September 8, 2023

Apple’s 2-Day Slide Nears 200 Billion Dollars on China iPhone Curbs

📰 News Organizations

  • Apple’s 2-Day Slide Nears $200 Billion on China iPhone Curbs. Apple Inc. is on track to wipe out $200 billion of market value in just two days, as China plans to expand a ban on the use of iPhones to government-backed agencies and state companies.

  • US, EU Plan New Chinese Steel Tariffs. The US and European Union are working on an agreement that would introduce new tariffs aimed at excess steel production from China and other countries, as well as put behind them a Trump-era trade conflict.

  • Stripe Rival Adyen Secures Banking License In The UK. The license enables its merchants to offer cash advances to small and medium-sized enterprises in the country. Adyen already has a banking license in the Netherlands, which lets it process merchant payments nearly instantly.

  • GM Stock Adds To Losses After UAW Calls Company's Offer "Insulting". GM offered a 10% wage increase among other benefits, far short of the UAW’s demand of at least a 40% wage hike. GM also proposed additional inflation-protection payments and signing bonuses totaling more than $16,000.

  • British American Tobacco Finalizes Russia Exit with Sale. British American Tobacco signed a deal to sell its businesses in Russia and Belarus. Financial terms of the deal were not disclosed, but the transaction is expected to be completed within a month.

🐦 Twitter

  • As mortgage rates surge to the highest levels since 2000, the mortgage market is going deeper into a state of paralysis. A gauge of US mortgage applications for home purchases fell to a 28-year low last week. Source.

  • The recent "spike" in bankruptcies in August has been much talked about in the last few days. Some worry it means a "credit event" is coming. This is backward. The credit event is the spike in bankruptcies. Source.

  • The bigger picture is that shelter is a basic human necessity. The housing market has been underbuilt relative to demand for more than a decade. What we need in the U.S. is to build more housing of all types, rented or owned. Source.

  • A Chicago Fed paper finds that most of the effects from interest-rate hikes have already been passed through to the economy and that current rate levels are sufficient to bring inflation back down to 2% by mid-2024 without a recession. Source.

  • The long lag of monetary policy in action: 56% of single-family rental operators saw more than half of their acquisitions fall through due to financing costs last quarter, up from 22% last year. Source.

Investors often imagine capital allocation decisions within the firm come with pre-defined probability-weighted outcomes. IRL, you're making tough decisions under uncertainty and, often, particularly in non-tech contexts, without clear ways of even measuring the return ex post facto.

Moses Kagan

📓 Online Publications

  • Coinbase and Aave Form Coalition to Promote Tokenized Assets. The newly formed alliance will focus specifically on onboarding institutions into the tokenized asset space. The alliance will hold its inaugural Real World Asset Summit on September 19 in New York.

  • Coinbase Launches Crypto Lending Platform For US Institutions. The institutional-grade crypto lending platform will be offered to U.S. investors as part of its existing offering Coinbase Prime, a spokesperson for Coinbase confirmed.

  • Visa Taps Solana For Merchant Settlements In USDC. Visa noted that these firms service a growing number of merchants interacting with the blockchain and crypto economy who may prefer to receive stablecoins over traditional fiat currencies.

  • MetaMask Launches Feature to Sell ETH for Fiat. MetaMask said users with crypto wallets connected to the platform’s Portfolio decentralized application would be able to cash out Ether and send fiat to their bank accounts in the United States, United Kingdom, and parts of Europe.

  • FASB Says Crypto Assets Should Be Marked at Current Values. The U.S. standard-setting organization for accounting has moved to insist companies use “fair-value” accounting to report their crypto holdings. The board is encouraging companies to seek early adoption of the new standard.

🎧 Podcasts

  • US and European Companies Rush To Issue Debt Before Rate Decisions. $34 billion worth of investment-grade debt was issued in the US. Companies are trying to take advantage of the fact that debt markets are relatively calm now before two interest rate decisions from the ECB and the Fed. Source(0:51)

  • The Geopolitical Landscape Is Driving Energy And Food Prices. The war in Ukraine has disrupted global energy markets, as Russia is a major exporter of oil and natural gas. This has led to higher energy prices, which have rippled through the global economy. Source(18:50)

  • Big Tech Faces Fresh Legal Obligations As Brussels Lists New Rules. The EU announced a list of digital services that will have to comply with the bloc’s new regulations. Think Apple’s App Store or Google’s search function. The list targets services from six of the world’s biggest tech companies. Source(1:40)

  • Retail Investors Power Into Uranium. Uranium is the fuel used to produce nuclear energy. The international geopolitical situation, like the Russian invasion of Ukraine, has cast into doubt reliable supplies of energy from abroad. Now, governments are looking to domestic sources of energy. Source(4:20)

  • Major Problems With Unemployment and Labor. Jason Hartman discusses issues such as the aging construction workforce and the challenge of recruiting young individuals. He anticipates a prolonged housing shortage unless substantial changes are made to government policies, labor markets, or construction technology. Source(12:18)

  • The Future is Inflationary. There may be periods of disinflation or even deflation, but in broad terms, the predominant macroeconomic trend is inflation. While the expansion of the M2 money supply might be showing a minor decrease, when viewed in comparison to the previous reduction, it's merely a small change. Source(31:32)