investmentwatchblog--2020-06-02--Rents in the Most Expensive Cities Drop. Oil Patch Gets Hit Too. But Massive Gains in Other Cities

Are the Work-from-Home-Folks Moving to Cheaper Pastures ?
In the most expensive rental markets in the US , rents are declining , and did so even in May which normally is a fairly strong month for rents .
And there may be some reasons .
Zumper in its June rent report : An anecdote in support of this theory fell into my lap the other day when I was talking with a guy from Google ’ s ad sales division who wanted to get me excited about spending money on Google ads .
In the call , he said that @ @ @ @ @ @ @ most Googlers , and that he ’ d moved from the San Francisco Bay Area back to St. Louis , now that he doesn ’ t need to be near the office in Redwood City .
He wasn ’ t alone apparently , and landlords with vacancies are adjusting by cutting their asking rents .
San Francisco remains the most expensive rental market in the US – though there are zip codes in Manhattan and Los Angeles that are even more expensive than the most expensive zip code in San Francisco .
But @ @ @ @ @ @ @ was .
In May , the median asking rent for a one-bedroom apartment in San Francisco dropped 2.6 % from April , to $ 3,360 , according to Zumper data .
This produced a 9.2 % drop from May last year , its largest year-over-year drop in the data that took it back the March 2017 .
Peak rent in San Francisco had been in October 2015 .
1-BR rents had edged past that in June 2019 by $ 50 for just one month , but have since dropped 9.7 % .
San @ @ @ @ @ @ @ never got back to their peak in October 2015 ( $ 5,000 ) : In May , it fell 1.8 % from April , to $ 4,420 , is down 6.4 % year-over-year , and down 11.6 % from the peak in October 2015 .
The data is collected by Zumper from over 1 million active listings , including Multiple Listings Service ( MLS ) , of apartments-for-rent in apartment buildings , including new construction , in the 100 largest markets .
Not included are single-family houses , condos for rent , rooms @ @ @ @ @ @ @ three or more bedrooms .
“ Median ” means half the advertised rents are higher , and half are lower .
“ Asking rent ” – the advertised rent – is a measure of the current market .
It is not a measure of rents long-term tenants have been paying .
That rents can drop for years in San Francisco , despite the widely held belief that rents never drop , is shown in the long-term chart of emailed by Patrick Carlisle , Chief Market Analyst San Francisco Bay Area , at Compass @ @ @ @ @ @ @ annual asking rents in apartment buildings fell 25 % from the peak in 2001 to the bottom in 2004 .
It took till 2012 before it surpassed by a visible margin the 2001 level .
Note the 5 % dip of the average annual asking rent following the Financial Crisis , and the 8 % dip from Q1 2016 ( this chart does not show Q4 2015 when the actual peak occurred ) , before the “ Trump bump ” kicked in .
Q1 2020 was still below Q1 2016 , and so @ @ @ @ @ @ @ further : In Los Angeles , in San Diego , in New York City , and other expensive rental markets , rents also dropped in May from April .
This has added to the weakness in those rental markets .
The table below shows the 16 most expensive major rental markets in the US by median asking rents .
The shaded area shows their respective peaks and changes from those peaks , which has turned into a sea of red ink .
Chicago and Honolulu are on top of that group , with @ @ @ @ @ @ @ apartments and of over 30 % for 2-BR apartments .
Seattle , once a red-hot market , is also awash in red ink .
As is Denver .
And Miami .
The Cities with the biggest percentage declines in 1-BR rents The table below shows the 25 cities , among the top 100 rental markets , that had the biggest percentage declines in asking rents for 1-BR apartments in May year-over-year .
What ’ s particularly interesting is the appearance of listings from the oil patch , including Tulsa , Baton Rouge , @ @ @ @ @ @ @ the Dallas-Fort Worth metro , such as Fort Worth and Plano : > The Cities with biggest percentage increases in 1-BR rents .
Yes , rents are surging elsewhere .
The table below shows the 25 cities with the largest rent increases among the top 100 rental markets , of which 16 booked double-digit rent increases , and seven booked rent increases of 15 % or more , which comes as a massive shock to people who experience these types of rent increases : Of the top 100 cities , in terms of @ @ @ @ @ @ @ rent increases .
In 11 cities , rents remained flat .
And in 39 cities , rents fell .
This would indicate that across the US , 1-BR asking rents would be up just a tad from a year ago .
Below is the entire list of Zumper ’ s top 100 most expensive major rental markets , in order of 1-BR asking rents in May , with year-over-year percent changes .
Median 1-BR rents in the $ 600 range exist in the US , in some nice cities too , including my @ @ @ @ @ @ @ have to go to the bottom of the list to find them .
You can use your browser ’ s search function to find a city ( if your smartphone clips the table on the right – there should be six columns – hold your device in landscape position ) : “ I ’ ve stopped defining worst-case scenarios because they keep getting worse every week ” : San Francisco ’ s controller .
Read… San Francisco , Epitome of the “ Everything Bubble , ” Faces Fiscal Chaos .
Boom-and-Bust , Always @ @ @ @ @

Are the Work-from-Home-Folks Moving to Cheaper Pastures?
In the most expensive rental markets in the US, rents are declining, and did so even in May which normally is a fairly strong month for rents. And there may be some reasons. Zumper in its June rent report:
“It seems the pandemic has shifted the demand for apartments away from the most expensive cities, since usually demand picks up as we head into summer, but now the opposite is true. As more and more companies move into remote work, many renters don’t want to pay the big city price tag when they are unable to use the amenities and are looking for more affordable options outside of large, metropolitan areas.”
An anecdote in support of this theory fell into my lap the other day when I was talking with a guy from Google’s ad sales division who wanted to get me excited about spending money on Google ads. In the call, he said that he was working from home, like most Googlers, and that he’d moved from the San Francisco Bay Area back to St. Louis, now that he doesn’t need to be near the office in Redwood City. He wasn’t alone apparently, and landlords with vacancies are adjusting by cutting their asking rents.
San Francisco remains the most expensive rental market in the US – though there are zip codes in Manhattan and Los Angeles that are even more expensive than the most expensive zip code in San Francisco. But it’s less expensive than it was.
In May, the median asking rent for a one-bedroom apartment in San Francisco dropped 2.6% from April, to $3,360, according to Zumper data. This produced a 9.2% drop from May last year, its largest year-over-year drop in the data that took it back the March 2017.
Peak rent in San Francisco had been in October 2015. 1-BR rents had edged past that in June 2019 by $50 for just one month, but have since dropped 9.7%.
San Francisco’s median two-bedroom asking rents never got back to their peak in October 2015 ($5,000): In May, it fell 1.8% from April, to $4,420, is down 6.4% year-over-year, and down 11.6% from the peak in October 2015.
The data is collected by Zumper from over 1 million active listings, including Multiple Listings Service (MLS), of apartments-for-rent in apartment buildings, including new construction, in the 100 largest markets. Not included are single-family houses, condos for rent, rooms, efficiency apartments, and apartments with three or more bedrooms.
“Median” means half the advertised rents are higher, and half are lower. “Asking rent” – the advertised rent – is a measure of the current market. It is not a measure of rents long-term tenants have been paying.
That rents can drop for years in San Francisco, despite the widely held belief that rents never drop, is shown in the long-term chart of Q1 asking rents emailed by Patrick Carlisle, Chief Market Analyst San Francisco Bay Area, at Compass: During the Dotcom bust, average annual asking rents in apartment buildings fell 25% from the peak in 2001 to the bottom in 2004. It took till 2012 before it surpassed by a visible margin the 2001 level.
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Note the 5% dip of the average annual asking rent following the Financial Crisis, and the 8% dip from Q1 2016 (this chart does not show Q4 2015 when the actual peak occurred), before the “Trump bump” kicked in. Q1 2020 was still below Q1 2016, and so far this year, rents have fallen further:
In Los Angeles, in San Diego, in New York City, and other expensive rental markets, rents also dropped in May from April. This has added to the weakness in those rental markets.
The table below shows the 16 most expensive major rental markets in the US by median asking rents. The shaded area shows their respective peaks and changes from those peaks, which has turned into a sea of red ink.
Chicago and Honolulu are on top of that group, with declines-from-peak of over 20% for 1-BR apartments and of over 30% for 2-BR apartments. Seattle, once a red-hot market, is also awash in red ink. As is Denver. And Miami.
The Cities with the biggest percentage declines in 1-BR rents
The table below shows the 25 cities, among the top 100 rental markets, that had the biggest percentage declines in asking rents for 1-BR apartments in May year-over-year. What’s particularly interesting is the appearance of listings from the oil patch, including Tulsa, Baton Rouge, and Houston, but also markets in the Dallas-Fort Worth metro, such as Fort Worth and Plano:>
City 1-BR Y/Y % 1 Syracuse, NY $820 -15.5% 2 Durham, NC $990 -10.8% 3 San Francisco, CA $3,360 -9.2% 4 Tulsa, OK $590 -9.2% 5 Houston, TX $1,100 -9.1% 6 Aurora, CO $1,090 -8.4% 7 Orlando, FL $1,210 -8.3% 8 Jacksonville, FL $880 -8.3% 9 Baton Rouge, LA $780 -7.1% 10 Denver, CO $1,440 -6.5% 11 Salt Lake City, UT $1,000 -6.5% 12 San Antonio, TX $870 -5.4% 13 Anaheim, CA $1,610 -5.3% 14 Lexington, KY $710 -5.3% 15 Santa Ana, CA $1,690 -5.1% 16 Seattle, WA $1,800 -4.3% 17 Anchorage, AK $910 -4.2% 18 Chicago, IL $1,510 -3.8% 19 Los Angeles, CA $2,170 -3.6% 20 Fort Worth, TX $1,060 -3.6% 21 Plano, TX $1,130 -3.4% 22 Madison, WI $1,140 -2.6% 23 Irving, TX $1,110 -2.6% 24 Charlotte, NC $1,170 -2.5% 25 Laredo, TX $810 -2.4%
The Cities with biggest percentage increases in 1-BR rents.
Yes, rents are surging elsewhere. The table below shows the 25 cities with the largest rent increases among the top 100 rental markets, of which 16 booked double-digit rent increases, and seven booked rent increases of 15% or more, which comes as a massive shock to people who experience these types of rent increases:
City 1-BR Y/Y % 1 Cleveland, OH $940 16.0% 2 Des Moines, IA $940 16.0% 3 Newark, NJ $1,330 15.7% 4 Columbus, OH $810 15.7% 5 Cincinnati, OH $900 15.4% 6 St Louis, MO $910 15.2% 7 Norfolk, VA $920 15.0% 8 Lincoln, NE $770 14.9% 9 Wichita, KS $700 14.8% 10 Detroit, MI $700 14.8% 11 Indianapolis, IN $860 14.7% 12 Chattanooga, TN $890 14.1% 13 Buffalo, NY $1,120 13.1% 14 Rochester, NY $950 13.1% 15 Philadelphia, PA $1,500 11.1% 16 Boise, ID $1,060 10.4% 17 Reno, NV $1,000 9.9% 18 Nashville, TN $1,360 8.8% 19 Colorado Springs, CO $990 8.8% 20 Memphis, TN $790 8.2% 21 Tucson, AZ $700 7.7% 22 Scottsdale, AZ $1,420 7.6% 23 Sacramento, CA $1,300 7.4% 24 Akron, OH $580 7.4% 25 Arlington, TX $880 7.3%
Of the top 100 cities, in terms of 1-BR apartments, 49 cities experienced year-over-year rent increases. In 11 cities, rents remained flat. And in 39 cities, rents fell. This would indicate that across the US, 1-BR asking rents would be up just a tad from a year ago.
Below is the entire list of Zumper’s top 100 most expensive major rental markets, in order of 1-BR asking rents in May, with year-over-year percent changes. Median 1-BR rents in the $600 range exist in the US, in some nice cities too, including my former home town Tulsa, but you have to go to the bottom of the list to find them. You can use your browser’s search function to find a city (if your smartphone clips the table on the right – there should be six columns – hold your device in landscape position):
City 1-BR Y/Y % 2-BR Y/Y % 1 San Francisco, CA $3,360 -9.2% $4,420 -6.4% 2 New York, NY $2,950 -1.0% $3,220 -2.4% 3 Boston, MA $2,450 -2.0% $2,900 1.8% 4 San Jose, CA $2,420 -0.4% $2,950 1.0% 5 Oakland, CA $2,350 4.9% $2,850 4.8% 6 Washington, DC $2,220 0.5% $2,940 -0.7% 7 Los Angeles, CA $2,170 -3.6% $2,980 -1.7% 8 Seattle, WA $1,800 -4.3% $2,270 -4.6% 9 San Diego, CA $1,770 3.5% $2,300 -1.3% 10 Miami, FL $1,750 -2.2% $2,300 -0.4% 11 Santa Ana, CA $1,690 -5.1% $2,200 0.9% 12 Fort Lauderdale, FL $1,650 1.9% $2,150 2.9% 13 Honolulu, HI $1,640 -1.8% $2,000 -13.0% 14 Anaheim, CA $1,610 -5.3% $1,960 -7.1% 15 Long Beach, CA $1,570 1.9% $2,000 0.0% 16 Chicago, IL $1,510 -3.8% $1,810 -4.2% 17 Philadelphia, PA $1,500 11.1% $1,700 0.0% 18 Denver, CO $1,440 -6.5% $1,860 -4.6% 19 Scottsdale, AZ $1,420 7.6% $1,930 -4.0% 19 Atlanta, GA $1,420 -0.7% $1,810 0.6% 21 New Orleans, LA $1,400 -2.1% $1,600 4.6% 21 Providence, RI $1,400 0.0% $1,740 10.1% 23 Minneapolis, MN $1,370 -2.1% $1,820 -1.1% 24 Nashville, TN $1,360 8.8% $1,450 10.7% 25 Portland, OR $1,350 0.0% $1,690 0.6% 26 Newark, NJ $1,330 15.7% $1,610 15.0% 27 Sacramento, CA $1,300 7.4% $1,550 6.9% 28 Austin, TX $1,260 6.8% $1,530 0.7% 28 Baltimore, MD $1,260 6.8% $1,470 1.4% 30 Dallas, TX $1,250 -0.8% $1,650 -5.2% 30 Gilbert, AZ $1,250 6.8% $1,460 2.1% 32 Chandler, AZ $1,240 2.5% $1,430 -0.7% 33 Orlando, FL $1,210 -8.3% $1,400 -6.7% 34 Charlotte, NC $1,170 -2.5% $1,300 -3.0% 34 St Petersburg, FL $1,170 6.4% $1,580 -0.6% 36 Madison, WI $1,140 -2.6% $1,320 -0.8% 36 Tampa, FL $1,140 0.0% $1,360 0.7% 38 Plano, TX $1,130 -3.4% $1,530 -3.2% 39 Buffalo, NY $1,120 13.1% $1,360 15.3% 40 Irving, TX $1,110 -2.6% $1,410 -5.4% 40 Henderson, NV $1,110 -1.8% $1,350 0.7% 42 Houston, TX $1,100 -9.1% $1,330 -5.0% 43 Aurora, CO $1,090 -8.4% $1,350 -6.3% 43 Pittsburgh, PA $1,090 0.0% $1,350 0.7% 45 Fort Worth, TX $1,060 -3.6% $1,310 0.0% 45 Richmond, VA $1,060 1.0% $1,350 4.7% 45 Boise, ID $1,060 10.4% $1,180 7.3% 48 Fresno, CA $1,040 4.0% $1,180 3.5% 49 Chesapeake, VA $1,030 4.0% $1,190 -1.7% 50 Milwaukee, WI $1,010 4.1% $1,170 14.7% 51 Salt Lake City, UT $1,000 -6.5% $1,270 -7.3% 51 Virginia Beach, VA $1,000 -2.0% $1,240 1.6% 51 Reno, NV $1,000 9.9% $1,350 3.1% 54 Durham, NC $990 -10.8% $1,170 -7.9% 54 Phoenix, AZ $990 -1.0% $1,240 0.0% 54 Raleigh, NC $990 0.0% $1,200 3.4% 54 Colorado Springs, CO $990 8.8% $1,220 4.3% 58 Las Vegas, NV $970 -2.0% $1,200 4.3% 59 Rochester, NY $950 13.1% $1,130 15.3% 60 Cleveland, OH $940 16.0% $1,000 14.9% 60 Des Moines, IA $940 16.0% $990 15.1% 62 Kansas City, MO $930 -2.1% $1,080 -0.9% 63 Mesa, AZ $920 0.0% $1,150 -0.9% 63 Norfolk, VA $920 15.0% $1,020 2.0% 65 Anchorage, AK $910 -4.2% $1,180 2.6% 65 St Louis, MO $910 15.2% $1,230 7.0% 67 Cincinnati, OH $900 15.4% $1,200 7.1% 68 Chattanooga, TN $890 14.1% $1,020 14.6% 69 Jacksonville, FL $880 -8.3% $1,100 0.9% 69 Arlington, TX $880 7.3% $1,140 4.6% 71 San Antonio, TX $870 -5.4% $1,090 -5.2% 72 Indianapolis, IN $860 14.7% $930 14.8% 73 Omaha, NE $850 1.2% $1,020 -2.9% 73 Corpus Christi, TX $850 -1.2% $1,070 0.9% 73 Louisville, KY $850 0.0% $950 1.1% 76 Glendale, AZ $840 5.0% $1,100 4.8% 77 Spokane, WA $830 5.1% $1,020 3.0% 77 Bakersfield, CA $830 6.4% $1,080 12.5% 79 Syracuse, NY $820 -15.5% $1,010 -3.8% 80 Columbus, OH $810 15.7% $1,070 -0.9% 80 Winston Salem, NC $810 5.2% $860 3.6% 80 Laredo, TX $810 -2.4% $920 8.2% 83 Knoxville, TN $800 1.3% $930 3.3% 84 Memphis, TN $790 8.2% $840 5.0% 85 Baton Rouge, LA $780 -7.1% $900 -6.3% 85 Tallahassee, FL $780 2.6% $920 4.5% 87 Lincoln, NE $770 14.9% $930 4.5% 88 Oklahoma City, OK $750 2.7% $900 -1.1% 88 Augusta, GA $750 0.0% $850 2.4% 90 Greensboro, NC $720 1.4% $840 1.2% 90 Albuquerque, NM $720 4.3% $890 9.9% 92 Lexington, KY $710 -5.3% $950 -3.1% 93 Wichita, KS $700 14.8% $750 0.0% 93 Tucson, AZ $700 7.7% $930 5.7% 93 Detroit, MI $700 14.8% $800 15.9% 96 El Paso, TX $660 4.8% $800 5.3% 97 Shreveport, LA $650 0.0% $790 12.9% 98 Lubbock, TX $630 0.0% $850 7.6% 99 Tulsa, OK $590 -9.2% $810 1.3% 100 Akron, OH $580 7.4% $720 1.4%
“I’ve stopped defining worst-case scenarios because they keep getting worse every week”: San Francisco’s controller. Read… San Francisco, Epitome of the “Everything Bubble,” Faces Fiscal Chaos. Boom-and-Bust, Always. Now is the Bust


investmentwatchblog--2020-06-02--Charted: The Biggest Foreign Holders of U.S. Debt

The U.S. government is borrowing $ 3 trillion in the second quarter this year , an eye-popping number with unknown implications for the future of the economy .
With so much government spending in response to the coronavirus , we started to wonder , which countries actually own the most U.S. debt ?
• Japan holds more U.S. debt than any other country in the world at $ 1,271.7B , or 18.67 % of the total .
• China used to own the most debt but is now in second place at $ 1,081.6B or 15.88 % .
• No @ @ @ @ @ @ @ more than 6 % of total foreign-held debt .
The U.K. owns the third most in the world at just $ 395.3B or 5.8 % of the total .
• Foreign countries control only about 30 % of the entire national debt .
American investors , the Federal Reserve and other parts of the U.S. government own the rest .
We collected the figures for our visualization from the U.S. Department of the Treasury as of March 2020 , the latest month for complete numbers .
We wanted to see which countries hold @ @ @ @ @ @ @ and a percentage of the whole .
We also grouped countries from the same continents together .
In turns out , there are two heavyweights in Japan and China , followed by dozens of other countries holding much smaller levels of U.S. debt .
The most obvious takeaway is that Japan and China both account for the largest share of U.S. debt in our visual .
According to the month-by-month figures from the Treasury , Japan surpassed China as the largest foreign holder of American debt in May 2019 .
Taken together , @ @ @ @ @ @ @ or 34.55 % of American debt owned by foreign countries .
In other words , two countries alone control more than a third of the foreign market for American debt .
But there are also a variety of other interesting nuggets about foreign holders of U.S. debt in our visualization .
A number of European countries own a lot of debt , including the U.K. ( $ 395.3B ) , Ireland ( $ 271.5B ) and Luxembourg ( $ 246.1B ) .
These countries don ’ t inspire the same kind of doom @ @ @ @ @ @ @ as Japan and China .
The Cayman Islands also deserve special mention because they own a surprising amount , $ 207.2B or 3.04 % of all foreign holders .
Perhaps that is due to American investors holding assets offshore but still looking for the security of government bonds .
Foreign holders of U.S. debt will have no shortage of opportunities to buy more of it .
The U.S. national debt has been on an upward trajectory for several years .
In fact , the recent coronavirus spending will up the deficit this year @ @ @ @ @ @ @ debt to new heights .
There ’ s one big and important caveat to keep in mind when considering who owns the U.S. debt .
The grand total amount of debt in our visualization only comes out to $ 6.8T .
But smart observers know that the total U.S. debt is about $ 25.7T .
What accounts for the difference ?
American investors , the Federal Reserve and other parts of the U.S. government actually own about 70 % of the entire national debt .
Foreign countries would need to buy trillions of @ @ @ @ @ @ @ d control even half of the total .
Do you think that all the U.S. government ’ s spending will eventually come back to haunt the economy in the future ?
Let us know in the comments .

by howmuch
The U.S. government is borrowing $3 trillion in the second quarter this year, an eye-popping number with unknown implications for the future of the economy. With so much government spending in response to the coronavirus, we started to wonder, which countries actually own the most U.S. debt?
Buy this visualization
Japan holds more U.S. debt than any other country in the world at $1,271.7B, or 18.67% of the total.
China used to own the most debt but is now in second place at $1,081.6B or 15.88%.
No other country besides Japan and China holds more than 6% of total foreign-held debt. The U.K. owns the third most in the world at just $395.3B or 5.8% of the total.
Foreign countries control only about 30% of the entire national debt. American investors, the Federal Reserve and other parts of the U.S. government own the rest.
We collected the figures for our visualization from the U.S. Department of the Treasury as of March 2020, the latest month for complete numbers. We wanted to see which countries hold the most debt both in overall terms and a percentage of the whole. We also grouped countries from the same continents together. In turns out, there are two heavyweights in Japan and China, followed by dozens of other countries holding much smaller levels of U.S. debt.
Top Ten Foreign Holders of U.S. Debt
1. Japan: $1,271.7B
2. China: $1,081.6B
3. U.K.: $395.3B
4. Ireland: $271.5B
5. Brazil: $264.4B
6. Luxembourg: $246.1B
7. Hong Kong: $245.3B
8. Switzerland: $244.6B
9. Cayman Islands: $207.2B
10. Belgium: $206.1B
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The most obvious takeaway is that Japan and China both account for the largest share of U.S. debt in our visual. According to the month-by-month figures from the Treasury, Japan surpassed China as the largest foreign holder of American debt in May 2019. Taken together, Japan and China account for $2,353.3B or 34.55% of American debt owned by foreign countries. In other words, two countries alone control more than a third of the foreign market for American debt.
But there are also a variety of other interesting nuggets about foreign holders of U.S. debt in our visualization. A number of European countries own a lot of debt, including the U.K. ($395.3B), Ireland ($271.5B) and Luxembourg ($246.1B). These countries don’t inspire the same kind of doom and gloom in the American media imagination as Japan and China. The Cayman Islands also deserve special mention because they own a surprising amount, $207.2B or 3.04% of all foreign holders. Perhaps that is due to American investors holding assets offshore but still looking for the security of government bonds.
Foreign holders of U.S. debt will have no shortage of opportunities to buy more of it. The U.S. national debt has been on an upward trajectory for several years. In fact, the recent coronavirus spending will up the deficit this year to $3.7T, pushing the national debt to new heights. There’s one big and important caveat to keep in mind when considering who owns the U.S. debt. The grand total amount of debt in our visualization only comes out to $6.8T. But smart observers know that the total U.S. debt is about $25.7T. What accounts for the difference? American investors, the Federal Reserve and other parts of the U.S. government actually own about 70% of the entire national debt. Foreign countries would need to buy trillions of more in U.S. debt before they’d control even half of the total.
Do you think that all the U.S. government’s spending will eventually come back to haunt the economy in the future? Let us know in the comments.


investmentwatchblog--2020-06-03--ELECTION YEAR CYCLES AND THE STOCK MARKET – WHAT TO EXPECT?

by Chris Vermeulen of The Technical Traders Every election year over the past five US Presidential election cycles has presented a unique set of price rotation events .
Particularly evident in strongly contested US Presidential candidate battles where the voters are consumed with pre-election rhetoric .
The 2007-08 election cycle was , in our opinion , very similar to the current market cycle in terms of consumer sentiment and economic function .
The 2015-16 election cycle was less similar – yet still important for our researchers .
The economic conditions of the US economy and the global economy were vastly @ @ @ @ @ @ @ cycle and continue to evolve throughout the current 2020 election cycle .
Yet , our researchers believe the correlation of price volatility and rotation combined with the distraction for consumers as the election process occupies the hearts and minds of almost everyone across the globe takes a toll on the markets .
Prior to almost any US Presidential , price volatility and trends tend to become much more exaggerated and extended .
We ’ ve published research articles about this technical setup/pattern that occurs in the markets nearly 8 to 15+ months before @ @ @ @ @ @ @ The basic theory of the setup/pattern is as follows… _ 12+ months prior to the election date , the parties consolidate around specific candidates where the first battles of the US presidential election cycle conclude .
_ Over the next 12 months , the battle between the selected candidates becomes more heated and aggressive as voters are pushed information and disinformation related to their decisions .
_ The process of the election and the decision-making process for consumers/voters is very stressful and distracts from the normal economic activity for many .
This distraction @ @ @ @ @ @ @ expectations ( optimism and pessimism ) greatly depend on the outcome of the election .
Thus , the markets are stuck in a “ no man ’ s land ” type of “ stasis ” waiting for the election event to conclude .
Depending on the events that lead up to the election date , the stock market could be biased towards a bullish trend or a bearish trend which can have a big impact on the pre and post-election outcomes .
Before we continue , be sure to opt-in to our free @ @ @ @ @ @ @ , so you don ’ t miss our next special report !
Lets start by taking a look at the 2006-09 ( 2008 US election cycle ) data/chart .
First , we can see the price trend in 2006-07 was moderately bullish within the early election cycle .
The first real signs of a crisis in the markets took place in mid-2007 where a deep low price move setup a double-bottom .
Near the end of 2007 and into very early 2008 , the stock market collapsed below those lows and never really @ @ @ @ @ @ @ began in June 2008 – after a moderate price recovery from the new lows .
Price continued to collapse more aggressively just prior to the election date and even after the election was completed .
Yes , we know this collapse was related to the 2008-09 Housing/Credit market crisis and was not related to the directly related to the Presidential election event .
Yet , we , as technicians , believe price translates all external factors into a form that we can use to derive future information from .
The point we want @ @ @ @ @ @ @ cycle years tend to be much more volatile and aggressive .
The pre-election price declines appear to set up a bottom or double-bottom price level 12 to 15+ months prior to the election date .
After that completes , the markets may attempt to rally above previous highs at some point , but will likely attempt to retest recent lows 4 to 12 months prior to the election date .
As voters/consumers ’ attention is consumed by the election process , news and rhetoric , consumers change their habits and become more protective @ @ @ @ @ @ @ The one thing to consider when reviewing this chart is that the uncertainty and indecision in the markets related to the Presidential election cycle were compounded by the collapse of the housing , financial , and credit markets .
This event created additional price and economic concerns fairly early in 2008 .
Additionally , pay attention to the June 2008 change in price trend that sets up a deeper downside price collapse .
This next chart is the 2014-2017 US Presidential Election cycle and this chart highlights a very different time in US @ @ @ @ @ @ @ crisis event .
There was no massive implosion of the US or global markets taking place throughout this time .
There was only a heated battle between two candidates .
The chart shows how 2015 , nearly 12 months prior to the election date , the market price collapsed twice to complete a double-bottom pattern .
This pattern seems to set up prior to election cycles with fairly high consistency .
As we progress to the 12 month period just before the election date ( highlighted in CYAN ) , we can see @ @ @ @ @ @ @ moderate upside price bias after establishing a bottom very early in 2016 .
Still , there was a decent amount of volatility throughout the year – particularly in June and the 60 days prior to the actual election date .
Remember , other than political drama , this election cycle didn ’ t include any massive economic crisis events which could have altered the direction of the markets closer to the election date .
The deeper double-bottoms set up the price range headed into the election date and the lack of surprise/crisis events @ @ @ @ @ @ @ into the election event .
Now , we take a look at the current 2017-2020 setup .
This time , because of the prior extended rally in the markets from 2017 , we ’ ve seen a series of deeper price lows setups into an expanding bottom/downward sloping price trend .
This is somewhat unusual and suggests volatility is excessive at this time in the markets .
We ’ ve also experienced the COVID-19 virus event occur , which is acting like the 2008 housing/financial crisis event .
At this point , heading @ @ @ @ @ @ @ these Presidential election cycle events typically result in much greater volatility as we get closer to the election date , our research team believes the June through August period could prompt a broad market downside retracement which coincides with Q2 data/expectations .
The month of June prior to the election date ( Q2 ) appears to be a very instrumental period for the markets .
The downward sloping lows on this chart suggest a deeper price rotation may occur as the markets move closer to the election date and continue to process the @ @ @ @ @ @ @ related to Presidential election cycles is still at play in the markets .
Should some type of crisis event unfold in the midst of the final 5 to 6 months prior to the election date , the risk of a downside price event would become much more excessive .
Currently , the COVID-19 virus event has set up a critical price event headed into the 2020 Presidential election cycle which is somewhat similar to the 2008 election cycle .
Pay attention to the GDP Based Recession Indicator chart below .
Notice how the @ @ @ @ @ @ @ increase in the GDP Based Recession Indicator ?
Now , see how the current GDP Based Recession Indicator has already begun to spike upward ?
Unlike what happened in 2016 where the GDP Based Recession Indicator stayed below 30 , the current level of this indicator suggests a crisis event is beginning to unfold in 2020 .
If this crisis event continues , the process where the price will attempt to properly identify risks and valuation levels will likely take place over the next 8 to 12+ months – which is very similar @ @ @ @ @ @ @ .
Our researchers believe June 2020 could become a critical month for price activity where the future price trends are established .
Currently , we are urging our friends and followers to stay overly cautious of this upward price trend in the US stock markets .
Even though we have seen the NQ and other sectors rally to near all-time highs , we believe the markets are still excessively volatile and the indecision leading up to a Presidential election cycle could prompt some really big price moves in the future .
We are @ @ @ @ @ @ @ market and advising our clients to take very low-risk trades which have been properly sized .
This is a traders market where skilled technical traders can find incredible gains .
June through August will likely become critical in regards to the future price trends and will likely determine if the markets continue to push higher or rotate downward as concerns and potential crisis events continue to unfold .
Historically , June through August prior to a Presidential election cycle are very important measures of what happens near and after the election event .
@ @ @ @ @ @ @ and if you would like to get a pre-market video every day before the opening bell , along with my trade alerts .
These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week , not many traders can say that this year .
Visit my Active ETF Trading Newsletter .
If you have any type of retirement account and are looking for signals when to own equities , bonds , or cash , be sure to become a member of my Long-Term @ @ @ @ @ @ @ signal for subscribers .
Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis .

by Chris Vermeulen of The Technical Traders
Every election year over the past five US Presidential election cycles has presented a unique set of price rotation events. Particularly evident in strongly contested US Presidential candidate battles where the voters are consumed with pre-election rhetoric. The 2007-08 election cycle was, in our opinion, very similar to the current market cycle in terms of consumer sentiment and economic function. The 2015-16 election cycle was less similar – yet still important for our researchers.
The economic conditions of the US economy and the global economy were vastly different prior to each US Presidential election cycle and continue to evolve throughout the current 2020 election cycle. Yet, our researchers believe the correlation of price volatility and rotation combined with the distraction for consumers as the election process occupies the hearts and minds of almost everyone across the globe takes a toll on the markets. Prior to almost any US Presidential, price volatility and trends tend to become much more exaggerated and extended.
We’ve published research articles about this technical setup/pattern that occurs in the markets nearly 8 to 15+ months before the US Presidential election cycle before. The basic theory of the setup/pattern is as follows…
_ 12+ months prior to the election date, the parties consolidate around specific candidates where the first battles of the US presidential election cycle conclude.
_ Over the next 12 months, the battle between the selected candidates becomes more heated and aggressive as voters are pushed information and disinformation related to their decisions.
_ The process of the election and the decision-making process for consumers/voters is very stressful and distracts from the normal economic activity for many. This distraction translates into an indecisive market where future expectations (optimism and pessimism) greatly depend on the outcome of the election. Thus, the markets are stuck in a “no man’s land” type of “stasis” waiting for the election event to conclude.
Depending on the events that lead up to the election date, the stock market could be biased towards a bullish trend or a bearish trend which can have a big impact on the pre and post-election outcomes.
Before we continue, be sure to opt-in to our free market trend signals
before closing this page, so you don’t miss our next special report!
S&P 500 INDEX 2006-09 US PRESIDENTIAL ELECTION CYCLE
Lets start by taking a look at the 2006-09 (2008 US election cycle) data/chart. First, we can see the price trend in 2006-07 was moderately bullish within the early election cycle. The first real signs of a crisis in the markets took place in mid-2007 where a deep low price move setup a double-bottom. Near the end of 2007 and into very early 2008, the stock market collapsed below those lows and never really recovered. The real collapse in price began in June 2008 – after a moderate price recovery from the new lows. Price continued to collapse more aggressively just prior to the election date and even after the election was completed.
Yes, we know this collapse was related to the 2008-09 Housing/Credit market crisis and was not related to the directly related to the Presidential election event. Yet, we, as technicians, believe price translates all external factors into a form that we can use to derive future information from. The point we want to try to make is that election cycle years tend to be much more volatile and aggressive.
The pre-election price declines appear to set up a bottom or double-bottom price level 12 to 15+ months prior to the election date. After that completes, the markets may attempt to rally above previous highs at some point, but will likely attempt to retest recent lows 4 to 12 months prior to the election date. As voters/consumers’ attention is consumed by the election process, news and rhetoric, consumers change their habits and become more protective of their assets and future expenses.
The one thing to consider when reviewing this chart is that the uncertainty and indecision in the markets related to the Presidential election cycle were compounded by the collapse of the housing, financial, and credit markets. This event created additional price and economic concerns fairly early in 2008. Additionally, pay attention to the June 2008 change in price trend that sets up a deeper downside price collapse.
S&P 500 INDEX 2014-2017 US PRESIDENTIAL ELECTION CYCLE
This next chart is the 2014-2017 US Presidential Election cycle and this chart highlights a very different time in US history. There was no massive housing/credit crisis event. There was no massive implosion of the US or global markets taking place throughout this time. There was only a heated battle between two candidates. The chart shows how 2015, nearly 12 months prior to the election date, the market price collapsed twice to complete a double-bottom pattern. This pattern seems to set up prior to election cycles with fairly high consistency.
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As we progress to the 12 month period just before the election date (highlighted in CYAN), we can see the 2016 election year resulted in a moderate upside price bias after establishing a bottom very early in 2016. Still, there was a decent amount of volatility throughout the year – particularly in June and the 60 days prior to the actual election date.
Remember, other than political drama, this election cycle didn’t include any massive economic crisis events which could have altered the direction of the markets closer to the election date. The deeper double-bottoms set up the price range headed into the election date and the lack of surprise/crisis events prompted a moderate upside price bias leading into the election event.
S&P 500 CURRENT 2017-2020 PRESIDENTIAL ELECTION CYCLE
Now, we take a look at the current 2017-2020 setup. This time, because of the prior extended rally in the markets from 2017, we’ve seen a series of deeper price lows setups into an expanding bottom/downward sloping price trend. This is somewhat unusual and suggests volatility is excessive at this time in the markets. We’ve also experienced the COVID-19 virus event occur, which is acting like the 2008 housing/financial crisis event.
At this point, heading into early June 2020 and understanding that these Presidential election cycle events typically result in much greater volatility as we get closer to the election date, our research team believes the June through August period could prompt a broad market downside retracement which coincides with Q2 data/expectations. The month of June prior to the election date (Q2) appears to be a very instrumental period for the markets.
The downward sloping lows on this chart suggest a deeper price rotation may occur as the markets move closer to the election date and continue to process the technical and economic data. The uncertainty related to Presidential election cycles is still at play in the markets. Should some type of crisis event unfold in the midst of the final 5 to 6 months prior to the election date, the risk of a downside price event would become much more excessive.
GDP BASED RECESSION INDICATOR
Currently, the COVID-19 virus event has set up a critical price event headed into the 2020 Presidential election cycle which is somewhat similar to the 2008 election cycle. Pay attention to the GDP Based Recession Indicator chart below. Notice how the 2008 election cycle correlated with a massive increase in the GDP Based Recession Indicator? Now, see how the current GDP Based Recession Indicator has already begun to spike upward? Unlike what happened in 2016 where the GDP Based Recession Indicator stayed below 30, the current level of this indicator suggests a crisis event is beginning to unfold in 2020.
If this crisis event continues, the process where the price will attempt to properly identify risks and valuation levels will likely take place over the next 8 to 12+ months – which is very similar to what happened in 2008 and 2009. Our researchers believe June 2020 could become a critical month for price activity where the future price trends are established.
CONCLUDING THOUGHTS:
Currently, we are urging our friends and followers to stay overly cautious of this upward price trend in the US stock markets. Even though we have seen the NQ and other sectors rally to near all-time highs, we believe the markets are still excessively volatile and the indecision leading up to a Presidential election cycle could prompt some really big price moves in the future. We are still trading the long side of the market and advising our clients to take very low-risk trades which have been properly sized. This is a traders market where skilled technical traders can find incredible gains.
June through August will likely become critical in regards to the future price trends and will likely determine if the markets continue to push higher or rotate downward as concerns and potential crisis events continue to unfold. Historically, June through August prior to a Presidential election cycle are very important measures of what happens near and after the election event.
I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.
If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.
Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.
Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.


investmentwatchblog--2020-06-03--IT’S A SET UP: POLICE ALLOW LOOTING, ARREST STORE OWNERS FOR PROTECTING THEIR PROPERTY

The United States has descended further into tyranny and the police are strengthening the ruling class ’ power by using force against the wrong people .
It ’ s all a set up to divide and conquer .
The police are allowing property destruction , but arresting store owners for protecting their own property .
Donald Trump isn ’ t helping either .
No amount of martial law will fix this , because the troops , like the cops , have their marching orders and take commands from the ruling class and political elitists , not us .
It ’ @ @ @ @ @ @ @ ’ s happening on American soil !
This is a fight for our basic human rights to not be ruled at this point .
In Las Angeles , the tense standoff at the city ’ s Van Nuys neighborhood was filmed by a FOX 11 news crew .
According to the reporter at the scene , several vehicles drove up to a gold store , and a group of apparent looters attempted to enter the premises .
They were confronted by the store ’ s owners , two of whom were wielding shotguns @ @ @ @ @ @ @ a large machete-type knife on his belt .
According to a report by RT , the people , identified by the reporter as the store ’ s owners , were heard yelling : “ We ’ re closed , bro.
” When the police arrived , several men had fled the scene and were chased down by the officers .
The police handcuffed and detained the people that had come out of the shop , prompting the reporter to shout : “ They ’ re the store owners !
They ’ re protecting @ @ @ @ @ @ @ a fight for our basic human right to live without a ruling class , the government has done their best , with the help of the mainstream media to undermine the word “ anarchy.
” Just to educate the readers , anarchy simply means : an-without archos-rulers .
It literally means “ without rulers.
” Nothin more , nothing less .
Wake up .
There ’ s a reason they won ’ t tell you this and say it ’ s “ anarchists ” causing the rioting .
Those who don ’ t @ @ @ @ @ @ @ trying to control you .
It ’ s easy to misplace anger when so much is happening so quickly , but it ’ s important to understand the end game here and WHY the ruling class needs you to hate “ anarchists.
” When you don ’ t want to live under a ruler , it simply means no one has a higher claim to your life than yourself .
Isn ’ t it obvious why they need you to reject critical thinking and simply hate those who want to live freely ?
@ @ @ @ @ @ @ the propaganda arm of the government ) will tell you what they want you to believe , and sadly , people are still falling for it .
The brainwashing isn ’ t going to stop , but we can at least be aware of it instead of falling for it .
Divide and conquer .
It ’ s worked for a long time , but once people examine the truth , that narrative fails .
It ’ s time to look past the politicians and their hired enforcers and look into yourself .
@ @ @ @ @ @ @ yourself , and not some ruler or master , you ’ re an anarchist too and they are making us all out to be the bad guys because we are rejecting their false authority over us .
The governments of the world know their time is up .
Too many see past the facade at this point , so they will do whatever they can to hold onto power for as long as possible .
The beast will not go down without a fight .
Don ’ t let them take your common @ @ @ @ @ @ @ health along with them .
This is a war for your mind .
Don ’ t let the ruling class win !
After Brainwashing People For Decades , MSM and Governments Are Losing Control of People It ’ s time to really start to go within and figure out who you are and if you need a ruler or a master , or if you ’ re a free sovereign human being .

by Mac Slavo of SHTFplan
The United States has descended further into tyranny and the police are strengthening the ruling class’ power by using force against the wrong people. It’s all a set up to divide and conquer. The police are allowing property destruction, but arresting store owners for protecting their own property.
Donald Trump isn’t helping either. No amount of martial law will fix this, because the troops, like the cops, have their marching orders and take commands from the ruling class and political elitists, not us. It’s time to wake up to what’s happening on American soil! This is a fight for our basic human rights to not be ruled at this point.
In Las Angeles, the tense standoff at the city’s Van Nuys neighborhood was filmed by a FOX 11 news crew.
Arrest goes wrong | Police handcuff shop owners who tried to PROTECT their property from looters MORE: t.co/RVbQ7ZibwE pic.twitter.com/Azj79VP33W — RT (@RT_com) June 2, 2020
According to the reporter at the scene, several vehicles drove up to a gold store, and a group of apparent looters attempted to enter the premises. They were confronted by the store’s owners, two of whom were wielding shotguns. Another person at the scene had a large machete-type knife on his belt. According to a report by RT, the people, identified by the reporter as the store’s owners, were heard yelling: “We’re closed, bro.” When the police arrived, several men had fled the scene and were chased down by the officers.
The police handcuffed and detained the people that had come out of the shop, prompting the reporter to shout: “They’re the store owners! They’re protecting the store!”
Because this is a fight for our basic human right to live without a ruling class, the government has done their best, with the help of the mainstream media to undermine the word “anarchy.” Just to educate the readers, anarchy simply means: an-without archos-rulers. It literally means “without rulers.” Nothin more, nothing less. Wake up.
We are primarily funded by readers. Please subscribe and donate to support us!
Not all anarchists are violent. In fact, most anarchists I know practice the non-aggression principle (NAP). The initiation of violence is what the state is all about. Voluntaryists/anarchists/ancaps = the most moral & logically consistent way for humans to comport themselves. — 🌗JD🌗 (@Voluntaryist_) May 31, 2020
There’s a reason they won’t tell you this and say it’s “anarchists” causing the rioting. Those who don’t want rulers will not be the ones trying to control you. It’s easy to misplace anger when so much is happening so quickly, but it’s important to understand the end game here and WHY the ruling class needs you to hate “anarchists.” When you don’t want to live under a ruler, it simply means no one has a higher claim to your life than yourself. Isn’t it obvious why they need you to reject critical thinking and simply hate those who want to live freely?
We know they (mainstream media, the propaganda arm of the government) will tell you what they want you to believe, and sadly, people are still falling for it. The brainwashing isn’t going to stop, but we can at least be aware of it instead of falling for it. Divide and conquer. It’s worked for a long time, but once people examine the truth, that narrative fails.
It’s time to look past the politicians and their hired enforcers and look into yourself. Who owns you? If you own yourself, and not some ruler or master, you’re an anarchist too and they are making us all out to be the bad guys because we are rejecting their false authority over us.
The governments of the world know their time is up. Too many see past the facade at this point, so they will do whatever they can to hold onto power for as long as possible. The beast will not go down without a fight. Don’t let them take your common sense, critical thinking, and mental health along with them. This is a war for your mind. Don’t let the ruling class win!
After Brainwashing People For Decades, MSM and Governments Are Losing Control of People
It’s time to really start to go within and figure out who you are and if you need a ruler or a master, or if you’re a free sovereign human being.


investmentwatchblog--2020-06-03--Mystery stones appear in Sherman Oaks, CA

Seriously , pallets of bricks and pre-packaged bundles of stones appearing throughout the USA ?
Who is behind this ?

by ratioetlogicae
Seriously, pallets of bricks and pre-packaged bundles of stones appearing throughout the USA?
We are primarily funded by readers. Please subscribe and donate to support us!
Who is behind this?


investmentwatchblog--2020-06-03--The Best rundown of what’s happening you will see today

There are few members of the media who tell the truth .
This is one .
Watch the whole thing @ @ @ @ @ .

There are few members of the media who tell the truth. This is one. Watch the whole thing and you will be impressed.
We are primarily funded by readers. Please subscribe and donate to support us!
h/t Playaguy


investmentwatchblog--2020-06-03--Social Unrest Rises as Confidence Falls

Social Unrest Rises as Confidence Falls

Protests egged on by the legacy media quickly devolved into large-scale riots and looting over the weekend in more than a dozen U.S. cities .
Some important institutions have betrayed the public trust , and Americans facing quarantine and staggering unemployment have arrived at the boiling point .
Meanwhile , the ranks of people buying gold and silver as a hedge against economic chaos and financial malfeasance swelled again in recent months .
A new wave of Americans is grappling with what it means for Congress to spend trillions it doesn ’ t have .
Or for Federal Reserve bankers @ @ @ @ @ @ @ hand them over to their friends on Wall Street .
Seymour Hurst created the Debt Clock in 1989 when the US debt was about $ 2.7 trillion and that debt represented about 50 % of US GDP .
It ’ s been more than 30 years hence , but the government ’ s appetite for borrowing has only grown .
The federal deficit this year will be larger than the entire national debt was when Hurst began sounding the alarm .
Out-of-control borrowing and spending certainly is just one facet of the incompetent @ @ @ @ @ @ @ the past three decades .
The approval rating for federal politicians is pathetic .
The general consensus is that our leaders are completely unaccountable and many are self-dealing .
Fewer and fewer people buy the rhetoric some politicians spew about limited government .
Federal bureaucracies have also been failing in some very high-profile ways .
There aren ’ t many people left who think justice is blind and laws are applied equally .
The Department of Justice ’ s handling of Jeffrey Epstein is a great illustration .
Few believe the official story @ @ @ @ @ @ @ rage over the fact that high-profile and well connected pedophiles are somehow immune from prosecution .
There is no shortage of other examples , including bias at the IRS against conservative groups and the total incompetence of the Centers for Disease Control .
How many Americans still expect fairness , integrity , and good leadership from anyone in power in Washington ?
Trust is also fading in key private-sector institutions .
Many of us are now aware that the Deep State power behind our unaccountable federal government is also behind the vast corporations @ @ @ @ @ @ @ television , and internet news .
And it is no secret that markets are manipulated by Deep State bankers .
Americans are realizing we have fake news and fake markets .
This context is useful , we think , as the George Floyd riots wreak havoc and the authorities violate the public trust .
It isn ’ t just minorities living in tough neighborhoods who are fed up .
Confidence in a variety of major institutions has been stretched thinner and thinner for a very long time .

by: Clint Siegner
Protests egged on by the legacy media quickly devolved into large-scale riots and looting over the weekend in more than a dozen U.S. cities.
Some important institutions have betrayed the public trust, and Americans facing quarantine and staggering unemployment have arrived at the boiling point.
Meanwhile, the ranks of people buying gold and silver as a hedge against economic chaos and financial malfeasance swelled again in recent months.
A new wave of Americans is grappling with what it means for Congress to spend trillions it doesn’t have.
Or for Federal Reserve bankers to print trillions of electronic notes and hand them over to their friends on Wall Street.
Seymour Hurst created the Debt Clock in 1989 when the US debt was about $2.7 trillion and that debt represented about 50% of US GDP.
It’s been more than 30 years hence, but the government’s appetite for borrowing has only grown. The federal deficit this year will be larger than the entire national debt was when Hurst began sounding the alarm.
We are primarily funded by readers. Please subscribe and donate to support us!
Out-of-control borrowing and spending certainly is just one facet of the incompetent leadership Americans have been worrying about over the past three decades.
The approval rating for federal politicians is pathetic. The general consensus is that our leaders are completely unaccountable and many are self-dealing. Fewer and fewer people buy the rhetoric some politicians spew about limited government.
Federal bureaucracies have also been failing in some very high-profile ways. There aren’t many people left who think justice is blind and laws are applied equally.
The Department of Justice’s handling of Jeffrey Epstein is a great illustration. Few believe the official story about his “suicide.” There simmering rage over the fact that high-profile and well connected pedophiles are somehow immune from prosecution.
There is no shortage of other examples, including bias at the IRS against conservative groups and the total incompetence of the Centers for Disease Control. How many Americans still expect fairness, integrity, and good leadership from anyone in power in Washington?
Trust is also fading in key private-sector institutions. Many of us are now aware that the Deep State power behind our unaccountable federal government is also behind the vast corporations which control most print, radio, television, and internet news. And it is no secret that markets are manipulated by Deep State bankers.
Americans are realizing we have fake news and fake markets.
This context is useful, we think, as the George Floyd riots wreak havoc and the authorities violate the public trust. It isn’t just minorities living in tough neighborhoods who are fed up. Confidence in a variety of major institutions has been stretched thinner and thinner for a very long time.


investmentwatchblog--2020-06-03--DC Thugs Moving into HOMES! Homes Are Getting Looted

DC Thugs Moving into HOMES !
Homes are getting looted !
!
Mr President !
Why isn ’ t anyone @ @ @ @ @ ?
?
?
?
People where are your guns ?
pic.twitter.com/4Wjh2CdrCj

DC Thugs Moving into HOMES! Homes are getting looted!!
Mr President! Why isn’t anyone helping these families?????? People where are your guns? pic.twitter.com/4Wjh2CdrCj
— Girl♥Bot (@AMErikaNGIRLLL) June 2, 2020


investmentwatchblog--2020-06-02--DKNG – Fundamental DD Inside – DKNG

DKNG – Fundamental DD Inside – DKNG

This is an example of fundamental DD that takes place at ‘ smart ’ money institutions based on my professional experience in IBD , Private Equity & most recently at a HF ( mods can message me for proof ) .
Not thoroughly fleshed out b/c you autists have limited attention spans , but a summary .
Figured I ’ d take the time to give back to this community that has provided many lolz , & should be a good measuring stick when evaluating other forms of fundamental DD posted here .
DKNG – DraftKings , Inc. : vertically @ @ @ @ @ @ @ provides retail sports betting & back-end betting solutions through SBTech .
Think of SBTech as the tech ‘ market-maker ’ for traditional sports betting , they do all the funny math to set the betting odds & seem to be working on back-end solutions for DKNG Casino Only ~2 % of the ~ $ 90Bn gambling revenues were placed online which is the lowest in the world where betting online is legal .
For example , in other countries online gaming activity represents ~6 % – ~52 % of total gambling revenues , @ @ @ @ @ @ @ Wall Street expects online gaming revenue to be $ 20Bn- $ 40Bn within the next 10 years .
For this to be achieved , the online gambling market will have to achieve a ~30 % penetration rate on total country gaming revenues .
There is an expectation that this is could be easily achievable given penetration trends overseas – see page 11 of this : s1.rationalcdn.com/vendors/stars-group/documents/presentations/TSG-Investor-Day_March-27-2019.pdf Other catalysts include increasing adaptation of sports betting in more states .
States that have both legal sports betting + online sports betting permitted : NV , @ @ @ @ @ @ @ .
Sports betting permitted but no online : DE , MS , RI , MO , AR .
Prior to COVID there was ongoing discussions across many States , especially ones with growing deficits to explore how permitting sports betting could create a fresh avenue of tax dollars .
Post COVID there is an expectation that these discussions will be given extra focus as many States will be hungry for incremental tax dollars .
Important to note that currently 43/50 States allow DFS , but given the small share DFS has on total @ @ @ @ @ @ @ DKNG is banking on traditional sports betting for a variety of reasons , more later .
There are entire articles on Google arguing this catalyst so I ’ ll end this here .
DKNG ’ s main offerings are Daily Fantasy Sports ( “ DFS ” ) products & traditional sports book products to its clients .
Long story short , a metric to look for in my opinion ( that is curiously not reported by management or remarked on ) is the hold % in traditional gaming sector parlance or the ‘ @ @ @ @ @ @ @ ‘ traditional ’ gaming products like sports betting & Blackjack .
For DFS : DKNG takes ~15 % of the prize pool ( note : used to be ~6-11 % [ 2 ] ) .
Curiously , their main competitor FanDuel also has moved up to a ~15 % rake recently .
Google searches show the smaller competitors have a rake in the ~13 % range .
This ‘ rake ’ has grown ~2x in 6 years , but it has been a delicate move on behalf of management .
Why ?
B/c @ @ @ @ @ @ @ ( equal to autistic day traders on Robinhood ) have noted this increase & based on some Googling , some have moved down market to the smaller players .
As a side note , many live casino games have their rules altered to grow the Hold % .
For example , Blackjack games with 6:5 payouts on 21 have materially higher Hold % than the traditional BJ rules that pay out 3:2 .
Given the findings so far , DKNG may not have much room to materially increase its hold % in DFS @ @ @ @ @ @ @ 15 % .
More on this later .
Now why is this important ?
This is important b/c the typical sports book ( ex-Parlays ) have a ~5 % hold % /rake .
Parlays have up to a ~30 % hold ( which is why it ’ s commonly known as the sucker ’ s bet ) , & just for reference , the average Blackjack table clocks in 14.5 % .
What this means : Every dollar put into these games , the “ House ” or DKNG , will take 15 @ @ @ @ @ @ @ , for sports bets they will be pocketing ~5 % , up to ~30 % if you ’ re into parlays , & we ’ ll just use the standard 14.5 % BJ hold for the DraftKings Casino platform .
So why the acquisition of SBTech & a foray into the traditional sports gambling market ?
As you can see previously , the illegal sports betting market is > 30x the size of the current daily fantasy sports market .
So it ’ s clear that the DFS providers including DKNG are foraying @ @ @ @ @ @ @ base & hopefully convert them into games that have a higher hold % , such as DFS/DKNG Casino .
As of May 2020 , DKNG has achieved a 30 % penetration rate on its ~4mm ‘ monetized ’ DFS clientele to its Online Sports Book ( OSB ) , from the OSB+DFS clientele , DKNG has converted 50 % into its DraftKings Casino platform .
Including non-monetized users , user base totals at 12mm .
Based on these unit economics : every 1mm of additional users - > 333k monetized users for DFS @ @ @ @ @ @ @ > 50k users for DraftKings Casino .
• In total , DKNG has DFS paying clientele of ~4mm , the metric management focuses on is “ Monthly Unique Payers ( MUP ) ” which spans across DFS & online sports betting*** .
As of Q1 ’ 20 they reported 720,000*** MUPs , representing +16 % YoY growth [ 3 ] • Average revenue per monthly user ( ARPU ) of ~ $ 41 , +11 % YoY • Based on previous observation of Hold % , looks like ARPU growth will be limited @ @ @ @ @ @ @ grown at a ~11 % CAGR & ARPU has grown at a ~19 % CAGR • As a side note : the ~4mm monetized user base was acquired at ~ $ 122/user over 3 years .
Total users cost them $ 41/user over the last 3 years [ 3 ] .
• They are currently EBITDA negative & Wall St expects them to be positive by 2023 • I took a dive into the math driving this , here is a summary : • Based on their current cost structure they will need @ @ @ @ @ @ @ of ~ $ 46 to break-even .
This implies total monetized users of ~10mm from ~4mm currently • DKNG ’ s user base of ~12mm is on the low end of the sector vs. its ‘ brick & mortar ’ competitor ’ s user bases ( online betting platforms with physical casino presence ) • CZR with 55mm , MGM with 33mm , ERI with 10mm ( in pending merger with CZR , could have a lot of overlap ) , FanDuel with 8.5mm • Is there a concern for increased marketing costs @ @ @ @ @ @ @ s look at a case study of NJ , the first state to open both mobile & retail sports betting : • FanDuel + DraftKings have held 80 % + of the OSB market share since 12/2018 which is estimated to be driven by the conversion opportunity from DFS that is unique to both companies [ 4 ] • On the flipside , a case study to examine going forward is how DKNG can get OSB customers in a State that does not allow DFS .
Nevada .
Home to Las Vegas .
@ @ @ @ @ @ @ highly likely due to casino lobbying ) , NV was a top-15 State in terms of revenue for them .
NV is home to the fattest sports book in the US , & recently the gaming commission started to parse the data on sportsbook wagers done online vs. in-person , & it came out to roughly 50/50 .
It will be interesting to see how they try to capture market share in a state with no DFS • Long-term EBITDA margin target of 35 % requires huge growth in MUPs • Based on @ @ @ @ @ @ @ Holding ARPU of ~ $ 46 , MUPs will have to be ~5.2mm , a 7x increase from current to achieve a EBITDA margin of 35 % • A focus on future earnings will be management ’ s ability to shift to a more fixed-cost structure which would effectively lower the MUP requirement for profitability Things to look for when going Long – Progress of additional States legalizing sports betting – specifically , States with DFS already legalized – Cost structure evolving to a more fixed mix vs. the mostly variable mix currently @ @ @ @ @ @ @ that determines profitability • Management seems to be focused more on the first step , but one thing to note is that the 33 % monetization rate is very high when compared to something like League of Legends which isn ’ t entirely comparable but in 2013 had a ~4 % monetization rate [ 5 ] .
This , combined with the below implies that this conversion rate may be the ceiling for now • As a side note , ~6 years ago FanDuel had ~300k monetized on an ~800k user base for @ @ @ @ @ @ @ 6 ] Given the cost structure of the company , I ’ m going to base the price targets around Enterprise Value / Revenues ( driven by MUPs & ARPUs ) .
• ARPU sensitivity from $ 41 – $ 47 for an average of $ 44 , just a $ 3 increase from current of $ 41 .
These MUPs imply a monetized customer base of 28mm – 33mm .
At the high-end , this implies that DKNG monetized customer base will equal MGM ’ s current total user base .
At @ @ @ @ @ @ @ , DKNG is trading at 3.5x – 4.5x forward Revenues on an expected > 5,000 MUPs .
• Consideration : A 1x premium to FanDuel ’ s 3.6x , implies a ~15 % upside to current .
They ’ re bigger than FanDuel , do they deserve the premium ?
• Consideration : Stock currently implies that they should on average be growing at 40 % QoQ – during 2018 they had on average +30 % growth QoQ in MUPs , marking their best year Jason Robins , 39 – Co-Founder & CEO @ @ @ @ @ @ @ day 1 in 2011 .
The 2 other buddies he started the Company with are still at DKNG .
Dude navigated the Company through the scandal that rocked them in ’ 15 & ’ 16 , and was the trailblazer in getting DFS labeled as a non-gambling product that enabled it to open in States without a gaming designation .
This shit is the stuff that gets people in history books .
His accomplishments make him seem like a very competent guy .
Has 3 kids now , and only ~3 % economic @ @ @ @ @ @ @ of the voting power through his Class B share ownership .
Also he actively participates in venture investments , sitting on 10 boards .
His comp plan performance bonus target is pretty murky , but main drivers are EPS growth , revenue growth , then a bunch of margin & return metrics , along with share price returns .
Overall , very open-ended & it ’ s safe to say as long as shit doesn ’ t hit the fan , he will be eligible for his max payouts year over year .
@ @ @ @ @ @ @ to encompass everything possible for maximum flexibility to justify him earning his max comp as long as DKNG is still around .
Since he ’ s got voting control of 90 % , I ’ ll end the specific-person overview here , but want to note that they have a very bloated C-suite .
12 folks at DKNG , 8 folks at SBTech , all with C-suite designations .
Whereas their main competitor FanDuel , has 3 guys with a C-suite designations & 1 EVP , but is a sub under a larger @ @ @ @ @ @ @ of ~5 guys .
Looking through glassdoor you can see the biggest complaint among employees giving bad reviews is based on management , all of the specific issues they point out IMO are a result of a top-heavy company .
Seems like a good starting point to optimize their cost structure , but given Robins ’ history of sticking this entire thing through with his co-founders since ’ 11 stuff like this doesn ’ t seem to be a part of his playbook .
They ’ re a public company now though , @ @ @ @ @ @ @ interesting to see going forward .
If I were to initiate a position in DKNG , the stock would have to fall to the $ 35- $ 37 range for me to be a buyer of the stock , and based on this rough intro analysis I ’ ll be considering Put options if it breaches $ 50 .
I would not touch Calls at this level .
Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based on the information in this article .
Do @ @ @ @ @

by IAMB4TMAN
This is an example of fundamental DD that takes place at ‘smart’ money institutions based on my professional experience in IBD, Private Equity & most recently at a HF (mods can message me for proof). Not thoroughly fleshed out b/c you autists have limited attention spans, but a summary. Figured I’d take the time to give back to this community that has provided many lolz, & should be a good measuring stick when evaluating other forms of fundamental DD posted here.
NFA.
DKNG – DraftKings, Inc.: vertically integrated US mobile betting operator that also provides retail sports betting & back-end betting solutions through SBTech. Think of SBTech as the tech ‘market-maker’ for traditional sports betting, they do all the funny math to set the betting odds & seem to be working on back-end solutions for DKNG Casino
The Big Picture
Total annual US Gambling Revenue: ~$90Bn [1] Casinos: ~$75Bn Illegal Sports Betting: ~$13Bn Horse Racing: ~$0.8Bn Daily Fantasy Sports: ~$0.4Bn
Only ~2% of the ~$90Bn gambling revenues were placed online which is the lowest in the world where betting online is legal. For example, in other countries online gaming activity represents ~6% – ~52% of total gambling revenues, with ~12% being the average.
Wall Street expects online gaming revenue to be $20Bn-$40Bn within the next 10 years. For this to be achieved, the online gambling market will have to achieve a ~30% penetration rate on total country gaming revenues. There is an expectation that this is could be easily achievable given penetration trends overseas – see page 11 of this: s1.rationalcdn.com/vendors/stars-group/documents/presentations/TSG-Investor-Day_March-27-2019.pdf
Other catalysts include increasing adaptation of sports betting in more states. States that have both legal sports betting + online sports betting permitted: NV, NJ, WV, PA, IA. Sports betting permitted but no online: DE, MS, RI, MO, AR. Prior to COVID there was ongoing discussions across many States, especially ones with growing deficits to explore how permitting sports betting could create a fresh avenue of tax dollars. Post COVID there is an expectation that these discussions will be given extra focus as many States will be hungry for incremental tax dollars. Important to note that currently 43/50 States allow DFS, but given the small share DFS has on total Gaming Revenues, it increasingly looks like DKNG is banking on traditional sports betting for a variety of reasons, more later. There are entire articles on Google arguing this catalyst so I’ll end this here.
Digging Deeper
DKNG’s main offerings are Daily Fantasy Sports (“DFS”) products & traditional sports book products to its clients. Long story short, a metric to look for in my opinion (that is curiously not reported by management or remarked on) is the hold % in traditional gaming sector parlance or the ‘rake’ & compare it to the ‘traditional’ gaming products like sports betting & Blackjack.
For DFS: DKNG takes ~15% of the prize pool (note: used to be ~6-11% [2]). Curiously, their main competitor FanDuel also has moved up to a ~15% rake recently. Google searches show the smaller competitors have a rake in the ~13% range.
This ‘rake’ has grown ~2x in 6 years, but it has been a delicate move on behalf of management. Why? B/c the more ‘sophisticated’ DFS players (equal to autistic day traders on Robinhood) have noted this increase & based on some Googling, some have moved down market to the smaller players. As a side note, many live casino games have their rules altered to grow the Hold %. For example, Blackjack games with 6:5 payouts on 21 have materially higher Hold % than the traditional BJ rules that pay out 3:2. Given the findings so far, DKNG may not have much room to materially increase its hold % in DFS games in the near-term from current of 15%. More on this later.
Now why is this important? This is important b/c the typical sports book (ex-Parlays) have a ~5% hold %/rake. Parlays have up to a ~30% hold (which is why it’s commonly known as the sucker’s bet), & just for reference, the average Blackjack table clocks in 14.5%. What this means: Every dollar put into these games, the “House” or DKNG, will take 15% of your money for DFS games, for sports bets they will be pocketing ~5%, up to ~30% if you’re into parlays, & we’ll just use the standard 14.5% BJ hold for the DraftKings Casino platform.
So why the acquisition of SBTech & a foray into the traditional sports gambling market? As you can see previously, the illegal sports betting market is >30x the size of the current daily fantasy sports market. So it’s clear that the DFS providers including DKNG are foraying into the space to capture this user base & hopefully convert them into games that have a higher hold %, such as DFS/DKNG Casino.
As of May 2020, DKNG has achieved a 30% penetration rate on its ~4mm ‘monetized’ DFS clientele to its Online Sports Book (OSB), from the OSB+DFS clientele, DKNG has converted 50% into its DraftKings Casino platform.
Including non-monetized users, user base totals at 12mm. Based on these unit economics: every 1mm of additional users -> 333k monetized users for DFS -> 100k users for OSB -> 50k users for DraftKings Casino.
Some Numbers – Italicized/Bolded the important
In total, DKNG has DFS paying clientele of ~4mm, the metric management focuses on is “Monthly Unique Payers (MUP)” which spans across DFS & online sports betting***. As of Q1’20 they reported 720,000*** MUPs, representing +16% YoY growth [3] Average revenue per monthly user (ARPU) of ~$41 , +11% YoY Based on previous observation of Hold %, looks like ARPU growth will be limited Since ’17, MUP has grown at a ~11% CAGR & ARPU has grown at a ~19% CAGR As a side note: the ~4mm monetized user base was acquired at ~$122/user over 3 years. Total users cost them $41/user over the last 3 years [3].
They are currently EBITDA negative & Wall St expects them to be positive by 2023 I took a dive into the math driving this, here is a summary: Based on their current cost structure they will need to have ~1.7mm MUPs at an ARPU of ~$46 to break-even. This implies total monetized users of ~10mm from ~4mm currently
Numbers that represent Risks to Long Thesis
DKNG’s user base of ~12mm is on the low end of the sector vs. its ‘brick & mortar’ competitor’s user bases (online betting platforms with physical casino presence) CZR with 55mm, MGM with 33mm, ERI with 10mm (in pending merger with CZR, could have a lot of overlap), FanDuel with 8.5mm Is there a concern for increased marketing costs to increase user base? Let’s look at a case study of NJ, the first state to open both mobile & retail sports betting: FanDuel + DraftKings have held 80%+ of the OSB market share since 12/2018 which is estimated to be driven by the conversion opportunity from DFS that is unique to both companies [4] On the flipside, a case study to examine going forward is how DKNG can get OSB customers in a State that does not allow DFS. Nevada. Home to Las Vegas. Prior to NV pushing FanDuel/DKNG out (highly likely due to casino lobbying), NV was a top-15 State in terms of revenue for them. NV is home to the fattest sports book in the US, & recently the gaming commission started to parse the data on sportsbook wagers done online vs. in-person, & it came out to roughly 50/50. It will be interesting to see how they try to capture market share in a state with no DFS
Long-term EBITDA margin target of 35% requires huge growth in MUPs Based on their estimated ’22 cost structure: Holding ARPU of ~$46, MUPs will have to be ~5.2mm, a 7x increase from current to achieve a EBITDA margin of 35% A focus on future earnings will be management’s ability to shift to a more fixed-cost structure which would effectively lower the MUP requirement for profitability
Things to look for when going Long
– Progress of additional States legalizing sports betting – specifically, States with DFS already legalized
– Cost structure evolving to a more fixed mix vs. the mostly variable mix currently as this will be the forward figure that determines profitability
– Increasing User Base (Curr.: 12mm) -> Monetized Base (Curr.: 4mm) -> MUP (1Q’20: 0.7mm)
Management seems to be focused more on the first step, but one thing to note is that the 33% monetization rate is very high when compared to something like League of Legends which isn’t entirely comparable but in 2013 had a ~4% monetization rate [5]. This, combined with the below implies that this conversion rate may be the ceiling for now
As a side note, ~6 years ago FanDuel had ~300k monetized on an ~800k user base for a monetization rate of ~37% [6]
Share Price Target
Given the cost structure of the company, I’m going to base the price targets around Enterprise Value / Revenues (driven by MUPs & ARPUs).
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MUP sensitivity of 5mm – 6mm
ARPU sensitivity from $41 – $47 for an average of $44, just a $3 increase from current of $41.
Share Price targets based on 2.0x – 4.5x EV / Sales. Note: Flutter Entertainment (FanDuel ParentCo) trades at ~3.6x EV/Sales
Bear Case MUP: 5mm -> $20.32 – $45.73
Base Case MUP: 5.5mm -> $22.27 – $50.10
Bull Case MUP: 6mm -> $24.21 – $54.47
These MUPs imply a monetized customer base of 28mm – 33mm. At the high-end, this implies that DKNG monetized customer base will equal MGM’s current total user base.
At yesterday’s close of $43.70, DKNG is trading at 3.5x – 4.5x forward Revenues on an expected >5,000 MUPs.
Share Price drivers / considerations:
– Continued multiple expansion
Consideration: A 1x premium to FanDuel’s 3.6x, implies a ~15% upside to current. They’re bigger than FanDuel, do they deserve the premium?
– MUP Growth exceeding beyond targets
Consideration: Stock currently implies that they should on average be growing at 40% QoQ – during 2018 they had on average +30% growth QoQ in MUPs, marking their best year
Management Team
Jason Robins, 39 – Co-Founder & CEO. Duke BA, started DraftKings from day 1 in 2011. The 2 other buddies he started the Company with are still at DKNG. Dude navigated the Company through the scandal that rocked them in ’15 & ’16, and was the trailblazer in getting DFS labeled as a non-gambling product that enabled it to open in States without a gaming designation. This shit is the stuff that gets people in history books. His accomplishments make him seem like a very competent guy. Has 3 kids now, and only ~3% economic ownership in DKNG but has 90% of the voting power through his Class B share ownership. Also he actively participates in venture investments, sitting on 10 boards.
His comp plan performance bonus target is pretty murky, but main drivers are EPS growth, revenue growth, then a bunch of margin & return metrics, along with share price returns. Overall, very open-ended & it’s safe to say as long as shit doesn’t hit the fan, he will be eligible for his max payouts year over year. I’m assuming the lawyers tried to encompass everything possible for maximum flexibility to justify him earning his max comp as long as DKNG is still around.
Since he’s got voting control of 90%, I’ll end the specific-person overview here, but want to note that they have a very bloated C-suite. 12 folks at DKNG, 8 folks at SBTech, all with C-suite designations. Whereas their main competitor FanDuel, has 3 guys with a C-suite designations & 1 EVP, but is a sub under a larger ParentCo that has its own management team of ~5 guys.
Looking through glassdoor you can see the biggest complaint among employees giving bad reviews is based on management, all of the specific issues they point out IMO are a result of a top-heavy company. Seems like a good starting point to optimize their cost structure, but given Robins’ history of sticking this entire thing through with his co-founders since ’11 stuff like this doesn’t seem to be a part of his playbook. They’re a public company now though, so it’s going to be interesting to see going forward.
TL;DR:
If I were to initiate a position in DKNG, the stock would have to fall to the $35-$37 range for me to be a buyer of the stock, and based on this rough intro analysis I’ll be considering Put options if it breaches $50. I would not touch Calls at this level.

[1] Susquehanna Research – U.S. Online Gambling 6/27/19
[2] rotogrinders.com/articles/bang-for-your-buck-a-look-at-dfs-industry-rake-153302
[3] draftkings.gcs-web.com/static-files/8f3a5c5a-7228-45bf-aab2-63604111c48d
[4] Goldman Sachs Research – DKNG Initiation 5/19/20
[5]www.gamasutra.com/view/news/223071/Dont_monetize_like_League_of_Legends_consultant_says.php
[6] rotogrinders.com/threads/how-many-people-actually-play-dfs-regularly-252044
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.


Shorting Uber

Uber IPO ’ d 1 year ago for $ 42 a share raising $ 8.1bn with an initial market cap of $ 70bn .
Today the stock trades at $ 34 and has a market cap of $ 62bn .
It is trading at a 72x it ’ s 2-year forward P/E ratio .
The notion that Uber will be profitable in 2022 at $ .48 / share by developing a brand new business line or being first to market with self-driving cars is utterly fanciful .
Uber ’ s growth stalled even before the Coronavirus .
Uber ’ s @ @ @ @ @ @ @ 2017 .
Investors were going wild and Uber was taking over the world .
Uber bought Otto , a self-driving trucking company that stole data from Google to found the company .
In 2017 , after many lawsuits , it forgot Otto existed and focused on self-driving cars .
Over the past month , Uber laid off 6,700 employees , or 30 % of their staff , and shuddered dozens of offices throughout the world to achieve savings of $ 1bn .
Achieving profitability by cost savings is impossible for a business that @ @ @ @ @ @ @ .
A 30 % workforce reduction shows that today they have absolutely no plan to develop new technology or business lines that can move them in the direction of profitability .
It basically removes any hope of developing a new future for Uber .
Uber will not come out with AWS , buy supermarket to deliver food , nor have the luxury to burn $ 4bn per year on self-driving cars ( Waymo ) .
As of its last filing , which only had a couple weeks worth of Coronavirus fear , Uber @ @ @ @ @ @ @ growth is slowing dramatically .
Furthermore , the lasting impact of the Coronavirus and an increased acceptance of work from home may forever halt Uber ’ s growth .
Uber themselves admit rides will never be profitable until there are self-driving cars .
If you just watched the Tesla 3 crash straight into an overturned big rig , we ’ re not going to get there in the next few years .
Certainly not by 2022 .
In the mean time , Uber will continue to burn $ 10bn a year just to @ @ @ @ @ @ @ 9bn if you believe their recent cost-cutting measures will be effective .
You may think Uber Eats is the next big thing , but remember they lose $ 3.36 on every order and they don ’ t expect profitability until 2024 .
Also , operations behind Eats are much more complex .
A self driving car can not deliver food .
Maybe they ’ ll figure that out , but not any time soon .
Growth , while high is slowing .
And remember more growth means more lost money .
Could Uber @ @ @ @ @ @ @ .
Uber is not the next Amazon .
While Amazon chose to not take any profits and reinvest in their business , it was still a choice .
Uber has no magic switch to make money and their business revolves around increasing mobility , not cost cutting and decreased commuting from office workers .
Uber ’ s ‘ Other Bets ’ account for a paltry $ 30mm in revenue .
Google gets to use ‘ Other Bets ’ as a line item .
Not Uber .
But how are they supposed to grow @ @ @ @ @ @ @ if they have no business line that makes money ?
Amazon has always had a profitable ecommerce business .
Google has search , Apple makes the highest quality hardware in the world and Microsoft is a combination of Google and Apple ( and other stuff that always seems to make money ) .
I see no bright spot in Uber ’ s future that will allow them to achieve even half of their current valuation .
Uber Has a Serious Cash Problem .
$ 9bn might seem like a lot of money for @ @ @ @ @ @ @ cap , but somehow , it ’ s actually a scary number .
Over the last 12 months Uber burned through $ 10bn in cash , funded by high yield debt .
Furthermore , Uber has basically zero tangible assets they can use to secure debt .
They only have their brand and driver relationships , which are about as toxic as their $ 900mm in debt coming due in 2025 , with a yield of 7.5 % .
Imagine if your mortgage had a 7.5 % rate .
Uber ’ s Q2 @ @ @ @ @ @ @ to be downright scary .
Banks are already loading up on high yield notes at the behest of the government .
Why would they add Uber to their portfolio of UEDs ?
The fact Uber even considered investing in Flying Taxis puts them in the same mental facility as Adam Neumann .
The world looked great in 2018 and 2019 .
Today is different .
We won ’ t have flying taxis anytime soon , I think people would rather increase remote work and live in more affordable areas further from city centers @ @ @ @ @ @ @ right now is a fantasy we do not need .
I just want to have a drink at a bar… All that said , I don ’ t think Uber will go bankrupt .
In all likelihood , they will merge with Grubhub , achieve some scale in food delivery , and centralize their ride-share programs to large cities with increased pricing at a dramatically lower scale .
Business trips will be fewer and Zoom meetings will be more common .
Today I ’ m buying a few put options expiring on December @ @ @ @ @ @ @ time for there to be bad news about earnings and for earnings to be released .
I ’ d like to see Uber do well in the long-term and I don ’ t hate the company .
I think they ’ re important to the economy and they take the kind of risks we need to push innovation forward .
I just don ’ t like the current valuation .
Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based on the information in this article @ @ @ @ @ @ @

by chancellor-sutler
Uber IPO’d 1 year ago for $42 a share raising $8.1bn with an initial market cap of $70bn. Today the stock trades at $34 and has a market cap of $62bn. It is trading at a 72x it’s 2-year forward P/E ratio. The notion that Uber will be profitable in 2022 at $.48 / share by developing a brand new business line or being first to market with self-driving cars is utterly fanciful.
Uber’s growth stalled even before the Coronavirus. Uber’s revenue grew 100% from 2016 to 2017. Investors were going wild and Uber was taking over the world. Uber bought Otto, a self-driving trucking company that stole data from Google to found the company. In 2017, after many lawsuits, it forgot Otto existed and focused on self-driving cars. Over the past month, Uber laid off 6,700 employees, or 30% of their staff, and shuddered dozens of offices throughout the world to achieve savings of $1bn. Achieving profitability by cost savings is impossible for a business that can only achieve profitability through massive scale. A 30% workforce reduction shows that today they have absolutely no plan to develop new technology or business lines that can move them in the direction of profitability. It basically removes any hope of developing a new future for Uber. Uber will not come out with AWS, buy supermarket to deliver food, nor have the luxury to burn $4bn per year on self-driving cars (Waymo).
As of its last filing, which only had a couple weeks worth of Coronavirus fear, Uber grew just 14.3%. Uber ridership growth is slowing dramatically. Furthermore, the lasting impact of the Coronavirus and an increased acceptance of work from home may forever halt Uber’s growth. Uber themselves admit rides will never be profitable until there are self-driving cars. If you just watched the Tesla 3 crash straight into an overturned big rig, we’re not going to get there in the next few years. Certainly not by 2022. In the mean time, Uber will continue to burn $10bn a year just to stay relevant. Er, maybe $9bn if you believe their recent cost-cutting measures will be effective.
You may think Uber Eats is the next big thing, but remember they lose $3.36 on every order and they don’t expect profitability until 2024. Also, operations behind Eats are much more complex. A self driving car cannot deliver food. Maybe they’ll figure that out, but not any time soon. Growth, while high is slowing. And remember more growth means more lost money.
Could Uber Be the Next Amazon? Fuck no. Uber is not the next Amazon. While Amazon chose to not take any profits and reinvest in their business, it was still a choice. Uber has no magic switch to make money and their business revolves around increasing mobility, not cost cutting and decreased commuting from office workers. Uber’s ‘Other Bets’ account for a paltry $30mm in revenue. Google gets to use ‘Other Bets’ as a line item. Not Uber. But how are they supposed to grow ‘Other Bets’ R&D if they have no business line that makes money? Amazon has always had a profitable ecommerce business. Google has search, Apple makes the highest quality hardware in the world and Microsoft is a combination of Google and Apple (and other stuff that always seems to make money). I see no bright spot in Uber’s future that will allow them to achieve even half of their current valuation.
We are primarily funded by readers. Please subscribe and donate to support us!
Uber Has a Serious Cash Problem. $9bn might seem like a lot of money for a company with a $62bn market cap, but somehow, it’s actually a scary number. Over the last 12 months Uber burned through $10bn in cash, funded by high yield debt. Furthermore, Uber has basically zero tangible assets they can use to secure debt. They only have their brand and driver relationships, which are about as toxic as their $900mm in debt coming due in 2025, with a yield of 7.5%. Imagine if your mortgage had a 7.5% rate.
Uber’s Q2 numbers coming out in August are going to be downright scary. Banks are already loading up on high yield notes at the behest of the government. Why would they add Uber to their portfolio of UEDs?
The fact Uber even considered investing in Flying Taxis puts them in the same mental facility as Adam Neumann. The world looked great in 2018 and 2019. Today is different. We won’t have flying taxis anytime soon, I think people would rather increase remote work and live in more affordable areas further from city centers. Taking a flying taxi into work right now is a fantasy we do not need. I just want to have a drink at a bar…
All that said, I don’t think Uber will go bankrupt. In all likelihood, they will merge with Grubhub, achieve some scale in food delivery, and centralize their ride-share programs to large cities with increased pricing at a dramatically lower scale. Business trips will be fewer and Zoom meetings will be more common.
Today I’m buying a few put options expiring on December 18th. That’s plenty of time for there to be bad news about earnings and for earnings to be released. I’d like to see Uber do well in the long-term and I don’t hate the company. I think they’re important to the economy and they take the kind of risks we need to push innovation forward. I just don’t like the current valuation.
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--2020-06-02--Remember the pandemic?! Yeah. Neither do they.

Hundreds of thousands take the streets in France in support of Black Lives Matter .
They demand an end to @ @ @ @ @ rights abuses , and U.S. street executions of civilians .
# ICantBreathe # GeorgeFloyd # @ @

Hundreds of thousands take the streets in France in support of Black Lives Matter. They demand an end to racism, impunity, human rights abuses, and U.S. street executions of civilians. #ICantBreathe #GeorgeFloyd #BlackLivesMatter pic.twitter.com/ExVOsf2gYH
— Anonymous (@YourAnonCentral) June 2, 2020


investmentwatchblog--2020-06-02--The Fed is creating the largest asset bubble ever.

La la land pic.twitter.com/gzPqTgYPwW — Sven Henrich (@NorthmanTrader) June 2, 2020
HALF OF SMALL BUSINESSES CAN'T COVER EXPENSES pic.twitter.com/cfuI4yyoIJ — Win Smart, CFA (@WinfieldSmart) June 2, 2020
2020 is a weird and ugly mix of 1918, 1932, 1967, and 1999. — Morgan Housel (@morganhousel) June 2, 2020
$VIX with slight breakdown. Could recover tomorrow. But now looks like up against overbought. pic.twitter.com/2Ot6AizCEg — Market Musings (@AndysCycles) June 2, 2020
Interesting chart from The Conference Board. I forgot that there was a large FOMO — fear of missing out — stock rally in 1930 pic.twitter.com/RVR8qiI9wZ — Paul Krugman (@paulkrugman) June 2, 2020


investmentwatchblog--2020-06-02--Enormous march extending multiple city blocks in #Philadelphia, one of the numerous protests over th

Enormous march extending multiple city blocks in # Philadelphia , one of the numerous protests over the death of # @ @ @ @ @ the nation today again.pic.twitter.com/ztFeEILmo8

Enormous march extending multiple city blocks in #Philadelphia, one of the numerous protests over the death of #GeorgeFloyd that are happening across the nation today again.pic.twitter.com/ztFeEILmo8
— Disclose.tv 🚨 (@disclosetv) June 1, 2020


investmentwatchblog--2020-06-02--66 million children could fall into extreme poverty because of coronavirus.

66 million children could fall into extreme poverty because of coronavirus .

66 million children could fall into extreme poverty because of coronavirus.
📕 Read more: t.co/IvAOQ85IYr pic.twitter.com/hYmKfWKfLR
— World Economic Forum (@wef) June 2, 2020


investmentwatchblog--2020-06-02--Holy cow! The S&P downgrade/upgrade ratio on levered loans hit 43.2! GDP is now projected to fall ne

Holy cow! The S&P downgrade/upgrade ratio on levered loans hit 43.2! GDP is now projected to fall nearly 53% in the second quarter, according to a Fed gauge

Holy cow ! The S&P downgrade/upgrade ratio on levered loans hit 43.2 ! That's not a %, btw. That's 43.2 downgrades for 1 upgrade 😱. The peak in the GFC was 8.4. — JohannesBorgen (@jeuasommenulle) June 2, 2020
GDP is now projected to fall nearly 53% in the second quarter, according to a Fed gauge t.co/lF6AD0HCEX — Jeff Cox (@JeffCoxCNBCcom) June 2, 2020
Poll from @Alignable reveals that 48% of small businesses are not able to pay June rent & other expenses in full @SoberLook pic.twitter.com/tNe7j6FxuP — Liz Ann Sonders (@LizAnnSonders) June 2, 2020
the unemployment rate is 19.7%, and Q2 GDP is estimated to be around -50%, but apparently the algos saw some "green shoots" in the last 10 minutes of trading today pic.twitter.com/BrVqvr7WY2 — StockCats (@StockCats) June 2, 2020
Chase card activity by stay home order status. Pretty much as expected, but still not much of a distinction t.co/VPtI9nGQqX pic.twitter.com/4bRKXTSt77 — Sam Ro 📉 (@SamRo) June 2, 2020


investmentwatchblog--2020-06-02--Very powerful resignation letter from a Facebook engineer who worked on misinformation tools.

Very powerful resignation letter from a Facebook engineer who worked on misinformation tools .
`` Mark always told us that @ @ @ @ @ at speech that calls for violence .
He showed us on Friday that this was @ @ @ @ @

Very powerful resignation letter from a Facebook engineer who worked on misinformation tools.
"Mark always told us that he would draw the line at speech that calls for violence. He showed us on Friday that this was a lie." pic.twitter.com/IfyhdHsprs
— Julia Carrie Wong (@juliacarriew) June 2, 2020


investmentwatchblog--2020-06-02--New York City Is a Warzone, Over 2000 Arrests So Far, Businesses DESTROYED, Gun Sales SHATTER Record

No atheists in the foxhole .
No gun confiscators when Daddy government refuses to save you .

No atheists in the foxhole.
No gun confiscators when Daddy government refuses to save you.
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