Agregador de canales de noticias

To map the ascent of man, begin at the beginning

Phytoplankton love global warming

A rogue soldier explains life in Europe’s strangest country

Not, alas, for the planet

Businesses seem to avoid it if they can

The plight of an industrial giant offers ammunition to both sides of the corporate-governance debate

A visit to China’s far west reveals glaring double standards

They spell work for smaller firms, greater competition—and risks, too

The history of Hokkaido’s indigenous folk has been cruel

Rak Patel, director de Enterprise Sales de Spotify para la región EMEA habla de un gran pilar para Spotify, la publicidad. Leer

 

Hola amigos!

Hoy quiero compartir con vosotros esta pieza, una loca idea que me rondaba por la cabeza desde hace mucho tiempo y que al final la he sacado ha base de martillazos jejeje

Se trata de una navaja que se compone de 2 partes: la primera parte  la hoja y la segunda parte, lo que seria la union en una sola pieza de cuerpo/muelle/bloqueo

Hoja forjada en Sanmai 1095 y 15n20, cuerpo/muelle/bloqueo forjado en 1095.

Una longitud total abierta de 155m de los cuales 55mm son de filo útil, un ancho de pala de 20 mm, un grosor en total de 6mm , 95mm de longitud cerrada y 48gr de peso.Y como toque especial, grabado en la empuñadura de manos del gran Miguel Angel Delgado (instagram:@miguel_grabador), una auténtica maravilla!

Un juego de contrastes entre las partes con brut de forja, el sanmai y el pulido a espejo y que como remate un grabado en el lateral que es una autentica pasada, de la mano de Miguel Angel Delgado (instagram:@miguel_grabador)

Un trabajo que no dejará indiferente a nadie, o eso espero...

un saludo amigos!

Se puede hacer un puzle tridimensional. Pero no se pueden tirar las piezas de este gran puzle en una gran mesa para montarlo.

La imagen cambia constantemente. Cada cierto tiempo algunas piezas se desvanecen y otras aparecen.

.

Si se gana un kilo de masa muscular, el volumen de tu cuerpo se incrementará tanto como una caja de zapatos.

Si se gana un kilo de grasa corporal, el volumen de tu cuerpo se incrementará tanto como 3 cajas de zapatos.

Lo mismo, pero al revés, es decir restando en vez de sumando, por cada kilo de músculo o de grasa  que se pierda.

.Rollete mensual en el ibex 35

El Nasdaq 100 y el Dow jones no paran hasta dentro de unas horas, así que a estos dos, los dejamos para mañana.

El ibex 35 ya ha se ha parado a descansar, y como esta semana que ya ha finalizado es la del último viernes del mes, toca mirar el rollete mensual en este índice.

Ibex 35 semanal. En este rollete mensual los números son: 121. ¡Que rollo!, tengo que seguir remando a la baja en este ibex 35. En cuanto este asunto de señal de cerrar cortos y abrir largos, cerraré los cortos y me iré a otro índice, un más normal, en el que los rollovers sean trimestrales y no mensuales. En fin, que tengo que seguir remando a la baja….

….el ibex 35 ya lleva unas cuantas semanas en fase de exceso, en el momento en que toque su línea azulada, que está y estará quietiña en el mismo sitio de cara a la próxima semana (8688,6 ¡doble ocho!), entonces esta fase de exceso llegará a su fin y se pondrá a prueba si detrás de la subida desde finales de febrero hasta ahora, hay algo sólido o es uno de esos castillos en el aire que aparecen por aquí y por  allá con cada cierto tiempo.

Los números no cambian, y este mes, incluso han empeorado un poco más.

En esta situación el ibex 35 está intentando agarrarse a su línea negra, tal y como yo lo veo, tarde o temprano se descolgará de esa línea negra y como mínimo, debería de irse a tocar su línea azulada, lo lógico y normal sería irse más abajo todavía, ya se verá hasta donde, y claro, no nos olvidemos que aquí todo es de momento y tiene que someterse a revisiones periódicas, puesto que en cualquier revisión las cosas puede cambiar.

El número de acciones alcistas, aunque sean alcistas sin ningún plus, sólo en el ibex 35 son ya 24.

Hace dos meses por ejemplo eran 18, hace 3 meses eran 16 y ha finales de Febrero eran 11.

Pues esta cifra tiene que bajar, al menos eso es lo más probable.

Lo único que baja a nivel acciones y bastante, y es algo que sólo se ha dado este mes es el número de valores que están por encima de su línea negra.

Son 9, el mes pasado sin ir más lejos eran 15.

Fluidra lleva en este plan 32 semanas, si en un futuro esta o cualquiera de estas empiezan a caer con cierta fuerza, es  bueno recordar que todo este circular por encima de la línea negra, si pintan bastos, se les puede caer encima de la cabeza obligándoles a revertir a vete tú que media y de que período.

A continuación van: MTS 30 semanas, BBVA 28 semanas, Cie 26 semanas, Santander 19 semanas, Repsol 18 semanas, Sabadell 8 semanas y Almirall 6 semanas.

Se han descolgado de la línea negra (como debería en teoría hacer el ibex 35 tarde o temprano), ya veremos que consecuencias tiene, teniendo en cuenta que los números siguen negativos, las siguientes acciones:

ACX, NTGY, Mel, BKT, CABK, ITX, MAP.

Alguna de estas como por ejemplo ACX y CABk, hace poco han puesto fin a sus propias fases de exceso y ojo, porque esto lo hacen bajo unos números del rollete mensual que siguen erre que erre con que este ibex 35 tiene que hacer una limpieza por ahí abajo.

Otros valores como Melia no han destacado en nada y otros curiosamente, aunque se descuelgan de la línea negra, resulta que inauguran fase de subida parabólica, hablo de Inditex y  Mapfre.

El Domingo, si tengo tiempo, miramos un momento a Inditex y Mapfre, pero ya adelanto, que estas dos, especialmente Inditex, hace tiempo que no salen en ninguna lista de la suerte y por tanto, hace tiempo que no destacan en nada.

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Lovecraft padecía neofobia: miedo y odio al cambio.

Esto le hizo alejarse de todo el mundo, incluso de una pavita que se le acercó y que al final le dio por imposible.

.

RATIOS.

. ¿Qué acciones con capitalización igual o superior a 1000 millones, con independencia de si cotizan en el ibex 35 o en el mercado continuo, tienen mejor ratio pavito que el ibex 35?  (que termina la semana con 2,66):

FDR 7,05   ROVI 3,70   ALB 3,30

Aquí sin novedades en el frente, tan sólo el detalle de que Fluidra y corporación financiera Alba mejora sus propios ratios pavitos, mientras que Rovi, que la vimos ayer, empeora un poquito de momento, su propio ratio pavito.

. ¿Qué acciones con capitalización igual o superior a 1000 millones, con independencia de si cotizan en el ibex 35 o en el mercado continuo, tienen el plus de “Riquiñas”?

ALB

Mencionar que EKT si se esforzara un pocucho más, podría ser calificado como Riquiña.

. Novedades en ALB  y FDR

Lo de ALB, es decir, Corporación financiera Alba llama mucho la atención, ( el problema es que está en un índice cuyos números no invitan a comprar nada),  y ya lleva en este plan un cierto tiempo, tiene todo, por un lado mejor ratio pavito que el ibex 35, por otro lado el plus de Riquiña, encima está y continúa estando en su propia fase de exceso, y pa-re-ce, que esta semana han decidido que el recorte ya ha finalizado y han empezado a despegar.

ALB (Corporación financiera alba), semanal. De momento, y ya desde hace tiempo, lo tiene todo, fase de exceso incluida, tan sólo le falta dibujar un precio por ahí arriba, si superan como  pa-re-ce que va a suceder, sus máximos de 46,33, un precio por ahí arriba aparecerá…..

….lo que controla el valor desde que está en su fase de exceso es la línea azulada, esa línea de cara a la próxima semana se quedará quietiña en el mismo sitio en el que permanece desde hace 43,20 (El visual en la pantalla me lo redondea y por eso se ve 43,21).

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El granito no se ve afectado en lo más mínimo por las condiciones atmosféricas.

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FDR (Fluidra semanal). de momento,, en mi opinión, cualquier esto tendría que estar quietiño por debajo del último escalón, 29,45 (valdría 29,44). La línea roja subirá de cara a la próxima semana hasta los 28,71, como todavía no supera los 29,45, pues todavía no se puede usar esa línea roja como stop., pero ese momento está cada vez más cerca.

En fin. Fluidra o Alba, son ejemplos de muchas cosas, también lo era Inditex entre 2010 y 2012 cuando subió cerca de un 50% mientras que el ibex 35 bajó lo mismo o un poquito más que lo que Inditex subió.

Pero claro, el resto del pelotón, salvo alguna otra excepción se fueron para abajo como cabezas d ajo.

En ocasiones hay excepciones, eso de que TODO sube o TODO baja, aunque en alguna ocasión se cumple en otras muchas no.

Lo dicen personas que no tienen demasiada experiencia operando y por eso se agarran a estadísticas y historietas de esas en las que no hay salida por ningún lado, lo que significa que ganas o ganas.

Mirar, en el Nasdaq 100 por ejemplo, hay varias acciones que están rompiendo mínimos de 52 semanas, y están en un índice que anda rompiendo máximos históricos.

En ocasiones puede subir todo, en ocasiones puede subir casi todo, en ocasiones sube alguna cosa  suelta y en otras ocasiones, como por ejemplo durante 7 meses del 2008, ninguna acción del índice sube, TODAS bajan.

Las situaciones que se pueden subir son muy variadas.

Volivendo al 2008, acciones de índices que subían un poco o un poco más, a nivel mundial, eran alrededor de 150, si incluías acciones de menos de 1000 millones de capitalización eran algo más de 1200.

Otra historia es cuantas de estas tenían algún plus.

Por otro lado: Acciones de índices no llegan a 4000 y si contamos todas las acciones sin importar un pito su capitalización, son más de Doscientas mil.

Hoy he hablado mucho, tengo sed, ¿Qué pasa? ¿No necesitais beber?

¿En serio?,  ¡uy!, vosotros me  parecéis un poco raros y vosotras un poco raras.

¡un momento!, glups….¿acaso sois marcianos? Me piro!, tengo mucha prisa!, adiooossssss

Below are the upside resistance targets based on the work of Edson Gould. The targets, based on the $0.18 low, are: $0.43 $0.52 $0.60 Each of the upside resistance targets are levels to expect that the price will either trade … Continue reading →

Below are the upside resistance targets based on the work of Edson Gould. The targets, based on the $0.18 low, are: $0.43 $0.52 $0.60 Each of the upside resistance targets are levels to expect that the price will either trade … Continue reading →

Welcome to another issue of Net Interest, my newsletter on financial sector themes. This week’s issue is a bit different – it’s a guest post by Bruce Packard. Like me, Bruce is a former equity research analyst; in fact we used to work together at Credit Suisse. I’ll introduce him properly below. In the meantime if you’re reading this, but haven’t yet signed up you can do so here:

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Litigation Finance

An occasional theme here at Net Interest is the study of new asset classes. There’s something quite fascinating about them: how and why they emerge, why some endure and some don't, the types of people who pioneer them and the money they make and lose doing so.

It's hard to believe now, but equities were once a new asset class, at least in institutional eyes. A few years ago some finance professors conducted an appraisal of John Maynard Keynes’ performance as manager of his Cambridge college endowment from 1921 to 1946. Keynes’ top-down macro approach generated disappointing returns in the 1920s, but when he switched to stocks – not permitted by many other colleges until later – his performance improved. “Keynes’ great insight was to appreciate the previously overlooked attractions of a new asset class for long-term investors, namely equities.” 

Since then plenty of new asset classes have sparked institutional interest. We’ve discussed here some contemporary ones – crypto of course, and also revenue contracts; we’ve also discussed one that didn’t endure – supply chain finance. With interest rates so low, the demand for alternative asset classes offering i) higher returns and ii) uncorrelated risk has never been higher, making this a ripe environment for new asset classes to incubate. 

This week, we take a close look at another new asset class – litigation finance. And there’s no-one better to introduce us to it than Bruce Packard. A couple of years ago, Bruce spent some time working with a mutual friend who was setting up a litigation finance crowdfunding platform: Axia Funder. Today, he writes a weekly column for Sharepad. 

Over to Bruce.

Size of the market

The size of the legal market is huge. The top 30 law firms have $2 trillion of pending arbitration claims; annual law firm fees are $860 billion globally (of which just over half is in the US). Both corporates and law firms expect the market to grow further as disputes rise following the pandemic, according to a research survey published by Ernst & Young.

One such dispute is the case between Tatiana Akhmedova and her son, Temur. The case erupted after Temur had conspired with his father to hide assets following his parents’ divorce. In April this year in London, a High Court Judge, Mr Justice Knowles ruled in favour of Tatiana. Temur was ordered to pay his mother £75 million. The court heard how Akhmedov senior transferred assets such as their superyacht, Luna (worth around £340 million) and an art collection (worth around £110 million) into the ownership of trusts in Liechtenstein in order to prevent his ex-wife receiving £453 million that she had been awarded following the couple’s divorce.

Burford Capital, a new type of law company that funds court cases, is helping Tatiana recover these assets from her ex-husband and son. Disputes like this should be uncorrelated with other asset classes such as Government bonds or equities, which all respond to economic cycles. Indeed disputes tend to be unique in nature, and should be uncorrelated with each other. There’s little to suggest the pursuit of the Akhmedov yacht should be correlated with another of Burford’s claims – against the Argentinian Government over the expropriation of an oil company (YPF).

What are legal assets?

For industrial companies, property, plant or equipment make up the bulk of assets recorded on their balance sheet. But financial companies’ assets are more abstract, such as loans like mortgages or bonds, with the debt often secured on tangible assets like property. Companies like Burford take this one step further, and offer non recourse funding of legal claims in return for a share of the money recovered when the dispute is settled. This is inherently risky – court judgments can go against you, even if your lawyers believe you have a strong case.

If the claimant loses, they (and the litigation funder) receive nothing and may have to pick up the other side’s costs. Therium, an unlisted litigation finance company, has suffered a couple of high profile losses. One involved a drunken bet made in the Horse and Groom pub between Sports Direct owner Mike Ashley and banker Jeffrey Blue; Jeffery Blue lost and had to pick up Mike Ashley’s costs. Another was the case brought by Amanda Staveley against Barclays over the bank’s 2008 fundraising. Both cases highlight the risk in litigation finance: the outcome tends to be binary – either a large gain or zero. 

Burford says that they lose just 10% of their cases. They win 29% of their cases in court, but the majority of cases, 61%, are settled before going to court. Burford doesn't own the case, they provide the funding, so it is the plaintiff’s decision whether to settle out of court for less money, or go to court and receive a likely higher reward, but at the risk of losing, and receiving nothing. 

Tatiana Akhmedova and her attempts to impound Luna reveals that litigation finance isn’t just about the judge ruling in a claimant’s favour. Defendants often hide assets overseas to evade court orders and some jurisdictions are friendlier than others. Imagine trying to enforce an English court’s award against a Russian oligarch in a Russian court. Asset tracing and recovery are therefore also integral to successful litigation finance.

Burford is the only major litigation funder to keep an asset tracing and recovery team in-house; most funders outsource this activity to firms run by ex-intelligence agents and private investigators. Christopher Bogart, Burford’s CEO, says: “Enforcing judgments is core both to the integrity of the legal system and the success of a litigation finance business. In some cases, scofflaws try to evade payment of court judgments and their obligations.” (I had to look up the word “scofflaws” but it is a word, meaning: a person who flouts the law, especially by failing to comply with a law that is difficult to enforce effectively.)

Sometimes asset recovery can lead down unusual paths. Harry Sargeant, a US billionaire, accused Daniel Hall, who works for Burford, of illegally accessing highly personal materials, stored on a corporate server belonging to the family business. Burford was trying to enforce a $29 million judgment against Sargeant and presumably Hall believed that this would be more likely if he had obtained a compromising video tape of the billionaire.

Returns

Common sense would suggest you don’t see high returns without any risk. At first glance the numbers look very attractive in a low yield environment. Burford reports that on $831 million worth of disputes that they have funded with their own balance sheet since 2009, they have generated a ROIC of 92% and an IRR of 30%. A competitor, Litigation Capital Management reports an even higher ROIC of 135% and an IRR of 78% over the last 9.5 years.

As you would expect, high returns attract new entrants. The Association of Litigation Funders lists 13 members, including Burford, Harbour, Vannin and Therium. Most firms remain confident that competition should not drive down returns, as this is a relationship based business, with law firms tending to recommend the funders who they have successfully worked with in the past. 

That may be true, but it’s rare to find an industry where a large inflow of capital does not alter the economics of returns. Like banking and insurance, there will be several years’ time lag between new business written and rewards (or losses) reported. Litigation funders that are writing business based on optimistic return assumptions can do so for several years before the chickens come home to roost.

Accounting

A separate criticism of high reported ROICs, is that the returns are illusory and the sector has opaque accounting. It is important to understand that c. 100% ROICs that funders report is not comparable with the mid to high teens returns that companies like Unilever report. The litigation finance companies report the ROIC on a portfolio of completed cases and exclude i) cases where money has been invested, but have not yet settled and ii) allocating their group operating costs.

Importantly, Burford and its critics do not disagree on the numbers, but how the numbers are presented. By way of example, Burford’s 92% ROIC calculation is based on $831 million capital deployed in completed cases, from which they’ve recovered $1,597 million. Simple. Yet if we sum up all of the capital deployed using the table on page 45-46 of the 2020 FY Annual Report, the sum comes to $1.8 billion. The roughly $1 billion difference represents those cases that have yet to be completed. Should the “Invested Capital” denominator include all capital that has been invested, or just that from completed cases? I think that you can make the case for both calculations; what is important to understand is that the high ROIC figures reported by litigation finance companies are not comparable with what companies in other sectors report.

Burford has a market cap of $2.4 billion versus a total portfolio of $4.5 billion of disputes, though that contains both funds managed for third parties not on their balance sheet and cases that have been written up using Fair Value accounting. Critics have suggested that Burford is quick to write up gains with Fair Value accounting, but slow to recognise losses. Originally Burford management were not keen on Fair Value accounting, in 2010 they said:

“[We] believe strongly that litigation and arbitration returns are inherently speculative and are most appropriately accounted for by holding investments at cost until a cash realisation has occurred, as opposed to taking unrealised gains into income before a litigation resolution has occurred. Moreover, the appropriate metric, in our view, for Burford Capital’s share price measurement is its relationship to net asset value based solely on actual cash realisations. Thus, for the guidance of investors, we publish a cash NAV figure alongside the requisite IFRS-based NAV, and we encourage investors to consider the cash NAV as the appropriate valuation metric.”

Then something changed. In 2011 Annual Report, Burford stopped publishing cash NAV, claiming that:

“We have also historically published a “cash NAV”, but that measure has not been embraced by analysts and investors, and given the increased complexity in its computation following the Firstassist acquisition and the relatively modest and clearly identifiable unrealised gain in the portfolio, we do not intend to continue to use or publish it after this set of accounts.”

Study silence to learn the music

Voluntary disclosure – what companies choose to tell investors – rather than what they are required to reveal, is a fascinating area. And very often when companies change their mind and withdraw disclosure it’s even more significant, though harder to spot. When you walk around the City of London and see large cranes and a new building going up, it’s often hard to recall the building that previously stood in the space. Similarly, unless you are reading corporate results laid out with the previous year’s results in parallel, it’s hard to see what is no longer there. Or, as the Finnish Operatic Metal band Nightwish sang: I studied silence to learn the music.

Perhaps a coincidence, but around this time is when Selvyn Seidel, the co-founder who lived in the village of Burford, left the company. The other co-founder was the current CEO, Christopher Bogart, previously General Counsel for Time Warner and before that Cravath, Swaine & Moore. 

Burford’s IPO in 2009 was backed by Neil Woodford, while he was still at Invesco Perpetual. He bought 45% of the share capital when the shares IPO’d at 100p, which required a special waiver from the Takeover Panel, as over 30% would normally require a mandatory bid for the entire company. This valued Burford at £80 million market cap in October 2009. Other institutions with disclosable interests were Baillie Gifford, Fidelity, Eton Park and Scottish Widows. Most of those investors have sold out now, Woodford’s fund has been wound down, Invesco owns just 6% and currently the largest shareholder is Saudi Arabian fund, Mithaq Capital, with 10.5%. 

Short selling attack

By October 2018, Burford’s share price had risen from its 100p 2009 IPO price to almost £20, and the company raised £192 million (or $251 million) at 1850p per share. Canaccord published a sell note in April 2019 and in August 2019, Carson Block of Muddy Waters led an attack on the company, calling it “a perfect storm for an accounting fiasco.” Block has made a name for himself shorting Chinese frauds: Orient Paper, Sino Forest, Luckin Coffee. He has been aggressive and he has been right. In his report he compared Burford’s accounting to Enron. Block also highlighted the fact that Christopher Bogart’s wife, Elizabeth O’Connell was the CFO, though she has since been replaced by Jim Kilman, formerly Burford’s investment banker at Morgan Stanley.

Muddy Waters can claim victory in their battle: Burford’s share price fell back below £3 in March 2020, helped by a broad sell off in markets due to the pandemic. Following the attack, Burford disclosed that they have written up the value of their court case against Argentina for expropriating the oil company YPF to $773 million. The firm’s rationale is that there is a secondary market in this large claim; they sold 39% of their interest in the proceeds of the YPF/Petersen claim for $236 million in cash in a series of third-party transactions from 2016 to 2019. Burford management says that Fair Value accounting requires them to write up the value of the asset. 

Many twists and turns

Burford’s share price has now recovered to 780p.  Last week they announced that they had bought back £24m of bonds yielding 6.5% due 2022, which does not appear to be the actions of a company that is worried about its financial position. It’s possible that they do recover a significant sum from the Argentinian Government in the next few years, which would justify management’s accounting. The case against Argentina will be heard in New York, probably at the start of 2022. Lawyers with large value disputes are tenacious, many of their cases take years to come to judgment, with many twists and turns. The jury is still out.

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More Net InterestStress Tests

US banks have a lot of catch-up to do. Last year they were restricted from increasing dividends and doing share buybacks as regulators encouraged them to preserve capital. This week, they all passed their stress tests, with ample buffers against regulatory capital minimums. In aggregate, the banks that participated in this test have around $175 billion of excess capital, equivalent to around 10% of their market cap. Compared with their own capital targets, which are typically more conservative than regulatory minimums, they have around $100bn of excess capital.

Although the stress applied to banks in these tests was not as severe as last year, when the outlook was more uncertain, it remains a pretty severe test. The Fed stressed credit card loans at a loss rate of 16.2%, much higher than what was incorporated into stress tests five years ago (13.4%) and a big gap versus the rates currently being realised. In commercial real estate, where risk might be more apparent today, losses were estimated using a 10.5% loss rate, which is the highest ever used in a Fed stress test (last year a rate of 6.3% was used). Yet the banks are quite well covered and already have a large stock of provisions to absorb such high losses; the top seven banks have sufficient provisions to cover around half of their stress-case losses before capital even has to be tapped into (last year that coverage was only around a quarter). 

Banks will report capital plans on Monday (28 June). They will be eager to disgorge their excess capital to shareholders. 

Revolut

I’ve discussed Revolut here a few times before, and I’ve been remiss – I should have disclosed that I’m an investor; I participated in the series A back in 2016. However, first and foremost I’m an experienced analyst and that stops me being starry-eyed. This week the company filed its 2020 financials and they are a bit mixed. 

The company lost £168 million on revenue of £261 million (including fair value gains on cryptocurrencies). Between those two numbers, there’s a lot of cost. Much of that is linked to risk, compliance and control enhancements. Based on LinkedIn data, around a sixth of the company’s workforce (of ~ 2,500) now sits in some sort of compliance function. The good news is that those costs are largely fixed and don’t have to scale with the company. Nor do the total costs include much marketing. The company halted marketing and discretionary spending during the year, yet continued to win new customers largely by referral (customer count is 15 million as at March 2021, up from 10 million in February 2020). 

Revenues have diversified. Just over a third of revenue now comes from card and interchange, compared with just less than half in 2019. Crypto picked up the slack which may now be taking a hit, but the company also opened up a source of income via subscriptions which now contribute 29% to revenue. Subscriptions are good because the rest of the revenue base is very transaction oriented; there’s no interest income here. In fact, average deposits per customer stand at around £300, much less than at Wise, where they stand at £2,300, so scope to earn substantial recurring revenue from them is limited (notwithstanding the current level of interest rates). Average revenue per customer of £21 for the year is not great, although there is likely a distribution around that number (how many of the 15 million customers are not active?)

Despite the company’s grand ambitions to expand globally, most revenue still comes from the UK – 88% of statutory revenue in 2020 (i.e. excluding the mark-up on crypto). By the end of the year, Revolut had 200,000 customers in the US, where it intends to make a push. 

Press reports indicate that Revolut is looking to raise capital. Part of this may be to fund regulatory capital to underpin the bank licenses the company has applied for in the US and the UK. Klarna has been regulated as a bank since 2017 and has had no trouble raising capital, but its core product is higher return than Revolut’s. Key will be whether Revolut can use its banking licenses to win more deposits and introduce more products. 

Tink/Visa

Visa announced this week that it would acquire Tink, a European open banking platform, for $2.2 billion (versus its last valuation of $825 million in December). Founded in 2012, Tink offers customers access to underlying consumer financial data via a single API. It reaches over 250 million consumer bank accounts across 18 markets in Europe via integrations into over 3,400 financial institutions (versus ~11,000 market total). It offers five key products: Transactions, Account Check, Income Check, Payment Initiation and Money Manager. 

Account-to-account payments are growing as a credible alternative to payments made via card networks, particularly given the support of unified protocols such as Open Banking in the UK. This deal gives Visa a foothold in the segment. Open banking payments are better suited to large ticket items since fees do not scale with transaction size, and to transfers between a consumer’s various accounts (e.g. bank to fintech). They may also be better suited to variable recurring payments compared with cards kept on file. Depending on the underlying payments network, settlement times can also be faster, such as in the UK under Faster Payments. 

Visa was exposed by the DOJ when it tried to buy Plaid. It is unlikely that there will be an incriminating email trail this time (or back-of-the-napkin doodles of volcanoes) but the motivation is similar: to own control of the disruptive play rather than look on passively.

It’s a cunning strategy.

The US Federal Reserve satisfies the global demand for dollars while maintaining the dollar’s title as the planet-wide currency king.

With one brilliant move, it has divided the world up into allies and non-allies of the US.

Today, everyone needs the stability of the USD in a world turned upside down with economic turmoil.

Granted, that stability may be only relative to other countries’ own currencies. But American allies have to deal with that reality.

They know it. And the Fed knows it.

• That’s why the Fed has created a path to access US Dollars for government-identified real allies of America.

And it has denied access to those identified as unfriendly.

It’s critical that you understand this…

And when you do, you’ll be miles ahead of almost everyone else.

The US has put a system in place where all but the most die-hard anti-American nations will want to be included among the friendlies.

In fact, many will do anything to make the list. How do they do this? Through SWAP lines.

Never heard of them? Then you’re not alone.

For the most part, when I bring up SWAP lines, I have found myself speaking into a vacuum.

I haven’t come across one person in a hundred that knows about them. And that includes business executives, politicians, or even bigshots in the financial industry itself.

Most investors are not even cognizant of the program’s existence, much less aware of its significance.

But given how important SWAP lines are to the global economy, every investor should understand them and how they work.

What Are SWAP Lines?

First things first, here’s how the Fed explains swap lines on its own website:

• If you have access to a US swap line, you are what I call a +SWAP Line Nation.
• If you don’t have access to a swap line, you are a -SWAP Line Nation.

SWAP Lines Are a Financial Lifeline

In the wake of any global panic, the most recent example being the pandemic…

Many central banks request that America provide financial assistance to at least alleviate the stress caused by a lack of US Dollars.

SWAP lines have provided that relief and will continue to do so.

They are, literally, lifelines. And they are also debts.

• All those dollars borrowed must be paid back in US Dollars, with interest, also requiring dollars.

It’s ingenious because demand for the US Dollar breeds further demand.

It will be paramount for nations grappling with deflation to enter the favored group capable of exercising swap lines.

Here’s a list of the nations that have access to US Dollar SWAP lines (as of now):

Countries outside the group—the negative swap line (-SWAP) nations—will struggle to access US dollars.

SWAP Lines are Important for Investors

The result of how this program is set up is that countries receiving swap lines will follow any stipulations they are asked to follow. They’ll have no choice.

• Suppose you want to be blessed with a swap line from the U.S…

In that case, you must be careful not to antagonize the hand that feeds you.

This means not aligning in any way with nations designated as non-friendly and agreeing to follow any restrictions, such as sanctions, that the US government puts on.

The struggling nations that require emergency access to US Dollars, and can’t get them…

• Could engage in the expropriation of foreign-owned assets as the world recession deepens.

For example:

Last year Papau New Guinea revoked Barrick Gold’s social license. Several months ago, Barrick gave the PNG government a 51% stake in the mine. Now the mine is back in production.

The PNG government is not the only nation flexing its muscles…

• Chile is amidst altering its tax code which could see miners be taxed up to 75%

• And just recently, Kyrgyzstan seized Centerra’s Kumtor gold mine.

It’s either that or face crippling depressions or revolutionary uprisings of their citizens (or both).

So, American businesses with operations in these places had better beware (and so should their investors).

SWAP Lines Will Defend American Interests

As global deflation progresses, there will be more nations that will be granted swap lines. But do not forget, swap lines will always defend American interests.

Make no mistake, this is big business…

• By April 2020, the drawdown of USD SWAPS was just under half a trillion dollars.

The last time that foreign central banks took down that amount from US SWAP lines was at the height of the 2008 global financial crisis.

The SWAP lines worked back then to prevent a complete worldwide financial meltdown. Same thing now. But this is just the tip of the iceberg.

Few want to be shut out, and around eighty-five nations have applied for US swap lines (currently, 14 central banks have been approved (EU representing 27)).

In fact, Indian Prime Minister Narendra Modi has publicly confessed to having “swap line envy.” To be approved, all those countries must solidify their positions as US allies by falling into line with our policies.

Think they will? Yep, me too.

More Nations Will be Added

Over time, I expect these critically important SWAP lines to be increased and more nations to be slowly added.

They’ll be subject to the terms set by the US government—both financially and geopolitically. But they’ll accede.

As monetary and fiscal policy are blending into one, it’s just a matter of time before the President uses SWAP lines as a big geopolitical leverage hammer.

SWAP lines are that important, and they will dictate global alliances and policy. So, pay attention to them.

Because I promise you, they will have an impact on companies, investments, and ultimately, the very fabric of our world.

• If you have a producing asset in a Negative SWAP Line (-SWAP) country, you must prepare for potential setbacks and for things to go wrong.

It’s about properly understanding and pricing in risk.

Something that has become overlooked in the resource sector.

SWAP Lines and Your Portfolio

Because I believe nations who do have existing SWAP lines won’t screw with foreign operating entities (American companies) to the extent of the –SWAP Line Nations.

I still expect higher taxes in all countries as it’s the only thing politicians across the world have executed effectively throughout time.

This means mining assets in +SWAP Line Nations won’t nationalize their gold mines, copper mines etc. Those nations won’t screw with America.

Nations with existing U.S. SWAP lines won’t put Forex (FX) restrictions on the foreign (American) companies operating there. –SWAP Line Nations may do so, and many have already.

This will cause less (and in some cases prevent) those U.S. Dollars in –SWAP lines from being sent back home as dividends to the owners of the company.

Know the plan. Read the playbook.

And most of all, be prepared. You can get my team and me to do the heavy lifting for you through my premium research service – Katusa’s Resource Opportunities.

I’ll tell you exactly what I’m doing – where I’m investing – and how you can follow.

Regards,

Marin Katusa

The post SWAP Lines are One of the Most Important Things You’ve Never Heard Of appeared first on Katusa Research.

Hola amigos!

Hoy quiero compartir con vosotros esta pieza, una loca idea que me rondaba por la cabeza desde hace mucho tiempo y que al final la he sacado ha base de martillazos jejeje

Se trata de una navaja que se compone de 2 partes: la primera parte  la hoja y la segunda parte, lo que seria la union en una sola pieza de cuerpo/muelle/bloqueo

Hoja forjada en Sanmai 1095 y 15n20, cuerpo/muelle/bloqueo forjado en 1095.

Una longitud total abierta de 155m de los cuales 55mm son de filo útil, un ancho de pala de 20 mm, un grosor en total de 6mm , 95mm de longitud cerrada y 48gr de peso.Y como toque especial, grabado en la empuñadura de manos del gran Miguel Angel Delgado (instagram:@miguel_grabador), una auténtica maravilla!

Un juego de contrastes entre las partes con brut de forja, el sanmai y el pulido a espejo y que como remate un grabado en el lateral que es una autentica pasada, de la mano de Miguel Angel Delgado (instagram:@miguel_grabador)

Un trabajo que no dejará indiferente a nadie, o eso espero...

un saludo amigos!

Las grandes fortunas españolas han aprovechado el reciente optimismo del mercado para ganar casi 4.000 millones con sus sicav dese los mínimos de marzo de 2020. Leer