Month: May 2021

While many of the SPACs he has sponsored have seen less than stellar returns, Chamath Palihapitiya and his VC firm, Social Capital, are doing just fine.  Palihapitiya has been a player in Silicon Valley for years, but thanks to the SPAC boom, 2020 was a breakout year for the former Facebook employee. Not only did he rake in profits for his firm and his investors, but SPACs have changed the nature of the IPO process

Somewhat lost in all the excitement of the SPAC boom is the fact that Social Capital is a VC firm that has invested in more than 70 companies during the past decade, which has been a lucrative one for Silicon Valley. Social Capital has backed many a winner, including Slack, SurveyMonkey, Wave (acquired by H&R Block) and Yammer (which was acquired by Microsoft). Its entire portfolio is listed here.

Between 2011 and 2020, Social Capital has achieved a Gross Internal Rate of Return equivalent to 1,441%, compared with just 248% for the S&P 500. But as Warren Buffett, Jamie Dimon and Jeff Bezos have shown, annual investor letters aren’t so much about sharing returns, but are about allowing the CEO to pontificate about issues near and dear to their hearts.

And Palihapitiya, whose interviews and tweets draw a large audience, didn’t disappoint. In a section entitled “What the hell is going on – 2020 edition”, Palihapitiya opened with one of the most quoted lines penned by Charles Dickens – “it was the best of times, it was the worst of times…” before progressing to other topics from BLM, to obesity to the fact that “people have stopped thinking for themselves.”

We have reproduced the entire section below (emphasis ours):

What the hell is going on – 2020 edition

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way…”

Most of us recognize this as the famous beginning of Charles Dickens’ 1859 novel A Tale of Two Cities. Dickens wrote about the years leading up to the French Revolution and is about two men who are, in some ways the same, but in others completely different. In hindsight, 2020 can be described in equivalent terms.

On the one hand, 2020 was a witness to the ongoing compounding of prosperity, health, life expectancy and wealth that has symbolized the post World War II 20th and 21st centuries thus far. But at the same time, through the lens of COVID-19, 2020 introduced us to the fragility of our lungs, our borders, our institutions and our compassion with many lives lost and many mistakes made.

In no world was the coronavirus pandemic a blessing but it was instructive. What was laid bare in the cloud of 2020 was, if taken positively, a roadmap for us to follow if we want to rebuild that “shining city upon a hill” again.

Globalization as we know it is over

This, in our opinion, is the largest macro force at play coming out of the pandemic, but it is still poorly understood. First, some history. When historians describe the period from 1980 to 2020, they may initially focus on Paul Volcker’s fight to rein in runaway inflation but it will quickly move to 1994. In 1994, Deng Xiaoping’s “socialism with Chinese characteristics” faced a reckoning with the devaluation of the RMB to the US Dollar. While a currency devaluation may not mean much to most people, the implications of this one were immense. Overnight, China’s currency became almost 40% more competitive and the West was flooded with an amazing production surplus. We were able to buy things made in China at a huge discount, so we bought more and more, building an insatiable demand of retail consumption.

This currency devaluation also had several advantages for China. With a large demographic bulge of young people, the government was able to put these hard working and ambitious people to work in all manner of factories. In turn, these factories were increasingly running 24 hours per day feeding the West’s insatiable appetite for consumption – and a virtuous cycle was born. China was then able to take the proceeds of this activity and invest heavily in its own infrastructure, running massive yearly GDP gains and eventually becoming the 2nd most important economy in the world.

Other Asian countries, not willing to stand on the sidelines, joined the devaluation fun and by the turn of the century, we had seen an entire block of countries devalue their currency relative to the US Dollar further exacerbating the trade deficit/surplus between the West and Asia.

Then in 2001, the other shoe fell.

With President Bush increasingly pushing for a war in Iraq, he also advocated for China to become a member of the World Trade Organization. By December of 2001 China was admitted to the WTO and in November of 2002, China supported the UN Security Council resolution that created the pretext for the US invasion of Iraq. Within the course of a few months, the US became distracted by fighting a protracted and oddball war in the Middle East while China was able to focus on scaling their economy and building wealth. The US was spending money needlessly while China was saving and investing.

Then, because of China’s admission to the WTO and the normalized trade relations that came with it, globalization was supercharged. Companies in the West were not just incentivized to buy cheap Chinese goods, they also had a mechanism to export jobs to, and invest heavily in, China. All of this, as we know now, ultimately hollowed out the American middle class, created the Rust Belt, lit the fuse on the opioid crisis and enabled a resurgence of both left and right populism. The kill shot to globalization came in 2016 with the election of President Trump – it was the disenchanted protest vote heard around the world.

“Just in time” was a feature and is now a bug

We should note that despite all of the issues with globalization noted above, we were not allowed to be anything but positive about globalization until the pandemic.

During the pandemic, facing critical shortages of goods like PPE, it became clear that globalization had created a fragile ecosystem which was optimized for “just in time” instead of “under all circumstances”. The former is cheaper and faster while the latter manages corner cases and reliability despite being inefficient and costly.

Now it’s easy to be anti-globalization and advocate a hyper balkanized world view. But the problem is that if each country was forced to be self-sufficient, it is akin to advocating for the Dark Ages. Instead, a more reasonable middle ground is a world where we value a handful of trading partners for critical resources, metals and supply chains versus just one. While no one country will get rich quickly under this model, and while it will likely be more inefficient and cause prices to rise, it will also allow many countries to create lots of middle class jobs for their populations (ie the circa 2000 China playbook but for everyone).

Based on this, we see many new investment opportunities in all things “resiliency”. In rebuilding supply chains for rare earths, battery metals, semiconductors, additive manufacturing and many other end markets, we believe we will see a resurgence of the American middle class and our manufacturing prowess. This will also have a secular, positive impact on commodity prices, as well as creating a new generation of technology companies who view “under all circumstances” as a feature and “just in time” as a historical artifact.

Basically, by the end of 2020, we essentially learned that the original manifestation of globalization was like sugar. In the right quantities, it’s hard to beat, but if there is too much of it, it will lead to cavities and disease.

We have an epidemic of obesity

Speaking of disease, simply put, the pandemic told us an ugly truth: we are a nation of overweight and obese people and it’s getting worse. At the end of 2020, 42.4% of all Americans were obese. If being obese wasn’t psychologically and physiologically hard enough, the pandemic made clear that it was also an acute killer. Of all hospitalized patients with COVID-19, 78% were overweight or obese. Further, the mortality rate for this cohort was 20%. Chained probabilities mean that if you are overweight/obese and you are hospitalized with the next variant of covid you have a (78% * 20%) = 15.6% chance of dying. And each new year, and with every new variant, you have a new 15.6% chance of dying. At some point, it’s impossible to outrun these odds.

We have a responsibility to recognize this as the epidemic that it is and start to address it in scaleable ways. The most difficult thing to fix, but where tremendous value will come from, is improvements to our domestic food supply. American’s have become addicted to cheap food high in sugar, preservatives and other additives. It’s not clear that there is a sustainable food supply that can be created at the same price point but this is where we need to invest engineering, science and government resources. It is possible to imagine a domestic food supply that is rich in nutrients, free of pesticides and engineered to taste good that can satiate the American palate. If we don’t, and the next pandemic doesn’t kill us, then over the next few decades, the chronic care of America’s obese population will.

People have stopped thinking for themselves

Part of what led to our obesity epidemic were lies about fats versus sugars. The issue of truth has only become more exacerbated. In fact, the most pernicious issue with the pandemic was how rife it was with a lack of information, disinformation and misinformation. The often conflicting and inconclusive statements from our institutions: CDC, WHO, POTUS, FDA disappointed many. Wear a mask. Don’t wear a mask. Clean surfaces regularly. Surfaces don’t pass COVID-19. Ingest bleach. Don’t ingest bleach. Don’t take this vaccine because it causes clots. Actually, that’s not true, take it.

As all of this conflicting information was put into the world on the same level playing field, average people were left to scratch their heads in confusion, paralyzed with fear or invent their own conspiracy theories to explain it to themselves.

In fact, all of this mis/disinformation had a very sinister result. Instead of making the issue simpler to understand, we started a dangerous new trend of making science about interpretation vs facts. Every day of the pandemic, we saw various ways of interpreting data, facts, cohorts and theories to maximize clicks and confusion and minimize rational decision making. Even worse, we stopped iterating, we stopped changing our minds through data and instead we allowed bad decisions to fester because saving face became more important than good decisions. This is a dangerous trend which will undoubtedly spill into many other organizations we rely on unless we do something.

In a world of social media where everyone has a megaphone, we need to increasingly rely on institutions for the truth, not the opposite. But the pandemic has further eroded this expectation and has drawn opinion lines around science. The implications of this for future pandemics, natural disasters or broad public agreement on big issues is concerning – especially as we leave the pandemic, survey the damage and try to return to normal.

Inequality and climate change are getting worse

If we entered 2020 precariously trying to manage the growing inequality we have in America, we left with even fewer answers and new levels of anger and discontent. The trillions of dollars printed by the Federal Reserve in 2020 were critical to ensuring well functioning capital markets, but it also exacerbated the asset inflation that separates average Americans from the wealthiest ones. Despite a raging pandemic, large unemployment and negative GDP, the S&P 500 returned 17.88% in 2020 (with dividends reinvested). It’s likely that most Americans didn’t feel 17.88% richer or more secure by the end of 2020 but financial assets seemed to not listen.

At the same time, despite an entire world in a lockdown, the effects of climate change continued unchallenged. In fact, per NASA, despite much less economic activity, 2020 was not only the warmest year on record, it added to a trend where now the last seven years have been the warmest seven years on record. At this rate, the impacts to the Earth’s biodiversity and resource scarcity (food, water) are unavoidable.

BLM

Finally, as we look back on 2020, we need to talk about Black Lives Matter. While we all want to live in a world where stating the obvious isn’t necessary, this is what millions of people were forced to do throughout America in 2020. The overwhelming majority of BLM protests were just that – peaceful statements of disapproval about the status quo. The reason is that over decades, we have allowed systemic racism and unconscious bias to affect how an entire class of people are treated – by the justice system, by the penal system, by the social welfare system, by the education system and the list goes on – because of the color of their skin. In no reasonable, moral worldview is this acceptable. Even in the most reductionist worldview, if it could happen to them, then why not to you? The point is that equality is a pillar of the US democracy…not an expendable feature that can come and go.

To wit, we can’t fix what we don’t acknowledge and we need to acknowledge that this has happened and begin the hard work of finding solutions. Again, as in other areas, the immediate reflexive reaction is to swing the pendulum wildly to the other side which is what politicizes the issue and stops progress. Is the solution to BLM and improving policing of black and brown lives to wildly decarcerate? No. It’s a more nuanced middle ground where you can logically support BLM, training and accountability for police and law and order all at the same time. I think we will find that this kind of nuance has broad support across America for the politician willing to take this middle ground.

Insiders vs Outsiders

In all of these issues – inequality, climate change and BLM among many others, lies an important emerging truth about how, in 2021, solutions can be found and coalitions built. In order to truly address the root causes of inequality, climate change or systemic racism we need to acknowledge what brought us here.

Again, some history. The modern media landscape before social media was about a few, trusted outlets that became the tastemakers for the broad majority of people. If you didn’t like the opinion of CBS News, you could always switch to ABC or NBC. Through the social media lens of 2020, having a choice between ABC News, NBC News and CBS News is akin to the famous Henry Ford quote that:

“Any customer can have a car painted any colour that he wants so long as it is black.”

The implications of this monocultural interpretation of facts and truth were vast and, in hindsight, somewhat predictable. There were a few outlets (NBC, CBS, ABC) that catalyzed opinions and views – and as long as they stayed relatively centered, not much could go wrong. At the same time, it also turned out that systemic injustices would continue to compound with no obvious way to shine a light on and fix them unless these three outlets decided to do so.

This hasn’t just been a problem of broadcast TV. In fact, many of the most important issues of our time were the byproduct of business model decisions within the media landscape that were poorly thought through, if at all.

Take for example, the rampant inflation in the price of US private universities.

What does this have to do with the media? The prices of US private universities were relatively stable until they exploded in 1983. As it turns out, 1983 was also the year that US News & World Report started their Best Colleges Ranking issue. In it, they amplified artificial markers of admissions exclusivity including selection rate and cost. This fed the university administrators and parents with a new kind of insecurity that was masterfully, and perhaps inadvertently, exploited to create the higher education system we now have. As they sold more ads and sold more copies, entire admissions criteria were changed in order to rank highly. Heretofore normal parents became “helicopter parents” all fed by keeping up with the Jones’ who sent their kid to Stanford. Perhaps the team at US News & World Report were simply trying to sell ads in their magazine and deserve no blame, but the result is still the same.

The point is that many of our institutions, our biases and status quos have been shaped by a select group of media insiders who tell us what to know or think. While this isn’t inherently wrong, in and of itself, it’s a system that is under attack. Social media now allows outsiders to sit on the same level playing field as insiders with insiders scrambling to find new solutions. If you aren’t convinced, just see what your kids browse on YouTube.

You can now find your own news, your own tribe, your own calling and feel validated in a way that wasn’t possible before. We have all become multi-faceted and diverse in our opinions with room and opportunity to explore the edge cases and think in nuanced ways. This has also meant that centralized tastemaking and narrative control are the least valuable it has ever been.

For most people, the solution is in getting the facts, finding the middle ground, de-escalating the rhetoric, being open minded and listening to one another. The implications of all of this are vast and we are focused on how all of this may play out, particularly in the financial markets.

On Markets

If 1980-2020 was about rampant globalization, then 2020-2060 will be a moderation of this dynamic. In part because of demographics. As we start 2021, there has been a meaningful shift in the demographics of the West vs Asia. Every two years, the median age in China increases by ~1 year. In America, we are roughly staying the same. As this has played out over time, the median ages of China and America have now become equal. But China will continue to age while America remains relatively young over the next few decades. The scale of this demographic shift means fewer young workers in China, increased domestic consumption by older Chinese citizens and the attendant infrastructure needs to deal with an aging population. As China lowers growth to deal with this trend, the impact on prices should see a reverse of the 1990s and 2000s. In other words, prices, in general, are more likely to go up than down for traditional commodities and goods.

Now as we face rising prices, the existential risk in the market is related to inflation. As inflation goes up so will interest rates which has negative implications to future cash flows (this disproportionately negatively affects tech companies). That said, an eternal truth about interest rates, inflation and the like, is that the only way to be immune is to grow really fast. While it’s true that there are cyclical companies to own at certain times over others during a rising inflationary period, the surest way to survive is to keep growing faster than the rate of rising costs. To that end, while we are cautious believers in the case for moderate inflation we remain ardent believers in the case for technology and growth stocks.

The no man’s land, however, is the slow growing company – whose leadership has eroded. These are the new quicksands of the public markets and while tantalizingly offering cheap cash flows, unless that cash can create a new arc of growth for that company or be invested by that CEO at superior rates of return, it is literally the last puff of a used cigar that one is best advised to avoid.

On Performance

We had a very strong 2020.

Palihapitiya compared Social Capital’s returns to both the S&P 500…

…while also comparing the firm to Buffett’s Berkshire Hathaway.

Readers can find the full letter below:

Authored by Liam Brooks via AmericanThinker.com,

Teen climate zealot Greta Thunberg raised some eyebrows last week when she tossed an f-bomb in a video she posted Saturday to commemorate the International Day of Biological Diversity. (Something I’ve admittedly never heard of.) 

“Our relationship with nature is broken,” Saint Greta flatly stated.

“But relationships can change. If we don’t change, we are f**ked.”

”Our relationship with nature is broken. But relationships can change. When we protect nature – we are nature protecting itself.”

Thank you @MercyForAnimals for sponsoring this film by @tommustill and me.#ForNature #BiodiversityDay pic.twitter.com/2tXPFaeqWq

— Greta Thunberg (@GretaThunberg) May 22, 2021

Primarily known for her astounding expertise on climate change and fossil fuels, the 18-year-old Swedish activist has expanded her wealth of knowledge to include medicine, agriculture, and forestry.

 “Millions have died from COVID-19, Zika, Ebola, West Nile Fever, SARS, MERS,” Saint Great advised.

“Up to 75% of all new diseases come from other animals. Because of the way we farm and treat nature, cutting down forests and destroying habitats, we are creating the perfect conditions for diseases to spill over from one animal to another and to us. The next pandemic could be much, much worse. But we can change.”

But Saint Greta didn’t stop there.

She also displayed her expertise in nutritional science, issuing an edict on how her subjects should eat. According to Greta, switching to a plant-based diet could save up to eight billion tons of carbon dioxide in the atmosphere annually. Add that to the total elimination of the fossil fuel industry, her long-stated primary goal, and all living beings may not be totally extinct by 2030. 

“We must value Nature by the way we spend our money, everything that hurts and downgrades nature must have very high tax, so high to replace all other taxes except for a wealth tax!”

Pretty impressive for someone with a ninth-grade education, Asperger’s Syndrome, clinical depression, OCD, and selective mutism. Makes me somewhat ashamed of my college diploma, a worthless piece of paper which can’t even protect me from my inherent whiteness, let alone the destruction I cause with every bite of filet mignon!

“As long as we value money above life, nothing will change. Stop capitalism. Change our values.”

Thank God for the likes of Saint Greta Thunberg, whose profound intellect helps protect fools like me from ourselves!

While Greta’s profanity is viewed negatively by certain members of the Great Unwashed, the truly enlightened understand where she’s coming from.

After all, with the entire planet facing imminent collapse, the ignorant masses — you know, capitalists, conservatives, climate change deniers, Trump supporters, racists, people who eat meat and drive gas-powered vehicles, etc., etc., etc. — sometimes need to be slapped in the face to get a true dose of reality.

And who better to prescribe that essential medication than Greta Thunberg, Patron Saint of the Hysterical Left.

If we’d come to our collective senses and follow Saint Greta’s simple formula for positive change, we can avoid certain disaster and truly live in utopia!

Imagine yourself and your loved ones gathering berries and nuts and returning to your grass hut, and… gathering berries and nuts and returning to your grass hut.

Dozens of people are missing in north-western Nigeria after a boat carrying 200 capsized on Wednesday, according to Reuters, citing a state spokesperson.

“The boat was ferrying about 200 passengers” coming from the neighboring country of Niger, said Yahaya Sarki, a spokesperson for the governor of Kebbi.

“Their locally made wooden boat capsized mid-water,” Sarki said. “Bodies are still being recovered. We can’t ascertain the number for now.”

The boat was reportedly overloaded when it suddenly snapped into two in the middle of the Niger River. 

Reports of how many people on board vary from news agency to news agency—some say between 160 and 200.

Authorities in Kebbi State told the BBC that first responders had been dispatched to the scene to search for survivors. 

“A rescue operation is underway, but only 22 survivors and one dead body have been recovered,” a local official reportedly said.

Qasimu Umar Wara, a resident of Wara town, told Reuters the passengers were returning from a newly-discovered gold vein in Niger. 

“They usually go there in the evenings and return to Wara in the morning,” he said. “Most of them are petty traders, food vendors and the local miners.”

The wooden boat is reportedly rated for 80 passengers, and the accident is likely due to overloading. 

Jared Dillian, Bloomberg Opinion columnist and publisher of The Daily Dirtnap, returns to the Daily Briefing to update viewers on his inflation thesis and the re-opening trade. He tells Real Vision’s Jack Farley why he thinks the re-opening might already be fully priced in and shares advice to investors on how to manage their risk in stocks, bonds, gold – as well as Bitcoin.

Since Bill and Melinda Gates first announced their divorce earlier this month, barely a day has passed without some unflattering new revelation, as the American media apparently scrambles to compensate for all those years where it treated Bill Gates with kid gloves.

It’s bad enough that Melinda reportedly divorced Bill over his insistence on maintaining ties with Jeffrey Epstein, something that has stoked speculation about whether Gates might face more sexual harassment allegations (sure enough, reports have emerged claiming he was essentially pushed out at Microsoft over improper behavior involving a female subordinate) or that he might be caught up in the Epstein drama.

Larson

While that so far hasn’t happened, the allegations of sexual improprieties have been enough to shatter his “dad geek” image. And now, the NYT has published a #MeToo-style report alleging that Gates’ main money man, Michael Larson, has a long history of sexual harassment and Scott Rudin-style abuses, and that Gates has repeatedly been warned about Larson’s antics, but neglected to act. Perhaps because Larson helped Gates grow his assets from $10 billion to $130 billion-plus through a strategy of low-profile investments, including buying up so much land that Cascade is believed to be the largest owner of farm land in the US.

Larson has managed Gates’ money since the early 90s; before that, he was a portfolio manager at Putnam Investments. Cascade was incorporated in 1995 in Washington State. The generic-sounding name allowed Larson to runa  vast investment operation with a relatively low public profile. The perception that Larson had Gates’ unwavering support allowed him to do essentially whatever he pleased. And his employees, most of whom were hired directly out of college, never felt empowered to speak up.

The list of allegations is pretty typical: Larson was accused of sexual harassment, racist remarks, acting extremely vindictive toward employees who left the company as well as his extremely blunt and degrading comments made in meetings, which his staffers described as “Larson bombs”. Overall, he was described as a “bully”.

But what’s more, Bill and even Melinda Gates had been made aware of Larson’s behavior as early as the mid-2000s.

But Mr. Larson, 61, also engaged in a pattern of workplace misconduct at Mr. Gates’s money-management firm, Cascade Investment, according to 10 former employees as well as others familiar with the firm.

He openly judged female employees on their attractiveness, showed colleagues nude photos of women on the internet and on several occasions made sexually inappropriate comments. He made a racist remark to a Black employee. He bullied others. When an employee said she was leaving Cascade, Mr. Larson retaliated by trying to hurt the stock price of the company she planned to join.

Cascade paid off at least seven people , including former employees, who witnessed or were the victim of Larson’s inappropriate behavior. The fact that Gates was so reluctant to reprimand Larson is “at odds with his image as a roving global do-gooder and champion of women’s empowerment,” the NYT said.

While spokespeople for Larson and Cascade denied the allegations, a representative for Melinda Gates offered a cryptic statement saying she was unaware of “most” of these allegations, but at any rate had zero power to do anything about it since she had zero control over Cascade.

Courtney Wade, a spokeswoman for Ms. French Gates, said, “Melinda unequivocally condemns disrespectful and inappropriate conduct in the workplace. She was unaware of most of these allegations given her lack of ownership of and control over B.M.G.I.”

One particular incident, where Larson made a joke about a black employee living in “a ghetto”, was even brought to the Gates’ attention back when it happened in 2005. The employee who was the subject of the joke was also targeted with other harassing behavior, including Larson allegedly shorting the stock of a company that made her a competing offer.

Ms. Ybarra, then 30, had joined Cascade three years earlier as an investor relations analyst. After she announced her planned departure, Mr. Larson became so angry that he shorted the stock of InfoSpace, according to three people familiar with the episode. (Short selling involves placing bearish bets on the company’s shares, which sometimes causes the stock to fall.) Two of the people said they saw Mr. Larson’s trades on their computer terminals.

Mr. Larson told Ms. Ybarra and others that he had shorted InfoSpace’s stock out of spite, according to the three people, who heard about his remarks at the time.

Mr. Giglio confirmed that Cascade shorted the stock but denied that Mr. Larson did it to spite Ms. Ybarra.

At the same time, Mr. Larson repeatedly pressured Ms. Ybarra to remain at Cascade. She ultimately agreed to stay.

On Election Day that November, Mr. Larson asked some Cascade employees in the office about the best time to go vote. Ms. Ybarra, who is Black, replied that she had voted that morning without having to wait in line. Mr. Larson responded: “But you live in the ghetto, and everybody knows that Black people don’t vote.” The scene was described by two people who heard the comment and a third who was told about it later.

Mr. Giglio denied that Mr. Larson made the remark.

At least one employee at Cascade complained to human resources about Mr. Larson’s remark. The complaint made its way to Mr. Gates and Ms. French Gates, who later spoke to Ms. Ybarra as part of an internal investigation, according to people familiar with the matter.

In January 2005, she quit Cascade, received a small payout and agreed to not speak about the firm in the future.

Another anecdote used in the report involves California fund manager Robert Sydow, who had been close friends with Larson until he tried to confront Larson about his behavior, at which point Larson retaliated by allegedly pulling money he had with Sydow’s firm.

In November 2006, Mr. Gates and Ms. French Gates were sent another complaint about Mr. Larson. This one was from Robert E. Sydow, a California fund manager who had been close friends with Mr. Larson and whose firm, Grandview Capital Management, Mr. Larson had hired to manage a $1.6 billion slice of the foundation’s endowment.

Mr. Sydow wrote a six-page letter to the Gateses accusing Mr. Larson of abruptly severing Cascade’s ties with Grandview after a dispute between him and Mr. Sydow. (The dispute, Mr. Sydow wrote, came after Mr. Sydow warned Mr. Larson that he needed “to stop using his power to hurt others in anger.”) The letter, reviewed by The Times, said Mr. Larson had harmed Grandview’s reputation in part by spreading “false and defamatory” lies about it in the market.

Mr. Sydow, the godfather to one of Mr. Larson’s children, went on to describe multiple instances of Mr. Larson seeking to punish employees who left Cascade and retaliating against those who cooperated with the investigation into his treatment of Ms. Ybarra, among other things.

Mr. Larson has “the potential to greatly embarrass both you and the foundation,” Mr. Sydow wrote.

“We exit agreements with third-party investment managers for a variety of reasons,” Mr. Larson said in a statement sent by Mr. Giglio.

The sexual harassment allegations involving employees chiefly revolve around two incidents:

• At a work Christmas party in the mid-2000s, Mr. Larson was seated outdoors with a small group of male employees after dinner, according to one of the men. Three female colleagues were standing about 20 feet away. “Which one of them do you wanna” have sex with? Mr. Larson asked the men, using a profane verb.
• On at least one occasion in recent years, with employees looking on, Mr. Larson displayed photographs of naked women on his phone and compared them to Ms. Berman, the human resources executive, according to a former employee who witnessed the incident and another person who was told about it. (Ms. Berman left Cascade in 2015.) Another woman who worked at Cascade said Mr. Larson asked her if she would strip for a certain amount of money.

Larson apologized for using “harsh language”, but said he only did so early in his career.

But by far the most egregious allegations involved Larson’s alleged harassment of a bike shop manager, who eventually received a monetary settlement after she hired a lawyer who sent a letter to the Gates’s attorneys warning them about Larson’s behavior.

Around the time of the complaints involving Ms. Harrington, Mr. Larson was repeatedly propositioning, and being rebuffed by, the manager of a local bicycle store that was mostly owned by a firm, Rally Capital, that Cascade had invested in.

In 2017, the manager hired a lawyer, who sent a letter to Mr. Gates and Ms. French Gates warning them that if Mr. Larson did not stop harassing her, she would sue them. The letter said Mr. Larson had exposed himself to the manager and had told her that he wanted to have sex with her and another woman, according to someone who read the letter.

Mr. Gates agreed to settle the matter by having a payment made to the bike store manager. Ms. French Gates insisted that an outside investigator review the incident and Cascade’s culture, people familiar with the matter previously told The Times. In 2018, Mr. Larson went on paid leave while the investigation took place.

When Larson left Cascade on a temporary leave in 2018, Gates confided in another senior employee that Larson likely wouldn’t return. However, he did return the following year, after an investigation into the bike shop manager’s allegations found that they could not be substantiated.

Rumors about Larson’s behavior have percolated for years, but now that the NYT has targeted him with a #MeToo-style expose, it’s likely his days atop Cascade are numbered. The last money manager fired by Gates was Andrew Evans, who served a six-month prison sentence for bank fraud (Gates even visited him in jail). When WSJ published a front-page story about Evans’ criminal record in 1993, Gates was forced to seek out somebody else to manage his personal fortune. That’s when he met Larson.

With the likes of JPMorgan and Goldman jumping on the crypto train (favoring Ethereum over Bitcoin), yet another one of the world’s most legendary investors has became bullish on the space (adding to Loeb, Dalio and Druckenmiller, while Munger and his Omaha homie likely never will).

On Thursday, Carl Icahn told Bloomberg Markets‘ Taylor Riggs that while he doesn’t own any digital currencies, his firm might get involved in a “relatively big way,” adding “Crypto is here to stay in one form or another.“

“I think a natural manifestation of this inflation,” said Dalio, adding “it’s not yet there – but you had it in the 70s, and what’s gonna happen if you have that is, [people are] going be for looking for other stores of value outside the dollar. We are the resereve currency now, but if you keep printing money, it’s not going to be there.”

When asked if he sees crypto as a store of value or more of a payment system, or the ‘underlying blockchain’ as is the case with Ethereum, Icahn replied: “With Ethereum it’s the underlying block chain. So, Ethereum has two things – you can use it as a payment system, you can use it as a store of value.”

“So Ethereum and Bitcoin are different. Bitcoin to me is just a store of value.“

When asked by host Caroline Hyde if he was looking at Bitcoin and Ethereum for an investment, Icahn said “I’m looking at the whole business. I’m not looking at what to buy necessarily at this time, I’m just looking at the whole business and how I might get involved in it with Icahn Enterprises, in a relatively big way. Cause I do think it’s here to stay in one form or another.”

“What does relatively big way mean?” asked Hyde, who then pressed him on the dollar amount he might invest.

“Well, a big way for us would not be to buy a few coins or something,” replied Icahn, adding “I mean, a big way for us would be a billion dollars, billion and-a-half dollars … I’m not going to say exactly.“

Watch:

Authored by Jack Phillips via The Epoch Times,

Following calls last summer from groups such as Black Lives Matter to “defund the police,” a number of city officials are now walking back statements to go through with cutting funding to law enforcement due to surges in crime levels.

The Minneapolis City Council several months ago voted to approve $6.4 million more in funding to the police department, coming after a number of councilmembers last year pledged to completely abolish the department.

A family takes pictures in front of a mural of George Floyd in Minneapolis, Minn., on May 28, 2020. (Brandon Bell/Getty Images)

Minneapolis Mayor Jacob Frey, a Democrat, announced in May that he’s pushing to increase funding to the city’s police department—coming about a year after George Floyd’s death in police custody, which sparked the Black Lives Matter protests, riots, and arson attacks across Minneapolis.

“The violence needs to stop; it’s unacceptable,” he said earlier in May during a news conference, which came amid a massive spike in violence in the city.

“People deserve to feel safe in their neighborhood, they deserve to be able to send their kids out to the sidewalk to play and to recreate without bullets flying by. That’s unacceptable. We should be holding these perpetrators accountable.”

Frey blamed activists’ calls to defund the police.

“When you make big, overarching statements that we’re going to defund or abolish and dismantle the police department and get rid of all the officers, there’s an impact to that,” he said.

A police officer stands amid smoke and debris as buildings continue to burn in the aftermath of a night of protests and violence following the death of George Floyd, in Minneapolis, Minn., on May 29, 2020. (Charlotte Cuthbertson/The Epoch Times)

Last year, during a protest in Minneapolis, Frey was admonished by Black Lives Matter supporters because he refused to abolish the city’s police force—in a scene that some compared to “struggle sessions” during the Chinese Communist Party-led Cultural Revolution in the 1960s and 1970s. The mayor, however, said he wanted a “structural revamp” of the city’s police force.

New York City Mayor Bill de Blasio, a Democrat, announced this month that his city is building a police precinct in Queens to deal with a spate in rising crime—coming months after he pledged to cut $1 billion from the NYPD’s budget. The city has cut far less from the police department than the pledged $1 billion.

In late April, the mayor said stimulus funding from the federal government will allow for the construction of a new NYPD precinct in southeastern Queens.

“This is something that for decades the community asked for,” de Blasio said at a press briefing last month. 

“The 116th precinct building was something that could not happen in that environment, because of … trade-offs,” he said. “It was one or the other, which was the choice in 2020. We leaned into the investments in young people. Now, thankfully, we have the resources to address both these issues.”

This comes in the midst of a historic increase in shootings, murders, and other violent crimes. According to NYPD data, there was a 76 percent increase in shootings in March 2021, as compared to March 2020.

People are arrested on the Brooklyn Bridge after about a dozen Black Lives Matter protesters briefly shut down the bridge in New York City, on July 15, 2020. (Angela Weiss/AFP via Getty Images)

While Democrat Mayor Eric Garcetti and some members of the Los Angeles City Council pledged to cut funding last year, they reneged on that commitment last week.

The council approved more funding to the Los Angeles Police Department to hire 250 more officers, which comes within the backdrop of rising crime in Los Angeles.

Garcetti, separately, is proposing a 3 percent increase in the LAPD’s budget from $1.71 billion to $1.76 billion. Last year, the city cut about $150 million from the department’s budget.

In Baltimore, a city that has historically had a high crime rate, the city’s spending board in mid-May approved a budget with a $28 million increase to the police department.

In 2020, the city cut about $22 million from the police department’s budget.

The “defund the police” movement has also seen its support plummet since last summer, according to various polls. A recent survey in March showed that just 18 percent of Americans support the cause.

Some Democrat members of Congress, after the Nov. 3 election, also panned the movement. Rep. Abigail Spanberger (D-Va.), who won a close race, reportedly panned Democrats’ messaging during the last election cycle.

“The number one concern that people brought to me in my race that I barely rewon was defunding the police,” she told other Democrats. “And I’ve heard from colleagues who say, ‘Oh it’s the language of the streets, we should respect that.’ We’re in Congress. We are professionals. We are supposed to talk about things in the way where we mean what we are talking about. If we don’t mean we should defund the police, we shouldn’t say that.”

Authored by Steve Watson via Summit News,

A professor with the Johns Hopkins School of Medicine has said that there is a general dismissal of the fact that more than half of all Americans have developed natural immunity to the coronavirus and that it constitutes “one of the biggest failures of our current medical leadership.”

Dr. Marty Makary made the comments during a recent interview, noting that “natural immunity works” and it is wrong to vilify those who don’t want the vaccine because they have already recovered from the virus.

Makary criticised “the most slow, reactionary, political CDC in American history” for not clearly communicating the scientific facts about natural immunity compared to the kind of immunity developed through vaccines.

“There is more data on natural immunity than there is on vaccinated immunity, because natural immunity has been around longer,” Makary emphasised.

“We are not seeing reinfections, and when they do happen, they’re rare. Their symptoms are mild or are asymptomatic,” the professor added.

“Please, ignore the CDC guidance,” he urged, adding “Live a normal life, unless you are unvaccinated and did not have the infection, in which case you need to be careful.”

“We’ve got to start respecting people who choose not to get the vaccine instead of demonizing them,” Makary further asserted.

Listen:

The professor’s comments come amid a plethora of media generated propaganda suggesting that natural immunity isn’t enough, and that those who do not choose to take the vaccine should be socially ostracised.

The likes of the World Health Organisation have even shifted the definition of ‘herd immunity’, eliminating the pre-COVID scientific consensus that it could be achieved by allowing a virus to spread through a population, and insisting that herd immunity comes solely from vaccines.

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