Spekulatius

The fact that the bond and equity market doesn't believe the Fed is one of the core issues for the Fed. The Fed needs to regain credibility and that is why I think higher interest rates for longer is a likely outcome. This will also prevent a whipsaw of inflation that we could see. It's very clear that CPI data is rapidly cooling for now, but it is less clear that core inflation is cooling to the extend that it allows for the 2% inflation benchmark. The labor market so far has not shown much indication of slowing (unemployment still at 3.5%) so that gives the Fed a lot of leeway. Same with the USD has been weakening, which also takes of systemic risk from USD shortage. Also, what happens if CPI data starts to re-accelerate because energy costs start to rebound, which is what many are expecting here? Just random musings of course.

I wish there were 9-10% wage increases. Not in my or my wife's circles that's for sure. They are just not happening.

Sold remainder of TMUS and LMT. Also sold HOPE (which i just bought) about flat. Didn't like the CFO leaving as well as earlier comments back and forth with the SEC regarding their filings. I don't like to be an hero.

I don’t think we need to be worried about V and MA. The larger implication are for some of the Fintech that facilitate certain aspects of the payment process. Companies like Adyen or PayPal come to my mind or the owners of Zelle (large banks etc). Some might be able to take advantage of the new Infrastructure provided by FedNow and others may be disrupted. I think something like Adyen in particular could get disrupted, but I don’t know the inner working of payment well enough to be certain. I do know that Adyen facilities payments for large companies and that seems like something that Fednow can address, if not right away then later. I think it also makes competition easier for smaller financial institutions , as they get access to the Fednow infrastructure at the same terms than larger ones. So if you are a low cost tech savvy internet only bank, you may love Fednow, as you can now provide services to the customer better than before.

Sold IAC today - 15% loss. That Meredith purchase looks like a turd to me. Maybe I am giving up and selling too soon, wouldn't be the first time.

Looks like Fednow service is about to launch. I think this will be more disruptive to some Fintech than to VISA and Mastercard: https://www.frbservices.org/financial-services/fednow/about.html Hopefully, it will replace the painfully slow ACH transfer (for which some banks are still charging money). Fees look low: https://www.frbservices.org/resources/fees/fednow-2023

The red (estimate) line seems to have some predictive power at turning points.

The short term estimates are useful to understand the market earning expectations. If they are missed the stock is likely going down.

I think the insurance brokers were cheap when Spitzer was investigating them for these contingent fees. O don’t think they were 1*or 2* rated. I didn’t buy them because I didn’t understand the business model. There was concern that the absence of these fees would break the business model. I don’t think the brokers were really cheap since that episode about 10+ years ago, with the exception of a short period in 2015/16 (the mini recession) back then probably. Even great business get cheap once in a while, but it could be a once or twice decade event. Lot’s of patience required to acquire a position and then you need to sit on it, which is is even harder.

Bought a bit of $HOPE today, the US-Korean focused bank brought up by @dealraker. I suppose it's down due to the CFO leaving. Paying about tangible book is a good bet here and it pays a decent dividend as well.

What is Putin’s snickers bar? https://www.wsj.com/articles/playing-risk-made-cold-war-kids-masters-of-an-unruly-globe-11673015444?mod=trending_now_news_4

Read the disclosures in the 10-Q or 10-K for same store revenues. You will be surprised. They do supply these details. I haven’t checked Realty Income recently but have checked on other NNN Reits and they typically are in they 2-3% range. Rent increases may have an inflation clause but they are capped. NNN is about the worst asset class you can own as Reit in times of high inflation. They are really much more a bond than real estate.

I bought my first house in 2002. The mortgage rate was 6.75 percent with BofA in spring 2002. So mortgage rate like we currently have currently certainly have are not exactly a new experience, thry were around exactly 20 years ago. I do think that once the Fed stops raising, mortgage rates will come down, because the margins that banks or mortgage lenders need will come down. That’s due to the convexity nature of MBS in a rapid rate rising cycle, I think. I do think the Fed already signaled that they won’t cut in 2023, but they may be about to be done rising for now. Maybe another 0.25% rise and we could be done.

The tripple net landlords will get destroyed when higher inflation persists. Their rent escalation is typically 2% annually which means you are buying a bond more so than real estate.

I bought some CPT (sunbelt MF) and ESS (West coast MF). I think Multifamily Reits have outperformed the SPY over the long run, but not lately (last few years). Lower interest rates have to do with it (not lately though) but I think pricing power and lack of terminal value risk and relative stability of rents are factors that make this a good asset class. Best asset class in Reits may be trailer park Reits like ELS and SUI but both still trade at pretty rich multiples.

The reason for the run doesn’t matter. They hold a bunch of securities , some HTM and some MTM that are have a fair value below the price they are held on thr balance sheet. If there is a run in the bank, they need to sell the securities and realize the losses and this will deplete their capital. I think SI is probably done here, I don’t think they will survive this. They also have liabilities from money laundering etc charges that are unknown and likely one of the causes of the run on the bank. FWIW, all these banks associated with crypto that have taken deposits have huge problems. Thats where regulators need to look to make sure that crypto does not impact the banking system. These banks like SI are on-ramps to crypto ecosystem and with crypto deflating there is ann impact on those FDIC insured banks.

Belgian beer St Bernardus :

Openinsider.com: http://www.openinsider.com

“The Recruit” is definitely satire. think, “The Office” but with CIA instead of Dundee Mifflin paper company. It’s not the greatest show, but fairly entertaining.p for what it is.

Bought a bit on Onex from BX sales proceeds. Need to do some more research on that one. Also did the @thepupil trade with a starter in both ESS and CPT multi family Reits. Small add to GOOGL for good measure as well.

I liked "Where the Crawdads sing" against the odds: Streams on Netflix.

@Xerxes You have a very different view of history in general than I do. Way back then, when I had history in school, our teacher presented two different views of history. There is the one view that history centers around “great leaders” as anchor points. That’s the history written by Alexander the Great, Charlemagne, Caesar, Churchill, Hitler, Napoleon. This is typically the history that was taught hundred of years ago. Then there is the school that believes that great leaders don’t really matter all that much and that history works sort of like a mechanical clock that moves in somewhat predictable ways driven by long term forces. The leaders only matter is over as they crystallize these forces and often accelerate their deployment. This is the history taught by Karl Marx and also Mearsheimer fall into this school of thought. I don’t think any of these views are correct and history is just what people do and reflects the choices they make. There is free will and there are forces driving nations in certain direction for a long time. that’s why Britain is different than Germany and China is different than the US. But nothing is inevitable and sometimes great leaders break or redirect the longer term forces and sometimes the long term forces break the great leaders.

I recommend checking out the documentary “Winter on Fire” about the Euromaiden revolution on Netflix. It also provides background and it is clear that the war in Ukraune started in February 2014 not 2022, it just went cold for a while. Before Viktor Yanukovych was ousted , Ukraine was on its way to become a Russian vassals state like Belarus by means of a treaty with Putin that pivoted Ukraine away from its path to the EU toward Russia. When people revolted and ousted Yanukovych, Putin took military action and invaded the Crimea and also started a proxy war in Donbas that never really ended. Now in 2022, Putin came to finish the jobs he started in 2014 but what while the West and the US did nothing in 2014, to Putins surprise the Western response was unified and impactful and that’s got us and Ukraine where we are right now. Based on my read of the story line of history and and Putin, this will not end with Ukraine becoming neutral or anything of this sort, because Putin knows that the people in Ukraine tilt toward the west and sooner or later any Russian friendly regime might fall. So in my opinion, the only way to end this is to help Ukraine to become part of Europe in the end and likely part of NATO or associated with it. Anything else will just make the conflict a temporary cold one and Putin will strike again at an opportune time for him to get what he thinks belongs to Russia. I have no idea if another Russian leader would look at this the same way. Possibly any Russian leader would, be skeptical towards the west, but I don’t think about anyone would start a war - that’s a choice not and inevitable thing.

Looks like I am down about 6%. Winners were buyout candidates (CSVI, SWMA, KNBE) and losers mostly tech and VNT and some small caps.

I did a Google search for this title and incidentally found an article from a Georgian author with the same title. Seems very prescient what this author predicted in 2019. https://neweasterneurope.eu/2019/08/26/all-is-not-quiet-on-the-eastern-front/ The more I think about this, the more it is clear that this attack on Ukraine is part of Putins long term plan.