UK

https://www.bloomberg.com/news/articles/2022-11-11/sam-bankman-fried-fooled-the-crypto-world-and-maybe-even-himself?srnd=premium-europe “A lot of people have compared this to Lehman. I would compare it to Enron,” former Treasury Secretary Lawrence Summers said Friday in a Bloomberg TV interview. “The smartest guys in the room. Not just financial error but -- certainly from the reports -- whiffs of fraud.”

https://www.ukrinform.net/rubric-ato/3611403-general-staff-russia-did-not-ask-ukraine-for-green-corridor-to-withdraw-troops-from-kherson.html "According to the available information, the Russian side addressed neither the leadership of the Armed Forces of Ukraine, nor the leadership of the General Staff, nor the command of the army groups with a request to create so-called ‘green corridor’," Brigadier General Oleksiy Hromov, Deputy Chief of the Main Operational Department of the General Staff of the Armed Forces of Ukraine, said at a briefing, answering Ukrinform's question about the request for a "green corridor" for the invaders. Earlier today, Serhiy Khlan, a member of the Kherson Regional Council, said that the Russians were moving their equipment to the left bank of the Dnipro River, and the Armed Forces of Ukraine were destroying it.

https://www.bloomberg.com/news/articles/2022-11-09/short-seller-jim-chanos-warns-the-crypto-crackdown-is-coming-now “You're going to get a judicial outcry now to regulate the system and bring these guys to justice,” Chanos, the founder of hedge fund firm Chanos & Co. said. The warning comes on the day that Sam Bankman-Fried, the founder and CEO of major crypto exchange FTX.com, suggested the company could be heading for bankruptcy barring an injection of fresh capital. Chanos has criticized a slow-moving regulatory response to crypto before, noting that it’s ultimately market cycles that dictate how authorities respond. “Asset prices are both the defense attorneys and the prosecutors” when it comes to financial frauds, he said. While crypto itself is often characterized as an anti-government asset with some ‘defensive’ or ‘uncorrelated’ characteristics, Chanos noted that there’s a long history of alternative currency projects popping up during bull markets, or “when people’s sense of disbelief is suspended.” He said that people often focus on the downsides of fiat currency, rather than its strengths — which include a central bank backstop in times of crisis.

I think crypto is still substantially smaller than dotcom was, so hopefully fallout will be manageable for economies, but for sure it will cost some, just think about all this mining equipment or even advertising market. It would be very interesting to know how much of online advertising was/is crypto related.

I donnt want to get ahead also, but recently they also toned down nukes speech a lot. Much more now they are talking about "national unity" etc and about "openess to negotiation". Just look: https://tass.com/politics/1534305. It it almost impossible to believe (so I still dont), or maybe China or/and India did something, after recent dirty bomb information campaign by Shoigu:)

Russian workers have made progress repairing a key bridge to Crimea that was severely damaged in a blast that Moscow blamed on Ukraine, officials said, but the span is not expected to be fully operational before next year. The structure — the 12-mile Kerch Strait Bridge that connects Crimea to Russia — holds symbolic and strategic value for Moscow, serving as a key logistics link that has been vital for the Kremlin’s war effort in Ukraine. Marat Khusnullin, a Russian deputy prime minister in charge of the country’s infrastructure, said on Tuesday that the first of four replacement spans of the bridge had been installed. The full restoration will not be completed before next September, Mr. Khusnillin told President Vladimir V. Putin last week. The bridge was damaged by a vast explosion in October that sent two spans of the bridge tumbling into the water. Several other spans, including railway tracks, were severely damaged by a resulting fire. The incident dealt an embarrassing blow to the Kremlin, not just because the bridge had served as the primary supply route for Moscow’s forces fighting in southern Ukraine amid a Ukrainian counteroffensive, but also because the bridge holds deep symbolism for Mr. Putin as a pillar of his disputed claim to the Crimean Peninsula since the structure’s completion in 2018. Although one railway track and one roadway were still operational after the blast, the explosion reduced Moscow’s ability to move equipment and troops to Crimea and Ukraine’s south.

https://www.bloomberg.com/news/articles/2022-11-08/rise-of-russia-hardliner-yevgeny-prigozhin-fuels-fear-in-putin-s-elite Now that would be quite a succesor...

https://www.barrons.com/articles/warren-buffett-bets-big-on-energy-51667929870 Buffett was asked at the Berkshire shareholder meeting last year about the Chevron investment and whether he was comfortable owning an oil stock given the role of fossil fuels in warming the planet. “If you expect perfection in your spouse or your friends or in company, you’re not going to find it,” Buffett responded. “Chevron is not an evil company in the least. And I have no compunction in the least about owning Chevron. And if we own the entire business, I would not feel uncomfortable about being in that business.” Buffett then asked Berkshire Vice Chairman Charlie Munger for his view, and Munger said: “Well, I agree. You can imagine two things. A young man marries into your family. He’s an English professor at, say, Swarthmore, or he works for Chevron. Which would you pick? I’d take the guy from Chevron.”

https://www.bloomberg.com/news/articles/2022-11-08/crypto-exchange-binance-to-buy-rival-ftx-com-terms-undisclosed?srnd=premium-europe&leadSource=uverify wall Billionaire Changpeng “CZ” Zhao consolidated his position atop the crypto world on Tuesday with a stunning move to take over FTX.com, the suddenly troubled firm led by his chief rival and one-time disciple, Sam Bankman-Fried. The letter of acquisition intent by Zhao’s Binance Holdings came after a bitter feud between the two men spilled into the open, with Zhao actively undermining confidence in FTX’s finances and helping spark an exodus of users from the three-year-old FTX.com exchange. A day before reaching a deal, Bankman-Fried said on Twitter that assets on FTX were “fine.” Such moves would be prohibited on Wall Street but aren’t uncommon in this rough-and-tumble corner of finance, which remains largely devoid of regulation about a decade year after its founding. Ironically, it was Bankman-Fried who was pushing for greater regulation, something that Zhao has largely opposed. https://www.bloomberg.com/news/articles/2022-11-09/ftx-binance-deal-sam-bankman-fried-s-downfall-stuns-crypto-world?srnd=premium-europe Some of FTX’s investors found out about the deal on Twitter, according to people familiar with the matter. These investors are uncertain whether they will receive any money if the agreement with Binance goes through. The list of losers in the collapse includes investors in Bankman-Fried’s exchange, valued at nearly $32 billion in a January financing. Those include blue-chip names like the SoftBank Group Corp.’s Vision Fund, the Ontario Teachers’ Pension Plan, the Singapore wealth fund Temasek Holdings Pte., hedge fund Tiger Global Management and Lightspeed Venture Partners. Following the January fund-raising, Bankman-Fried told Bloomberg the funds would likely go toward mergers and acquisitions, with possible targets including payments businesses, NFT-centric firms and the metaverse.

And, give or take, but they are still some 30 per cent cheaper.

Also: https://www.wsj.com/articles/insurers-are-facing-a-steep-rise-in-reinsurance-rates-11667858056?mod=hp_lista_pos2 Insurers are in the middle of negotiations with reinsurers, which are trying to boost rates by 10% to 30%. Nearly two-thirds of U.S. property-catastrophe coverage renews each Jan. 1, including for many large diversified U.S. and European insurers. Allstate Chief Executive Thomas Wilson said the price increases being sought by reinsurers are due to their recent losses, worries about climate change and the dollar’s recent strengthening, which hurts some reinsurers because they sell coverage in U.S. dollars yet hold their capital in another currency. “The combination of those three things will make for a really tight reinsurance market,” Mr. Wilson said. “It seems likely to me that the price will go up next year.” Allstate won’t face the hit all at once because its reinsurance program staggers renewals over three years, he said. Rapidly rising interest rates are also hurting reinsurers. Higher rates reduce the value of the bonds they hold. If the companies face payouts, for example from a quick succession of major hurricanes, they might have to sell some of their bonds at a loss. The inflation being experienced by carriers is driving up reinsurance prices, too. With so many issues stacked up, “this is really the most challenging renewal year probably since Katrina,” said David Flandro, head of analytics of Howden Group, a London-based broker. In the January 2022 renewal period, year-over-year property-catastrophe reinsurance price increases worldwide came in at 9%, according to Howden data. Reinsurers haven’t been shy about the price increases they anticipate. Swiss Re’s Group Chief Financial Officer John Dacey said in an Oct. 28 earnings call that “prices will not show some sort of an evolutionary adjustment, but rather a fairly radical adjustment up.”

These a great points! I also feel similar re FFH vs banks. FFH is as cheap as banks, provides same or better rate upside (banks will not be able to fix much higher rates for next 5-7-10 years as FFH maybe could?) while possible risks are smaller or different. Does anyone has good idea on how FFH could position their bond portfolio in the nearest future? Is it possible for them to go for much longer duration at some point in the future? Have they said anything about this or it will be totaly opportunistic?

I would quess this has more to do with 1. their fees 2. listing place / tax treatment than with trust?

I think their patience and this years massive change in bond yields provides opportunity for FFH for the first time in like 10 years to make their 15 per cent return target actually work without any heroic assumptions? That would lead to a at least 1.5 BV or 10-12 normalised PE and vs current price we have almost 50 MoS? If it is cheap or dirty cheap, I do not now, maybe not dirty cheap but quite cheap or cheap enought for such a company. Now we are discussing linguistic like those analysing fedspeach:)

https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-november-6 Key Kremlin officials began collectively deescalating their rhetoric regarding the use of nuclear weapons in early November. The Russian Ministry of Foreign Affairs (MFA) released a statement on “the prevention of nuclear war” on November 2, stating that Russia “is strictly and consistently guided by the postulate of the inadmissibility of a nuclear war in which there can be no winners, and which must never be unleashed.” The Russian MFA also stated that it is committed to the reduction and limitation of nuclear weapons.[1] Russian President Vladimir Putin stated on October 27 that Russia has no need to use nuclear weapons against Ukraine and claimed Russia has never discussed the possibility of using nuclear weapons, only “hinting at the statements made by leaders of Western countries.”[2] The deputy chairman of the Russian Security Council, Dmitry Medvedev, has similarly increasingly downplayed the fiery nuclear rhetoric he used throughout October and is now focusing on promoting Russian unity in the war in Ukraine. Time for Leopards to show up?

Why such a strong reaction?

https://seekingalpha.com/article/4553507-tesla-working-on-biggest-disruption-ever-humanoid-robots?mailingid=29602811&messageid=2800&serial=29602811.6852&utm_campaign=rta-stock-article&utm_medium=email&utm_source=seeking_alpha&utm_term=29602811.6852 Solutions is waiting just around the corner...gee such things probably shows, that this downturn is not over yet:)

Maybe if some really substantial decouplimg from China occured? But maybe it is possible that it just to far for the market participants to look untill some time after year end. Also, what I do not understant: so Japan not even tries to raise rates, UK just has ackknowleged, that its economy (or financial system) can not bear substancially higher rates. I am sure EU will soon follow them too. US is in the best position, but I do not understant how is it that different and if it will be able to have very high rates for long, when the whole world around can not afford it? And somewhat normal rates, like right now, is nothing to freak out about, it would be healthy for a long term. RE high/low FCF, value vs growth, sure some reversion and justice is due:), however, if growth is real, than it is part of the formula. Just put terminal growht rate of 10 or even 6 percent into any FCF / (i - g), and see where that gets you. Not growing FCF at a 10 per cent discount is worth 10x, IF it is growing by 7 percent for at least 10 years, then that current multiple quickly goes to more than 15x etc. The question is ofcourse if the growth is real, and before this year it was overprojected and overvzlued on steroids. This is changing very fast this year:). Another thing, not every time, but ussualy these higher FCF / jam today companies are much inferior in other ways: roe, capital intensity, leverage, structurally disrupted etc. so you also have yo be carefull with them.

This is exactly how I feel too. Excited, probably to much or to early or both:). Only I try to sleep longer, few hours does not work for me in a longer term:). I had more pain earlier this year and after unsuccessful "trip" with china, by dumb luck in timing, in the summer I was back to mostly BRK and cash in my portfolio. Usually I am fully invested or use some leverage and only if markets are really crazy I would go to no more than 1/3 cash and some defensive, not very overvalued things (this happens very rarely) . BRK usually fits that well, I do not remember it to be overvalued since after GFC. Changing mind in summer on China was still very painful since I took risk and waited for better exit prices than was immediately after Russian invasion. I have never owned any FANG (only AAPL indirectly through BRK) before (only similarly "long duration" non tech companies), but in general am very biased to owning them (no leverage, diversified globally, pricing power, high roe etc), so now I am in a process in spending my cash on these kind of companies (e.g. UMG, GOOGL, META etc). If Prem is right and they will have fall another 50 per cent (as from CC), then again, not for the first time, I am too early. I am EUR based, so also have this strong USD benefit this year (possible problem in the future) and not sure what to do about this. Also we have a crazy (probably temporary) situation with RE prices where I live since they are still like 20+ per cent up from a year ago. In 2008 they also lagged stock market substantially and it was an opportunity then and perhaps even more is now. This time residential RE prices are especially distorted (for the benefit at this point in time) because of war in Ukraine. We were quite used to this, but suddenly it is like half of people around you are either from Belarus, Ukraine or Russia itself. However much more painful or harder to make any moves in RE, than in stocks, but I feel some pain from just watching and not doing anything about this:) UK

Seems like some pivot in markets attitude towards FFH:)

Nice charts! Thanks!