaming about hitting a jackpot, more seasoned market veterans remain wary about the sudden boom. The crypto world is notoriously opaque, and unlike stocks or bonds, which are rooted in economic and business fundamentals, getting a read on what makes Bitcoin tick can be impossible even for the savviest investors

“Whenever I see mainstream media attention like this, that usually leads to a sell-off,” said Kevin Murcko, the founder and CEO of CoinMetro, an Estonia-based crypto exchange. “The big fish need to lay off risk so they open the floodgates to bring in retail guys to dump on. Not sure this is the case this time around but it seems a bit suspect.”

Back in 2017, legions of college kids went home for Thanksgiving and convinced their parents investing in bitcoin was a good idea. The price jumped from $8000 to over $1900 in the ultimate Santa Claus rally. It then gave up the whole advance by the beginning of February.

"We are excited to begin testing of this vaccine in the United States to offer new hope to patients with lung and other cancers,” adds Kaumaya. “Reaching this point where we can transition our findings from the lab to the clinic speaks to the perseverance and dedication of Imugene's clinical and research team – including our research lab staff at Ohio State – to build on the clinical and commercial potential.”

The new research was published in the journal Oncoimmunology and the video below offers a more detailed explanation of how the novel cancer vaccine works.

Cancer vaccines are already very successful in preventing cervical cancers. A shot to prevent some forms of lung cancer would be a gamechanger for many individuals. The question is not if buy when these new technologies reach commercial utility because the profit prize from success is so large.

PayPal and Jack Dorsey's Cash App have bought 100% of newly mined bitcoins as the digital token is seeing a record rally this year, according to Pantera Capital's monthly blockchain newsletter.

After PayPal announced it would allow its users to buy, sell, and hold the digital token, about 300 million active users got instant access to digital currencies.

The US payments firm's crypto-exchange platform, itBit, was recording only moderate volumes until PayPal's announcement.

But once PayPal's service went live, itBit's volumes started exploding within four weeks. PayPal is already buying 70% of the newly mined bitcoins while Cash App has bought about 40%, Pantera said.

If one company is buying all new supply and 60% of existing supply is held off market, the supply inelasticity versus rising demand argument goes into overdrive. The fact that one company can so readily soak up all new supply begs the question what happens when more companies open up crypto trading to their clients? It is also the most likely causal factor behind the jump in alt-coins over the weekend. 

Check out the Ledger Nano X hardware wallet. It can hold 100 apps simultaneously. Whereas, please be aware that the ETH app can hold all ERC20 tokens. So just by installing BTC and ETH you can hold keys to many more coins that just BTC and ETH. You will have BTC + all ERC 20 coins.

Thank you for this valuable information which is sure to be of interest to the Collective.

“Bitcoin seems to be the hedge of choice against the U.S. dollar debasement that is looming, either through more Federal Reserve quantitative easing, higher government debt or a steepening yield curve -- or all three,” Jeffrey Halley, a senior market analyst with Oanda Asia Pacific Pte, wrote in an email.

Bitcoin’s investor base is also widening as more institutions make the jump into the asset class. Purchases or endorsements from the likes of Square Inc., Paul Tudor Jones and Stan Druckenmiller add to the mix. But its volatility -- including a furious run toward $20,000 in December 2017 followed by a bust -- make arguments for the cryptocurrency as a store of value contentious.

Fear of missing out “is well and truly in play here, and the fact that so many big hitters are publicly declaring their positions is clearly helping,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a Nov. 18 note. “I don’t see this move as a mania or grossly over-loved just yet.”

The bitcoin price is back testing its peaks which begs the question whether it is about to break on the upside in a rerun of the 2017 mania. The one big difference between bitcoin and other assets is it is completely borderless. All anyone needs is an internet connection to buy. That equates to a very wide investor base for what is a tight market.

Analysts have long expected Amazon to dive deeper into health care in a bet the company can bring its digital real estate and logistical prowess to bear on a roughly $4 trillion industry in the U.S. with a reputation for inefficiency. The company rattled drug retailers with its PillPack acquisition, but Amazon has been slow to integrate the online pharmacy startup into its offerings.

The announcement Tuesday marks the first time that shoppers can order prescription drugs directly on Amazon. Previously, they were redirected to PillPack’s website. An integrated pharmacy removes one of the few gaps in Amazon’s offerings compared with major big box and grocery rivals, some of whom have long filled shoppers’ prescriptions in the same stores where they sold flat-screen televisions or cans of soup.

The discounts are a clear play for people who pay for their medications with cash, whether they are uninsured or are looking to save money. Strong demand for transparency and better deals have helped fuel the rise of discount card programs like GoodRx Holdings Inc. Amazon will display both the price when using insurance and the price without. Infusing transparency into a system that has been frustratingly opaque for consumers could alter the supply chain.

“We designed Amazon Pharmacy to put customers first – bringing Amazon’s customer obsession to an industry that can be inconvenient and confusing,” said TJ Parker, vice president of Amazon Pharmacy and co-founder of PillPack.

Waiting for 15 or 20 minutes while a prescription is filled must be one of the biggest nuisances of the retail experience. Being forced to walk around aisles of products one has no interest in begs the question, “how long does it take to select a product from a shelf and put it in a bag?

The challenge for pharmacists is they spend much more time ensuring the veracity of a doctor’s instructions than they do filling them out. Yet, that is only small part of their business. The bulk of volume is focused on repeat custom and it is this business Amazon is targeting. Chronic conditions are where the money is in selling pharmaceuticals, Renewable prescriptions do not need to be verified all that often and cashflows are received on a subscription basis. That’s the kind of service Amazon excels at.

Unlike the carbon-fiber and lithium-ion sheets being developed by Asp and Greenhalgh, Kotov and his students created a zinc-air structural battery for their automatons. This cell chemistry is able to store much more energy than conventional Li-ion cells. It consists of a zinc anode, a carbon cloth cathode, and a semi-rigid electrolyte made from polymer-based nanofibers that is nanoengineered to mimic cartilage. The energy carriers in this type of battery are hydroxide ions that are produced when oxygen from the air interacts with the zinc.

While structural batteries for vehicles are highly rigid, the cell developed by Kotov’s team is meant to be pliable to cope with the movements of the robots. They’re also incredibly energy-dense. As Kotov and his team detailed in a paper published earlier this year, their structural batteries have 72 times the energy capacity of a conventional lithium-ion cell of the same volume. For now, their batteries are being used to power robotic toys and small drones as a proof of concept. But Kotov says he expects they’ll be used in midsize robots as well as larger hobby drones in the not-so-distant future. “Drones and medium-size robots need to have new solutions for energy storage,” Kotov says. “I can guarantee you that structural batteries will be a part of that.”

The battery has always been an addendum, a limiting factor, and a parasite. Today it’s vanishing before our eyes, melting into the fabric of our electrified world. In the future, everything will be a battery, and stand-alone energy storage will seem as quaint as landline telephones and portable CD players. It’s a disappearing act worthy of a great magician: Now you see it—and soon you won’t.

Dematerialisation is the process through which many of the locations and products we have previously physically interacted with have disappeared onto the internet. The disappearance first of the record player and then the record store is a clear example of that trend.

I remember a few years ago that you wrote in one of your articles that Tesla could well go broke! It could yet happen but they seem to have found a firmer footing since then for the time being. 

Could their joining the S&P Index be an early warning of trouble ahead for the market generally as this Bloomberg report suggests?

https://www.bloomberg.com/opinion/articles/2020-11-17/will-the-stock-bubble-burst-as-soon-as-tesla-joins-the-s-p-500?sref=O3zvoUBa

Thank you for this question. I’ve written a lot about Tesla over the last decade. It’s a highly leveraged company so there is always a risk it will not be able to achieve its goals. At its current valuation it cannot afford to disappoint. If we listen to Elon Musk, the company was about a month from bankruptcy during the ramp up of Model 3 production but it successfully pulled through. 

The question then becomes whether that energy associated with Bitcoin is put to good use. Does Bitcoin justify its energy usage? Does it add enough value?

So far, the market says it does and I agree. A decentralized digital monetary system, separate from any sovereign entity, with a rules-based monetary policy and inherent scarcity, gives people around the world a choice, which some of them use to store value in, and/or use to transmit that value to others.

Those of us in developed markets that haven’t experienced rapid inflation for decades may not see the need for it, but countless people in emerging markets have experienced many instances of severe inflation in their lifetimes, tend to get the concept more quickly.

Furthermore, a significant portion of the energy that Bitcoin uses, could otherwise be wasted. Bitcoin miners seek out the absolute cheapest sources of electricity in the world, which usually means energy that was developed for one reason or another, but that doesn’t currently have sufficient demand, and would therefore be wasted.

The energy to utility argument for bitcoin makes intuitive sense and willingness of investors to continue to support the asset class is a testament to the belief people have that there is intrinsic value in the network.

As money managers rushed to price in stronger economic growth, factor investors who dissect stocks by how much they’ve risen or fallen saw this strategy, known as momentum, crash on Monday like never before. Equities more sensitive to the economic cycle like value and small-cap names skyrocketed.

So while the S&P 500 is just shy of its record high, it’s been a wild week for quants even by the standards of this wild year, with many enduring violent moves rather than capitalizing on the risk-on mood.

All this recalls long-standing worries that freakish cross-asset gyrations are getting more common thanks to cheap money and investor crowding.

Quigley’s estimate for the odds of this week’s shock is in part tongue-in-cheek, based on a rule of thumb for a normal distribution of statistical data. Asset moves are not known to reliably obey this convention that says 98% of all data points occur within three standard deviations of the mean.

But even with the knowledge that market prices are more prone to outlier moves, a rotation of the magnitude seen this week was still a shock to risk models.

Quantitative strategies are designed to take advantage of relative small moves between asset classes that take place every day. They make money be sizing their positions according to the “normal” volatility in the ratios they monitor. 98% efficiency means that on any given day there is a 2% chance of a volatility event leading to unexpected losses. That’s acceptable for the vast majority of investors provided the incidence of outsized events remains low. The reason the credit crisis killed off so many fixed income macro strategies is because the dispersion in the returns broke out and stayed that way for a prolonged period.

As you are an investor in Ethereum (it also comprises 35% of our fund), I've attached my recent Fact Sheet comments fyi :

Ethereum announced on 4 November (after a lengthy period of research, development and extensive testing) the imminent launch of the first phase of the major ETH2 upgrade. Ethereum, like Bitcoin, currently uses Proof Of Work (POW) to secure its blockchain while ETH2 will use Proof Of Stake (POS). POS requires that sufficient quantities of ETH are deposited on the blockchain and that these depositors also run a validator/node to process transactions and reach consensus on their validity.

Depositors/validators are rewarded for the risk they take and the service they perform by receiving additional ETH (the total quantity of ETH issued is determined by a sliding scale depending on the total amount staked). Should depositors act with malign intent they stand to lose their ETH, while tardy maintenance or excessive downtime will result in depositors/validators being penalised. Should the minimum threshold of 524288 ETH and 16384 validators be reached on 24 November, the ETH2 Beacon chain will go live on 1 December (if not then 7 days after the thresholds are reached). Running a validator is not without its technical challenges, and any ETH staked cannot be withdrawn until the current ETH1 chain becomes a shard of the ETH2 chain. That could take anything from one to two years from now. We are potentially keen to stake some of our ETH, but are proceeding cautiously and would likely use a third party to run the validators on our behalf.

Vitalik Buterin, the founder of Ethereum, recently posted a blog post https://vitalik.ca/general/2020/11/06/pos2020.html on why the new POS will be more decentralised, more secure and far more resistant to attack than the current POW used by ETH and Bitcoin. It is worth remembering that the majority of Bitcoin’s mining is in China – and ANT Financial’s IPO travails demonstrate yet again the extent that power is centralised in China. The next priorities for Ethereum are to release Sharding on ETH2 (which will increase the potential transactions per second to 100k) sometime in the next year as well as Ethereum Improvement Proposal (EIP) 1559 which will substantially improve Ethereum’s fee model – including burning the bulk of the fees generated on the system. EIP1559 will likely have the effect of reducing Ethereum’s net issuance (after ETH1 becomes a shard of ETH2) to negative.

On a one to two year horizon, Ethereum therefore offers the following advantages relative to Bitcoin :1) greater security and resistance to attack, 2) more decentralised (an average consumer laptop can run many nodes easily vs the large server farms needed to mine Bitcoin ), 3) lower inflation/issuance, 4) vastly higher scalability (100k transactions per second vs 7), 5) full programmability from inception (while Bitcoin’s programmability is limited), 6) the ability to earn a yield on your ETH through staking (which will become very easy in time and with no lockups), 7) the centre of the DEFI (Decentralised Finance) ecosystem, which it is already, and 8) use vastly less electricity (Bitcoin’s POW uses as much as say New Zealand).

I am however also very bullish on Bitcoin….the bull case of which is becoming increasingly well known (for example https://winklevosscapital.com/the-case-for-500k-bitcoin/). The Ethereum bull market has barely started in my opinion.

I can send the full Fact Sheet if you are interested.

Thank you for this detailed email which summarised a great deal of information relating to the evolution of the Ethereum network. I agree that the transition to the proof stake rather than proof of work model is a significant catalyst for investor interest. I’m sure subscribers would be gratified to see your fact sheet.

However, the strong reading from the first large-scale trial to post efficacy results bodes well for other experimental vaccines, in particular one being developed by Moderna Inc. that uses similar technology. Its big trial could generate efficacy and safety results in weeks. If that study succeeds as well, there could be two vaccines available in the U.S. by around year-end.

Pfizer expects to get two months of safety follow-up data, a key metric required by U.S. regulators before an emergency authorization is granted, in the third week in November. If those findings raise no problems, Pfizer could apply for an authorization in the U.S. this month. A rolling review is in process in Europe.

So far, the trial’s data monitoring committee has identified no serious safety concerns, Pfizer and BioNTech said.

Leading the Race
The positive preliminary data mean the U.S. pharma giant and its German partner are on track to be first with a vaccine, after signing advance deals with governments worldwide for hundreds of thousands of doses. The companies have said they should be able to produce 1.3 billion doses -- enough to vaccinate 650 million people -- by the end of 2021. About 50 million doses are expected to be available in 2020.

“It shows that Covid-19 can be controlled,” BioNTech Chief Executive Officer Ugur Sahin said in an interview. “At the end of the day, it’s really a victory of science.”

This news is the foundation of the argument for removing social distancing guidelines by the end of the second quarter at the latest.

It no longer matters whether one agrees with wearing a mask, practising social distancing, vacating offices, opening or closing schools or the potential for overloading the healthcare system. The question of whether this was necessary or not is now irrelevant. The introduction of vaccines will render the argument mute.

Resolution requires concerted and consistent effort over a long period of time. It took 25 years to reform Finland’s primary education system before it topped the league in PISA scores. Singapore achieves superior health care outcomes at 25% of the cost of the US and 40% of Europe thanks to a system which gives consumers “skin in the game”.  It’s now thirty years in the making. Denmark’s commitment to wind power dates back to the 1970’s when the benefits were egregiously uneconomic. More than half of its energy is now from renewable sources. Ontario Teachers’ Pension Plan has evolved over thirty years since Lamoureux convinced Canada’s labor unions that the fund needs to attract and pay the best people from Goldman Sachs and Blackrock to work for them, rather than paying them fees.  Ontario Teachers’ has had an annualized total-return of 10% since reforms were made in 1990, and retirees’ pensions are fully funded with 100% inflation protection provided on all pensions.

It may be far-fetched to think that small, successful, experimental nations can fill this vacuum of leadership, but the world is begging for consistent leadership and a positive example, so an opportunity presents itself to step up.  

There is a good reason small countries tend to succeed in niche areas, and are often more successful than larger countries on specific metrics. They have to. Israel, South Korea or Switzerland have spent lifetimes grappling with the uncertainty of geopolitics. They understand the reality that if they don’t succeed on their own no one is going to help them.

Ireland is small rainy island on the tip of Europe, without a commitment to education and active courting of FDI, coupled with low corporate taxes and light regulation it would be a very dreary place indeed.

Sony executives have been deliberating over a price increase for some time, said people familiar with the discussions. A spokeswoman for Sony said the company is selling titles at launch for as little as $50 and the “biggest games" for $70. She said the higher price is “reflective of the growing development resources needed for these ambitious games.”

Game companies argue prices haven’t kept pace with the cost of other media like a movie ticket, Netflix or cable television, said Yoshio Osaki, the head of IDG Consulting Inc., which works with most major publishers. Since 2005, the cost to develop a game has tripled or quadrupled, he said.

“Not all publishers will launch next-gen games at $70,” Osaki wrote in an email. “However, we do anticipate that a growing percentage of games will launch at $70, but not all at once and not uniformly across every publisher or every game franchise.”

Capcom Co., the Japanese publisher of Resident Evil and Street Fighter, won’t release software for the new systems until next year. But like other companies, Capcom said it’s taking a “title-by-title” approach. “We believe game software’s price should be determined by how much money consumers are willing to pay for the quality, not by how much money we spend to make that game,” said Kenkichi Nomura, the chief financial officer.

This discussion of what the cost of computer game should be is missing a significant evolution of the market which has been going on for the last decade. Freemium is the biggest trend in the market where players have access to the game for free and pay of add-ons to speed up their progress or enhance the look of their online profile. 

Strong performances across most commodities with stocks sharply higher and the dollar lower is “in the realization that the combination of a Biden win and senate majority by the Republicans may remove a great deal of policy uncertainty,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said in a note.

The big question for many individuals at present is how do we insulate ourselves from the trend of massive and continued monetary and fiscal stimulus? The purchasing power of fiat currencies continues to fall and that is helping to inflate the prices of all assets. The answer is increasingly to lock down ownership of physical assets in limited supply now, before the price goes up any further.

With votes still being counted in key battleground states, it’s unclear if the the U.S. will more aggressively shift toward green energy, as Democratic candidate Joe Biden has pledged -- or if President Donald Trump will get four more years to promote fossil fuels.

While investors may be spooked by the uncertainty, its unlikely a second Trump term will significantly thwart the growth of wind and solar power. Demand for clean power has increased throughout the Republican’s presidency, thanks to state-level policies, corporations pushing to go green and a growing appetite for environmental, social and governance, or ESG, investments.

With a Republican controlled Senate a green new deal is unlikely to be approved. However, that has not stopped the sector from prospering for more than a year. The determination of both Europe and China to pursue anything that can enhance potential for energy independence and fewer emissions will be unaffected by the US Presidential election.

The Cambridge, Massachusetts-based company presented data from two trials at a conference in December. One trial showed the drug may slow the progression of the disease, while the other found no effect. Researchers questioned the positive results because not all participants completed the trial before it was stopped.

Aducanumab targets amyloid plaque that builds up in the brains of Alzheimer’s patients. Brain scans showed the drug removed the plaque, but whether that had any benefit is unclear. While the plaque is found in the brains of Alzheimer’s patients, scientists don’t know what role it plays in the disease.

More than 40% of patients who took high doses of aducanumab developed brain swelling or hemorrhages. Most didn’t develop symptoms but the side effects were seen on brain scans.

The number of people with Alzheimer’s is likely to trend higher over the coming decade as the large number of baby boomers progress in age. There has never been an effective treatment for the ailment. That pretty much means that every patient will be prescribed the drug when it is approved on the basis that something is better than nothing. It is very rare to see a product meet the hurdle of a large unmet need and expanding potential market.

One user, who goes by Vind on Discord, was among Discord's earliest cohort of users. He and his Battlefield 4-playing friends ditched TeamSpeak for the app, right as they were also starting to do more than just talk about Battlefield. "We were moving away from being purely about the game to being more about a general community." Discord let them set up different channels for different conversations, keep some order in the chaos, and jump in and out as they wanted. But Vind said one feature particularly stood out: "Being able to just jump on an empty voice chat, basically telling people, 'Hey, I'm here, do you want to join and talk?'"

Almost everyone I talked to picked that same example to explain why Discord just feels different from other apps. Voice chatting in Discord isn't like setting up a call, it doesn't involve dialing or sharing a link and password or anything at all formal. Every channel has a dedicated space for voice chat, and anyone who drops in is immediately connected and talking. The better metaphor than calling is walking into a room and plopping down on the sofa: You're simply saying, I'm here, what's up?

The evolution of chatrooms for gamers into a real-world phenomenon for business is not going to occur without some bumps on the road. However, the quality of calls and ease of use is so much better than Zoom or RingCentral that it is hard to imagine these companies will hold onto their dominant market positions indefinitely.

As expected, the plenum declared that China had met the critical political goal of becoming a “moderately prosperous society” in 2020. By the end of the year, China’s GDP is expected to reach nearly 100 trillion yuan (RMB)—equivalent to $14.3 trillion—a figure higher than the plan’s forecast of RMB 92.7 trillion, which makes China’s economy in nominal terms about 66.7 percent the size of that of the United States in 2019 ($21.4 trillion), up from 40.6 percent the size of the United States in 2010. China reportedly lifted 55.75 million people out of poverty and created 60 million jobs in urban areas over the past half-decade. By the end of 2020, there will be basic medical insurance coverage for 1.3 billion and basic pension support for nearly 1 billion citizens.

Looking ahead, the plenum emphasized that the 14th Five-Year Plan will build on the 13th Five-Year Plan’s principles of innovation, regional coordination, green development, international openness, and social equity. That said, there was a distinct emphasis on strengthening the domestic economy. There was no mention of a growth rate target; instead, the country will focus on improving quality and raising productivity. The plan will highlight China’s need to gain technological independence; become a powerhouse in manufacturing, cyber, and the digital economy; and raise China’s international competitiveness. At the same time, China will need to expand domestic consumption as a share of the economy, which will be dependent on raising wages, building a more complete social safety net, and expanding economic opportunities in rural China.

The middle-income trap has been escaped by only a handful of countries. South Korea, Singapore and Taiwan spring to mind. They have mustered the wherewithal to evolve their governance structure to become more efficient and successfully transitioned to high-end manufacturing and services. Relatively small populations relative to the scale of their exports has been a significant aid in achieving those goals.

The Australian government just approved fast tracking the Asian Renewable Energy Hub (asianrehub.com) proposed to be built in the Pilbara. It will generate green hydrogen from water using solar and wind energy that can produce clean ammonia to power ships, generate power and be used as a feed-stock for industrial processes. They say it will be the world's biggest power station at 26,000MW, covering 6500 square kilometers of land. It will start exporting in 2028.

Thank you for this informative email. Among the challenges faced by renewables is the distance of the primary locations wind and solar are available from the primary consumption markets. The only way to bridge that gap is to transport the energy produced to where it is needed. Producing green hydrogen and ammonia is a solution to that challenge and both are valued added commodities with a ready evolving market.

JPMorgan Chase's digital currency is in commercial use for the first time, and the bank has built a new business around the technology underpinning the coin. That follows a Bitcoin price surge over this month.

JPM Coin — a cryptocurrency JPMorgan launched last year — "is being used commercially for the first time this week" by a big technology client, which the bank did not identify, CNBC reported on Tuesday. The client is using the cryptocurrency for cross-border payments.

The bank has also created a new segment devoted to cryptocurrencies and blockchain, the record-keeping technology that enables cryptocurrency transactions. That segment is called Onyx.

JPMorgan hopes blockchain could reduce errors and rejections in cross-border payments if banks are able to verify account information was accurate and regulatory compliance, CNBC said. Such payments can slow down as they pass through the global banking system.

Takis Georgakopoulos, JPMorgan's global head of wholesale payments, told CNBC he believes the world is "shifting to a period of commercialization" of blockchain and cryptocurrency.

Banks issuing their own currency was relatively commonplace until the last few decades and the UK still has some vestiges of the practice. The ability of anyone with sufficient skill to create their own cryptocurrency is a testament to how early we are in the digital money cycle. As it matures and governments take a significant interest the range of what is possible is likely to coalesce around government sponsored digital currencies.

The package is aimed at seeing Rolls-Royce through to 2022, when the company expects to resume sufficient cash generation alongside a gradual recovery in demand for air travel. Chief Executive Officer Warren East has also said the company could sell assets as it repositions for the future.

“We didn’t want to put the business and our shareholders’ interests at risk by gambling on the situation next year so that’s why we chose to go with this package now,” the CEO said at an investor meeting.

Even with funding secured, Rolls-Royce still faces an uphill road to recovery. The twin-aisle planes the company supplies are predicted to take until at least 2025 to recover to pre-pandemic levels and the group has announced plans to cut 9,000 jobs.

The 10 per 3 rights issue is due to close at November 11th and will ensure Rolls Royce has sufficient capital to see it through the next couple of years come what may. It’s a worst-case scenario funding raise and will take place against a background of low interest rates and high liquidity.

Hello Eoin It seems to be difficult to invest in Ethereum here in Europe/Switzerland. first, there are very few providers and second, the liquidity is miserable. I want to invest appr US $ 200K, can you guide me where to go? 

Thank you for this question. Average daily volume of Ethereum is in order of about $7 billion so I suspect the markets you are looking at are not especially deep. The most expedient method to buy most cryptocurrencies is through a reputable exchange. Coinbase is the largest to the best of my knowledge. 

Italy’s Snam SpA will brush aside Brexit and invest 33 million euros ($39 million) in ITM Power Plc, which produces electrolyzers, a crucial component in the hydrogen technology.

The investment is part of a 150-million pound ($197 million) capital increase by ITM. The accord is part of Snam’s expansion in the technology after the European Union put hydrogen at the heart of its measures to cut greenhouse gases and become climate neutral by 2050. Hydrogen, if made with renewables, could replace coal, oil, and eventually natural gas, and help eliminate about a third of emissions from industries like steel and cement by mid-century, according to BloombergNEF.

“The hydrogen sector is like the internet before the dot com boom,” Marco Alvera, chief executive officer of Snam, said in an interview. “What matters now is to unlock potential technology and to find the right positioning.”

The EU is going to spend €2 trillion on a green new deal. China is at least talking about going carbon neutral within the next thirty years. That’s a lot of money chasing an energy transition.

Bitcoin surged to the highest level since July 2019 after PayPal Holdings Inc. announced it will allow
customers to use cryptocurrencies.

The largest digital coin increased as much as 4.9% to $12,488 Wednesday, surpassing the previous high for the year of $12,473 set in August. Gains among so-called alt coins were even larger, with Litecoin jumping more than 11% and Bitcoin Cash surging 8%.

PayPal customers can use select cryptocurrencies including Bitcoin, Ether, Bitcoin Cash and Litecoin on the platform. Mike Novogratz, who runs Galaxy Investment Partners, on Twitter called it “the biggest news of the year in crypto,” adding that banks will embark on a race to service digital currencies.

“We have crossed the rubicon,” he said. The news sparked an exuberant response from crypto fans who pointed to a string of recent announcements that suggest wider acceptance by old-school financial mainstays. Two public companies -- Square Inc. and MicroStrategy Inc. -- said recently that they invested in Bitcoin. And Fidelity Investments announced in August that it’s launching its first Bitcoin fund, adding its establishment name and star power to the often-maligned asset class.

The most recent bitcoin halvening was completed in May. That means the reward for solving the algorithm halved which doubled the difficulty of mining the next one. Since the genesis of the cryptocurrency, halvenings have resulted in investors appreciating the limited supply argument and the increasing difficult of creating new bitcoins as time progresses.

Airbnb is also a better value than hotels, offering more space but with less Covid (no check-in, elevators, or common areas) at a lower cost. A crisis is a terrible thing to waste, and Covid afforded the CEO the cloud cover to cut costs and refocus on the core business. In May Airbnb laid off a quarter of its staff (1,900 employees). CEO Chesky managed to pull a Bezos and was seen as a hero for his empathetic approach to layoffs (generous severance, extended healthcare, and a website of Airbnb employees who were laid off to help them find new leads). Firing people, sending out private pics — tomato/tomahto. Chesky and co-founders relinquished their salaries, cut pay in half for executives, and slashed nearly $1 billion in marketing expenses. The firm is in fighting shape.

The reduced cost structure and market recovery mean the path to profitability has become bigger, better lit, and shorter. There are rumors the firm will accelerate into/through profitability in 2021. The story here won’t be one of distant, but burgeoning, profits.

The story stock of 2020, where the narrative rode shotgun as the numbers sat quietly in the backseat, was Tesla. Airbnb will not electrify the world, but it will host it and reshape the resources required to let people tap into a basic instinct: to explore with others. What Airbnb lacks in story (unlikely Mr. Chesky can land two Brooklyn studio apartments on dual barges concurrently), it makes up in performance. There is no better vision than performance.

I had the pleasure of virtually attending a talk by Scott Galloway last week. He’s an engaging speaker and his topic at the time was how personal priorities shape purchasing decisions. He had a lot to say about equality of opportunity in college admissions. His main point was admissions, as they are currently structured in the USA, are tantamount to a caste system. I imagine his classes at NYU are well-attended.

The Emerging Market (EM) share of world output in the last 20 years doubled from 19% to 38% with the EM world growing at about double the rate of the Developed world (DM). This kept the total world growth at a 3-3.5% range over the last decade despite every region in the world growing a little slower than in the previous decade.

The implications of the swings in the global deflator and the FX on businesses and global incomes was much larger than most imagined which is visible in Fig 1 above. It breaks down the nominal world output and its components showing that the world in real terms grew at a pretty even rate of 3-3.5% through most of the last twenty years, with the swing in the ‘Deflator+FX component’ creating the big booms or bust feel in the world.

We are entering another such ‘Supercycle’ which was born about a quarter ago. Our definition of a supercycle is nominal World Output growing at 8-10% for a few years lifting most boats globally. Our view on the components of this global Supercycle are essentially building in a few key assumptions –

1. The World growth in real terms continues in the 3% +/- 1% range after normalizing to pre Covid levels in real terms by 2022. This is line with the IMF and many other estimates.

2. We expect the Global deflator to stay elevated in the 2-4% range for the next few years driven by stimulative fiscal and monetary policy by most large world economies. This would be aided by a weaker US$ and concurrent to it.

3. The US$ weakens 3-4% per annum for the next few years with rising deficits, with the Chinese Yuan doing the heavy lifting on the other side. The Yuan weakness in the previous few years had prevented this from playing out earlier. This paves the way for a strong Asian and EM FX basket which together account for about half of the world output. This is in a way similar to what happened in 2003-2005.

A link to the full note is posted in the Subscriber's Area.

Thanks for this interesting missive which may be of value to subscribers. Here is an additional note from the sender:

The lack of a punchline applies to many of the Facebook controversies since then: the United Kingdom’s Information Commissioner’s Office determined that the only scandal about Cambridge Analytica was the degree to which they oversold their capabilities;

 the afore-linked report from the Columbia Journalism Review highlighted how infinitesimal the scale of Russian interference on the platform was, and research shows that “fake news” makes up a fraction of American’s media diet; more recent research about voting fraud argued:

Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.

The power of the editor is at the root of the argument about which media venue carries the most weight in the cacophony of voices seeking attention at major turning points in politics and markets. Social media is a morass with so many voices competing for attention that no one account carries the weight of an established oracle of knowledge. That is where the strength of the winners in the mass media world prosper. They are still seen as the destination for truth. That is particularly true when they run a story taking a contrary angle to what they normally write.

Sees growth reverting back to levels similar to pre-COVID as the world recovers, and sees paid net adds likely to be down year over year in 1h 2021 as compared to the big spike in paid net adds in 1h 2020
Sees 2021 free cash flow be -$1 billion to break-even
As productions increasingly restart, we expect Q4’20 FCF to be slightly negative and therefore, for the full year 2020, we forecast FCF to be approximately $2 billion, up from our prior expectation of break-even to positive
With $8.4 billion in cash on our balance sheet at the end of the quarter plus our $750m credit facility which is undrawn, our need for external financing is diminishing

Netflix is running a capital-intensive model that is entirely dependent on growth. It got a significant boost in subscriptions from the pandemic but in an increasingly crowded competitive space the ability to continue to sustain growth has to be questionable.

But things started changing last year, coinciding with some important shifts in both the industry and the global political economy. Once neck-and-neck with Samsung Electronics Co., TSMC has now pulled ahead at the leading edge, while Intel Corp., formerly the world’s most-advanced chipmaker, has fallen further behind. The Hsinchu-based company now commands around 54% of the chip foundry market, according to researcher TrendForce.

At the same time, the rollout of 5G mobile technology and artificial intelligence ran smack into the tech Cold War (which includes the U.S. effectively banning TSMC from selling to China’s champion, Huawei Technologies Co.). This meant that the queue of companies wanting the best chip manufacturing in the world — such as Apple Inc., Qualcomm Inc. and Huawei — kept growing, while the supply of foundries able to meet their needs faces continued congestion.

This seems to have emboldened management to keep raising prices. Clients appear undeterred. Chips are generally the most important item in a device — be it a flashy new iPhone or high-end server — and the higher cost is far outweighed by the greater power and efficiency that superior components provide. 

I’ve warned before that TSMC ought to be careful. Regulators, clients and governments may worry that the company is becoming too powerful. Signs that it’s leveraging its power to raise prices could add those to concerns.

Right now, though, everybody still needs TSMC. That’s a nice position to be in, while it lasts.

With the release of Apple’s 5g phone today, demand for enabled devices will likely ramp higher. In a digitally connected work place where remote working plays an important role, the removal of lag is a significant development that does not get enough attention. It transforms the real-time ability of remote control of all manner of devices. Whether that is remote surgery, esports or industrial diagnostics, all are now further enhanced with the evolution of 5G.

Chinese electric carmaker NIO Inc. received confidence votes from at least two Wall Street analysts on Wednesday, after JPMorgan and Citi both upgraded their ratings on the stock.

While JPMorgan’s action was based on the expectation that the use of new-energy vehicles in China will quadruple by 2025 from last year’s levels, Citi pointed to multiple factors, including a very strong order backlog during the country’s Golden Week national holiday, an increase in NIO’s market share and a drop in battery costs.

JPMorgan analyst Nick Lai expects the penetration of new- energy vehicles in China to accelerate, jumping to 20% of the market by 2025 from less than 5% in 2019. Shifting customer preferences will help drive the trend, along with an expected drop in the cost of electric-car and battery production, the
analyst wrote in a note.
 

300 miles of ranges appears to be good enough for most investors. Whether that is the case for consumers is another question entirely. The practicality of daily life means 300 miles is probably enough 99% of the time but it also depends on ready access to charging facilities.

Beginning today, October 8, we’re excited to open up our fully driverless offering to Waymo One riders. Members of the public service can now take friends and family along on their rides and share their experience with the world. We’ll start with those who are already a part of Waymo One and, over the next several weeks, welcome more people directly into the service through our app (available on Google Play and the App Store). In the near term, 100% of our rides will be fully driverless. We expect our new fully driverless service to be very popular, and we’re thankful to our riders for their patience as we ramp up availability to serve demand. Later this year, after we've finished adding in-vehicle barriers between the front row and the rear passenger cabin for in-vehicle hygiene and safety, we'll also be re-introducing rides with a trained vehicle operator, which will add capacity and allow us to serve a larger geographical area.

We’ve achieved this milestone with the thought and care that our riders expect from us. We’ve enhanced our health and safety policies and procedures throughout our fully-owned fleet, sought the feedback of our team, partners, riders, as well as federal, local, and state authorities, all while continuing to advance the Waymo Driver’s capabilities.

To our entire community: thank you for being a part of this important journey. And to all the Waymonauts who’ve worked so hard getting us here: thanks for your dedication to our mission. Together, we’re building a safe and more accessible future with every autonomous mile we drive.

Waymo’s approach to autonomous driving is piecemeal. They appear confident to drive around a 5x10 mile area in one of Phoenix’s suburbs. However, they are not confident enough to extend range beyond that well mapped area without a safety driver. That suggests this is another step on the way to full autonomy.

Rather than a threat to existing producers, Tesla Inc.’s push into lithium mining is a sign of future demand strength, according to the largest producer of the key ingredient in batteries for electric vehicles.

“They’re kicking the industry in the pants,” Eric Norris, head of lithium at Albemarle Corp., said in an interview. “The market interpreted it as a strong signal of value erosion, but I view it differently. It’s a sign of what needs to come to drive the vision they have for 2030.”

Tesla’s foray into mining is at the center of the carmaker’s plan to cut battery costs and deliver on a promise to bring a $25,000 electric vehicle to market. Elon Musk told investors last month that Tesla has secured access to 10,000 acres of lithium-rich clay deposits in Nevada and planned to use a new, “very sustainable way” of extracting the metal. That news helped send lithium-producer shares tumbling, with Albemarle falling 16%, the the most on record.

Tesla has set an ambitious target of compressing battery manufacturing costs faster than any of its competitors. That means sourcing materials cheaply, redesigning the bed of the vehicles and taking over responsibility for manufacturing its own cells. It’s a couple of year project and represents the same kind of scale and expense as building the original Gigafactory did.

A link to the full report is posted in the Subscriber's Area. 

The fourth quarter is going to bring two strong sales events for Amazon. Prime Day usually occurs in July but was delayed because of the pandemic. It will now take place on the 13th. That might just kick off the beginning of the holiday season. Considering the extent of excess savings this year is likely to deliver a bumper holiday season for Amazon’s retail operation.

Hi Eoin, could you please state what your APPROXIMATE price objective is for XXX to know whether you see this more as an opportunistic trade or more of fundamental return to e.g., the 200dma? Thank you

Thank you for this question. I view my trades as opportunistic and my investments as holdings in a long-term portfolio. 

Earlier this year, China agreed to buy U.S. crude as part of a broader deal meant to ease rising trade tensions between the two world powers. The Trump administration agreed to cut some tariffs on Chinese goods in exchange for purchases of American farm, energy and manufacturing exports. ~

China's buying so far is a long way from fulfilling commitments made in that deal, and to some extent it is simply restoring crude flows that were cut off amid the earlier U.S.-China trade tensions. As part of a deal, Beijing agreed in January to buy $52.4 billion worth of oil and liquefied-natural-gas from the U.S. by the end of 2021. The buying was delayed by the outbreak of the Covid-19 pandemic, but has ratcheted up more recently.

“The Chinese had to catch up," said Petro-Logistics Chief Executive Daniel Gerber. That is now upending traditional oil-trade routes world-wide and further depressing some prices. Global prices have been hammered by falling demand caused by the pandemic.

Amid the new U.S. shipments to China, Saudi Arabia recently cut prices for its crude for buyers in Asia, a move that could make that oil more attractive to other regional buyers. It is also now resorting to storing unsold oil at home and overseas, including at depots in Egypt, Singapore and China. Saudi Arabia's domestic crude-oil inventories rose 7% to 81 million barrels in the two weeks to Sept. 20, a level not seen since June, said Paris-based commodities-analysis company Kayrros.

China has a significant energy deficit and that is not about to change in the next few years. In fact, assuming continued economic recovery it may widen significantly. At the other end of the spectrum the USA, Russia and Saudi Arabia has large quantities of oil and gas available for export. That pretty much ensures competition for end markets will remain active and explains why Russia and the USA remain at odds on a wide number of issues. 

Scientists developing a compact version of a nuclear fusion reactor have shown in a series of research papers that it should work, renewing hopes that the long-elusive goal of mimicking the way the sun produces energy might be achieved and eventually contribute to the fight against climate change.

Construction of a reactor, called Sparc, which is being developed by researchers at the Massachusetts Institute of Technology and a spinoff company, Commonwealth Fusion Systems, is expected to begin next spring and take three or four years, the researchers and company officials said.

Although many significant challenges remain, the company said construction would be followed by testing and, if successful, building of a power plant that could use fusion energy to generate electricity, beginning in the next decade.

It’s impossible to know whether the SPARC design will work but a couple of points are worth considering. The first is they are holding to their estimate of having a prototype up and running by 2024. That at least is a positive. The second is the team behind the project only set the company up because they lost their funding at the old MIT tokomak project. Academics have no incentive to set or exceed deadlines. Commercial enterprises do.

Regeneron Pharmaceuticals Inc. climbed the most in almost seven months on Monday after U.S. President Donald Trump received the biotech company’s antibody cocktail to treat Covid-19.

President Trump’s treatment was the “ultimate validation” for Regeneron, according to SVB Leerink analyst Geoffrey Porges. Like Regeneron, Eli Lilly & Co. and AbCellera Biologics Inc. are developing an antibody therapy, not only as a treatment for the virus but also as a preventative.

When used as a prophylactic, these products could be considered a passive vaccine as opposed to the active shots most people think of as a vaccine, Bloomberg Intelligence’s Sam Fazeli said last week. AstraZeneca Plc, as well as GlaxoSmithKline Plc and partner Vir Biotechnology Inc. are testing similar therapies.

The primary reason for the lockdowns in March was because there was no effective treatment for the virus. Considering the speed with which it was spreading there was a clear risk hospitals would be inundated with patients. As news headlines are filled with talk of second waves, we really should be looking at the response from a first principles basis.

Energy-market watchers say what makes today different than 10 years ago, when interest in clean tech also was hot, is that these power sources are now economically viable as subsidies fall away.

Peter McNally, global lead for industrials, materials and energy at research firm Third Bridge, says aggressive investment by utilities in renewable energy has lowered the cost of clean tech and showed it was viable at scale. Just as utilities invested in natural gas 20 years ago at the expense of coal, they are now doing the same with alternative energy.

"Clean-tech businesses are starting to stand on their own, and I think they got a big boost from the utilities," he says.

Even though Joe Biden disavowed support for the green new deal in last night’s debate, that did nothing to hamper enthusiasm for the sector today. Part of the reason for that is its success is less dependent on political whim than it was a decade ago.

Dear Eoin, many thanks for the excellent commentary on these "interesting times"! is there a reason why Palladium seems to be trading better than Gold or Silver at the moment? Many thanks, A

Thank you for this question which may be of interest to the Collective. Palladium is mostly produced as a byproduct of nickel and platinum mining. That means Russia and South Africa are the primary producers.

One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change.

Federal Reserve policy makers on Wednesday highlighted the importance of fiscal stimulus for an economic recovery that recently has outperformed forecasts. Chairman Jerome Powell continued to wave the fiscal flag carefully at a congressional hearing -- amid a political stalemate over a new package -- saying that more support was likely to be necessary. Others were more full-throated, with Cleveland Fed President Loretta Mester saying it was very much needed given the “deep hole” the economy is climbing out of.

Chicago Fed President Charles Evans expressed concern the stimulus he penciled in won’t be forthcoming, while Boston Fed President Eric Rosengren suggested it’ll take another wave of infections to prompt action, and likely not until next year.

Declines in the stock market, until recently attributed to a reversal of excessive tech-share gains, have increasingly been attributed in part to worries about the recovery and the need for more stimulus. The S&P 500 Index was down 1.7% as of 2:22 p.m. in New York, the fifth drop in six days.

“The most difficult part of the recovery is still ahead of us,” Rosengren said in remarks Wednesday, saying he was more pessimistic than his colleagues over how many Americans will return to work over the next 15 months.

The impending bitter dispute between the Democrats and Republicans about the latter’s determination to approve a new supreme court justice before the election has pretty much shelved any hope of additional stimulus before the election. Add to that the real potential that an election result may not be immediately available and the timeline for when an additional fiscal stimulus will be agreed gets pushed further out.

“Over the last few years, Tesla has been making a lot of moves related to batteries.

We are talking about buying companies like Maxwell and Hibar, and applying for patents on new technology, like a tabless battery cell and a cell to pack design.

While all these moves were mostly evaluated on their own merits, it wasn’t clear how all those things would fit together.

That’s exactly what Tesla demonstrated at its Battery Day.

Tesla explained how they have made major improvements in five key aspects of batteries:

Cell design, specifically form factor.
Battery cell factory design with manufacturing innovations
New anode materials
New cathode materials
New battery pack design

And then, by combining all these things together, Tesla achieves a battery cost breakthrough with a 56% reduction in cost per kWh:

What is most impressive is how all those innovations work together. Each result in an incremental improvement to battery technology, but if you combine them together, you get breakthrough-level performance and cost:

Tesla has the ambition to become a truly globally significant car company. The much-hyped battery day supplied a long list of potential solutions to achieve that goal. The challenge is what is being suggested is complicated to begin with and that is before the manufacturing headaches have been fully appreciated. Above all else building out cell manufacturing capacity to the scale suggested is going to be expensive.

The data’s strength was surprising because the period spanned Melbourne’s shift to Stage 4 restrictions and a curfew to contain a rapidly spreading outbreak, as well as nervousness in neighboring New South Wales that it was headed down the same path. The labor market’s ability to absorb this weakness and maintain its recovery is testament to the government’s signature JobKeeper employment subsidy -- that will extend into 2021 -- and central bank stimulus.

Self-employed workers drove the monthly jobs increase. As part-time jobs returned at twice the pace of full-time, the ubiquitous food delivery services, with its riders pedaling the streets of Australia’s cities, are expected to be responsible for much of this rise.

“The upshot is that the unemployment rate is now unlikely to climb to 8.5% over the coming months as we had anticipated, let alone the 10% predicted by the RBA and the Treasury,” said Marcel Thieliant, senior economist for Australia at Capital Economics. “Indeed, with restrictions in Victoria set to be loosened toward year-end, employment should continue to rise.”

The Reserve Bank of Australia, which has kept its benchmark interest rate near zero since March, when it began buying government bonds to ensure the yield on three-year remained around 0.25%, had predicted the jobless rate would climb to around 10% later this year.

Australia has successfully contained the coronavirus outbreak in Melbourne but the whole economy benefits from the monetary and fiscal stimulus to aid Victoria. With the RBA’s cash target rate at 0.25% Australia’s higher growth sectors that can benefit from access to abundant liquidity should continue to prosper.

A link to the full report is posted in the Subscriber's Area. 

The long-term charts contained in this report are helpful from the perspective of an investor either looking to monitor the potential for a bubble to evolve in the tech sector or the potential for cycles to rebound from depressed levels as a global recovery takes hold.

A link to the full report is posted in the Subscriber's Area. 

Media commentary continues to focus on the number of new cases of COVID-19 but that is an irrelevant figure. The numbers of hospitalisations and deaths and the fear that healthcare systems would be overrun was the reason for locking down economies. The reality today is even in countries where the number of cases is increasing, the hospitalization rate has not increased because most newly infected people are younger. Obviously, there are risks that younger people will infect older people but that is a manageable risk compared to the financial stress of total cessation of economic activity.

The European Society for Medical Oncology meeting, which begins this week, will be headlined by results from Immunomedics Inc. -- which Gilead is buying for about $21 billion; and Seattle Genetics Inc., which drew more than $1 billion dollars in an investment and partnership from Merck.

The meeting will offer investors a peek into the blockbuster hopes for Immunomedics’ lead cancer drug and provide Merck holders added details on the effectiveness of a cancer drug the company has signed on to help bring it to patients.

Innovation in the healthcare sector has long been outsourced to biotechnology companies. Experimentation tends to be resource hungry and it is difficult to predict what will eventually become a commercial product. The answer has been to allow early stage investors take the start-up risk with the promise of the best solutions being eventually bought out at a substantial premium. That model ensures a robust pace of M&A activity work.

But experts say one risk Nvidia faces is that the takeover could encourage ARM's wider client list to shift focus to a rival type of chip technology, which lags behind in terms of adoption but has the benefit of not being controlled by one company.

"ARM is facing growing competition from RISC-V, an open-source architecture," wrote CCS Insight's Geoff Blaber in a recent research note.

"If its partners believed that ARM's integrity and independence was compromised, it would accelerate the growth of RISC-V and in the process devalue ARM."

Mr Blaber also suggested regulators might block the deal.

"This process will take months if not years with a high chance of failure," he told the BBC.

Mr Huang has said that he expects it to take more than a year to "educate" regulators and answer all their questions, but said he had "every confidence" they would ultimately approve the investment.

The big question is just how much trouble is the Vision Fund in? ARM Holdings was deemed to be central to Softbank’s ambitions of carving out of a dominant position in future technological innovation. The sale of this key asset signals trouble.

Known for their love of risk, individual investors appear to be changing the contours of South Korea’s broader market. They are the force behind the benchmark Kospi index’s 64% rebound from its March low -- the strongest performance in Asia in that period -- having bought a net 25.6 trillion won ($21.6
billion) worth of stocks since then even as foreign funds and institutional investors sold. In the U.S., the Robinhood craze means that retail investors now account for roughly 20% of equity trading, up from 15% historically, according to Bloomberg Intelligence analysis.

“Retail investors appear to be seeking short-term profits after hearing their next-door neighbors earned lots of money from stocks after the March selloff,” said You Seung-Min, chief strategist at Samsung Securities Co.

The activity of Korean short-term traders in September hasn’t been limited to typical darlings like preferred stocks or shares of healthcare firms. They have also dominated trading in blue-chip companies like Samsung Electronic Co., about 81% of value traded this month through Sept. 8, and SK Hynix Inc.,
almost 76%.

“Unlike previously, they are trading large-cap stocks as well because they believe some large-size firms may be able to make a huge profit amid the spread of the Covid-19,” You said.

The South Korea and Taiwanese markets are heavily oriented towards technology companies which has made them a natural destination for traders playing the stay-at-home momentum trade. South Korean retail traders were also highly active in the cryptocurrency markets in 2017. That experience may have emboldened them to be more aggressive in pursuing gains during this momentum move.

It's not clear how big a deal this particular pause is. Trial halts aren’t uncommon or a sure sign of a significant problem. Health care news publication Stat reported Wednesday that the participant received the vaccine and not a placebo, but it's possible that the volunteer’s illness — reported to be a spine condition called transverse myelitis — is unrelated to the shot. They may have already had the condition, or this could simply prove to be a singular outlier. The range of possible outcomes includes everything from a quick restart to a longer delay that could create concern about vaccines that use similar technology, including an effort from Johnson & Johnson and Russia's already approved shot. With just one event, the former seems more likely than the latter, especially given the latest news from the FT on the trial’s possible quick resumption.

The pause may slow enrollment in AstraZeneca's trial if it restarts, and may affect other efforts. It may also incline companies and regulators to wait for a bit more safety data before approval. That's not such a bad thing if it builds confidence in the eventual result. Still, halting to track down an answer is the responsible move for volunteers, the company, and the vaccine race.

It’s clear that the world must proceed carefully in developing shots intended for millions. While approved vaccines are very safe and companies working on Covid-19 candidates have reported few red flags in small early tests, the human immune system is complicated and unusual reactions do occur. Only large-scale trials on a diverse population can determine whether a particular shot is safe for general use and differentiate outliers from deal-breakers. Big tests are especially crucial in a pandemic scenario with less time for early research.

There are over 150 candidates for COVID-19 vaccines and we only need one to work. This is a massive proof of concept exercise for genetic solutions. The reason it usually takes years to come up with a vaccine is because of the process of using dead virus or growing weakened samples.