Trump, Inflation, Artificial Intelligence, and Movie Theatres

Thursday morning news drop

• Inside Trump’s Ailing Business Empire Donald Trump upended the American presidency after stepping away from the company that made him rich and famous. Four years later, returning to his empire after losing the White House, what he finds may upend him. (Bloomberg)

• Inflation is coming: Signs that everything is about to get much more expensive A rundown of all the reasons that your loonies could soon be losing up to 5 cents of value every year (National Post)

• Inflation Is Just a Monster Under the Bed for Investors Despite all the fuss about expectations for higher prices, there’s little indication that a worrisome jump is coming.(Bloomberg)

• The Secret Auction That Set Off the Race for AI Supremacy How the shape of deep learning—and the fate of the tech industry—went up for sale in Harrah’s Room 731, on the shores of Lake Tahoe. (Wired)

• Rich Millennials Are Splashing Millions on Crypto Art The pandemic hit the art world hard. But an influx of young, tech-savvy collectors has kept the market buzzing. (Bloomberg)

• The pandemic won’t be the end of movie theaters, but it will forever change them Is the abandonment of the movie-house a temporary aberration forced by social distancing, or a sweeping lifestyle change? That conclusion may not be entirely clear until several of the big movie franchise films (the studios call them “tentpoles”) give it a go in the theaters this summer. (CNN)

• Credit Suisse Global Investment Returns This report contains extracts from the full hardcopy Credit Suisse Global Investment Returns Yearbook. In the Yearbook, renowned financial historians Professor Elroy Dimson, Professor Paul Marsh and Dr. Mike Staunton assess the returns and risks from investing in equities, bonds, cash, currencies and factors in 23 countries and in five different composite indexes since 1900. This year, the database is broadened to include 90 developed markets and emerging markets, and the Yearbook presents an in-depth analysis of nine new markets.(Credit Suisse)

Non-Fungible Tokens, Asset Bubbles and Baseball's Pace of Play Crisis

Wednesday news drop

Out at the bike park some random person stops by and asks if he can have 30 seconds of my time for a business pitch. I try to say no, but he proceeds to inform me that NFT’s (non-fungible tokens) are all the rage and that I have to get some. Meanwhile I hear some other random people shout out that Bitcoin is the future global currency, while another person chirps that it is going to be the next Beanie Baby fad. Kids these day say NFT’s are the future. I guess every generation has had their share of confusing and uncertain times.

• The climate controversy surrounding NFTs There’s a case for more sustainable crypto art, but it’s hotly contested (Verge)

• Still haven't learned what NFTs are? Well, this one just sold for $69M Digital artist Beeple now one of the top 3 most valuable living artists, auction house says. (CBC) Meanwhile a digital-only artwork has sold at Christie's auction house for an eye-watering $69m (£50m) - but the winning bidder will not receive a sculpture, painting or even a print. (BBC)

• Asset bubbles and where to find them There's only one sure way to identify an asset bubble, and that's after the bubble has burst. Until then, a fast-appreciating asset may seem overvalued, only for its price to keep rising. Anyone who has tried to breathe one last breath into a balloon and finds it can accommodate two or three more breaths can relate. (Vanguard)

• Howard Marks: 2020 In Review We are left to contemplate the jaw-dropping list of extremes compiled during this turbulent year: We had a health emergency, an ailing economy, the most generous capital market of all time, and strong stocks and bond markets. This seemingly anomalous relationship between the pandemic and recession on one hand and the strong capital and stock markets on the other can be explained by the Fed’s and the U.S. Treasury’s aggressive actions. (Oaktree Capital)

• Wikipedia Is Finally Asking Big Tech to Pay Up The Big Four all lean on the encyclopedia at no cost. With the launch of Wikimedia Enterprise, the volunteer project will change that—and possibly itself too. (Wired)

• Not tonight, darling: how the world lost its libido – and how it can get it back After a year of lockdowns, home schooling, social distancing and stress, sex drives are suffering – among both couples and single people. Can we do anything about it – or do we just have to wait till the end of the pandemic? (The Guardian)

• MLB Can't Wait Any Longer to Fix Its Pace of Play Crisis Willy Adames stepped to the plate to bat against Julio Urías. His job: find any way to get on base, which would bring the tying run to the plate for the Tampa Bay Rays in Game 6 of the 2020 World Series. If he failed, their season was over, and the Los Angeles Dodgers would be world champions. What happened next provided a fitting end to not just the game, but also another season in a decade of baseball’s declining entertainment value. (Sports Illustrated)

House Hunt Victoria, Financing Revenue, and Bond Investors

Tuesday morning news drop

• Ain’t So Bad For the 11th time since 1994, long-term bonds are in a 10% drawdown. The most interesting thing about this chart is that an all-time high followed all of them. And just eyeballing it, it looks like it didn’t take too long for investors to get their money back.

  Bond investors got. (Irrelevant Investor)

• Macro Thinking There is a lot of buzz going around about the size of the latest Covid relief bill and the national debt. $1.9 Trillion is a lot of money. Democrats call it the minimum amount of support needed to help individuals struggling through the pandemic, while Republicans call it a “liberal wish list” of pork barrel spending. I think we can be confident that the truth lies in between these two analyses. (Belle Curve)

• From Bowie Bonds to Pipe: Financing Recurring Revenue The idea that a predictable set of cash flows can be traded for cash proved alluring. A special financial structure called a whole business securitization emerged to channel sticky cash flow streams to investors. Today, it is used by companies which generate steady streams of income without the tangible assets that would provide the backbone for more conventional securitizations. (Net Interest)

• Why Bond Investors (and Wise Men) Got Inflation Wrong Recent history has tended to mock the financial worrywarts, and for understandable reasons. (Bloomberg)

• How Facebook got addicted to spreading misinformation The company’s AI algorithms gave it an insatiable habit for lies and hate speech. Now the man who built them can't fix the problem. (Technology Review)

• The Housing Boom That Never Ends Already Wiped Out All the Short-Sellers Real estate dominates Canada’s economy to an alarming degree (Bloomberg)

• Are investors driving the market? Prices are ripping upwards, and it’s natural to wonder where all that demand suddenly came from. It’s true that the market reversed trend and started heating up in mid 2019, but low interest rates and other pandemic impacts drastically accelerated that trend. (House Hunt Victoria)

The Bond Market, Inflation, Value Investing, 4 Day Work Week, and Crypto Trading Cards

Monday morning news drop

• Bond Market’s ‘Game of Chicken’ With Fed Is Set for a Reckoning Investors are again reassessing one of the bond market’s premier reflation trades -- the curve steepener -- as expectations for growth and inflation perk up at a clip that was hard to imagine just a few months ago. (Bloomberg)

• On Inflation How inflation drives asset prices and how to predict inflation Inflation is the economy’s Jay Gatsby: talked about by many, understood by few. Inflation can have big impacts on markets, yet predicting inflation is notoriously difficult and most investors’ portfolios are not optimized for inflationary environments. Since the 1980s when inflation peaked in the United States, research on this important economic topic has all but completely dried up. (Verdad)

• 16th-Century Traders Could’ve Predicted Zero Rates A Q&A with Paul Schmelzing, author of a paper that traces 800 years of borrowing costs, on central banks, inflation and the U.S.-China rivalry. (Bloomberg)

• Is Value Investing Really Back? Value investing is back. But is it really? Jack Forehand showed that despite the impressive results over the last 12 months, there is more to the story than just value leading the charge. (Irrelevant Investor)

• From Crypto Art to Trading Cards, Investment Manias Abound Each market frenzy seems crazier than the last. But all have the same roots. This past week, a trading card featuring the quarterback Tom Brady sold for a record $1.3 million. The total value of the cryptocurrency Bitcoin hit $1 trillion. And Christie’s sold a digital artwork by an artist known as Beeple for $69.3 million after bids started at just $100 (New York Times)

• Tell Your Boss the Four-Day Week Is Coming Soon A century after the invention of the weekend, more companies are adding another day.(Businessweek)

• How Unfair Property Taxes Keep Black Families From Gaining Wealth Flawed assessments for America’s $500 billion in annual property taxes hit Black neighborhoods hardest. (Businessweek)

• In Boost for Renewables, Grid-Scale Battery Storage Is on the Rise Driven by technological advances, facilities are being built with storage systems that can hold enough renewable energy to power hundreds of thousands of homes. The advent of “big battery” technology addresses a key challenge for green energy — the intermittency of wind and solar. (Yale Environment 360)

• How Lease Deals Have Truckers Hauling a Load of Debt Like many long-haul truckers, Frank Merrill dreamed of being his own boss. Some day, he told himself, he would buy his own big rig and become an owner-operator, king of the road, choosing what loads and routes he would take and carving out more time for a life outside the truck. (Westword)

Mark Carney, Pickup Trucks, Electric Cars, Wealth Transfer, and Double D in Duncan

Weekend news drop

• Mark Carney: ‘I didn’t want the Bank of England job. But I was asked to fix something’ He earned a fortune at Goldman Sachs, but now the banker wants the financial sector to reassess its values and tackle the climate emergency (Guardian)

• What Happened to Pickup Trucks? As U.S. drivers buy more full-size and heavy-duty pickups, these vehicles have transformed from no-frills workhorses into angry giants. And pedestrians are paying the price. (Bloomberg)

• The great generational wealth transfer is under way Recent reports on the frenzy in the real estate market have often referenced a somewhat surprising element: Millennials have largely been driving the rush. It would appear it’s millennials, not investors from mainland China, largely responsible for the head-spinning amounts of money being put down on properties. And there is likely a perfect explanation. (Globe and Mail)

• Debranding Is the New Branding From Burger King and Toyota to Intel and Warner Brothers, major brands are discarding detail and depth. Why now, and what’s the rush? (Bloomberg)

• Excel Never Dies The Spreadsheet That Launched A Million Companies. Most software we use at work exists in one of two categories: 1. It’s new and we love it for now. 2. It’s old but we have to use it and we hate it. But there’s one software product born in 1985 that inhabits its own category: it’s old, but we love it, we always will, and you’ll have to pry it from our cold, dead, fingers. That product, of course, is Microsoft Excel. (Not Boring)

• Big Market Delusion: Electric Vehicles The “big market delusion” is when all firms in an evolving industry rise together, although as competitors ultimately some will win and some will lose. The electric vehicle industry, with its astronomical growth in market-cap over the 12 months ending January 31, 2021, is a prime example of a big market delusion. In the highly competitive and capital-intensive auto industry, the January 2021 valuations of electric vehicle manufacturers are simply not sustainable over the long term.(Research Affiliates)

• How Facebook got addicted to spreading misinformation By the time thousands of rioters stormed the US Capitol in January, organized in part on Facebook and fueled by the lies about a stolen election that had fanned out across the platform, it was clear the Responsible AI team had failed to make headway against misinformation and hate speech because it had never made those problems its main focus. The company’s AI algorithms gave it an insatiable habit for lies and hate speech. Now the man who built them can’t fix the problem. (MIT Technology Review)

• Bitcoin is a mouth hungry for fossil fuels The story of Bitcoin isn’t a sideshow to climate; it’s a very significant and central force that will play a major role in dragging down the accelerating pace of positive change. This is because it has an energy consumption problem, it has a fossil fuel industry problem, and it has a deep cultural / ideological problem. Years of blood, sweat and tears extinguished by a bunch of bros with laser-eye profile pictures. (Ketan Joshi)

• Weight Watchers Isn’t Fooling Anyone The company rebranded as WW in 2018, but it’s still selling the same unhealthy diet culture. The whole idea of dieting and losing weight is increasingly seen as unhealthy and sometimes misogynistic and really just uncool. The cult of thinness hasn’t disappeared, but the body positivity movement has begun to chip away at it. (Slate)

• The Greatest Pool Player In History Just Wanted To Hustle He spent his teenage years and his twenties as a hustler, living in what the New York Times once called “lucrative obscurity.” He traveled to the United States and played under different names, returning to the Philippines tens of thousands of dollars richer. His unassuming nature suited him as a hustler. But you can only hide from your own shadow for so long. It got to the point that Efren Bata was a known commodity in billiards halls around the world. So he did the only thing he could do—he turned pro. (Defector)

A lap down Double D in Duncan Bas Van Steenbergen RAW

BC Economy, Data Privacy, Inflation, and the Role of Luck

Friday morning news drop

• B.C. expected to outperform other provinces in economic rebound The pandemic lockdown severely restricted a growing economy in 2020, but that’s all set to change this year as the majority of Canadians begin to access COVID-19 vaccines. (Douglas)

• Building confidence and trust The path ahead for privacy and data regulations in Canada. Canadian governments are working on legislation with the goal of balancing data privacy and protection without sacrificing innovation. (RBC)

• Inflation Isn’t Happening, and It Likely Won’t. Here Are 7 Charts Showing This. Inflation may be on many investors’ minds, but it has yet to show up in the numbers. Moreover, a close reading of the data suggests that inflation won’t be a problem for some time, if ever. (Barron’s)

• Companies That Rode Pandemic Boom Get a Reality Check While the pandemic battered the economy, tech companies and consumer companies powered by digital technology stood out as islands of growth. But with coronavirus cases and deaths falling, more than two million Americans a day getting vaccinations and the overall economic outlook improving, investors are starting to turn elsewhere. (New York Times)

• Bitcoin As A Meme And A Future: Most people who ask the Bitcoin Question admit that they weren’t imagining any particular use for the currency. They don’t predict that the banking system is going to collapse, leaving only Bitcoin. Nor do they really think that the value of the U.S. dollar will crash so radically and permanently that Bitcoin becomes a more stable asset. But still, they ask, butstill? (Noema)

• How Lucky Are You? The highly unlikely happens surprisingly often. Nassim Taleb wrote “We tend to underestimate the role of luck in life in general (and) overestimate it in games of chance.” A special basketball randomness edition in honor of March Madness (Better Letter)

• Inside ‘The Firm’: How The Royal Family’s $28 Billion Money Machine Really Works “I don’t know how they could expect that after all of this time, we would still just be silent if there is an active role that The Firm is playing in perpetuating falsehoods about us.” The Firm—also known as “Monarchy PLC”—are the public faces of a $28 billion empire that pumps hundreds of millions of pounds into the United Kingdom’s economy every year. Here’s how it affects their 1,000-year-old business. (Forbes)

Jeff Grosso, the regular man’s skateboarding legend For decades, Jeff Grosso lived and breathed skateboarding, spreading his passion for the sport in person and in his digital series with Grosso’s YouTube series is “Loveletters to Skateboarding” His friends and family recall his passion, his character and what made him a skateboarding legend. Because style matters more than anything.

Finding Unrideable Lines with Chris Akrigg | The Old World Behind the Scenes Trial bike legend Chris Akrigg is a man of an exquisite taste when it comes to bikes and ways of using these beautiful machines. Same could be said for the Tillmann Brothers when it comes to filming bikers & choosing places to film them. Therefore it is not hard to imagine that joining forces & travelling to Scotland resulted in an absolute banger of a segment in The Old World Movie.

GME Gamestop, Tesla, Women on Boards, and the New BMW M3

Thursday morning news drop

• Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, continues quantitative easing The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week. (Bank of Canada)

• GME, Doge, Supreme: How Getting Rich Went Full Internet The idea has always been that value — in stocks, art, precious metals, whatever — is inextricably tied to “fundamentals.” But it seems the internet changed that (hello, GME and Dogecoin!). Felix Salmon explains that if you want to understand finance now, you’d be better off studying Supreme than an annual report. (Wealthsimple)

• Seven More Ways to Fool Yourself Into Good Financial Decisions Being boring has its advantages, behavioral economists say. (Businessweek)

• Tesla owner spends $160 driving cross-country in all-electric 2021 Mustang Mach-E My problem with Tesla is their quality of service and workmanship. Some people accept it. When I had a 2019 Model X 100D, I used to hit a puddle and water would shoot up from the dashboard in my car. That car cost me almost $90,000. They couldn’t figure it out. In the Mach-E, everything looks nice (Detroit Free Press)

• Fixed mortgage rates have increased. But for home buyers willing to gamble, variables are getting cheaper Major lenders have hiked fixed five-year mortgage rates over the past few weeks in response to rising government bond yields, but new home buyers willing to take a gamble may be tempted by another option: declining borrowing costs for variable mortgages. (Globe and Mail)

• Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars In a hot housing market, it means nothing that you have a household income of more than $200,000 and a down payment of $450,000. (Globe and Mail)

• The Empty Religions of Instagram How did influencers become our moral authorities? Are we truly nonreligious, or are our belief systems too bespoke to appear on a list of major religions in a Pew phone survey? (New York Times)

• Report Regarding Women on Boards and in Executive Officer Positions This report outlines key trends from a recent review of public disclosure regarding women on boards and in executive officer positions as required by Form 58-101F1 Corporate Governance Disclosures. The review was completed for the purposes of identifying key trends. A qualitative assessment of compliance with the disclosure requirements was not conducted. (Canadian Securities Administrators)

The New BMW M3 Looks amazing except for the front… how did they make a car look soo good and soo ugly at the same time?

Inflation, Housing Market, Fast Fashion, Runner's High, and Wrestling

Wednesday morning news drop

• The Biggest Economic Experiment in History The government just passed another $1.9 trillion spending bill. There are still households and individuals who are suffering financially, through no fault of their own, because of the pandemic. (A Wealth of Common Sense)

• On Inflation: How inflation drives asset prices and how to predict inflation What we have learned so far about inflation: what works in inflationary environments, which indicators best predict inflation, and, most importantly, how this can generate returns in simple trading strategies. (Verdad)

• Biggest Players in the Short-Selling Game Are Getting a Pass It’s in the air again, on Reddit, in Congress, in the C-suite: Hedge funds that get rich off short-selling are the enemy. The odd thing is, the biggest players in the game are getting a pass. (Bloomberg)

• North America’s Biggest Bet on Downtowns Shifts to the Suburbs Toronto, Montreal and Vancouver built more apartment units per capita than almost every other large North American city over the past decade. But the Covid-19 pandemic and its attendant remote-work revolution now have urbanites leaving in record numbers, emptying condo towers and sending rents tumbling for thousands of mom-and-pop investors who took part in the boom. (Bloomberg)

• Is Fast Fashion Finally out of Style? With big retailers closing locations and customers flocking to boutique brands, shopping habits may be changing for good (Walrus)

• Getting to the Bottom of the Runner’s High For years we’ve been crediting endorphins, but it’s really about the endocannabinoids. (New York Times)

• The Lost Year: What the Pandemic Cost Teenagers In Hobbs, New Mexico, the high school closed and football was cancelled, while just across the state line in Texas, students seemed to be living nearly normal lives. Here’s how pandemic school closures exact their emotional toll on young people (Propublica)

• Pro-Wrestling is in a Rights Boom TV ratings for pro wrestling are a far cry from the late ’90s, when “Stone Cold” Steve Austin, The Rock, Degeneration-X, Hollywood Hogan and the nWo dominated Monday nights with ratings for the 18-49 demo in the high 5s and 6s for two shows going head-to-head. (Variety)

Bitcoin's Climate Problem, Value Investing, Fredrik Eaton, and Air Jordan's

Tuesday morning news drop

• Bitcoin’s Climate Problem As companies and investors increasingly say they are focused on climate and sustainability, the cryptocurrency’s huge carbon footprint could become a red flag. One Bitcoin transaction is the “equivalent to the carbon footprint of 735,121 Visa transactions or 55,280 hours of watching YouTube,” (New York Times)

• EVs Could Make Dealerships a Thing of the Past, Too When cars don’t need repairs or in-person updates, it changes the whole sales model (Bloomberg)

• A Once-In-A-Career Occurrence If you were stalking the value trade but were waiting for the coast to be clear, you probably felt like you missed the move. Regime shifts happen fast in the stock market. Especially today’s stock market. (Irrelevant Investor)

• Wall Street Hype Has Evolved Since the Dot-Com Era Similarities are everywhere, but investors need to understand five key differences. (Bloomberg)

• Why You Should Be Wary of Claims That the Stock Market Is in a Bubble Bubbles, bubbles everywhere. So say an increasing number of Wall Street professionals, who see the lofty prices of everything from equities to Bitcoin, new homes to the soaring value of newly public companies as clear signs that the financial system is again on the verge of a major reset similar to what happened in 2000 and 2008. (Time)

• Canada’s Construction Investment May Be Pausing To See If Work-From-Home Sticks The consensus is work-from-home is temporary, but real estate developers might not be so sure. Statistics Canada (Stat Can) data shows construction investment reached a high in January. The trend is driven by residential construction investment, which reached a new record. Non-residential construction showed minimal growth, and is now effectively negative in real terms. (Better Dwelling)

• Fredrik Eaton saw the demise of his family’s department store empire Less than a decade after Mr. Eaton’s tenure as chairman, president and CEO of the T. Eaton Co. Ltd., the once-dominant retailer sought bankruptcy protection, having fallen out of step with the times. The company had been thrashed by its competitors, including Sears and Walmart, which arrived in Canada in 1995. (Globe and Mail)

• What Perks Does a Twice-Impeached President Deserve? Former leaders get libraries, Secret Service details, and intelligence briefings. But, after Trump's four years of upending norms, the usual honours may no longer apply (Walrus)

• How Air Jordans Won Over The World The outstretched image of Michael Jordan in logo form – the famed “jumpman” motif – is a modern artefact. Few people fail to recognise his sprawled 6’6” figure, seen wearing the namesake Air Jordan sneakers he created with Nike, reaching for a ball at an upright angle. It’s the silhouette of a man that revolutionised basketball and slam-dunked his way to fame, all the while popularising a certain pair of shoes. (Vogue)

Canadian Housing Prices, Inflation, and the 4 Day Workweek

Monday morning news drop

• Inside the COVID-19 recession, one of the most unequal in modern history While many middle and high-income workers are back at work, the country's low-wage workers are still suffering from a recession that has annihilated their jobs. (60 Minutes)

• The Most Important Chart of the Decade We just witnessed the only recession in the history of this planet where the personal savings rate hit a 50-year high. This chart, which I think is the most important one from the last decade, comes from J.P. Morgan’s Guide to Retirement. (Irrelevant Investor)

• How to Profit From Inflation Stock prices are said to climb a wall of worry. These days, that worry is inflation. (Irrelevant Investor)

• Inside Xinjiang’s Prison State Survivors of China’s campaign of persecution reveal the scope of the devastation. (New Yorker)

• The Republican revolt against democracy, explained in 13 charts The Trump years revealed a dark truth: The Republican Party is no longer committed to democracy. These charts tell the story. (Vox)

• “Mark Changed The Rules”: How Facebook Went Easy On Alex Jones And Other Right-Wing Figures Facebook’s rules to combat misinformation and hate speech are subject to the whims and political considerations of its CEO and his policy team leader. (Buzzfeed)

• Tell Your Boss the Four-Day Week Is Coming Soon A century after the invention of the weekend, more companies are adding another day. (Businessweek)

• In the Atlantic Ocean, Subtle Shifts Hint at Dramatic Dangers The warming atmosphere is causing an arm of the powerful Gulf Stream to weaken, some scientists fear. (New York Times)

• Housing is Not (just) a Victoria problem You’ll often hear that real estate is local, and especially in a country as large as Canada, the conditions in one market don’t necessarily reflect those in any other. That’s usually true, but the pandemic has been an exception, with unprecedented synchronization of price trends across the country (and in fact across the continent). The year over year price increase for the country hit 23% in January, which has only been exceeded a couple times in the last 4 decades (and at much lower baseline prices). Even markets that have been in the dumps for years like Calgary saw a spike in the average sale price after the pandemic hit. (House Hunt Victoria)