Jon McNeill, Lyft’s Chief Operating Officer, has unexpectedly left the company, according to Bloomberg.
Lyft is having so much trouble retaining a COO that the company has said it won’t hire a replacement for McNeill. The company has struggled to keep top lieutenants in past years, with McNeill’s predecessor, former Amazon executive Rex Tibbens, lasting less than three years.
Prior to working at Lyft, McNeill spent two and half years working at Tesla, directly under Elon Musk. His title at Tesla was president of global sales and service. Upon his hiring at Lyft, the company touted his experience and welcomed him to the “Lyft family”. Since then, of course, the company has gone public and seen its stock trade about 10% lower than its IPO price.
Lyft founders Logan Green and John Zimmer said in a email that McNeill’s role and responsibilities will be reassigned to other employees, while crediting him with establishing new businesses, including car repair shops for Lyft drivers.
The e-mail stated: “As JMac moves on to his next chapter, we wish him the very best.”
Shares of Lyft fell nearly 4% in mid-day Monday trading on the news, before paring their losses.
via ZeroHedge News https://ift.tt/2K0qRKG Tyler Durden
“American exceptionalism has led to a country that is exceptionally un-self-aware.” – Peter Thiel
The economic contraction ahead will put this borderline psychotic country through some interesting ch-ch-ch-changes. Mr. Trump now fully owns the Potemkin status quo of record stock markets poised against a withering rot of human capital at the core of an industrial society in sunset mode. Leadership at every corner of American life – politics, business, media – expects an ever-higher tech magical updraft of fortune from an increasingly holographic economy of mere fugitive appearances in which everybody can get more of something for nothing. The disappointment over how all this works out will be epic.
Globalism is wobbling badly. It was never what it was cracked up to be: a permanent new plateau of exquisitely-tuned international economic cooperation engineered to perfection. It was just a set of provisional relations based on transient advantage. As it turned out, every move that advantaged US-based corporations blew back ferociously on the American public and the long-term integrity of the social order. Sinister as it seems, the process was simply emergent: a self-organizing evolution of forces previously set in motion. And, like a lot of things in history, it seemed like a good idea at the time.
“Off-shoring” US industry jacked up corporate profits while it decimated working class livelihoods. In return, that large demographic got “bargain shopping” at Walmart, a life of ever-upward revolving debt, and dead downtowns. The country got gigantic trade deficits and government debt loads. In effect, globalism compelled America to borrow as much as possible from the future to keep running things the way they were set up to run. Now, there is just suspicion that we’ve reached the limits of borrowing. Soon it will be a fact and that fact will upend everything we’ve been doing.
You can see how this is playing out in politics, especially the proposed government-enforced redistribution of whatever wealth is supposed to be left. Of course, much of that wealth is a figment, represented in abstract financial instruments pegged to “money” that may have a lot less value than presumed. The Democratic Party detects opportunity in the gross imbalances of this notional capital and so they are promising every conceivable form of grift to voters from a guaranteed basic income and free medical care and college education to reparations for the descendants of slaves.
They certainly might win the 2020 election on the basis of that proffer, but good luck scaring up the actual financial mojo to make it happen without destroying whatever value remains in the US dollar. The predicament may be aggravated by foreign capital seeking refuge in US financial markets as the banking systems in China and Euroland unwind, giving politicians the false impression that other people’s money belongs to Americans. And anyway, what will these foreigners actually be investing in here? Collateralized loan obligations based on seven-year used-car payment schemes?
The American Left just can’t grok the fact that we missed the window of opportunity for setting up a national health system. That was a mid-twentieth century thang: cheap oil and industrial growth. Please note: it was the Democratic Party under Mr. Obama that turned the college loan industry (and Higher Ed with it) into the appalling racket it’s become, because it fit the template of a society pretending to prosper by racking up debt. That demographic of debtors will be seeking magical debt relief. If they get it, it will be at the expense of the government that took on the guaranteed backing of all that debt, now well over a trillion dollars.
Industrial growth is over, and with it the expectation that all the old debts can be paid back. A few economic commentators are predicting “stag-flation.” We’d be lucky if that’s all it turned out to be. But we’re unlikely to get a re-play of the 1970s. That was an era of geo-financial disturbance that resolved for a while with new oil from Alaska and the North Sea. That’s not going to happen again this time. Stag-flation was just a matter of going nowhere for a decade. The contraction ahead will be brutal, not going nowhere but rather going down hard to a lower and harsher standard of living.
It’s also hard to calculate how disturbing and disruptive the prosecution of the RussiaGate perps will be. If the Democratic Party is acting batshit crazy about it now after the Mueller testimony fiasco, how will they react when dozens of their partisans are marched into court to face charges of sedition. That ugly business looks on-track to collide with the coming financial distress. The result will be much more severe political turbulence than the thinking class expects.
It’s easy to imagine circumstances in which normal institutions get suspended and the old major parties are superseded by “emergency” seizures of power by other parties as yet unknown.
via ZeroHedge News https://ift.tt/2ZjOh2O Tyler Durden
Following China’s crude imports from Iran plunging this summer, sinking almost 60% in June compared to a year earlier – which corresponded to Washington shutting down the waiver program in May – leaders in Tehran are urging China to buy more Iranian oil.
China’s crude shipments from Iran totaled 855,638 tons last month, which averages to 208,205 barrels per day (bpd), compared with 254,016 bpd in May, according figures from the General Administration of Customs, cited in a recent Reuters report.
Iran’s Vice President Jahangiri made the appeal to Beijing and “friendly” countries to up their Iranian crude purchases in statements Monday. “Even though we are aware that friendly countries such as China are facing some restrictions, we expect them to be more active in buying Iranian oil,” Jahangiri reportedly told visiting senior Chinese diplomat Song Tao.
Image via Asia News
He said this while also on Monday issuing a statement saying Iran stood ready to “confront” American aggression in the region and that multilateralism must be upheld.
“The foreign policy of the Islamic Republic of Iran is to protect multilateralism and confront American hegemony,”Jahangiri said, according to the IRIB news agency.
He added that Iran’s recent move to breach uranium enrichment caps could be reversed should other parties return to upholding their side of the nuclear agreement.
Simultaneously, China’s oil purchases from Iran’s rival Saudi Arabia have soared to record volume, totaling 1.89 million barrels a day last month, according to numbers cited in Bloomberg.
“Shipments from the OPEC producer made up almost a fifth of its total oil purchases in June and was 64% higher than the previous month,” while at the same time “Imports from Iran fell to the lowest since May 2010,” according to Bloomberg.
Meanwhile, in a crucial development related to Iran’s trying to weather the severe US-led sanctions storm, a long anticipated plan for gasoline export has begun with an inaugural shipment to neighboring Afghanistan.
The Fars news agency said on Monday that a first consignment of export gasoline will start trading in Iran’s Energy Exchange (IRENEX) later this week.
It said some 10,000 tons of gasoline with octane number of 91 will be available for sale to Afghanistan through IRENEX on Wednesday, adding that the trade will take place both in the Iranian rial and in major international currencies.
Iran’s refining capacity has grown significantly over the past years as the country slashed fuel imports while also coping with increased domestic demand.
Officials have expressed hope that Iraq along with Afghanistan, as well as Caspian Sea countries would become main destinations for gasoline export.
via ZeroHedge News https://ift.tt/2GAKQxb Tyler Durden
I recently wrote about the “F.I.R.E.” movement and how it is a byproduct of late-stage bull market cycle. It isn’t just the “can’t lose” ideas which are symptomatic of bullish cycles, but also the actual activities of investors as well. Not surprisingly, the deviation of growth over value has become one of the largest in history.
This divergence of the “performance chase” should be a reminder of Benjamin Graham’s immortal warning:
“The investor’s chief problem, and even his worst enemy, is likely to be himself.”
With valuations elevated, prices at record highs, and the current bull market the longest in U.S. history, it seems like a good time to review the 5-most dangerous psychological biases of investing.
The 5 Most Dangerous Biases
Every year Dalbar releases their annual “Quantitative Analysis of Investor Behavior” study which continues to show just how poorly investors perform relative to market benchmarks over time. More importantly, they discuss many of the reasons for that underperformance which are all directly attributable to your brain.
From Dalbar’s 2018 study:
“In 2018 the average investor underperformed the S&P 500 in both good times and bad, lagging behind the S&P by more than 100 basis points in two different months.”
Cognitive biases are a curse to portfolio management as they impair our ability to remain emotionally disconnected from our money. As history all too clearly shows, investors always do the “opposite” of what they should when it comes to investing their own money.
Here are the top-5 of the most insidious biases investors are falling into RIGHT NOW!
1) Confirmation Bias
As individuals, we tend to seek out information that conforms to our current beliefs. If one believes that the stock market is going to rise, they tend only to seek out news and information that supports that position. This confirmation bias is a primary driver of the psychological investing cycle of individuals as shown below. I discussed this just recently in why “Media Headlines Will Lead You To Ruin.”
As individuals, we want “affirmation” our current thought processes are correct. As human beings, we hate to be told we are wrong, so we tend to seek out sources which tell us we are “right.”
Currently, individual investors are “fully” back in the market despite a fairly decent bruising in 2018. Historically, this has not turned out well for individuals, but given that “optimism sells,” it is not surprising to see the majority of the mainstream meeting touting a continuation of the bull market.
This is why it is always important to consider both sides of every debate equally and analyze the data accordingly. Being right and making money are not mutually exclusive.
2) Gambler’s Fallacy
The “Gambler’s Fallacy” is one of the bigger issues faced by individuals when investing. As emotionally driven human beings, we tend to put a tremendous amount of weight on previous events believing that future outcomes will somehow be the same.
The bias is clearly addressed at the bottom of every piece of financial literature.
“Past performance is no guarantee of future results.”
However, despite that statement being plastered everywhere in the financial universe, individuals consistently dismiss the warning and focus on past returns expecting similar results in the future.
This is one of the key issues that affect an investor’s long-term returns. Performance chasing has a high propensity to fail, continually causing investors to jump from one late cycle strategy to the next. This is shown in the periodic table of returns below. “Hot hands” only tend to last on average 2-3 years before going “cold.”
I traced out the returns of large capitalization stocks (S&P 500) and U.S. Fixed Income (Barclay’s Aggregate Bond Index) for illustrative purposes. Importantly, you should notice that whatever is at the top of the list in some years tends to fall to the bottom in subsequent years.“Performance chasing” is a major detraction from investor’s long-term investment returns.
Currently, money is chasing Technology, Discretionary, and Communications, with Energy, Healthcare, and Bonds lagging. From a contrarian viewpoint, with “Value” dramatically underperforming “Growth” at this juncture of the investment cycle, there may be a generational opportunity soon approaching.
3) Probability Neglect
When it comes to “risk-taking” there are two ways to assess the potential outcome. There are “possibilities” and “probabilities.”As individuals, we tend to lean toward what is possible such as playing the “lottery.”
The statistical probabilities of winning the lottery are astronomical. In fact, you are more likely to die on the way to purchase the ticket than actually winning the lottery. However, it is the “possibility” of instant wealth that makes the lottery such a successful “tax on poor people.”
As humans, we tend to neglect the “probabilities,” or rather the statistical measures of “risk,” undertaken with any given investment, in exchange for the “possibility” of gaining wealth. Our bias is to “chase”stocks, or markets, which already have large gains as it is “possible” they could move higher. However, the “probability” is that a corrective action will likely occur first.
With markets currently well deviated above long-term historical means, and valuations elevated, the possibility is greatly outweighed by the probability of a mean-reverting event first. The following chart is derived from Dr. Robert Shiller’s inflation-adjusted price data and is plotted on a QUARTERLY basis. From that quarterly data is calculated:
The 12-period (3-year) Relative Strength Index (RSI),
Bollinger Bands (2 and 3 standard deviations of the 3-year average),
CAPE Ratio, and;
The percentage deviation above and below the 3-year moving average.
The vertical RED lines denote points where all measures have aligned
Over the next several weeks, or even months, the markets could certainly extend the current deviations from long-term mean even further drive by the psychology of the “herd.”But such is the nature of every bull market peak, and bubble, throughout history as the seeming impervious advance lures the last of the stock market “holdouts” back into the markets.
Probability neglect is another major component to why investors consistently “buy high and sell low.”
4) Herd Bias
Though we are often unconscious of the action, humans tend to “go with the crowd.” Much of this behavior relates back to “confirmation” of our decisions, but also the need for acceptance. The thought process is rooted in the belief that if “everyone else” is doing something, then if I want to be accepted, I need to do it too.
“If all your friends jump off a cliff, are you going to do it too?” – said by every Mother in history.
In life, “conforming” to the norm is socially accepted and in many ways expected. However, in the financial markets the “herding” behavior is what drives market excesses during advances and declines.
As noted above, the “momentum chase” currently is good example of “herding” behavior. As Michael Lebowitz noted recently:
“The graph below charts ten year annualized total returns (dividends included) for value stocks versus growth stocks. The most recent data indicates value stocks have underperformed growth stocks by 2.86% on average in each of the last ten years.”
“There have only been eight ten-year periods over the last 90 years (total of 90 ten-year periods) when value stocks underperformed growth stocks. Two of these occurred during the Great Depression and one spanned the 1990s leading into the Tech bust of 2001. The other five are recent, representing the years 2014 through 2018.
When the cycle turns, we have little doubt the value-growth relationship will revert. In such a case value would outperform growth by nearly 30% in just two years. Anything beyond the average would increase the outperformance even more.”
Moving against the “herd” is where investors have generated the most profits over the long term. The difficulty for most individuals, unfortunately, is knowing when to “bet” against the stampede.
5) Recency Bias
Recency bias occurs when people more prominently recall, and extrapolate, recent events and believe that the same will continue indefinitely into the future. This phenomenon frequently occurs in with investing. Humans have short memories in general, but memories are especially short when it comes to investing cycles.
As Morningstar once penned:
“During a bull market, people tend to forget about bear markets. As far as human recent memory is concerned, the market should keep going up since it has been going up recently. Investors therefore keep buying stocks, feeling good about their prospects. Investors thereby increase risk taking and may not think about diversification or portfolio management prudence. Then a bear market hits, and rather than be prepared for it with shock absorbers in their portfolios, investors instead suffer a massive drop in their net worths and may sell out of stocks when the market is low.Selling low is, of course, not a good long-term investing strategy.”
This bias in action looks a lot like the chart below.
During bull markets, investors believe that markets can only go up – so “buy the dip” becomes a “can’t lose” investment strategy. This bias also works in reverse during bear markets. Investors become convinced the market will only go lower which eventually leads them to “panic selling” the lows.
Recency bias is the primary driver behind the “Buy High/Sell Low” syndrome.
Everyone’s A Genius
The last point brings me to something Michael Sincere once penned:
“At market tops, it is common to see what I call the ‘high-five effect’ — that is, investors giving high-fives to each other because they are making so much paper money. It is happening now. I am also suspicious when amateurs come out of the woodwork to insult other investors.”
Michael’s point is very apropos, particularly today, it’s currently “high-fives and pats on the back.”
The market’s ability to seemingly recover from every setback, and to ignore fundamental issues, has led investors to feel “bulletproof” as investment success breeds overconfidence.
The reality is that strongly rising asset prices, particularly when driven by emotional exuberance, “hides” investment mistakes in the short term. Poor, or deteriorating, fundamentals, excessive valuations, and/or rising credit risk is often ignored as prices increase. Unfortunately, it is only after the damage is done the realization of those “risks” occurs.
For investors, it is crucially important to understand that markets run in full cycles (up and down). While the bullish “up” cycle lasts twice as long as the bearish “down” cycle, the majority of the previous gainsare repeatedly destroyed.
The damage to investors is not a result of lagging markets as they rise, but in capturing the inevitable reversion. This is something I discussed in “Bulls And Bears Are Both Broken Clocks:”
“In the end, it does not matter IF you are ‘bullish’ or ‘bearish.’ The reality is that both ‘bulls’ and ‘bears’ are owned by the ‘broken clock’ syndrome during the full-market cycle. However, what is grossly important in achieving long-term investment success is not necessarily being ‘right’ during the first half of the cycle, but by not being ‘wrong’ during the second half.”
We are only human, and despite the best of our intentions, it is nearly impossible for an individual to be devoid of the emotional biases which inevitably leads to poor decision making over time. This is why all great investors have strict investment disciplines they follow to reduce the impact of their emotions.
At market peaks – everyone’s a “Genius.”
via ZeroHedge News https://ift.tt/2GCuS5I Tyler Durden
Small liberal arts colleges in the U.S. simply refuse to die, despite a torrent of bad news about the U.S. higher education marketplace and the increasing uselessness of their degrees.
Bennington College in Vermont is one such example, according to Bloomberg. It sports famous alumni like Donna Tartt and
Bret Easton Ellis and charges $73,000 per year for admission. Located at the foot of Vermont’s green mountains, it nearly went out of business in the 1990’s and was still under duress at the beginning of this decade.
But the school – and its 700 undergraduates – have hung on. It’s a microcosm of how these types of schools continue to defy the odds nationwide. Massachusetts’ Hampshire College was another institution known for its artisiness than has somehow still hung on.
David Bergeron, a former deputy assistant secretary in the U.S. Department of Education who specialized in higher education said:
“They’ve survived because they’ve been able to exploit what they’re good at, and that has enabled them to continue to attract students and retain faculty. The threat of closure has brought a new level of energy.”
The environment of pressure on these colleges has been helped along by the $1.6 trillion in student loans outstanding, discouraging many from even attending colleges at all. The hot-button issue is surely going to be center stage for the 2020 Presidential race and the number of high school graduates is also declining, especially in the Northeast and Midwest.
Meanwhile, immigration restrictions have slowed down the supply of tuition paying students from places like China. Last year, about 33% of colleges saw a decline in revenue from tuition, up 15% from five years ago. The Council of Independent Colleges now estimates that 2% of its roughly 650 members are “struggling financially.” About 12 of these colleges have closed or merged in the last 4 years, including Vermont’s Marlboro College and the University of Bridgeport in Connecticut, who have agreed to merge.
But the U.S. Department of Education says there is about 750 colleges with 1,000 or fewer students, compared with about 790 a decade ago, which is hardly a major falloff. Harvard Business School Professor Clayton Christensen had predicted that half of all U.S. colleges would go bankrupt in 15 years back in 2013, when online colleges were starting to take off.
Sweet Briar College
Colleges such as Williams and Amherst, a selective liberal arts school, still rank among the country’s most sought out education destinations and wealthiest institutions relative to size. But again, even colleges like Virginia’s Sweet Briar College, which has been under financial stress, have found a way to keep operating. In 2015, this college announced it was shutting down and its alumnae, who hired a law firm to prevent the plan, raised $30 million to save the school.
After a restructuring, the school cut its tuition nearly in half, to $21,000 and reduced majors to 18, from 40, and emphasized programs in science, technology and math. It has balanced its budget and raised $64 million since then. Enrollment is expected to grow this fall by 20%. They’re even come up with some “creative” revenue streams: “raising bees, crops and perhaps
later livestock, drawing on its 3,200 acres that were once a working farm.”
Nathan Kluger, director of agricultural enterprise said: “We’re driving interest, driving agriculture, driving an experience, which is really selling tuition dollars.”
Hampshire College, in Amherst, Massachusetts looked like it could be the most recent college casualty. It announced that it might not enroll freshman and that it was laying off 24 staffers. But alumni, including Ken Burns, are busy raising money for the school.
Bennington College
Interim President Ken Rosenthal said:
“We have to look in places for students that we may not have looked before. We’ll see where our alumni are living and go there and get their help to try to take the message of Hampshire College into their communities.”
Hampshire is now expecting to enroll 600 to 700 students this year and is saving money allowing students to take classes at neighboring schools. The college has hired 35 year old Mariko Silver, who helped turn around Bennington College in 2013. After Silver’s onboarding, the college saw its endowment triple to $51 million and it saw applications rise 20%.
Michael Hecht, who worked as the accountant to influential painter and Bennington alumna Helen Frankenthaler, also helped. He stated: “We’re being aware and taking advantage of opportunities that are out there. It was all there. We’re really connecting the dots.”
via ZeroHedge News https://ift.tt/32YG4Dl Tyler Durden
The outlook for natural gas producers is not great. They are getting clobbered by low prices today, amid a glut. But the medium- and long-term looks even worse, with renewable energy increasingly taking market share.
The gas industry has drilled itself into this predicament. Gas production continues to ratchet higher, rapidly replenishing inventories, which had plunged to a 15-year low heading into this past winter season. Inventories are still below the five-year average, but have climbed quickly in recent months.
If the natural gas industry had hoped that a stunning heat wave sweeping over a large swathe of the East Coast would rescue prices, they are surely now disappointed. Natural gas prices continue to fall, despite the heat, and there is little prospect of a rebound. On Friday, spot natural gas prices fell by another 3 percent, dipping below $2.20/MMBtu.
Record production from the Marcellus is one of the main reasons. But oil drillers are also to blame. The frenzied pace of drilling in the Permian – which, to be sure, has been slowing as of late – has produced a wave of natural gas so large that the industry is flaring enormous volumes of gas because of the lack of pipelines. Texas regulators seem unwilling to regulate the rate of flaring over fear of hurting the industry, so the flaring continues.
Still, record levels of associated gas production from the Permian are dragging down prices. New midstream capacity later this year from the Gulf Coast Express pipeline will bring more gas to market, adding to supply woes. More pipelines are in the offing for 2020 and 2021.
Even the increasing volumes of gas exported overseas is not enough to tighten up the market. “We expect the current oversupply to persist as production growth, mainly associated gas from oil basins, matches LNG export growth over the next year,” Bank of America Merrill Lynch wrote in a note.
While some of this is not new news, the surprising thing is that the outlook does not seem to improve the further out one looks. There is little reason to expect things to turn around. Gas production is still rising and inventories will be well-stocked next winter. “[T]oo much gas past peak winter keeps pressure on next summer and allows us to maintain our $2.6/MMbtu price projection for the 2020 strip,” Bank of America said.
Even more shocking still is that the investment bank said that the market becomes more depressed as we move into 2021. “Our lofty 4.5 tcf inventory outlook for 2021 is quite bleak and drives our 2021 average price forecast of $2.4/MMbtu, which is $0.15/MMbtu below the current curve,” the bank said.
Beyond that, the queue of new LNG projects dries up, taking away a growing source of demand. The glut of LNG capacity over the last few years lead to a dearth of FIDs in new export facilities. As the list of projects currently under construction finishes up, there are few projects coming in behind them. “The real problem, in our opinion, is not the LNG export capacity growth over the next year, but is instead the lack of LNG capacity additions in 2021-2023,” Bank of America said. “During the lull in US LNG export growth, the US will likely have to rely on some combination of other sources of demand and a slowdown in production growth.”
But here is where it gets really tricky for the gas industry. Even amid the current down market, demand has also been growing quite a bit. Cheap gas has opened up new markets in petrochemicals, electric power and exports. But by the mid-2020s, renewable energy really starts to begin eating into the gas industry’s market share. To date, natural gas in the electric power sector has grown briskly, seizing market share from the mortally wounded coal industry. But in the 2020s, gas will have a tougher time, as it begins to fall prey to clean energy.
The writing is already on the wall. NextEra Energy Resources signed a deal in recent days that may offer a glimpse into the future. The deal with Oklahoma-based Western Farmers Electric Cooperative calls for a renewables combo – 250 megawatts of wind, 250 MW of solar, and 200 MW of battery storage. Integrated together, the project addresses intermittency concerns. The kicker? It’s cheaper than natural gas. “It’s actually cheaper, economically, than a gas peaker plant of similar size, particularly with the tax credits that are available right now,” Phillip Schaeffer, the principal resource planning engineer at Western Farmers, told Greentech Media. “Prices have fallen significantly over the last several years.”
As the deal shows, this is not an abstract far-off threat for gas. Gas is losing out to renewables today. “[R]enewable energy could provide headwinds for power sector natural gas demand,” Bank of America said. “Wind and solar projects, even without subsidies, are now competitive with new build natural gas generation, which is a depressing statistic for potential longer term natural gas bulls.”
“The lull in LNG demand growth that begins in 2021 and renewable headwinds are too much for the natural gas market to overcome,” Bank of America concluded. Natural gas companies are ultimately going to have to hit the brakes on new drilling, the bank said.
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The Iranian Parliament Commission on Economy has recently approved cryptocurrency mining in the country amid US sanctions.
Governor of the Central Bank of Iran (CBI), Abdolnaser Hemmati said that “a mechanism to mine digital coins were approved by the government’s economic commission and will later be put to the discussion at a Cabinet meeting.”
The Bitcoin craze has circulated around Iranian media, landing on front pages of newspapers and has been featured on television news shows across the country. Even some of the country’s top ayatollahs have been publicly discussing cryptocurrencies, according to the Associated Press.
— Mansour Ghandi (IRAN 🇮🇷 ) (@mansour_ghandi) July 24, 2019
Some government officials are concerned that the energy-intense process of mining Bitcoin is violating Iran’s system of subsidized electricity.
Hemmati said, cryptocurrency miners shouldn’t run illegal operations but rather contribute to the country’s economy.
“We do believe that the cryptocurrency industry should be recognized as an official industry in Iran to let the country take advantage of its tax and customs revenues.”
Cryptocurrencies are an alternative to fiat money printed by sovereign governments around the world. Central banks have limited authority over Bitcoin and other digital currencies because the coins trade outside of the Society for Worldwide Interbank Financial Telecommunication, commonly known as SWIFT.
Mining coins in the country has become extremely popular thanks to government-subsidized energy; the cost per kilowatt-hour is some of the cheapest in the world. Miners avoid using Western rigs, which are too expensive, and opt for less expensive Chinese computers.
“It is clear that here has turned into a heaven for ‘miners, ‘” Mohammad Javad Azari Jahromi, Iran’s minister for information and communications technology, recently told AP in an interview. “The business of ‘mining’ is not forbidden in law, but the government and the Central Bank have ordered the Customs Bureau to ban the import of (mining machines) until new regulations are introduced.”
Ali Bakhshi, the head of the Iran Electrical Industry Syndicate, said the cost per kilowatt-hour for miners will be increased to 7 cents, a huge jump from the already going rate of a half-cent but still half the price versus Western energy markets.
Iran’s religious leaders have some concern that miners could try to circumvent paying extra for the electricity as well as using digital currency to hide or move money illicitly.
Tabnak News quoted three ayatollahs calling Bitcoin as either questionable or “haram,” suggesting it could be forbidden under Islam finance rules.
Jahromi said, religious leaders, have become more open to cryptocurrency after his staff advised them how it had value in the real economy.
“Some of our top clerics have issued fatwas that say Bitcoin is money without a reserve, that it is rejected by Islamic and cybercurrencies are haram,” Jahromi said. “When we explain to them, this is not a currency but an asset, they change their mind.”
Iran has been developing a rial-backed national cryptocurrency, able to avoid US economic sanctions.
A new study from the foundation for Defense of Democracies (FDD) insists cryptocurrencies are being used by Iran to bypass the America’s geopolitical supremacy.
The FDD study suggests that a rial-backed national cryptocurrency, particularly one tied to oil, could make it more difficult for Washington to enforce sanctions.
The world is evolving, shown through the adoption of cryptocurrencies in Iran, can circumnavigate Washington and the American financial sector who hold dominance in global finance. It could take at least a decade, but Iran is certainly laying the building blocks to operate its economy outside US control.
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For some unexplained reason, investors naively believe that in a country where, by now everyone knows that all the official government data is fake and manipulated and goalseeked to serve specific political goals, the corporate data is somehow more accurate or credible.
Hopefully that will now change, because as Shanghai’s Yicai Global reports, China’s securities regulator has suspended 43 IPOs and refinancings handled by the country’s second-largest accounting firm, including IPOs on the country’s new Star Market “Nasdaq-style” trading venue, as the company is probed for allegedly falsifying information.
Ruihua Certified Public Accountants, which audits almost a third of all listed companies in China, has been implicated in a scandal involving the infamous chemical maker Kangde Xin Composite Material, which we profiled back in January when we noted that the bankrupt company was reporting cash 15 times greater than due debt, up until the moment it defaulted.
Specifically, the accounting firm is accused of inflating profits by CNY11.9 billion (USD1.7 billion) from January 2015 to last December. As the CPA responsible for the company’s auditing all those years, Ruihua is also under scrutiny, the China Securities Regulatory Commission said in a statement on its website on July 26.
The Zhangjiagang, Jiangsu province-based firm is also suspected of bumping up its operating income through fictitious sales, exaggerated operating costs and fictional expenses on research, development and sales according to Yicai. If found guilty, the company and its controllers will be issued with the maximum penalty and will be banned for life from the stock market, the CSRC added.
In response, the Beijing-based accountancy denied any wrongdoing – of course – and said that is has fully performed its auditing duties regarding the chemical makers’ earnings report, it said in a statement yesterday.
Nevertheless, at least 29 IPO projects it was handling have been suspended, the CSRC said, and 10 of these were for main board IPOs, seven were for the small and medium-sized enterprise board, and 12 were for Shenzhen’s ChiNext board. One of Ruihua’s clients has actively withdrawn its IPO application. Furthermore, of the 511 companies awaiting regulatory review of their IPO applications, some 30 are audited by Ruihua and all of those have been turned down, according to financial information service provider Wind.
The accounting scandal has also spread to Shanghai’s new science and technology innovation board, the Star Market, which debuted a week ago today, and we profiled it here. It is probably not a shock that one day after the initial euphoria fizzled, the STAR market’s return have been disappointing as the buying enthusiasm from the first day disappeared, as did the easy gains.
Four of Ruihua’s clients, Beijing LongRuan Technologies, Beijing Transuniverse Space Technologies, Luoyang Jianlong Micro-Nano Materials and Shenzhen JPT Opto-Electronics have all been stopped from going public.
It’s not just IPOs that are being scrutinized – Ruihua’s refis have not been spared either. Seven listed companies’ refinancing plans have been halted as the CPA comes under investigation, the firms said on July 26. Two other public companies audited by Ruihua had to stop their refinancing for the same reason, they said in statements yesterday.
Another client of Ruihua is under investigation, this time by the Shanghai Stock Exchange. Despite CNY1.8 billion on its balance sheet, Furen Group Pharmaceutical was unable to issue cash dividends of CNY60 million. The bourse’s enquiry discovered over CNY1.7 billion missing, and that the Shanghai-based drugmaker only has CNY3.8 million in liquidity.
Last year, Guangdong Zhengzhong Zhujiang CPA’s IPO projects were also halted pending investigation.
The report of potential pervasive accounting fraud follows our report from Sunday that a major Chinese bank with over $100 billion in assets – Bank of Jinzhou – was bailed out over the weekend.
“For Baoshang Bank, the government took a state takeover, while for Bank of Jinzhou, the government introduced some state-owned strategic investors,” said Dai Zhifeng, analyst with Zhongtai Securities Co; in reality both were government rescues, only in the latest case Beijing used state-owned bank intermediaries.
We expect that the efficient market purists will soundly mock China for its wholesale data fabrication and fraud, but considering that US non-GAAP profits are at all time highs, while the US Government’s Bureau of Economic Analysis on Friday revised US corporate operating profits to a 5 year low, one wonder who is worse in fabricating and manipulating data – China or the US, and keep in mind that in the US accountants collectively participate in the non-GAAP fraud and regulators bless it by allowing such data manipulation to continue quarter after quarter. At least China is pretending to do something about the problem.
Alas, at the end of the day the reality is clear: the “adjusted profit” data in both the US and China is not worth the paper it is printed on.
via ZeroHedge News https://ift.tt/2K0KDFD Tyler Durden
Victoria’s Secret has more than just a Jeffrey Epstein problem. The four-decade-old lingerie retailer faces pressure to market to an ‘increasingly broadened’ definition of beauty – including ‘rubenesque’ women and transgender individuals who just want to feel sexy.
The company is currently doing Jeffrey Epstein damage control – after Epstein’s two-decade-long reign as a “close confidant, financial manager, and right hand” to the CEO of Victoria’s Secret parent company – L Brands’ Leslie Wexner, according to Bloomberg. And while he wasn’t an employee of Victoria’s Secret, Epstein had a major impact on the lingerie company over the years.
Epstein also influenced the way the lingerie company operated, associating with the division’s chief marketing officer, Ed Razek. In 2005, for example, Razek was a guest at Epstein’s Manhattan mansion, welcomed by young women who said they were working as models for Epstein. Razek told fellow guest William Mook, head of Mok Industries LLC in Columbus, Ohio, that Victoria’s Secret used Epstein models and that his girls were in “the major league,” according to Mook. –Bloomberg
Wexner and Epstein’s relationship officially ended in 2007, around 18 months after the financier was charged with several counts of sexual misconduct in Florida – to which he pleaded guilty to just one charge and spent 13 months jail with work release privileges (during which he is alleged to have continued to sexually abuse girls) in a sweetheart deal. Epstein was arrested in July on charges of sex trafficking minors, putting a fresh spotlight with the financier’s relationship to Victoria’s Secret and Wexner.
What’s more, L Brands may not have had such a clean break from the convicted pedophile and his network.
Epstein at one point had a $1 million investment in MC2 Model Management, according to a sworn deposition by a former company bookkeeper. MC2 is owned by Jean-Luc Brunel, a Frenchman who is alleged in a civil lawsuit to have brought girls as young as age 12 to the U.S. for sexual purposes and provided them to his friends including Epstein. Brunel even visited Epstein when he was first imprisoned in 2008. Victoria’s Secret continued to work with MC2-represented models after Wexner severed ties with Epstein. At least three MC2 models walked in Victoria’s Secret’s 2015 fashion show, and the agency’s models were at auditions in 2017 and 2018. They’ve also posed for its catalogs and website. In a 2014 letter to Brunel, his business partner, MC2 President Jeff Fuller, cited worries by Saks, Nordstrom, Macy’s, and other clients about Brunel’s friendship with Epstein. There was no mention of concern on the part of Victoria’s Secret. –Bloomberg
#MeToo
Looking forward, Victoria’s Secret “is increasingly at odds with society’s changing definition of beauty and the #MeToo movement, both of which are sparking a very different vision of how to portray women and their bodies,” according to the report – which notes that Wexner’s lingerie empire has shed $20 billion in market value since 2015.
Can a male-dominated company that presents women as lingerie-clad “angels” successfully market to millennials and younger generations conditioned to shun any hint of misogyny, fat-shaming, mansplaining, gender assumption and patriarchal oppression?
Founded in 1977 by Roy Raymond and bought five years later by Wexner for $1 million, the brand sold directly to women looking for push-up bras and sexy panties. As time went on, the brand became fused to a very specific notion of ‘sexiness’ – i.e. smoking hot, pouty-faced young women with tight, athletic bodies.
As the brand grew, it still provided plenty of eye candy for men—especially through its glittery annual fashion show, which became a marketing coup and a much-anticipated event for the men who flocked to view it. The first was staged in New York’s Plaza Hotel in 1995 (the same year then-real estate developer Donald Trump was forced to sell the legendary hostelry to avoid bankruptcy) and included model Stephanie Seymour gliding down the catwalk. Models wore white and black bras and underwear, but not the large white angel wings that the models in subsequent shows would make famous. Over the years the extravaganza grew with more lights and pop stars. Supermodels such as Gisele Bündchen and Tyra Banks graced the stage. As such, it cast a sex-infused spotlight on a product that our grandmothers viewed as utilitarian and likely purchased from the old Sears catalog. –Bloomberg
With companies such as Abercrombie dropping its highly sexualized marketing – which had fallen out of favor with shoppers – can Victoria’s Secret market to a #MeToo world full of “sexy at any size” women and transgender individuals? Will they?
Victoria’s Secret hasn’t strayed much from its uniformly tall and thin angels. Last November, Razek told Vogue magazine that, after consideration, he’d decided not to use transgender models in his fashion shows. “Well, why not? Because the show is a fantasy,” Razek said, sparking some outraged celebrities and customers to call for his resignation.
The failure to embrace changing norms about women and beauty may already be having an impact on Victoria’s Secret’s finances. Sales, which had been on a steady rise since 2010, fell to $7.4 billion in fiscal 2017—the first drop in seven years—and edged slightly lower again last year. Sales at stores open for more than 12 months, a closely watched measure in retailing, also slipped in 2018, with operating income at the unit tumbling 45%, to $512.4 million. –Bloomberg
As a result, L Brands has shut down dozens of underperforming locations – announcing in February the closure of 53 Victoria’s Secret locations in North America, over 3x its average.
“Given the decline in performance at Victoria’s Secret, we have substantially pulled back on capital investment in that business,” said L Brands executives during a May earnings call.
“Although results were consistent with our guidance, we are clearly not satisfied and are working hard to improve performance.”
Earlier this year, Wexner told employees that he was taking a “fresh look” at everything, including brand positioning, marketing, and real estate, in an effort to recharge the business. One notable change: In May, Victoria’s Secret pulled its fashion show from network television after 23 years. Ratings bottomed out in 2018, with only 3.3 million viewers, down from the previous all-time low of 5 million the year prior. In a memo Wexner sent employees about “re-birthing” Victoria’s Secret, he said network TV is no longer the right fit for its signature fashion show, which is expected to move to streaming. –Bloomberg
Can Victoria’s Secret forge a sexy path forward without alienating shoppers attuned to ‘body-inclusive’ messaging?
Rebel Wilson at the MTV Movie Awards, 2015
via ZeroHedge News https://ift.tt/2Yc6fHT Tyler Durden
The University of California-Berkeley has been taken off of the U.S. News 2019 Best Colleges rankings after U.S. News says it handed over incorrect alumni contributions data.
According to U.S. News, UC-Berkeley misreported alumni giving rates, telling U.S. News that the giving rate for fiscal years 2016 and 2017 was 11.6 percent when the actual rate of giving for 2016 was 7.9 percent.
UC-Berkeley also admitted to U.S. News that the incorrect reporting dates all the way to 2014, and was due to the university including alumni pledges for giving to the school, which is not what U.S. News uses in their ranking metrics.
A letter sent to UC-Berkeley by U.S. News states that the university included alumni pledges and tax-deductible charitable gifts in their submission, rather than including the number of alumni donors who gave “cash” gifts that qualified.
According to U.S. News, UC-Berkeley “greatly overstated” their alumni giving data, which counts for 5 percent of the ranking system that U.S. News uses to determine their list.
Because of this error, UC-Berkeley has been taken off of the list, and placed in the Best Colleges “unranked” category.
U.S. News states that the university will remain on the “unranked” column until the 2020 Best Colleges list is released, given that UC-Berkeley confirms the accuracy of the data submitted for that list.
For the next three years, the Chancellor and President of UC-Berkeley will have to certify the accuracy of the submissions given to U.S. News.
The 2020 Best Colleges rankings will be published in September, and U.S. News is requesting that UC-Berkeley certifies their submission by Aug. 5.
Prior to being taken off the list, UC-Berkeley held the number 2 spot, according to Forbes.
In addition to UC-Berkeley being taken off the list, the University of North Carolina-Pembroke, Mars Hill University, and Scripps College were also put in the “unranked” column.
Campus Reform reached out to UC-Berkeley but did not receive a comment in time for publication.
via ZeroHedge News https://ift.tt/2SNdPTy Tyler Durden
