Blogs y opiniones de economia en ingles

“One of the most persistent fallacies is the reflexive association of wealth with wisdom,” Ed Borgato once wrote.

Wealth might be a sign of good decisions, but can those decisions be repeated? And do good decisions in one field translate to wisdom in other areas of life? Maybe, maybe not – that’s the best we can say. And there are times where exceptional wealth can prevent empathizing with ordinary people, making insight more precarious.

A similar mistake, a bit harder to grasp, is the assumption that smart people have the right answers.

They may. But does intelligence in one field convert to others? Does being good at taking tests translate to, say, leading groups of people?

Maybe. It’s never clear.

And like wealth, there are situations where people become too smart for their own good, where intelligence is a liability and blocks good decisions.

A few causes:

The ability to create complex stories makes it easy to fool people, including yourself.

I know people I would not want to debate with on the question, “What is 2 + 2?” because they could go down a rabbit hole that’s over my head and leave me either exhausted or convinced the answer may not be four.

The dangerous thing is that those people can do the same things to themselves.

Richard Feynman said, “The first principle is that you must not fool yourself — and you are the easiest person to fool.” The smarter you are I think the truer that becomes.

When you’re blessed with intelligence you’re cursed with the ability to use it to concoct intricate stories about why things happened – especially stories justifying why you made a mistake or why you’ll eventually be right in an area you’re wrong.

The big blowups in any field aren’t typically caused by a lack of smarts. The catastrophes are typically caused by extreme intelligence that causes people to believe their own dangerous stories – that you can predict with accuracy, use leverage because your prediction must be true, and ignore warning signs that would have been obvious to a normal person who’s less adept at mental gymnastics

What’s boring is often important and the smartest people are the least interested in what’s boring.

Ninety percent of personal finance is just spend less than you make, diversify, and be patient.

But if you’re very intelligent that bores you to tears and feels like a waste of your potential. You want to spend your time on the 10% that’s mentally stimulating.

Which isn’t necessarily bad. But if your focus on the exciting part of finance comes at the expense of attention to the 90% of the field that’s boring, it’s disastrous. Hedge funds blow up and Wall Street executives go bankrupt doing things a less intelligent person would never consider. A similar thing happens in medicine, a field that attracts brilliant people who may be more interested in exciting disease treatments than boring disease prevention.

There’s a sweet spot where you grasp the important stuff but you’re not smart enough to be bored with it.

Intelligence can make it difficult to communicate with ordinary people, who may have the missing insight you’re looking for.

How many academics have discovered something amazing, but wrote it in a paper so dense and complex that no one else can understand it?

And how many ordinary people would be able to bring an academic’s discovery into the real world if they could understand what was written in those papers?

It has to be so many.

Computer scientist Edsger Dijkstra once wrote:

[Complexity has] a morbid attraction. When you give an academic audience a lecture that is crystal clear from alpha to omega, your audience feels cheated and leaves the lecture hall commenting to each other: “That was rather trivial, wasn’t it?” The sore truth is that complexity sells better.

When complexity is the preferred language of very smart people, great ideas can become walled off from ordinary people. Most of the allure of the information age is that ideas can be shared among huge groups of people. But among the superintelligent, that’s often not the case – they’re speaking a different language.

Occasionally someone like Richard Feynman comes along, whose storytelling skills equal his genius. But it’s rare. Communication and intelligence are not just separate skills; they can repel each other, and the smarter you become the more complex your communication and the smaller the audience you may be able to persuade.

The key, like so many things, is respecting balance and diverse views.

Record temperatures. Cycle high inflation. Record speculation. Record stock issuance. Sadly, no one informed these people there is no such thing as Ponzi retirement...
We just learned that June was the hottest month on record in the U.S. At the same time, first half stock inflows were the hottest on record, and IPO issuance in just the first half hit a FULL YEAR record:
The market is on fire.




The Robinhood IPO which was sidelined earlier this year due to the Gamestop debacle, has now been opportunistically timed for the lowest seasonal volumes and liquidity of the year. Prime time for market manipulation at all time highs. Peak financialization is occurring at a time when market fragility is also at record extremes. Markets have been in a widely ignored liquidity death spiral for years. 
June 23rd, 2021


"Look, for example, at what has happened to trading in futures contracts on the S&P 500 index — typically the world’s most liquid equity index futures. Over the past decade their liquidity, as measured by market depth, has collapsed by around 90 per cent. This pattern is repeated across asset classes and regions"
"Lower liquidity, tends to amplify moves and exacerbate volatility"

History will say that the Millennials were reluctant to invest in stocks. So, Wall Street slapped a gamified interface onto a mobile app called "Robinhood" which turned out to be a Candy Crush gateway to Citadel. The world's largest and most profitable hedge fund and payment for order flow dark pool.
All packaged as the "democratization of markets". 



"It’s sometimes hard to identify era-defining moments when they happen; usually you can only really see them after the wave rolls back. Helpfully, Robinhood has given us a high place to stand so we can see a little farther"
Indeed.
As Baby Boomers retire in record numbers, it became necessary to entice reluctant Millennials into these fraudulent markets in order to become the end of cycle bagholders of record. Which means that we are witnessing the largest transfer of risk in human history. One must ask themselves, what type of  nihilistic society throws its own children under the bus - Whether talking about the stock market or Social Security defunded by serial tax cuts for the ultra-wealthy, this society of assholes is guilty as charged. 
Sadly, no one informed these people that there is no such thing as Ponzi retirement. And the financial services cartel is certainly not going to let them in on that little secret. Every other ad these days is for retirement planning, wedged in between ads for erectile dysfunction.





Today we learned that JP Morgan profit DOUBLED while revenue fell. How? Because loan loss reserves were reduced. Another sleight of hand that is widely ignored in this house of mirrors. 





This entire fraud is now running on glue fumes, and collapsed summer volumes and volatility. Can it hold up until the Robinhood IPO or will it spontaneously explode at all time highs?
"Bull market"




Put it this way. 
If THIS is the GOOD news, imagine what the bad news will look like.
Today's serial psychopaths have designed the ultimate financial death trap. When the algos front-run record Robinhood newbies out the margin call door, that will be all folks.

DocuSign Inc. (DOCU) has seen soaring growth over the past year and significantly outperformed the S&P 500. The electronic signature technology company’s stock rose by approximately 289.6% as of July 9, 2021, compared to the S&P 500’s gain of about 33.7% since the start of 2020. Despite this growth, hedge funds were selling, and DocuSign lost traction on the WhaleWisdom Index, landing at 33 after a previous ranking of 14.

Demand for DocuSign’s subscription services has understandably increased during the coronavirus pandemic due to the need to stay connected during remote telework. DocuSign offers companies a method for remote preparation and sharing contracts and other agreements while electronically recording e-Signatures and approval notes. In particular, the company’s flagship e-signature product saw a boom in popularity from remote work during the pandemic. Even with vaccination rollouts and many pandemic restrictions lifted, DocuSign continues to see momentum for its services. Many businesses move to a hybrid workforce with a portion of remote work remaining.

Hedge Funds Are Selling

DocuSign has temporarily lost favor with hedge fund managers and institutions. Looking at activity by the top hedge funds in the first quarter of 2021, the aggregate 13F shares held declined to about 40.0 million from 40.7 million, decreasing approximately 1.9%. Of the hedge funds, 33 created new positions, 82 added to an existing position, 41 exited, and 67 reduced their stakes. Aggregate holdings by institutions experienced a slight decrease of about 0.1% to approximately 139.5 million from 139.6 million.

(WhaleWisdom)

Encouraging Multi-year Estimates

Analysts expect to see earnings rise in the next two years, bringing earnings to approximately $2.17 by January 2023. Revenue estimates are also favorable, with a year-over-year forecast showing revenue rising from $2.1 billion by 2022 and $2.6 by 2023.

(WhaleWisdom)

Analysts Are Optimistic

Analysts shared optimistic outlooks after the first-quarter results were released. William Blair & Co. anticipates a strong year for DocuSign. Oppenheimer & Co., Inc. shared that DocuSign is “strategic technology for the new digital future of work” and maintained an Overweight rating on the stock while lowering their price target to $260 from $300 due to industry compression. Morgan Stanley recognized the continuing forward momentum for DocuSign, which was not simply a one-time benefit from the coronavirus pandemic. Morgan Stanley maintained an Overweight rating on the stock and gave it a price target of $295.

Favorable Outlook

DocuSign’s future looks promising as the company continues to run with the boost in momentum garnered during the pandemic. Hedge funds may have recently decreased holdings, but optimistic estimates from analysts should be encouraging to investors.

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"Utterly Unacceptable": Judge Blasts DC Jail For Not Allowing Jan. 6 Capitol Defendant Access To Evidence

Authored by Jack Phillips via The Epoch Times,

A federal Washington D.C. judge faulted a district jail on Thursday for failing to provide evidence to a defendant who was arrested for allegedly being involved in the Jan. 6 Capitol breach and has been held there for months.

Jorden Mink, the defendant in the case, was indicted (pdf) on several federal charges, including destruction of government property and theft. Mink, who has pleaded not guilty, has been held in jail since January. Officials have alleged Mink used a baseball bat to smash windows at the Capitol and passed furniture through the smashed windows to the crowd outside.

“I can’t allow someone to sit in prison for this long without access to material,” Judge Randolph Moss said at a court hearing on Thursday, saying the delay in evidence was “utterly unacceptable” and “not consistent with due process.”

During the Thursday court hearing, prosecutors said they had given the evidence to the jail in May and didn’t understand why Mink hasn’t been able to obtain the documents. Mink was offered a plea deal, prosecutors noted, but they said he can’t decide on whether to accept the deal because he hasn’t seen the evidence against him.

Randolph ordered prosecutors to work with the jail to grant the defendant access to the evidence against him by the end of Thursday, reported CNN. If Mink doesn’t gain access to the documents soon, the judge said, his detention may be reconsidered.

There have been other reports of Jan. 6 defendants not being able to gain access to evidence against them, essentially denying them due process under the Constitution’s Fifth Amendment. Prosecutors have suggested that due to the sheer number of arrests related to the incident, there have been delays.

So far, more than 500 defendants across nearly every U.S. state have been charged over the past six months over the Jan. 6 breach, according to the Department of Justice in early July.

It comes as lawyers earlier this month said that dozens of people in federal custody following the Jan. 6 incident are currently being held in solitary confinement, denied access to legal counsel, and are being denied medical care.

“There are about 50 plus or minus that are being detained, that have been in prison for months and will likely remain in prison for many more months until their day in court,” attorney John Pierce told EpochTV’s “The Nation Speaks.”

Mink was scheduled to appear before Randolph in April but missed the court date because he tested positive for COVID-19. His attorney, Michael Mosher, said that Mink was having difficulty gaining access to medication that he takes regularly while in jail.

“He takes medications to treat those, but since coming to Virginia and DC, he’s not been getting those meds as prescribed,” Moser told a court at the time, according to local media.

In January, Mink was arrested at his home in Bridgeville, Pennsylvania, and was held in the Butler County Jail. Federal court records say that he was transferred from the county jail to the D.C. jail.

The Epoch Times has contacted the D.C. jail for comment.

Tyler Durden Sun, 07/11/2021 - 15:30

Watch Kyle Bass On The "Cancer" Of China’s New Digital Currency

“Imagine a currency that almost has a mind of its own … It knows your account data, knows your birthday, your social security number, where you live” and exactly what you like to buy. And all of this knowledge would be sitting in the hands of the Chinese Communist Party.

In this Epoch Times interview of American Thought Leaders, Kyle Bass, founder of Hayman Capital Management and one of the few people who successfully bet on the bursting of the subprime bubble, breaks down the threat of a new Chinese digital currency and how the regime could force countries to use it.

“They’re so good at exploiting every crack, every nook, every cranny … They take our openness, and they exploit it,” Bass says.

Watch more in the full American Thought Leaders interview below.

Tyler Durden Sun, 07/11/2021 - 15:00

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Hedge Fund CIO On The DeFi Revolution

By Eric Peters, CIO of One River Asset Management. For those unfamiliar withe Decentralized Finance (DeFi), we urge you to read "Decentralized Finance (DeFi) 101" first.

“Revolutions are defined by the revolutionaries,” said Marcel Kasumovich, our head of research. “History may find them after the fact, but we are living with them in real time. It started with Satoshi’s anonymity. This is part of the revolutionary design. Components of the Bitcoin protocol were invented long before Satoshi brought it together in a single, stable protocol. Adam Back created hash-cash that is the currency unit of the Bitcoin protocol. Satoshi is the Picasso, the creative genius, transforming buckets of paint into an enduring philosophy. Perhaps Satoshi understood there was no timetable for success. It could take days, years, or decades to inspire a generation. The anonymity of Satoshi allows the group to live forever. We are all Satoshi.”
 
“It is not your average youth movement. It will not be defined by a noisy twitter debate or clever memes,” continued Marcel, placing this moment in historical context. “Vitalik Buterin was inspired by Satoshi, and the Ethereum protocol is going through its most profound transformation since its inception only a short six years ago. Would Satoshi have agreed with the Buterin fork? It is not the point. Splinters in the revolution are precisely part of the creative process; if you are not breaking things on the path to innovation, you are not doing it right. Then there is Stani Kulechov. A student of law in Helsinki Finland with an interest in programming who discovered the world of fintech through the lens of the Ethereum protocol and the smart contracts it could employ. ETHLend was created in 2017, and it is better known as the leading lending protocol of Aave.”

 
“Aave is now the leader in decentralized finance. There is $10bln of locked capital in Aave protocols. Almost half of the $15bln in DeFi lending happens on the Aave protocol. Of the interest paid through DeFi lending, 46% is done through Aave at an annualized rate of $245mm. It is tempting to trivialize the achievement. After all, total loans and leases in the US commercial banking system are more than $10trln. But keep in mind Stani Kulechov achieved his graduate degree in law in 2018 and his interest in computer programming was cultivated as a teenager. The revolutionaries are not chasing any traditional financial institution. They are chasing a desire to make things better, and a hope for getting closer to the truth. In Kulechov’s words, “DeFi might not replace all TradFi service providers, but it will replace the software and infrastructure that TradFi is based upon”. With no hint of irony, he observes that “TradFi becomes the gateway for DeFi.””

“Regulation. It is the word to put shivers in the spine of any traditional institution evaluating asset allocation in the digital ecosystem. Regulation will not stand for it. Regulation will slow growth. Regulation will redistribute profit. Regulation will force decentralized agencies to be on a level playing field with centralized ones - as though traditional institutions are somehow disadvantaged from capital-starved decentralized players. It is a term used to invoke fear, and it requires far more precision in its mention. The crypto economy is regulated. Ask anybody in the money service business who is registered with FinCEN and provides thousands of monthly reports on suspicious transactions, by regulatory decree. As the crypto economy enters the mainstream, it will blend with TradFi as a matter of practicality. It must and it will.”

“Regulation is the gateway for DeFi to enter the mainstream, and it is already happening. Last August, Aave received an Electronic Money Institution license from the UK Financial Conduct Authority, that allowed the protocol to trial services with UK citizens. Aave Pro will be released in this month, aimed at bringing institutions into the liquidity pool of decentralizing lending. Well-regarded smart contracts will add centralized tools such as whitelisting of addresses and know-your-customer provisions. These are precisely the steps that the FATF regulatory body would desire.”

“There is no turning back,” explained Marcel. “The technology is being tested, adopted, and admired. The revolution is happening from within institutions with leaders who see a better way. It will take time for users to see the value. After all, statues of revolutionaries are only mounted long after their work is done. But make no mistake – the people and firms who underestimate the intelligence, drive and creativity of those working on change are precisely the ones who will be, at best, left behind and, at worst, run-over by the technologies. These are not our parents’ revolutionaries.”

Anecdote

Each generation believes it can create a better world. Were it not so, we would still live in caves. Some generations thirst for change through revolution. That probably has to do with longer term economic and political cycles. But for whatever reason, amongst these revolutionary generations, some are more determined, effective. The 1960s-70s youth seemed radical, but they were far from French revolutionaries. Their actions failed to spark an inferno. My wife Mara grew up in a hippy enclave during that period. Her town sought to opt out of the system by going backward, living off the land, returning to simpler times.

But history rarely turns back the clock for long. That generation never had a credible plan to replace the system with something better. Nor did it have a new technology to amplify force. The establishment knew this. The youth back then presented no real threat, just the appearance of instability. Daisies and LSD.

But today’s youth have built the technologies to power revolution. Their protocols remain nascent, but if they’re allowed to flourish (or if they cannot be stopped), they will credibly replace incumbent industries that the masses have come to despise (retail banks, commercial banks, central banks, wall street, money transfer agents, credit card companies, social media companies, exchanges of every kind, censors, and the list has just started). Someday these technologies may threaten our notion of centralized government control.

In the 1960s-70s, incumbents knew the revolutionaries had no credible plan. This time, revolutionary technologies are already being rolled out. They are more efficient, cheaper, faster. They cut out the middlemen. And empower the individual. Today’s incumbents are threatened with extinction. In fact, if today’s business leaders were 30yrs younger, most would be racing to build their companies/wealth in this new field of blockchain. This is what a credible revolution looks like, waged by brilliant youth, impassioned, with fantastic ideas, immense wealth, and humanity’s most powerful technologies, applied in ways that incumbents can barely understand. And it is too early to tell exactly where this new generation will lead us, only that it is to a profoundly different future.

Tyler Durden Sun, 07/11/2021 - 15:00

Poor Hedging Could Cost U.S. Shale $20 Billion

Authored by Irina Slav via OilPrice.com,

U.S. shale oil producers have suffered billions in losses from hedging their output at lower than current prices, the Financial Times reported today, citing data from IHS Markit.

According to the consultancy, even though crude oil is trading at over $70 per barrel right now, U.S. shale producers are selling their barrels for an average of $55 because that’s the price they hedged their future sales at.

For the first half of the year, IHS Markit says, losses have reached $7.5 billion but if oil prices remained around $75 per barrel, this could add another $12 billion during the second half of the year as demand continues improving.

This, the report notes, could give OPEC more pricing power: because of their badly miscalculated hedging, U.S. shale oil producers are unlikely start boosting production in any major way anytime soon. As a result, OPEC can do pretty much what it wants with its own production and push prices however high it wants.

“Opec gets a pass to keep lifting prices right now if it wants to, without fearing much of a US supply response,” Bill Farren-Price, an analyst at Enverus, told the FT.

“Shale producers are locked into selling their oil cheaply this year.”

Meanwhile, U.S. shale producers have become wary of hedging, according to a Reuters report from earlier this week.

After a surge in hedging in June, the report noted, companies have now retreated and adopted a wait-and-see attitude, not least because of bullish forecasts on oil prices.

"With every bank saying that oil will be at $90-$100, no one is going to put hedges on right now," one industry executive told Reuters.

Shareholders are sceptical of the benefits of hedging, too, Reuters reports, citing analysts. In fact, shareholders would rather companies ramped up production than hedging, which is acting as a deterrent factor, too. Still, some shale producers are hedging more, although these are a small minority.

Tyler Durden Sun, 07/11/2021 - 14:30

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