investmentwatchblog--2020-04-24--REVEALED: Luxury hotel group Ashford Inc. is biggest beneficiary of PPP with $59MILLION after exploi

REVEALED: Luxury hotel group Ashford Inc. is biggest beneficiary of PPP with $59MILLION after exploiting loophole to net 6 times the max payout

• Ashford Inc. , a hospitality real estate business with several subsidiaries , has already received $ 30million in loans from the US Paycheck Protection Program • This is the biggest sum received by any of the more than 100 public company disclosures related to these loans , according to analysis by Wall Street Journal • The group ’ s subsidiaries also took home $ 12.8 million in loans and subsidiaries of affiliate company Braemar Hotels & Resorts have been granted $ 15.8 million • This comes as CEO and chairman Monty Bennett and other major shareholders pocketed millions in @ @ @ @ @ @ @ up by the government to help small businesses pay workers and bills but many large firms have claimed millions through loopholes • The program has a $ 10million and 500-staff limit but large firms such as Ashford with its 7,000-plus workforce have spread claims over multiple subsidiaries • Subsidiary Ashford Hospitality Trust owns luxury properties including the Marriott Beverly Hills and the Ritz Carlton in Atlanta • In March , Bennett said the Trust didn ’ t have money to cover its debt payments • Brookfield Asset Management has slammed Bennett accusing him @ @ @ @ @ @ @ and ‘ suspect insider transactions ’ The luxury hotel group that owns Marriott Beverly Hills and the Ritz Carlton in Atlanta and is ran by a major Donald Trump donor has been named as the biggest beneficiary of the coronavirus loan program receiving a staggering $ 59million intended for small firms , while its boss has pocketed millions in dividends during the pandemic .
Ashford Inc. , a hospitality real estate business with several subsidiaries , has already received $ 30million in loans from the US Paycheck Protection Program set up by the @ @ @ @ @ @ @ paying their workers and bills .
This is the biggest sum received by any public company from these loans and is around eight times the average amount granted to firms , according to analysis by the Wall Street Journal .
Public filings show that the group ’ s subsidiaries also took home $ 12.8 million in loans and subsidiaries of affiliate company Braemar Hotels & Resorts have been granted $ 15.8 million .
This comes as CEO and chairman Monty Bennett , known for keeping exotic and endangered animals on his Dallas ranch @ @ @ @ @ @ @ father , have reportedly pocketed millions of dollars in preferred dividends as the coronavirus pandemic wages on .
Bennett is a major Trump donor , giving money to his race for the White House back in 2016 and donating $ 150,000 in the last six months for his reelection campaign , according to Federal Election Commission records .
A lender for subsidiary Ashford Hospitality Trust has slammed Bennett accusing him of committing a ‘ fraudulent scheme ’ and ‘ suspect insider transactions ’ .

Ashford Inc., a hospitality real estate business with several subsidiaries, has already received $30million in loans from the US Paycheck Protection Program
This is the biggest sum received by any of the more than 100 public company disclosures related to these loans, according to analysis by Wall Street Journal
The group’s subsidiaries also took home $12.8 million in loans and subsidiaries of affiliate company Braemar Hotels & Resorts have been granted $15.8 million
This comes as CEO and chairman Monty Bennett and other major shareholders pocketed millions in preferred dividends
The PPP was set up by the government to help small businesses pay workers and bills but many large firms have claimed millions through loopholes
The program has a $10million and 500-staff limit but large firms such as Ashford with its 7,000-plus workforce have spread claims over multiple subsidiaries
Subsidiary Ashford Hospitality Trust owns luxury properties including the Marriott Beverly Hills and the Ritz Carlton in Atlanta
In March, Bennett said the Trust didn’t have money to cover its debt payments
Brookfield Asset Management has slammed Bennett accusing him of committing a ‘fraudulent scheme’ and ‘suspect insider transactions’
The luxury hotel group that owns Marriott Beverly Hills and the Ritz Carlton in Atlanta and is ran by a major Donald Trump donor has been named as the biggest beneficiary of the coronavirus loan program receiving a staggering $59million intended for small firms, while its boss has pocketed millions in dividends during the pandemic.
Ashford Inc., a hospitality real estate business with several subsidiaries, has already received $30million in loans from the US Paycheck Protection Program set up by the federal government to help small businesses keep paying their workers and bills.
This is the biggest sum received by any public company from these loans and is around eight times the average amount granted to firms, according to analysis by the Wall Street Journal.
Public filings show that the group’s subsidiaries also took home $12.8 million in loans and subsidiaries of affiliate company Braemar Hotels & Resorts have been granted $15.8 million.
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This comes as CEO and chairman Monty Bennett, known for keeping exotic and endangered animals on his Dallas ranch, and other major shareholders including his father, have reportedly pocketed millions of dollars in preferred dividends as the coronavirus pandemic wages on.
Bennett is a major Trump donor, giving money to his race for the White House back in 2016 and donating $150,000 in the last six months for his reelection campaign, according to Federal Election Commission records.
A lender for subsidiary Ashford Hospitality Trust has slammed Bennett accusing him of committing a ‘fraudulent scheme’ and ‘suspect insider transactions’.


investmentwatchblog--2020-04-24--Up to 2.7 Million in New York May Have Been Infected, Antibody Study Finds

Preliminary results from New York ’ s first coronavirus antibody study show nearly 14 percent tested positive , meaning they had the virus at some point and recovered , Gov .
Andrew Cuomo said Thursday .
That equates to 2.7 million infections statewide — more than 10 times the state ’ s confirmed cases .
The study , part of Cuomo ’ s “ aggressive ” antibody testing launched earlier this week , is based on 3,000 random samples from 40 locations in 19 counties .
While the preliminary data suggests much more widespread infection , it means New York @ @ @ @ @ @ @ than previously thought .
As of Thursday , nearly 16,000 people in New York have died of virus-related complications .
With 260,000-plus confirmed cases , the mortality rate would be as high as 6 percent .
With 2.7 million cases , it would be around 0.5 percent — much lower , though still much higher than the seasonal flu .
..New York City had a higher rate of antibodies ( 21.2 percent ) than anywhere else in the state and accounted for 43 percent of the total tested .
Long Island had a @ @ @ @ @ @ @ and Rockland counties saw 11.7 percent of their samples come up with the antibody… ..The early estimates mirror findings from a study in Los Angeles County , California .
Researchers there found COVID-19 could have been 55 times more prevalent than reported , which would mean a far lower morbidity rate than believed .

Preliminary results from New York’s first coronavirus antibody study show nearly 14 percent tested positive, meaning they had the virus at some point and recovered, Gov. Andrew Cuomo said Thursday. That equates to 2.7 million infections statewide — more than 10 times the state’s confirmed cases.
The study, part of Cuomo’s “aggressive” antibody testing launched earlier this week, is based on 3,000 random samples from 40 locations in 19 counties. While the preliminary data suggests much more widespread infection, it means New York’s mortality rate is much lower than previously thought.
As of Thursday, nearly 16,000 people in New York have died of virus-related complications. With 260,000-plus confirmed cases, the mortality rate would be as high as 6 percent. With 2.7 million cases, it would be around 0.5 percent — much lower, though still much higher than the seasonal flu.
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..New York City had a higher rate of antibodies (21.2 percent) than anywhere else in the state and accounted for 43 percent of the total tested. Long Island had a 16.7 percent positivity rate, while Westchester and Rockland counties saw 11.7 percent of their samples come up with the antibody…
..The early estimates mirror findings from a study in Los Angeles County, California. Researchers there found COVID-19 could have been 55 times more prevalent than reported, which would mean a far lower morbidity rate than believed.
www.nbcnewyork.com/news/local/new-york-virus-deaths-top-15k-cuomo-expected-to-detail-plan-to-fight-nursing-home-outbreaks/2386556/


investmentwatchblog--2020-04-24--SIX Senators ‘Unanimously’ Pass $483 BILLION Spending Bill. BOOM: American billionaires $280 billion

SIX Senators ‘Unanimously’ Pass $483 BILLION Spending Bill. BOOM: American billionaires $280 billion RICHER since pandemic…  Big banks get bigger…

With Only 6 Members Participating , Senate Passed $ 483-Billion Spending Bill by ‘ Unanimous Consent ’ The U.S. Senate @ @ @ @ @ 483-billion spending bill to further aid Americans during the COVID-19 pandemic—with only six members of @ @ @ @ @ The bill was approved by the “ unanimous consent ” of senators—most of whom were @ @ @ @ @ was given .

With Only 6 Members Participating, Senate Passed $483-Billion Spending Bill by ‘Unanimous Consent’
The U.S. Senate on Tuesday passed a $483-billion spending bill to further aid Americans during the COVID-19 pandemic—with only six members of the 100-member Senate participating.
The bill was approved by the “unanimous consent” of senators—most of whom were not there when that approval was given.


investmentwatchblog--2020-04-24--Want to learn how to sound like a smart investment manager while saying essentially nothing?

Want to learn how to sound like a smart investment manager while saying essentially nothing ?
Elerian gives a perfect @ @ @ @ @ this interview .
Endless platitudes that seem insightful but offer nothing actionable .
Just complete @ @ @ @ @ t.co/djpRX9sWnr

Want to learn how to sound like a smart investment manager while saying essentially nothing? Elerian gives a perfect 10 on this strategy in this interview.
Endless platitudes that seem insightful but offer nothing actionable. Just complete and utterly useless. 1/ t.co/djpRX9sWnr
— Dave (@djr8519) April 24, 2020


investmentwatchblog--2020-04-24--In-Depth Analysis and Valuation on Zoom Video Communications (ZM)

• Zoom provides a ‘ video-first ’ cloud-native scalable communications platform that changes how people interact through frictionless video , voice , chat , and content sharing • It primarily serves enterprises in the Americas , Asia Pacific , Europe , the Middle East , and Africa , but also caters to individuals as well • Zoom ’ s ( ZM ) share price ( as of 4/20/2020 ) is $ 148.99 • I believe that they are overvalued and should be priced around $ 70- $ 85 • While the market went down 30 % , ZM shares have @ @ @ @ @ @ @ on Feb. 19 ( ZM was at $ 104 ) and peaked at $ 164.94 on March 23 ( the day the market reached its current low ) • I think the rise in Zoom shares is unwarranted , regardless of stay at home circumstances surrounding the Coronavirus .
• Management noted materially higher usage from free users but saw no significant revenue uplift from the pandemic .
Users have spiked from 10 million in December to 200 million in March , and just recently 300 million .
• The company ’ s @ @ @ @ @ @ @ users are having a trial by fire on Zoom ’ s video calling application .
However , I am skeptical that Zoom will be able to convert enough of these free users within a reasonable time frame to justify the current valuation .
• I want to clarify that I see Zoom growing tremendously over the next five years , but the price is way ahead of itself • I attribute the growth to its Y/Y revenue growth being 88.4 % over the past year , 118 % the year prior , and @ @ @ @ @ @ @ With a SaaS business model , Zoom will enjoy a low CapEx due to third-party hosting ( mostly Amazon Web Services ) which eliminates the costs of self-managed servers , and as such is positioned against significant depreciation costs • I point to the PEG ( appropriate for high growth/speculative stocks ) and P/E ratios to expected favorable future earnings , but also an indication that the stock is highly overvalued • NTM ( next twelve months ) PEG is 10x which means that the stock is overvalued when taking into account both @ @ @ @ @ @ @ for these earnings in the future • LTM P/E ratio of 1489.9x and a NTM P/E ratio of 346.5x which both indicate the stock is trading high relative to earnings but offers little insight into the company ’ s EPS growth prospects • Zoom was actually profitable on a GAAP basis in fiscal 2019 • Unlike many young software companies , I expect profitability to continue as SaaS business models generally have consistent costs • Strong balance sheet with $ 0 debt and approximately $ 850 million in total cash and short term @ @ @ @ @ @ @ continued market penetration through leveraging their cloud-based solution ’ s ease of use and innovative features • Gaining traction with its Zoom Phones VoIP solutions with more than 2,900 customers • Pricing tiers are based on a per user per month basis and include Basic ( free ) , Pro ( $ 15 ) , Business ( $ 20 ) , and Enterprise for $ 20 ( more features with a volume discount ) .
• Zoom Rooms enables conference rooms with Zoom Meetings functionality and is $ 49 per room per month @ @ @ @ @ @ @ organizations using legacy providers ( such as Cisco ) to join Zoom meetings and is priced at $ 49 per port per month .
• In its S-1 filing , the company sized the unified communications and collaboration market at $ 43.1 billion by 2022 , with a 3 % annual market growth rate and a clear shift toward cloud-based solutions • It is clear that cloud-based software is an emerging market within communications that has tremendous growth potential • The unprecedented circumstances surrounding academics and work has given Zoom the ability to @ @ @ @ @ @ @ millions of people and the opportunity to retain some of these customers • Strong competition from a variety of technology providers • Cisco ( Webex ) and Microsoft ( Teams and Skype ) dominate the video conferencing market and can bundle a broad array of solutions in response to a competitive threat from Zoom .
• The industry has considerable intellectual property development which exposes Zoom to adverse rulings in patent infringement cases that could force the company to pay confiscatory license fees or abandon technology altogether • Zoom offers a freemium model @ @ @ @ @ @ @ which means revenue is concentrated among the largest customers .
• Smaller customers typically have higher churn , which could be exacerbated in Zoom ’ s case , where the number of free users far outpaces the number of paid users .
I believe the nature of the model would dictate a higher churn than fully paid enterprise software models .
• It remains unclear whether we are witnessing a paradigm shift in the way people work that enables Zoom to convert a substantial proportion of the new free users into paying subscribers @ @ @ @ @ @ @ the service when the current restrictions are lifted • Although expected to produce revenue growth at the high end of peers , this higher valuation offers less room for missteps and therefore carries greater inherent risks • Risks of customer data breaches and service outages especially with 80 % of Zoom ’ s R & D staff is based in China which poses a significant risk due to trade relations , data sensitivity , and the significant rise of intellectual property and trade secret theft present in China • Zoom completed its IPO @ @ @ @ @ @ @ a limited operating history as a public company to scrutinize • At high valuation levels , companies can often become momentum stocks that are punished severely if they do not deliver against expectations , which are regularly higher than consensus • Executing across so many different aspects of growth simultaneously in their product portfolio .
• Zoom Phone ( VoIP product ) is a more complex sale , the company is moving from smaller to larger customers , and there is a new head of sales .
• Three Stage Growth • Zoom @ @ @ @ @ @ @ and will continue to benefit from high revenue growth for several years to come • I expect this growth to significantly fade in FYE 2026 to relatively lower and stable rates • There is a strong indication that revenue will grow as a result of customers increasing 20-fold from 10 million in December 2019 to 300 million in March 2020 • I expect that most of the revenue will result in businesses allowing more employees to work from home due to the obvious viability of the platform for online meetings and work , @ @ @ @ @ @ @ to cut costs • I still expect the number of customers to go down tremendously from its current high once schools and businesses return to normal operations Terminal Value : $ 48,612.20 ; Intrinsic Value of Equity : $ 35,781 ; Intrinsic Share Price : $ 128.24 • Cisco Systems , Inc. ( CSCO ) engages in the design , manufacture , and sale of Internet Protocol based networking products and services related to the communications and IT industry .
Enterprise Value = $ 170,416 • Its SaaS product , Webex Meetings , @ @ @ @ @ @ @ service that enables global and virtual teams to collaborate on mobile devices and standards-based video systems in real time .
Webex Meetings includes features such as screen sharing , meeting recording , customizable layouts and meeting broadcasting .
• Current market leader in line with Microsoft ’ s platforms Teams and Skype • Verizon Communications Inc. ( VZ ) provides communications , information and entertainment products and services to consumers , businesses and governmental agencies .
Its Consumer segment provides wireless and wireline communications services .
Enterprise Value = $ 373,424 million • @ @ @ @ @ @ @ manufactures , licenses , supports , and sells computer software , consumer electronics , personal computers , and related services .
Enterprise Value = $ 1,284,431 million • Its SaaS product , Teams , is a unified communication and collaboration platform that combines persistent workplace chat , video meetings , file storage , and application integration ( Office 365 ) .
Microsoft also owns and markets another SaaS product , Skype and Skype Business , which they purchased for $ 8.5 Billion in 2011 • LogMeIn ( LOGM ) is a provider of @ @ @ @ @ @ @ connectivity services for collaboration , IT management and customer engagement .
Enterprise Value = $ 4,301 million • GoToMeeting ( including GoToWebinar ) is a web-hosted service created and marketed by LogMeIn .
It is an online meeting , desktop sharing , and video conferencing software package that enables the user to meet with other computer users , customers , clients or colleagues via the Internet in real time .
• Direct competitor with Zoom and is a veteran of the industry • VMware ( VMW ) provides cloud computing and virtualization software @ @ @ @ @ @ @ of cloud infrastructure and business mobility .
Enterprise Value = $ 59,183 million • Its products include Software-Defined Data Center , Hybrid Cloud Computing , and End-User Computing .
It supports modernizing data centers , integrating public clouds , empowering digital workspaces and transforming security • Similar business plan to Zoom as it operates as a SaaS , but it also helps in scaling businesses into digitalizing its services , which is similar to Zoom ’ s ability to assist businesses with learning how to operate and adapt to its online platform • @ @ @ @ @ @ @ provider of Voice over IP products .
Enterprise Value = $ 1,981 million • 8×8 products include cloud-based voice , contact center , video , mobile and unified communications for businesses .
Zoom directly competes in the VoIP market segment with 8×8 • Company has a struggling financial situation but provides insights into how this specific segment of the communications industry ( that is VoIP ) is oversaturated with competition and offers little to no opportunity for growth • This may be the reason Zoom only offers its VoIP product in a package @ @ @ @ @ @ @ ADBE ) is a software company .
Enterprise Value = $ 159,048 million • The Company offers products and services used by professionals , marketers , knowledge workers , application developers , enterprises , and consumers for creating , managing , measuring , optimizing , and engaging with compelling content and experiences .
• Adobe is a mature state software company that offers insights into what a successful SaaS business with a diversified portfolio of quality products looks like , which is helpful to compare to a young company like Zoom .
Zoom @ @ @ @ @ @ @ every multiple except for NTM EPS ZM is in line with its peers in terms of gross profit , but severely lags behind in all of the other benchmarks TLDR : Although Zoom should be trading at multiples higher than its peers as it is a relatively new company and only IPO ’ d in 2019 , the current share price ( as of 4/20/2020 ) is way ahead of itself .
With speculative high-growth stocks one should pay closer attention to the PEG Ratio rather than the P/E ratio ( PEG of @ @ @ @ @ @ @ undervalued ; < 1 is undervalued ; > 1 is overvalued ) In conclusion , I feel that ZM is highly overvalued when compared to its peers , the DCF yields a stock range that shows Zoom is overvalued as well , but that it justifies higher multiples and ratios .
I want to emphasize that given the current market situation , a likely bear market cycle for the greater part of the year , Zoom is trading significantly higher than it should be .
On top of this , its PEG ratio @ @ @ @ @ @ @ shows that the stock is significantly higher than its projected EPS growth as well as that it has a high P/E ratio to begin with .
TLDR ; TLDR : Appropriate range according to peers : $ 70- $ 85 – > More appropriate range would be $ 85- $ 100 taking into account my FCFE model ( which is very difficult to conduct with only four years of financial information ) Strike and Date : 8/21 $ 85p – $ 100p range … to be even safer : 11/20 $ 100p Disclaimer @ @ @ @ @ @ @ purposes .
Do not make any investment decisions based on the information in this article .
Do you own due diligence .

by anonuser123987
Section I: Executive Summary Investment Thesis (Valuation as of 4/20)
Zoom provides a ‘video-first’ cloud-native scalable communications platform that changes how people interact through frictionless video, voice, chat, and content sharing It primarily serves enterprises in the Americas, Asia Pacific, Europe, the Middle East, and Africa, but also caters to individuals as well
Zoom’s (ZM) share price ( as of 4/20/2020 ) is $148.99 I believe that they are overvalued and should be priced around $70-$85 While the market went down 30%, ZM shares have climbed 17% since the market peak on Feb. 19 (ZM was at $104) and peaked at $164.94 on March 23 (the day the market reached its current low)
I think the rise in Zoom shares is unwarranted, regardless of stay at home circumstances surrounding the Coronavirus. Management noted materially higher usage from free users but saw no significant revenue uplift from the pandemic . Users have spiked from 10 million in December to 200 million in March, and just recently 300 million. The company’s funnel is increasing, as so many users are having a trial by fire on Zoom’s video calling application. However, I am skeptical that Zoom will be able to convert enough of these free users within a reasonable time frame to justify the current valuation.
I want to clarify that I see Zoom growing tremendously over the next five years, but the price is way ahead of itself I attribute the growth to its Y/Y revenue growth being 88.4% over the past year, 118% the year prior, and 149% two years prior. With a SaaS business model, Zoom will enjoy a low CapEx due to third-party hosting (mostly Amazon Web Services) which eliminates the costs of self-managed servers, and as such is positioned against significant depreciation costs I point to the PEG ( appropriate for high growth/speculative stocks ) and P/E ratios to expected favorable future earnings, but also an indication that the stock is highly overvalued NTM (next twelve months) PEG is 10x which means that the stock is overvalued when taking into account both current earnings and the expected growth rate for these earnings in the future LTM P/E ratio of 1489.9x and a NTM P/E ratio of 346.5x which both indicate the stock is trading high relative to earnings but offers little insight into the company’s EPS growth prospects
List of Key Drivers
Zoom was actually profitable on a GAAP basis in fiscal 2019 Unlike many young software companies, I expect profitability to continue as SaaS business models generally have consistent costs
Strong balance sheet with $0 debt and approximately $850 million in total cash and short term investments
Long runway for growth with continued market penetration through leveraging their cloud-based solution’s ease of use and innovative features Gaining traction with its Zoom Phones VoIP solutions with more than 2,900 customers Pricing tiers are based on a per user per month basis and include Basic (free), Pro ($15), Business ($20), and Enterprise for $20 (more features with a volume discount). Zoom Rooms enables conference rooms with Zoom Meetings functionality and is $49 per room per month. Zoom Conference Room Connector allows organizations using legacy providers (such as Cisco) to join Zoom meetings and is priced at $49 per port per month.
In its S-1 filing, the company sized the unified communications and collaboration market at $43.1 billion by 2022, with a 3% annual market growth rate and a clear shift toward cloud-based solutions It is clear that cloud-based software is an emerging market within communications that has tremendous growth potential
The unprecedented circumstances surrounding academics and work has given Zoom the ability to place its service in the hands of millions of people and the opportunity to retain some of these customers
***List of Key Risks **\*
Strong competition from a variety of technology providers Cisco (Webex) and Microsoft (Teams and Skype) dominate the video conferencing market and can bundle a broad array of solutions in response to a competitive threat from Zoom. The industry has considerable intellectual property development which exposes Zoom to adverse rulings in patent infringement cases that could force the company to pay confiscatory license fees or abandon technology altogether
Zoom offers a freemium model and caters to companies of all sizes which means revenue is concentrated among the largest customers. Smaller customers typically have higher churn, which could be exacerbated in Zoom’s case, where the number of free users far outpaces the number of paid users . I believe the nature of the model would dictate a higher churn than fully paid enterprise software models. It remains unclear whether we are witnessing a paradigm shift in the way people work that enables Zoom to convert a substantial proportion of the new free users into paying subscribers or whether these users will simply abandon the service when the current restrictions are lifted
and of all sizes which means Although expected to produce revenue growth at the high end of peers, this higher valuation offers less room for missteps and therefore carries greater inherent risks Zoom faces several lawsuits surrounding privacy concerns Risks of customer data breaches and service outages especially with 80% of Zoom’s R&D staff is based in China which poses a significant risk due to trade relations, data sensitivity, and the significant rise of intellectual property and trade secret theft present in China Zoom completed its IPO in April 2019, so it has a limited operating history as a public company to scrutinize At high valuation levels, companies can often become momentum stocks that are punished severely if they do not deliver against expectations, which are regularly higher than consensus
Executing across so many different aspects of growth simultaneously in their product portfolio. Zoom Phone (VoIP product) is a more complex sale, the company is moving from smaller to larger customers, and there is a new head of sales.
Section II: Intrinsic Value
Three Stage Growth Zoom is currently in its early-high growth stage and will continue to benefit from high revenue growth for several years to come I expect this growth to significantly fade in FYE 2026 to relatively lower and stable rates There is a strong indication that revenue will grow as a result of customers increasing 20-fold from 10 million in December 2019 to 300 million in March 2020 I expect that most of the revenue will result in businesses allowing more employees to work from home due to the obvious viability of the platform for online meetings and work, which presents the opportunity to downsize offices to cut costs I still expect the number of customers to go down tremendously from its current high once schools and businesses return to normal operations Free Cash Flow to Equity approach
Fundamental Drivers

preview.redd.it/it9ya3qxjpu41.png?width=608&format=png&auto=webp&s=b81c2c5a0711758de7c6d1bdaec3d511a8b4a867

Terminal Value: $48,612.20; Intrinsic Value of Equity: $35,781; Intrinsic Share Price: $128.24
Intrinsic Valuation Drivers

preview.redd.it/63fvmn7kkpu41.png?width=538&format=png&auto=webp&s=0103516a422d6ca1da5cbfede7e710a3eb109a7c

preview.redd.it/zq4su1alkpu41.png?width=543&format=png&auto=webp&s=d5bb30091d05ecc19c062a9488c63e12fff98f62
Section III: Relative Valuation
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Comparable Companies
Cisco Systems, Inc. (CSCO) engages in the design, manufacture, and sale of Internet Protocol based networking products and services related to the communications and IT industry. Enterprise Value = $170,416 Its SaaS product, Webex Meetings, is a cloud-based web and video conferencing service that enables global and virtual teams to collaborate on mobile devices and standards-based video systems in real time. Webex Meetings includes features such as screen sharing, meeting recording, customizable layouts and meeting broadcasting. Current market leader in line with Microsoft’s platforms Teams and Skype
engages in the design, manufacture, and sale of Internet Protocol based networking products and services related to the communications and IT industry. Enterprise Value = $170,416 Verizon Communications Inc. (VZ) provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its Consumer segment provides wireless and wireline communications services. Enterprise Value = $373,424 million Verizon recently agreed to purchase Blue Jeans Network, Zoom competitor, for $400M
provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its Consumer segment provides wireless and wireline communications services. Enterprise Value = $373,424 million Microsoft Corporation (MSFT) develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services. Enterprise Value = $1,284,431 million Its SaaS product, Teams, is a unified communication and collaboration platform that combines persistent workplace chat, video meetings, file storage, and application integration (Office 365). Microsoft also owns and markets another SaaS product, Skype and Skype Business, which they purchased for $8.5 Billion in 2011 Current market leader in line with Cisco’s Webex platform
develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services. Enterprise Value = $1,284,431 million LogMeIn (LOGM) is a provider of software as a service and cloud-based remote connectivity services for collaboration, IT management and customer engagement. Enterprise Value = $4,301 million GoToMeeting (including GoToWebinar) is a web-hosted service created and marketed by LogMeIn. It is an online meeting, desktop sharing, and video conferencing software package that enables the user to meet with other computer users, customers, clients or colleagues via the Internet in real time. Direct competitor with Zoom and is a veteran of the industry
is a provider of software as a service and cloud-based remote connectivity services for collaboration, IT management and customer engagement. Enterprise Value = $4,301 million VMware (VMW) provides cloud computing and virtualization software and services and engages in the provision of cloud infrastructure and business mobility. Enterprise Value = $59,183 million Its products include Software-Defined Data Center, Hybrid Cloud Computing, and End-User Computing. It supports modernizing data centers, integrating public clouds, empowering digital workspaces and transforming security Similar business plan to Zoom as it operates as a SaaS, but it also helps in scaling businesses into digitalizing its services, which is similar to Zoom’s ability to assist businesses with learning how to operate and adapt to its online platform
provides cloud computing and virtualization software and services and engages in the provision of cloud infrastructure and business mobility. Enterprise Value = $59,183 million 8×8 Inc. (EGHT) is a provider of Voice over IP products. Enterprise Value = $1,981 million 8×8 products include cloud-based voice, contact center, video, mobile and unified communications for businesses. Zoom directly competes in the VoIP market segment with 8×8 Company has a struggling financial situation but provides insights into how this specific segment of the communications industry (that is VoIP) is oversaturated with competition and offers little to no opportunity for growth This may be the reason Zoom only offers its VoIP product in a package with other products
is a provider of Voice over IP products. Enterprise Value = $1,981 million Adobe Inc. (ADBE) is a software company. Enterprise Value = $159,048 million The Company offers products and services used by professionals, marketers, knowledge workers, application developers, enterprises, and consumers for creating, managing, measuring, optimizing, and engaging with compelling content and experiences. Adobe is a mature state software company that offers insights into what a successful SaaS business with a diversified portfolio of quality products looks like, which is helpful to compare to a young company like Zoom.
is a software company. Enterprise Value = $159,048 million
Multiples

Zoom is astronomically higher than its peers in every multiple except for NTM EPS
Benchmark Analysis: Profitability Margins

ZM is in line with its peers in terms of gross profit, but severely lags behind in all of the other benchmarks
Putting these multiples to work:

preview.redd.it/h47qxen4mpu41.png?width=254&format=png&auto=webp&s=50711d50b9df4f4d0f5b33035a18482a267358a6
preview.redd.it/b6kjyhn4mpu41.png?width=241&format=png&auto=webp&s=31ef6ed6ac25355cff8b29865284f73eb3814b2c
My favorite part^
TLDR: Although Zoom should be trading at multiples higher than its peers as it is a relatively new company and only IPO’d in 2019, the current share price (as of 4/20/2020) is way ahead of itself. With speculative high-growth stocks one should pay closer attention to the PEG Ratio rather than the P/E ratio (PEG of 1 indicates it is neither overvalued or undervalued; <1 is undervalued; >1 is overvalued) In conclusion, I feel that ZM is highly overvalued when compared to its peers, the DCF yields a stock range that shows Zoom is overvalued as well, but that it justifies higher multiples and ratios. I want to emphasize that given the current market situation, a likely bear market cycle for the greater part of the year, Zoom is trading significantly higher than it should be. On top of this, its PEG ratio (over 1 is considered overvalued) shows that the stock is significantly higher than its projected EPS growth as well as that it has a high P/E ratio to begin with.
TLDR; TLDR: Appropriate range according to peers: $70-$85 –> More appropriate range would be $85-$100 taking into account my FCFE model (which is very difficult to conduct with only four years of financial information)
Strike and Date: 8/21 $85p – $100p range … to be even safer: 11/20 $100p
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.


investmentwatchblog--2020-04-24--I figured out why this market is being so idiotic (seriously)

I seriously haven ’ t found a ticker that has a drop in buyers from the retail side .
EVERYONE @ @ @ @ @ Every fund manager is realizing this and unloading bags .
No real reason to pull @ @ @ @ @ just slowly sell off whatever shares you have .
I think the key is recognizing @ @ @ @ @ money to dump in , then you pull the rug on them .
When will @ @ @ @ @ : This information is only for educational purposes .
Do not make any investment decisions @ @ @ @ @ this article .
Do you own due diligence .

by robbinhood69
Check this
robintrack.net/symbol/AAL
robintrack.net/symbol/LVS
We are primarily funded by readers. Please subscribe and donate to support us!
robintrack.net/symbol/CCL
I seriously haven’t found a ticker that has a drop in buyers from the retail side. EVERYONE is BTFD right now. Every fund manager is realizing this and unloading bags. No real reason to pull the rug when you can just slowly sell off whatever shares you have. I think the key is recognizing when retail is out of money to dump in, then you pull the rug on them. When will retail run out?
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.


investmentwatchblog--2020-04-24--Beijing is doing everything it can to clamp down on Hong Kong’s pro-democracy camp before September’

Beijing is doing everything it can to clamp down on Hong Kong’s pro-democracy camp before September’s parliamentary elections.

# Beijing is doing everything it can to clamp down on # HongKong 's pro-democracy camp before September 's parliamentary @ @ @ @ @ Communist fashion , the # CCP has weaponized the # RuleOfLaw and is using it @ @ @ @ @ # Freedom.pic.twitter.com/jRWE2vzBbK

#Beijing is doing everything it can to clamp down on #HongKong's pro-democracy camp before September's parliamentary elections. In classic #Communist fashion, the #CCP has weaponized the #RuleOfLaw and is using it to strip HK of its #Freedom.pic.twitter.com/jRWE2vzBbK
— Prof. Steve Hanke (@steve_hanke) April 24, 2020


investmentwatchblog--2020-04-24--Interactive Brokers CEO: “We would like to ask you not to buy our shares unless you become an active

Interactive Brokers CEO: “We would like to ask you not to buy our shares unless you become an active user of our platform”

I thought it was a little bit crazy , but then it got me thinking , and it ’ s actually interesting .
Imagine a world were investors invest in companies they like/find useful/ or at least have actually tried and realized it ’ s potential .
IBKR aims to provide an exceptionally inexpensive and versatile platform for our clients to manage their finances .
It is vitally important to us that our clients be better equipped , pay lower prices , and have other advantages so as to generate higher returns than the customers of other brokers .
In @ @ @ @ @ @ @ getting frequent feedback and advice , and by otherwise working with our users .
Owning our shares provides increased motivation for our clients to work with us toward these goals .
Investment by passive investors , and by others who do not use our platform , tends to cause a run up in our share price .
This makes it more difficult for our clients to purchase our shares .
You may be considering investing in IBKR .
We would like to ask you not to buy our shares unless you become an @ @ @ @ @ @ @ doing so .

by Dagoru95
I thought it was a little bit crazy, but then it got me thinking, and it’s actually interesting. Imagine a world were investors invest in companies they like/find useful/ or at least have actually tried and realized it’s potential.
“Dear Prospective Investor,
IBKR aims to provide an exceptionally inexpensive and versatile platform for our clients to manage their finances.
It is vitally important to us that our clients be better equipped, pay lower prices, and have other advantages so as to generate higher returns than the customers of other brokers.
In part, we achieve these goals by getting frequent feedback and advice, and by otherwise working with our users. Owning our shares provides increased motivation for our clients to work with us toward these goals.
We are primarily funded by readers. Please subscribe and donate to support us!
Investment by passive investors, and by others who do not use our platform, tends to cause a run up in our share price. This makes it more difficult for our clients to purchase our shares.
You may be considering investing in IBKR. We would like to ask you not to buy our shares unless you become an active user of our platform prior to doing so.
Sincerely yours,
Thomas Peterffy”
Source: investors.interactivebrokers.com/ir/main.php


investmentwatchblog--2020-04-24--Short Sellers Make Nearly $300M Betting Against USO

“ Retail has been plowing into these oil contracts thinking they ’ re buying spot crude oil when they ’ @ @ @ @ @ month .
So they ’ re paying $ 22 a barrel when the spot market @ @ @ @ @ .
Retail investors are going to get fleeced if they continue to fly into these @ @ @ @ @ said Monday on CNBC ’ s “ Closing Bell .
”

“Retail has been plowing into these oil contracts thinking they’re buying spot crude oil when they’re buying the next front month. So they’re paying $22 a barrel when the spot market’s negative $38. Retail investors are going to get fleeced if they continue to fly into these oil ETFs,” he said Monday on CNBC’s “Closing Bell.”
We are primarily funded by readers. Please subscribe and donate to support us!
www.cnbc.com/2020/04/23/short-sellers-make-nearly-300-million-betting-against-retail-investors-favorite-oil-fund.html


investmentwatchblog--2020-04-24--Has anyone noticed real estate investors seem delusionally optimistic now?

Yeah I know most people in here are interested in equity markets .
I am also primarily interested in equities .
But just for discussion I wanted to bring this up and see what people think… I was just listening to the Bigger Pockets podcast ( a podcast for real estate investors ) and everyone on there seemed so optimistic with little acknowledgement of the true situation we are in .
I heard comments like : – “ Maybe we will see a small dip in prices over the summer ” – “ I ’ m only seeing rents dropping @ @ @ @ @ @ @ don ’ t think we ’ ll see it go much lower for now ” So banks are tightening lending requirements , we have mass unemployment ( maybe 20 % ? )
, we have situations where you literally can not evict non-paying tenants and by some counts I read we have 30 % of US tenants not paying rent .
I would be surprised if Airbnb hosts are getting even 10 % of the bookings they were getting last year .
Are real estate people out of touch with reality right now @ @ @ @ @ @ @ people are preparing for the possibility that this goes on much past June .

by ardme
Yeah I know most people in here are interested in equity markets. I am also primarily interested in equities. But just for discussion I wanted to bring this up and see what people think…
I was just listening to the Bigger Pockets podcast (a podcast for real estate investors) and everyone on there seemed so optimistic with little acknowledgement of the true situation we are in. I heard comments like:
– “Maybe we will see a small dip in prices over the summer”
We are primarily funded by readers. Please subscribe and donate to support us!
– “I’m only seeing rents dropping 3-4% in my area and I don’t think we’ll see it go much lower for now”
So banks are tightening lending requirements, we have mass unemployment (maybe 20% ?) , we have situations where you literally cannot evict non-paying tenants and by some counts I read we have 30% of US tenants not paying rent. I would be surprised if Airbnb hosts are getting even 10% of the bookings they were getting last year.
Are real estate people out of touch with reality right now? I don’t think enough people are preparing for the possibility that this goes on much past June.


investmentwatchblog--2020-04-24--Administration faces significant hurdles in getting Fed to help rescue an oil industry squeezed by p

Administration faces significant hurdles in getting Fed to help rescue an oil industry squeezed by plunging crude prices given CB’s aversion to helping specific industries & ITS LACK OF AUTHORITY TO HELP BUSINESSES THAT ARE INSOLVENT …BECAUSE IT’S AGAINST THE LAW!@business — Danielle DiMartino Booth (@DiMartinoBooth) April 24, 2020
How to ruin your banking system… How to crash an economy by bringing lending to screeching halt.. On the other hand, consider the source whose first public speech demanded banks hold so much capital they could never fail & in doing so be treated as PUBLIC UTILITIES Brilliant t.co/aT3MWHfHds — Danielle DiMartino Booth (@DiMartinoBooth) April 24, 2020
How to ruin your banking system… The Fed should go negative next week, former President of the Fed Bank of Minneapolis Kocherlakota says. To fight a deepening recession, it should take US interest rates below zero for the first time ever. t.co/q4IE80AP1n pic.twitter.com/D14d6YoAcO — Holger Zschaepitz (@Schuldensuehner) April 24, 2020
Fed balance sheet expands by another $205bn from prior week to record $6.6tn as Powell keeps printing press rumbling. Holdings of US Treasurys rose by $120.5bn to $3.9tn. Mortgage-backed securities rose $54bn to $1.6tn. Swap lines to CenBank counterparties rose $31.4bn to $409bn. pic.twitter.com/muEn1VT8X6 — Holger Zschaepitz (@Schuldensuehner) April 24, 2020


investmentwatchblog--2020-04-24--If corporate America expects us to bail them out every time we have a crisis, then maybe we need to

If corporate America expects us to bail them out every time we have a crisis , then maybe we need @ @ @ @ @ higher tax rate as an insurance premium… Jim Chanos @ jfc_3_ t.co/K6fBI00Ozt pic.twitter.com/nIDw1WaSRL

If corporate America expects us to bail them out every time we have a crisis, then maybe we need to start charging corporations a higher tax rate as an insurance premium…
Jim Chanos @jfc_3_ t.co/K6fBI00Ozt pic.twitter.com/nIDw1WaSRL
— Real Vision (@RealVision) April 24, 2020


investmentwatchblog--2020-04-24--This is broken. Fed buying junk and it’s still broken. Almost back to levels prior to the announceme

This is broken. Fed buying junk and it’s still broken. Almost back to levels prior to the announcement.

HYG Monthly: This is broken. Fed buying junk and it's still broken. Almost back to levels prior to the announcement. pic.twitter.com/aGlP2uL2Gg — Simply Vertical (@Simple_Trends) April 23, 2020
big gap between $HYG and $SPY #ES_F today, real block sellers of HYG all day as it decouples from equities (perhaps on back of cluster of defaults, latest $HTZ) – but such divergence means one of them is right and the other is wrong looking forward — Tian (@RealTianZeng) April 24, 2020
I don't think we're talking enough about how the Fed buying high-yield (junk) bonds is a massive bailout to shale oil producers. 40% of HY bonds in the US are shale companies. Fed is basically backstopping their borrowing costs. Ridiculous. — Tyler Bryant (@tyler_bryant) April 24, 2020
Fed buying junk bonds & unlimited QE
ECB buying junk bonds & corporate bonds & QE
BOJ discussing unlimited bond buying owns virtually all ETFs Zero to negative rates all of them. Central banks are weapons of economic mass destruction. No sense.
No limits.
No exit strategy. — Sven Henrich (@NorthmanTrader) April 23, 2020
Longer term HYG risk proxy and S&P 500 are now back after massive Fed backed move. Interesting that HYG is trending down while Spooz are running higher. Careful peeps. pic.twitter.com/0fvIcnj335 — Gubb (@gubbmintcheese) April 24, 2020
The Coming Default Crisis With Online Loans “In my 30 years of doing this, I’ve never seen payments impairments spike so quickly.”t.co/q1jckWH3DH pic.twitter.com/7EeQW5aCW1 — Jonathan Tepper (@jtepper2) April 24, 2020


investmentwatchblog--2020-04-24--Dollar shortage warning.  New lows for EM currencies with $BRL being decimated. Blood in the streets

Dollar shortage warning. New lows for EM currencies with $BRL being decimated. Blood in the streets?
Not even close. Wall Street still estimates a 20+% appreciation in $BRL and further rate cuts by end of 2021. Good luck with that. pic.twitter.com/qrKJAJQ7OM — Otavio (Tavi) Costa (@TaviCosta) April 24, 2020
EuroDollar Future … like it's 2008 pic.twitter.com/q4LfYoeLpi — HowlingWolves (@HaulingWolves) April 24, 2020
Red flag in the Umich sentiment index: "prob of losing a job in the next 5 years" hit a record high of 18.9%. Expected biz conditions for next 5 yrs at a 6-yr low. Points to a rising savings rate/calls into question the narrative of future "normalized" profits not being dented. pic.twitter.com/DfKliyuMZJ — David Rosenberg (@EconguyRosie) April 24, 2020
Longer term chart of the ECRI Weekly Leading Index to help put recent moves in context. Index is freely available for download here: t.co/BYc8b2omH9 pic.twitter.com/iQknObpmOj — Lakshman Achuthan (@businesscycle) April 24, 2020
Goldman Sees Global Oil Storage Full In 3-4 Weeks; Expects Another Oil Price Crash t.co/BE468Lfz7K — FreeZerohedge (@freezerohedge) April 24, 2020
Brazilian REAL is crashing the most since 2008.. — A.Urban (@AlessioUrban) April 24, 2020
Emerging market currencies remain weak as the USD shortage intensifies. Export revenues and commodity prices collapse while the USD denominated maturity wall approaches. pic.twitter.com/OaJFyldIr1 — Daniel Lacalle (@dlacalle_IA) April 24, 2020
CORONAVIRUS UPDATE: CHINA, HARBIN CITY 10M PEOPLE ON LOCKDOWN AFTER 87-YEAR-OLD MAN TESTED POSTIVE AND INFECTED 78 PEOPLE, WITH 55 CONFIRMED — First Squawk (@FirstSquawk) April 24, 2020


investmentwatchblog--2020-04-24--“A vaccine historically is a 5 year process. You read it could be as soon as a year. That’s just ext

“ A vaccine historically is a 5 year process .
You read it could be as soon as a year @ @ @ @ @ extremely optimistic .
Not impossible , but optimistic , ” says BCG CEO Rich Lesser @ @ @ @ @ to get back to normal and why that may be further away than most think @ @

“A vaccine historically is a 5 year process. You read it could be as soon as a year. That’s just extremely optimistic. Not impossible, but optimistic,” says BCG CEO Rich Lesser on what it will take to get back to normal and why that may be further away than most think. pic.twitter.com/QGVLdQANbG
— Squawk Box (@SquawkCNBC) April 24, 2020


investmentwatchblog--2020-04-24--Watch for the ripple effects… More homeowners seeking to delay mortgage payments; Credit card compan

Watch for the ripple effects… More homeowners seeking to delay mortgage payments; Credit card companies are reducing card limits; US earnings revision ratio is back to ‘08 lvls;

Bloomberg News with some distressing news: U.S. homeowners seeking to delay mortgage payments topped 3.4 million, up 17% from a week earlier, according to Black Knight. About 6.4% of mortgage borrowers have entered forbearance — Robert Burgess (@BobOnMarkets) April 24, 2020
Credit card companies are reducing card limits to mitigate future losses from borrowers who can't pay. Since America's bubble economy has been driven by consumers spending borrowed money, if they can't charge it, they can't buy it. The Fed's house of cards is about to collapse. — Peter Schiff (@PeterSchiff) April 24, 2020
US earnings revision ratio is back to ‘08 lvls. Is the low for equities in? Don’t think so. Stocks have never bottomed w/ Consumer Conf. 18pts off cycle highs & heading for recession. Nov ‘01 was the low for US ERR; equities bottomed 16M later following an 83pt decline in conf. pic.twitter.com/1K3xbAMBJM — Julien Bittel, CFA (@BittelJulien) April 24, 2020
Small banks in US will blow up
t.co/lVwyItf7Q9 — A.Urban (@AlessioUrban) April 24, 2020
New orders for nondefense aircraft and parts was -$16.3 billion, a 296% decline. *orders include cancellations and are netted t.co/zzOgK1aPFZ — Sam Ro 📉 (@SamRo) April 24, 2020
JPMorgan is tracking US alternative data the way they were tracking China’s in January: *rush-hour commute time
* restaurant seating
* mass-transit ridership #COVID19 pic.twitter.com/8ibyT2MMP5 — Carl Quintanilla (@carlquintanilla) April 23, 2020
DEUTSCHE: “Looking at jobless claims numbers over the past five weeks shows dramatic differences between unemployment rates across the country with some states at 6% and other states at 25%.” pic.twitter.com/k5eREwshT1 — Carl Quintanilla (@carlquintanilla) April 24, 2020
GOOGLE TO CUT MARKETING BUDGET IN HALF, FREEZE HIRING – CNBC — FXHedge (@Fxhedgers) April 23, 2020
CORONAVIRUS UPDATE: CHINA, HARBIN CITY 10M PEOPLE ON LOCKDOWN AFTER 87-YEAR-OLD MAN TESTED POSTIVE AND INFECTED 78 PEOPLE, WITH 55 CONFIRMED — First Squawk (@FirstSquawk) April 24, 2020


investmentwatchblog--2020-04-24--U.S. Gasoline & Jet Fuel Days Of Supply Explode To Record Highs As Demand Collapses

Unfortunately , for the already vulnerable U.S. Energy Market , the worst is still yet to come .
As one energy analyst forecasted , we may see a negative $ 100 for oil a barrel of oil .
While this may sound totally insane , domestic oil producers still haven ’ t cut anywhere near the amount necessary .
As the U.S. Shale Oil Industry continues to pump more than 7+ million barrels per day ( mbd ) of oil , the availability of storage capacity dwindles considerably each passing day .
And with the 50 million barrels of oil @ @ @ @ @ @ @ States , the energy situation will go from BAD to WORSE and then to ABSOLUTELY HORRIBLE .
I hate to be so pessimistic , but the data doesn ’ t lie .
If we take a look at two U.S. petroleum stock indicators , we are already firmly entrenched in the WORSE category .
According to the EIA , U.S. Energy Information Agency , weekly U.S. Daily Gasoline stocks are the highest in recorded history .
As of the EIA ’ s lasted update posted yesterday , total U.S. Daily Gasoline stocks surged @ @ @ @ @ @ @ three-year average of 25.1 days : In just the past few weeks , U.S. gasoline stocks have added 22.5 days worth of inventory .
The major factor pushing the days of gasoline supply higher is the collapse in demand .
Here are the weekly change in U.S. Daily Gasoline stocks : You will notice that U.S .
Gasoline stocks are increasing about 6-7 days worth of supply each week .
And what about Jet Fuel stocks ?
?
With 96 % of U.S .
Airline traffic offline , jet fuel consumption has totally @ @ @ @ @ @ @ are now at a stunning 51.5 days of supply vs. the three-year average of 25.2 days : In just the past few weeks , U.S. jet fuel stocks have doubled by an additional 26.3 days worth of inventory .
Here are the weekly change in U.S. Days of Jet Fuel stocks : Jet fuel inventories are added about ten days of supply each week .
Soon , the U.S. Refinery Industry will be forced to cut back considerably on the refining of these petroleum products .
Again , the major reason for surging @ @ @ @ @ @ @ has to do with the collapse in daily demand .
However , I don ’ t see the demand for jet fuel increasing significantly anytime soon .
Furthermore , what will the U.S .
Refining Industry do if it must provide gasoline products , but it no longer needs any jet fuel products as the inventories are at full capacity ?
?
This will be a major challenge for the U.S .
Refining Industry .
Lastly , while the U.S. WTIC oil price has experienced a nice rally today to a high of @ @ @ @ @ @ @ USED TO IT .
The fundamentals for the U.S. Energy Market will go from WORSE to ABSOLUTELY HORRIBLE before any recovery can occur .
THANK YOU ALL FOR THE SUPPORT : I just wanted to thank all the individuals who continue to support the SRSrocco Report website and youtube channel .
I know some of you have canceled memberships as times are tough .
I totally understand .
If you are new to the site and find the information valuable , please consider supporting the website , if you have the means to @ @ @ @ @ @ @ below .

by Steve St Angelo of SRSrocco Report
Unfortunately, for the already vulnerable U.S. Energy Market, the worst is still yet to come. As one energy analyst forecasted, we may see a negative $100 for oil a barrel of oil. While this may sound totally insane, domestic oil producers still haven’t cut anywhere near the amount necessary.
As the U.S. Shale Oil Industry continues to pump more than 7+ million barrels per day (mbd) of oil, the availability of storage capacity dwindles considerably each passing day. And with the 50 million barrels of oil from Saudi Arabia heading to the United States, the energy situation will go from BAD to WORSE and then to ABSOLUTELY HORRIBLE.
I hate to be so pessimistic, but the data doesn’t lie. If we take a look at two U.S. petroleum stock indicators, we are already firmly entrenched in the WORSE category.
According to the EIA, U.S. Energy Information Agency, weekly U.S. Daily Gasoline stocks are the highest in recorded history. As of the EIA’s lasted update posted yesterday, total U.S. Daily Gasoline stocks surged to 47.6 days, up from the three-year average of 25.1 days:
In just the past few weeks, U.S. gasoline stocks have added 22.5 days worth of inventory. The major factor pushing the days of gasoline supply higher is the collapse in demand. Here are the weekly change in U.S. Daily Gasoline stocks:
Days of U.S. Gasoline Stocks
April 3rd = 34.0 days
April 10th = 40.9 days
April 17th = 47.6 days
You will notice that U.S. Gasoline stocks are increasing about 6-7 days worth of supply each week.
We are primarily funded by readers. Please subscribe and donate to support us!
And what about Jet Fuel stocks?? With 96% of U.S. Airline traffic offline, jet fuel consumption has totally collapsed. The U.S. Jet Fuel stocks are now at a stunning 51.5 days of supply vs. the three-year average of 25.2 days:
In just the past few weeks, U.S. jet fuel stocks have doubled by an additional 26.3 days worth of inventory. Here are the weekly change in U.S. Days of Jet Fuel stocks:
Days of U.S. Jet Fuel Stocks
April 3rd = 29.4 days
April 10th = 40.1 days
April 17th = 51.5 days
Jet fuel inventories are added about ten days of supply each week. Soon, the U.S. Refinery Industry will be forced to cut back considerably on the refining of these petroleum products.
Again, the major reason for surging gasoline and jet fuel days of supply has to do with the collapse in daily demand. However, I don’t see the demand for jet fuel increasing significantly anytime soon.
Furthermore, what will the U.S. Refining Industry do if it must provide gasoline products, but it no longer needs any jet fuel products as the inventories are at full capacity?? This will be a major challenge for the U.S. Refining Industry.
Lastly, while the U.S. WTIC oil price has experienced a nice rally today to a high of $18, DON’T GET USED TO IT. The fundamentals for the U.S. Energy Market will go from WORSE to ABSOLUTELY HORRIBLE before any recovery can occur.
THANK YOU ALL FOR THE SUPPORT: I just wanted to thank all the individuals who continue to support the SRSrocco Report website and youtube channel. I know some of you have canceled memberships as times are tough. I totally understand. If you are new to the site and find the information valuable, please consider supporting the website, if you have the means to do so, at Paypal or Patreon below.


investmentwatchblog--2020-04-24--Pandemic And Economic Collapse: The Next 60 Days

The news cycle moves so quickly these days writing analysis on current events becomes difficult ; the moment you publish an examination of the situation people have already moved on to the next disaster .
So , today I ’ m not going to do that .
Instead , let ’ s look at current trends and project what is likely to happen in the next couple of months .
In my article ‘ How The Pandemic Crisis Will Probably Develop Over The Next Year ’ published in early March , I outlined what I believed would be the major @ @ @ @ @ @ @ of these predictions have already occurred .
Now I would like to tackle a shorter timetable and focus more specifically on the economic side of things , along with the effects of government lockdowns and how they will continue .
Yes , that ’ s right , if you think the “ reopening ” of the economy is going to be widespread , or that it will last , don ’ t get your hopes up .
I am using a 60 day model because I have observed that the average non-aware person @ @ @ @ @ @ @ those of us in the liberty movement in terms of seeing the dangers ahead .
First and foremost , the lockdown issue is on almost everyone ’ s mind , and as I ’ ve been saying for the past month , it would not take long before people start freaking out about their financial prospects once they realize this thing may not be over “ in two weeks ” as we keep hearing every two weeks from the mainstream media , state governments and Donald Trump .
The “ two weeks until @ @ @ @ @ @ @ the public placated and docile , and the establishment will continue to use it until people are finally fed up , which is already beginning to happen .
Lockdown protests are sparking up across the country and it ’ s only going to get worse from now on .
Understand though that establishment elites probably expected this , especially in the US , and they are planning to use civil unrest to their advantage .
Do not be surprised if some areas of the country do indeed “ reopen ” next month , @ @ @ @ @ @ @ rural .
Do NOT count on first and second tier cities to reopen , at least nowhere near the activity that they had previous to the viral outbreak .
In fact , while rural towns try to go back to normalcy , many major cities will probably double down and increase restrictions rather than loosen them .
Why do I think this will happen ?
I ’ ve noticed an odd narrative being pushed in the mainstream media lately that has me concerned .
The MSM is aggressively promoting the notion that rural @ @ @ @ @ @ @ crushed by the coronavirus , and looser restrictions in these places are “ a danger to everyone ” .
Now , if you read between the lines in this propaganda , what I see is not the media reporting on what is happening now , but what they expect to happen soon .
In my area of Montana there is no community spread of the virus , and this is common to many parts of rural America .
However , what if rural towns reopen while large metropolitan areas remain closed for business @ @ @ @ @ @ @ expect a FLOOD of city dwellers to pour into rural areas looking for a taste of freedom and some open bars and restaurants .
If your small town is within 1-2 hours drive of a large city , get ready for a parade of yuppies on mainstreet looking for a vacation from lockdown .
This in itself is not a big deal .
If people want to drive from the city to spend money in small town America then that ’ s a benefit to struggling rural communities ( and a bizarre 180 @ @ @ @ @ @ @ But here is what I think will happen next : After about two weeks of reopening , small towns across the US will have a massive spike in infection numbers and community spread .
Viral clusters will develop and some people will die .
Does this mean our economy should be frozen to the point of collapse or that medical martial law is the answer ?
No , absolutely not .
But the media is already gearing up for the big “ we told you so ” , and as rural infections skyrocket @ @ @ @ @ @ @ start calling for renewed lockdowns even more harsh than before .
The rest of the world will say “ that ’ s what those Americans ( conservative Americans ) get for being selfish and trying to reopen too soon ” .
The economy can not be opened one piece at a time , it has to be opened all at once .
Otherwise , you are going to get a huge influx of people to reopened regions and an inordinate amount of infection cases will follow in those areas , exaggerating the spread @ @ @ @ @ @ @ a full reopening of the nation is not going to happen .
Get ready for a great big fake wrestling match between state governments and Trump in terms of how to handle ending lockdowns .
Take note though that Trump flip-flops so much on state power vs. executive power that no one actually knows where he really stands on the issue ; this is by design .
We hear a lot of complaints about the World Health Organization and China hiding or suppressing information on the coronavirus and the extent of the danger @ @ @ @ @ @ @ downplaying the pandemic in the EXACT same way in January , claiming that Chinese data was trustworthy and that the virus was under control .
This past week Trump seems to be taking the WHO and China to task , but is any of this real ?
Trump ’ s persona is meant to be ambiguous and chameleon-like , so that he can be presented as all things to all people .
For the political left he ’ s a boogeyman , a bumbling conservative villain and statist that is destroying the country @ @ @ @ @ @ @ drive them even more insane than they already are .
For some on the political right , Trump is a savior , or a martyr .
They place him on a pedestal so high that he can do no wrong and some even believe he is actually fighting a “ secret war ” with the elites using subversive tactics despite the fact that half of his cabinet is made up of banking and Council on Foreign Relations alumni .
This absurdity has divided the liberty movement into different camps – Those who realize @ @ @ @ @ @ @ who treat him like a 4D chess playing god .
I fully expect Trump to flip-flop again in the next two months .
For now , he is acting like a champion of the people defending lockdown protesters and pushing for a quick reopen .
After the next wave of infections and deaths occur , do not be caught off guard if he suddenly calls for stringent lockdown procedures .
Economically , new lockdowns after a short reopen will devastate small businesses that are clamoring for oxygen already .
The much vaunted small @ @ @ @ @ @ @ and it burned up in less than a week .
Another stimulus is on the table , but it is being contested .
If another bailout is passed it will vanish yet again with most small businesses still not receiving a dime .
Bottom line : Too-big-to-fail corporations are going to get their money , and small businesses will get little or none after the next 60 days .
This means that 50 % of the jobs in the country are now on the chopping block , and most of them will not @ @ @ @ @ @ @ the ropes with razor thin margins and extensive debt obligations .
The economy is dead on arrival , the pin to the grenade has already been pulled , the majority of Americans simply don ’ t realize it yet .
In terms of individual government aid , some laid off employees are sitting pretty , though , at least for a little while .
The stimulus measures are beginning to reach the newly jobless on top of their normal unemployment benefits , so even if businesses reopen , they may have a hard @ @ @ @ @ @ @ .
You can make more money from government checks right now than you can working full time at almost any service based business while also avoiding “ the Rona ” .
But what these people don ’ t realize is that this windfall is going to dissipate quickly .
Other recently unemployed people are still waiting for their checks , showing the government response to be uneven .
Stimulus is drying up fast and everyone and their mother has a hand out to get theirs , with corporations being the biggest drain .
@ @ @ @ @ @ @ disappeared in under a week should tell you what is about to happen with individual stimulus measures .
But beyond this problem is the unspoken issue of supply chain disruptions and inflation .
What good is your government check if 90 % of the stores are shut down , 50 % of the items you want to buy are considered “ non-essential ” and restricted , and the items you are allowed to buy are skyrocketing in price ?
The common American is being set up for a shock they are not prepared @ @ @ @ @ @ @ ( Universal Basic Income ) are barely going to keep them alive , let alone grant them months of paid leisure .
I think the awareness of this will hit the general public in around 60 days .
To reiterate , the supply chain breakdown will go mainstream in a couple months .
The stores are sparse right now ; they are stretching inventory to fill gaps in shelves and limiting purchases on a long list of items to one per customer , but they aren ’ t in crisis mode yet .
@ @ @ @ @ @ @ shutting down as well as farms having trouble hiring workers to process produce and other goods , there is no doubt food shortages are going to become a problem that the mainstream will no longer be able to ignore .
The lockdowns caused an initial drop in some prices due to closed restaurants and oversupply , but this is soon to end as supply is about to be destroyed because of lack of production .
Economic collapse rarely if ever leads to advantages for consumers ; this is a fallacy from the depression @ @ @ @ @ @ @ perpetuated by uneducated economists today .
The name for this type of event is a “ stagflationary crisis ” and it is something I have been warning about for years .
It means price inflation in necessities while deflation occurs in wages , many assets and some commodities .
The oil market is an indicator of these mechanics in action .
As oil plunges , the public gets cheap gasoline , but the price collapse also represents a collapse in global energy demand , and thus a collapse in production .
A collapse @ @ @ @ @ @ @ and thus higher prices , and the cycle continues until everything breaks and the populace is reduced to one of two choices – poverty or self sufficiency .
The extent of the crisis will become much more clear in the next two months to the majority .
The result will be civil unrest in the summer , likely followed by extreme poverty levels in the winter .
No measure of “ reopening ” is going to do much to stop the avalanche that has already been started .
The solution is always the @ @ @ @ @ @ @ removing yourself and your community from dependency on the establishment controlled economy .
It ’ s certainly difficult , but it is possible .
What is not possible is fixing the broken and corrupt economy we have now or stopping the current collapse .
This is a fool ’ s errand for people living in unicorn land .

by Brandon Smith
The news cycle moves so quickly these days writing analysis on current events becomes difficult; the moment you publish an examination of the situation people have already moved on to the next disaster. So, today I’m not going to do that. Instead, let’s look at current trends and project what is likely to happen in the next couple of months. In my article ‘How The Pandemic Crisis Will Probably Develop Over The Next Year’ published in early March, I outlined what I believed would be the major developments on a longer timetable. Some of these predictions have already occurred.
Now I would like to tackle a shorter timetable and focus more specifically on the economic side of things, along with the effects of government lockdowns and how they will continue. Yes, that’s right, if you think the “reopening” of the economy is going to be widespread, or that it will last, don’t get your hopes up. I am using a 60 day model because I have observed that the average non-aware person appears to be about two months behind those of us in the liberty movement in terms of seeing the dangers ahead.
First and foremost, the lockdown issue is on almost everyone’s mind, and as I’ve been saying for the past month, it would not take long before people start freaking out about their financial prospects once they realize this thing may not be over “in two weeks” as we keep hearing every two weeks from the mainstream media, state governments and Donald Trump. The “two weeks until reopen” mantra is designed to keep the public placated and docile, and the establishment will continue to use it until people are finally fed up, which is already beginning to happen.
Lockdown protests are sparking up across the country and it’s only going to get worse from now on. Understand though that establishment elites probably expected this, especially in the US, and they are planning to use civil unrest to their advantage.
Do not be surprised if some areas of the country do indeed “reopen” next month, but expect these locations to be primarily rural. Do NOT count on first and second tier cities to reopen, at least nowhere near the activity that they had previous to the viral outbreak. In fact, while rural towns try to go back to normalcy, many major cities will probably double down and increase restrictions rather than loosen them.
Why do I think this will happen? I’ve noticed an odd narrative being pushed in the mainstream media lately that has me concerned. The MSM is aggressively promoting the notion that rural states and counties are about to be crushed by the coronavirus, and looser restrictions in these places are “a danger to everyone”.
Now, if you read between the lines in this propaganda, what I see is not the media reporting on what is happening now, but what they expect to happen soon. In my area of Montana there is no community spread of the virus, and this is common to many parts of rural America. However, what if rural towns reopen while large metropolitan areas remain closed for business? Unless travel restrictions are instituted, expect a FLOOD of city dwellers to pour into rural areas looking for a taste of freedom and some open bars and restaurants.
If your small town is within 1-2 hours drive of a large city, get ready for a parade of yuppies on mainstreet looking for a vacation from lockdown.
This in itself is not a big deal. If people want to drive from the city to spend money in small town America then that’s a benefit to struggling rural communities (and a bizarre 180 degree shift from the norm). But here is what I think will happen next:
After about two weeks of reopening, small towns across the US will have a massive spike in infection numbers and community spread. Viral clusters will develop and some people will die. Does this mean our economy should be frozen to the point of collapse or that medical martial law is the answer? No, absolutely not. But the media is already gearing up for the big “we told you so”, and as rural infections skyrocket state governments and the federal government will start calling for renewed lockdowns even more harsh than before. The rest of the world will say “that’s what those Americans (conservative Americans) get for being selfish and trying to reopen too soon”.
The economy cannot be opened one piece at a time, it has to be opened all at once. Otherwise, you are going to get a huge influx of people to reopened regions and an inordinate amount of infection cases will follow in those areas, exaggerating the spread of the virus. Of course, a full reopening of the nation is not going to happen.
Get ready for a great big fake wrestling match between state governments and Trump in terms of how to handle ending lockdowns. Take note though that Trump flip-flops so much on state power vs. executive power that no one actually knows where he really stands on the issue; this is by design.
We hear a lot of complaints about the World Health Organization and China hiding or suppressing information on the coronavirus and the extent of the danger to the public. Yet Trump was downplaying the pandemic in the EXACT same way in January, claiming that Chinese data was trustworthy and that the virus was under control. This past week Trump seems to be taking the WHO and China to task, but is any of this real?
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Trump’s persona is meant to be ambiguous and chameleon-like, so that he can be presented as all things to all people. For the political left he’s a boogeyman, a bumbling conservative villain and statist that is destroying the country; he acts as a catalyst to drive them even more insane than they already are. For some on the political right, Trump is a savior, or a martyr. They place him on a pedestal so high that he can do no wrong and some even believe he is actually fighting a “secret war” with the elites using subversive tactics despite the fact that half of his cabinet is made up of banking and Council on Foreign Relations alumni.
This absurdity has divided the liberty movement into different camps – Those who realize Trump is a fraud, and those who treat him like a 4D chess playing god.
I fully expect Trump to flip-flop again in the next two months. For now, he is acting like a champion of the people defending lockdown protesters and pushing for a quick reopen. After the next wave of infections and deaths occur, do not be caught off guard if he suddenly calls for stringent lockdown procedures.
Economically, new lockdowns after a short reopen will devastate small businesses that are clamoring for oxygen already. The much vaunted small business stimulus package was a dud, and it burned up in less than a week. Another stimulus is on the table, but it is being contested. If another bailout is passed it will vanish yet again with most small businesses still not receiving a dime. Bottom line: Too-big-to-fail corporations are going to get their money, and small businesses will get little or none after the next 60 days. This means that 50% of the jobs in the country are now on the chopping block, and most of them will not return because these businesses were already on the ropes with razor thin margins and extensive debt obligations.
The economy is dead on arrival, the pin to the grenade has already been pulled, the majority of Americans simply don’t realize it yet.
In terms of individual government aid, some laid off employees are sitting pretty, though, at least for a little while. The stimulus measures are beginning to reach the newly jobless on top of their normal unemployment benefits, so even if businesses reopen, they may have a hard time finding people to work for them. You can make more money from government checks right now than you can working full time at almost any service based business while also avoiding “the Rona”. But what these people don’t realize is that this windfall is going to dissipate quickly.
Other recently unemployed people are still waiting for their checks, showing the government response to be uneven.
Stimulus is drying up fast and everyone and their mother has a hand out to get theirs, with corporations being the biggest drain. The fact that the small business stimulus disappeared in under a week should tell you what is about to happen with individual stimulus measures. But beyond this problem is the unspoken issue of supply chain disruptions and inflation.
What good is your government check if 90% of the stores are shut down, 50% of the items you want to buy are considered “non-essential”and restricted, and the items you are allowed to buy are skyrocketing in price? The common American is being set up for a shock they are not prepared for when they realize that government checks (Universal Basic Income) are barely going to keep them alive, let alone grant them months of paid leisure. I think the awareness of this will hit the general public in around 60 days.
To reiterate, the supply chain breakdown will go mainstream in a couple months. The stores are sparse right now; they are stretching inventory to fill gaps in shelves and limiting purchases on a long list of items to one per customer, but they aren’t in crisis mode yet. With the biggest producers of meat products shutting down as well as farms having trouble hiring workers to process produce and other goods, there is no doubt food shortages are going to become a problem that the mainstream will no longer be able to ignore.
The lockdowns caused an initial drop in some prices due to closed restaurants and oversupply, but this is soon to end as supply is about to be destroyed because of lack of production. Economic collapse rarely if ever leads to advantages for consumers; this is a fallacy from the depression era which for some reason is still perpetuated by uneducated economists today.
The name for this type of event is a “stagflationary crisis” and it is something I have been warning about for years. It means price inflation in necessities while deflation occurs in wages, many assets and some commodities. The oil market is an indicator of these mechanics in action. As oil plunges, the public gets cheap gasoline, but the price collapse also represents a collapse in global energy demand, and thus a collapse in production. A collapse in production leads to less supply, and thus higher prices, and the cycle continues until everything breaks and the populace is reduced to one of two choices – poverty or self sufficiency.
The extent of the crisis will become much more clear in the next two months to the majority. The result will be civil unrest in the summer, likely followed by extreme poverty levels in the winter. No measure of “reopening” is going to do much to stop the avalanche that has already been started. The solution is always the same: localized trade and production and removing yourself and your community from dependency on the establishment controlled economy. It’s certainly difficult, but it is possible. What is not possible is fixing the broken and corrupt economy we have now or stopping the current collapse. This is a fool’s errand for people living in unicorn land.


investmentwatchblog--2020-04-24--Will The Fed Bail Out Struggling U.S. Oil Companies?

The Department of Treasury may set up a lending fund for oil companies , Secretary Steven Mnuchin told Bloomberg this week , adding that there was nothing final yet .
“ One of the components we ’ re looking at is providing a lending facility for the industry , ” Mnuchin said .
“ We ’ re looking at a lot of different options , and we have not made any conclusions.
” Besides direct loans—which the Federal Reserve would implement—the federal government may also buy stakes in some oil companies in addition to providing loans .
It could also @ @ @ @ @ @ @ according to a Bloomberg source .
The larger oil companies that hold an investment-grade rating would either have to fend for themselves on the debt market or take advantage of the loan program that the Fed has set up for small businesses , even if they are not exactly small businesses .
The actual small businesses , in the meantime , are asking the Fed to adjust the rules of the loan program to allow them to use the funds to pay off existing debt .
Investment-grade companies have options .
In addition @ @ @ @ @ @ @ , they can take part in the Fed ’ s bond-buying program .
Those with lower ratings , however , would need other options that the Treasury is considering in discussions with banks , Mnuchin told Bloomberg .
He added that the Fed lending to such higher-risk companies was not an option .
As Bloomberg notes , however , the oil price crash has seen many previously investment-grade companies suffer downgrades by rating agencies .
The position of even some of the largest players in the U.S. shale patch , such as Occidental @ @ @ @ @ @ @ of financial aid .
Exxon has also been downgraded , and while not in junk territory , Moody ’ s has warned that further downgrades were on the way lest the company changed its financial plans .

By Irina Slav
The Department of Treasury may set up a lending fund for oil companies, Secretary Steven Mnuchin told Bloomberg this week, adding that there was nothing final yet.
“One of the components we’re looking at is providing a lending facility for the industry,” Mnuchin said. “We’re looking at a lot of different options, and we have not made any conclusions.”
Besides direct loans—which the Federal Reserve would implement—the federal government may also buy stakes in some oil companies in addition to providing loans. It could also ask these companies to reduce production, according to a Bloomberg source.
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The larger oil companies that hold an investment-grade rating would either have to fend for themselves on the debt market or take advantage of the loan program that the Fed has set up for small businesses, even if they are not exactly small businesses. The actual small businesses, in the meantime, are asking the Fed to adjust the rules of the loan program to allow them to use the funds to pay off existing debt.
Investment-grade companies have options. In addition to the main street business loan program, they can take part in the Fed’s bond-buying program. Those with lower ratings, however, would need other options that the Treasury is considering in discussions with banks, Mnuchin told Bloomberg. He added that the Fed lending to such higher-risk companies was not an option.
As Bloomberg notes, however, the oil price crash has seen many previously investment-grade companies suffer downgrades by rating agencies. The position of even some of the largest players in the U.S. shale patch, such as Occidental, is now more precarious in terms of financial aid. Exxon has also been downgraded, and while not in junk territory, Moody’s has warned that further downgrades were on the way lest the company changed its financial plans.
By Irina Slav for Oilprice.com


investmentwatchblog--2020-04-24--How many US Dollars are enough?

How many US Dollars are enough?

The issue of what you might call King Dollar is not one which gets the coverage it deserves .
Instead the media coverage tends to highlight claims that its period of rule is on the way out with China demanding more use of the Yuan or Russia the rouble and so on .
Or we get the various proclamations that we need some sort of world currency which to my mind are more like pie in the sky thinking than blue sky thinking .
When we looked at the IMF on the I noted the suggestions that its SDRs ( @ @ @ @ @ @ @ world currency but there are all sorts of flaws there .
If we look at the issues of the Euro can anybody even imagine trying to apply a fixed exchange-rate to the whole world ?
We would have all sorts of individual booms and busts before we even get to the idea of a joint interest-rate .
That is before we get to the track record of the IMF after all can you imagine trying to get its currency accepted in Argentina and Greece .
It is not as if the taps have @ @ @ @ @ @ @ see the balance sheet is expanding at a rapid rate and let me just add that if you really think the US Federal Reserve is buying US Treasury Bonds to “ restore functioning to this key U.S. financial market.
” I have a London bridge to sell you .
The truth is that it is implicitly financing the US Budget Deficit as we note that the ten-year yield is a mere 0.58 % and the long bond is a mere 1.17 % in spite of surging expenditure .
We can now switch to @ @ @ @ @ @ @ we have noted in the past that QE does not go straight into the numbers as one might assume .
Looking at the ECB data has shown that what should be clear cut narrow money creation seems to sometimes go missing in action .
However we are seeing quite a surge in the money supply as we note that the narrow money measure ( M1 ) only went through US $ 4 trillion as March began but by the 13th of April was already US $ 4.73 trillion .
Putting that another way @ @ @ @ @ @ @ % the annualised six-monthly one is 15.7 % and the quarterly one is 23.4 % .
You can see which way that is going and I would point out that only a month or so ago 11.6 % would be considered very high .
Peering into the detail we see that the surge in narrow money is mostly deposits , There has been a rise in cold hard cash , dirty money as Stevie V would say but deposits have risen by around US $ 700 billion over the past couple of months @ @ @ @ @ @ @ throughout the credit crunch and NPR seem to have caught up with .
The numbers here have ballooned and are the missing link so to speak in the balance sheet data above .
As of last night some US $ 432.3 billion have been supplied to foreign central banks .
I will let that sink in and then point out that it means banks in those countries or regions either can not get US Dollars at all or can only get them at an interest-rate which challenges their solvency .
As to the @ @ @ @ @ @ @ be mainly from the following too although not always in this order .
Bank of Japan US $ 215 billion and the ECB $ 142 billion .
Particularly troubling from the Japanese point of view is that as well as being the leader of the pack they are needing ever more .
When we note that the Bank of England has only asked for US $ 27.3 billion which is low when you look at the size of the UK ’ s banks we see the Bank of Japan needed another US $ @ @ @ @ @ @ @ note is that the Norges Bank requested some US $ 3.6 billion for 84 days yesterday .
So the heat is on for at least one Norwegian bank .
Also the extension of the swaps to Emerging Markets as requested by @ trinhonomics has been used .
The Bank of Korea has taken US $ 16.6 billion , the Bank of Mexico some US $ 6.6 billion and the Monetary Authority of Singapore some US $ 5.9 billion .
In spite of the balance sheet rises and the effort to become in effect @ @ @ @ @ @ @ supplying US Dollars the exchange rate remains firm .
We can look at it in terms of the broad index being 123.2 as opposed to the 114.7 it ended 2019 or simply that it was set at 100 in 2006 .
There are plenty of influences here but one thing we can be sure of is that the US Dollar is in demand .
Let me give you some examples .
We have looked at India before and back then going through 70 seemed significant .
As to Kenya an interest-rate of 7.25 @ @ @ @ @ @ @ ?
Then we have Brazil showing how the Dollar has impacted South America .
So economics 101 is having another bad phase because a massively increased supply is not pushing the price down .
In come respects it may even be creating more demand because if you know there is a ready supply then you may then use it more .
Ouch !
After all the much lower oil price should be reducing the demand for US Dollars and indeed the negative price such as it applied should be depth-charging it .

by Shaun Richards
The issue of what you might call King Dollar is not one which gets the coverage it deserves. Instead the media coverage tends to highlight claims that its period of rule is on the way out with China demanding more use of the Yuan or Russia the rouble and so on. Or we get the various proclamations that we need some sort of world currency which to my mind are more like pie in the sky thinking than blue sky thinking. When we looked at the IMF on the I noted the suggestions that its SDRs ( Special Drawing Rights) could become the world currency but there are all sorts of flaws there.
So far SDR 204.2 billion (equivalent to about US$281 billion) have been allocated to members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis. The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
If we look at the issues of the Euro can anybody even imagine trying to apply a fixed exchange-rate to the whole world? We would have all sorts of individual booms and busts before we even get to the idea of a joint interest-rate. That is before we get to the track record of the IMF after all can you imagine trying to get its currency accepted in Argentina and Greece.
Supply of US Dollars
It is not as if the taps have been turned off.
The numbers: The Federal Reserve’s balance sheet expanded to a record $6.6 trillion in the week ended April 22, an increase of $205 billion from the prior week, the central bank said Thursday. What happened: Holdings of U.S. Treasurys rose by $120.5 billion to $3.9 trillion. The central bank has been purchasing Treasurys at a rapid pace in a bid to restore functioning to this key U.S. financial market. The central bank’s holdings of mortgage-backed securities rose $54 billion to $1.6 trillion. ( MarketWatch)
As you can see the balance sheet is expanding at a rapid rate and let me just add that if you really think the US Federal Reserve is buying US Treasury Bonds to “restore functioning to this key U.S. financial market.” I have a London bridge to sell you. The truth is that it is implicitly financing the US Budget Deficit as we note that the ten-year yield is a mere 0.58% and the long bond is a mere 1.17% in spite of surging expenditure.
We can now switch to the money supply for further insight because we have noted in the past that QE does not go straight into the numbers as one might assume. Looking at the ECB data has shown that what should be clear cut narrow money creation seems to sometimes go missing in action. However we are seeing quite a surge in the money supply as we note that the narrow money measure ( M1) only went through US $4 trillion as March began but by the 13th of April was already US $4.73 trillion.
I’ll be back in the high life again
All the doors I closed one time will open up again
I’ll be back in the high life again
All the eyes that watched me once will smile and take me in ( Steve Winwood )
Putting that another way the annual rate of increase is 11.6% the annualised six-monthly one is 15.7% and the quarterly one is 23.4%. You can see which way that is going and I would point out that only a month or so ago 11.6% would be considered very high.
Peering into the detail we see that the surge in narrow money is mostly deposits, There has been a rise in cold hard cash, dirty money as Stevie V would say but deposits have risen by around US $700 billion over the past couple of months.
Sending Dollars To Friends Abroad
This a subject I have covered throughout the credit crunch and NPR seem to have caught up with.
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As the global economy shuts down, the U.S. Federal Reserve has begun sending billions of dollars to central banks all over the world. Last month, it opened up 14 “swap lines” to nations such as Australia, Japan, Mexico, and Norway. A “swap line” is like an emergency pipeline of dollars to countries that need them. The dollars are “swapped,” i.e., traded for the other country’s currency.
The numbers here have ballooned and are the missing link so to speak in the balance sheet data above. As of last night some US $432.3 billion have been supplied to foreign central banks. I will let that sink in and then point out that it means banks in those countries or regions either cannot get US Dollars at all or can only get them at an interest-rate which challenges their solvency.
As to the demand then we always expected it to be mainly from the following too although not always in this order. Bank of Japan US $215 billion and the ECB $142 billion. Particularly troubling from the Japanese point of view is that as well as being the leader of the pack they are needing ever more. When we note that the Bank of England has only asked for US $27.3 billion which is low when you look at the size of the UK’s banks we see the Bank of Japan needed another US $19 billion overnight.
One factor of note is that the Norges Bank requested some US $3.6 billion for 84 days yesterday. So the heat is on for at least one Norwegian bank.
Also the extension of the swaps to Emerging Markets as requested by @trinhonomics has been used. The Bank of Korea has taken US $16.6 billion, the Bank of Mexico some US $6.6 billion and the Monetary Authority of Singapore some US $5.9 billion.
Exchange Rate
In spite of the balance sheet rises and the effort to become in effect the world’s central bank by supplying US Dollars the exchange rate remains firm. We can look at it in terms of the broad index being 123.2 as opposed to the 114.7 it ended 2019 or simply that it was set at 100 in 2006.
Comment
There are plenty of influences here but one thing we can be sure of is that the US Dollar is in demand. Let me give you some examples.
Kenya shilling hits a new all-time low of 107.6500 against the US dollar according to data from @business
Rupee falls to all-time low of 76.87 against US dollar in early trade ( Press Trust of India from Wednesday)
At the start of the year, $1 bought you 4.00 Brazilian reals. It now buys you 5.53 reais. That’s a 38% rise for the dollar (27% fall for the real) in less than four months. ( @ReutersJamie )
We have looked at India before and back then going through 70 seemed significant. As to Kenya an interest-rate of 7.25% is not helping much is it? Then we have Brazil showing how the Dollar has impacted South America.
So economics 101 is having another bad phase because a massively increased supply is not pushing the price down. In come respects it may even be creating more demand because if you know there is a ready supply then you may then use it more. Ouch! After all the much lower oil price should be reducing the demand for US Dollars and indeed the negative price such as it applied should be depth-charging it.
Once I built a tower up to the sun
Brick and rivet and lime
Once I built a tower, now it’s done
Brother, can you spare a dime? ( Bing Crosby )