Farmer Diaries

First, everyone should listen to the Hidden Force podcast , it's a revealing and very interesting discussion about politics, economics on a global scale. Addendum:  It seems that a trade agreement is on the table, again, with China and that they are working on the final wording.  First, is Trump's promise that China will import $200 billion of US goods.  If you consider that agribusiness is the #, and it peaked at $79 billion (at today's price it would be around $60 billion) its hard to see how this will be achieved.  It all seems like a massive clime down by Trump (but again it's hard to know since the whole thing is "shrouded in secrecy" granted the final document has not been drafted or signed.  But overall, Trump back down on tariffs -- and it's not entirely clear why.  What is clear is that $200 billion is wishful thinking and will eventually cause more trade friction.   Yesterday, Trump announced new tariffs on Brazil and Argentina, because they

It's a well-known joke about Africa:  Africa's future is brilliant with economic growth...always in the future! As for Mexico, things are looking bleak, sure AMLO can easily blame the great Satan to the North, but so many many issues are purely domestic...its a sad fact that Mexico's economy will end the year in recession, although there is still a month to go! The truth is that AMLO exercised political power, as its predecessors had before him, with little thought as to the economic consequences: (1)  Pemex was a mess long before President Obrador took power, in the last year of the previous administration, the state had to inject massive cash into the state-owned oil company just so that it could meet some of its long-overdue bills. (2)  CFE was trying to modernize, but things were slow and sometimes very competent engineers would demonstrate their complete lack of financial literacy -- really it was no their job! (3)  The school reform has stalled, and the then

Headline:  Netflix to spend US$ 15 billion in content...an answer to the new competition (according to the headline), except for one big thing.  Dear readers guess how much Netflix spent on content in 2019 -- if you guessed $ 12 billion you would be right, and how much dod the revenue grow for the year -- 31%.  So obviously spending more on programming is the way to go! There are two competitors to Netflix:  Amazon and Apple, the rest you can forget. Facebook will concentrate on teen romance/horror etc and Disney will recycle its film itself -- attractive to parents of young children everywhere (and no one else).  What is amazing is how much of Amazon's offering is charitably "B-reel" stuff.  Now, I'm not saying that Netflix doesn't have its fair dose of shlock but compared to Amazon, its a much smaller fraction. Also, Netflix has a secret weapon -- its international content!  Which is largely not shown in the US, but which is often amazing -- saw an absolutel

Take your pick you got prices from $1.2 trillion all the way to $2,7 trillion (as market value).  With this valuation comes a lot of question: 1) What is the scale of Saudi Arabia's reserves 2)  What price will SA sell its sweet crude (its a technical term...) 3)  What are the chance of a revolution -- or government seizure? 4)  The middle east is a tinder box right now All good questions that the analysts used in evaluating the value of Aramco...hence the massive valuation delta.

So yesterday I was playing with the grandson of a friend, the child and the dad were playing with some simple blocks making very interesting buildings and figures...all very simple and you had to use your imagination a lot! I remember the same pleasure, as a child, with lego, but now all I see are these "pre-designed kits" where imagination is gone out of the window.  In my days you wanted a spaceship and you built it with the block at hand (even better if you had a piece of clear lego for the cockpit -- but not essential).  I and my friends would compare how great your spacecraft were.  Not once did we consider following instructions of any sort -- we just picked legos off the floor (they were in large boxes) and from there we would build our universe. Now I get that lego makes a lot more money from these 200 pieces kits it sells for $39.99 than they would from just selling half a kilo of assorted blocks of various shapes and sizes, but to me, they killed what made legos

In the 1950s the Catholic Church in Quebec went all-in supporting a conservative party, even using the Sunday sermon to strongly urged their flock to support this Conservative party. "heaven is blue and hell is red" was a favorite to justify supporting this conservative party. This worked for years until it didn’t. Abuse of power and less the Christian behavior by those leaders but also a changing of the system -- the education system that had, until then, been the purview of the Catholic church was suddenly "yanked out" into the public sector.  the loss of influence was massive, and "the people" realized that they didn't need the church's opinion.  In the space of 3 years (36 months) the churches of Quebec emptied themselves, to this day they've not recovered -- also if you consider the numerous sexual crimes of the clergy... Faith lost "bigly" as Trump would say.  What had been a powerful political force in the province was kill

The story; I'm at the gate counter for the airline (code-sharing partner of the airline from which I bought the ticket), I am looking to purchase an upgrade to business class if available! This is the answer I got:  This ticket was sold by our code-sharing partner and cannot be upgraded!  Now I can understand if they wanted to keep their upgrade for their direct customers.  But the aircraft left with four business class seats empty; forgone free revenues. The airline gave up a few hundred dollars of revenues because its system is too inflexible to allow the gate agent to generate more profit for the airline. In fact, the gate agent could have said, at this time I don't have any space, but if you wait a bit, and before boarding, I may be able to accommodate you!  Even if the answer, in the end, had been no, it would have been better. We had no choice to buy the ticket from their code-sharing partner -- because the code-sharing partner was the "international segment&qu

UPDATE:  last week, suddenly with no rhyme or reason the price of bitcoin suddenly jumped to $9,800.00 (thereabouts).  Again, no reason or logic, just a massive 30% increase in the price of Bitcoin.  Proof that Bitcoin is neither a store of value or a currency -- a currency (or a store of value cannot vary, for no apparent reason, by 30% in a day...) So the crypto took a major soak yesterday, Bitcoin that was hovering around $8,000 and has been around that figure for some months fell to $7,400. What's interesting about me being right about the fall of crypto...I have zero ideas why they dumped 14% of the value in a trading session So once again I prove that I know nothing (like Sargent Klinger!)

Turns out the CEO of WeWork got $1,2 billion so not $1.7, but at the same time 4,000 WeWork employees lost their job with 2 weeks severance.... Well what's really funny is WeWork is worth what Softbank says it's worth -- well at least until its auditors ask some hard questions.  The strangest thing is that apparently, Neumann (the Ex-CEO) got $1.7 billion... First off, no one knows if this is true or BS (my guess the latter)  but nevertheless its hard to see how WeWork can be worth $ 7 billion since it is near bankruptcy bleeding cash and its reputation is in tatters. Whatever!  The reality is that this is a crazy world.  Lets not forget the Grill Cheese Company (yep that was for real) that had a market valuation of nearly $ 100 million operating 11 food trucks with no (and I mean NO) barriers to entry, tons of copy cats and "how many grill cheese would you eat a week?" oh and operating losses greater than its total revenues... So Yeah, we work at $7 billion

On October 19, 1987, I had been working in my first ever job for a total of 2 weeks in the London (UK) credit department of what is now BoNY Mellon.  I had let a basement flat in Nothing Hill from a family friend for a few months until I found the perfect place to set up!  That morning, I made my way to the office via the central line (to Bank station...).  All was well, I had heard during the night that there had been heavy wind, but really saw little impact on Kensington Park Road, the subway train was on time (as usual) but surprisingly empty -- but I didn't really focus on this because I'd only been on the job for 10 days -- half of which were in a training center in West London.  I arrive in the office and few people are about -- that was getting surprising, and few people around  (all recently hired newbies) are congregating around the Reuter's machine (a green screen about the size of an Ipad).  Everyone is looking at the UK markets and French markets and the news

The WeWork valuation was always based on the greater fool. That these VC investors  would find a sucker (eg the IPO market) to make them whole!  Because there is simply no logic to the WeWork valuation. It was already the single largest tenant in NYC and a substantial player in many other capitals, and yet it was very far from showing profits.  The operating losses for WeWork appear to have been almost greater than its total revenues So the likes of SoftBank decided that the best option was to treat WeWork as if it were a tech company and not just a real estate play (and a not very interesting one). Leasing office space and then subleasing it to small companies... it’s hardly groundbreaking. So what’s the fall out?  First it would appear that WeWork is on its way to bankruptcy since I doubt that the VC will pony up more cash. I suspect that the shares of IWG (holding company for Regus, WeWorks main competitor) will take a hit. They got a nice boost from the WeWork IPO rumours Wha

Let's be honest, there's not many differences between new and older cell phones anymore.  It's not like to speak faster or that the internet is faster (not yet anyway).  I remember when the news would send reporters to the major Apple outlets to interview people who had been waiting in line for there new phone. The proof that cell phones are now a commodity, I was not aware until this morning that the Iphone 11 was out.  I looked at the specs, just because it was an add on the internet and frankly aside from the camera and possibly a slightly better screen -- not that I would really notice. To be honest I've been kind of disappointed with the apple eco-sphere of late, my Macbook Air, Ipad and Iphone no longer synchronized, and I really don't care enough to do anything about it... Then for the pleasure of buying a Iphone 11, the tab is $1,400.00 in Canada! Steve Job must be spinning in his grave, that his iconic products are now seen as a run of the mill t

So 30 years ago GPA aviation at the time the largest aircraft lessor was about to do an IPO; at my bank was a lender to the group and we were becoming concerned by the performance of the aircraft lessor.  We had, by some strange coincidence a buyer for our stake, they wanted to be part of the lender's group so that they could get in the "pre IPO bandwagon"  we were not interested in that business (for many many reasons), and they were buying our participation slightly over PAR. My recommendation was SELL SELL SELL, but my boss was a greedy SOB and wanted more, and so in the end that lender lost about 50% of its loan in the bankruptcy...my boss actually kept his job...typical the bigger you screw up the more they keep you! Now looking at WeWork we see a similar situation in that the company is fast running out of cash (burning about US$ 2 billion per annum) and no end in sight.  today the board decided to sell the CEO's GV aircraft (yes a $60 million dollar toy).

Update:   It seems that the IPO is now on the shelf (at least for the time being), in a related note, Softbank is seeking to hire a new "valuer" for its assets!   As I said, even $20 billion seems rich considering that IWG market cap is around $3 billion (and that's just risen by $500 MM based on WeWork's "valuation").  I suspect that IWG share price is going to feel some pain with re-adjustment...maybe Soooo WeWork shareholders are starting to see the nature of the problem...in ascribing a valuation of more than $47 billion, the arranger may have overshot a realistic valuation that buyers would be ready to consider.  Now let's be clear that figure of $47 billion was driven by Softbank (that has its own issues) where the valuation there was driven by the latest round in which Softbank participated.  The guy responsible for the valuation is Ron Fisher (yep there's a real name there not just an organization). Part of the problem is that WeWork is

First off, having dinner two weeks ago with a long lost friend who worked in the first tier supplier segment to Boeing (e.g. guys who provide major subsystems), and gave me the "lowdown" on the birth and growth of the B737MAX.  None of this is confidential, in fact, all of it is available via different sources, what is unusual is the confluence of linked event that makes the whole saga look and feel a lot worse. This person is very well regarded by a number of world-class airline CEO, and once the Ethiopian airline crash occured he actually called them individually and suggested that they really really should ground the aircraft, that there was a fundamental problem that Boeing had overlooked. I really cannot make the connections here, it would basically reveal my source, again its not that the information is unknown just that he's put the events together because of his position in the industry, his knowledge of the players and literally having "no skin in the ga

There is one very important secondary observation to make on the Argentina melt-down: one of main reasons we saw such a dramatic crash in bonds and the near 50% tumble in the stock market was the complete absence of serious market makers or broking .  This isn’t due to investment banks and traders not seeing opportunity in over-sold Argentina, but more a result of how capital regulations and trading rules have made it utterly non-economic to trade smaller, illiquid, risk markets.  The market was opportunistic.  We saw bid/offers wide enough to turn a supertanker thru – and it proved very difficult to execute any client orders. The Implications are serious – if we see a breakdown, then the collapse of liquidity across markets like High-Yield (now officially defined as anything yielding anything) and corporate bonds will be crushing.  Wide bid/offers and chronic illiquidity will massively exaggerate losses and deepen any sell-off.  It’s going to hit less liquid equity markets also –

So CTV news came out with  "secret report" commissioned by ViaRail that to build a $4 billion high-speed rail link should not include Quebec City...now that's a real surprise!  (no not really at all).  The world's investment banks have been telling ViaRail that the most logical option was actually to "exclude" Montreal and Quebec City from a high-speed corridor.  Now, this analysis was done 20 years ago (I know I was the architect of one of these studies -- I know at least two other IB guys who said the same thing, something that ViaRail didn't want to hear at the time).   To give you a sense of timing all this took place prior to 9/11.  Since then Montreal has grown tremendously -- slowly catching up to the rest of Canada! Our conclusion, at the time, was there very little demand for travel from Quebec City to Toronto and only marginal traffic to Ottawa that was served daily (with a 42 seat aircraft), don't know the aircraft now, but there is stil

So the IMF things the magic number will be 0.9%, Citibanks things 1.4%, and HSBC 1.5%.  Who is right?  really not important, what is important is that growth is substantially lower than the 3% that AMLO was hoping to achieve in 2019 and 2020.  But this almost irrelevant There are three issues here (1) Domestic generated growth, (2) foreign investor generated growth via investments and (3) US import driven growth.  AMLO has the ability to influence the first two; needless to say that over the past 12 months AMLO has made sure that foreign investors feel "unwelcomed", mainly because of his decision on "reforming" Mexico's energy sector -- the first is the shutting down of all new energy project.  Now for most builders a solar and wind farms the use of PPA -- where the government (via CFE) buys all the power is the easiest and cheapest; using a combination of export credit agency funding and private equity finding CFE has the ability to acquire energy.  It's

I got a call, early early this morning from a friend in Tokyo.  Actually, it was last night, he's a kind of a specialist, in fact, he doesn't deal with clients, his client is his employer, he works in the equity derivatives risk management team for DB.  He got a notification of risk (figure out that a bank like DB would use such convoluted wording) basically he (and his whole team) were told that they were at risk of losing their job pending a complete review. Basically, its a kindness of sort, it means to prepare yourself, don't buy anything extravagant and work the network because you could be out.  His job is fascinating, basically, he manages the bank's derivatives exposure thereby reduce capital utilization.  It's a supremely important job since he's basically the reason the bank will make a profit of 12% instead of 6%.  Now he doesn't take any risk himself, he's not a trader he's a really really smart guy who's seen this business under al

I've often written about the F35, Canada decided to purchase the aircraft to replace its fleet of aging CF-18 aircraft, and when I say aging, I mean really aging!  some aircraft are more than 20 years old. The logic of buying the F35, what was touted by GD as the most advanced stealth aircraft in the world made some sense when looking at the war theater in Eastern Europe, that had dominated the news for some years prior.  As usual, the military was buying equipment for the last engagement. The first and most important problem of the F35 was its cost, which was literally two orders of magnitude more than the CF18 that the Canadian armed forces had purchased int he 1970s and 1980s (and extensively refurbished in the 1990s).  the CF18 cost about 35 million apiece (in 1990's money) the F35 was nearer $500 million per aircraft. The second problem is that the aircraft is a single engine (fewer parts) aircraft, for Canada that has extensive land (Northwest Passage etc) where air

Tarrif Man was at it again last week imposing massive tariffs on nearly $200 billion of Chinese imports...the end of the world as we know it.  For those paying attention, Trump has also imposed new tariffs on Mexican tomatoes to appease farmers in Florida who are feeling the sting of higher labor costs (thanks to ICE & its friends). The question is what does it mean; well first off its evident that, so far, the Chinese exporters have not absorbed the additional costs of tariffs -- that is usually how these things work, right now supply chains are being examined (on both sides) and decisions about future production are being made.  Nevertheless in an US$18 trillion economy -- even a few hundred billion is not that much!  So far some consumer (actually as farm products are an important staple for most household) are being affected by some rising costs (imported vegetables) and some lower costs (hog feed prices are the lowest they've even been having collapsed).  So meat is chea

Only 18 months ago, Boeing's reputation was good, sure it had screwed up its battle with Bombardier on the C-Series handing the project to Airbus that now has a full complement of aircraft from 100 seats all the way to 550 seats (ok ok the A380 is a financial quagmire).  Still, Boeing had the upper hand with the B777 and the B787 and the B737 was a dependable workhorse for short haul flights.  In the space of 18 months throughout 2017 and 2018, Boeing repurchased nearly $20 billion worth of shares.  The impact has been dramatic on December 31, 2016, Boeing's share price was near US$ 155.  On March 1, 2019, the price of Boeing peaked at US$ 450.00 per share!  In the space of 18 months, the share price of the airline had trebled!  Since then it has lost nearly $100 per share! The first "big" problem was the two accident that involved the B737MAX -- the savior aircraft for Boeing and its potential long term profit center.  Cheap to develop (all things considered) Boe

On one side a government is blamed for poor economic growth, often without it being responsible.  On the other side it gains the benefit when the economy is growing; last month Canada create more than 100,000 new jobs -- youth unemployment is at its lowest in years!  See here for more. Bottom line 100,000 new jobs in Canada is like the US adding 900,000 jobs in a month -- its a lot!  Actually, its the largest number of new jobs, in one month, ever recorded since records began in the 1950 (yep only 70 years).  Again, showing how little central banks know (sorry Monique) these numbers came out just two weeks after the Bank of Canada got all "negative" on Canada's economic growth. Granted I've not looked at the type of jobs being created...still a few of these 100,000 jobs must be good!  After all the bad news suffered by the Trudeau administration, a large percentage which seems to be self-inflicted, the strong growth in the job market will play well for the gove

Actually, I'm far from being the only naysayers about the health of European banks, in German banks in particular.  The reason German banks are in trouble is that the two biggest cannot count on their domestic operations -- because DB and Commerzbank only account for 15% of the domestic depositor base (compare that to Canada's nine largest banks that account for 95% of all deposits).  Moreover, European governments decided to shield their banks from reform requirements after 2009, even their 2009 intervention was different than in North America -- in the US the Treasury took shares as collateral for their "investments" in Europe they got bonds -- limiting control and upside potential. The reality is that DB/Commerzbank merger dies (rightly) a few weeks ago because taking two bad banks and making them into one bigger bad bank is not a good idea -- for politicians!  So the American Conservative Blog wrote about the European banks here , and it's interesting to s

Over the weekend a study came out here which showed that the price of dryers (washers too by the way) had risen by an average of US$ 90.00 per machine. Following the imposition of tariffs (and aluminum too) on washing machines, some manufacturing was relocated to the US.  It is estimated that nearly 2,000 jobs were created.  As an individual that is suddenly working at manufacturing washing machines in the US, for them it's a good thing -- they have a job.  For everyone else (who is buying a washing machine) its a bad thing. The number came out and what was surprising is that after years of falling prices for washer&dryers the price suddenly shot up.  In fact, and that's the interesting part, not only did the price of foreign washing machine rise, so did the price of domestic ones.   The total cost of the tariffs has been estimated at US$ 1.5 billion -- the Treasury department got about US$ 78 million and the rest was for the benefits of the new workers (yeah) and to t

Well, that's Monday morning for you, and it's not even April 1... So this morning Trump suggested that Boeing rebrand their aircraft, as a way of winning back the flying public.  There are a few problems here, first and foremost 99% of the flying public could not tell the difference between a Boeing 737 and an Airbus 320, secondly, the "public" for Boeing are the airlines.  Now there are between 5,000 and 5,500 airlines in the world, but in reality "real" airlines there are only 700-800 operating in the world. I would be very surprised that these "customer" could not see through a rebranding effort, when in fact the B737 is Boeing's workhorse aircraft and has for the past 40 years.   The problem is not the brand, in fact, the B737 is very respected.  The problem is this aircraft and its apparent instability that has bee managed by software -- without, it seems, informing/training the crew on how it works, what it does and how to shut it dow

A few weeks ago President Trump was all excited by the idea that the entire legislation would be found illegal -- funny how Trump loves activist judges when it favor's his desired outcome, and that the entire law would, in fact, be unconstitutional.  This, of course, is the result of the GOP Congress stripping out a specific aspect of the Obamacare legislation. Imagine his disappointment when the GOP refused to carry the water for the President -- and indicated that they had no plan, no timetable, no ideal or even analysis of what the future of healthcare should look like.  For Trump the objective was (a) remove Obamacare -- and destroy Obama's legacy, (b) get someone to do something about healthcare that was "cheap and great".  That's the sum total of the White House's contribution to the debate. What is clear is that after the massive tax cut that took place in 2018 -- and yes the reality of lower reimbursements is partly the result of less retention at

The Mueller report was given to the Justice Department on Friday, and aside from those in trouble right now -- and going to jail there is little new "bad news" for Trump.   It turns out that there appears to be insufficient evidence of collusion between Trump and the Russians.  It doesn't mean that the Russians didn't try to influence the American vote towards Trump, just that Trump didn't seek this support he just got it...because as far as the Russians were concerned he was the better candidate (for them). So why was Trump so pro Putin in virtually any environment?  That too came out during the Mueller investigation; commerce seems to be at the source of his support for Putin.  It seems that for personal reason Trump views his relationship with Putin as very important, Trump confused the interest of America with the interest of Trump.  Not entirely surprising from such a narcists, but this doesn't equate to TREASON!!! Some were saying (like the Guardian&

IN the discussions about what happened on the Ethiopian Air disaster one thing must be pointed out -- Ethiopian Air is probably Africa's best carrier and well regarded by the entire industry.  Its management is professional and it's aircraft maintenance second to none.  I suspect that it is this fact that has led to the decision by many carriers to ground the 737Max until they figure out what went wrong As for the cause of the accident, a few days still will be required to get an idea as to whether the accident was related to the Lion Air accident

The last production A380 will be delivered in 24 months time (that means that the last one is already in the production cycle).  I've never been onboard the A380 aircraft -- I just didn't fly it.   When the A380 became the new super heavy aircraft king of the world it was evident that there are two different issues here by each of the two dominant aircraft manufacturers. Whereas Boeing has largely decided to cancel the B747 type about 5 years ago, Airbus was the only player on the heavy metal business.  Boeing instead has concentrated on twin-engine aircraft with the B777 and the B787.  Now the 777 is a seriously large aircraft with a capacity of up to 550 sardines passengers. I was well acquainted with the decision process at Boeing; since they were looking at a possible new variant of the B747 -- and to them, the numbers didn't work (and the cost for them was a fraction of the cost of developing the A380).  Boeing's planning team could not justify the aircraft bas

So lets be amused for a few minutes.  Today, the Mexican government announced that they will, with the help of private enterprise build the Mayan Train, 1,490 km of rail track to take the foreign tourist across the Yucatan peninsula, all of it.  So the government announced that this train project, which will cost between US$ 7 and 11 billion will start operations in 4 years (from right now), never mind that there is no consortium in place or traffic for that matter.  Population density in the peninsula is very low.  Today you can drive from Cancun to Chichen Itz in about 90 minutes, there is an excellent (and very straight road that links the two). The tour bus tour from your hotel to Chichen Itza and back cost about $75.00 but also includes entrance tickets. Let's assume that you can sell train tickets (return) for $100.00.  It would be unreasonable to think that you can sell tickets for more. Lets further assume that 20% of all road travel will be replaced by rail.  6,0

Despite what the title says, 5 million tons is not, it turns out, a lot of soybeans.  In fact, America produces 4.3 billion bushels of soybean.  In 2017, China purchased 31 million tons of Soybeans.  So China, which had cut its import of Soybean to nearly zero by the end of 2018, has agreed to restore something like 7% of what it had imported in the past...this is called victory. The latest news is that China has actually contracted for 2 million tons, so about 40% of what they had indicated they were going to purchase, and something like 3% of what they bought in 2017.  So Trump got played -- the problem when you start a trade war, are the long term ramifications.  The truth is that China has secured alternative sources of Soybean elsewhere.  They have signed contracts so its harder to go back.  Moreover, the beans are not usually purchased by government entities.  It could take several years until trade levels return to their 2017 level -- and this only once relationship between Ch

Over the past few weeks, I've begun to be bombarded with deals that refer to the next big thing:  Edge computing.  The concept is simple, lots of data is produced by all our devices from your smartphone to your car to your smart meter on your house.  All these things produce data, and the internet is a big pipe, but it's not that big. The Verge had an interesting article about Edge Computing and one of the things they mentioned is the security camera conundrum; let's assume that you install a camera in your house, and stream that data to the cloud (eg the web -- so you can see that camera feed on your iPhone).  All is good, but let's assume that you decide that one camera is good, but 12 is a lot better.  The problem is obvious you have data clog in your system.  You either purchase much more bandwidth or your system doesn't work.  But in reality 99.999% if what on security camera is a lot of nothing.  Assume that your home server recognizes that it will not send

So it feels like -60 in Chicago (doesn't matter celsius or Fahrenheit-- its bloody cold).  But in Montreal its only -11c or 12F.  So what gives.  Polar Vortex has not made it to Quebec...and it will not.  So while the US is freezing (as is part of Western Canada) Quebec and Ontario escaped the whole thing...   

This comment should be treated with a large grain of salt! The reason you should care, but not too much about this "proof" of the slow down is that its circumstantial with a sample of TWO.  That's just not enough to get people excited.  Moreover, one of the two "example" was recently acquired -- which means that the pre-purchase performance was over-inflated and that reality is catching up. The examples are as follows: (1) A Fintech (2) A law firm The first (the subject of a recent acquisition -- all participants were private companies...), has seen, since the end of Q4/2018 a slow down in billing; both in terms of acquiring new clients but also getting new business from existing clients.  I should point out that this fintech is very exposed to the retail sector (via its clients).  they have seen, on average, a 25% reduction in billing from existing clients!  Heads rolled last week! The second is a law firm, that is seeing a massive increase in its activ

In September 2018, BKXCM (02450 SHE) annual financial statements showed that the company's cash and non-cash short term holdings exceeded Y15 billion, that was sufficient to cover 15x its interest and principal due on January 14, 2019.  The company declined to pay interest on its bonds a few days ago, because of cash flow issues.  It makes you wonder if 90 days ago there really was ever Yuan 15 billion in cash and near cash assets on the balance sheet of KXCM. The problem is as follows:  There is no concept of audited financial statements in China, the numbers are all essentially "Management's Accounts", which has limited value.  China is not the only place in the world were this occurs (E.G. Turkey) but it's somewhat unusual for a country like China not to have the concept of third-party accounting. The reason the Y15 billion was never really there is that it's more than likely that the company over-inflated the value of its profits and the difference had

A fascinating article out of University of Chicago Business school on the limits of blockchain -- especially when regarding cryptocurrency security.  I have to be honest that some of the proof was "well above me" but the fundamental issue is true; cryptos are created with Math, and there's, at the very least, then this massive power could also be used to corrupt the system. The article is here , and should make for interesting reading especially for those who are still good at math! The concept is that of a double spending attack, the attacker sells say bitcoin for dollars. The bitcoin transfer is registered on the blockchain and then, perhaps after some escrow period, the dollars are received by the attacker. As soon as the bitcoin transfer is registered in a block–call this block 1–the attacker starts to mine his own blocks which do not include the bitcoin transfer. Suppose there is no escrow period then the best case for the attacker is that they mine two blocks 1′