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When There’s Talk of Gun Control, Gunmakers Play the Jobs Card. They’re Often Bluffing

Gunmakers are convincing elected officials they have to choose between gun-control laws and manufacturing jobs and benefiting richly. At first he thought it was an umbrella. But when the shotgun that was pointed at John Seymour went off, hitting him in the back and the wrist, he thought he was going to die in his own barbershop. He fell to the floor and played dead as the gunman shot three of his customers, killing two of them. Then the gunman, a former customer, killed two men in a nearby oil-change shop and holed up in an abandoned restaurant, where he later died in a shootout with police. Nearly 10 years later, Seymour thinks constantly about the shooting. “To this day, anything goes, Bang bang! and I jump. What do you expect? I had a guy die on top of me at my barbershop,” says Seymour, 76, who is known locally as John the barber. “​​We never thought we’d be a mass-murder part of the country.” [time-brightcove not-tgx=”true”] But like just about everyone else in Ilion, N.Y, a small town in New York’s Herkimer County about 80 miles northwest of Albany, Seymour has a soft spot for Remington Arms, the gun manufacturer that has been located here since Eliphalet Remington started making firearms in 1816. Remington’s imposing redbrick factory looms over Main Street. Walk around downtown, past the vape shops, the peeling multifamily homes, and the Remington Federal Credit Union, and you can hear the clinking of steel being cut as the factory churns out orders. Jason Koxvold for TIMEJohn Seymour in his barber shop where he survived a mass shooting nearly a decade ago. People here don’t talk about how Remington’s version of an AR-15—made in Ilion—was used in the Sandy Hook Elementary School shooting less than 200 miles away, or that the company filed for bankruptcy twice between 2018 and 2020, because of financial engineering by the private equity firm that bought the company in 2007. They also don’t talk about how the company regularly threatens to leave New York and move somewhere cheaper, or periodically lays off hundreds of workers, leaving some in limbo for months or years. What they do talk about is Remington’s proud history of making arms for America when the country needed them the most, like during World Wars I and II—when workers had to carpool to the factory because the parking lot couldn’t fit everyone’s cars—and the affinity they have for a company that employed most of their fathers, and their father’s fathers. “They help the little village of Ilion and its 7,500 people,” says Seymour, who when he isn’t plying his trade as a barber moonlights as a wedding and event singer. His father worked at Remington for 43 years, beginning in 1932, and Seymour’s brother and brother-in-law also worked there. “They pay taxes on that building, and we give them a little break on everything.” Remington, on the other hand, has not been very kind to the village of Ilion in recent years. After decades of threatening to relocate to the South, where gun laws are friendlier and labor is cheaper, the company went so far as to move two lines of manufacturing to Alabama in 2014, after that state offered nearly $70 million and factory space rent-free. That endeavor ultimately failed, leaving the Alabama factory shuttered, and some of the equipment moved back to Ilion. When the Remington Outdoor Company filed for bankruptcy in 2020, it owed hundreds of thousands of dollars to local suppliers and utility providers, including the local shoe store, the hardware store, and Ilion’s treasurer, police department, water commission, and the roughly 609 workers it had abruptly laid off without the health care benefits or severance pay promised in their contract. Despite these slights, many Ilion residents remain unfailingly loyal to the company. “I would say that we bleed green—Remington green,” says Frank “Rusty” Brown, who has worked at the factory since 1995 and was one of the workers who protested outside the factory in 40-degree weather in October 2020, after Remington filed for bankruptcy and fired all its Ilion manufacturing workers. “This is our living; it’s how our parents made a living. I’m dedicated to the place.” Remington’s Ilion and Tennessee properties, as well as its long-gun, shotgun, and pistols businesses, were bought out of bankruptcy in 2020 by a company called the Roundhill Group LLC, which now operates Remington through a holding company called RemArms. Roundhill appears to have been created solely to purchase Remington’s assets from its bankruptcy proceedings; Richmond Italia, a paintball entrepreneur who is one of Roundhill’s two partners, said in court filings that he was approached by Ken D’Arcy, a professional race-car driver and manufacturing executive who was appointed CEO of Remington in 2019. D’Arcy suggested that Italia buy Remington’s firearms assets. (The two men knew each other because they had both served as CEOs and then sat on the board of GI Sportz, a paintball company that filed for bankruptcy in October 2020, shortly after Roundhill purchased Remington.) In November 2021, D’Arcy, who is still CEO of Remington, announced that RemArms was moving to LaGrange, Ga. Ilion officials scurried to give RemArms incentives to stay, offering a 50% discount on property taxes, but Remington seemed uninterested in negotiating. Some residents began to imagine a town without Remington; others, like Brown, remained skeptical that the factory would shut down. After all, RemArms had started calling workers like him who’d been laid off in 2020 back to the factory in April 2021 to restart manufacturing, and the company is now negotiating with the United Mine Workers of America, the union representing workers when Remington filed for bankruptcy, to ink a new contract for Ilion. The Roundhill Group did not respond to calls and emails seeking comment for this story. “Remington has been going to move elsewhere since my parents worked there,” says Brown, whose wife, two daughters, and son-in-law still work at the plant. “You hear it so many times over the years, you become numb to it.” Jason Koxvold for TIMEFrank “Rusty” Brown has worked at the Remington Arms factory since 1995. Remington’s hot-and-cold relationship with Ilion is not a rare case among American gunmakers. It may seem reasonable to assume, in light of recent state laws and lawsuits filed against them, that gun companies are under siege, their bottom lines threatened by regulations and shifting public attitudes toward firearms. But today more than ever, gun manufacturers like Remington (now RemArms), Smith & Wesson, and Colt are pulling the strings, convincing elected officials they have to choose between gun-control laws and manufacturing jobs. States in the South and West are offering millions in incentives to gun companies and loosening laws around gun ownership to show their fealty to gun culture, even as gunmakers have raked in $3 billion in profits since the pandemic began. Profits for gunmakers have been strong for the last decade, with both Smith & Wesson and Sturm Ruger & Co., the country’s two biggest gunmakers, surpassing $100 million in profit every year. That’s putting pressure on states like New York to loosen recently passed gun-control laws, to convince manufacturers to stay—even though often those manufacturers are just adding new locations in other states and not actually leaving their original homes. The gunmakers’ leverage makes sense in a country where manufacturing is still seen as the backbone of the country, even though jobs in the sector make up less than 10% of U.S. employment, down from one-quarter of employment half a century ago. Politicians and voters on the right and left often romanticize factory jobs that make products marketed as all-American, such as trucks, tractors, and guns, particularly if they’re set to remain on American soil. (In the case of guns, many buyers don’t want something manufactured in a foreign country where safety standards are perceived to be lower). As America has become more polarized, gun manufacturers have been able to orchestrate complicated political theater, threatening to move factories—and jobs—when gun-control legislation is passed in certain states. They are garnering millions of dollars in incentives from states and local economic development boards rolling out the red carpet to demonstrate their gun-friendly credentials. Despite evidence that giving incentives to factories isn’t a cost-effective way to create jobs, and often they actually lose money—as in the case of electronics maker Foxconn’s deal in Wisconsin—states know that attracting manufacturers is popular with voters. Remington is a master at this game. In 1995, the company announced that it was moving its headquarters to North Carolina, receiving $150,000 from the state to do so. In the end, no manufacturing jobs were moved to the state. Then, after private equity firm Cerberus Capital Management purchased Remington in 2007 and rumors swirled that manufacturing would be moved overseas to save money, the State of New York gave Remington $3 million to expand its Ilion plant, and then $2.5 million more in 2010 to add 100 jobs. Just three years later, in 2013, New York passed sweeping gun-control legislation the SAFE Act, which banned some assault-style weapons, began requiring background checks for nearly all gun sales, and prohibited people who’d committed certain offenses from possessing guns. Ilion politicians used the law’s passage to criticize state Democrats for driving Remington away, and indeed, Remington soon announced that it was being courted by five other states. Six elected officials from the Ilion area pledged assistance should Remington build a new manufacturing plant in the area, warning in a public letter that “the clock is ticking on an inevitable exit by Remington from the state.” Read more: How Gunmakers May Benefit From Mass Shootings In 2014, Remington announced it was moving two production lines to Huntsville, Ala., a decision the company’s CEO George Kollitides blamed on New York gun laws, citing “Alabama’s rich tradition of defending freedom,” as a “major deciding factor” in the move. At the time, a company spokesperson said the move was “a strategic business decision” to consolidate plants. But while the announcement provided a platform for conservatives to lambast New York’s gun laws, the Ilion plant continued to operate with around 1,300 employees. The jobs that moved to Alabama were from other Remington plants in conservative states like Montana, Utah, and North Carolina. Alabama’s play for Remington did not look so smart by 2020, when Remington filed for bankruptcy and owed $12.5 million to Huntsville, because it had not met the hiring numbers it had agreed to in its $70 million incentive deal with the city. The company appeared to be drawing from the same playbook when it announced it was moving its headquarters to LaGrange in 2021. “The decision to locate in Georgia is very simple: the state of Georgia is not only a business-friendly state; it’s a firearms-friendly state,” RemArms CEO Ken D’Arcy said at the time. RemArms secured $6 million in incentives from Georgia, and pledged to build a $100 million research and development center in LaGrange. According to T. Scott Malone, president of the Development Authority of LaGrange, RemArms has set up shop in an 80,000-sq.-ft. temporary facility, and recently started producing its first guns. RemArms specifically attributed its decision to move to a New York law passed in 2021 that would bypass blanket immunity provided to gunmakers under federal law, and make it easier to bring civil lawsuits against gun companies. “Unfortunately, if a law like that is passed in New York State, we would have to reconsider our options for the future and our plans to expand our New York operations,” Italia, the managing partner for Roundhill Group said in an email to Utica’s Times Telegram in July 2021. But the law applies to all gunmakers that sell guns in New York, which would include RemArms wherever it has its plants. But despite all the headlines, the company has told New York stakeholders that it now has no plans to close the Ilion facility. “Nobody’s moving to Georgia—in fact, they’re adding employees here,” says John Piseck, CEO of the Herkimer County Industrial Development Agency, a public-benefit corporation that can offer tax breaks to local businesses. RemArms has called back nearly all of the 609 workers Remington laid off when it filed for bankruptcy in 2020, according to Jamie Rudwall, president of the United Mine Workers of America. He notes that only 300 have actually returned, the rest having either found new jobs or retrained for new careers. Business is good. Because gun sales are soaring in the U.S., and manufacturers need to expand operations to keep up with demand, gunmakers can combine business decisions with lobbying, announcing that they’re opening a new factory in Georgia or North Carolina to meet demand while complaining about gun-control laws elsewhere. Retailers performed 21 million background checks associated with the sale of a firearm in 2020, a 62% increase from 2019, and twice as many as 2010, according to data from the National Instant Criminal Background Check System (NICS) that is used as a rough proxy for gun sales. The figures don’t include background checks for other purposes, like concealed carry permits. For workers like Brown, the constant push and pull is more of a nuisance than a threat to their livelihoods. Brown—whose wife, two daughters, and soon-to-be son-in-law work at the Ilion plant—says the company should know by now that it won’t find workers anywhere as skilled, dedicated, or patient with the company as those in Ilion. “It’s always, ‘We’re going to move to where there’s cheaper labor. We’re going to move to where there’s this law or that law.’ After so many years, you become immune to it,” Brown says. “And then to see them fail miserably in Alabama, it’s like, ‘I told you so.’ ” To this day, both Georgia and New York officials are still pulling for RemArms to bring some more good news to their communities, even though RemArms’ future looks a little shaky. Tax collectors in Alabama are already trying to foreclose on some of Roundhill’s recently purchased assets because they weren’t removed from the state in a timely fashion, according to bankruptcy documents. The firearms economy When Brown was growing up, there were lots of manufacturing jobs in upstate New York, but Remington was the place he wanted to be. “It was so hard to get in there, because it was the greatest job ever,” he says. Both his parents had worked there, so he knew: health care didn’t cost anything; he got a pension and a good wage; and he didn’t have to bother with college. By the time he was laid off in 2020, he was making $26.87 an hour—more if he worked nights or overtime. Brown is one of thousands of people in the U.S. Northeast who make a living manufacturing firearms. The area around western Massachusetts and Connecticut, nicknamed Gun Valley, has been a gunmaking hub since George Washington set up an armory in Springfield, Mass., in the late 18th century to keep weapons out of reach of the British Navy. In 1986, 47% of guns manufactured in the U.S. were made in Connecticut, 24% in Massachusetts, and 12% in New York, according to Jürgen Brauer, the chief economist with nonpartisan research group Small Arms Analytics, who analyzed historical data from the Bureau of Alcohol, Tobacco, and Firearms (ATF). But in recent years, amid rising political polarization, states in the South and West, desperate to attract jobs in the aftermath of the Great Recession, have attempted to lure manufacturers from Gun Valley. Their pitch: gun companies should move to places where people like guns. The sunset of the federal assault-weapons ban in 2004, and subsequent attempts by states to pass laws either loosening or tightening rules on gun ownership, signaled where gunmakers would be welcome. Some states even started to designate official state guns alongside their state flowers and fish. “We’re all here to show our support for the Second Amendment to our neighbors and communities,” Nebraska Governor Pete Ricketts said earlier this year, onstage with five other governors at the trade show of the National Sports Shooting Foundation (NSSF), which now spends more on lobbying than the National Rifle Association. (Around 10,000 guns were made in Nebraska in 2020, less than 1% of all guns made in the U.S.) Jason Koxvold for TIMEJamie Rudwall, president of the United Mine Workers of America. “There’s a trend of companies that have picked up and moved, and it’s really been accelerating as of late,“ says Mark Oliva, managing director of public affairs at the NSSF. The NSSF keeps a running list of gunmakers that it says have migrated from the Northeast to the South, including Kimber, Sturm Ruger & Co., and Beretta. But the NSSF’s list is misleading. Though some gunmakers have picked up and moved their factories south from states like Connecticut, the far more common occurrence is that they move only their headquarters to Southern states, but keep manufacturing in the state in which that factory already exists. Such a move can secure juicy incentives such as tax breaks and free facilities, and generate headlines about liberal states losing manufacturing, while sparing gunmakers the hassle of moving millions of dollars of equipment and hiring and training new workers. Indeed, most of the companies on the NSSF’s list of “gun industry migration” still have manufacturing in the northeast. The devil is in the details. According to Brauer’s analysis of ATF data, by 2020 just 1.42% of guns were made in Connecticut, and less than 1% in New York, while states like Georgia, North Carolina, and South Carolina accounted for 9%, 6%, and 5%, of firearm manufacturing, respectively. The two top states for gunmaking in 2020, according to the data, were Missouri and New Hampshire. However, those figures only show where guns are distributed, rather than manufactured, deceptively counting Smith & Wesson—the biggest producer of guns in 2020—as a Missouri company, even though its guns in 2020 were made in Massachusetts, not Missouri. The company generated headlines in 2017 when it announced it was moving to Missouri, receiving a 50% tax break over 10 years. But at the time, it only moved about 20 jobs from its Massachusetts headquarters. The data shows that Massachusetts made 21% of all firearms in 2015 and just 0.49% in 2020—but that’s because Smith & Wesson established a distribution center in Missouri, not because it moved its manufacturing, Small Arms Analytics’ Brauer says. And in October 2021, Smith & Wesson said it would be relocating its headquarters to Tennessee from Springfield, Mass., its home for 165 years, after a bill was introduced in the Massachusetts legislature that would have banned the manufacture of assault weapons for civilian use. (The bill has gone nowhere.) At the time, Smith & Wesson said it decided to move because “We are under attack.” What it did not make clear was that its manufacturing operations—accounting for about 1,000 jobs—would stay in Springfield, and that what it was moving to Tennessee was assembly and distribution of firearms. One-quarter of the jobs being moved to Tennessee are currently located in Missouri and Connecticut, not Massachusetts. The Missouri warehouse the company had received an incentive for just a few years before would be closed, Smith & Wesson said. The company received $9 million from the state of Tennessee and made a deal with the local economic development agency that gives it a 60% tax break for seven years. Its CEO, Mark Smith, thanked Tennessee’s governor and legislature for their “unwavering support of the 2nd Amendment and for creating a welcoming, business friendly environment.” Smith & Wesson did not respond to requests for comment for this story. Gunmakers are increasingly turning to this playbook. Kahr Arms, which said it was moving out of New York in 2013 because of “stricter gun control,” moved its headquarters to Pennsylvania, which also has relatively strict gun-control laws, and kept its manufacturing in Massachusetts. Meanwhile, Colt, which threatened to move after Connecticut considered gun control laws in 2008 and passed them in 2013, decided to remain and then received a $10 million loan from the state of Connecticut in 2017. Colt made 158,501 guns in Connecticut 2020 and was recently bought by Czech company Česká zbrojovka Group (CZG), which itself received incentives in 2019, including 73 acres of free land by the state of Arkansas to build a gunmaking plant there. That Little Rock, Ark. plant has been put on hold, and the company says it has no plans to move Colt out of state. “Once situated in one state, it is exceedingly rare for a firearms manufacturer to move its entire operation to another state,” says Brauer. His research has found that gunmakers that say they’re leaving a Northeast state because of its gun-control policies usually keep a substantial presence there, and that they leave not because of the political climate but because they can find nonunionized, lower-paid workers in the South—and get millions of dollars in incentives. In 2010, for example, Olin Corp., owner of a Winchester ammunition factory, moved 1,000 jobs from Illinois to Mississippi after union workers in Illinois rejected a contract that would have reduced their pay. And a Remington executive told the New York Times in 2019 that in Ilion, the union “had them by the balls,” one reason the company moved some operations to Alabama from New York. Oliva, of the National Sports Shooting Foundation, says that moving operations is not a decision gunmakers take lightly, but that Smith & Wesson and other companies have to consider “the survival of a business” when states like Massachusetts talk of banning the manufacturing of some assault weapons to anyone but police and the military. The companies keep some manufacturing in the places where they were founded, out of loyalty to workers, he says, but “it is clear that many of these manufacturers are expanding to other states which are more friendly business environments and more friendly to gun rights.” For RemArms worker Brown, one of the ironies of the company’s indicating it will move to a state friendlier to gun owners is that Ilion is a place where people love guns. Ilion residents will offer to show strangers their gun collections, or wax lyrical about their favorite hunting rifle. Ask them about gun-control legislation, and they’ll blame Democrats, or politicians in Albany, for punishing the law-abiding citizens who want to own guns to hunt or to protect themselves. (Herkimer County voted for Donald Trump over Joe Biden in 2020 by a 2-to-1 margin.) Even “barber John” Seymour—still widely recognized locally as a mass-shooting survivor—is skeptical about the effectiveness of gun-control laws. “It’s tough for me to see the stuff that goes on in places like Uvalde,” he says. “But that guy would have gotten a gun no matter what—he was on a mission.” He points to the difficulties of assessing someone’s mental health when deciding whether they should be allowed to purchase a gun. In Seymour’s own case, the man who shot him, Kurt Myers, was mostly known locally as a loner who kept to himself, but authorities never found a motive for why he’d shot six people. It’s laws like New York’s SAFE Act that have most riled people in Ilion. “The climate changes when you say, ‘Big bad Remington is making this big mean gun in the middle of our state,’ ” says Rudwall, the union rep. “Look at the comments these politicians made: they demonize the tool, not the dude that did it.” When Remington threatens to leave, locals often blame state politicians for driving gunmakers out of the state. New York Republican Congresswoman Claudia Tenney has seized on that sentiment, campaigning to overturn the SAFE Act, lambasting former New York Governor Andrew Cuomo for what she has called “failed economic and anti–Second Amendment policies in New York,” and using her positions on guns to shore up her connection with Donald Trump. At a fundraiser Trump held for Tenney in 2018, he warned attendees: “They want to end your Second Amendment and they’re putting a big move on it … Cuomo wants to end your Second Amendment more than anybody.” In 2020, when Remington filed for bankruptcy, Tenney said she’d contacted President Trump and would get the factory reopened, and that it would “eventually employ a workforce significantly larger than the plant’s previous head count.” (It’s unclear whether Trump intervened.) A week later, Tenney was re-elected in one of the most expensive House races in the country, by 109 votes. Jason Koxvold for TIMERemington Arms has told New York stakeholders that it now has no plans to close the Ilion facility. Gunmakers’ threats to leave states in the Northeast have helped to stoke fear among some employees. As soon as renderings of the LaGrange RemArms headquarters started showing up online, Brown says his daughters and other workers on the factory floor began to express concern that they would lose their jobs. The pictures emerged just as the union was in the middle of negotiations with RemArms over wages and benefits, and people around the plant started hinting that the union should take whatever deal it could, says union representative Rudwall. Negotiations are still ongoing. “My daughter says, ‘Daddy, look at this brand-new facility, they’re not going to stay here,’ ” Brown says. “So when Jamie [Rudwall] comes back with a contract, whether they like it or not, they say, ‘Yes,’ because we want to keep working.” There are other jobs in Ilion; in this economy, there are other jobs just about anywhere. They’re just not manufacturing jobs. The county’s largest employer is now Tractor Supply, which is a distribution center. Verizon has a presence in the area, and Amazon is opening a warehouse nearby too. But some of the laid-off Remington workers who missed their chance to go back to the factory say they’d go back if given the opportunity. Allen Harrington worked at the Remington factory in Ilion for eight years. In October 2020, a few months after Remington filed for bankruptcy, the company laid off nearly all of its Ilion workers. Harrington was on the factory floor at the time, until a supervisor came in and said they had to shut everything down, and that everyone was terminated, and that health care, severance, and other benefits would be gone at the end of the month. Harrington eventually found a job making $13 an hour in a warehouse, down from the $25 he had made at Remington. He kicks himself for not going back to school after being laid off, but he felt too old—and he felt sure that the factory would re-open and he could work in manufacturing again. It’s hard to let go. “I loved that job,” Harrington says. “I know it’s uncertain there, but I’d go back in a heartbeat.”.....»»

Category: topSource: timeAug 19th, 2022

When There’s Talk of Gun Control, Gunmakers Play the Jobs Card. They’re Often Bluffing

Gunmakers are convincing elected officials they have to choose between gun-control laws and manufacturing jobs and benefiting richly. At first he thought it was an umbrella. But when the shotgun that was pointed at John Seymour went off, hitting him in the back and the wrist, he thought he was going to die in his own barbershop. He fell to the floor and played dead as the gunman shot three of his customers, killing two of them. Then the gunman, a former customer, killed two men in a nearby oil-change shop and holed up in an abandoned restaurant, where he later died in a shootout with police. Nearly 10 years later, Seymour thinks constantly about the shooting. “To this day, anything goes, Bang bang! and I jump. What do you expect? I had a guy die on top of me at my barbershop,” says Seymour, 76, who is known locally as John the barber. “​​We never thought we’d be a mass-murder part of the country.” [time-brightcove not-tgx=”true”] But like just about everyone else in Ilion, N.Y, a small town in New York’s Herkimer County about 80 miles northwest of Albany, Seymour has a soft spot for Remington Arms, the gun manufacturer that has been located here since Eliphalet Remington started making firearms in 1816. Remington’s imposing redbrick factory looms over Main Street. Walk around downtown, past the vape shops, the peeling multifamily homes, and the Remington Federal Credit Union, and you can hear the clinking of steel being cut as the factory churns out orders. Jason Koxvold for TIMEJohn Seymour in his barber shop where he survived a mass shooting nearly a decade ago. People here don’t talk about how Remington’s version of an AR-15—made in Ilion—was used in the Sandy Hook Elementary School shooting less than 200 miles away, or that the company filed for bankruptcy twice between 2018 and 2020, because of financial engineering by the private equity firm that bought the company in 2007. They also don’t talk about how the company regularly threatens to leave New York and move somewhere cheaper, or periodically lays off hundreds of workers, leaving some in limbo for months or years. What they do talk about is Remington’s proud history of making arms for America when the country needed them the most, like during World Wars I and II—when workers had to carpool to the factory because the parking lot couldn’t fit everyone’s cars—and the affinity they have for a company that employed most of their fathers, and their father’s fathers. “They help the little village of Ilion and its 7,500 people,” says Seymour, who when he isn’t plying his trade as a barber moonlights as a wedding and event singer. His father worked at Remington for 43 years, beginning in 1932, and Seymour’s brother and brother-in-law also worked there. “They pay taxes on that building, and we give them a little break on everything.” Remington, on the other hand, has not been very kind to the village of Ilion in recent years. After decades of threatening to relocate to the South, where gun laws are friendlier and labor is cheaper, the company went so far as to move two lines of manufacturing to Alabama in 2014, after that state offered nearly $70 million and factory space rent-free. That endeavor ultimately failed, leaving the Alabama factory shuttered, and some of the equipment moved back to Ilion. When the Remington Outdoor Company filed for bankruptcy in 2020, it owed hundreds of thousands of dollars to local suppliers and utility providers, including the local shoe store, the hardware store, and Ilion’s treasurer, police department, water commission, and the roughly 609 workers it had abruptly laid off without the health care benefits or severance pay promised in their contract. Despite these slights, many Ilion residents remain unfailingly loyal to the company. “I would say that we bleed green—Remington green,” says Frank “Rusty” Brown, who has worked at the factory since 1995 and was one of the workers who protested outside the factory in 40-degree weather in October 2020, after Remington filed for bankruptcy and fired all its Ilion manufacturing workers. “This is our living; it’s how our parents made a living. I’m dedicated to the place.” Remington’s Ilion and Tennessee properties, as well as its long-gun, shotgun, and pistols businesses, were bought out of bankruptcy in 2020 by a company called the Roundhill Group LLC, which now operates Remington through a holding company called RemArms. Roundhill appears to have been created solely to purchase Remington’s assets from its bankruptcy proceedings; Richmond Italia, a paintball entrepreneur who is one of Roundhill’s two partners, said in court filings that he was approached by Ken D’Arcy, a professional race-car driver and manufacturing executive who was appointed CEO of Remington in 2019. D’Arcy suggested that Italia buy Remington’s firearms assets. (The two men knew each other because they had both served as CEOs and then sat on the board of GI Sportz, a paintball company that filed for bankruptcy in October 2020, shortly after Roundhill purchased Remington.) In November 2021, D’Arcy, who is still CEO of Remington, announced that RemArms was moving to LaGrange, Ga. Ilion officials scurried to give RemArms incentives to stay, offering a 50% discount on property taxes, but Remington seemed uninterested in negotiating. Some residents began to imagine a town without Remington; others, like Brown, remained skeptical that the factory would shut down. After all, RemArms had started calling workers like him who’d been laid off in 2020 back to the factory in April 2021 to restart manufacturing, and the company is now negotiating with the United Mine Workers of America, the union representing workers when Remington filed for bankruptcy, to ink a new contract for Ilion. The Roundhill Group did not respond to calls and emails seeking comment for this story. “Remington has been going to move elsewhere since my parents worked there,” says Brown, whose wife, two daughters, and son-in-law still work at the plant. “You hear it so many times over the years, you become numb to it.” Jason Koxvold for TIMEFrank “Rusty” Brown has worked at the Remington Arms factory since 1995. Remington’s hot-and-cold relationship with Ilion is not a rare case among American gunmakers. It may seem reasonable to assume, in light of recent state laws and lawsuits filed against them, that gun companies are under siege, their bottom lines threatened by regulations and shifting public attitudes toward firearms. But today more than ever, gun manufacturers like Remington (now RemArms), Smith & Wesson, and Colt are pulling the strings, convincing elected officials they have to choose between gun-control laws and manufacturing jobs. States in the South and West are offering millions in incentives to gun companies and loosening laws around gun ownership to show their fealty to gun culture, even as gunmakers have raked in $3 billion in profits since the pandemic began. Profits for gunmakers have been strong for the last decade, with both Smith & Wesson and Sturm Ruger & Co., the country’s two biggest gunmakers, surpassing $100 million in profit every year. That’s putting pressure on states like New York to loosen recently passed gun-control laws, to convince manufacturers to stay—even though often those manufacturers are just adding new locations in other states and not actually leaving their original homes. The gunmakers’ leverage makes sense in a country where manufacturing is still seen as the backbone of the country, even though jobs in the sector make up less than 10% of U.S. employment, down from one-quarter of employment half a century ago. Politicians and voters on the right and left often romanticize factory jobs that make products marketed as all-American, such as trucks, tractors, and guns, particularly if they’re set to remain on American soil. (In the case of guns, many buyers don’t want something manufactured in a foreign country where safety standards are perceived to be lower). As America has become more polarized, gun manufacturers have been able to orchestrate complicated political theater, threatening to move factories—and jobs—when gun-control legislation is passed in certain states. They are garnering millions of dollars in incentives from states and local economic development boards rolling out the red carpet to demonstrate their gun-friendly credentials. Despite evidence that giving incentives to factories isn’t a cost-effective way to create jobs, and often they actually lose money—as in the case of electronics maker Foxconn’s deal in Wisconsin—states know that attracting manufacturers is popular with voters. Remington is a master at this game. In 1995, the company announced that it was moving its headquarters to North Carolina, receiving $150,000 from the state to do so. In the end, no manufacturing jobs were moved to the state. Then, after private equity firm Cerberus Capital Management purchased Remington in 2007 and rumors swirled that manufacturing would be moved overseas to save money, the State of New York gave Remington $3 million to expand its Ilion plant, and then $2.5 million more in 2010 to add 100 jobs. Just three years later, in 2013, New York passed sweeping gun-control legislation the SAFE Act, which banned some assault-style weapons, began requiring background checks for nearly all gun sales, and prohibited people who’d committed certain offenses from possessing guns. Ilion politicians used the law’s passage to criticize state Democrats for driving Remington away, and indeed, Remington soon announced that it was being courted by five other states. Six elected officials from the Ilion area pledged assistance should Remington build a new manufacturing plant in the area, warning in a public letter that “the clock is ticking on an inevitable exit by Remington from the state.” Read more: How Gunmakers May Benefit From Mass Shootings In 2014, Remington announced it was moving two production lines to Huntsville, Ala., a decision the company’s CEO George Kollitides blamed on New York gun laws, citing “Alabama’s rich tradition of defending freedom,” as a “major deciding factor” in the move. At the time, a company spokesperson said the move was “a strategic business decision” to consolidate plants. But while the announcement provided a platform for conservatives to lambast New York’s gun laws, the Ilion plant continued to operate with around 1,300 employees. The jobs that moved to Alabama were from other Remington plants in conservative states like Montana, Utah, and North Carolina. Alabama’s play for Remington did not look so smart by 2020, when Remington filed for bankruptcy and owed $12.5 million to Huntsville, because it had not met the hiring numbers it had agreed to in its $70 million incentive deal with the city. The company appeared to be drawing from the same playbook when it announced it was moving its headquarters to LaGrange in 2021. “The decision to locate in Georgia is very simple: the state of Georgia is not only a business-friendly state; it’s a firearms-friendly state,” RemArms CEO Ken D’Arcy said at the time. RemArms secured $6 million in incentives from Georgia, and pledged to build a $100 million research and development center in LaGrange. According to T. Scott Malone, president of the Development Authority of LaGrange, RemArms has set up shop in an 80,000-sq.-ft. temporary facility, and recently started producing its first guns. RemArms specifically attributed its decision to move to a New York law passed in 2021 that would bypass blanket immunity provided to gunmakers under federal law, and make it easier to bring civil lawsuits against gun companies. “Unfortunately, if a law like that is passed in New York State, we would have to reconsider our options for the future and our plans to expand our New York operations,” Italia, the managing partner for Roundhill Group said in an email to Utica’s Times Telegram in July 2021. But the law applies to all gunmakers that sell guns in New York, which would include RemArms wherever it has its plants. But despite all the headlines, the company has told New York stakeholders that it now has no plans to close the Ilion facility. “Nobody’s moving to Georgia—in fact, they’re adding employees here,” says John Piseck, CEO of the Herkimer County Industrial Development Agency, a public-benefit corporation that can offer tax breaks to local businesses. RemArms has called back nearly all of the 609 workers Remington laid off when it filed for bankruptcy in 2020, according to Jamie Rudwall, president of the United Mine Workers of America. He notes that only 300 have actually returned, the rest having either found new jobs or retrained for new careers. Business is good. Because gun sales are soaring in the U.S., and manufacturers need to expand operations to keep up with demand, gunmakers can combine business decisions with lobbying, announcing that they’re opening a new factory in Georgia or North Carolina to meet demand while complaining about gun-control laws elsewhere. Retailers performed 21 million background checks associated with the sale of a firearm in 2020, a 62% increase from 2019, and twice as many as 2010, according to data from the National Instant Criminal Background Check System (NICS) that is used as a rough proxy for gun sales. The figures don’t include background checks for other purposes, like concealed carry permits. For workers like Brown, the constant push and pull is more of a nuisance than a threat to their livelihoods. Brown—whose wife, two daughters, and soon-to-be son-in-law work at the Ilion plant—says the company should know by now that it won’t find workers anywhere as skilled, dedicated, or patient with the company as those in Ilion. “It’s always, ‘We’re going to move to where there’s cheaper labor. We’re going to move to where there’s this law or that law.’ After so many years, you become immune to it,” Brown says. “And then to see them fail miserably in Alabama, it’s like, ‘I told you so.’ ” To this day, both Georgia and New York officials are still pulling for RemArms to bring some more good news to their communities, even though RemArms’ future looks a little shaky. Tax collectors in Alabama are already trying to foreclose on some of Roundhill’s recently purchased assets because they weren’t removed from the state in a timely fashion, according to bankruptcy documents. The firearms economy When Brown was growing up, there were lots of manufacturing jobs in upstate New York, but Remington was the place he wanted to be. “It was so hard to get in there, because it was the greatest job ever,” he says. Both his parents had worked there, so he knew: health care didn’t cost anything; he got a pension and a good wage; and he didn’t have to bother with college. By the time he was laid off in 2020, he was making $26.87 an hour—more if he worked nights or overtime. Brown is one of thousands of people in the U.S. Northeast who make a living manufacturing firearms. The area around western Massachusetts and Connecticut, nicknamed Gun Valley, has been a gunmaking hub since George Washington set up an armory in Springfield, Mass., in the late 18th century to keep weapons out of reach of the British Navy. In 1986, 47% of guns manufactured in the U.S. were made in Connecticut, 24% in Massachusetts, and 12% in New York, according to Jürgen Brauer, the chief economist with nonpartisan research group Small Arms Analytics, who analyzed historical data from the Bureau of Alcohol, Tobacco, and Firearms (ATF). But in recent years, amid rising political polarization, states in the South and West, desperate to attract jobs in the aftermath of the Great Recession, have attempted to lure manufacturers from Gun Valley. Their pitch: gun companies should move to places where people like guns. The sunset of the federal assault-weapons ban in 2004, and subsequent attempts by states to pass laws either loosening or tightening rules on gun ownership, signaled where gunmakers would be welcome. Some states even started to designate official state guns alongside their state flowers and fish. “We’re all here to show our support for the Second Amendment to our neighbors and communities,” Nebraska Governor Pete Ricketts said earlier this year, onstage with five other governors at the trade show of the National Sports Shooting Foundation (NSSF), which now spends more on lobbying than the National Rifle Association. (Around 10,000 guns were made in Nebraska in 2020, less than 1% of all guns made in the U.S.) Jason Koxvold for TIMEJamie Rudwall, president of the United Mine Workers of America. “There’s a trend of companies that have picked up and moved, and it’s really been accelerating as of late,“ says Mark Oliva, managing director of public affairs at the NSSF. The NSSF keeps a running list of gunmakers that it says have migrated from the Northeast to the South, including Kimber, Sturm Ruger & Co., and Beretta. But the NSSF’s list is misleading. Though some gunmakers have picked up and moved their factories south from states like Connecticut, the far more common occurrence is that they move only their headquarters to Southern states, but keep manufacturing in the state in which that factory already exists. Such a move can secure juicy incentives such as tax breaks and free facilities, and generate headlines about liberal states losing manufacturing, while sparing gunmakers the hassle of moving millions of dollars of equipment and hiring and training new workers. Indeed, most of the companies on the NSSF’s list of “gun industry migration” still have manufacturing in the northeast. The devil is in the details. According to Brauer’s analysis of ATF data, by 2020 just 1.42% of guns were made in Connecticut, and less than 1% in New York, while states like Georgia, North Carolina, and South Carolina accounted for 9%, 6%, and 5%, of firearm manufacturing, respectively. The two top states for gunmaking in 2020, according to the data, were Missouri and New Hampshire. However, those figures only show where guns are distributed, rather than manufactured, deceptively counting Smith & Wesson—the biggest producer of guns in 2020—as a Missouri company, even though its guns in 2020 were made in Massachusetts, not Missouri. The company generated headlines in 2017 when it announced it was moving to Missouri, receiving a 50% tax break over 10 years. But at the time, it only moved about 20 jobs from its Massachusetts headquarters. The data shows that Massachusetts made 21% of all firearms in 2015 and just 0.49% in 2020—but that’s because Smith & Wesson established a distribution center in Missouri, not because it moved its manufacturing, Small Arms Analytics’ Brauer says. And in October 2021, Smith & Wesson said it would be relocating its headquarters to Tennessee from Springfield, Mass., its home for 165 years, after a bill was introduced in the Massachusetts legislature that would have banned the manufacture of assault weapons for civilian use. (The bill has gone nowhere.) At the time, Smith & Wesson said it decided to move because “We are under attack.” What it did not make clear was that its manufacturing operations—accounting for about 1,000 jobs—would stay in Springfield, and that what it was moving to Tennessee was assembly and distribution of firearms. One-quarter of the jobs being moved to Tennessee are currently located in Missouri and Connecticut, not Massachusetts. The Missouri warehouse the company had received an incentive for just a few years before would be closed, Smith & Wesson said. The company received $9 million from the state of Tennessee and made a deal with the local economic development agency that gives it a 60% tax break for seven years. Its CEO, Mark Smith, thanked Tennessee’s governor and legislature for their “unwavering support of the 2nd Amendment and for creating a welcoming, business friendly environment.” Smith & Wesson did not respond to requests for comment for this story. Gunmakers are increasingly turning to this playbook. Kahr Arms, which said it was moving out of New York in 2013 because of “stricter gun control,” moved its headquarters to Pennsylvania, which also has relatively strict gun-control laws, and kept its manufacturing in Massachusetts. Meanwhile, Colt, which threatened to move after Connecticut considered gun control laws in 2008 and passed them in 2013, decided to remain and then received a $10 million loan from the state of Connecticut in 2017. Colt made 158,501 guns in Connecticut 2020 and was recently bought by Czech company Česká zbrojovka Group (CZG), which itself received incentives in 2019, including 73 acres of free land by the state of Arkansas to build a gunmaking plant there. That Little Rock, Ark. plant has been put on hold, and the company says it has no plans to move Colt out of state. “Once situated in one state, it is exceedingly rare for a firearms manufacturer to move its entire operation to another state,” says Brauer. His research has found that gunmakers that say they’re leaving a Northeast state because of its gun-control policies usually keep a substantial presence there, and that they leave not because of the political climate but because they can find nonunionized, lower-paid workers in the South—and get millions of dollars in incentives. In 2010, for example, Olin Corp., owner of a Winchester ammunition factory, moved 1,000 jobs from Illinois to Mississippi after union workers in Illinois rejected a contract that would have reduced their pay. And a Remington executive told the New York Times in 2019 that in Ilion, the union “had them by the balls,” one reason the company moved some operations to Alabama from New York. Oliva, of the National Sports Shooting Foundation, says that moving operations is not a decision gunmakers take lightly, but that Smith & Wesson and other companies have to consider “the survival of a business” when states like Massachusetts talk of banning the manufacturing of some assault weapons to anyone but police and the military. The companies keep some manufacturing in the places where they were founded, out of loyalty to workers, he says, but “it is clear that many of these manufacturers are expanding to other states which are more friendly business environments and more friendly to gun rights.” For RemArms worker Brown, one of the ironies of the company’s indicating it will move to a state friendlier to gun owners is that Ilion is a place where people love guns. Ilion residents will offer to show strangers their gun collections, or wax lyrical about their favorite hunting rifle. Ask them about gun-control legislation, and they’ll blame Democrats, or politicians in Albany, for punishing the law-abiding citizens who want to own guns to hunt or to protect themselves. (Herkimer County voted for Donald Trump over Joe Biden in 2020 by a 2-to-1 margin.) Even “barber John” Seymour—still widely recognized locally as a mass-shooting survivor—is skeptical about the effectiveness of gun-control laws. “It’s tough for me to see the stuff that goes on in places like Uvalde,” he says. “But that guy would have gotten a gun no matter what—he was on a mission.” He points to the difficulties of assessing someone’s mental health when deciding whether they should be allowed to purchase a gun. In Seymour’s own case, the man who shot him, Kurt Myers, was mostly known locally as a loner who kept to himself, but authorities never found a motive for why he’d shot six people. It’s laws like New York’s SAFE Act that have most riled people in Ilion. “The climate changes when you say, ‘Big bad Remington is making this big mean gun in the middle of our state,’ ” says Rudwall, the union rep. “Look at the comments these politicians made: they demonize the tool, not the dude that did it.” When Remington threatens to leave, locals often blame state politicians for driving gunmakers out of the state. New York Republican Congresswoman Claudia Tenney has seized on that sentiment, campaigning to overturn the SAFE Act, lambasting former New York Governor Andrew Cuomo for what she has called “failed economic and anti–Second Amendment policies in New York,” and using her positions on guns to shore up her connection with Donald Trump. At a fundraiser Trump held for Tenney in 2018, he warned attendees: “They want to end your Second Amendment and they’re putting a big move on it … Cuomo wants to end your Second Amendment more than anybody.” In 2020, when Remington filed for bankruptcy, Tenney said she’d contacted President Trump and would get the factory reopened, and that it would “eventually employ a workforce significantly larger than the plant’s previous head count.” (It’s unclear whether Trump intervened.) A week later, Tenney was re-elected in one of the most expensive House races in the country, by 109 votes. Jason Koxvold for TIMERemington Arms has told New York stakeholders that it now has no plans to close the Ilion facility. Gunmakers’ threats to leave states in the Northeast have helped to stoke fear among some employees. As soon as renderings of the LaGrange RemArms headquarters started showing up online, Brown says his daughters and other workers on the factory floor began to express concern that they would lose their jobs. The pictures emerged just as the union was in the middle of negotiations with RemArms over wages and benefits, and people around the plant started hinting that the union should take whatever deal it could, says union representative Rudwall. Negotiations are still ongoing. “My daughter says, ‘Daddy, look at this brand-new facility, they’re not going to stay here,’ ” Brown says. “So when Jamie [Rudwall] comes back with a contract, whether they like it or not, they say, ‘Yes,’ because we want to keep working.” There are other jobs in Ilion; in this economy, there are other jobs just about anywhere. They’re just not manufacturing jobs. The county’s largest employer is now Tractor Supply, which is a distribution center. Verizon has a presence in the area, and Amazon is opening a warehouse nearby too. But some of the laid-off Remington workers who missed their chance to go back to the factory say they’d go back if given the opportunity. Allen Harrington worked at the Remington factory in Ilion for eight years. In October 2020, a few months after Remington filed for bankruptcy, the company laid off nearly all of its Ilion workers. Harrington was on the factory floor at the time, until a supervisor came in and said they had to shut everything down, and that everyone was terminated, and that health care, severance, and other benefits would be gone at the end of the month. Harrington eventually found a job making $13 an hour in a warehouse, down from the $25 he had made at Remington. He kicks himself for not going back to school after being laid off, but he felt too old—and he felt sure that the factory would re-open and he could work in manufacturing again. It’s hard to let go. “I loved that job,” Harrington says. “I know it’s uncertain there, but I’d go back in a heartbeat.”.....»»

Category: topSource: timeAug 19th, 2022

The night the Lord of the Skies got away

In 1985, US agents had a chance to stop Mexico's top drug lord. Years later, evidence from that night proved valuable in a way no one could predict. Reuters; John Moore/Getty Images; Rachel Mendelson/InsiderOne night in 1985, US agents may have had a chance to stop the rise of Mexico's most powerful drug lord — a chance they quickly gave up without knowing it. But the evidence gathered that night would prove valuable in a way no one could predict. If he'd blinked he might have missed them.The pair of cars were parked window to window, just off the side of Highway 67, nine miles north of the tiny border town of Presidio, Texas. As David Ramirez cruised by in his dun-colored U.S. Border Patrol sedan, the night sky outside the range of headlights was so pitch-black that he could have been forgiven for not spotting the vehicles.    Ramirez guessed that something was up. Slowing the cruiser, he banged a quick U-turn and headed back. "They were on the side of the road, at that time of night, in that area, which was known for drug trafficking," Ramirez recalled. "And there wasn't any other traffic. We were out there in a patrol vehicle and we saw maybe two other vehicles in a three-hour time span."It was May 1985, and Ramirez had only been with the Border Patrol for two and a half years. But at a posting as remote as southwest Texas, where only a handful of agents were stationed at the time, that qualified him to train the new guy. So, in the passenger seat sat his partner for the evening, a trainee agent learning the ropes as they cruised along this ribbon of pebbles, dust, and potholes masquerading as a state highway.As Ramirez maneuvered his patrol car, two pairs of headlights came on, two engines rumbled to life, and two cars peeled out. A late-model pickup truck went first, and, following closely behind, a big-body, white Mercury Grand Marquis. They were headed south, toward Presidio, and toward Mexico.Ramirez spun the cruiser around once again and sped off in pursuit, flashing his red-and-blues to signal the drivers to stop. The two vehicles ignored him.The Mercury wasn't going that fast, 60, maybe 70 miles-per-hour, but it acted as a sort of rearguard, allowing the driver of the pickup truck to put more and more distance between himself and the Border Patrol agents giving chase. This went on for a while, five minutes maybe. Finally, with the pickup truck out of sight, the driver of the Mercury eased to the side of the road and crunched to a stop. Ramirez knew it was a feint designed to let the other driver — and whatever cargo he might be carrying — get away. But he also knew that at the end of that road, just before the international port of entry, was a Border Patrol station. He radioed ahead for agents to be on the lookout, and turned his focus to the Mercury.Carefully opening his door, Ramirez climbed out of the cruiser, unclasped the snap on his holster, and drew his .38-caliber service revolver, holding it at a downward angle. It had been dark for hours, but in these parts even after midnight  in late spring can be mind-bendingly hot. The thermostat hovered around 95 degrees and the night air hung heavy like a blanket. As Ramirez approached the Mercury from the driver-side door, his heart rate quickened. The ambient sounds of the desert night, the buzz of insects and snuffling of wild javelinas, receded into the background. His training — and his survival instinct — kicked in to guide him. The trainee, armed with a shotgun, mirrored the more experienced agent and sidled toward the car from the passenger side. Speaking in Spanish through the rolled down window, the driver had an easy-does-it, friendly manner. With the trainee standing back, Ramirez holstered his revolver and requested the suspect's documents. The driver obliged.One was a border-crossing card, issued by the Immigration and Naturalization Service, that allowed Mexicans living close to the border to cross back and forth for errands and jobs.The other document identified the driver as an agent of the Federal Security Directorate, or DFS, a powerful — and phantasmagorically corrupt — branch of Mexico's federal law enforcement. For Ramirez, this didn't prove the man was a cop. The DFS was notorious for its connections to drug traffickers, and its agents were known to hand out fake badges to the smugglers they worked with. But he couldn't be sure the man wasn't a cop.Ramirez asked the man if he had any weapons, and the driver said no, no guns. But peering into the Marquis, Ramirez could see a box of ammo sitting on the passenger seat, clear as day. He asked again. No weapons? You sure about that?David Ramirez (r); John Moore/Getty Images; Rachel Mendelson/InsiderThe driver made no attempt to keep the lie going and admitted that, sure, he had a small gun in the trunk. On Ramirez' orders, the driver opened the door and walked around to the rear to pop the trunk. The "small gun" turned out to be a loaded AR-15 assault rifle.Ramirez eyed the driver more closely now. He stood about six feet tall, trim and lanky, and dressed like a well-heeled cowboy, with nice boots and well-fitting clothes. Despite everything, he seemed relaxed. Ramirez gave the driver a careful patdown and, finding no other weapons on him, escorted him back to the Border Patrol cruiser and directed him into the back seat, locking him in there but deciding not to place him in handcuffs, given the DFS badge."In any law enforcement, I would say there's a certain courtesy you give to [other] law enforcement," Ramirez told me. "As a young agent, I didn't really know how to deal with it. I was naive."The trainee took the keys to the Mercury and started back to the station at the Presidio-Ojinaga border. Ramirez followed. In the backseat, the driver sat – quiet, calm, no fuss.The man's name, according to his INS card and DFS badge, was Amado Carrillo Fuentes.The Lord of the Skies Within a decade of that traffic stop, Amado would be the most significant drug trafficker in Mexico. His knack for using airplanes to smuggle huge quantities of drugs earned him the nickname "el señor de los cielos," the Lord of the Skies, and, to this day, he is easily the most prolific and most powerful drug lord the country has ever seen. His would be a household name in Mexico and a curse on the lips of U.S. federal agents tasked with fighting the narcotics trade. Another two decades after that, he would feature prominently as the absurdly white-washed protagonist of the Netflix series Narcos: Mexico. But on the night David Ramirez encountered him on that desolate stretch of Highway 67, Amado was just one trafficker among many. Not a nobody, certainly, but his photo wouldn't yet be on any police bulletin boards, nor his name in any newspapers.Amado was then 28 years old, and for years he had found a comfortable niche for himself in the growing drug empire run by his uncle — a fearsome brute named Ernesto "Don Neto" Fonseca — Miguel Ángel Félix Gallardo, and Rafael Caro Quintero. Like nearly all major drug traffickers of the era — including Joaquín "El Chapo" Guzmán Loera, who was born around the same time as Amado — they all hailed from the northwestern state of Sinaloa. But they ran their operation out of the city of Guadalajara, and became known as the Guadalajara cartel. As the demand for cocaine began to surge in the late 1970s and exploded in the early 1980s, most cocaine headed to the U.S. from Colombia, across the Caribbean, and into Florida. But as the DEA and the Coast Guard cracked down on that route, the Colombians needed a new way of getting drugs north The syndicate that Don Neto, Félix Gallardo, and Caro Quintero operated, which previously focused on heroin and marijuana and was well positioned to offer an alternative route to their new friends in Colombia, was busy forging contacts with Colombian cocaine suppliers. Within a few years, the Mexican traffickers had become an integral link in the chain that saw cocaine travel by air from its roots high in the Andes to labs in the jungles of Colombia to local smugglers in Mexico, and finally to an eager customer base in the United States. Using the staggering infusion of cash that came along with their new specialty in moving cocaine, the Guadalajara network was able to bring most of the major drug traffickers in Mexico under a unified protection racket negotiated by Félix Gallardo and overseen by the DFS and other federal police agencies.Amado, who was quickly gaining a reputation for being cool-headed and having a talent for forging political connections, played a key role in this transformation of the drug game, coordinating cargo planes, loaded down with hundreds — and later thousands — of kilos of coke, to clandestine air strips in northern Mexico.An act of supreme recklessnessEverything changed, however, just a few months before Amado was stopped in southwest Texas. In February 1985, a group of gunmen snatched a young DEA agent named Enrique "Kiki" Camarena off the streets of Guadalajara, tortured and murdered him along with a pilot who'd worked with the DEA, and dumped their bodies on a distant ranch. Amado Carrillo Fuentes (c). Henry Romero/Reuters; Rachel Mendelson/InsiderThe brutal kidnapping, torture, and murder of a U.S. federal agent was an act of supreme recklessness and the consequences were sweeping. By April, Don Neto and Caro Quintero were in prison, Félix Gallardo was in hiding, and the network they had carefully built and paid a fortune to protect was in disarray, cracking under the pressure of a vengeful United States, and the obligatory, if belated, efforts of Mexican cops. (Just this month, on July 15, Caro Quintero was arrested in Mexico in a joint U.S.-Mexican operation. In 2013, while serving a 40-year sentence for the murders, a Mexican court had ordered Caro Quintero released. U.S. officials immediately sought to re-arrest him, adding him to the FBI's Ten Most Wanted Fugitives list, but Caro Quintero went into hiding. During the operation on July 15, 14 marines died when their Black Hawk helicopter crashed outside the city of Los Mochis. A few days after the re-capture of Caro Quintero, in a seemingly unrelated move, Félix Gallardo officially trademarked his own name, apparently for a fashion brand.)Mid-level traffickers who were lucky or savvy enough to escape the dragnet exploited a sudden power vacuum and set up territorial fiefdoms, negotiating new protection pacts with corrupt officials and continuing to traffic all the cocaine, heroin, and marijuana that North Americans could sniff, shoot up?, or smoke.Amado was one of those survivors, but he couldn't stay in Guadalajara. So he headed to Ojinaga, just across the border from Presidio, Texas, where he joined forces with a rough-and-tumble smuggler named Pablo Acosta. The Wild West At the northern extreme of the Chihuahuan Desert and the southwest extreme of Texas, Presidio sits just east of Ojinaga — rather than the proverbial "north of the border," as the Rio Grande runs south there. Located just to the south and east lies Big Bend National Park, and with its canyons, culverts, and deep ravines scored into the earth over millennia, the landscape is such a godsend to smugglers of all kinds that it could almost seem as if it was created for that express purpose.   For as long as the border has divided Presidio and Ojinaga, this remote land has been a causeway for smugglers looking to take advantage of prohibition in the U.S. — first of alcohol, later of marijuana and heroin, and finally cocaine — and of Mexico's booming black market for illegally imported commercial goods that resulted from the country's high tariffs.David Ramirez, a native of of El Paso, arrived in Presidio in 1982, shortly after joining the Border Patrol. He could almost count his fellow agents on two hands, and together they were tasked with patrolling not only the port of entry, with its wooden, two lane bridge crossing the river, but also the vast desert landscape stretching out on either side. (It was still many years before the Border Patrol would morph into the veritable army that polices the border today, with its drones, seismic motion sensors, and agents more numerous than the armies of more than a dozen small nations.) "We often had no radio comms, and all of Big Bend [National Park] to deal with," Ramirez recalled. "It was like the Wild West."Ramirez and his fellow agents may have had the might of the U.S. government at their backs, but down in Presidio, with the drug trade in overdrive, they were tilting at windmills.It wasn't like they could rely much on the Mexican authorities across the border either. The dirty and not so well-kept secret of the drug trade in Mexico is that it is inextricably tied to and controlled by extra-official protection rackets run by corrupt members of the country's business, political, and judicial elite. Just like every other lucrative smuggling corridor along the border, Ojinaga was controlled by a local boss. For much of the 1970s, that person had been Manuel Carrasco; when he eventually ran afoul of too many people he fled town and with time — and after a few shootouts — control passed to an up-and-coming trafficker named Pablo Acosta. 'He's their guy'According to the journalist Terrence Poppa, who chronicled the rise and fall of Acosta in his 1991 book "Drug Lord," Acosta came to power in Ojinaga in the late 1970s or early 1980s, and by 1982 he was either directly involved with, or charging a tax on, all illegal merchandise flowing across the border.Acosta, like Amado, was treated to a sympathetic portrayal in Narcos: Mexico. The actor Gerardo Taraceno plays Acosta up as a sentimental, old-school cowboy — reckless and violent at times, sure, but living by a code of honor and harboring a sentimental streak to boot. This flies in the face of all available evidence. Poppa — and a number of sources I spoke with who either investigated Acosta or did business with him — said that the real-life Acosta was a brutal thug, quick to mete out violence and shocking cruelty against anyone he saw as a threat. He shot men down in the street in broad daylight, subjected people to brutal torture, and was said to have once strapped a rival to the back of his pickup truck and dragged him to his bloody, horrible death. And as the years wore on, Acosta grew ever more erratic, thanks in part to his growing number of enemies and also to his fondness for basuco, a crude cocaine paste that he sprinkled into cigarettes and smoked around the clock.He was, in other words, the polar opposite of Amado. Little is known of Amado and Acosta's working relationship, one the young face of the drug trade to come and the other the proud, battle-scarred avatar of what came before. Amado was there not to do Acosta's bidding but to look after the interests of his uncle's syndicate in Guadalajara, which was increasingly coordinating shipments of cocaine on behalf of the Colombians and moving it through Ojinaga. David Ramirez (r); Rachel Mendelson/InsiderOne player who had the opportunity — or misfortune — to see that dynamic up close was Don Henry Ford, Jr, a former drug trafficker working in the region in the '70s and '80s."Amado Carrillo was never working for Pablo Acosta, not for one fucking day," Ford told me. "He represents the big guys down there, the cartel, he's their guy."When Pablo Acosta was finally gunned down in a raid by Mexican police in the tiny village of his birth in 1987, rumors immediately proliferated that Amado had paid a corrupt police commander $1 million to take him out. Unrepentant cowboyIf Ramirez that night in 1985 saw the amiable, confident face that Amado showed when being detained, Don Henry Ford Jr., two years prior, saw something closer to the real Amado — the careful balance of friendly and ruthless with which Amado gained the trust of business partners and government benefactors, while rooting out potential traitors and rivals.Ford grew up on a Texas ranch a few hundred miles north of the border, but as his family's business started to fail in the late 1970s he began to drift down to Mexico, making trips back and forth across the border in search of easy money and unlimited weed."You may consider one side Mexico and one the U.S., but it ain't either. It's the border," Ford told me recently when I reached him by phone. "People in Presidio and Ojinaga have more in common with each other than with anyone in Washington or Mexico City."By the time I talked to him, Ford had been out of the drug game for decades. The beginning of the end had come in 1986 when he was arrested in Texas but then managed to escape and spend a year or so as an honest-to-god fugitive outlaw, laying low in a tiny communal ejido south of the border, guarding multi-ton shipments of Colombian weed in a cave with just a rifle by his side. In 1987, he was caught while moving about a hundred pounds of weed in southern Texas and ended up serving seven years of a 15-year sentence before being released on good behavior — after which he spent another few years under tight restrictions, pissing in a cup for his parole officer as many as three times a week. As much as he hated giving up those years to prison and parole, Ford knows how lucky he was: less than a year after his second arrest, in 1988, the US eliminated parole for federal offenses and introduced mandatory minimums for large-scale drug trafficking. If he'd been busted any later, he could have spent the rest of his life behind bars, as did many drug traffickers — particularly Black and Brown people — sentenced amid the drastic ramping up of the U.S. war on drugs.He put that life behind him — raised kids, raised cattle, and even put aside some land and a business to pass on to his children. But he still has the spark of an outlaw in his voice. Even his email address, which includes the words "unrepentant cowboy," makes clear that he remains resolutely nonconformist. The south Texas ranch where Ford spends his days is so remote that his cell phone barely gets a signal. When we spoke, his voice crackled out of earshot every time he moved in the wrong direction or when he sat down.Ford had a rather haphazard start as a drug trafficker, running into some greedy cops on his first trip to Mexico who were happy to relieve him of his seed money and send him packing. But before long he found a knack for the business, and developed a lucrative operation trading with a loose network of marijuana growers and wholesalers, trafficking hundreds of thousands, or even millions, of dollars in weed at a time.He did most of his business in the state of Coahuila, east of Acosta's territory in Chihuahua, where he could work without having to deal with Acosta, who he knew by reputation to be a fickle and violent man. Years later, Ford would find that out firsthand, when he was attacked by men he believes to have been working for Acosta, and interrogated at length by a man he believes to be Acosta himself. He believes it to have been Acosta because he was blindfolded, and Ford is not one to say things he's not 100% sure of. (I had to take Ford's word on this incident, as there's no record of it aside from Ford's memory of the experience, and Acosta is not around to confirm it.)But before his near-death encounter with Acosta, it was in Coahuila, in the home of his main connect, a guy named Oscar, that he first met Amado around 1983.Their first meeting was just in passing; Amado was one of several cowboy-looking guys milling about during a visit to the home of his partner, where Ford was visiting on one of his many trips south to score wholesale loads of weed. Amado was dressed, like the rest of the guys, in wide-cut polyester pants and the boots popular with Mexican cowboys with a high, slanted Spanish riding heel."He didn't look like anybody extraordinary at all, he looked like Oscar was giving him some work on the farm," Ford told me. "He wasn't wearing a bunch of gold jewelry and shit that would give away the sense of being wealthy. His boots were worn."For most of his career, Ford had stuck to marijuana. And even in the early years of the cocaine boom he said he could see the effect that the introduction of cocaine was having on the business of smuggling. Guys he had known to be sworn pacifists motivated by peace and love as much as money, began carrying weapons, acting all jittery."All of a sudden it was like Miami Vice," he recalled. But he wasn't so altruistic as to turn down good business, and it soon became clear to him that the real money was in cocaine. He wanted in. So he made some inquiries and was told the person to talk to was Amado — that quiet guy in cowboy boots he'd met once a while back.The meeting happened sometime in 1983, just Ford, his cousin, his partner Oscar, and Amado in a motel room in the city of Torreon, in the southern reaches of Coahuila. It started off well enough — like many meetings between drug traffickers, it was mostly a chance to size each other up. Amado brought with him some of the product he had on hand, and for a few hours, the wirey Texan and the Sinaloan trafficker hung out, drank, sniffed cocaine, and chatted pleasantly. Just as Ramirez would observe later, Ford recalled Amado as a smooth customer, calm and collected but friendly. Even a few drinks and a few lines deep, Amado kept his wits about him."He did a lot more listening than he did talking," Ford said.Ford liked that, and he told Amado that he didn't have any interest in working with a hothead like Acosta."I told him 'If you're like that, I don't wanna do business with you,'" Ford said. "I'm interested in fuckin' moving some drugs and making some money."Ford and Amado didn't make a deal that night, but Ford said they agreed to "something tentative." When it was time for Amado to go, but he left the remaining coke as a gift, more where that came from, and Ford and his cousin set about enjoying it.Rachel Mendelson/InsiderA few hours later, as they were trying to sleep off their coke jitters, there came a series of thunderous knocks on the door, bam-bam-bam, and chaos descended on them. A team of heavily armed men rushed into the hotel room. They wore no uniforms, but they moved with such trained precision that Ford immediately took them for cops of some sort. Over the next few hours, he said, they questioned the pair relentlessly."This motherfucker did this to see if I was a cop," Ford said. "He didn't trust us, and decided he was gonna find out who we were."He never saw Amado again.200 miles from El PasoTwo years or so after Ford met him in Torreon, Amado sat patiently in the Border Patrol station in Presidio with agent David Ramirez. The other driver, the one Amado had slowed down to let escape, had made it to the point of entry. His car was clean and, after showing his ID — along with a DFS badge like Amado's — the agents who spoke to him had nothing to charge him with, and let him cruise back into Mexico. (In an interview, Ramirez told me ruefully that he had written the man's name down in his notebook but later lost it, and the question of the man's identity piques his curiosity to this day.)As for Amado, Ramirez may not have caught him trafficking drugs in flagrante, nor had he proven any collusion with the driver of the pickup truck. But there was the AR-15 he'd found in the trunk. For a nonresident of the United States, it was a serious crime to be in possession of a loaded assault rifle. If charges were brought, it could have earned him a few solid years in a federal prison. No one knew it then, but that could have put a serious crimp in Amado's upward trajectory. But that wasn't the purview of the Border Patrol. If they were going to hold Amado, the Bureau of Alcohol, Tobacco, and Firearms — 200 miles away in El Paso — would have to get involved. If they agreed, someone would have to come in from El Paso, a four-hour drive away, bring Amado back, and then take him to magistrate court in Pecos, another two-hour drive from El PasoRamirez made the call, and waited. In the meantime, in case Amado would be charged, Ramirez fingerprinted the suspect, and took a couple mugshots.By now it was around three in the morning. Amado had been pretty quiet as they drove into Presidio, but sitting in the Border Patrol station, he started to open up a bit more, chatting with Ramirez, even boasting a bit as they made small talk to kill time."The guy, once again, had not a worry in the world," Ramirez said. "Real easy guy, and you know it was strange, he offered a lot of info, like that his uncle was Don Neto and that Caro Quintero was his partner."It might seem strange that an experienced heavy in the drug trade would brag about his connections to a well-known trafficker like Don Neto and the notorious killer of a federal agent like Caro Quintero, but the code of silence only applies to the saps at the bottom of the totem pole, or to the civilians ensnared in the web of violence, corruption, and extortion that funnels money up to the bosses. For the guys making the real money, the relationship with law enforcement is a lot more fluid, with a lot more give and take. Perhaps Amado saw an opportunity to cultivate a contact, pocket a card that he could play at a later date. Or maybe he just knew that no ATF agents were getting their asses out of bed at three in the morning and driving all the way to Presidio and back to book him. Much more likely was that he'd be back in Mexico by sun-up no matter what he said to Ramirez.An hour passed, and then Ramirez got word from the Bureau that they weren't going to bother with this one. Coming all that distance to Presidio, it was too much trouble. So he let Amado go. Ramirez held on to the box of ammo, but Amado drove back into Mexico a free man with the illegal AR-15 in his trunk.'You can't live in what-ifs'Looking back to that night in Presidio in 1985, It's hard to fathom how it was possible that agents of the federal government had one of the top drug traffickers in Mexico in their custody and didn't even know it. But according to Ramirez, that was par for the course back then. "At that time, in that area, there was no intelligence collection. It was very primitive," he said. "We were patrol, we weren't really trained for intelligence gathering. Unfortunately that was the attitude back then."Ramirez doesn't pester himself much wondering how things might have gone if the ATF had bothered to haul Amado in. "He coulda done some time, sure," Ramirez replied when I pushed the point. "But you can't live in what-ifs."After that night in 1985, Ramirez would see Amado from time to time around town on the other side of the border. Ramirez would mostly avert his gaze so as not to make eye contact with the man whose night he'd ruined. He saw him at the border crossing too, and from the way Amado carried himself there, Ramirez said he could tell Amado had pull among Mexican officials."He was a charismatic kinda guy," Ramirez recalled. "He made friends with the inspectors there on the U.S. side, the Customs inspectors and the immigration inspectors, invited them to his ranch and they would go over and come back and tell about the cookouts and the time they had." One of the inspectors even invited Ramirez to the party. Ramirez politely declined.Whatever scrutiny caused him to flee Guadalajara did not appear to have followed Amado to Ojinaga, according to Ramirez. "He wasn't hiding! I mean he was out in the open," Ramirez said with some bemusement.In the years that followed, Amado continued to plot his deliberate, careful rise to power. That evening he spent with Ramirez would go down as his only known brush with US authorities — or at least the only one in which he was a suspected criminal rather than a guy asking Customs inspectors over for lunch. Alongside other major traffickers of his generation, like "El Chapo" in Sinaloa and Sonora and the Arellano-Félix brothers in Tijuana, Amado expertly navigated every power vacuum that presented itself — or triggered power vacuums himself. By the late 1980s Amado had moved his base of operations to Ciudad Juárez, the sprawling metropolis that sits across the river from El Paso, where the multiple ports of entry allow a far greater amount of train, truck, and car traffic — and contraband — than Ojinaga ever could. It was there that Amado truly came into his own, controlling organized crime in the city so tightly that normal, everyday street crime became a rarity, lest criminals incur the wrath of the henchmen tasked with keeping things quiet and orderly. David Ramirez had left Presidio as well, transferring to his hometown of El Paso, where he began doing undercover work investigating trafficking networks alongside Mexican cops. He saw firsthand the control that Amado exercised in the city.He even saw Amado once. Ramirez was in Juárez, eating breakfast with some Mexican colleagues, including a federal police commander, when who walks in but Amado, surrounded by a swarm of burly, heavily armed guards. Amado made a beeline for their table and greeted the commander warmly as Ramirez studied his food and preyed that he wouldn't be recognized. "I thought 'oh shoot, this is the guy I arrested!'" Ramirez recalled. "Everybody says they're looking for him, and he's right there!" Once again, though, Ramirez's hands were tied: no matter how much the U.S. might want its hands on Amado, he was out of reach in Mexico, where his massive web of bribes and political connections made him largely untouchable. Still, even if Ramirez's actions did nothing to stop Amado's rise to power, it wasn't all for naught.The Lord of the Skies is deadOn July 3, 1997, Amado Carrillo Fuentes entered Hospital Ángeles Santa Mónica in the ritzy Mexico City neighborhood of Polanco. Amado had had a rough time of it recently, and it would have shown, his voracious cocaine habit and relentless workload taking their toll on his face and his increasingly heavy frame. The hospital was under heavy security, with an entire wing shut down for the guest of honor's privacy. Reuters; Rachel Mendelson/InsiderAmado was by now the undisputed public face of the drug trade in Mexico, with mansions all over the country and countless men doing his bidding. Being the boss is great for a guy like Amado, but not if everyone knows it. In Juárez he and his henchmen had worked hard to keep his name out of the papers, intimidating and threatening journalists and even discouraging singers from composing narcocorridos, the norteño ballads penned in honor of prominent drug traffickers that form an important role in the folk history of organized crime in Mexico. But when you amass power and wealth like Amado had, you can only remain in the shadows for so long. Things had really taken a turn for Amado that February, when one of his most important guardian angels — General Jesús Héctor Gutierrez Rebollo, Mexico's drug czar  — was arrested and publicly accused of collaboration with Amado. Just a few months earlier, Guttierrez Rebollo had been feted in Washington, described by his American counterpart as "a guy of absolute, unquestioned integrity." So it was with a deeply embarrassed vengeance that the attention of both governments now trained itself on Amado.Amado knew as well as anyone that a drug lord's days are numbered as soon as he becomes a liability to the government. By multiple accounts, Amado started looking for an exit almost immediately. He bought property in Chile, moved money abroad, and was even rumored to have approached contacts in the government to offer a massive bribe in exchange for his freedom to retire in anonymity.On July 3, he checked in under a fake name at the hospital in Polanco to undergo plastic surgery to alter his features. (Or, it was rumored later, for a bit of liposuction. It may have been both.)He was never seen alive again.The next day, July 4, about two miles away from the hospital in the similarly posh Lomas Altas neighborhood, Fourth of July festivities were underway at the fortress-like mansion that was home to the U.S. Ambassador to Mexico. Diplomats and dignitaries, bureaucrats and spooks were spread out across the lawn, mingling with their spouses. Among the revelers were a handful of agents of the Drug Enforcement Administration, who, as Amado might have suspected, had been racing to pin down Amado before he could vanish.Their day off came to a sudden end when one of the DEA agents got a call. According to his source, Amado had succumbed to an overdose on the operating table and the body was headed for burial in his home state of Sinaloa.The call kicked off a furious race by U.S. and Mexican officials alike desperate to confirm the drug lord's death. Rumors were swirling that it was all a lie, that Amado couldn't possibly be dead, and to quiet this talk Mexican officials would a few days later take the extraordinary step of laying out Amado's body — puffy by now; his skin a ghastly grey-green — for a viewing at a government building in Mexico City, inviting journalists to show his corpse to the world.Meanwhile, a young intelligence officer for the DEA named Larry Villalobos was racking his brains to think of a way to confirm that the body was Amado's.Then it hit him: the fingerprints. Villalobos had worked for a while as a fingerprint technician with the FBI before joining the DEA, and, prior to his posting in Mexico City, he had been stationed at the DEA field office in El Paso, where he'd helped build a dossier on Amado. As part of his research, he had learned of Amado's brief detention by Border Patrol agent David Ramirez back in 1985, and he knew Ramirez had taken Amado's mugshot and fingerprints. Villalobos made some calls, and it wasn't long before Ramirez found himself awoken by the ring of his telephone. Amado may not have been worth getting out of bed for when Ramirez called the ATF back in 1985, but he sure was now.."They called me about 3 or 4 o'clock in the morning, wanting to know if I still had his prints," Ramirez recalled rather matter-of-factly. "So I dug 'em up and I sent 'em to him."In Mexico City, Villalobos received a fax of the prints and headed to the morgue to compare them with those belonging to the corpse.They were a match.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 22nd, 2022

Ten Strategies To Guide Teens About Money

How many times have you heard somebody say that they wish they had learned about money earlier? Maybe you’ve even said the phrase yourself. Wished you had a better financial education from the start so you could avoid some of the hefty mistakes that we can pay for well into our adult life. Well, you […] How many times have you heard somebody say that they wish they had learned about money earlier? Maybe you’ve even said the phrase yourself. Wished you had a better financial education from the start so you could avoid some of the hefty mistakes that we can pay for well into our adult life. Well, you cannot go back in time, but you can make sure the teenagers in your life learn these lessons early on – and get to avoid the costly pitfalls. This might not feel like the most exciting subject to a teenager, but it might just be the best gift you can give them. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more By getting their finances off to a great start they can benefit from things such as budgeting skills, larger savings, fewer debts, and compound interest. And just by having a thorough financial education, they’ll be more equipped to avoid common money mistakes and make smarter financial choices. These are the ten best ways to guide teens about money in 2022. Give them a monthly allowance One of the first things you can do to help your teenagers learn about money is to give them a monthly allowance. That means instead of them coming to the bank of mom and dad every time they need something, they get a monthly amount to budget themselves and decide what is a priority or not. It’s up to you whether you want to equate this monthly allowance to specific chores around the house, or to rules such as ‘going to their violin lessons’ or ‘getting B’s and above at school’, for example. If your teenager struggles with motivation then adding a financial reward can be a good way to incentivize them, and teach them how good it feels to earn your own money. Alternatively, the concept of an allowance can also just be an agreed monthly payment, that usually increases with age. Encourage them to get a part-time job or side hustle One of the greatest money lessons you can give a teenager is the skill of discipline and hard work. By having this ingrained from a young age, they’ll naturally grow a better appreciation and understanding of money than somebody who doesn’t start working until much later in life. Having a part-time job, whether that’s after school, on the weekends, or during the school holidays, also teaches valuable social skills and can grow them as an individual. Popular part-time jobs for teens The responsibility and grind that comes with a part-time job will quickly be rewarded when your teenagers start earning their very own income. However small, having your own money is an exciting time and for teenagers with little costs, this can vastly improve their quality of life. Retail Hospitality Lifeguard Babysitting Delivering newspapers Fast food server Side hustle ideas for teenagers The teenage years are the perfect time to start a side hustle because you have free time and no responsibilities. Without the fear of failure hanging over your teenagers, they can afford to spend time experimenting and trying out what side hustles they enjoy most before they have bills to consider. They’ll also learn valuable entrepreneurial skills, and if they do well could create the beginnings of a business to continue in years to come. Tutoring other children at their school Creating a blog or Youtube channel Teaching languages online Selling physical products Digital products online with unique selling proposition Guide them about budgets One of the first financial lessons you need to guide your teen is how to budget. No amount of money earned makes up for a lack of budgeting, because until one has control of where their money goes it can leave as quickly as it came. As John Maxwell said, “A budget is telling your money where to go, instead of wondering where it went.” For this reason, budgeting is something your teen needs to understand before they go off into the world and start making their own money. Ideally, you would start teaching them about budgets during childhood with their allowance or money they’re gifted. Teaching them simple lessons of prioritization, and when they get to the store to spend their money making sure they stick to the agreed budget and not caving and topping up their funds for them when it comes down to it. If your child doesn’t have money of their own yet, you can try getting them involved with the family budget. Not only will this give them a greater appreciation for the things they have, but it’ll prepare them for the day they need to budget for their only family. Play games that involve financial strategy One of the most fun ways to introduce your teenager to the world of finance is to play games that involve financial strategy. Learning is easier and less intimidating when there’s an element of play involved, and even particularly reluctant teens won’t be able to resist getting involved. Games that teach money lessons Pay Day The Allowance Game Monopoly Risk The Game of Life The Stock Exchange Game Explain taxes Many of us didn’t learn about taxes until we left school and started working. Or in some cases, not even then. Poor education around tax can result in missed payments, painful fines, bad credit scores, and a lot of headaches. So teaching your teen about taxes earlier rather than later is definitely not a bad idea. One of the first things you can teach your teens is why taxes exist in the first place. Explain how taxes benefit us in our everyday lives and make the world a safer, fairer place. By drumming this in from an early age, you can make sure your teen is responsible with their taxpaying and feels proud of the contributions they can make to society instead of resentful. Make sure your teens know that tax is not optional, despite what they might see online. Give them a bank account Putting away the piggybank and getting a bank account is an exciting moment in anyone’s life and will make your teen feel very grown-up and responsible. The more you can involve them in the process of choosing a bank and account type, the better. Many banks offer sign-up incentives and other benefits, such as cashback on purchases. Teaching your teens how to make the most of these from an early age will result in savvy spenders later on. By using online banking, your teens will improve their financial literacy and be better prepared for when they don’t have you around to help. Take some time to go through their bank of choices app with them, explaining how to read a statement, set up direct debits, and make payments. This will give them a chance to ask questions and you can test them on the different features. Warning: with money-making scams more prevalent than ever, this is a good time to give your teen a talk about online safety and not transferring money without your permission. If you have any concerns about this, consider agreeing to shared access of your teen’s online banking to make sure they’re not in any danger.   Explain how investing works You will rarely meet a person who doesn’t wish they began investing earlier. Making your money work for you is an exciting prospect, even to an unassuming teen, but many are too intimidated to start until much later in life- Says Stefan F. Dieffenbacher, Founder of Digital Leadership Encouraging your teen to start investing a portion of their income (whether that comes from a part-time job, business, allowance, or gifts) is a great way to set them up for success in the future. Because investing comes with a risk, teens should be given a thorough introduction to the world of investing before they commit to any serious amount of money. Teens may be more susceptible to un fact-checked social media posts and what their friends tell them which can cause problems when you team that with the impulsivity and lack of financial education many young people have. So, this is your opportunity (and responsibility) to ensure your teens know exactly what they’re getting into and understand all the possibilities beforehand. Investing topics to discuss with teenagers Compound interest. Make sure your teenagers understand compound interest and how beneficial it could be to them to start their investing journey early. Diversification. Let your teenager know about all the different ways they can invest their money and how to create a diverse portfolio to balance the risk. Patience. Explain the concept of ‘buy and hold’ and make teenagers aware that there is no such thing as a quick buck when it comes to investing. Consume financial education resources together If you don’t feel like you have all the answers to share with your teenagers, then try consuming financial content together. This could be as simple as listening to finance podcasts in the car or scrolling through money tips on Tiktok together, and it can be a great way to introduce new topics to discuss and research further. Teenagers don’t like to feel like they’re being lectured to, so finding a way to make it entertaining or using up dead time is a great way to inspire them to learn more in a fun, less formal way. By making the most of all the great financial resources out there you’re also introducing a wider range of financial advice and insights than any one person could possibly give. A well-rounded financial education needs to come from varied sources and people from different backgrounds and walks of life. Free financial content to consume with your teenager The Financial Diet The Ramsey Show Millennial Investing Afford Anything Girls That Invest The Diary of a CEO You Need a Budget Simple Money Save Live Thrive The Broken Wallet The Break Platform Teach them about debt You cannot teach your teenager about money without giving them an education on debt. Whether your family deals with debt or not, it’s important that your teenagers understand the role debt has in society and how this affects people. Instead of demonizing all debt and making teenagers feel like this is something to be feared (because this will result in feelings of shame and hiding debt in the future) you can educate them on the different types, the ways it can be utilized, and the types to avoid. Debt topics to discuss with teenagers Credit card debt. At the same time, you can teach your teenager about credit scores and the effects this has on their future financial choices. Student loans. If it’s likely your teenager will have to take on a student loan to attend college, make sure they’re aware of how this might affect their future as well as variants that could lower this impact, such as community college and scholarships. Car payments. Many teenagers want to get a car as soon as possible, but make sure they understand the difference between owning a car outright and leasing one – and which option might be best for them. Debt repayment strategies. While you might not want to imagine a world where your teenager is struggling to get out of debt, it’s important to be realistic and prepare them for ways to repay any debt they incur as responsibly as possible. Mortgage. The one kind of debt that most people can expect to have in their lifetime. The sooner you can teach young people about mortgages and the house buying process, the sooner they can start making the right steps towards this. Interest. Make sure to teach your teenagers how interest varies from debt to debt, so they can spot those sneaky high-interest repayments that can cause a vicious cycle to incur. Watch financial tv shows together If your teenager starts yawning whenever you bring up money management strategies, you may need to meet them somewhere in the middle. Start small by suggesting TV shows you can watch together that are entertaining and involve money lessons. This way they’ll still be learning but feel less intimidated because they’ll be in the comfort of their living room. You can use the time afterward to initiate wider conversations around the topics mentioned, let them ask any questions, and use this as an ice-breaking technique. TV shows and films that teach money lessons Shark Tank The Apprentice The Wolf of Wall Street The Profit The Pursuit of Happyness Dirty Money Bonus Tip- Discuss retirement options Your teen probably doesn’t spend much time thinking about retirement, especially if they haven’t entered the world of work just yet. However, you can never start too early with these things, and getting a good understanding of their retirement options will help them make choices now that their future selves will be very grateful for. If your teen struggles to grasp the concept of retirement then you could draw upon some examples of retirees in their lives, like grandparents and great grandparents. The retirement options you’ll discuss with your teen will depend on what country you live in, so we won’t deep dive into this here, but you might want to chat about the following: What retirement is and why do people need money for their old age The age people tend to retire, and the concept of FIRE (financial independence retire early) How much money they might need to have a good quality of life in retirement The importance of compound interest and getting started early Company benefits and advantageous pension schemes to look out for Saving for retirement as a self-employed person What is a 401k and the tax benefits that come with it Final words I hope you found these eleven strategies to guide teens about money helpful. You have an incredibly important opportunity to make a difference in somebody’s life by giving them these insights, and they’ll one day be very grateful that you took the time to impart this knowledge to them. At the same time, it’s okay not to be a complete financial expert. Be honest with teenagers about what you do and don’t know, and don’t be afraid to share your mistakes with them. They’ll appreciate your honesty and vulnerability, and understand that it’s how we rectify our financial mistakes that matter most. Teaching teenagers about money is also a great way to brush up on your own financial education, assess the choices you’re making, and be the best role model that you can be. Happy teaching! Article by Melissa Won, Due About the Author 9 years digital marketing experience with leading multinational company. Proven track record in handling several brands targeting different consumer groups. Updated on Jun 16, 2022, 3:50 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJun 16th, 2022

Are Putin And Xi "Gray Champions"? Part 2

Are Putin And Xi 'Gray Champions'? Part 2 Authored by Jim Quinn via The Burning Platform blog, In Part 1 of this article I examined previous Fourth Turnings and the Gray Champions who won and lost, but made a difference in the course of history. Now I will try to peer through the fog of disinformation, lies, and false narratives to try and determine which Gray Champions will make a difference in this Fourth Turning. The U.S. and NATO are playing with fire by poking the bear. This is no longer a limited conflict between Russia and the Ukraine. In the early days of the conflict, there were constant talks between both sides, with the possibility of a negotiated resolution. The American Empire nixed those talks. The neo-cons, representing the interests of the military industrial complex uni-party, see an opportunity to further enrich themselves, while believing they can bleed and weaken Putin. But who is really being weakened in the long run? Putin’s military operation began on February 24. Oil was $93 a barrel. It is up 13% and despite economic sanctions, Russian oil revenue is higher, and the ruble is at a two year high versus the USD and Euro. Natural gas prices are up 69%. Diesel prices are up 89%. Gasoline prices are up 29%. Wheat prices are up 31%. The stock market is down 5% and at a one year low. As an exporter of oil, natural gas, and wheat, is Russia really suffering from these price increases, or are the citizens of the EU and U.S. bearing the brunt of the pain? Russians are paying $2.80 a gallon for gasoline, while Americans are paying $4.65 per gallon. Who’s winning this proxy war? Russian oil exports are up 50% in 2022. The Biden administration is amateur hour on steroids. The State Department and Defense Department are led by inept woke lightweights who are stumbling and bumbling our country into World War 3. They keep pushing Putin, attempting to instigate him into an action they can use as a basis for officially declaring war against Russia. Make no mistake about it, the U.S. is already at war with Russia and Putin knows it. Economic sanctions, even though they have backfired and hurt Europe and the U.S. far more than Russia, are an act of war. Providing the Ukraine with tactical information so they can target generals and naval ships is an act of war. Shipping high tech military weaponry, in addition to enriching U.S. arms makers, to the Ukraine is an act of war. Sending $54 billion, printed out of thin air by Powell and his cronies and exacerbating our already 40-year high inflation, to the corrupt Zelensky so he can buy U.S. arms, is an act of war. I wonder if the “Big Guy” will get his 10%. Calling for the overthrow of a world leader, who has 6,000 nuclear weapons at his disposal, is a reckless act of war. This isn’t a video game, where you get to start over if you make the wrong move. This game of Risk could end life on this planet as we know it if someone makes the wrong move. Fourth Turnings have a life of their own, with the generational juxtaposition driving events towards conflict rather than towards a negotiated resolution. The Prophet Generation leaders are sure of themselves, even when the facts argue against their plans. They will plunge forward, as their arrogance and self-absurdness convince them they are destined to achieve immortality in history books as the leader who changed or saved the world. We are in the midst of an era where events are being orchestrated by evil men whose agendas, while not totally coordinated, all coalesce around a future world of authoritarian domination by the few and passive subjugation by the many. It is clear Gates and Clinton are active conspirators in the Great Reset scheme being implemented by the billionaire global oligarchs. Trump is an enigma, as his rhetoric appears to be against these forces of evil, but his actions speak otherwise. His assessment and selection of key personnel, endorsement of candidates, and continued full throated support of the blood clot inducing Big Pharma experimental gene therapies that don’t keep you from catching or transmitting a low-risk flu, classifies him as either a clueless dupe or just controlled opposition, paid to keep half the masses distracted from their conspiracy to implement their Build Back Better New World Order. His actions in not doing everything in his power to free the January 6 hostages, rotting in government dungeons, passive support for Biden’s reckless Ukraine provocations, and endorsement of left wing lunatics like Oprah talk show host and Turkish citizen Mehmet Oz for Senate in a state where he doesn’t reside, prove his true colors. A Trump victory in the 2024 presidential election would ensure a chaotic whirlwind of domestic violence as a likely global conflict would already be underway. Is Putin the world’s last hope in derailing the WEF Great Reset agenda or is he just playing his part in enslaving the global population in squalor and debt within a techno-gulag dystopian surveillance federation, where you will own nothing and be happy while your overlords own everything and dole out your rations depending upon your level of subservience? Even though there have been tenuous links between Putin and the WEF globalist cabal, the reaction of these globalists to his military operation reveals he is not on their side. The U.S. controlled NATO has been slowly encircling Russia with missiles and the imminent admission of Sweden and Finland will put their missiles on Putin’s doorstep. Putin and his closest advisors are clear headed and understand the stakes, as stated by Dimitry Medvedev: “The pumping of Ukraine by NATO countries with weapons, the training of its troops to use Western equipment, the dispatch of mercenaries and the conduct of exercises by the countries of the Alliance near our borders increase the likelihood of a direct and open conflict between NATO and Russia instead of their ‘war by proxy. Such a conflict always has the risk of turning into a full-fledged nuclear war. This will be a disastrous scenario for everyone.” – Dimitry Medvedev – Former Russian President It appears this showdown between the failing and flailing American Empire and Putin will be the existential clash of this Fourth Turning. There is one certainty. Putin will not accept defeat in Ukraine. He plans to attain his objectives, whatever the cost. If the U.S. and NATO are foolish enough to directly intervene, they risk confirming Robert Oppenheimer’s lament – “Now I am become Death, the destroyer of worlds”. Putin has seen the writing on the wall since the 2014 U.S. orchestrated coup d’état and has shown tremendous restraint in his response. His Ukraine invasion has been targeted on military objectives, making all efforts to avoid civilian casualties. The Russian military is methodical, efficient, and boring, as opposed to the Shock & Awe U.S. military that has failed miserably at achieving their objectives for 20 years. The false flag Ukrainian attempts to create atrocity narratives have failed pathetically. But Putin’s restraint should not be mistaken for weakness. He is a man of his word, not one of Biden’s bloviating apparatchiks who got their job based on race, sex, or wokeness credentials. He means what he says and is willing to back up his words with actions. “If someone intends to intervene in the ongoing events from the outside and create strategic threats for Russia that are unacceptable to us, they should know that our retaliatory strikes will be lightning-fast. We have all the tools for this, and we will use them if necessary. And I want everyone to know that.”  – Vladimir Putin – April 28, 2022 There is no doubt in my mind Putin will be the most impactful of the Gray Champions over the last several years of this Crisis. The other Gray Champion who has been biding his time and generally keeping a low profile is Xi Jinping. Like Putin, a dictator for life, he can play the long game, while the U.S. fiddles and burns. He has refused to condemn Putin’s invasion and is tacitly supporting Russia by purchasing their oil and wheat, sanctioned by the West. He is also learning the U.S. and the EU are paper tigers, bogged down by immense levels of debt, vacuous leadership, a willfully ignorant populace, and militaries focused on wokeness rather than preparation for war. He continues to rattle his sword towards Taiwan, probing and testing the U.S. reaction. Xi’s aspiration is for China to dominate the 21st Century and he is applauding the foolishness of the American Empire in its death throes as it accelerates its fall by seeing its currency and military domination degraded rapidly. Xi is a serious man, on par with Putin, when it comes to tenaciously implementing his agenda. Both Russia and China have major demographic issues and as dictators, they always have the possibility of being overthrown by an internal adversary. Human rights, gender inclusivity, and choosing preferred pronouns are not high priorities for these men. Xi has been rapidly building up his military, using the hundreds of billions the U.S. has supplied buying their cheap crap for decades. China’s CCP has infiltrated American universities and stolen our technological innovations, bribing corrupt politicians, greedy corporate CEOs, spineless college administrators, and our dishonest whore media, to gain control over key aspects of our economic system. They are truly the enemy within. And the Biden crime family is beholden to both China and Ukraine. Xi played Trump like a fiddle, pretending they were personal friends and making promises he never intended to keep, as shown by our trade deficit with China up 30% from 2021 and on-track to reach an all-time high over $450 billion in 2022. Both Putin and Xi see the deterioration, degradation, and unseriousness of those steering the American ship of state into a sea of icebergs. They witness the bumbling fool of a president on a daily basis and the dimwitted sycophants running his administration behind the curtain. It would be comical if these amateurs weren’t in the process of tearing the fabric of American society to shreds, while simultaneously pushing the world into a global conflict in which the likelihood of nuclear confrontation grows by the day. Xi most certainly plans to enact a takeover of Taiwan when he believes the U.S. is too distracted, militarily stretched and bogged down in their European misadventure. Biden has already pushed Russia and China closer, along with India, while the majority of the world supports Russia in this conflict. You will not hear that from the U.S. media, but it is a fact. The U.S. Empire is not loved by the rest of the world. It has been feared, because if you stepped out of line in honoring the USD for all obligations you were summarily bombed into oblivion or cut off from the billions in “foreign aid” (aka bribes) doled out by American politicians. None of the foreign aid ever aids the people of those countries. It aids corrupt foreign leaders, arms dealers, and politicians who have a portion of the funds funneled back into their pockets. It has worked like a charm for decades, but these arrogant psychopaths went too far this time with their Covid scheme, unleashing a tsunami of inflation and destroying the just in time global supply chain they created when they sold off our manufacturing to China. The horrific reported inflation of 8.3% is really 17%, if measured as it was during Paul Volcker’s reign as Federal Reserve Chairman. Of course, he took the courageous action of raising rates to 20% in order to crush it and succeeded. The cowardly Powell has rates under 1% and will do as he is told by his globalist overlords, destroying our economy so the Great Reset can move forward unabated. History seems to be accelerating, with major developments and sudden turns every few weeks. False narratives and engineered distractions (Ukraine war, leaked abortion ruling, covid variant of the month) are designed to divert your attention from the collapse of our economy and financial markets. No one is really in control, though there are many egomaniacal self-absorbed despots who believe they can alter the course of history in the direction they choose. Klaus Schwab, Bill Gates, and the rest of the World Economic Forum authoritarian evil globalist purveyors of real disinformation want to destroy our way of life so they can implement the way of life they want us to have – owning nothing, eating bugs, obeying their commands, under constant technological surveillance, and in constant fear of being turned in if they voice dissent. Essentially, they want to impose a techno-fascist global regime upon the masses. Those pulling the strings know the jig is up. They’ve played the debt card to the hilt. It began to unravel in September 2019 when the repo market cracked. Everything since has been part of their exit strategy plan. They know the house of cards is about to come crashing down and are attempting to pull off a controlled demolition in which they retain their wealth, power, and control. Of course, their hubris will ultimately lead to their downfall, as the world is too complex, has too many variables to control, and their malevolent machinations will blow up in their faces and possibly blow up the entire world. As we see shortages of baby formula, eggs, wheat, fertilizer, diesel fuel, high tech equipment, vehicles, along with open borders allowing hordes of illegals to pour into the country, and Democrat run urban enclaves encouraging murder and mayhem, all created by purposeful decisions made at the highest levels of government and funded by the likes of Soros and Gates, you can’t help but recognize their real goal is to destroy this country. We’ve reached the point Frank Zappa warned us about a few decades ago. “The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.” – Frank Zappa I understand what they are trying to accomplish. With little food or fuel, and less than 1% of the population able to grow their own food to sustain themselves, the Build Back Better oligarchs expect the masses to beg them to be saved. This is where the WEF slogan, “You will own nothing and be happy” comes to fruition. You will be doled out a food ration, work menial jobs, live a squalid existence, use their global digital currency, and try to maintain a high social credit score so you are not ostracized and condemned to the gulag, or worse. The world is highly complex, and the best laid plans of these psychopaths are likely to go awry. I don’t believe they can pull off this controlled demolition without unleashing a myriad of unintended consequences. There is a pugnacious, heavily armed minority who will refuse to bend the knee to the arrogant, soft, egg head billionaires like Gates. His man boobs and pot belly don’t inspire admiration from average hard working blue collar man. A motivated minority of skilled freedom minded patriots can cause a multitude of problems for globalist totalitarians. I also believe Putin and Xi are roadblocks to the WEF agenda, explaining the fawning over failed comedic actor Zelensky and his invitation to speak at Schwab’s annual World Economic Forum. The course of this Fourth Turning now hinges upon the actions of Putin and Xi in response to the threats and warlike actions being taken by an American Empire desperately clinging to the mantle as the dominant world power. In theory I understood this Fourth Turning would ultimately lead to a bloody global conflict, but a few years into this Crisis I didn’t visualize a scenario which would lead to such an outcome. Each Fourth Turning has seen an exponential increase in deaths, as the killing technology has improved. There were approximately 65 million deaths during World War II, with Russia incurring 27 million of those deaths. That means approximately 3% of the global population were killed during the last Fourth Turning. Over 4% of the U.S. male population was killed during the Civil War. A similar death toll percentage today would exceed 250 million people. With the killing technology available today to men of dubious intellect and malicious motives, the potential loss of life could exceed our worst nightmares. I hoped for a less dismal route for this inevitable Crisis, but we are now careening towards our own rendezvous with destiny. On the current trajectory, we are running out of time on the Doomsday Clock. Strauss and Howe laid out four potential outcomes, which I have presented many times before in previous articles. Three of the four are not positive. If you asked me a few years ago, I would have selected outcome three as the most likely, as the American Empire died with a whimper, much like the British Empire after World War II. Now I realize outcomes three and four are highly unlikely. I believe outcome two is inevitable, as the dominant nation (America) has chosen to take a course which will engulf the planet in a war with an unknowable outcome. Once war starts on a grand scale, it could spin out of control and result in outcome number one. We can only hope cooler heads will prevail, but observing what is considered leadership in this day and age, I’m not optimistic. This Fourth Turning could mark the end of man. It could be an omnicidal Armageddon, destroying everything, leaving nothing. If mankind ever extinguishes itself, this will probably happen when its dominant civilization triggers a Fourth Turning that ends horribly. For this Fourth Turning to put an end to all this would require an extremely unlikely blend of social disaster, human malevolence, technological perfection, and bad luck. The Fourth Turning could mark the end of modernity. The Western saecular rhythm – which began in the mid-fifteenth century with the Renaissance – could come to an abrupt terminus. The seventh modern saeculum would be the last. This too could come from total war, terrible but not final. There could be a complete collapse of science, culture, politics, and society. Such a dire result would probably happen only when a dominant nation (like today’s America) lets a Fourth Turning ekpyrosis engulf the planet. But this outcome is well within the reach of foreseeable technology and malevolence. The Fourth Turning could spare modernity but mark the end of our nation. It could close the book on the political constitution, popular culture, and moral standing that the word America has come to signify. The nation has endured for three saecula; Rome lasted twelve, the Soviet Union only one. Fourth Turnings are critical thresholds for national survival. Each of the last three American Crises produced moments of extreme danger: In the Revolution, the very birth of the republic hung by a thread in more than one battle. In the Civil War, the union barely survived a four-year slaughter that in its own time was regarded as the most lethal war in history. In World War II, the nation destroyed an enemy of democracy that for a time was winning; had the enemy won, America might have itself been destroyed. In all likelihood, the next Crisis will present the nation with a threat and a consequence on a similar scale. Or the Fourth Turning could simply mark the end of the Millennial Saeculum. Mankind, modernity, and America would all persevere. Afterward, there would be a new mood, a new High, and a new saeculum. America would be reborn. But, reborn, it would not be the same. I’ve always preached preparedness and combining forces with like-minded people, but can you really prepare for a world where outcome one or two is the climax of this Fourth Turning? I know many bloggers make money off of doom, but I simply cannot conceive of a positive outcome based on the current dynamics driving the world towards war. I’d love to give a Knute Rockne speech to inspire the team to rally around someone who can lead us to victory. But all I see are monkeys with matches in a room full of dynamite. It’s only a matter of time until it explodes. The decline of an empire is awful to watch and even worse to live through. I wish you Godspeed and thank you for reading my ramblings. I hope I’m wrong. *  *  * The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation. Tyler Durden Tue, 05/17/2022 - 23:45.....»»

Category: dealsSource: nytMay 18th, 2022

How ‘Subscribe to Me’ Became the Future of Work

Creators are bumping up against the limits of the platforms they use In August, Savannah’s entire monthly income was at stake. OnlyFans, the social media platform where she built her career, making an average of $2,000 a month from subscribers, had just announced it would be removing content like hers from the site. But there was little she could do about it. She remembers thinking: “OK, well, this is another Thursday, I might as well finish my Chick-Fil-A, and I’m just gonna chill here and wait for us to get some sort of response.” Savannah, 24, is part of a vibrant, supportive community of online sex workers that underwrite OnlyFans’s considerable financial success; it’s now valued at over $1 billion. But in a move that may foreshadow changes to come, that community was shaken when OnlyFans announced it would be banning explicit content on the site. “The sky falls on OnlyFans, like, every three or four months,” Savannah says, wryly. [time-brightcove not-tgx=”true”] She could’ve gotten a more standard job when she graduated from college in 2020 with a business degree—maybe at a bank, as a mortgage loan officer. But while career-hunting, she was working three part-time jobs and her boyfriend at the time suggested trying out OnlyFans. She opened an account in January 2020, posting sassy videos and photos that showed off her passion for Star Wars cosplay and her cheeky sense of humor to attract subscribers. “It was nerve-wracking,” Savannah admits. At first, the subscribers just trickled in; she made $80 that month. Then the pandemic lockdowns started, and Savannah’s online star began to rise. “It was an extreme case of right place, right time,” she says. “Everyone was suddenly locked inside. And they were horny. And it just all came together.” By September 2020, she had earned enough money to buy her own house—a goal that had always seemed elusive with a traditional career path. “I never, ever thought that I would be stable enough to buy a house, period, in my lifetime,” she says. That sense of stability was put to the test by the new August policy—briefly. OnlyFans backtracked just days later. For many, online sex work is easy to ignore or view as the internet’s titillating sideshow. Historically, though, the conditions of sex work serve as an indicator of the health of a society, and the inconclusive OnlyFans incident could predict the future of the growing digital creator economy and its workers. Annie Flanagan for TIME“Not only has it absolutely changed the trajectory of my life forever, but I have fun, I’m my own boss,” says Savannah. Savannah considers herself half sex worker and half “online creator,” a burgeoning and nebulous category of workers who have turned to online platforms to profit off their talents and speak to niche audiences. But the creator economy that took off around 2011 with YouTube has evolved as creators seek autonomy over their intellectual property and freedom from brand sponsorships and social media restrictions. Writers, gamers, academics, sex workers, chefs, athletes, artists: anyone with a point of view, or a video to share, has flocked to sites like Twitch, OnlyFans, Patreon and Substack in hopes of selling their skills directly to their fans. A September study from the Influencer Marketing Factory estimates some 50 million people around the world participate in this economy, broadly—that’s a third the size of the entire U.S. workforce. The study valued the creator market north of $100 billion in 2021. Direct subscription creators are a fraction of that, but a rapidly growing one. There are over a million creators on OnlyFans; streaming platform Twitch boasts over 8 million active streamers; Patreon, which hosts pay-to-view visual and written content, says it has over 200,000 active accounts. And the money generated by this new class keep going up, with OnlyFans announcing it has facilitated over $3 billion in payouts to accounts since their founding five years ago. Patreon says its creator accounts have racked up over $2 billion. Twitch’s in-app purchases neared $200 million in the first half of 2021 alone. Creators skew Millennial and Gen Z; digital natives are, after all, more prepared to capitalize on and take risks online. One study from research firm PSFK suggested that over 50% of Gen Z Americans are interested in becoming an “influencer” as a career. But some of the most successful subscription creators—historian Heather Cox Richardson, musician Amanda Palmer, photographer Brandon Stanton, and model Blac Chyna—are in their 30s or older, and were well established in their careers before selling their skills online, a fact that lends the subscription creator economy more credence. These days, Savannah—who goes by Savannah Solo on her Twitter, Instagram, TikTok and OnlyFans pages—counts hundreds of thousands of subscribers to her public profiles, and 6,500 paying subscribers to her more risqué content on OnlyFans. She doesn’t want to stop. “Not only has it absolutely changed the trajectory of my life forever, but I have fun, I’m my own boss, I wake up and I put on makeup and I wear a stupid costume and make fun content. You can decide if you want to be a persona—or if you just want to be yourself,” she says. But, as she has learned in August, the reality of a creator career is more complicated. Annie Flanagan for TIMESavannah looks through OnlyFans messages while laying at home on Oct. 18. The problem with platforms The job title “creator” is a new invention, born in the past decade thanks to the rise of self-publishing opportunities. First there was YouTube, the ür-influencer platform. Then came Facebook, Twitter and Instagram. These web2 behemoths offered anyone the ability to build a fanbase with little more than an internet connection (and, for the most successful, access to a way to photograph or video themselves). At first, little money was transferred into the hands of the creators; success in the form of wide viewership was a badge of honor, not a moneymaking scheme. That changed with the rise of models in which creators received a cut of advertising associated with their content (like pre-roll video ads on YouTube) and sponsored content and ambassadorship programs (like many of Instagram’s influencer programs). This kept content free for fans while still paying the creators—and it’s the model that still dominates the market. But positioning image-conscious brands in between fans and creators who value authenticity is not always a natural fit. Brands drop creators when they post something the brand doesn’t like. Creators lose autonomy when they spend all their time crafting sponsored content. Enter the paid social media model, in which audiences can contribute directly to their favorite creators. “From the creators’ point of view, it gives them more control and empowerment,” says OnlyFans CEO and founder Tim Stokely, about the potential for direct-to-creator paid social media to be the economic engine of the online future. The company is famous for featuring sex worker creators like Savannah, but Stokely is pushing the platform’s PG accounts, where users can subscribe to a chef’s cooking videos or a trainer’s workouts. Read More: Why OnlyFans Suddenly Reversed its Decision to Ban Sexual Content Twitch was early to this game, launching in 2011. “The digital patronage model we see popping up today in other iterations exists because of Twitch’s early entry in and focus on the creator economy,” says Mike Minton, Vice President of Monetization at Twitch. Twitch prefers to consider itself a “service” rather than a platform: it serves creators with access to audiences and monetizes their viewership, and serves fans by making it easy to watch and contribute. But it’s not all profit for creators. Hidden in the slick appeal of be-your-own-boss social media entrepreneurialism is the role of the platforms themselves, and sticky questions of ownership. Twitch, for instance, provides the necessary infrastructure for popular gamers to stream hours of high-resolution content to mass audiences of live viewers. But it also takes a 50% cut of any subscriptions. OnlyFans says the 30% it takes helps offset the costs of the security and privacy features that adult content in particular requires. Patreon takes from 5 to 12%, depending on your plan; Substack takes 10%, minus processing fees. Consummate middlemen, these companies have created low barriers to entry while still gatekeeping, at least financially. “There’s a history of artists being taken advantage of, and artists have to keep criticizing and keep skepticism at a high level,” says Jack Conte, CEO of Patreon. “I think that’s mission critical. Artists have to be educated, and choose wisely and watch platforms carefully.” Patreon, for its part, offers its users full access to their email lists in an attempt to offer greater control over their audience relationships. Patreon has had its share of controversy: a 2018 kerfuffle surrounded their choice to ban certain politically-extreme voices from the platform; payment snafus and hikes in processing fees have ruffled feathers; and their current content policies exclude sexually explicit work, to the frustration of some. The company is eager to try to keep up with creator-favored trends, however, announcing plans to integrate crypto payments and considering developing “creator coins,” and developing a native video player to more directly compete with YouTube. Stokely doesn’t try to promise financial stability or freedom to OnlyFans’ million-plus creators, especially given the complications of banking regulations (on which the company blamed the brief August ban of sexual content). He knows that change is inevitable, but he does promise one thing: OnlyFans will not become “littered with paid posts and adverts” like the free platforms. Annie Flanagan for TIME“I wake up and I put on makeup and I wear a stupid costume and make fun content. You can decide if you want to be a persona—or if you just want to be yourself,” Savannah says. Navigating an unsteady landscape Writer and musician Amanda Palmer, 45, is intimately acquainted with the challenges of creative autonomy. Palmer, the frontwoman of indie rock duo the Dresden Dolls, extricated herself from an album deal a decade ago, choosing to embrace independence—with all its financial risks—and gather income from her fans directly. “There’s been a general shift in consciousness, that people are no longer scratching their heads when an artist or a creator comes to you directly and says, Hey, I need 10 bucks,” she says. “You’re seeing it in right wing podcasting. And you’re seeing it in feminist journalism on Substack. And you’re seeing it with musicians and gamers on Patreon, and you’re seeing it with porn stars on OnlyFans.” Palmer started a Patreon in 2015, where she now posts bits of music, videos and blog posts to 12,000 paying subscribers. The direct, monetized line of communication with her fans has meant she could weather the pandemic storm—when she couldn’t play live concerts—using honesty and openness in the content she shares as bartering coin for their cash. She says she has made over $5 million in subscriptions to support her creative endeavors, although her net profit mostly just pays rent and living expenses. Still, it has been an effective solution to the conundrum of monetizing fame and artwork for a niche audience. Read More: The Livestream Show Will Go On. How COVID Has Changed Live Music—Forever Palmer’s experience with Patreon is a prime use-case for the company: a non-major artist finds financial freedom through direct-to-consumer content sharing. “Because of what’s happened over the last 10 years, there’s now hundreds of millions of creative people who identify as creators, putting their work online and already making a lot of money and want to be paid and want to build businesses,” Conte says. “Patreon is tiny; compared to the amount of creators in the world, we’re a speck.” But with $2 billion in payouts over the years, it’s proved to be a meaningful speck for a collection of creators. Conte says that about half the money that Patreon processes goes to creators who are making between $1,000 and $10,000 per month. “It’s not Taylor Swift rich, it’s not Rihanna rich. It’s a middle class of creativity: a whole new world of creators that are being enabled by this,” he says. It’s a group like Palmer: people who have a specific viewpoint, a built-in audience and an effective grasp on how to optimize their dynamic with fans. Still, even Palmer, who has “very warm feelings” about Patreon, recognizes that it can’t be trusted forever. “I’ve been ringing the warning bells for years about how dangerous it is to get into bed with a for profit company, and use them as the only avenue to reach your audience, right? Because it is dangerous, because at any moment, Facebook can take that away from you, at any moment, Patreon could sell up to Facebook and decide to change all of the rules of engagement. I really hope that doesn’t happen. But there are no guarantees in this dog eat dog tech world,” she says. “In order to protect myself, I always keep a lot of phone lines open with my community.” Annie Flanagan for TIMESavannah looks through photos with her assistant Cay. Healthy skepticism, and solidarity In her Instagram photos, Jahara Jayde doesn’t look real: technicolor eyes, luminous, airbrushed skin, ears elongated into elven tips. In her five-plus-hour Twitch streams every evening, though, she’s a bit more human, video chatting in real time with her thousand-plus viewers and slurping noodles from an unseen bowl as she plays Final Fantasy XIV through her dinnertime. When she streams, it’s just her and her subscribers. But she has discovered how vital it is to have a community of creators in this business, too. Twitch averages nearly 3 million concurrent viewers; in 2020, people watched nearly 20 billion hours of content on the site. By nature of its freewheeling live video DNA, it’s a place that is hard to regulate and populated by a wide array of characters. “I deal with racism on all of the platforms,” says Jahara, a 30-year-old BIPOC woman, citing in particular a recent influx of “hate raids” targeting BIPOC and LGBTQ+ creators on Twitch. Some creators even led a day-long streaming boycott to draw attention to the issue. Twitch has had to regulate the use of certain words and emotes (their version of custom emojis) in user chats in order to limit problematic language and content. Because of—and despite—that, Jahara has built a keenly supportive, tight-knit community that is expanding the definition of what it means to be a gamer or a creator, and who gets rewarded for the work. She’s a member of The Noir Network, a collective of Black femmes who work in content creation and help each other navigate the often-confusing Wild West of digital work, one that she is committed to continuing with. She loves the work, she just wants to make it better. Read More: The Metaverse Has Already Arrived. Here’s What That Actually Means Jahara didn’t mean to become a full-time gaming streamer when she first tried out Twitch in August 2020; she was already a business analyst with a side gig as a Japanese tutor, making use of her college degree. But soon she was gaining steam with eager subscribers: she got 300 in a month, more than enough to start monetizing her streams. “I was like, Oh, maybe I could be good at this,” she says over the phone from her home in Arizona. After just four months on Twitch, Jahara quit her day job. These days, thanks to Twitch’s subscription system, she brings in about $2,000 a month. With her tutoring clients, who she picked up because of her Twitch, she’s now matching her prior income. “And it’s awesome, because it’s doing the two things that I absolutely adore,” she says. “Ever since I was a little kid, my dad used to bring me into his room and talk to me about how I should work for myself, and the entrepreneurial spirit,” she says. She surprised herself by being able to take his advice. She has the freedom to be herself professionally, the flexibility to take care of her four-year-old daughter in the mornings before preschool, and the hope that her fiancé will eventually be able to leave his job as a manual laborer to support her online presence full time. (He already takes and edits all her photos, and does her marketing.) To her, it feels good to be a part of something. “I get a lot of messages, parents and teens and kids that tell me, like, ‘My daughter saw your photos, and her friends told her that she couldn’t copy that character because it’s not the same color as her, but now she’s excited to do it,” Jahara says. “People tell me that they feel more comfortable, they feel represented and they feel seen just by being able to see my face in the space. It wasn’t something that I expected when I set out for it. But it’s something that definitely keeps me going every day.” It’s networks like that one that have helped organize and provide a modicum of power to creators who are learning as they go. Longtime adult performer Alana Evans, 45, has an inside view of how this works; as president of the Adult Performance Artists Guild, she has helped hundreds of performers navigate issues with tech platforms including Instagram, Tiktok, and, of course, OnlyFans. “I was seeing hundreds of performers lose their pages, for very obscure reasons; you would be given an email that had vague reasons as to why maybe you were deleted, and they were absorbing all of their money,” she says. She and her organization have been able to help many rehabilitate their accounts. But these days she preaches the gospel of diversification, and of making sure that performers do their due diligence about who owns and profits from the platforms they share on. Beyond that, Evans has her sights set on the big picture: working through legal avenues to classify anti-sex-work restrictions, like those set by payment companies, as “occupational discrimination.” It’s only once they deal with the banking side of things, Evans explains, that online sex workers will be able to participate in the creator economy fully and safely. Read More: U.S. Workers Are Realizing It’s the Perfect Time to Go on Strike Creators in the music industry are trying to find power by banding together, too. By day, David Turner, 29, is a program manager at the music streaming service SoundCloud. By night, he publishes a weekly newsletter, called Penny Fractions, that goes into the nitty-gritty of the streaming industry; it’s been his pet project for over four years now. After publishing with Patreon for a few years, Turner realized only a small segment of the most popular creators were truly generating the income the platform touted. “They don’t care about me,” he says over the phone from Brooklyn. Now, Turner hosts his newsletter on an independent service and serves on the board of Ampled, a music services co-op whose tagline is “Own Your Creative Freedom.” Collectivization, as Turner sees it, is the safest way for this next generation to protect themselves from the predations of the market. Other decentralized social platforms like Mastodon and Diaspora, music streaming services like Corite and Resonate and sex-worker-backed sites like PocketStars have popped up to provide alternatives to the more mainstream options. Their selling point: bigger payouts to creators, and opportunities for creators to invest in the platforms themselves. But mass adoption has been slow. If the calling card of the independent platform is their bottom-up approach, that is also their limiting factor. By nature, they are scrappier, less funded and less likely to be able to reach the wide audiences that the top user-friendly sites have already monopolized. Annie Flanagan for TIMESavannah dresses up in Star Wars cosplay as Padmé. The future for creators When OnlyFans made its policy change in August, collectivization is what got sex workers through. Alana Evans helped lead the charge. To Evans, who has been in the industry for decades, it was just the latest iteration of exploitation from more powerful overlords. She saw her community speaking up against the change—particularly on Twitter, where sex workers and performers quickly renounced the policy and began proactively publicizing their accounts on other, friendlier platforms. To her surprise, their vocal opposition worked and OnlyFans moved quickly to find a solution. But Evans knows that this latest golden era of online work is already ending. “The writing is on the wall,” she says. Even successful creators like Savannah have begun actively promoting accounts on alternate platforms like PocketStars and Fansly. They know no solution, and no single site, will be forever. “The advice I’ve been given is to expect it all to crumble, and to have to rebuild again,” Savannah says. That advice isn’t specific to OnlyFans; it’s echoed by Amanda Palmer about Patreon, and Jahara about Twitch. As platforms inevitably seek a better bottom line, the creator workforce has no choice but to trust the tech companies will do right by them. In the meantime, they’re taking a note from the labor movement that has risen up in other industries this year: solidarity works......»»

Category: topSource: timeDec 1st, 2021

60 gifts teens will actually love to receive, from bluetooth speakers to platform Chucks everyone is wearing

The best gifts for teens are ones they'll actually want to use, like tech gadgets, beauty products, and cool accessories. Here are 60 unique gifts. When you buy through our links, Insider may earn an affiliate commission. Learn more.Best Buy; SmokoWe feel you — teenagers are notoriously hard to shop for. But that's all the more reason to give them a gift that shows how much you really care. Their teen years can be fickle and picky, but believe us when we can that they appreciate a thoughtful gift more than they'll probably let on.We've rounded up 60 well-rounded gifts to make your search a little bit easier, with a little something for every model of teen and tween. A music subscription, clean beauty options, and vintage-esque steals? They name it, we've got it!The 60 best gifts for teens in 2022:A hilariously meme-able party gameAmazonWhat Do You Meme Game, available at Amazon and Walmart, $29.99Meme lovers and board gamers unite for this hilarious What Do You Meme adult party game. Seating three to 20 players, this 435-card deck turns the kitchen table into a battleground for who can create the funniest memes. You can always add an expansion pack for fresh laughs!An adorably vintage sweaterUrban OutfittersUrban Renewal Vintage Printed Cropped Sweater, available at Urban Outfitters, $45 This Gen Z-approved sweater by Urban Renewal combines endless top trends into one timeless piece. Cropped, patterned, and sourced from some of the best vintage styles from around the world, each sweater is original and worn to perfection. No two styles are exactly alike, making this sweater their very own.An Apple Music subscriptionBest BuyApple Music Subscription, available at Apple, $9.99 monthly after a 1-month free trialAs far as we're concerned, most teenagers communicate best through music. A subscription to Apple Music is a beat that keeps on playing, serving up over 90 million songs, 30,000 playlists, and live radio. Psst…you can upgrade to a multi-user jam sesh for just $5 more a month.A trendy corduroy tote bagAmazonCorduroy Tote Bag, available at Amazon, $10.99 Lightweight, casual, and made of soft, durable corduroy, this endlessly wearable tote is perfect for school books or day trip essentials. Bonus points: It also features cotton lining, an extra two-pocket design, and whimsical messaging on the front.A vial of Good Chemistry perfumeAmazonGood Chemistry Sugar Berry Perfume, available at Target and Amazon, $26.99For teens refining their sense of style, a signature scent is never a bad idea. This Sugar Berry Eau De Parfum contains a skin-loving formula with naturally-derived ingredients — and NO  phthalates, parabens, propylene glycol, or dyes. With irresistible notes of freesia, raspberry, and vanilla, they've got the perfect combo of happy and sweet.A pair of ultra-popular platform sneakersConverseConverse Run Star Hike Platform, available at Converse, Nordstrom, and Foot Locker, $110Everyone is rocking these fashion-forward, reimagined versions of classic Chucks. Endlessly wearable and timelessly designed, you can choose from classic neutrals and snazzy patterns, or customize them for a more personal touch.A wearable throw blanketBed Bath & BeyondUGG Avery Hooded Throw Blanket, available at Bed Bath & Beyond, $29.99What's better than a gift that's fun and comfortable? This UGG hooded blanket is a perfect addition to movie night, a cozy evening at home, or after-school relaxation. Featuring a soft flannel exterior and faux Sherpa texture, this throw comes in six different colors for optimal coziness.A heatless curling rod headbandAmazonCORATED Heatless Curling Rod Headband, available at Amazon, $9.99This heatless curling rod is perfect for beauty gurus to-be. As seen on TikTok, this sleep-in, satin-covered curler is a healthier way to curl with no heat and no damage. Just clip, braid, and tie off dry hair for bouncy curls with zero expense.This exclusive Harry Potter-themed eyeshadow paletteColourPopBack to Hogwarts Pressed Powder Palette, available at ColourPop and Ulta, $30ColourPop's most requested collab is here, with Harry Potter-themed makeup storming the internet. For die-hard HP fans, we recommend the Back To Hogwarts shadow palette. It holds 24 spellbinding shades inspired by their fave characters in matte, pressed glitter, metallic, and more!A tie dye kit they can use for a fun at-home activityAmazonTulip One-Step Tie Dye Kit, available at Amazon, $14.50They can revitalize white clothes and spend a few hours having fun doing something creative, whether solo or with family or friends. This kit has enough materials for up to 30 projects, so no white fabric will be left untouched!This one-step hair dryer brushElana Rubin/InsiderRevlon Salon One-Step Hair Dryer and Volumizer Hot Air Brush, available at Target, Amazon, and Ulta, from $32.49Who doesn't love a one-step tool that feels luxurious? This popular round brush acts as a hairdryer while they brush, giving their hair volume without much finesse or time. You can find a full review of the Revlon One-Step here. An Apple AirTag to keep track of their belongingsLisa Eadicicco/InsiderApple AirTag, available at Target, Apple, and Amazon, from $28.99The teenager in your life can attach this tag to their backpack, wallet, keys, or any other easily lost item and find it easily with the Find My app whenever they've misplaced it. Using the app, they can opt for the tag to play a sound until they've found their keys sandwiched between couch cushions or their wallet in the pantry.A board game that feels like a video gameAmazonCephalofair Games Gloomhaven Board Game, available at Amazon, $181.23This collaborative board game (good for one to four players) is sort of like Dungeons & Dragons, Magic the Gathering, and other cult-favorite fantasy adventure games that forces its players to contend with monsters and mercenaries, explore a new world, and discover treasure and fame. Players make tactical decisions, and the game unfolds in reaction to their choices. Disposable cameras to help them stay in the momentAmazonFujifilm Instax Mini 9 Instant Camera, available at Amazon, Walmart, and Barnes & Noble, from $69.95Funsaver One Time Use Film Camera (2-pack), available at Amazon, $39.99Disposable cameras are popular right now, partly because of the nostalgic aesthetic of a polaroid and partly because of their simplicity. Spending so much time immersed in technology — and combatting the temptation to retake and edit photos in real-time — keep us from staying present.Disposable film cameras or polaroids help preserve memories without adding to their screen time. Plus, they give them cute photos to decorate their room with!Glossier's fan-favorite productsGlossierBoy Brow + Balm Dotcom + Futuredew Set, available at Glossier, $44No-makeup makeup is in right now and, if your teen is into beauty products, they may appreciate a gift from Glossier. The brand features the "natural and glowy" products that Olivia Rodrigo says she wears in her Vogue beauty diary.We'd recommend a gift card or a pack like the Boy Brow + Balm Dotcom + Futuredew pack, which covers three of its fan-favorite products.A great bookAmazon"Ready Player One" by Ernest Cline, available at Amazon and Bookshop, from $11Books are an incredible gift if your teen is a reader. It can translate into hours of enjoyment at a minimum and, at its best, a favorite story that follows them well into adulthood.Plus, if you've read the book, it can also mean great conversations about it or movie adaptations to watch together. It's also a gift where money doesn't really matter; you can find a great read for $20 and spending more won't make much difference.Some book suggestions:"All the Bright Places," a popular YA book on TikTok"Scythe," a bestselling dystopian YA book similar to "The Hunger Games"The best young adult books, according to a teenagerThe best young adult romance booksThe best young people's literature of 2021 according to the National Book AwardsThe best books we read in our 20sAn eco-conscious tie-dye beanieFree The EarthParks Project Beanie, available at Free People, from $40These unisex tie-dye beanies come in cool colors and with a unique plant logo. (To date, the Parks Project has reportedly contributed over $2,000,000 to help fund vital projects in national parks around the US).Ribbed beanies are big right now, à la the popular Carhartt beanie. If they've got that staple covered, the Parks Project also has tube socks. A splashproof, portable Bluetooth speaker perfect for outdoor tripsAmazonUltimate Ears Wonderboom 2, available at Amazon, Target, and Best Buy, from $99.98This rugged, compact speaker can go with them anywhere. It's waterproof, has an "outdoor boost" button specifically for listening outside, is "drop-proof," and boasts a 13-hour battery life.A plush toy that they can heat upSmokoTayto Potato Mini Toasty Heatable Plushie, available at Smoko, $10Whenever they need some cozy comfort, they can heat up this cute animal-shaped heating pad for a snuggle.A portable phone chargerAmazonElecjet Powerpie Portable Charger, available at Amazon, $69.99This handheld charger can charge up your teen's smartphone or various devices like an iPad or small laptop so they can stay in touch, turn their paper in on time, or just never have to stress about 5% battery life.Sheet masks to go with a Netflix marathonAmazonTONYMOLY I'm Real Sheet Masks (10 pack), available at Amazon and Revolve, from $24There are few things my 15-year-old sister loves more than oversized hoodies, Boba, and an endless supply of sheet masks. Grab a pack, throw them on, and make a night out of it with your teen's favorite candy and TV show.A pair of trendy, easy-to-use AirPodsAppleApple AirPods Pro (2nd Gen) with Charging Case, available at Target, Amazon, and Apple from $239.99If you're after the title of their favorite relative of the year, here's a good place to start. AirPods are both easy to use and functional as well as trendy. A Boba-shaped AirPods Pro caseSmokoBoba Tea AirPods Pro Case, available at Smoko, $16Part of my 15-year-old sister's ideal trifecta is Boba, but you can pick up a cute, fun AirPods case no matter what their interest is — Baby Yoda, gaming, Boba, or whatever else. A Bluetooth water bottle speakerGrommetAsobu Bluetooth Water Bottle Speaker, available at Amazon and Walmart, from $39.99This Bluetooth water bottle speaker offers a boost of hydration and fun for everyone. The water-resistant speaker resides at the top, ensuring greater sound quality that lasts 6-10 hours. It's the perfect accessory for them to bring to every hang-out session. A slim leather walletAmazonBellroy Slim Sleeve Leather Wallet, available at Amazon and Bellroy, $79This thin wallet is a subtle nudge toward minimalism, something many teens appreciate. The Bellroy Slim Sleeve wallet offers room for up to eight cards and a pocket to stash cash. It comes in a variety of colors and features environmentally certified leather.An eco-friendly phone casePelaPela Phone Case, available at Amazon and Pela, from $19.99Pela offers a wide variety of biodegradable cases for iPhone and Android, all made from plant-based polymers. Pela cases are rugged enough to offer drop protection, and if a phone has both a Pela case and screen protector but still cracks, Pela will cover the bill to get it fixed.A comfortable and sustainable Patagonia pullover they'll wear all the timePatagoniaPatagonia Men's Lightweight Synchilla Snap-T Pullover, available at Patagonia, REI, and Dick's Sporting Goods, $129Patagonia Women's Better Sweater 1/4-Zip Fleece, available at Patagonia, REI, and Dick's Sporting Goods, from $76.99A Patagonia sweater is a particularly good gift for teens who are interested in sustainability. The company has been turning plastic bottles into polyester for its clothing since 1993 and continues to do so today.Its Snap-T pullover is the unofficial uniform of the cozy adventurer. It and the Better Sweater are long-held favorites, and both are comfortable classics that they'll no doubt come to rely on heavily during colder weather.A gift card for stylish new glassesWarby ParkerGift Card, available at Warby Parker, from $50Teens are a notoriously picky bunch, so you can never go wrong with a gift card. If they're in the market for new glasses or sunglasses, we recommend Warby Parker because of its versatility, size flexibility, and free at-home try-on program. An Amazon Echo Dot for hands-free calls, alarms, music, updates on the weather, and moreAmazonEcho Dot (4th gen), available at Best Buy, Amazon, and Target, $49.99The Amazon Echo Dot is the most popular Amazon device for a reason — it's compact and has all the capabilities of Alexa (weather updates, recipes, music, news) without any of the bulk. A smartphone-sized travel photo printerTargetHP Sprocket 200 Photo Printer, available at Amazon and B&H Photo, $79.99This tiny, compact device prints photos with sticker backing on ZINK film with Zero Ink technology. It connects to devices via Bluetooth, and multiple devices can connect at once (personalized LED lights indicate who is currently printing). String lights with clips for photosAmazon/Business InsiderRoom Essentials Photo Clip LED String Lights, available at Target, $10Perfect for creating the archetypal teen room that's most often seen in Netflix movies and old Taylor Swift music videos, the photo clip string lights combine warm light and Polaroids (or other memorabilia). A trendy Champion sweatshirtUrban OutfittersChampion Reverse Weave Fleece Crew Neck Sweatshirt, available at Urban Outfitters and Champion, from $38Like Fila, Champion is a brand that's had a resurgence as of late. If you want to get them something they'll end up wearing all the time, this is a good candidate. A great video game"The Legend of Zelda: Skyward Sword HD" / Nintendo"The Legend of Zelda: Skyward Sword HD" for the Nintendo Switch, available at Amazon, Walmart, and GameStop, from $40.73If they're into video games, all other gifts may pale in comparison to a really good new one. Check out "Hades," "NBA 2K22," and "The Legend of Zelda: Skyward Sword HD."A vinyl record membershipVinyl Me, PleaseGift Membership, available at Vinyl Me, Please, from $119There's no greater joy than adding to a record collection or playing a new album for the first time. Your recipient gets to choose from three different types of tracks each month and will also receive extra goodies in each package. They'll also get one bonus record as part of the three-month gift membership. A gentle facial cleansing device that removes 98.5% of dirt and makeupFOREOLuna 3 Facial Cleansing Device, available at Foreo and Amazon, $219FOREO's cult-favorite Luna 3 cleansing device gently and effectively cleans with thin, antimicrobial silicone touch-points, and it removes 98.5% of dirt and makeup residue without irritating the skin. Plus, it's 100% waterproof and the battery life lasts for months per charge.Find a full review on the previous generation Luna 2 from a female reporter and a male reporter here.Comfortable lounge pants that look put-togetherMeUndiesMen's The Lounge Pant, available at MeUndies, $68Women's Lounge Pant, Women, available at MeUndies, $68MeUndies is a popular LA startup that makes some of the most comfortable underwear we've ever tried. Their lounge pants, however, are the real hidden gem — perfect for lounging around on weekend mornings or heading to the dining hall when they get to college (yep, they'll last that long) while still looking sleek.A subscription to a famous book club that sends them great hardcovers each monthBook of the Month/Instagram3-Month Gift Subscription, available at Book of the Month, $49.99If your teen is a bookworm, Book of the Month is an especially cool gift. It's a book club that has been around since 1926, and it's credited with discovering some of the most beloved books of all time (like "Gone with the Wind" and "Catcher in the Rye" to name a couple).If you gift them a subscription, they'll receive a hardcover book delivered once a month. Books are selected by a team of experts and celebrity guest judges.If they're really more into audiobooks or e-reading now rather than hardcovers, check out a gift subscription to Scribd (full review here).An Apple Watch that combines their smartphone with a fitness trackerAmazonApple Watch SE GPS, 40mm, available at Apple, Amazon, and Walmart, from $249If you have a little extra to spend on your teen, consider getting them a smartwatch. The Apple Watch SE is like a smartphone, fitness tracker, and music player all in one. Just like on their phone, they can customize the watch to show their favorite apps to pick, including social media.A cute iPhone caseSociety6Coffee Reading iPhone Case, available at Society6, $21.25This fun iPhone case is funny and unique, and most of their friends probably won't have the exact same one. Reusable strawsAmazonHiware Reusable Silicone Straws (10-pack), available at Amazon, $7.99Help teens do their part to keep single-use plastics out of trash bins, landfills, and the ocean by giving them this pack of reusable silicone drinking straws. They come in various colors and include a few cleaning brushes as well.A set of velvet retro-inspired scrunchiesAmazon/Business InsiderHair Scrunchie Variety Pack, available at Target and Bed Bath & Beyond, from $6.99Another trendy gift is as many scrunchies as you can carry. This pack comes with 12 options in enough colors to work with virtually any outfit or mood. A multicolor mini cinema light boxUrban OutfittersMulticolor Cinema Light Box, available at Uncommon Goods, from $20These trendy lightboxes are inspired by cinema marquees, and they come with 100 letters and symbols for personal messages. This one also has color-changing LED lights for further customization.Fun and useful PopSockets for the back of their phoneAmazon/Business InsiderPopGrips, available at PopSockets and Amazon, from $6PopSockets have become their own cultural phenomenon in recent years, and they're surprisingly useful. Get your teen one for their own phone or tablet, and depending on their age, you may find it's the gift they're most excited about. It doesn't hurt that there's free domestic shipping on orders over $20, or that you can actually design your own.A waterproof e-reader with a no-glare screenAmazonAmazon Kindle Paperwhite, available at Amazon and Target, $139.99Amazon's Kindle Paperwhite is its thinnest, lightest version. It also has double the storage, a built-in light that adjusts to accommodate reading indoors or outdoors, and is waterproof for reading anywhere, including the beach or bath. Plus, a single battery charge lasts weeks rather than hours.Cool backpacks from a popular startup with a charitable missionSTATE Bags/FacebookState bags and accessories, from $38State bags are increasingly popular thanks to their versatile, laid-back aesthetic and characteristically bright nylon colorways. They're also known as #GiveBackPack(s), because for every State bag purchased, State hand-delivers a backpack — packed with essential tools for success — to a local child in need. The Lorimer and Bedford are two of the company's best sellers.A three-month subscription of beauty productsBirchBoxMonthly Subscription, available at BirchBox, $15Teens are usually among the most interested in the latest and greatest beauty or grooming products — but may lack the funds to try all the full-sized versions. Birchbox sends samples of new and beloved products once a month, so they can test out new finds and discover products they may want to buy a full size of in the future. (It's also just fun to get an ongoing gift.)Personalized NikesNikeCustomizable Nikes, available at Nike, from $120Nike makes great stuff, but it's nice to get the benefits of a great shoe without forsaking what makes something unique. You can customize a pair of Nikes for them, or give them a gift card so they can get creative making something one-of-a-kind on their own.A great Alexa-enabled speaker they can control by voiceSonosSonos One Smart Speaker, available at Sonos, Best Buy, and Amazon, from $219The new Sonos One smart speaker fills any room with clear, rich sound, and they can use Alexa to play and control their music without ever lifting a finger. Find a full review here.A cult-favorite hair towel that reduces damage and cuts drying time by 50%Aquis/Business InsiderAquis Rapid Dry Hair Towel, available at Amazon, Walmart, and Target, from $20.49Aquis' cult-favorite hair towels can cut the amount of time it takes your hair to dry in half — a claim we're happy to report holds up. The proprietary fabric also means there's less damage to wet hair while it dries. If they've ever complained about frizzy hair, this and a silk pillowcase are thoughtful gifts they'll actually use. A Disney+ subscription for access to classic movies and moreDisney PlusGift Subscription, available at Disney Plus, $79.99/yearDisney Plus is the new Disney-centric streaming service. The platform includes Disney, Pixar, Marvel, Star Wars, National Geographic, and 20th Century Fox. You can gift a whole year of access for $80, which is something their entire family can benefit from.If you'd rather test Disney Plus out before buying, you can sign up for a free weeklong trial.A suitcase with an ejectable battery that can charge their devices on the goAwayThe Carry-On, available at Away, from $275Travel startup Away makes a great carry-on with an ejectable battery that can charge devices on the go, 360-degree wheels, and a lightweight build that travels easily. In other words, it takes a lot of the angst out of travel and may make family trips far more enjoyable and stress-free.Durable sunglasses that look good, tooAmazonSmith Optics Lowdown2, available at Smith Optics and Backcountry, from $109Who better to make a pair of durable, performance-based sunglasses than the company known for innovating the ski goggle? The Lowdown2 features bio-based materials for the frame, ChromaPop lens technology which creates high contrast and vibrant colors, and an anti-reflective, smudge-resistant coating.Plus, the brand offers peace of mind with free shipping, 30-day returns, and a lifetime warranty.Comfortable, high-quality sheets that come in lots of colors and patternsBrooklinenLuxe Hardcore Sheet Bundle, available at Brooklinen and Amazon, from $245.03We think Brooklinen makes the best high-end sheets at the best price on the market, and most of the Insider Reviews team uses Brooklinen on their own beds. It's perfect for lazy Saturday mornings or the rare occasion sleeping in is encouraged.The Luxe Hardcore Sheet Bundle comes in 15 colors and patterns that range from classic to fun, and you can mix and match them to suit their preferences. Grab a gift card (delivered digitally) if you want to give them more freedom.Fidget ballsSpeks2.5mm Magnet Balls, available at Speks, $34.95Made from rare earth magnets, these tiny balls can be molded into an infinite number of shapes and designs. The size of Speks balls makes them ideal for teens to keep with them for those unpredictable moments of nervousness that fill teenage years.A pack of smart plugs so they can control devices from a distanceAmazon/Business InsiderTP-Link Kasa WiFi Smart Plug, 2-Pack, available at Best Buy, $24.99Whether they're wondering if they turned off their hot iron or just don't want to get up to turn off the TV, a smart plug lets them control devices from a distance. You can connect to them using any smart device.A Time-Turner clock that actually spinsHarry PotterHarry Potter Time-Turner Clock, available at Pottery Barn Teen, $89It may not be able to take them back in time or help them be in two places at once, but this Time-Turner clock will keep them on top of their schedule. It even has a functional hourglass on the back so they can time their study breaks. A toothbrush with a timerAmazonOral-B Pro 1000 Electric Toothbrush, available at Amazon and Oral-B, from $49.94 Rigorous dental hygiene isn't usually on the top of the list of things teens care about, which is all the more reason a rechargeable toothbrush with a timer is a fantastic gift. This rechargeable brush breaks up 300% more plaque on the gum line than traditional brushing and lets them know when two minutes have passed.Compact hand sanitizer sprayTouchlandTouchland Power Mist Hand Sanitizer, available at Touchland and Sephora, $9It's in the car, the house, and their pocket these days, but many hand sanitizers smell a little like household cleaners. Touchland comes in scents like Vanilla Cinnamon and Forrest Berry, or even unscented for the teen who likes to keep it simple.The compact sanitizer features 67% alcohol for killing germs but balances it with soothing aloe vera and essential oils to hydrate the skin. A lottery card that donates to charitiesLottoLove/Business InsiderScratch Off Card, available at LottoLove, from $5When you gift this lottery card, you're actually giving the gift of charity. When you "win big," you're winning a charitable prize that gets donated to nonprofits in one of four categories: Clean water, solar light, nutritious meals, or literacy tools. To date, LottoLove and its partners have impacted lives in over 70 countries.Gift cards for concert tickets, food, and clothesChipotleYou can't go wrong with money for their favorite things, especially for teens who are relying upon part-time jobs to fund their frequent Chipotle meals and concert trips with friends. Check out more gift card ideas here.Everything: Visa Gift Card / Amazon Gift CardCoffee and food: Starbucks Gift Card / Chipotle Gift CardEntertainment and live events: Netflix Gift Card / Xbox Gift Card / Hulu Gift Card / StubHub gift cardMusic: Spotify Gift CardSheets: Brooklinen Gift CardGroceries and food: Whole Foods Gift Card / Chipotle Gift CardClothes: Nordstrom Gift Card / Everlane Gift CardTech: Best Buy Gift CardRead the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 22nd, 2022

The Credit Card Competition Act Brings New Challenges To Consumers And Investors

As both consumers and investors try to navigate the challenging market conditions against the backdrop of a wounded post-pandemic economy still in recovery, new legislation imposed by the federal government could bring sweeping changes to the credit card processing network market. In an effort to ease the burden of fees for both consumers and businesses, […] As both consumers and investors try to navigate the challenging market conditions against the backdrop of a wounded post-pandemic economy still in recovery, new legislation imposed by the federal government could bring sweeping changes to the credit card processing network market. In an effort to ease the burden of fees for both consumers and businesses, the Credit Card Competition Act (CCC) would look to increase the competitiveness of the credit card network, rerouting transactions through a range of wider networks. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more   The idea behind CCC would see some of the market's biggest players such as Visa (NYSE:V) and Mastercard (NYSE:MA) share the space with smaller credit card companies, which could result in lower swipe fees for merchants and minimize the cost burden on consumers. Recent findings from Ascent revealed the true cost of credit card processing for merchants. Typical fees can range between 1.15% + $0.05 to 3.15% + $0.10 in interchange fees. There is also an additional 0.14% to 0.17% in assessment fees that get added on top.  While this might not look like a lot, for small businesses this quickly starts to add up. Additionally, these are only the financial burdens carried by merchants. Other restrictions call for merchants and business owners to also pay interchange, assessment, and processing fees. While the inner workings of this network are complex, the understanding behind CCC would help to increase the breathing room to allow for more balanced competition between credit card companies and to force the largest players to lower their routing fees to help them remain competitive. Big box retailers, including Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), and Target (NYSE:TGT) have been lobbying the government to bring sweeping changes to how credit card processing is controlled after the major failed attempt of the Durbin Amendment. There are however two sides to the story, and on the one side, you have some who argue that the act will serve as a sort of government price control. On the other hand, some feel that the changes could bring another string of challenges and complications to an already tight-knit industry. For Consumers While there are cost-saving benefits that will be passed onto consumers, and merchants, in this case, there hasn't been much talk surrounding the long-term changes the Credit Card Competition Act will have on consumers. For starters, there’s the possibility that the new cost savings could lead to an increased number of consumers taking out credit cards as a way to help offset pandemic-driven costs and the high cost of living. Banks issuing credit cards will be left to increase annual fees, and credit standards as a way to protect their bottom line, and tighten access to those applicants deemed a credit risk. The underlying costs, which could potentially see banks raising interest rates in an attempt to adjust for price changes, would fall heaviest on consumers who can afford the adjustments the least. Although we can consider how the Durbin Amendment, which forms part of the Dodd-Frank Act 2011 removed key funding of debit and credit card rewards, many felt that it was the major retailers who ended up pocketing more from the routing mandates. In this case, we could see the same thing happening again, where the mandates would rather play in favor of big box retailers while pushing consumers and small businesses only further into the abyss. Research on the Durbin Amendment by the Federal Reserve Bank of Richmond found that roughly 77.2% of merchants did not make any price adjustments post-regulation. Only 1.2% of merchants did end up reducing their prices, while 2.16% increased their prices. This brings into question whether the new routing regulations will make a difference for consumers who are already struggling to keep up with the soaring cost of living. Higher costs and eye-watering inflation figures have left many Americans relying on their credit cards according to the Consumer Financial Protection Bureau (CFPB). Most recent figures revealed that many consumers owned an average of about 20% more on their credit cards in June 2022 than compared the same period in 2019. On top of that, major credit unions have also come under fire as the number of complaints about inaccurate credit reports has been soaring in recent months. Consumer Reports policy analyst Syed Ejaz told CBS News that “Mistakes on credit reports are all too common and can have serious consequences, especially for those who are already struggling to make ends meet.” These costly mistakes have only made it more important for you to know which credit report you should request and how you should go about dealing with any inaccuracies. Unsure, and afraid to fully see the bigger picture of how routing mandates will impact the consumer market in the long term, lobbyists and big box retailers are pushing forward, planting themselves firmly behind legislators. For Investors The argument becomes increasingly confusing and even more complicated when you start looking at how new routing mandates will impact investors. To start on a positive note, some investors might enjoy the fact that credit companies such as Visa and Mastercard, which accounts for 83% of the general-purpose credit card market, may perhaps see a change in bottom-line performance if new regulations come into effect. As competition widens in the market, credit card companies might look to adopt new methods as a way to remain competitive in the network. In this case, key performance indicators and market share will ultimately impact investor sentiment in the near-term results. On the other hand, economists argue that if new regulation is extended to the credit card industry, community banks, and local credit unions could end up losing between $5 and $10 billion in annual revenue. Shrinking revenue not only plays out on the company’s bottom line performance but more so impacts overall performance in terms of consumer reward programs, credit costs, interest rates, and tighter credit restrictions. Ongoing cutbacks would also mean that companies would be forced to lower their standing in the market, leaving investors bearish over their performance. The savings that new regulations will bring will only push the involved parties, in this case, consumers, investors, and small merchants only further into the woods, shifting billions to the big box retailers. An underlying feeling which has left some investors with a bad taste in their mouths is that new regulations could lead to the federal government interfering in private contractual agreements. A similar argument that some investors have already pointed to is how the Securities and Exchange Commission (SEC) has been attempting to prescribe provisions on contracts between private fund advisors and investors. Several proprietary factors have complicated how new regulations could influence investors' performance and the overall marketplace sentiment, which has already experienced major headwinds throughout the last few months. The Bottom Line Having the federal government support the entire reengineering of the payments system is a dangerous, yet compelling anecdote. For consumers, it leaves them at the mercy of retailers, who at this point have already taken a massive beating as economic conditions further erode. On the other hand, investors will also have a tough call to make, especially against the backdrop of a possible recession and an even more tumultuous market performance. Though it’s possible that the Credit Card Competition Act could bring sweeping changes that will help to force a more competitive network among the dozens of credit card companies - it’s still leaving too many questions unanswered. If we consider the previously failed attempts prompted by regulators, it becomes difficult to see how any possible changes will drive a positive impact, especially in a time when consumers and small business merchants are in a tight financial position. There are adverse consequences that affect all involved parties, though instead of viewing this as the enemy, consumers, investors and merchants would need to start understanding that this is the cost of doing business in the post-pandemic economy......»»

Category: blogSource: valuewalkSep 22nd, 2022

Why Business Leaders Should Always Be Thinking About the Next Crisis

The Wharton School's Erika James and Simmons' Lynn Perry Wooten spoke with TIME about their book The Prepared Leader Erika H. James, dean of the Wharton School at the University of Pennsylvania and Lynn Perry Wooten, president of Simmons University, are leaders in their field who are also experts in leadership. The pair have spent two decades researching and writing about the topic and previously wrote the 2010 book Leading Under Pressure. Their new book, The Prepared Leader, was written during the COVID-19 pandemic and draws on years of research and interviews with leaders about their experiences leading during the tumult of 2020. James and Wooten did all this while themselves transitioning into their current jobs at the height of the pandemic, in 2020. James became the first woman and person of color to lead the Wharton School, while Wooten became Simmons’ first Black president. [time-brightcove not-tgx=”true”] “We were living out what we were writing in this book as leaders of the Wharton School or of Simmons University,” says James. “That duality of experiencing it, trying to be effective leaders while also writing about it, and leveraging our research at the same time, is a really powerful part of our professional history.” James and Wooten spoke with TIME about why they believe preparedness should be the “fourth P” in a company’s bottom line, along with people, profit and the planet. They also discussed the importance of establishing—and maintaining—diversity in crisis management teams, and the role of what they call “mega communities” like the #MeToo or Black Lives Matter movements—broad and diverse collectives of stakeholders that can span organizations, sectors and, sometimes, societies. This interview has been condensed and edited for clarity. (For coverage of the future of work, visit TIME.com/charter and sign up for the free Charter newsletter.) Why do you think that leaders were so woefully unprepared for the pandemic and other crises before it? James: We don’t generally like thinking about or anticipating bad news, and the notion of a pandemic of this scale, we’ve seen signals or smaller versions of this in the past 20 years or so. But we’ve always been able to navigate them. They didn’t have hardly at all the effects that the pandemic of COVID-19 had on a country or certainly around the world. And so I think we are easy to dismiss the notion that something as catastrophic as a crisis would actually materialize and that we would be affected by them. So, because our brain doesn’t like to think about negative news, we tend not to prepare for bad things. Wooten: It’s not only that our brains don’t need to think about it, we don’t educate leaders for it. So people have to study accounting and HR and strategic planning and finance and marketing. But when you talk to leaders about their on-the-job training, their formal training, their college training, very little time gets them to think about the skill sets, the competencies you need for leading in a crisis situation. And how you take those skill sets that we talked about in a book and become this prepared leader means that you also think about it in the context of the people who work in your organization, whatever your profit model is, or your effective model—and the planet. Some might argue that if you’re, as a leader, constantly focused on what crisis might be ahead, perhaps you’re not as focused on the day-to-day running of the business. How should leaders be balancing those two priorities? James: We have to do both, quite frankly. And I think the most effective leaders are constantly thinking about what we need to do to achieve our strategic objectives, while also being mindful that we rarely ever perfectly achieve the goals and objectives that [we] set out to achieve. Things are always happening, and the best leaders are those who think about where their vulnerabilities—either internal to their organization or where there might be external threats that prohibit their organization from achieving the results in the timeframe that they had desired. So, we’re unprepared because we don’t like to think about them, we’re not taught to think about them—the best leaders understand that being effective means doing both strategic leadership and crisis preparedness. You write in the book about “sudden” and “smoldering” crises. Could you explain how leaders’ responses to those should differ? Wooten: The smoldering crises are the ones, hopefully, that you have time to prepare for—you’re constantly scanning the environment, you’re looking for signals. You’re saying “what could happen, possibly.” Even the pandemic, when you started to see it happening in other countries, leaders had to ask themselves, “what’s going to happen if it comes to the United States?” So those smoldering crises have been gradual. Sudden crises: you don’t know they’re going to happen—they take you off guard. But if you have the skill set [to think] “OK, how are we going to communicate? How are we going to build trust? How are we resourceful? How do we mobilize all of our stakeholders?” then you may not know the crisis [is coming]—a national disaster or a lawsuit or something—but at least you have the skill set to activate your leadership team. James: I’ll add that typically, we spend our time thinking about those external sudden crises. Most organizations have an active shooter plan, most organizations have a weather events strategy if a hurricane or something happens. So we plan for the things that are generally least likely to happen—those sudden events. What we don’t tend to plan for are the smoldering events which generally are things that are happening inside the organization that are oftentimes a function of bad decision-making, ineffective behavior, a poor culture—those kinds of things that sort of simmer under the radar until they erupt because nobody has paid attention to them. Not paying attention to these sorts of issues can have a very serious financial impact. How important is preparedness to a company’s bottom line? Wooten: Crises can cost money—it’s how much money do we leave [behind] because we have to stop business: money that we lose from lawsuits, money that we lose from reputational effects. And this is where we talk about the intersection of being a prepared leader with your profit. The better that you can be a prepared leader, you can prevent crisis so you’re saving money. You can preserve your reputation. You can make sure that your operations can go on. How have you both drawn on your own experiences of fighting fires as leaders for the learnings that you present in the book? James: I’ll share a quick story. Lynn and I wrote an initial book several years ago called Leading Under Pressure. And when I was sharing that book with some neighbors, they said, “Oh, is that a parenting book?” That was such an unusual response to a book titled Leading Under Pressure, but in hindsight, you realize that, as parents, we’re constantly doing the work of crisis leadership. We’re constantly scanning to see what could go wrong with our kids. We’re constantly trying to prepare them for the next step in their life. We’re constantly trying to put out fires when something bad happens to our children. So I think as parents we’re very well, attuned to naturally thinking about things going wrong. We don’t oftentimes make that shift to the workplace. That’s not to say that employees are like children, but it’s the same level of responsibility that a leader has, and understanding what we need to be mindful of is the active part of preparation. Wooten: For me, I’m constantly scanning my environment and trying to make sense of what’s going to happen, what could be the next crisis on the horizon. I lead a small university and in the United States. We talk about the demographic cliff, especially for small universities, as fewer students are going to college as people are moving from different sides of the country. And so I’m thinking about, “OK, how is this demographic cliff going to require me to innovate, to rethink the business model of my university?” So the sense-making, creativity, the innovation… We have a tool where we talk about how you take a crisis and look at it as an opportunity to do something different. In the book, we talk about the National Basketball Association and how they used the pandemic. There are many examples where we’ve seen organizations reinvent themselves and the crisis has become an opportunity to do something better—either the way you organize people or how you do technology or how you change your business model. So I’m constantly thinking about opportunities too. What are the biggest lessons for businesses from the pandemic? Wooten: We can be agile. Never before have we seen industries and businesses and communities reinvent themselves. You take healthcare and telemed, you take universities and K-12 systems going online, so we can be agile. And so how do we do things quicker? The other big lesson is looking for examples of effective communication. We know that in crisis situations, leaders have to communicate, communicate, communicate. We talk about that in the book. It’s important, because you want to build trust. And so being competent, having a psychological contract as you communicate with people, are so important—and having compassion. James: I would add that one of the key lessons is recognizing that our tendency, generally, when we experience threat, is to retreat and become very limited in how or where we seek information. And because a crisis means it’s something that we’ve not experienced before, whatever is in our history, our past is not going to inform us in terms of how to respond to this crisis. So the need for creativity—the need for intentionally seeking out information and ideas and new perspectives to help us solve a problem that we’ve never experienced before—that sort of goes against our psyche. But the leaders who have been most effective are those who are actually able to expand the sources from which they draw information and problem-solving. What should leaders today be thinking about when it comes to leading through the next crisis, big or small? James: To me, it’s thinking about understanding the lessons that they’ve learned or what they’ve experienced going through the pandemic and evaluating honestly, “what did we do well, in responding to that, what didn’t really do well and responding to that? What structures or policies or procedures do we have in place that can help us mitigate the next crisis?” Guaranteed, the next crisis probably will not be another pandemic, but it will be something else. And there’s muscle memory. If we are intentional about learning from what we just went through, we can leverage that muscle memory to help inform us the next time something else happens—but only if we are intentional about reflecting and learning the lessons having just gone through the previous crisis. Wooten: We talk about mega communities [in the book.] It’s not only looking inside your organization to say what did you do well, or what did you need to improve, but “who do I need to partner with? How do I expand my network so I’m a better organization?” Mega communities say a lot of tough problems need the three sectors: you need government, you need the nonprofit sector and you need the corporate sector. We saw that in the pandemic. Who else managed that last crisis well? What can I learn from them? What are the key skills you’ve identified that leaders need to be able to handle a crisis? James: Generally, effective crisis leaders will engage in signal detection to understand what are the vulnerabilities and what do we need to be on the lookout for? The next phase is around crisis planning and prevention. When a crisis does hit, there’s the notion of damage control or containment—how do we limit its impact? And the fourth stage is business recovery. And then lastly, there’s the learning phase. Within each of those phases, Lynn and I have identified several key leadership traits or competencies that are necessary, so in the signal detection phase, for example, one trait is sense-making. How do I make sense of all of the information that’s coming at me, how do I put it together in a way that allows me to communicate to the broader organization? Here’s what we’re learning, and here’s what we can start to prepare for it. Wooten: I [also] want to talk about our risk taking. Sometimes during a crisis, when you’re reinventing yourself and adapting to the world, you have to think about what risks we’re going to take. [For example,] we’re going to take all the basketball players and create a bubble in Orlando. Some of that was risk taking. But it’s assessing the risks and understanding what the pros and cons are. Erica and I talk a lot about how one of the leader’s roles in the crisis is to ensure resiliency. Yeah, you’re going into this panic, you’re going to become paralyzed, but at some point, you’re going to have to bounce back. Resiliency is “how am I going to bounce back and what is it going to take for me to be better? What are the investments I have to make—the team I need, the financial investments, the infrastructure—so that I can be resilient in that recovery mode?” And with that kind of risk-taking, when it is something like the pandemic you are having to make those decisions very quickly as well. Wooten: Yep. Part of being quick is you’ve got to have the data, and you have to have the theory of change—”why am I doing this? What does the data show me?” And being ethical. All the stakeholders are going to be involved in your risky decision. What are you doing to ensure their well being in a crisis situation? James: I think it’s important to highlight that not all stakeholders are equal. You have people who are advocates for your organization and want to support everything that you’re doing. You’ll have people who are sort of ambivalent, they may know your company, but they don’t feel one way or another about it. And then you have people who are potentially very aggressively antagonistic to your company. And in times of crisis, it might be [that] the people who might be most vocal might not be the ones who need the most attention. So those who are antagonistic to you might be very much all over social media. They might be very much present and vocal and you might feel like you need to devote your attention to that group. But they’re less likely to want to support you no matter what your efforts are, because they are naturally antagonistic to what it is you do. The real key, especially in a time of crisis is to pay attention to those who are ambivalent, so that you avoid those from becoming antagonistic, and you potentially are able to influence them to become your advocates. And I don’t think leaders oftentimes recognize [that]—they’ll go to the loudest voices, but the loudest voices are not always the stakeholders that need and deserve the leaders’ attention. Diversity is something that you identify as an important element when building a team that’s equipped for a crisis. There was a recent study from Imperial College Business School, which found that diversity on boards is something that’s often sacrificed when companies are struggling. How can organizations prevent that from happening? James: I think it really is a matter of the intention of the leader. If the leader understands the value that comes from having diverse perspectives on the board and the management team—wherever—then he or she will facilitate creating a diverse and inclusive environment in both of those settings. And then it becomes making sure that the board is aligned with the values of diversity. It becomes the board’s responsibility to ensure that the leader and the managers are, in fact, engaging in practices that create an inclusive communities such that the value of diversity, the voices—the perspectives that allow a leader to make the most effective decisions—are, in fact, being heard. Wooten: I believe most leaders want to have diverse inclusive organizations but haven’t thought about the roadmap. And so it’s asking yourself “When I look around the table, especially the boardroom, who’s missing, especially relevant to this organization?” And then, “what is my plan to make sure that the people who are missing can be in the room to make it happen?” And part of that, once you get them in the room, is that they have to feel like they belong. We talk about in the book, going to all different types of experts to resolve the crisis and hearing various voices from outside the organization, at the top of the organization and at the bottom. And crisis always calls for you to really think about diversity and equity and inclusion. We definitely saw it in the pandemic, as we saw, for example, women exiting the workplace, as we saw how people were dealing with the social reckoning. So, sometimes, crises—a natural disaster or something like a medical crisis—will have a parallel to diversity issues. James: Oftentimes when we now use the phrase diversity, we immediately turn to demographic diversity and think we need more women, we need more people of color. And, while that continues to be true for most organizations, we’re also inclusive in our approach to diversity, especially in a time of crisis, because our tendency as leaders is to go to the content experts. So in a crisis we’re gonna go to the legal counsel, and we might go to public relations or head of communications. And those folks are important contributors to understanding how best to navigate the crisis. But if those are the only two perspectives and we’re not going to people who are interfacing with customers on a daily basis, if we’re not going to our customers, if we’re not going to shareholders to understand the perspective that they bring, then we’re not going to have the most fulsome set of information and data upon which to make a decision. So for us, demographic diversity is important, but it’s not the only kind of diversity that matters in a time of crisis. (For coverage of the future of work, visit TIME.com/charter and sign up for the free Charter newsletter.) Do you have any tips for people who have that perspective and are struggling to have their voices heard within an organization? Wooten: When I’m coaching people like that, I [say] “think about where are opportunities to showcase your knowledge in multiple communications. Maybe you don’t feel comfortable speaking up in a meeting, but it could be an email, it could be a water cooler conversation, it could be a text message, but think about various communication pathways that you can showcase your expertise.” The other thing is, I always say partner with someone—the CFO partnering with the chief marketing officer. Spend some time with a person from a different background to share what you’re working on, and how you can manage through the crisis, and get their perspective. James: I would add, aligning your work—or the communication that you want to get upward into the organization—with the strategic priority of the organization. That way it’s more likely to get the attention of top management, because it’s already an area or a topic or an issue that they’re focused on. So if you can align whatever it is you’re trying to get communicated in the context of that strategic priority is much more likely to get attention. What role does technology play in both creating and combating crises? Wooten: We all have seen crises be birthed from social media, or cybersecurity, so the chief information officer, the chief technology officer, is an important member of any organization’s crisis leadership team. They always have to be on the lookout. But technology is an efficient solution to a lot of crises. I gave the example of technology being the solution for how we get medical appointments during the pandemic—the telemed. Likewise, we’ve seen that a lot of organizations were successful communicating on social media, for example, using technology to find out where there were outbreaks of COVID or using technology to find out where you can get vaccinated......»»

Category: topSource: timeSep 18th, 2022

Jay Powell: A Breathing Weapon Of Mass Destruction?

Jay Powell: A Breathing Weapon Of Mass Destruction? Authored by Matthew Piepenburg via GoldSwitzerland.com, Below we track how the Powell Fed serves as a contemporary weapon of mass destruction. Powell’s so-called “war against inflation” will fail, but not before crushing everything from risk asset, precious metal and currency pricing to the USD. As importantly, Powell is accelerating global market shifts while sending a death knell to the ignored middle class. Let’s dig in. The Fed: Creators of Their Own Rock & Hard Place In countless interviews and articles, we have openly declared that after years of drunken monetary driving, the Fed has no good options left and is literally caught between an inflationary rock and a depressionary hard-place. That is, hawkishly tightening the Fed’s monthly balance sheet (starting in September at $95B) while raising the Fed Funds Rate (FFR) into a recession was, is and will continue to be an open head-shot to the markets and the economy; yet dovishly mouse-clicking more money (i.e., QE) would be fatally inflationary. Again, rock and a hard place. What’s remarkable and unknown to most, however, is that the Chicago Fed recently released a white paper during the Jackson Hole meeting which says the very same thing we’ve been warning: Namely, that Powell’s WMD “Volcker 2.0” stance (arrogance/delusion) is only going to make inflation (and stagflation) worse, not better. To quote the Chicago Fed: “In this pathological situation, monetary tightening would actually spur higher inflation and would spark a pernicious fiscal stagflation, with the inflation rate drifting away from the monetary authority’s target and with GDP growth slowing down considerably. While in the short run, monetary tightening might succeed in partially reducing the business cycle component of inflation, the trend component of inflation would move in the opposite direction as a result of the higher fiscal burden.” In short, Powell can’t be Volcker. Why? Simple. America Can’t Afford Powell (or His Rate Hikes) This hard reality is economic and mathematical, not political or psychological, though Powell suffers from both political delusion and a psychological lack of self/historical awareness… I’d like to ask Powell, for example, how the US plans to pay for its now rate-enhanced (i.e., even more expensive) debts and obligations regarding defense spending, Treasury obligations, social security and health care when just the interest payments alone on Uncle Sam’s current bar tab are unsustainable? Powell, part of the so-called “independent Fed,”will now have to make a political choice (and trust me, the Fed IS political): Will he A) intentionally seek to crash the economy into the mother of all recessions to “fight” the inflation his own private bank’s balance sheet singularly created, or B) will he help turn America into the Banana Republic that it is already becoming by printing (debasing) trillions more US “dollars”? The “inflation-fighting” Powell, embarrassed to go down in history as the next Arthur Burns, may just A) continue to hike rates and strengthen the USD (currently bad for gold), which is sending America to its knees, or B) sometime this autumn he’ll cave, pivot and let inflation rip (while the BLS, of course, under-reports inflation (i.e., lies) by at least ½). In the meantime, we can only watch markets and economic conditions continue to tank as interest rates and the USD climbs toward a peak before the USD makes a record-breaking fall. And why do I see a fall? Easy. The Credit Markets Are Screaming “Oh-Oh!” To borrow/twist from Shakespeare: “The bond market is the thing.” Everything, and I mean everything, hinges on credit markets. Even the cancerously expanding US money supply(M0-M4) is at root just 95% bank credit. Understanding credit markets is fairly simple. When the cost of debt is cheap, things (from real estate to growth stocks) feel good; when the cost of debt is high (as measured by the FFR, but more importantly by the fatally rising yields on the US10Y), things collapse. We saw the first (and media-ignored) warnings of this collapse in September of 2019 when the oh-so critical (yet media ignored) repo markets imploded, none of which can be blamed on COVID (2020), Putin (2022) or climate change. As dollar liquidity dries up, so will markets, economies and lifestyles. Remember: All market crises are, at root, just liquidity crises. A Summer of Credit Drought As previously warned, signs of this drying liquidity are literally everywhere. The Fed’s own Quarterly Loan Officer Survey confirms that banks are lending less. And given that 70% of the US bond market is composed of junk, high-yield and levered loans (i.e., the worst students in the class hitherto priced as PhD candidates), the rigged game of debt roll-overs and stock buy-backs is about to end in a stock and bond market near you as rates rise to unpayable levels. Furthermore, it’s worth noting that US banks (levered 10X) and European banks (levered 20X due to years of negative nominal rates), will now use rising rates as the long-awaited excuse to de-lever their bloated balance sheets, which is fatal to risk asset markets. Even more alarming, however, is what this de-leverage will mean to that massive, USD-based and expanding (1985 to now) Weapon of Mass Destruction otherwise known as the OTC and COMEX derivative markets. Rather that expand, this fatal market will contract—all of which will have massive implications for the USD as debt markets slowly turn from a past euphoria to a current nightmare. The Dangerous USD Powell Ignores Measured by the DXY, the Dollar is ripping. But you’ll note that Powell and his “data points” never address the Dollar. Powell, like most DC-based Faustian deal-makers, lives in a US-centric glass house, which ignores the rest of the world (namely Emerging Markets, oil producers and mislead “allies”) who are de-dollarizing (i.e., repricing the USD) as I type this. In case Powell never took an econ history class or read a newspaper that was not written in English, it might be worth reminding him that EM nations like Venezuela, Lebanon, Argentina, Turkey, and Sri Lanka, as well as, of course, the BRICS themselves, are tired of importing US inflation and paying trillions and trillions of Dollar-denominated debt or forced dollar-settled oil purchases. As the Fed artificially strengthens the USD via rate hikes, debt-soaked nations are forced to either: A) debase their currencies to pay their debts (which might explain Argentina’s 69.5% official interest rate) or B) raise rates and look elsewhere for new trading partners or money. Even “developed” economies are seeing their currencies at record lows vis-à-vis the rising USD (Japanese Yen at 50-year lows, UK’s currency at 37-year lows and the euro now at 20-year lows). And as for those cornered EM nations, $650B of the IMF’s 2021 usurious (and dollar-based) loans to them have already dried up. EM Markets Looking East Not West So, where will EM countries go trade, survival, better energy pricing, and even fairer gold pricing? The answer and trends are now open and obvious: East not West, and away from (rather than toward) the USD. Russia and China are making trade and currency deals not only with the BRICS at a rapid pace, but with just about every nation not otherwise “friendly” (i.e., forced to be) with the USA (and which “friends” now face a cold winter on this side of the Atlantic.) Even the notoriously corrupt LBMA gold market, which spends its every waking hour using forward contracts to artificially crush the paper gold price, is about to see a Moscow-based new gold exchange (the Moscow Gold Standard). Of course, such a Moscow exchange makes sense given that 57% of the world’s gold comes from Eurasian zip codes where a post-sanction Putin sees yet another golden opportunity to fix what the West has broken. Furthermore, and as stated above, as the derivatives markets de-lever, demand for the USD (and hence dollar-strength) will equally tank, as OTC settlements are done in USD, not Pesos, Yen, euros or Yuan. As we warned within weeks of the failed sanctions against Putin, the world is de-dollarizing slowly yet steadily, and once the DXY inevitably slides from 108, to 107 and then below 106, the Greenback’s fall will mirror Hemingway’s description of poverty: “Slowly then all at once.” For the last 14 months, the Dollar Index has been trading above its quarterly moving average, which as the always-brilliant Michael Oliver reminds, is like a runner who never exhales. At some point the USD’s lungs will collapse. Gold: Waiting for the USD to Snap The foregoing and seismic shifts in the derivative and EM markets portend the sick finale of the USD, and hence for the currently repressed gold price. In short: As the former tanks, the latter surges. Many are nevertheless angry that gold hasn’t ripped in a world of geopolitical risk and rising/persistent inflation, but that’s because the artificially rigged USD has been their only (and short-lived) measure. As risk assets in the US and around the world experience double-digit declines, gold in every major currency but the USD has been rising, not falling: And even gold’s relative decline in US markets remains minimal compared to double-digit losses in traditional US risk-parity (i.e., stock/bond) portfolios for 2022. A COMEX in Transition You also may have overlooked that those fat foxes over at the BIS recently unwound 90% of their gold swaps (from 500 to 50 tons) at precisely the same pace that JP Morgan and Citibank (which hold/control 90% of the US commercial banking gold derivatives) just expanded the notional value of their gold derivatives by 520% (!). Anyone and everyone in the precious metals markets knows that the notional value of those contracts over-shoots the actual supply of the physical metal by 99%. The COMEX is a nothing more than a legalized fairytale (fraud) whose non-fictional pains (and gold surges) are inevitable. In the meantime, however, many players in the COMEX markets (the precious metal exchange in NY) are now (and increasingly) looking to take delivery of real rather than paper gold. Why? Because they see the writing on the wall. Gold is a monetary metal not a paper card trick. The COMEX players want to get as much physical metal as they can before false idols like Powel and the global EM currents flowing East take down the USD’s post-Bretton Woods hegemony. When/as that happens, gold does what it always does when nations and their debased currencies tank: It rises. And you can be sure that JP Morgan and Citi will keep the paper gold price low until they have enough of the physical gold in hand when gold rips and the USD sinks. For Now, More Lies, Empty Phrases and Distractions In the meantime, Powell will act like the nervous captain of a sinking ship and play with rates and the USD as the DC information bureaus (i.e., BLS) spread more open fictions and false distractions on everything from the inflation and unemployment rate to suddenly forgotten viral threats (?), the freedom of Ukraine or the political theme of climate change. And of this you can also be certain: Powell will continue the Fed’s historical role of crushing the US working class. Translating Powell’s “Softening Demand” As Powell wandered Jackson Hole, he warned Americans to prepare for “softening demand,” which is a euphemism for crushing the middle class via rising rates and long-term (rather than “transitory”) inflation ahead. This rich. After being the sole tailwind for pushing equity markets up by hundreds of percentage points with mouse-click money since 2009, the Fed has made the top 10% (which owns 85% of the Fed-inflated stock market wealth) extremely rich. Now, by deliberately cranking rates higher, Powell’s Fed is making the middle class (bottom 90%) even poorer. Wealth inequality in the US has NEVER been higher, and this never bodes well for the future of an openly fracturing nation. Indeed, inflation pains and rising rates certainly hurt all Americans. For the wealthy, such inflationary pains sting; however, for the working class, they cripple. And as far as this crippling effect of “softening demand” goes, we can blame that squarely on the narrow shoulders of such false idols like Greenspan, Bernanke, Yellen and Powell. For years, they’ve been saying their mandate was to control inflation and manage employment. But that employment (as confirmed by PWC, household surveys and our own two eyes) is about to see hiring freezes, downsizing and lay-offs as debt-soaked enterprises with tanking earnings and confidence levels cut costs and jobs. Again: That’s not “softening,” that’s crippling. But as I’ve shown in Rigged to Fail and Gold Matters, the Fed’s real mandate is providing (now increasingly scarce) liquidity to credit markets (and hence tailwinds for the equity markets), which benefit a minority, not a majority, of the population. This easily explains Andrew Jackson’s prescient warning that a central bank simply boils down to the “prostitution of our government for the benefit of the few at the expense of the many.” Truer words were never spoken, and we are now seeing these warnings playing out in real time, and will see even more pain ahead in this surreal new normal of “softening demand” and a current America of central-bank created serfs and lords. Powell’s words, of course, do not match his or the Fed’s deeds, a profile flaw that has been hiding in plain site since the Fed’s not-so-immaculate conception in 1913. The more that investors understand where the decisions are made and why, and the more they track the market signals (bond yields, credit markets and currency debasements), the more they can prepare for what is already here and what lies ahead. Tyler Durden Sat, 09/17/2022 - 10:30.....»»

Category: blogSource: zerohedgeSep 17th, 2022

Putin is facing pressure from Russia"s hawkish nationalists who want all-out war in Ukraine

Russian ultra-nationalists are increasingly a thorn in Vladimir Putin's side and they've created an opening for critics of all stripes. Russian President Vladimir Putin at the 2022 Eastern Economic Forum in Vladivostok, Russia on September 7, 2022Sergey Bobylev/TASS Host Photo Agency/Handout via REUTERSPresident Vladimir Putin is facing an increasing threat from Russian ultra-nationalist figures who are using their huge platforms on Telegram to demand a far more aggressive military mobilization in Ukraine. For months, Putin appeared to have established broad support for the war, while successfully drowning out dissent. But following a series of military defeats, culminating in the devastating rout in Ukraine's eastern Kharkiv region, the president is facing pressure on multiple fronts.  Breaking with the official line, the ultra-nationalists have increasingly become a thorn in the side of Putin's administration, causing Putin's carefully assembled 'power vertical' to splinter from the inside. Last week, Igor Girkin, a leading ultra-nationalist who led the pro-Russian separatists in 2014 trying to wrest the Donbass region from Kyiv's control in 2014, told his 581,000 subscribers on Telegram that Defense Minister Sergey Shoigu should be executed by firing squad and that Russia should launch strikes on Ukrainian power plants. Several people, including Girkin, have called for tactical nuclear strikes to be used on various targets in order "to drive 20 million refugees to Europe." The tactic was encouraged again on Russia's state-run Channel One, the leading propaganda outlet, by Igor Korotchenko, a military expert and editor of Russia's National Defense magazine. Others have accused the Kremlin  of concealing "bad news" about how poorly the war has been going for Russia — a criticism that, until now, has largely been denied a hearing in the heavily muzzled Russian media. This week, Ukrainian officials said they have retaken more than 3,000 square miles of Russian-held territory since the start of September. The State Duma usually rubber stamps whatever law Putin wants and is not noted for rocking the boat. So it surprised many commentators on Monday when Mikhail Sheremet, one of its members from the ruling United Russia party, said publicly that "full mobilization" in Ukraine was necessary for victory.Igor Girkin is seen in the city of Donetsk, eastern Ukraine on July 11, 2014.Dmitry LovetskyAP PhotoAttacks like that have meanwhile emboldened others from across the political spectrum to speak up in a way that seemed impossible just a few months ago. Earlier this week, liberal councilors in Moscow and St. Petersburg signed a petition demanding Putin's resignation.Putin's spokesman, Dmitry Peskov, has responded directly to the growing clamor and the nationalists' anger at Russia's retreat, saying that Russians as a whole continue to support the president."The people are consolidated around the decisions of the head of state," said Peskov. "As for other points of view, critical points of view, as long as they remain within the law, this is pluralism, but the line is very, very thin, one must be very careful here."Since first winning the presidency in 2000, Putin has folded all of Russia's key institutions, from the media to the church and the courts, into a power vertical where the Kremlin's bureaucratic machine stands at the top. The idea was to smother any glimmer of democracy and the influence of the oligarchs by making sure all of the key decisions went through him. Pressure from all sidesPutin's edifice of power has withstood pressure for over 20 years from protests inspired by liberals, ecologists, pensioners and Siberians but now it is facing its biggest threat. As the nationalists' most prominent figurehead, Igor Girkin has been among the most searing in his criticism of Russia's military strategy. His comments have ranged from pessimistic, suggesting a belief that Russia could be defeated, and bravado, as he's sought to cajole Putin into taking more aggressive action.Addressing his followers last week, Girkin said: "The war in Ukraine will continue until the complete defeat of Russia. We have already lost; the rest is just a matter of time.'Then, on Wednesday, Girkin said that Kremlin officials were living "on the Planet of the Pink Ponies" and that Russia must commit to total war rather than entertain any illusions that the conflict could end with "peace on parity terms." "Just do not stop at the objects on the Left Bank [of the Dnipro river]. Kyiv and Western Ukraine must be extinguished no less, and even more ruthlessly," he said. Aleksandr Kots, a pro-Kremlin war journalist with 600,000 followers, used his Telegram channel on Wednesday to say that the Kremlin was hiding terrible news from the Russian public. "We need to do something about the system where our leadership doesn't like to talk about bad news, and their subordinates don't want to upset their superiors," he said.Girkin and Kots, as well as war bloggers such as Boris Rozhin and German Kulikovsky, are believed to be untouchable due to the krysha — protection — afforded them by figures in the senior echelons of the military and security services. Ramzan Kadyrov, the tyrannical leader of the volatile Chechen republic, is the wild card in the deck. Russian Prime Minister Mikhail Mishustin, left, meets with Chechnya's leader Ramzan Kadyrov in Moscow on Feb. 3, 2022.Dmitry Astakhov, Sputnik, Government Pool Photo via APSpeaking on his Telegram channel on Thursday, Kadyrov said: "There is no need to wait for the Kremlin to declare martial law. Each regional governor is quite capable of preparing, training and staffing at least 1,000 volunteers." Chechnya has already prepared a law allowing the drafting of men born in 1995-2004, while Kadyrov has called on regional governors to carry out "self-mobilization."Even the Communists are acting up after two decades of obsequious obedience.  Their veteran leader Gennady Zyuganov is seemingly frustrated with toeing  the official line 26 years after allegedly having the presidency stolen from him by Russia's first president Boris Yeltsin. ,Speaking on Tuesday,  Zyuganov said: "Most of all, we need maximum mobilization of our strength and resources" in order to win what he called a "war" against the US, Europe and NATO.A day earlier, his Communist comrade Mikhail Matveev caused a stir when the suggested that governors and deputies sign up for the front as volunteers. The Governor of Khabarovsk Mikhail Degtyarev, who had been attending the Eastern Economic Forum, complained to the Russian news outlet RIA Novosti that he would like to fight in Ukraine as a volunteer, but could not vacate his position.  Degtyarev is a member of the Liberal Democratic Party, a loyal Kremlin faction formerly led by the notorious ultranationalist Vladimir Zhirinovksy, who died in April.  Residents in his Far East region quickly created a petition "to help the Governor fulfil his dream and go fight in the Donbass." The petition has already been signed by tens of thousands of people, but Degtyarev has yet to resign. 'Harming the the future of Russia and its citizens'Criticism of the war effort is also coming from the liberal side of the political spectrum although many of its senior leaders are either in exile or have already been rounded up.Earlier this week, St. Petersburg councillor Ksenia Thorstrom shared a petition for Putin's resignation that had been signed by two dozen fellow liberal councillors in Moscow and St. Petersburg. "We, the municipal deputies of Russia, believe that President Vladimir Putin's actions harm the future of Russia and its citizens," it said. Emergency workers move the body of a Ukrainian soldier during an exhumation in the recently retaken area of Izium, Ukraine, on Sept. 16, 2022. Ukrainian authorities had discovered a mass burial site that contained hundreds of graves.Evgeniy Maloletka/AP PhotoA week ago, representatives from St Petersburg's Smolninskoye region, went further and called on federal lawmakers to open a treason case Putin in order to remove him from office for launching the invasion of Ukraine. Unlike the response to other political factions, the reaction by the authorities against the liberals has been swift. The Smolninskoye District Court ruled that the municipal council should be dissolved and subsequently charged the deputies with "discrediting" Russia's military.Councilor Nikita Yuferev, who was fined and threatened with prison after attaching his name to the petition, tweeted: "Now the Governor of St. Petersburg will decide whether to disperse us to hell or not."Yet the public discourse has changed dramatically since the war began seven months ago. Back in April, Aleksei Gorinov, a municipal councilor from one of Moscow's districts, was jailed for seven years after he lightly criticized the invasion of Ukraine during a discussion about a children's drawing contest.  A fractured alliance The Kremlin has had tricky relations with fringe ultra-nationalists who are typically difficult to control despite the authorities best efforts to infiltrate them. The National Bosheviks, a movement led by the writer and dissident Eduard Limonov, had to be confronted in 2001 for plotting to invade Kazakhstan in a bid to foment a rebellion there by ethnic Russians. Limonov, who was arrested, denied the charges. Since 2014, nationalists like Girkin had been advocating for Russia to conquer more territory to create "Novorossiya"—a notional territory that encompasses eight Ukrainian oblasts, including the Donetsk and Luhansk oblasts and much of eastern and southern Ukraine. Putin's decision to invade Ukraine, supposedly to protect Russian speakers in the eastern provinces and to encourage what he called an urgent "de-Nazification" of the country, realized one of the nationalists' top priorities. Burned Russian tanks litter Vokzalna Street in Bucha, where a column of Russian military vehicles making their way toward Kyiv was destroyed by Ukrainian forces; Bucha, Ukraine, April 4, 2022. The bodies of more than 450 people killed during Russia's occupation of Bucha have been discovered.Erin Trieb for InsiderNothing more demonstrated to the ultra-nationalists that Putin was wedded to their cause than when he convened a Security Council meeting in February, just days before the invasion, to rubber stamp recognition of the Donbass and Crimea as independent states. Putin all but declared war on Ukraine by warning that Kyiv would bear responsibility for "ensuring bloodshed" if they did not stop the violence against ethnic Russians in the east of its country. In extraordinary footage broadcast from a Kremlin marble hall, each member of the Security Council was compelled by Putin to say on the record whether they supported the controversial decision. Prime Minister Mikhail Mishustin squirmed uncomfortably and muttered that he did, while Sergey Naryshkin, head of Russia's fearsome foreign spy service, stammered nervously and got confused after being grilled by Putin. The political theater and the subsequent invasion convinced the ultra-nationalists that Putin and the ruling elites were now firmly on their side. The democratic stooge The ways in which the debate in Russia has shifted in recent days and weeks can be seen on state-controlled television talk shows. Months ago, calling the Russian action in Ukraine a "war," rather than using Putin's phrase of "special military operation" could have landed a commentator in trouble. But these days, lawmakers make that point openly. Panel discussions on stations like NTV and Rossiya-1 have long featured a token democratic stooge who is kicked from pillar to post for being a NATO apologist, or in the pocket of the US. However, panelists and hosts are now struggling or unable to silence that lone voice, who's now seen as the only one making any sense, in the face of Russia's overwhelming military setbacks. In a clip that has gone viral, liberal Moscow municipal deputy Boris Nadezhdin appeared on a NTV talk show and declared that "it's absolutely impossible to defeat Ukraine using those resources and colonial war methods with which Russia is trying to fight."Nadezhdin, a one-time ally of murdered opposition leader Boris Nemtsov, called for peace talks aimed at halting the war before being interrupted by Sergey Mironov, head of the pro-Kremlin Just Russia party. Mironov declared that there can be no negotiations with "Zelenksy's Nazi regime,"  and that the only option is that it's destroyed. With that, the show suddenly erupted into a genuine debate, with another participant seemingly backing Nadezhdin by highlighting the military's failings.  Contrast that clip with an appearance made by Nadezhdin on the same show in April, when the other participants ganged up on him for brazenly suggesting that the Soviet Union had "occupied Czechoslovakia and Eastern Europe." "We didn't occupy anyone, we freed them," one of the panelists corrects Nadezhdin.By Thursday, leading propagandist Vladimir Solovyov was wondering aloud why Nadezhdin hadn't been thrown in jail. One of his guests on the Rossiya-1 channel bravely weighed in, suggesting there must be many people who think like Nadezhdin if he's free "to say it on a federal television station."To this, Solovyov, who has been sanctioned and had his Italian villa seized, quipped that if Russia is democratic, it may be a sign that the Kremlin's control over the media — a key pillar in Putin's power vertical — is weakening. A demonstrator holds a sign reading 'No war!' in St. Petersburg, Russia, on Feb. 24, 2022. Hundreds of people gathered in the center of Moscow on Thursday, protesting against Russia's attack on Ukraine. Many of the demonstrators were detained.Dmitri Lovetsky/AP PhotoIt's not unheard of in Russia for radical hawks to use the media to test the waters for radical policies. What's different about this moment is that a growing number of these figures are now off-leash — openly undermining Putin and warning that he will be replaced if he does not order more extreme action against Ukraine. The widespread purging of liberals and journalists that occurred in the early days of the Ukraine war is relatively straightforward in Russia. But cracking down on ultra- nationalists is more dangerous and may have dire consequences – especially if Russia loses the war.Meanwhile, as the Russian economy is slowly grinding towards Brezhnev-era zastoi (stagnation), ordinary Russians are fed up with rising grocery prices, being on unpaid leave from their jobs, and being blocked from traveling to the West. "People are keeping their heads down and trying to block out the news," said Maxim, who declined to give his full name out of fear for his security."Some of my friends have lost their jobs, and everyone is tightening their belts. Any mobilization would be the tipping point because nobody here wants to fight this stupid war – apart from the raving nationalists."Read the original article on Business Insider.....»»

Category: smallbizSource: nytSep 17th, 2022

Some Nuns and Bishops Are Taking on the U.S.’s Biggest Gunmaker. They May Succeed

An unlikely group of activists is going head to head with gunmaker Smith & Wesson on Sept. 12. It was her years as a teacher in the Seattle-area Catholic School system that made Sister Judy Byron particularly sensitive to gun violence. “We had fire drills in Washington, we had earthquake drills, but never in my wildest imagination would I ever have thought someone would have come in with a firearm to the school where I was,” she says. And then came the school shooting at Columbine, and years later, Sandy Hook. “I remember thinking at the time, if we don’t do something now, when we’ve murdered all those little first graders, we never will. And of course we didn’t.” [time-brightcove not-tgx=”true”] She knew more could be done by one of the biggest stakeholders in gun violence: gunmakers. “Every time there’s an incident you hear from everyone—even the NRA will put out a statement—but we never hear anything from the firearms manufacturers,” says Byron, who is an Adrian Dominican Sister, an order of about 400 nuns with a motherhouse in Michigan. “They have to be part of the solution to this.” Almost a decade after Sandy Hook but only months after horrific shootings in Buffalo, New York and Uvalde, Texas, Byron, together with an unlikely group of activists, is going head to head with the U.S.’s biggest gun manufacturer, Smith & Wesson. On Sept. 12, the storied gunmaker will hold its annual shareholder meeting online. Along with the usual run-of-show for these events—re-electing board members, ratifying some salaries, approving an omnibus stock plan and officially re-installing its auditors—shareholders will be asked to vote on Item 5, a proposal to get the gun manufacturer to adopt a comprehensive human rights policy. Byron and her band of investors seek to encourage the company to take a look at the way its business operations may impinge on the rights of others. Read More: The Inside History of How Guns Are Marketed and Sold in America Byron is the leader of a consortium of 14 religious shareholders, the Northwest Coalition for Responsible Investment, who have hatched an ambitious—and possibly quixotic—plan to open another avenue for conversation about the fraught issue of gun ownership in America, which despite dozens of deadly incidents since Sandy Hook has been stuck in a cycle of finger-pointing and inaction. While most of the members of the Coalition are other religious orders, and thus unlikely gun investors, they seek to use shareholder power to nudge gun companies into reckoning with the effect of firearms in America. The effort stems from conversations Byron had in 2016 with the Interfaith Coalition for Corporate Responsibility (ICCR), a mix of faith-based and ethics-based investors who together have about $4 trillion in managed assets, and who have long used investment as a form of engagement with the corporate America. The unusual shareholder initiative is non-binding and seems modest enough. It asks that the company “adopt a comprehensive policy articulating its commitment to respect human rights,” and asks for “a description of proposed due diligence processes to identify, assess, prevent and mitigate actual and potential adverse human rights impacts.” Elaine Thompson—APSister Judy Byron, director and coordinator of the Northwest Coalition for Responsible Investment, in her office in Seattle, March 2018. The proponents of the policy say that Smith & Wesson needs to explore and communicate the risks it may be facing—and thus shareholders may be facing—as a manufacturer of a dangerous product. These include reputational risks, that people will suddenly find the stock abhorrent and sell their shares after a horrific event involving a product the company makes (the Marjory Stoneman Douglas High Schoolshooter in Parkland, Florida used a Smith & Wesson weapon); financial risk, that the company will be sued and have to pay damages—as Remington was and did—and legal risks, that a change in gun laws may one day limit the company’s profitability. Smith & Wesson’s board has asked shareholders to vote against the proposal. But Sturm Ruger’s board opposed a similar initiative brought by members of the same group in June. And it passed with almost two thirds of the vote. “Our lens for this is that they need to take a very holistic look at their policies, procedures, products and practices,” says Laura Krausa, the assistant director of advocacy programs for Commonspirit Health, another member of the coalition, who was also one of the lead petitioners at Sturm Ruger. “They need to have a third-party auditing firm really talk with the wide spectrum of stakeholders to understand where they have some rights risks that could impact their bottom line.” Daniel Brenner—The New York Times/ReduxLaura Krausa, director of advocacy for CommonSpirit, a nonprofit hospital chain, at her home in Wheat Ridge, Colo., in May 2022. In its advice to shareholders, Smith & Wesson says that it has already taken steps to identify and manage any financial risks it faces and that the originators of the proposal have a gun-control agenda rather than the best interest of shareholders at heart. The shareholder activists disagree. “We believe, honestly, that reasonable and sensible solutions to prevent gun violence and to promote gun safety both can and should peacefully coexist with the Second Amendment,” says Krausa. Smith & Wesson declined several interview requests made by TIME to its media representative Whether as a result of this tactic or the increased regulatory scrutiny weapons manufacturers have been under since President Biden came into office, Smith & Wesson has recently gone on the offensive, stepping up its communications with its shareholders and customers, releasing several documents about its products, procedures and operating principles. On Aug. 15 CEO Mark Smith came out swinging on social media, accusing the “government and its lobbying partners in the media” of causing “the surge in violence and lawlessness” and then “shifting the blame on to Smith & Wesson” and other gun companies and gun owners. Making the religious case for gun control Many Christians are guns-rights supporters, but the group attempting to influence Smith & Wesson say their faith has led them the other way. Krausa works in violence prevention and shareholder advocacy for Commonspirit Health, a large non-profit health system associated with the Catholic church, with about 1000 clinics in 21 states. She sees engagement with gun companies as part of a larger approach to addressing the violence that often sends victims through Commonspirit’s doors. “Obviously, one reason we’re very interested in this is that we see this coming into our facilities,” she says. “Gun violence is rampant. In FY ’21, we had 3,200 incidences of injuries that came into our facilities. The cost of that is $32 million. And the human cost is far worse.” Like Byron, she feels that gun manufacturers are the missing piece in the struggle to lower gun violence. “There’s a lot of people trying to solve this problem,” she says. “But so far, the gun manufacturers haven’t joined that group. And because they do happen to make the product that is part of the problem, it seems very reasonable that they should come to the table and discuss solutions as well, and really look at how rights are being violated or potentially violated by their products.” Reverend Doug Fisher, an Episcopal Bishop in the western Massachusetts, and another member of the shareholder group, also got involved after the shooting at Sandy Hook, when some local church leaders formed Bishops United Against Gun Violence. In 2012, they started trying to help craft state and federal legislation to address what he calls “the absolute public health crisis of gun violence.” Progress in that area stalled, says Fisher, “and so we thought, ‘Well, maybe if we get in dialogue with the gun manufacturers, we can invite them to be part of the solution rather than part of the problem.” And so the Episcopal church took gun companies off the list of stocks it would not hold and became weapons investors. Progress on engaging the gun companies, however, has still been slow. The first shareholder proposal at Smith & Wesson was in 2018, asking for a gun safety report. It passed, but the groups felt the resultant report was half-hearted and shoddily done, mostly copied off the internet rather than reflecting any original thinking. The human rights policy was proposed in 2019 and again in 2021, each time garnering a slightly larger percentage of votes; last year, 44% of shareholders were in agreement. Since then, Byron says executives from Smith & Wesson have met with representatives from the group several times, but the two sides were unable to persuade each other of the merits of their position. This frustrates her. “You know, even Philip Morris International has a human rights policy,” she says. One advantage the faith-based proponents have is that, as people who believe in eternity, they are prepared to play the long game. The ICCR was founded when the Episcopal church bought shares in General Motors in 1971 and asked it to disinvest from South Africa, which it eventually did. It took apartheid another 23 years to fall. The movement has more recently worked with hotel chains on trafficking and pharmaceutical companies on HIV and AIDS drugs as well as campaigns around racial justice and environmental protection. They lose more than they win, but the losses are all they need. After an unsuccessful shareholder vote at Gilead Sciences in the early 2000s, the pharmaceutical firm nevertheless decided to make its HIV drugs more available in developing countries. “[The company] really became a leader in addressing HIV AIDS,” says Byron. More recently, in February 2021, a shareholder proposal for a human rights report at food giant Tyson was voted down by investors, but by the end of the year, after the ICCR indicated its intention to try again, the food giant agreed to have an independent party conduct just such an audit. Read More: When There’s Talk of Gun Control, Gunmakers Play the Jobs Card. They’re Often Bluffing Byron, the kind of nun who favors Hawaiian shirts, tries to be even-handed about what Smith & Wesson is doing. “One good thing they do that I wouldn’t have known [before meeting the corporate secretary] is they don’t let any of their product be shown in video games—the shooter video games kids use,” she says. But she cannot hide her disbelief that the firearms manufacturer couldn’t do more. Her group would like them to “really look at that supply chain and see if there are any places where guns are disappearing or being sold where they shouldn’t be sold,” and “to look at how they market the products and who they market them to, and where they market them now.” Her biggest ask, however, is for better safety features. “We get the same song and dance all the time about why technology doesn’t work in guns,” she says. “In the future I see that guns will have to be technologically smart.” She uses the example of passcodes and facial recognition on smartphones. “You know, if you couldn’t use my cell phone here on my desk, there’s no reason why if I had a gun on my desk, you should be able to pick it up and use it. I mean, it’s just, I don’t think it makes sense in this age.” Fisher says improving its products’ safety features would make Smith & Wesson a better company. “Car companies are always trying to make their cars safer,” he says. “I can safely pull out of the parking lot outside right now because there’s a rearview camera. Why can’t gun companies do the same thing? Why can’t they do things to make their products safer?” This is a particularly sensitive point for Smith & Wesson, since a former CEO, Ed Shultz, agreed to start to develop more safety mechanisms in 2000, in return for the withdrawal of lawsuits against the company mounted by several states. The reaction was brutal: gun wholesalers and many small retailers boycotted the brand, the company was dropped by its law firm and sold by its British owners, Shultz was forced out and the plan was dropped. Ever the nun, Byron is sympathetic to the company’s travails. “That trauma is in their DNA,” she says. “They feel that, you know, they’re not gonna make that mistake again.” But she points to the example of Edward Stack, the CEO of Dick’s Sporting Goods, another company in which the shareholder activists invested and had more success. By the time they met with him, Stack had already been moved to act by the 2018 Parkland shooting. He removed large-capacity magazines and rifles from stores. The blowback was also intense; 65 employees quit straight away and sales dropped. But the company recovered and retail giants Walmart and Kroger made similar moves not long afterwards. “All it takes is, you know, a leader who really sees what the problem is and what they could do about it,” says Byron. Ed Shultz’s departure was 22 years ago, before the tragedies at Sandy Hook, Parkland and Uvalde, Texas. Recent surveys have shown an increasingly large majority of Americans favor stricter gun laws. Can the shareholders succeed now? Smith & Wesson’s largest investors are institutional fund managers such as BlackRock, Vanguard and the hedge fund Renaissance Technologies. Both the activist group and Smith & Wesson have met with these investors’ representatives on several occasions, as well as with governance groups that advise shareholders, such as Glass Lewis and Institutional Shareholder Services (ISS). When a similar proposal requesting a human rights impact study passed at Sturm Ruger in June, that company’s CEO, Christopher Killoy, blamed the institutional investors, who “blindly followed the guidance” of governance groups. Both Glass Lewis and ISS have recommended voting in favor of the proposal at Smith & Wesson this year. But they also recommended that last year, when it didn’t pass. Scott Keller—The Daily Times/APSmith and Wesson President and CEO Mark Smith, left, and Tennessee Governor Bill Lee prepare for a ground breaking ceremony for the new Tennessee location for the firearms manufacturer, November 2021 in Alcoa, Tenn. In the meantime, business is good for gun manufacturers, including Smith & Wesson. Most analysts that follow the company’s stock recommend buying in. In the first year of the pandemic, Smith & Wesson’s revenues increased by 27%. For the fiscal year that ended in April, the company had $875 million in sales, it says, with a gross profit margin of 43%. And the board is clearly happy with its new-ish CEO. Since he was appointed in 2020, Smith has had a 77% raise in his base salary, according to ISS, which, with other incentives, has taken his earnings to $2.8 million. The vote at Ruger took place shortly after 19 elementary school students and two teachers were killed in Uvalde, and it’s unclear if, in the absence of such a tragedy, voters will feel as motivated to call on the gun companies to reexamine their role. It’s also unclear if such a non-binding proposal is worth the investment the shareholders have put in. Byron believes it is. In 2020, according to the CDC, there were more than 45,000 firearm-related deaths in the U.S.—about 124 people a day. That’s about 12% more Americans than died from car crashes, and half as many as died from drug overdoses. More than half of those gun deaths were suicides and more than 40% were homicides. “We have 400 million guns [in America] now,” she says. “It’s gonna take more than my lifetime to change this, but you know, we just have to do something.”.....»»

Category: topSource: timeSep 10th, 2022

Transcript: Lynn Martin

   The transcript from this week’s, MiB: Lynn Martin, President of the NYSE, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN… Read More The post Transcript: Lynn Martin appeared first on The Big Picture.    The transcript from this week’s, MiB: Lynn Martin, President of the NYSE, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Lynn Martin. She is the president of the New York Stock Exchange, the world’s largest, with over 2,400 listed companies for a combined market cap of about $36 trillion. She is also chair of the fixed income and data services at ICE, Intercontinental Exchange. She began her career at IBM in Global Services and came to them with a BS in Computer Science and a master’s degree in Stats from Columbia. Lynn Martin, welcome to Bloomberg. LYNN MARTIN, 68TH PRESIDENT OF NYSE GROUP: Thanks so much for having me. RITHOLTZ: Thanks so much for joining us. I have so many things to ask you about, but I have to start out with you were at IBM pretty much in its heyday. Tell us what that experience was like. MARTIN: It was great. I’m going to date myself a little bit. RITHOLTZ: Yeah. MARTIN: But I was there through the Y2K crisis — RITHOLTZ: Right. MARTIN: — when global services was relied upon by customers around the globe to get them through that crisis. RITHOLTZ: Or near crisis, or almost crisis. Was it a crisis? MARTIN: Almost crisis. It wasn’t. That’s fair. It wasn’t a crisis, and that I remember waking up on New Year’s Eve 1999, I’m going to work in a call center because that’s what you do in your 20s, working at IBM. And we were watching the Australia open, the clocks hitting in Australia and everything was fine. RITHOLTZ: Right. MARTIN: And we sort of knew that once Australia opened okay, we were going to be okay. RITHOLTZ: So was this like a near miss, or was this, hey, a lot was made about something that turned out to be less of a — MARTIN: I think the industry became very well prepared. I don’t know that it was a near miss, but I think we got ahead of a potential challenge. There was a technical challenge and that computers only understood years in two digits as opposed to four digits. So 2000 could have been 1900, and that could have caused challenges. I don’t know if those challenges would have been as extreme as was forecasted or not, but I’m really glad we didn’t find out. RITHOLTZ: Yeah. To say the very least. So IBM, I’m sort of jumping ahead in the story, you began your career in Computer Science is coding on a Commodore 64. Would you like to explain that for the youth who don’t know what a Commodore 64 is? MARTIN: So I remember when I came home from elementary school one day, and my dad who was an electrical engineer, he used to design fuel gauges on airplanes, came home with this huge box. And it was a Commodore 64. I said, “What’s that?” He said, “The first home computer.” And I said, “What’s that?” And I was a kid, I had no idea. And he also brought home a stack of floppy discs, which were quite large for the youth that don’t remember. RITHOLTZ: They were literally floppy. They’re not like — MARTIN: They were floppy. You could bend them, twist them, whatever the case may be. RITHOLTZ: Right. Though you shouldn’t. MARTIN: Though you shouldn’t because your program would not work if you did that. And I just became hooked on it. And as any good kid does, you become hooked on video games first. So that’s really what got me into the Commodore 64. RITHOLTZ: So is that what led to a focus on data service and computer science, the simple C64? MARTIN: Well, what really led me in the path of studying for my undergrad was my dad giving me really good advice, which was way ahead of its time in the early ‘90s when I was applying to college, where he suggested I not go into the traditional engineering discipline, but instead go into computer science mainly because not only was I good at math and good at sciences, but he said there were always be opportunities for women in computer science. RITHOLTZ: That’s interesting. MARTIN: And it’s something that was just way ahead of its time and it sounded good to a 17-year-old filling out a bunch of college essays at the kitchen table. So I ticked off computer science despite, you know, not having a tremendous amount of experience with a computer aside from playing with video games and fiddling around more as a hobby than anything. RITHOLTZ: And now, you oversee a system that is a combination of advanced data systems, lots of hardware and software plumbing. You have to keep 2,400 listed companies up and running, trading as much as a billion shares a day. MARTIN: Yeah. RITHOLTZ: How do you go from the Commodore 64 to that? MARTIN: Fortunately, technology has been significantly advanced. And I think that’s what’s contributing to the volumes of liquidity that you actually see in the markets, but also the amount of incoming order messages that we see every day. RITHOLTZ: So when you say technology, it’s the technology at the New York Stock Exchange, as well as the technology at all the companies that are trading? MARTIN: Absolutely. Absolutely. And just macro technology, I remember the first classes I took in my CompSci major, I learned assembly language. I was coding on a mainframe. I was moving from register 1 to register 2, and that’s like the most basic form. And now, mainframes have become really thin machines. They’ve really moved into thin servers. They have moved into storage capacity like the cloud. So the advancement of technology, since I finished my degree in the late ‘90s to where it is today has really exploded into something that allows for more performant, more real-time type of interactions. RITHOLTZ: There’s a quote of yours I really like which probably explains your career, which is, quote, “The amount of satisfaction I would get when I compiled the program and the program did exactly what I wanted it to was beyond anything I had experienced previously.” Explain that. MARTIN: Absolutely. So I tend to view computer coding not that dissimilar to communicating in a foreign language. A lot of times you’re learning your French, Spanish to communicate with someone in a different country. When you’re learning computer coding, you’re just learning how to communicate with a machine. And a lot of times when you’re communicating with that machine, you think you’re telling them something really good and something really positive, and what comes out is something really not positive. So very frequently, maybe because I wasn’t the best coder, I would, you know, come back with errors or stuff stuck in what is known as an infinite loop, where the machine just keeps going and going and going. So those — RITHOLTZ: Rinse, lather, repeat is a great example. MARTIN: Exactly. It kept doing that. So on the days when I would put, you know, encode and the machine would do exactly what I told it to, I was like, “Oh, wow, that’s great.” RITHOLTZ: So you used the metaphor of a foreign language — MARTIN: Yeah. RITHOLTZ: — verb tense, syntax, punctuation, all these things really matter when you’re coding. MARTIN: It sure does. Syntax absolutely matters, efficiency also absolutely matters. The way I think of efficiency around computer coding is not that different to communicating with a local in a foreign country. They’ve got their — you’ve got your typical language, you know, the stuff that you would learn in textbooks, but then you’ve got, you know, the more shorthand types of communication. I kind of view efficient computer coding in the same fashion. RITHOLTZ: Really quite interesting. Let’s talk a little bit about the IPO process, how does this work when a company decides they want to go public? MARTIN: So a company will decide they want to go public. Typically, they will interview the variety of exchanges. That could be domestic U.S. exchanges. It could be — if they’re a foreign company, they will look at their home markets as well. Ultimately, they have a certain objective in mind. Do they want to raise capital? Do they not want to raise capital? If they want to raise capital, what investor base are they really targeting? (COMMERCIAL BREAK) MARTIN: More often than not, a company will select the U.S. markets because we have the most diverse, deepest pools of liquidity, the biggest access to investors, the biggest opportunity for a company to gain a global following. So typically they will select a U.S. exchange. RITHOLTZ: So you guys obviously have to prep when a company comes to you and says, “Hey, we’re considering you and some of your competitors.” What is your process like to prepare for — I don’t know if we still use the phrase beauty contest, but that was the old investment banking phrase. How do you gear up to say here’s why you should list with the NYSE and not our competitor? MARTIN: So my philosophy is very focused on how can we be a good partner to our listed companies, and what is that listed company seeking to achieve. And it’s not just about IPO day. IPO day I kind of equate to a wedding day. You’re going to have a great day. But — RITHOLTZ: Hopefully. MARTIN: Hopefully. But what I tend to think about is what happens a month after you go public, what happens six months after you go public. And how could we be a good partner to that firm in their public company journey? RITHOLTZ: I love the visual of this as a wedding day. So now, I’m thinking you have mother of the bride, father of the bride. Who are you working more closely with? Is it the investment bank? Is it management of the company? Who shepherds this along? MARTIN: You’re working with both. RITHOLTZ: Everybody, the caterers, the flowers. MARTIN: Yeah, exactly. Exactly. RITHOLTZ: The whole thing. MARTIN: You’re working with the banks who are underwriting the deal, the mother and father of the bride. RITHOLTZ: Right. MARTIN: I got to use your analogy. You’re also working very closely with the company, because the company has a vision. The company has been successful, and that they’ve gotten to the point where they’re graduating to the public markets, which is something that should be celebrated. But the company also has a two-year, three-year, five-year strategy of what they are really seeking to achieve, not just raising capital to fund operations, or to fund research and development. They have — may have M&A targets. They may want to expand their business through leveraging a community that the listings market, particularly the NYSE brings to the table. They may have specific concerns about certain areas of the market. One topic that CEOs are very focused on at the moment is ESG, environmental, social and governance, and how they are bringing sustainable practices to the market. So they want to tell that story. So everyone has got a different objective. So we spend a lot of time with CEO, CFO, IRO, the whole team, CMO, chief marketing officer, because they’re the ones that are, you know, orchestrating the story a bit. RITHOLTZ: Right. So let’s talk about the story a little. I just finished watching Apple iTunes’ WeCrashed. And what was so interesting was as they’re marching towards an IPO, it has nothing to do with the exchange. It has nothing to do with raising capital. The narrative just seemed to have taken over from your perch. You must see these things go by all the time, maybe not so much this year, which is a lighter IPO year. But last year, 2020, how do you look at these breaking new stories and all the buzz and mania around an IPO for both good and bad? How does that affect your job? MARTIN: Our job is ultimately to ensure that when a company comes to the market, they get the best experience possible when that stock opens and when that stock closes first week, first day, whatever the case may be. And that they’re happy with the experience. Ultimately, if there is news around the company, it may influence their decision to go public at a certain time. Ultimately the, the company that you are referencing did decide to go public. It just was at a different time. RITHOLTZ: Right. A little later. MARTIN: Yeah. RITHOLTZ: And there have been stories where that doesn’t necessarily work out well, or a company like Facebook goes public. The initial rollout is a little dicey. They announce something about mobile and suddenly the stock takes off. So when you talk about the month or the year after the wedding, these stories really very much change. It’s not just about the IPO day, is it? MARTIN: It’s not just about the IPO day, but that’s about the CEO articulating their strategy and executing on that strategy. And that’s what’s going to give the CEO and the public company, the next group of investors. They’re going to get a group of investors on IPO day. They’re going to do their road show right before the IPOs. They’re going to garner the initial set of interest. And a lot of times, companies will start that process even in a soft manner, even before they’re on the road for the IPO. But post-IPO day, it’s about execution. And when they have really exciting news to share, the market tends to reward it. You know, more people come into the stock. RITHOLTZ: Let’s talk about some other ways some people take their companies public. We’ve watched SPAC, super popular last year. They all seem to have blown up and done fairly poorly this year. How does the NYSE look at a product like a SPAC as an alternative method for a private company going public? MARTIN: Ultimately, we think SPACs are still a viable form for companies to go public. What you saw was a flood of SPACs coming to the market at the same time. So that may have contributed to some of the challenges that have now happened, given the time horizon that is associated with SPACs. But ultimately we see it as a very viable form for companies to continue to come to market. SPACs had been around for probably 15 to 20 years and that’s what — RITHOLTZ: Yeah, since the early 2000, people forget that. MARTIN: Yeah. And that’s what most people forget is that this was a form that companies were using to go public way before the last two years. They just became much more popular in the last couple of years, which is why you saw the flood. RITHOLTZ: To say the very least. There’s been a little bit of agitation towards direct listings, where there seems to be a decent amount of controversy on both sides. How do you guys look at direct listings as opposed to the IPO process? Well, we pioneered the direct listing. We pioneered it, I believe, three or four years ago. And we are quite proud of that innovation. It’s just another innovation allowing for private companies, in this case that didn’t want to raise capital, that didn’t need to raise capital, to become public companies, to have that public currency, to be able to fund their operations and/or to do M&A, and/or all the other great things that come along with being a public company, including providing investors, the opportunity to participate in the upside associated with the company. RITHOLTZ: What about the circumstances where investors can participate in the upside, specifically a lot of these venture-backed companies have stayed private for much longer. They kept doing rounds and have grown to sizes that we previously would think of as, hey, they should have gone public years ago. How do you guys look at that? Is this something that you pay attention to? Where do you think this goes? MARTIN: Yeah. I mean, we believe in the power of public markets. We believe in the upside that comes along with being a public company. Transparency, good governance you get. You’re able to reward your employees. You’re able to reward shareholders, allow a diverse group of shareholders to participate in the upside. And based on the feedback that we hear from companies who are private, the public currency is still very strong. Despite the fact that there’s volatility in the market, there is still demand for companies to go public. They’re just trying to figure out what time makes sense for them. RITHOLTZ: Interesting. My extra special guests this week is Lynn Martin. She is the president of the world’s largest stock exchange, the NYSE. They host 2,400 listed companies, with a market cap somewhere in the neighborhood of $36 trillion, doing more than a billion shares on a good day. That sounds like a pretty complex situation just to begin with. What’s it like managing something with so many moving parts? MARTIN: There are a lot of moving parts. But because I’m a technologist, I feel really good about the service that we provide. You know, one of the first things when I hopped into this role in January, unsurprisingly that I focused on was system capacity, and thinking about, you know, what’s our average response times? What sort of capacity do we have in the system to handle peak days? I’m glad I did that because a couple weeks after that, we had tremendous volatility. The week of January 24th, 25th, around then, the volatility — RITHOLTZ: Which is pretty funny because the prior year was almost no volatility. It was the quietest year in a long time. MARTIN: We started to see it a bit in December. So we saw the signs in December that volatility was starting to creep into the market. But we hadn’t seen that to your point, you know, really since the pandemic. The way we look at capacity is incoming order messages. For those listening and coming order messages is buy is coming into the system, sell is coming into the system, trades happening in the system. And very quickly, we started to see days that were in excess of 20% above pandemic levels from a messaging standpoint, and it equated to half a trillion messages being processed by our systems every day. So — RITHOLTZ: Half a trillion? MARTIN: Yes. RITHOLTZ: And by messages, it’s buy, sell and — MARTIN: Buy, sell, trade. Buy, sell, trade, that is it, incoming order messages, which is tremendous. And the fact that we were processing those with average response times in the stocks of about 30 microseconds was — RITHOLTZ: Micro? MARTIN: Yes. Yeah, micro. RITHOLTZ: Not milli, micro. MARTIN: Micro. RITHOLTZ: That’s incredibly critical. MARTIN: Incredible. Yeah. And you know, that really has continued. It’s been something I’ve had my eye on throughout the year. But our technologists have done a great job. We’ve recently upgraded our systems to our next generation matching engine technology. And our systems have, touch wood, held up beautifully from a response time standpoint. RITHOLTZ: So when all these things go right, we never hear about it. MARTIN: Exactly. RITHOLTZ: But when there’s a little snafu, it’s front page of the Wall Street Journal. Let’s talk about some of those. Let’s talk about what took place on the flash crash back in 2010. Do we really know whatever happened to that, or did just — and I’m going to give you guys credit. These are all old data systems. MARTIN: Yeah. RITHOLTZ: Everything that existed then have more or less been replaced, upgraded. MARTIN: Well, I think in a situation like that, you have seen a market structure evolve too to the point where there have been systems safeguards from a market structure standpoint, put in place around volatility halts, for example. RITHOLTZ: Before you go there, let me just back up a little bit. MARTIN: Yeah. RITHOLTZ: So this used to be a fairly manual system — MARTIN: Absolutely. RITHOLTZ: — with individual specialists, human beings — MARTIN: Yeah. RITHOLTZ: — at different posts on the floor for each individual stock. I kind of forget — having grown up with that, I kind of forget a lot of people are wholly unfamiliar with that. And there was a transition process where a lot of the manual processes were replaced with electronics and automated computers. There’s still humans involved but much less than they once were. Was that part of the impact in the flash crash? And how has that transition happened? A lot of which took place long before you got there. MARTIN: Yeah. It wasn’t necessarily as a result of any one particular area, other than just an evolution of the market. What I like to say is the most technologically advanced companies employ humans, and employ human interaction. Humans are there to make sense of what’s going on in the market, apply human judgment, remove noise from the system. It goes back to what we were talking about very early on, during our conversation today, which is when you’re writing code, frequently, what’s going to come back is an error, because that is just the computer reacting automatically to something. If you don’t have the human who can go in and fix the error, you’re going to remain in an error state. So the human’s job is really to remove the noise from the system, is to remove the volatility from the system. It’s something that I employed in my previous role, where we value $2.8 million securities on the fixed income opaque side of the market, using a lot of great systems, a lot of great mathematical mouth, and also couple hundred humans. And the reason why we have the best data set out there is because I have those humans who are all former bond traders and former muni specialists who can make noise of what’s coming into the system. I think the floor model is the exact same thing during really volatile days. You saw the human element really come into play. We saw two times less volatility on NYSE issued stocks at the open, three times less volatility on NYSE issued stocks at the close. And that is a 100% because of the job of the floor. RITHOLTZ: Really interesting. So let’s talk about — so you have stocks that are listed, and some of this is NYSE and some of this is Intercontinental Exchange. MARTIN: Yeah. RITHOLTZ: So they do stocks. They do bonds. They do options. They do derivatives. What else — and I don’t know if I left anything out, futures. What else is traded at either NYSE or ICE’s family of exchanges? MARTIN: We also have six clearing houses globally that clear the bulk of the credit default swaps market. In addition — RITHOLTZ: Where are those six located? MARTIN: Around the globe. Around the globe. Our largest — RITHOLTZ: Like London, Hong Kong? MARTIN: Yeah. Our largest clearing house is based in Europe. It is U.K. FCA registered. We’ve got a clearing house based in the U.S. We have a clearing house based in Singapore, as well as one in EMEA, one in Canada. So we’ve got them sprinkled throughout the globe. RITHOLTZ: And some of this is regional and some of this is redundancy and backup. MARTIN: Absolutely. RITHOLTZ: It makes a whole lot of sense. So I’ve been talking — I keep talking about the NYSE like it’s just the exchange. Let’s talk about the NYSE Group. MARTIN: Yeah. RITHOLTZ: That’s four electronic exchanges; NYSE Arca, which is the leader in ETFs; NYSE American Exchange; Chicago Exchange, National Exchange, plus two options exchanges, the American Options and Arca Options, which I think one is in New York, one is in San Francisco. Is that right? MARTIN: The floor is in San Francisco for Arca. RITHOLTZ: So how do all — I just mentioned four electronic exchanges, two option exchanges. How do all of these integrate with the NYSE’s operation? MARTIN: So common technology is really what pulls all of the exchanges together. The different medallions are really there to try different market models, different matching algorithms on the options side of the business, different market models from the equity side of the business. It gives us more flexibility to have — to be responsive to our customers. RITHOLTZ: Quite fascinating. So I mentioned 2021 was sort of aberrational. MARTIN: Yeah. RITHOLTZ: At no point in the year was the market less than 5% from all-time highs, that led to very, very little volatility in the year. How does a lack of volatility affect your daily work, or really the right way to ask that is when volatility spikes like we saw this year, does that make your job harder? MARTIN: It makes your job different. It makes your job focused more — (COMMERCIAL BREAK) MARTIN: — on thinking about things like system capacity, response times, you know, looking at that super closely because you always want to have a very responsive matching engine. You spend a little bit less time, though, welcoming IPOs to the market because many companies are not going to want to go out in a very volatile environment. RITHOLTZ: So this raises an interesting question. What can you guys do to — I don’t know if you can end volatility, but what can you do to tame it or make it more manageable? Is there anything in your trading process that can facilitate taking some of the spikes and volatility out of the market? MARTIN: Well, that’s where — that’s where our market maker model really resonates. And it’s really resonating with those companies who still believe in the public market currency, which there’s many of them, when they’re thinking about coming to the market because you can’t predict volatility. RITHOLTZ: Right. MARTIN: No one can control volatility. No one can predict volatility. But we can do things because of our market model to help the companies that are listed on us, have a less volatile experience. So our market model requires a designated market maker whose job is to trade that stock from the floor and they — RITHOLTZ: Create an orderly market? MARTIN: Correct. Correct, correct. And they smooth out volatility, not just intraday, but also at the open and the close. The open and the close are incredibly important moments in time for a company, particularly if you think of a company having quarter-end, or they’re having the share repurchases, or whatever the case may be. So that’s actually meaningful dollars, even post an IPO, in a CFO’s mind, when they’re doing share buybacks, things of that nature. So that’s where our market model really resonates, particularly in times like this, when you see the volatility in the market, when you see the VIX over 20, but you know that companies still want to go out in the public market. RITHOLTZ: You know, I think the public is probably less aware of some of the institutional order flow, like buy on open or sell on close, which it doesn’t hurt to have a professional overseeing that process so it doesn’t get too out of hand. MARTIN: Yeah. And also smoothen any imbalances because you’re not necessarily going to have a balanced book at the end of the day. RITHOLTZ: Which means they’re literally taking positions — MARTIN: They are. RITHOLTZ: — long or short in order to satisfy those orders. MARTIN: Absolutely. RITHOLTZ: So let’s talk about some imbalances, and I’m thinking about the sort of meme stock mania that began in 2020, when everybody was stuck at home during the pandemic, and just exploded in 2021. It was really a very unexpectedly wild ride, especially the companies involved. What was that experience like for you watching this? You weren’t yet president of the NYSE in 2020 or 2021, but you were still there. Tell us what that experience was like. MARTIN: I mean, it was incredibly interesting to watch the new retail interest in certain stocks and why they had picked certain stocks. And I think it’s just still something that is fascinating intellectually more than anything. I can’t really comment on any of their decisions, but it’s been interesting to watch how social media has really emboldened a new class of trader. RITHOLTZ: My favorite moment of that was the young — pretty handsome young couple. And the way we subsidize our lifestyle is we buy stocks. We only buy the stocks that are going up. And when they go up, we sell them. And we just do that over and over again from home. And I’m like, oh, I had no idea it was that easy. You could get rich trading stocks. Why didn’t someone tell me that 30 years ago? MARTIN: I tend to take the view that having a very balanced portfolio and knowing what you invest in, and investing for the long term is probably 9 times out of 10 the — maybe 9.5 times out of 10, the right philosophy to have. RITHOLTZ: I think Warren Buffett wouldn’t find anything to disagree with that. And yet we see people piling to companies of questionable potential. My favorite example was — was it Hertz that was bankrupt and everybody decided to buy Hertz since then? So as you’re observing this, is part of your brain saying we have to do X and Y and Z to stop this, or is it, well, that’s going to be an interesting end when that all — when that train stops? MARTIN: So our job is to make sure the markets are open and are available to the most diverse set of investors. RITHOLTZ: No paternalism. You just — MARTIN: Exactly. RITHOLTZ: Here’s the platform and make sure it runs. MARTIN: Ultimately, if there is questionable behavior, we police that. Our reg group who is a separate group, polices that and works closely with the regulator. RITHOLTZ: So let’s talk a little bit about that. You see behavior that sometimes it’s just — that looks pretty stupid. And sometimes it’s like, hey, this is looking a little suspicious, something doesn’t smell right here. What happens when your systems start flashing little alerts? Hey, look at this stock, something seems to be unkosher here. MARTIN: So that would be the job of reg to look at various trademarks. RITHOLTZ: Internally, the NYSE regulations. MARTIN: Yeah. They are a separate organization from the business, but they are an internal organization. And then, you know, they would either take enforcement action if it was suspicious activity, not stupid, not stupid. It’s not our job again to take views on whether or not a stock is worth something. That’s for the market to decide. And then if appropriate, refer it to the regulators. RITHOLTZ: So I would assume the NYSE has a fairly close relationship with the SEC and there’s probably a lot of back and forth on a regular basis. Tell us a little bit about that. How does the — MARTIN: Well, they are a regulator. We’re an SRO. So we do have a very close working relationship with them. We are — RITHOLTZ: So you’re a self-regulating organization. MARTIN: Yeah. RITHOLTZ: But you also have a, a relationship with the government regulator. MARTIN: Absolutely. Absolutely. RITHOLTZ: And I would imagine that’s a fairly productive relationship. MARTIN: It is. It is. Obviously, we have a very strong rule book. Anytime we make a change from a market structure standpoint from an order type standpoint, that has to be fully approved by the Commission. So we spend a lot of time with the SEC going through various rule changes. We want to introduce a new order type. We want to introduce a new — a different fee. There’s a variety of reasons why we need to do for filings. RITHOLTZ: So let’s use an example. I’m always — again, now I’m going to show my age. The circuit breakers from the ‘80s and ‘90s were pretty modest and things really had to go off the rails before they kicked in. Circuit breakers have very much been brought up to speed both on the broad market and individual companies. Tell us about the circuit breaker, is that coming from the NYSE? Is that coming from the SEC? MARTIN: So that is something in the wake of the volatility that has occurred at various points, various instances of stress in the market, whatever the case may be. RITHOLTZ: I mean, this goes back to ‘87, right? MARTIN: Absolutely. Pandemic. The market has really — the positive of every time there has been a challenge, the market has developed system safeguards, for lack of a better description. So — and they apply to all of the exchanges. So volatility halts, for example, we have volatility halts for securities, individual securities. But then we also have system halts when the entirety of the market has a certain drop. For example, you saw the market wide circuit breakers kick in, I believe, four times during the pandemic, really during the height of the pandemic and that’s — RITHOLTZ: March 2020. Yeah. MARTIN: Yeah. And the way that works is if the S&P is trading 7% below its opening level, it will automatically halt. RITHOLTZ: Opening level or previous close, how do you categorize that? MARTIN: Previous close. Previous close. Yeah. RITHOLTZ: So we close at 3000 and we open 210 points below that, there’s a halt right there? MARTIN: Yes. Yeah. RITHOLTZ: Makes sense. And individual companies, what are those circuit breakers like? MARTIN: It’s, I believe, 5% up or down. It will be at 10 halt. RITHOLTZ: So that’s a 10. And the first halt is — MARTIN: And actually, to be fair, it depends on the liquidity in the stock. It could be 5%. It could be wider, depending on the overall liquidity in market cap of the stock. RITHOLTZ: But when we — when we see a liquid stock take a 5%, or an 8%, or a 10% haircut, they tend to keep trading. MARTIN: You’ll have a very short halt, and then it will — RITHOLTZ: Just to let the book sort of rejigger? MARTIN: Correct. RITHOLTZ: So the first halt is how many minutes? Five minutes? MARTIN: I think it’s 10. RITHOLTZ: 10 minutes? MARTIN: Yeah. RITHOLTZ: All right. And then the second halt is longer. MARTIN: Yeah. And then if this continues to be a mess, it’s halted for the day. So the first, second, third strike, they’re out. We haven’t seen that in quite a while. What happens the next day when we reopen? How is that priced? Is it just the messages and orders, or is there a specialist trying to facilitate that? MARTIN: There is a specialist. That’s where the open — that’s where our market model shines. You have the opening auction and the closing auction, which again performed that function I mentioned earlier of smoothing out any imbalances, whatever the case may be to make for a smoother open and/or a smoother close. And that’s why when I mentioned earlier that we’ve seen two times less volatility at the open and three times less volatility at the close this year, that’s what I’m talking about. It’s the opening and the closing auctions. RITHOLTZ: Because a person is essentially — MARTIN: Because a person is trying to make sense of what’s going on. RITHOLTZ: Right. Smoothing that out and making it a little more balanced than it might have been. MARTIN: Correct. RITHOLTZ: And that means they’re also going at risk and taking positions to facilitate that. MARTIN: That’s right. RITHOLTZ: So you mentioned a couple of things I didn’t get to, I want to follow up on. One is the dual listing. So when a company is listed here and overseas, or is that the only reason to be a dual listing? How often — what are the other reasons to be — besides geographic, to be dual listed? MARTIN: A lot of times, it’s geographic. Very infrequently, there are some securities that are dual listed on us and our closest competitor in the U.S., but that’s very infrequent. So it’s typically to get access to a different group of investors. A lot of times you’ll also see a primary listing and then something called an ADR being listed in the U.S. where we’ll do the primary. And that’s more foreign issuers that want to have their primary listing on the home market, but then tap the liquidity in the U.S. market. So they’ll issue an ADR. RITHOLTZ: And then what about additions and subtractions? I know we occasionally see companies that were once smaller companies listed at what used to be considered regional exchanges — MARTIN: Yeah. RITHOLTZ: — graduate to the NYSE. And then every now and then, somebody, you know, is past their sell/buy date and they get de-listed. Tell us a little bit about what that process is like. MARTIN: Yeah. I mean, the de-listing process, you know, there’s a lot of things that go into the de-listing decision. RITHOLTZ: But it’s pretty mathematical, right? MARTIN: Yeah, it is. It is. RITHOLTZ: You know, check these boxes or — MARTIN: We’ve got — the reg has a variety of requirements to maintain your listing. It could be certain financial wherewithal. It could be the amount of shareholders, individual shareholders that are participating in your stock. So there is a formula that gets followed. RITHOLTZ: And what about the opposite? What about somebody graduating, for lack of a better phrase, to the NYSE? MARTIN: Yeah. And we’ve seen actually quite a few companies graduate to the NYSE this year alone. We’ve actually seen quite a few companies transfer to the NYSE this year. I think we’ve had 14 so far to date — RITHOLTZ: That’s a lot. MARTIN: — which is our best year on record. But we’ve seen — we have a smaller listings venue called NYSE American, which is for the smaller cap companies. And you know, we’re really happy when we see them graduate to the big board, for lack of a better description, because it means they’re having success. They’re having a tremendous amount of success in the public markets. RITHOLTZ: All right. Let me throw you a little bit of a curve ball. I’m going to ask you a question you can’t possibly answer, but I feel compelled to ask it. MARTIN: Awesome. RITHOLTZ: So I remember getting a tour of the floor of the exchange a million years ago, and it was giant room after room, after room down on Wall Street and Broad, and literally where physical chairs were being traded, traded physically person to person. That has slowly been computerized. That’s slowly been morphed into the modern market structure. But I have very fond memories of that massive building that takes up like two city blocks. Is there always going to be a physical exchange? This is the question that I don’t know if anybody can answer. But is there always going to be a physical exchange on Wall Street? At what point does that just, you know, become a venue for aftermarket IPO parties and things like that? MARTIN: There is always going to be the New York Stock Exchange at the corner of Wall and Broad. We’ve been here for 230 years, counting us being here for the next 230 years. We have survived many war, pandemic, volatility, crisis — RITHOLTZ: Explosions. MARTIN: — all sorts of — all sorts of unfortunate events. So there will always be an exchange at the corner of Wall and Broad. RITHOLTZ: That’s really good to hear. I have very fond memories of that. And not too far from there, the tour of the Federal Reserve gold. MARTIN: Federal Reserve, the vaults. Yeah. RITHOLTZ: Right. So those were — I think — I’m trying to remember if that was a high school teacher or a college teacher. It was ways ago. All right. So I know I only have you for a few minutes more. Let me jump to all my favorite questions we ask all of our guests, starting with what did you do to keep yourself entertained during the pandemic? What were you watching or listening to? (COMMERCIAL BREAK) MARTIN: Well, during the pandemic, I had the unique privilege of homeschooling two children in addition to doing my day job, which was focused on keeping the fixed income markets moving forward. So that was — that was a challenge. But I have to say I look back on it with fond memories, not just because our fixed income business provided a lot of transparency in a really opaque market, but also I got to spend some time — a lot of time with my kids. RITHOLTZ: That sounds like fun. Let’s talk about your mentors who helped to shape your career. MARTIN: I would say that I’ve had the opportunity to have mentors that have been bosses all throughout my career. It really started with my first project executive who was helping guide me through IBM, who taught me a lot of really important lessons that I still stay true to, one of which is you can never overcommunicate. But throughout my career, I’ve been lucky, fortunate that my bosses have always given me stretch jobs, where they give me an opportunity to do a job that maybe I didn’t have the background for, or I didn’t think I had the background for, but they thought I was the right person for that job. RITHOLTZ: Sounds interesting. What are some of your favorite books? What are you reading right now? MARTIN: Books are a challenge mainly because I have a finite amount of time in my day. Right now, you know, continuing to read a couple of interesting business books like, you know, I always go back to the Michael Lewis books because they’re just a good read — RITHOLTZ: Can’t beat them. MARTIN: — on top of anything. They’re a unique mix of storytelling and business, so it kind of scratches both itches, for lack of a better description. RITHOLTZ: Sure. I just reread Liar’s Poker — MARTIN: Yeah. RITHOLTZ: — on its 30th anniversary. It holds up surprisingly well. MARTIN: Yeah. RITHOLTZ: And you could see the outlines of, oh, it’s not quite a full Michael Lewis book, but there are hints of the writer he’s about to become. MARTIN: Yeah. RITHOLTZ: Really quite interesting. MARTIN: I also like Moneyball. Moneyball is one of my favorites. I mean, like that’s — RITHOLTZ: Hard to beat. MARTIN: You’re in baseball season. I’m a baseball fan. So therefore I’m going to, you know, focus on. RITHOLTZ: We may see the Mets go pretty deep into the playoffs this year. MARTIN: That I’m not going to — I’m going to hold my breath. We’re entering September and you know what usually happens to our boys from flashing in September, right? RITHOLTZ: They seem to be a little different team this year under another market participant, Stevie Cohen. MARTIN: You got to believe, right? RITHOLTZ: Listen, I grew up with, you know, the Lenny Dykstra era of you’re on the line and it’s so easy to get to Shea Stadium. MARTIN: Absolutely. RITHOLTZ: We used to go to games all the time and frequently to be disappointed, but so far — MARTIN: Well, I remember my first games were ‘85 and ‘86. RITHOLTZ: Oh, well, ’86 is — MARTIN: So I mean — and that’s when I just fell in love with them. RITHOLTZ: Bucky Dent and the little dribbler through the legs. That was it. MARTIN: Exactly. Like Bill Buckner and his name will go down in infamy I assume in Boston. But, man, I felt good in New York, right? RITHOLTZ: Yeah. MARTIN: So — and watching that team was a lot of fun with Strawberry and — RITHOLTZ: That’s right. MARTIN: — Ron Darling, who I think is a great broadcaster. By the way, he’s turned into a great broadcaster. RITHOLTZ: You know, they were always an interesting team, even if they didn’t bring home as many championships as the Yankees did. MARTIN: They were. They were. They were. I remember going to the Subway Series between them and the Yankees in the World Series in 2000, I think that was. And — RITHOLTZ: Is that a playoff or — MARTIN: No. They were in the World Series together. RITHOLTZ: Really? 2000 is kind of a blur to me. MARTIN: There you go. RITHOLTZ: That was like ’08, ’09, that year was a little bit of a blur. Our last two questions, what sort of advice would you give to a recent college grad who was interested in a career involving data services, listed stocks, any sort of trading or exchange-based work? MARTIN: The advice that I would give is to, in some respects, expect the unexpected. And what I mean by that is your traditional degrees aren’t necessarily going to be what’s going to make you successful. So be intellectually curious about the things, not just involved in finance. Be intellectually curious about the technology under that underpins the systems. And clearly, never be afraid to speak up if you want an opportunity, or take on an additional project that may not be in your day to day, but maybe something that is just an area that interests you. RITHOLTZ: Interesting. And our final question, what do you know about the world of data services, exchanges, market trading and public companies today you wish you knew 20 or so years ago? MARTIN: That is a great question. RITHOLTZ: We save it for last for a reason. MARTIN: I guess I wish I knew how important — I wish I knew how important the role of the programmer was going to become in financial markets. I understood then that, effectively, fair value was determined by a variety of mathematical — a bunch of math, for lack of a better description. Those mathematical models became much more sophisticated over time. But I don’t know that I fully appreciated that the guy or girl who is writing the code was going to be the one that was interacting with the systems 20 something years ago, and the importance of efficient interaction. RITHOLTZ: Quite fascinating. We have been speaking with Lynn Martin. She is president of the New York Stock Exchange. Thank you, Lynn, for being so generous with your time. If you enjoy this conversation, be sure and check out all of our previous 400 or so podcasts we’ve done over the past eight years. You can find those at iTunes or Spotify, or wherever you get your favorite podcast from. We love your comments, feedback, and suggestions. Write to us at mibpodcast@bloomberg.net. Sign up for my daily reading list at ritholtz.com. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team who helps put these conversations together each week. Bob Bragg is my audio engineer. Paris Wald is my producer. Atika Valbrun is our project manager. Sean Russo is my head of Research. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio. END   ~~~     The post Transcript: Lynn Martin appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureSep 7th, 2022

Bitcoin Aligns Incentives In The Perfect Way

Bitcoin Aligns Incentives In The Perfect Way Authored by Conor Chepenik via BitcoinMagazine.com, When a nocoiner asks me about Bitcoin, it’s hard not to take a “Michael Saylor breath” and embark on a four-hour conversation about how there is no second best. My Bitcoin elevator pitch has become better over time, but it’s hard explaining why the world so desperately needs an honest monetary ledger in 30 seconds. Proof-of-work is required to have the glorious experience of going down the Bitcoin rabbit hole. In this piece I attempt to lay out why the incentives of the network are so well thought out at every level. Humanity has never before had such a fair game. A truly free market ledger that anyone can access, verify and update if they play by the rules. From individuals to small businesses, followed by grid operators and energy companies, and finally nation-states, everyone benefits in the long run by playing fairly with electricity rather than through coercion and violence. While I’m most hopeful that Bitcoin can help empower sovereign individuals, it appears we are entering the point where institutions start stacking sats. As the network continues to grow in size, Bitcoin will reach a point where every company and nation-state will adopt the technology in some form or fashion, just like they have with TCP/IP. The Bitcoin rabbit hole makes learning fun and teaches people about energy, finance, philosophy, physics, history, game theory, economics, computer science and a bunch of other subjects. At my local Bitcoin meetups in Massachusetts, I’ve heard many similar stories of people starting to study and learn about subjects they otherwise would never have bothered to study. In order to have a good understanding of Bitcoin you must commit hundreds, if not thousands of hours. At which point you are just getting started because “no one has found the bottom of the Bitcoin rabbit hole.” Once you start to grasp what Bitcoin means for humanity, it almost feels like a cheat code for life. An apolitical, censorship-resistant, truly scarce, decentralized ledger that is being adopted by the masses from the ground up. It’s a blessing that the anonymous person or group named Satoshi Nakamoto solved the Byzantine generals problem.  (Source) INDIVIDUALS Socialism doesn’t work because people are self-interested. I’d love to live in a utopia where everyone cooperates and helps their neighbor. I firmly believe that when you give via your own free will, it is one of the best feelings in the world. However, it does not feel very good to give when you are forced to do so in order to avoid violence. Throughout history, taking away the ability for people to keep the fruits of their labor has always ended poorly. Telling people they must produce for “the greater good” is a recipe for disaster. One example of this is what happened in China between 1959-1961. The country experienced what is now referred to as the Great Famine under Mao Zedong. “Taking away all means of private food production (in some places even cooking utensils), forcing peasants into mismanaged communes, and continuing food exports were the worst acts of commission. Preferential supply of food to cities and to the ruling elite was the deliberate act of selective provision.”  - Vaclav Smil This is just one example of what happens when the government takes away the ability for its citizens to work on what they themselves deem worthy. It ruins the incentive structure for productive people to work on meaningful tasks. The world is not a utopia no matter how badly socialists want it to be. It is one thing to demonize monopolistic practices because they hinder the free market from operating properly. It is a completely different thing to demonize profit. If people can’t make a profit they won’t spend their time and resources making something of value. That is unless they are forced to do so by the threat of violence. The more coercion is applied, the less value is created because someone working for profit is a lot more motivated than someone working because they are being forced to do so. One monopolistic practice hindering our modern world today is the monopoly central banks have on fiat currency. By centrally planning interest rates and having the ability to create fiat money without facing an opportunity cost for doing so, the free market becomes corrupted. This leads to distorted price signals and individuals being pushed out on the risk curve. “Every day that goes by and Bitcoin hasn’t collapsed due to legal or technical problems, that brings new information to the market. It increases the chance of Bitcoin’s eventual success and justifies a higher price.” — Hal Finney While bitcoin becomes less risky every day it exists, I tip my hat to the individuals who understood its importance before buying bitcoin was a mainstream thing. Before exchanges like Mt. Gox, people were not using fiat currency to buy bitcoin. They were using electricity and computers to mine it, which is what made Bitcoin so special. A new system that is completely outside the traditional one of relying on credit and growth. Many projects that came before Bitcoin failed in the long run, but various ideas from these projects were referenced in Nakamoto’s white paper. Logically, over time, more people will come to the Bitcoin network to protect their purchasing power as long as the network keeps adding blocks of transactions approximately every 10 minutes. The more people who see the impact that fiat currency debasement has on their purchasing power, the more likely they are to look for alternatives to protect said purchasing power. This is what initially attracted me to buy some bitcoin in early 2017. My friend told me about this new form of currency that had appreciated greatly since its inception. I watched the documentary “Banking On Bitcoin,” which I still highly recommend because it helped open my eyes to the fact that money is just a ledger. Unfortunately, I didn’t fully go down the rabbit hole at that time. I spent the first couple of years of my journey looking at my exchange balances as my bitcoin and altcoins multiplied 10 times, only to be depressed when my gains came crashing down after the bull market ended. Like most who are initially attracted to cryptocurrency for the speculation, I obsessed over the fiat price. Doing so caused me to miss the whole point of not having to rely on any counterparties to verify and hold bitcoin. While it sucked losing all the fiat gains I had made, it taught me some very valuable lessons. “The danger is if people are buying bitcoins in the expectation that the price will go up, and the resulting increased demand is what is driving the price up. That is the definition of a BUBBLE, and as we all know, bubbles burst.”  - Hal Finney As Finney so eloquently pointed out in those early days, when something goes parabolic superfast it will likely crash just as fast. Pain is the best teacher and this was my first hint at why having a low time-preference is so important. It also served as a lesson for myself to focus on Bitcoin, not crypto. I kept an interest in Bitcoin, but it wasn’t until 2020 that I really started digging into the rabbit hole. When I got a stimulus check in the mail for doing nothing, that set off an alarm inside my mind. While free money is always nice, it was obvious that there would be consequences to the United States government handing out cash to its citizens. I didn’t fully understand why at the time. It was annoying me that I couldn’t put my finger on what was wrong so I started down the Bitcoin rabbit hole which led me to Austrian economics and how money actually works. It was both frustrating and enlightening to learn about Bretton Woods, 1971 and why central banks are in a race to debase their currency. When I learned that most U.S. dollars are held on a server (in an SQL database) at the Federal Reserve, I was shocked. These people can press buttons on a keyboard and print trillions. By granting 12 unelected officials the privilege to centrally plan the cost of borrowing money we have hindered the free market’s ability to effectively tell market participants what the cost of capital is. Fiat is latin for “by decree”; thus, it makes a lot of sense why central bankers will fight tooth and nail to keep the ability to control money. The Fed claims to be an apolitical organization, but as debt levels increase to numbers typically seen during times of war, central bankers are pressured politically to debase their currency. The other option is to default on the debt and that is never politically viable. The silver lining is that more people are waking up because they get frustrated watching their purchasing power decline rapidly in inflationary environments. Being self-interested is not a bad thing. It is what motivates individuals to work hard so they can enjoy the fruits of their labor. Bitcoin optimizes for this, while the Keynesian economic models of ever-expanding credit steal the fruits of people’s labor. No one knows how it ends but over time it makes sense more people would end up saving their “fruits” in the harder money.  Figures with a Bitcoin flag, walking on the U.S. dollar SMALL BUSINESSES Visa and Mastercard have a combined market capitalization of about $775 billion dollars at the time of this writing. They charge around 3% of retailers’ revenue for their services which eats into the profits or get passed onto consumers of the companies accepting debit and credit cards. While cards make it much easier to transact, many businesses and consumers would be happy to avoid these fees if possible. There is an option of going cash-only for final settlement, but that means missing out on business from younger generations who don’t carry cash. By accepting bitcoin, these companies not only avoid the fees, but they also receive final settlement transactions just like cash. No more waiting 90 days to make sure a credit card doesn’t get charged back. Bitcoin will massively disrupt many financial rails we have today. Many in the Western world might not appreciate what a big deal this is because our financial rails are pretty well established. However, those in less developed countries know perfectly well what a pain it is to have hucksters butting in to take a cut. It won’t be instant, but bitcoin can help wean small businesses off middlemen who are no longer necessary. Bitcoin can also serve as an incredible marketing tool. I’d gladly spend some satoshis at any local small businesses that took bitcoin. Tahinis is a great example of a small business who leveraged bitcoin to get some brand awareness. I’ve never been to Canada, but if I ever go, I’d like to eat at Tahinis so I can use bitcoin to buy shawarma. Bitcoin forms a special bond between people to the point where you literally want to support their business because you know they have taken the orange pill. (Source) ENERGY COMPANIES AND GRID OPERATORS Energy companies and grid operators also have a massive incentive to adopt a bitcoin strategy. Rather than just having one buyer on the grid that demands more energy during the day than at night, the grid could have a second buyer who is willing to consume energy 24/7, 365 days/year. Bitcoin miners can monetize energy that would otherwise go to waste. There is the up-front cost of buying an ASIC and having the technical whereabouts to maintain and run said ASIC. This means more jobs for the talented individuals who understand how to do so. More talented workers creating value means more energy efficient grids. It amazes me how much fear, uncertainty and doubt gets spread about Bitcoin’s energy usage, when the reality is Bitcoin can stabilize grids and make the capital put up to build green energy infrastructure much less risky.  If you wanted to build a massive hydro plant in a rural area before there was Bitcoin, it would be very hard to raise the capital. Investors would not want to put up their money for a power plant that did not have buyers for the power being generated. With Bitcoin, the investors can rest assured there is always a buyer for that power. While I think there will be a point when miners just keep the bitcoin, they can also sell them for fiat at any point in time. Unlike traditional markets, bitcoin never stops trading. Since fiat depreciates over time, the most efficient miners will be able to hold and accumulate their bitcoin, while the less efficient miners will have to sell for money that is constantly being debased by the money printer. The best companies will thrive over the long run, while the inefficient operators will have to adapt or die. It is the free market doing its job.  The more I learn about how grids operate, the more apparent it becomes that bitcoin can help usher in an abundant energy future where energy prices aren’t going parabolic because of poor decisions made by central planners who are printing money at unheard-of rates. The whole green energy and environmental, social and governance (ESG) narrative is an antihuman farce meant to hide the disaster that the central banks have created. These greeniacs claim that CO2 is going to suffocate the world, but this chart in Alex Epstein’s “Fossil Future” shows why more fossil fuel use is needed. (Source) Energy is the base layer of society. Without reliable and reasonably priced energy, things will get ugly fast. Just look at what happened to Sri Lanka who had one of the highest ESG ratings in the world before their economy collapsed. Every example of hyperinflation stems from irresponsible monetary policy. Calling currency debasement “quantitative easing” doesn’t change the fact that it results in more money chasing the same number of goods. People joke that Bitcoiners are psychopaths who can’t stop talking about magic internet money, but the truth is we just want others to take the orange pill so we can stop suffering from the central planners. Bitcoin Maximalists have a reputation of being mean online for calling out bad actors, but almost every Bitcoiner I’ve met in person turns out to be one of the most genuine, kind and intelligent people I meet. In person, I’ve seen that Bitcoiners are willing to help onboard as many people as they can because we all strongly believe Bitcoin is the best way to achieve a pro-human future where we have an abundance of food, energy and choice. In my opinion, helping people understand that bitcoin is the life raft is one of the most noble things a person can do. History has shown that the free market will ultimately end up with one form of money winning out. Before bitcoin that was gold and then we ended up with fiat to keep up with the speed of commerce. Now that we have bitcoin, I believe fiat will continue to rapidly lose its purchasing power as more people and businesses realize that bitcoin can’t be debased by a single entity. NATION-STATES This one is a double-edged sword. I want as many individual people to adopt bitcoin before the nation-states start accumulating. I’m hopeful that the nation-states who do end up adopting bitcoin will be able to utilize its fiat price appreciation to create a more abundant society for the individuals that live there. At the time of writing, two countries have adopted bitcoin as legal tender. According to the World Population Review’s prosperity index, El Salvador ranks 98 and the Central African Republic ranks 165 out of 167 countries. Neither of these countries is in the top 50% of prosperous nation-states and they were the first to adopt bitcoin. I believe this trend will continue since the most prosperous countries have much more to lose by not being able to “decree” what happens with their country’s money. Before bitcoin, El Salvador was a dollarized economy. Now they allow both USD and BTC to operate as legal tender. The Central African Republic had the CFA franc as its currency. According to Wikipedia: “Critics point out that the currency is controlled by the French treasury, and in turn African countries channel more money to France than they receive in aid and have no sovereignty over their monetary policies.”  Top: Central African Republic flag. Bottom: El Salvador flag It is encouraging to see nation-states that are at the mercy of foreign central banks adopt bitcoin to get around these monopolies. I imagine at some point the richest nation-states will be forced to adopt bitcoin if their currency is hyperinflated because it will be the only viable way to trade with other countries. These wealthy nations will fight for as long as they can to keep control of their monopoly on fiat currency. It is the poorer nations who don’t have complete sovereignty over their money that will look to bitcoin to protect their purchasing power because they have the least to lose.  If you are a nation-state and you can’t create your own money to fund government spending, you are much more likely to invest in a truly scarce currency than another nation-state that can create more of its own currency out of thin air. While El Salvador might not be in the green in terms of where they bought bitcoin on the spot market, they have made up for it with the massive boost in tourism and interest in their country. Personally, I would love the opportunity to visit El Salvador and use bitcoin to buy stuff. El Salvador will likely continue to experience a massive influx of tourism as more Bitcoiners, like myself, start to plan trips there so they can use this new form of money. The cyber hornets don’t mess around and as more countries notice the impact bitcoin can have on their local economies, the logical conclusion is to adopt it as legal tender and attract tourists to bolster their economy. (Source) CONCLUSION It might get messy. Rich nations, the World Bank and The International Monetary Fund aren’t just going to toss up their hands and go, “Well, it was fun controlling fiat while it lasted.” Just look at the U.S. who passed the Inflation Reduction Act, which includes hiring and arming an additional 87,000 IRS agents. The United States is planning on printing money out of thin air so they can pay citizens to do this. (Archived source) It is quite ironic that the nation which was created because we demanded no taxation without representation is doubling down on its tax force. The people in power will fight tooth and nail to protect their interests and hinder bitcoin’s adoption. Top-down controls can only go so far. Individuals, companies and nation-states are all self-interested. No one likes a parasite when they are the one dealing with the consequences that are draining their resources, time and value. Over a long enough time horizon, it seems bitcoin will bleed these parasites dry as they lash out and try to impose top-down controls across the world. The truth can only be hidden so long; it always comes out in the end. Bitcoin can fix energy, monopolistic central banks, credit-based systems and massive surveillance states. It can help disincentivize violence because if someone stores their private keys in their head, no one can steal that bitcoin. They can kill the person who holds the keys, but if they were not able to torture those private keys out of the victim’s head, that just results in a donation to the rest of the network since that person’s bitcoin will never be moved. If enough people adopt bitcoin and use solid safety practices, powerful entities stand to gain more by cooperating with these sovereign individuals rather than killing them. I don’t want it to get messy and I truly believe the best way to avoid conflict is by getting more people to take the orange pill and showing them how to run a node. Individuals, companies and nation-states theoretically no longer need banks to transact. As a U.S citizen, I hate to see America in disarray. Ray Dalio makes some excellent and terrifying points about the state of our republic in his book “The Changing World Order.” The U.S is a declining empire at this point and China is on the rise. This chart from Dalio really helped me understand what it means to have world reserve currency status. Estimates of 'power' levels of empires relative to others. The Netherlands had reserve currency status and lost it to the British, who lost it to the United States. Now it looks like China is getting ready to gain world reserve currency status over the U.S. There is little hope of reversing the trend of USD no longer being a global reserve currency. While losing reserve status is never a fun experience, the U.S could benefit greatly from having bitcoin as a neutral world reserve currency rather than the Chinese yuan. Having a central bank digital currency (CBDC) as the reserve currency would serve as the ultimate tool for central planners to corrupt the free market and wreak havoc on value creation. As a country, China has a deep, rich history and a nation full of hardworking people. However, their massive surveillance state and CBDCs are not something that will ever fly in a free country. It is up to the masses to say “enough!” and opt out. Future generations deserve a better world than one where the government can turn off access to its citizens’ money with the flick of a switch. These past two years have been absolutely insane. We are seeing people get their bank accounts frozen because they donated to a peaceful protest put on by truckers in Canada. We are seeing an attack on farmers across the globe to meet antihuman ESG agendas that will destroy countries in the same way it did Sri Lanka. We are even seeing the greatest nation on the planet come after its own citizens by devaluing their currency at unprecedented levels, hiring more IRS agents and raising taxes during a recession. All of this is what is at stake if the masses don’t wake up and peacefully opt out from these corrupt regimes with bitcoin. All we have to do is use an old computer or a Raspberry Pi and run Bitcoin Core. Now, it is that easy to transact with anyone in a peer-to-peer manner and verify that only 21 million bitcoin will ever be created. It brings a warm, tingly feeling to my heart thinking about the freedom, prosperity and abundance bitcoin can bring to the world. “Abundance in money creates scarcity everywhere else, and scarcity in money creates abundance.”  - Jeff Booth Once the masses understand this, they will understand why the phrase “Fix the money; Fix the world,” is the embodiment of the Bitcoin ethos. Tyler Durden Mon, 08/29/2022 - 21:40.....»»

Category: smallbizSource: nytAug 29th, 2022

Transcript: Hannah Elliot

      The transcript from this week’s, MiB: Hannah Elliott on Hypercars & EVs, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters… Read More The post Transcript: Hannah Elliot appeared first on The Big Picture.       The transcript from this week’s, MiB: Hannah Elliott on Hypercars & EVs, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast I have an extra special guest. If you want to listen to me wonk out about automobiles, Hannah Elliott is my favorite automobile reviewer. The last time I had her on I had people writing me and saying, “You know, you were like a little puppy dog piddling over yourself. You couldn’t get out of your own way. You were so excited to talk about cars with somebody.” This time, I think I’ll let Hannah speak a little more than I did last time. I try to keep my excitement in check, especially on the broadcast portion. But we did go back and forth on some stuff. If you were all interested in the automobile industry, EVs, motorcycles, collectible cars, Ferraris, Formula One, well, strap yourself in and get ready. This is two hours of automobile wonkery. With no further ado, my conversation with Bloomberg’s Hannah Elliott. Hannah Elliott, welcome back. HANNAH ELLIOTT, STAFF WRITER, BLOOMBERG BUSINESSWEEK: Thank you. It’s great to be here. RITHOLTZ: I’m — I always enjoy talking to you because I’m — I’m kind of a car guy. And before we get into automobiles, let’s just start a little bit with your — a background of your career. You’re a staff writer at Forbes Luxury. What led you to being a writer? And what led you to luxury? ELLIOTT: It’s a really funny story. I always start out by saying, of course, at Bloomberg, I get to write about cars. I get to write about the fun thing. Most people here write about how to make money, I get to write about how to spend money. RITHOLTZ: How to spend it, right. ELLIOTT: This was not by design, this was not my plan. I did love words and books, and I did study journalism in college. I went to Baylor University. Thinking of Brittney Griner right now, she also went to Baylor, so shout-out Brittney. But I went to Baylor, I got a journalism degree and moved to New York. I had interned writing about politics and religion actually, but saw on Craigslist an ad to assist the automotive editor at Forbes. And I knew nothing about cars. I come from a sports family. I’m not a car — I still say I’m not actually a car person, this is my job. It’s a beat. RITHOLTZ: Did you play sports in college? ELLIOTT: Yeah, I ran track. RITHOLTZ: OK. ELLIOTT: Yeah, I was a runner. RITHOLTZ: I was going to guess volleyball … ELLIOTT: Yes. RITHOLTZ: … because you’re 6’1”. ELLIOTT: A lot of people say basketball, but I … RITHOLTZ: No, you’re short for basketball, but you’re the right height for beach volleyball. ELLIOTT: Yeah, well, I got some cousins who are very good at volleyball. RITHOLTZ: Yeah. ELLIOTT: They played at SMU. But yeah, I was runner. My dad ran for Nike in the 80’s. RITHOLTZ: Oh, really? ELLIOTT: A lot of marathon distance, so I come from a big running family. My brother played basketball actually in Europe professionally, so a big sports family. No car … RITHOLTZ: Really? ELLIOTT: … anything. I mean, my — no, I mean, I did how to drive a — a stick shift because my dad taught me in his old board when I was 16 mostly because I bugged him just to do it, but I had an uncle with like an Acura Legend, which was probably the nicest car I was ever exposed to … RITHOLTZ: Wow. ELLIOTT: … and just shared an old Buick Skylark with my sister in high school that I was very embarrassed by. So not … RITHOLTZ: Understandably. ELLIOTT: … yeah. Although my sister actually — I think she kind of liked it, but not interested in cars at all. But back to this Craigslist ad, I figured, well, Forbes is a good brand. RITHOLTZ: Sure. ELLIOTT: It’s is not recognizable. I know I want to do journalism. There’s my foot in the door. I’ll figure it out once I get in. And fast forward, you know, this was in like 2007-2008. A lot of people got laid off in the industry. My editor who I’ve been working with for a year and a half or so got laid off. He was expensive, I wasn’t. I was … RITHOLTZ: You’re cheap. ELLIOTT: … being paid … RITHOLTZ: Right. ELLIOTT: … next to nothing, so it was like, well, who can write about cars and, you know, pick this up because we just fired the guy who’s covering them, which doesn’t make sense. RITHOLTZ: Right. ELLIOTT: And so, yeah, Elliott, you go. And Matthew de Paula, I will always be so grateful to him. He was the editor at Forbes at the time who hired me and really for a year and a half took me around everywhere and just taught me the beat. That’s how I approached it. This is a beat. I’m going to approach this just like anything else. There are no wrong questions. It’s just like this is the way that I would cover anything. And I always kind of thought, “Well, I’ll eventually go into other things,” and I did certainly do luxury and watch coverage at Forbes and celebrity coverage. You know, I got to talk to everyone from Jennifer Lopez to a cover story on Elon Musk back in the day before anyone really knew about him, which is … RITHOLTZ: Right, right. ELLIOTT: … crazy to think about now. You know, Forbes was great, and it just kind of was like cars were the thing that I did because no one else at Forbes was doing them. And then I just never stopped. And, you know … RITHOLTZ: What — what was the first car you reviewed at Forbes? ELLIOTT: That’s a great question. The first car I remember being allowed to drive as a Forbes staffer was probably an Aventador, a Lamborghini Aventador. RITHOLTZ: Oh, really? So you’re not fooling around? ELLIOTT: Which I was terrified, but … RITHOLTZ: Like (inaudible). ELLIOTT: … yeah, yeah, that I was terrified. RITHOLTZ: Here’s a $0.5 million car. Have some fun. ELLIOTT: Yes. I remember Matthew was in the passenger seat, so I wasn’t completely so low, but … RITHOLTZ: Matthew? ELLIOTT: Matthew de Paula who was the editor who hired … RITHOLTZ: Right. ELLIOTT: … me there. He was still around. And I mean, I was terrified. But also, I was young and dumb enough not to know any better. RITHOLTZ: Right. ELLIOTT: And I think that actually really served me. I didn’t know what I was supposed to do or not do. I just approached it like a journalist … RITHOLTZ: Right. ELLIOTT: … which I was, you know — I — and I still am really proud to be a journalist. I — I think it’s the best job. And cars are way more fascinating now even then. I mean, that was, you know, 12, 15 years ago. And even now like the car industry is the most exciting industry, I think … RITHOLTZ: It’s crazy now, it really is. ELLIOTT: … to be (inaudible), yeah. RITHOLTZ: So I was telling a friend that I was going to speak with you again and talk about cars. And their response was, you know, I love pizza, but if I have to make pizza for a living I would hate pizza. Is that the same? Is there still a thrill here or … ELLIOTT: That’s a … RITHOLTZ: … you like, you know, no longer can smell the roses? ELLIOTT: That’s a really good question. I think it actually works to my benefit that I never was a car person anyway. I’m not a car person, and I always say, here’s the difference. Every … RITHOLTZ: Yeah, because I think you’d become a car person whether or not you wanted to do. ELLIOTT: Well, I can certainly speak the language if I need to, and I feel very comfortable on those circles. But here’s the difference. I don’t go to car things that I’m not basically paid to be there. And everyone else at the car event, I mean, whether it’s a Formula E race or, you know, a Concorde, I’m paid to be there. Yes, it’s enjoyable. Yes, it’s glamorous and fun, and I really do enjoy it, but I don’t go to car things on my own personal time. I play with my dog, you know, or go buy a flower, something else because, yeah, I just think like your — your pizza friend, that’s — it would be too much and it would … RITHOLTZ: Right. I mean, if you’re doing it … ELLIOTT: Yeah. RITHOLTZ: … for a living at a certain point it’s like … ELLIOTT: Oh, yeah, I mean … RITHOLTZ: … just change. Even if you love what you’re doing, hey, I love the markets and finance … ELLIOTT: Yes. RITHOLTZ: … and — but on the weekends, I want to go out in a boat or sit on the beach or just something … ELLIOTT: Yes. RITHOLTZ: … say it loud. ELLIOTT: And I — I really say, look, if your car is the most interesting thing about you, you’re probably a little bit boring. I like to be … RITHOLTZ: Interesting. ELLIOTT: … around people who have a lot of dimensions, and … RITHOLTZ: OK. ELLIOTT: … a cool car is one of them and that’s awesome. RITHOLTZ: Right. ELLIOTT: But to me, that should not be the most interesting thing about you. I love car people. I love talking about cars, but like come on, you got to have some depth … RITHOLTZ: Right. ELLIOTT: … too. So, yeah, that might be a little — not trying to put anyone down, but to me, it’s like if I’m going to spend social time with you, you got to be able to talk about more than car. RITHOLTZ: Right. And that’s why you send your angry emails to helliott@bloomberg.net. ELLIOTT: Yes. RITHOLTZ: So what sort of automotive trends are catching your eye these days? What do you like? What don’t you like? ELLIOTT: Well, I think E.V. — like electric mobility for lack of a better word … RITHOLTZ: Huge, absolutely huge. ELLIOTT: … is — is despite the fact that we’re still, you know, hovering around five percent penetration of EVs in the U.S. RITHOLTZ: So is it five percent of new sales that’s all it is? ELLIOTT: Of — of all cars on the road. RITHOLTZ: Oh, well … ELLIOTT: Yeah. RITHOLTZ: … the cars last 15, 20 years these days. ELLIOTT: Correct. RITHOLTZ: So it’s going to be … ELLIOTT: So — but this is a very … RITHOLTZ: … it’s going to take a long time. ELLIOTT: Yeah, so it’s — it’s like one thing to talk about the hype of EVs. Certainly, at every car show and every car launch and every debut, it’s all electric vehicles. But in real terms in the real world, I think we can expect to see SUV’s that continue to get more and more expensive. I mean … RITHOLTZ: But what about the Aston Martin SUV, the Bentley … ELLIOTT: Completely. RITHOLTZ: … and the Rolls. ELLIOTT: And the Rolls and, you know, Porsche’s got a couple SUVs that are going to get close to 200,000 if you get every — but I — I — and I don’t think — you know, I remember when the first SUVs were really starting to get over $100,000, it was like, “Wow … RITHOLTZ: Right. ELLIOTT: … this is really crazy.” This is a utility vehicle, but it’s being price like electric car, but now it’s just on top of that. I mean, Lamborghini, Ferrari’s coming out with theirs, it’s just going to continue. And there seems to be no limit. And let’s not forget SUVs have the biggest margins. They’re basically … RITHOLTZ: Right. ELLIOTT: … doubling the production volumes for a lot of these smaller automakers like Lamborghini, Ferrari. So they’re going to double production volume and then the profits are just massive. RITHOLTZ: Look back when Porsche was independent. The clients saved the company. ELLIOTT: Completely. And also, it’s so interesting because back — you know, the people who are very into these sports brands like Porsche, Ferrari, Lamborghini, there’s so much philosophical angst about, well, but we’re really a sportscar company; we’re r really a — you know, a — a supercar company. What is our consumer going to think when we go into an SUV? No one cares. RITHOLTZ: Right, right. ELLIOTT: No one cares. I mean, there was all this like polite, oh, what — what will we do? No one will accept our DNA as a true sportscar company anymore. Nobody cares. RITHOLTZ: Half the people I know who own 911s have … ELLIOTT: Of course. RITHOLTZ: … either a Macan or a — a — a Cayenne … ELLIOTT: Yeah. RITHOLTZ: … in the garage because they stay with the brand. And the only problem with those SUVs — so I have a Macan S — you just go through tires and brakes like they’re — because they’re — it’s a big, heavy truck, but you can throw it around like it’s … ELLIOTT: Yeah. RITHOLTZ: … a sportscar. And eventually, it’s like, oh, I got eight, 12,000 miles. I got … ELLIOTT: Yeah. RITHOLTZ: … new rubbers and … ELLIOTT: Yeah. RITHOLTZ: … I need to replace a — I need to replace the — the brake pads, but it drives like a sportscar. ELLIOTT: And those have done nothing to diminish the allure of a 911. It’s not … RITHOLTZ: Other than funding them … ELLIOTT: Yeah. RITHOLTZ: … letting them — letting them spend money. ELLIOTT: Yeah. I mean, it’s not like, oh, if we make an SUV now people won’t take our sportscar seriously. It just … RITHOLTZ: It’s the opposite. ELLIOTT: … it elevates everything. RITHOLTZ: Right, 100 percent. ELLIOTT: Yeah, and I think that will really continue. I mean, if you look even at — even if you look at the 992, the new 911 compared to, you know, call it a turbo from the 70’s … RITHOLTZ: Double the size. ELLIOTT: … this is a — double the size. RITHOLTZ: Right. ELLIOTT: So … RITHOLTZ: In fact, somebody did — what is it — the Porsche — not the Boxster, the hard top, the — the Cayman. A — a new Cayman today is the size of a 70’s 911. ELLIOTT: Yeah, yeah. RITHOLTZ: It’s just shocking. All right. So that’s what trends you like. What bugs you? What — what’s the trend that you find, oh, I wish this would stop, this is terrible? ELLIOTT: Well, honestly the flipside of the coin is the whole idea that when you are creating electric vehicles, they tend to be appliances. RITHOLTZ: Yeah. ELLIOTT: I find that so boring and unfortunate. I don’t know what that means for the future, but I — my number one thing is car should be fun. Even if you — if it’s a commuter car, it should still be fun. And I do think there is a place for autonomous driving, you know, for — for commuting, sure. RITHOLTZ: Especially if you can set your cruise control so that it starts and stops … ELLIOTT: Yes. RITHOLTZ: … it’s like an L.A., you’re on the 405. ELLIOTT: Yes. RITHOLTZ: Who wants to be stressed about … ELLIOTT: That’s not driving, that’s just commuting. RITHOLTZ: Right, right. ELLIOTT: It’s a completely different thing. So I do think there is a place for it. But it is kind of sad to see how consumers who have been marketed to to believe that they are going to be virtuous by purchasing an E.V. and they’re going to symbol their, you know, virtuous status by driving electric vehicle that they’re somehow doing good for the environment. This is a little bit of a separate point. But to me, the best thing you could do for an environment is to not buy a new car. Use a car that already exists. Use an old car. RITHOLTZ: Interesting. ELLIOTT: And this goes hand in hand with the appliance thing. You know, I just drove the Cadillac Lyriq. RITHOLTZ: Which you didn’t exactly love. ELLIOTT: I didn’t necessarily love it because for many reasons. But to this particular point, it’s just kind of like an appliance. RITHOLTZ: Right. ELLIOTT: It — it looks interesting. The looks are there. But driving, it could have been from any brand. And I’m not sure. Cadillac used to really mean something. I’m not sure that’s going to have the same pull as the Cadillacs of yesterday. RITHOLTZ: Right, especially without the fins. ELLIOTT: Yeah. (COMMERCIAL BREAK) RITHOLTZ: This PS (ph) what really bugs me that I have to share, and I’ve been in a bunch of EVs. There is just no reason to bury the … ELLIOTT: Oh. RITHOLTZ: … the heating and air-conditioning controls … ELLIOTT: Yes, layers … RITHOLTZ: … at wee (ph) levels. ELLIOTT: … (inaudible). RITHOLTZ: And I know — I know you can’t expect a Volkswagen to be a Bugatti … ELLIOTT: Yes. RITHOLTZ: … even though they have the same ownership. But I just was watching review of the Chiron, and they brilliantly integrated just three buttons across all of your … ELLIOTT: Yes. RITHOLTZ: … heating, cooling fan, heated and cooled seats, just three little buttons. ELLIOTT: Yes. RITHOLTZ: You can push it in, you could pull it out or you could just turn the knob. And, you know, we have to pull that stuff. I know a lot of companies like to keep them at the bottom of the screen. ELLIOTT: Yes. RITHOLTZ: It’s still a pain in the neck. ELLIOTT: Yeah. And I’ve — I have mixed feelings about this. For instance, the new Mercedes cars like the S-Class and the EQ have this very big … RITHOLTZ: Giant. ELLIOTT: … giant screen that’s curved, and it goes across the entire dashboard. And it’s actually was very beautiful. And it is pretty well-designed. So I’m not — I actually did find it was intuitive, and I purposely don’t ask for help when I first get into a car. I want to be able to … RITHOLTZ: You want to see, right. ELLIOTT: … see if I can figure it out. I don’t want them to show me because that to me is a little bit more of a controlled environment to see if it’s intuitive. So I don’t have a problem with that necessarily, but in general, I do like some tangible knobs and buttons. RITHOLTZ: Hard buttons, yeah. ELLIOTT: Yes. And if you are having to scroll through multiple layers of software to turn on a seat heater, that’s distracting … RITHOLTZ: Right. ELLIOTT: … and annoying. RITHOLTZ: While you drive. ELLIOTT: Yeah, I just — yes. RITHOLTZ: Right. But meanwhile, the flipside of that is all the new Ferrari steering wheels. ELLIOTT: Yeah. RITHOLTZ: It’s like you don’t need anything else. ELLIOTT: (Inaudible). RITHOLTZ: Everything is at your thumbs. ELLIOTT: Did you get in the Roma, the Ferrari Roma? RITHOLTZ: I did. I don’t love the interior. ELLIOTT: What? RITHOLTZ: I find the exterior of that car just silky, sexy … ELLIOTT: Yes. RITHOLTZ: … gorgeous. ELLIOTT: Yes. RITHOLTZ: And the interior is a little disappointing. ELLIOTT: From the (inaudible) or the technology? RITHOLTZ: Just a little bit of both. I mean … ELLIOTT: Yeah. RITHOLTZ: … it’s — you know, not everything is a 488 or … ELLIOTT: Yeah. RITHOLTZ: … you know, I — I’ve kind of been looking at the F12 lately … ELLIOTT: Ooh. RITHOLTZ: … because the 812s have gone postal. And pre-pandemic, the F12 was just starting to come down in price. And for any three of my cars like … ELLIOTT: Yeah. RITHOLTZ: … well, you know, I could save a little maintenance and insurance if I swap … ELLIOTT: Sure. RITHOLTZ: … these three for that … ELLIOTT: Yeah. RITHOLTZ: … one. ELLIOTT: Quality over quantity. RITHOLTZ: And it was — it was — there was definitely — I love paying half of MSRP for a three-year-old car that still has most of its useful life ahead of it. And then it just, you know, they’re up 40, 50 percent … ELLIOTT: Yeah. RITHOLTZ: … from where I was like, oh, you’re $10,000 away … ELLIOTT: Yeah. RITHOLTZ: … from where I could think about this. So — so — so that’s a beautiful interior with hard … ELLIOTT: Yes. RITHOLTZ: … buttons … ELLIOTT: Yes. RITHOLTZ: … and a screen … ELLIOTT: Yes. RITHOLTZ: … and a separate little screen if you … ELLIOTT: Yes. RITHOLTZ: … buy the upgrade for the passenger. ELLIOTT: But you didn’t love it, you didn’t love it? RITHOLTZ: The Roma. ELLIOTT: Yeah. RITHOLTZ: So — so the 812 and the F12 are both just — I like that … ELLIOTT: Yes. RITHOLTZ: … environment. The Roma was just kind — it was a little too minimalist and … ELLIOTT: Oh, interesting. RITHOLTZ: … I kind of really like the dials, the buttons, the tack like — I want to feel — when I get into a Ferrari, I want to feel like I’m in a … ELLIOTT: Cockpit. RITHOLTZ: … right, a fighter plane. ELLIOTT: Yes. RITHOLTZ: What else looks really new and interesting to you? What cars or SUVs are you excited about even if they’re not out until ’23 or ’24? Not the Lyriq (inaudible) … ELLIOTT: OK. RITHOLTZ: … but what else? ELLIOTT: This is going to surprise you. I really did like the Hummer E.V. RITHOLTZ: Everybody I know who’s driven it says it’s spectacular. ELLIOTT: It’s (inaudible) — it’s — this is a — this is a vehicle … RITHOLTZ: Immense but spectacular. ELLIOTT: … yes, at 9,000 plus pounds. RITHOLTZ: Wow. ELLIOTT: And you’re going to be on the same level as a school bus basically height-wise. Again, if you love the Hummer, you’re going to love it. If you hate the Hummer, you’re going to hate it. RITHOLTZ: Right. ELLIOTT: But what I love about it is it’s not trying to be anything it isn’t. This is a very obnoxious vehicle, you know. RITHOLTZ: Right. ELLIOTT: But it doesn’t — it’s not trying to hide it. It has a point of view … RITHOLTZ: But it’s electric. ELLIOTT: … it’s going to pop you in the nose. RITHOLTZ: Right. ELLIOTT: But it’s electric, and it’s really fast. I drove that … RITHOLTZ: Insane 9,000 pounds, really fast. ELLIOTT: Yes, with launch mode, which also is ridiculous. There’s no … RITHOLTZ: Really? ELLIOTT: … there’s no reason a Hummer E.V. needs to have a launch mode. And I’m telling you, it pushes you back (inaudible). RITHOLTZ: Right. ELLIOTT: It’s crazy. And it was a … RITHOLTZ: Well, you’ve seen the YouTube videos of the people on the Tesla Plaid … ELLIOTT: Sure, yeah. RITHOLTZ: … just like having their minds blown probably. ELLIOTT: Yeah, well, imagine that and like something the size of a school bus basically. RITHOLTZ: Wow. ELLIOTT: It’s crazy, but I loved it. They did a good job with it. I think, you know, good luck trying to get one. And I saw they were — those … RITHOLTZ: 200 plus. ELLIOTT: … on Bring a Trailer already. RITHOLTZ: Right. ELLIOTT: Did you see the one that sold on Bring a Trailer for — I think it was around $200,000. RITHOLTZ: Yeah, yeah. ELLIOTT: Yeah. RITHOLTZ: There’s been several that have been going for 200 plus. ELLIOTT: Yeah, yeah. So I mean, it’s crazy, but I really did like it surprisingly. I thought they did a great job of incorporating the look of the old Hummer. I mean … RITHOLTZ: Yes. ELLIOTT: The minute you look at it, you know, it’s a Hummer … RITHOLTZ: It’s clearly a Hummer. ELLIOTT: … but it does look updated, too. I thought they did a better job, then maybe I don’t know a Defender. You know how they brought the new Defender in? Yeah, I was … RITHOLTZ: Yeah, but the new — so the new Defender has been slagged by a lot of people. ELLIOTT: Yeah, yeah. RITHOLTZ: The folks I know who won’t it all love it. ELLIOTT: Yeah. RITHOLTZ: I mean, the only beef anyone has is Range Rover so … ELLIOTT: Yeah. RITHOLTZ: … reliability is not their forte. ELLIOTT: Yeah, I was just going to say that it might be in the — in the shop every now and then. RITHOLTZ: And — and, by the way, it’s really interesting given the lack of availability of — of new cars and used cars go on any used car site and look for like a 2021 Range Rover Sport HSE, which is an expensive car. There are tons of them available. ELLIOTT: Yes. RITHOLTZ: And it’s mostly because the reliability downgrades their appeal as a used car. But … ELLIOTT: Yes. RITHOLTZ: … I was interested in — you mentioned the Defender, so I know someone in the U.K. who has the Defender as a hybrid … ELLIOTT: Right, OK. RITHOLTZ: … and says he gets 40, 50 miles a gallon … ELLIOTT: Amazing. RITHOLTZ: … because I think it was 45 miles local. So all your local … ELLIOTT: That’s great. RITHOLTZ: … driving is E.V., but if you want … ELLIOTT: Yeah. RITHOLTZ: … to go from London to take the Chunnel to Paris, you can tank up and you could make that trip. ELLIOTT: Yeah. I love that, and I — and I think, you know, I am — I am neither for nor against EVs. I — I do feel genuinely neutral about them. I — I think, OK, they’re probably going to happen, great. But it is true that like now that I’m living in Los Angeles, I can’t drive to Vegas in an E.V. without … RITHOLTZ: Right. ELLIOTT: … stopping for a considerable … RITHOLTZ: Perhaps hour, yeah. ELLIOTT: … amount of time — I mean, more than that — to — to … RITHOLTZ: Oh, really? ELLIOTT: … try to get a recharge. Yeah, I mean, realistically, you can’t drive up to San Francisco in an E.V. The hybrid solves that problem. RITHOLTZ: Right, that’s right. ELLIOTT: Yeah. And you still have decent efficiencies, so yeah. RITHOLTZ: And the same thing with the — the Range Rover, that HSE Sport, the new version which looks … ELLIOTT: Yeah. RITHOLTZ: … lovely is also available in a hybrid in the U.K. I don’t think it’s here, but what’s the giant Range Rover? Is the Land Rover? ELLIOTT: Yeah. RITHOLTZ: That is here with a hybrid, so you do get … ELLIOTT: So there you go. RITHOLTZ: … arguably the best of both worlds. You’re not a fan of the Defender, the new Defender’s look? ELLIOTT: I think — I think they could have done a little better, like the rear box, you know, how on the rear, the rear (inaudible) … RITHOLTZ: Yeah, yeah, so does … ELLIOTT: … there’s a box there. RITHOLTZ: … yeah, (inaudible) and out, yeah. ELLIOTT: It’s a step. Now, that blocks a lot of vision when you’re driving it. RITHOLTZ: I have an X4 so I know all … ELLIOTT: Yeah. RITHOLTZ: … about that blind spot back there. ELLIOTT: I — I don’t think it’s bad, I just think they could have done a little bit better, I don’t know. To me, it just really — I think Bronco, you know, they brought the Bronco back? RITHOLTZ: Spectacular. ELLIOTT: It looks amazing. RITHOLTZ: What a great job. ELLIOTT: Just — just had the Raptor, oh, my God, wow. RITHOLTZ: Have you driven the F150 Lightning yet? ELLIOTT: No, I haven’t. RITHOLTZ: I had it for a week. ELLIOTT: OK, thoughts? RITHOLTZ: Amazing, just a — first of all, if you’re not a pickup guy or girl, right, it’s immense and it’s, you know, almost to the engine exactly … ELLIOTT: OK. RITHOLTZ: … what the internal combustion version is. ELLIOTT: OK. RITHOLTZ: So it’s immense. By the way, the — the Bronco — I had the Bronco for a week also, and so I have a old Jeep Rubicon. And the interesting thing about the shape of the Jeep is it’s a great glass greenhouse. You can see everything. ELLIOTT: Yeah. RITHOLTZ: And the way the fenders are set off of the hood, you could see your corners. You really … ELLIOTT: Oh, yeah. RITHOLTZ: The Bronco is a giant rectangle, and you can’t see anything. I mean, your greenhouse is clean. ELLIOTT: Yeah. RITHOLTZ: You could see out the back, and they have great cameras. But you’re completely … ELLIOTT: Yeah. RITHOLTZ: … blind what’s in front of the truck for like 10 feet. It’s a … ELLIOTT: Yeah. RITHOLTZ: … other than that, it was a blast. We took it on the beach. We went off-roading. ELLIOTT: Are you converted? RITHOLTZ: What, into? ELLIOTT: To — from Jeep to — to a Bronco? RITHOLTZ: No, because … ELLIOTT: No, feasibility. RITHOLTZ: … the Jeep, I have a 2013 Rubicon, and it just goes anywhere. And I’m not like a crazy Jeep guy … ELLIOTT: Yeah. RITHOLTZ: … but my house is set-up on a hill, and four-wheel drive cars in the rain have a hard time getting up there. ELLIOTT: OK, yeah. RITHOLTZ: So the snow is impossible. ELLIOTT: Yeah. RITHOLTZ: And the Jeep just — it just laughs at everything, so yeah, for the snow … ELLIOTT: Some of that. RITHOLTZ: … four-degree angle … ELLIOTT: Yeah, that’s great. RITHOLTZ: … no — no issues. If I was looking to replace that, I would consider the Bronco. Two of my neighbors have one. They both love it. ELLIOTT: Yeah. RITHOLTZ: One has the convertible and the other one has a — a four-door. And, you know, every — I had it for a week. I thought it was a blast. It — it seems unstoppable. The — the F150 was just a wholly different experience. ELLIOTT: Let me ask you about that. You said it was amazing — amazing for a Ford F150 truck or amazing for an E.V.? RITHOLTZ: So I’ve never had a — any SUV. ELLIOTT: OK. RITHOLTZ: And I’ve driven EVs, but not — I mean, pickup, I’ve never had a pickup. And I’ve driven EVs, but I haven’t really had them for a week or so. So the first thing I learned is — and I wrote a long review on it. I — I plugged it in and it lights up, and the next morning it come out, and there’s no change. Oh, it lights up orange, I have to … ELLIOTT: Oh. RITHOLTZ: … oh, really put this in, so now it’s lighting up blue. And then on a 120 without a special charger, you’re adding like two miles … ELLIOTT: Yeah. RITHOLTZ: … an — an hour. ELLIOTT: A tricke. RITHOLTZ: Yeah, it’s a trickle. And then what was interesting, we went to the beach and they’re all these … ELLIOTT: The fast chargers. RITHOLTZ: Yeah, well, there’s semi fast chargers, and so we’re on the — at the beach for two hours, and I — it cost me $6.49 to add 48 miles. So kind of like $3 a gallon. ELLIOTT: Yeah. RITHOLTZ: It seems pretty cheap. It’s — like — like the Hummer, it’s stupid fast for its … ELLIOTT: Yeah. RITHOLTZ: … size and weight. ELLIOTT: Yeah. RITHOLTZ: It’s just stupid. And it’s a full pickup bed, so I dragged out to the beach house. I dragged — yeah, ever see the Roman arch for Hamax (ph). I had one taken apart. It’s like 16 feet. ELLIOTT: OK. RITHOLTZ: I threw that in the back. I threw … ELLIOTT: No. RITHOLTZ: … a six-foot table I had taken apart. I threw a big four-burner Weber. I just loaded up with stuff and I’m like … ELLIOTT: That’s great. RITHOLTZ: … I got a ton more room back here. ELLIOTT: Yeah. RITHOLTZ: So I — I — anybody who’s using stuff, I — I appreciate having a pickup. But to me, it’s like the SUVs — so I have an X4, the X — similar to the X6 or the GLE … ELLIOTT: Sure. RITHOLTZ: … that rounded back, and friends tell me … ELLIOTT: Yeah. RITHOLTZ: … oh, look how much space you’re giving up. I’m like … ELLIOTT: Yeah. RITHOLTZ: … twice a year I fill the back of the truck … ELLIOTT: Sure. RITHOLTZ: … all the way up. ELLIOTT: Sure. RITHOLTZ: The other 360 days … ELLIOTT: It’s fine. RITHOLTZ: … I look at an ugly rectangle. ELLIOTT: Yeah. RITHOLTZ: I’d rather have something that’s a little sexier, and if I … ELLIOTT: Yeah. RITHOLTZ: … really need to — I’ll either make two trips or take two cars or rent a truck if that’s what I really need. ELLIOTT: It’s not (inaudible), yeah. RITHOLTZ: But — but some people are just — can’t wrap their head … ELLIOTT: Yeah. RITHOLTZ: … arounds. ELLIOTT: Yeah. RITHOLTZ: Does the look of a car matter to you relative to its utility? And if it’s not your only car — hey, listen, if I had one car then OK, maybe … ELLIOTT: Right, yeah. RITHOLTZ: … (inaudible). I got too many cars. So to me, it’s not … ELLIOTT: You got a space issue. RITHOLTZ: We were discussing building a garage. ELLIOTT: See, this is how you’re … RITHOLTZ: So it’s the … ELLIOTT: … you’re crossing over into danger territory. RITHOLTZ: So, a friend said to me one tattoo is either too few or too many. ELLIOTT: Yeah. RITHOLTZ: It’s like there’s … ELLIOTT: That’s a very good point. RITHOLTZ: And — and so I’m at a point … ELLIOTT: Yes. RITHOLTZ: … where six cars are either too few — actually, five. I totaled my wife’s Panamera. ELLIOTT: Oh, are you OK? RITHOLTZ: Everybody’s fine. ELLIOTT: OK. RITHOLTZ: It was — this was — this was December — January, February, something like that, five miles an hour. ELLIOTT: No. RITHOLTZ: I slowed down to make a left, and the person … ELLIOTT: Oh, no. RITHOLTZ: … behind me thought I was pulling over … ELLIOTT: Yeah. RITHOLTZ: … crossed the double yellow. And you look in your rear view mirror in a truck … ELLIOTT: Oh, God. RITHOLTZ: … there’s no one behind me, so I make a left … ELLIOTT: Yeah. RITHOLTZ: … (inaudible) does. And a Panamera 4S got — it was six months old. ELLIOTT: Oh. RITHOLTZ: And the funny thing was I got 24 grand more than I paid for the car … ELLIOTT: Perfect. RITHOLTZ: … because the market prices had gone up so insane. So other than chipping my tooth and being sore for a week … ELLIOTT: Yeah. RITHOLTZ: … it happened in — right in front of my dentist building. ELLIOTT: Oh. RITHOLTZ: So when I called and said, “Hey, I chipped a tooth in a car accident … ELLIOTT: Oh, no. RITHOLTZ: … can I come in tomorrow?” ELLIOTT: Yeah. RITHOLTZ: She’s like that was in you in front of our building was it? ELLIOTT: Oh. RITHOLTZ: I’m like, yeah, that was. ELLIOTT: She saw it. RITHOLTZ: They — they heard it. ELLIOTT: Oh, my gosh. RITHOLTZ: They heard kaboom. ELLIOTT: Yeah. RITHOLTZ: And the crazy thing is the woman who’s driving the — the Lexus truck that hit us, she went to the hospital. She was fine. ELLIOTT: Oh, no. RITHOLTZ: It turned out she’s fine. ELLIOTT: OK. RITHOLTZ: She was just nervous and whatever. ELLIOTT: Yeah, yeah. RITHOLTZ: But — but was — she’s scared and shaken up. ELLIOTT: It’s scary. RITHOLTZ: But my wife and I were like black and blue (inaudible). ELLIOTT: Oh, no. RITHOLTZ: We just … ELLIOTT: It’s scary. RITHOLTZ: Car accidents are no fun. ELLIOTT: Yeah, scary. RITHOLTZ: But, you know, the Panamera did what it supposed to. ELLIOTT: Yeah, good. RITHOLTZ: All the airbags came down. ELLIOTT: Good, good. RITHOLTZ: The only weird thing is, as it’s happening, I’m like trying to cover the skin, I can’t — your brain can’t figure out what’s going on because nothing’s … ELLIOTT: Wow. RITHOLTZ: … operating. You can’t see … ELLIOTT: Yeah, yeah. RITHOLTZ: … like you’re blinded. ELLIOTT: Yeah. RITHOLTZ: The steering wheel doesn’t respond. So when we stopped moving, I went to open the driver door, and I — I couldn’t open the door, and like something’s wrong with the door. And I turned to my wife, I’m like, “Are you OK there’s something wrong with our door?” And people came running over to the car. ELLIOTT: Oh. RITHOLTZ: They opened our door and took her out. And so I had to climb over the seat … ELLIOTT: Oh. RITHOLTZ: … to get out. And I was genuinely shocked to see a car … ELLIOTT: Oh. RITHOLTZ: … t-boned. ELLIOTT: That’s scary. RITHOLTZ: Yeah, it’s just — and — and I’m like a religious signaler. And so normally, I would absolutely swear on a stack of bibles that I signaled, but the fact that the person want to pass us makes me wonder. Hey, was this the one time I made a left without saying, oh, how much of it is my fault? I don’t think it was because … ELLIOTT: It’s not your fault, Barry. RITHOLTZ: Well, normally … ELLIOTT: I’m telling you … RITHOLTZ: … when you’re making a left, the assumption is it’s your fault … ELLIOTT: Yeah. RITHOLTZ: … right? I mean … ELLIOTT: Yeah. RITHOLTZ: … but they crossed the double yellow line so … ELLIOTT: Yeah. RITHOLTZ: … I don’t … ELLIOTT: Yeah. RITHOLTZ: … look, New York is a no fault state so … ELLIOTT: It’s great. RITHOLTZ: … it doesn’t matter. But anyway, how do we get on the (inaudible)? ELLIOTT: We were talking about trucks … RITHOLTZ: Oh, that’s right so … ELLIOTT: … and space just to keep your cars. You got six cars, but now you’re having five. RITHOLTZ: Well, now I get five, from down to five … ELLIOTT: Yeah. RITHOLTZ: … I’m down to five. ELLIOTT: Are they all inside? RITHOLTZ: Three inside. ELLIOTT: OK. RITHOLTZ: The Jeep and the X4 outside. ELLIOTT: So you were potentially looking at another … RITHOLTZ: Oh, I am. We are at six. ELLIOTT: Yeah. RITHOLTZ: I got the FJ also. ELLIOTT: OK. (COMMERCIAL BREAK) … sky blue with a white roof and a black interior. ELLIOTT: I think you sent me a picture of that. RITHOLTZ: I started rebuilding one in Colombia pre-pandemic, then we went into lockdown. And they said, “Listen, we can’t hold onto the car. We — we have to … ELLIOTT: OK. RITHOLTZ: … we’re — we’re stuck.” I’m like, “Go ahead, sell it … ELLIOTT: Yeah. RITHOLTZ: … and I will find another one when this is over.” So long story short, 2021, rebuild a new one, imported to the U.S. in January. It sits in customs for two months because they’re so backed up in Port of Miami. Finally get it up here in like February-March, waiting for the last of the documentation to come in, which just came in like a week ago. ELLIOTT: Cool. RITHOLTZ: I had to get a certified translation of the purchase agreement because you can’t send them something showing 100 million pesos in — in Spanish. They don’t want to hear that at DMV. ELLIOTT: Yeah. RITHOLTZ: And so the car gets registered this week. So that’s … ELLIOTT: Oh, that’s exciting. RITHOLTZ: … number six. ELLIOTT: Cool. RITHOLTZ: So seven is … ELLIOTT: OK. RITHOLTZ: … too many. So the trucks are outside, the cars are inside. ELLIOTT: All right, all right. RITHOLTZ: But at a certain point, it’s, you know — you got to make a decision. Am I going to build a garage for all these things? And it’s worth keeping six cars (inaudible). ELLIOTT: Yes, this is a part-time job just maintain … RITHOLTZ: Yeah. ELLIOTT: … making sure the registrations are current, and making sure the batteries are all alive … RITHOLTZ: Insurance, right. ELLIOTT: … and the insurance, and oh, you got to (inaudible) them. RITHOLTZ: I put a triple charger on that, so that is … ELLIOTT: OK. Wait, what Corvette do you have? RITHOLTZ: ’67 Coupe, spectacular. ELLIOTT: I didn’t know that. RITHOLTZ: Yeah, all this show up on the website. ELLIOTT: I’ve been looking for a — I want to see three, white. They didn’t make very many of them. RITHOLTZ: So the — the C3 is the Corvette of my youth. ELLIOTT: Yeah. RITHOLTZ: Like when I was in high school … ELLIOTT: Yeah. RITHOLTZ: … it was a little 10 years before that … ELLIOTT: Yeah. RITHOLTZ: … but, you know … ELLIOTT: Yeah. RITHOLTZ: … they were used cars. ELLIOTT: Yeah. RITHOLTZ: And guys would buy a, you know, 10-year-old Vette, and it’s like I came very close to getting a ‘69 in yellow over black. ELLIOTT: Ooh. RITHOLTZ: And the prices hadn’t gone up. And I started seeing the C2s. I’m like, “These are just the most amazing (inaudible) cars.” ELLIOTT: I know. They’re so cool. RITHOLTZ: They’re just so gorgeous. ELLIOTT: They’re — they’re — I — you know, I just saw one. I follow this thing called Hobby Car Corvettes, and I just saw one. RITHOLTZ: Oh, really? ELLIOTT: They’ve got a white one in my birth year … RITHOLTZ: Right. ELLIOTT: … for sale in Pennsylvania. And I — I really thought, yes … RITHOLTZ: White over white or … ELLIOTT: White over red. RITHOLTZ: OK. ELLIOTT: A C3. It is an automatic (inaudible) … RITHOLTZ: That’s my wife’s old II Series. ELLIOTT: Oh, that is so cool. RITHOLTZ: I don’t get the automatic. ELLIOTT: I know, I know. California traffic though, I don’t want to sit in (inaudible). RITHOLTZ: So here’s — here’s the one thing you have to know about the old Vette. ELLIOTT: OK. RITHOLTZ: They’re tractors, like … ELLIOTT: Well, we know that. RITHOLTZ: I mean … ELLIOTT: Same with every old Lamborghinis. RITHOLTZ: … the clutch is heavy. The steering is heavy. The brakes … ELLIOTT: Yes, this is why I want an automatic. RITHOLTZ: I have drum brakes on (inaudible) … ELLIOTT: Oh, gosh. RITHOLTZ: … my ‘67, which, by the way, is supposed to be the pinnacle of the CII (inaudible). ELLIOTT: How often do you drive it? RITHOLTZ: I try and rotate all the cars out on the road once a week. ELLIOTT: OK, OK. RITHOLTZ: Although, you know, on a day like today when it’s … ELLIOTT: Yeah. RITHOLTZ: … raining cats and dogs … ELLIOTT: Yeah. RITHOLTZ: … it’s not … ELLIOTT: No. RITHOLTZ: … it’s not coming out of the garage. ELLIOTT: Yeah. But it is — to your point, it is a bit of a chore to maintain car — maintaining cars. RITHOLTZ: It’s worked. Six is too few or too many. ELLIOTT: It’s a relationship, yeah. RITHOLTZ: You — you need 20 and a … ELLIOTT: Yeah. RITHOLTZ: … a guy. ELLIOTT: A guy. RITHOLTZ: Right, or like four — you know, we have — we each have a daily driver. ELLIOTT: Yeah. RITHOLTZ: So when I was younger, we each had a daily driver, and there’ll be a convertible in the garage. ELLIOTT: Oh, cool. RITHOLTZ: So we had an old SL for a long time, and then we had a Z4. So there was always a fun car that we could take out on weekends. And you know what? A third car, hey, you start it once a month. Who cares? ELLIOTT: Yeah, not a big deal. RITHOLTZ: Six cars, it’s just — it starts to be work. ELLIOTT: It’s like cats, but for car guys. RITHOLTZ: Yeah. ELLIOTT: You keep acquiring. You know like the crazy cat lady? RITHOLTZ: Yeah, yeah, yeah. ELLIOTT: She just keeps taking them in. RITHOLTZ: Right, that’s what starts to happen. ELLIOTT: Yeah. RITHOLTZ: And once you go beyond a couple of cars just for what you need, it’s — well, what is the difference between having four extra cars and six extra cars? ELLIOTT: Not a lot. RITHOLTZ: It’s … ELLIOTT: Volume (inaudible). RITHOLTZ: … it’s excessive, right. ELLIOTT: Yeah. RITHOLTZ: Either way is excessive. ELLIOTT: For sure, but also … RITHOLTZ: My — my partner thinks I’m insane. My — my partner is at work … ELLIOTT: Yes. RITHOLTZ: … look at me and like, “How many cars are you going to buy?” And I’m like, “I don’t know.” I … ELLIOTT: Well, what about during the — this market? Isn’t it — wouldn’t be a bit smarter to put some cash into a car rather than — I mean, I have my own theories about that and I’ve been talking to a lot of people about it. RITHOLTZ: Yeah. ELLIOTT: But, you know, what I hear is … RITHOLTZ: At these elevated prices? Because I … ELLIOTT: I’m talking — I’m talking collecting old cars — old cars. RITHOLTZ: So, OK, how old is old? ELLIOTT: You know, it’s something — something 20 years or older. RITHOLTZ: OK. ELLIOTT: The — the vintage … RITHOLTZ: Well, the Vette is 50 years old and the … ELLIOTT: Sure. RITHOLTZ: … the — whatchamacall the … ELLIOTT: And that’s probably appreciated quite a bit. RITHOLTZ: It has — since I got that last summer … ELLIOTT: Yes. RITHOLTZ: … in the beginning of the pandemic, I kind of accidentally bought an R8 on Bring the Trailer. ELLIOTT: OK. RITHOLTZ: So my — I’m sitting outside, reading a book, and my wife says, “John from Salt Lake City on the phone.” And, you know, I have bids out on … ELLIOTT: Sure. RITHOLTZ: … Cars & Bids … ELLIOTT: Sure. RITHOLTZ: … and Bring a Trailer like 30, 40 percent away … ELLIOTT: Yeah. RITHOLTZ: … from the market constantly. And, you know, my credit card company thinks I’m crazy because, you know, they put the Holt (ph) … ELLIOTT: Because — holding, yeah, yeah, yeah. RITHOLTZ: And — and I pick it. Hi, can I help you? Congratulations on the car. I’m like, what? Which car? And he said the R8. I’m like, “I won want that? Really? That’s fantastic.” ELLIOTT: Yeah. RITHOLTZ: I go, “Wait a second. Are you sure? I was way off the market.” And as I say that … ELLIOTT: Uh-oh. RITHOLTZ: … I’m like, “Oh, this (inaudible) to take. You just … ELLIOTT: Yeah. RITHOLTZ: … stepped in it. ELLIOTT: Yeah. RITHOLTZ: And he said, “Well, tell you the truth,” he goes, “Did you have any idea what the reserve is?” I’m like, “No, how would I know that?” He said, “Because two days ago I spoke to Bring a Trailer and they took me into loan and reserve. ELLIOTT: Oh. RITHOLTZ: He goes, “You just barely beat the reserve.” ELLIOTT: Oh, wow. RITHOLTZ: And I’m like, “Why did you lower the price?” He’s like, “Well, I have a new Ferrari coming.” ELLIOTT: Yeah. RITHOLTZ: I had to make a room in the garage. ELLIOTT: Yeah. RITHOLTZ: OK. ELLIOTT: Yeah. RITHOLTZ: So I’m like, “Listen, I’ve always been a fan of that car. I love the gated shifter. ELLIOTT: Cool, sure. RITHOLTZ: And I think the V10 is kind of cheating. As much fun as it is, the V8 and that is — is a monster. So he — so everything was — he was a little miffed at me because this was April of 2020. It took me like six weeks to arrange insurance, register … ELLIOTT: Yeah. RITHOLTZ: … and shipping because nobody was doing anything. ELLIOTT: Yeah. RITHOLTZ: So he — I actually got an email from Bring a Trailer, which is like, “Hey, what’s going on?” I’m like … ELLIOTT: Yeah. RITHOLTZ: … “Dude, nobody is shipping cars.” ELLIOTT: He was in Texas? RITHOLTZ: He was in Utah. ELLIOTT: Oh, Utah. Oh, yeah. RITHOLTZ: And I was like, “Nobody is shipping cars.” ELLIOTT: Yeah. RITHOLTZ: “I can’t get my insurance company on the phone.” ELLIOTT: Yeah. RITHOLTZ: What am I going to do? ELLIOTT: Yeah. RITHOLTZ: Trust me, I … ELLIOTT: Yeah. RITHOLTZ: … I will wire the money in advance. ELLIOTT: Yes. RITHOLTZ: I just need to straighten all this stuff out. ELLIOTT: And logistics. RITHOLTZ: Right. ELLIOTT: Yeah. RITHOLTZ: If — if you need the cash, I’ll send the money today. ELLIOTT: Sure. RITHOLTZ: I just … ELLIOTT: Yeah. RITHOLTZ: So — so it was — it was interesting because when the car arrived I had all my paperwork, I had my insurance, I had my inspection, but DMV was closed. You can’t register the car. So I would take auction … ELLIOTT: Oh, don’t let that stop you. RITHOLTZ: … I would take the auction pay. I have a whole file … ELLIOTT: Yeah. RITHOLTZ: … and I would go out each morning at 7 a.m., and there’s nobody on the road. There’s no joggers. There’s no bicyclists. There’s no other cars and there are no police. So my local sideroads became a … ELLIOTT: That’s … RITHOLTZ: … little auto bond for me. ELLIOTT: … oh, that’s great. RITHOLTZ: And that lasted about two months, three months. ELLIOTT: Yeah. RITHOLTZ: And then, you know, I’m not an idiot. I — when people — they’re bicyclists or pedestrians or — fun time is over. ELLIOTT: Yeah. RITHOLTZ: It’s 7 a.m. in the beginning of the pandemic. ELLIOTT: There was a little sweet spot in there. RITHOLTZ: There was a huge sweet spot. ELLIOTT: You really get out the road. I remember we drove once from Santa Monica and Los Angeles to downtown in about 12 minutes, and we were not even speeding that much, it was just open road. RITHOLTZ: There’s nobody … ELLIOTT: Usually that drive takes an hour at least. RITHOLTZ: Right. ELLIOTT: Yeah, it’s great. RITHOLTZ: So — so I had my like stack of papers … ELLIOTT: Yeah … RITHOLTZ: … because I was … ELLIOTT: … just in case. RITHOLTZ: … I was fully … ELLIOTT: Yes. RITHOLTZ: … anticipating a conversation with the local constables … ELLIOTT: Yeah, yeah. RITHOLTZ: … saying … ELLIOTT: Are you a booster (inaudible) local that … RITHOLTZ: Years ago I used to do that. ELLIOTT: OK, yeah. RITHOLTZ: I kind of stopped because it’s a little — it’s just a little … ELLIOTT: Oh. RITHOLTZ: … dirty feeling … ELLIOTT: OK. RITHOLTZ: … sometimes. ELLIOTT: Yeah. RITHOLTZ: And I — I would rather churn my way out of a ticket that — you saw it. The — the badges, the courtesies, (inaudible) … ELLIOTT: Yeah. RITHOLTZ: … they don’t work the way they used to. ELLIOTT: Oh, really? RITHOLTZ: Yeah. ELLIOTT: I’ve never had one, but I always just thought that was kind of a nice thing. RITHOLTZ: I had one … ELLIOTT: Yeah. RITHOLTZ: … from someone I worked with. Long story, I did some work for the family of someone who passed away, and I got a shield as a thank you. ELLIOTT: OK. RITHOLTZ: And in New York City, the shield worked great. ELLIOTT: Yeah. RITHOLTZ: But once it’s stopped working and Nassau — I remember coming home from somewhere and getting pulled over, and the cop was like apologetic. ELLIOTT: Oh. RITHOLTZ: And he’s like, “Listen, we — we just can’t (inaudible).” ELLIOTT: You can’t? RITHOLTZ: Hey, man, you got a — so I learned as a kid … ELLIOTT: Yeah. RITHOLTZ: … just painfully honest with cops. ELLIOTT: Yes. RITHOLTZ: When cops pull me over … ELLIOTT: Yes, yes. RITHOLTZ: … it’s like the scene … ELLIOTT: Yes. RITHOLTZ: … from Liar Liar. That’s how I am. And usually, they … ELLIOTT: Yeah. RITHOLTZ: … basically — you know, they appreciate not blowing smoke up their … ELLIOTT: Yes. RITHOLTZ: … behind because they’re lied to all day long … ELLIOTT: Yeah. RITHOLTZ: … every day so … ELLIOTT: It must be refreshing. RITHOLTZ: … so right. So … ELLIOTT: Honesty. RITHOLTZ: … you know, tell — tell the officer when he says how fast were you going, I said, “Well, Officer, as I drove … ELLIOTT: Yeah. RITHOLTZ: … by, I saw you and I looked down, and I looked … ELLIOTT: You just look down. RITHOLTZ: … at the speedometer. ELLIOTT: Yeah. RITHOLTZ: And he goes, “And what did it say?” It said pull over because this office is going to have a few words with you. ELLIOTT: That’s correct. RITHOLTZ: And they laughed and … ELLIOTT: Yeah, that’s great. RITHOLTZ: … they thought you’re — you’re being honest with them. ELLIOTT: Yeah. RITHOLTZ: You don’t have to say, you know, “I was 25 over.” You could say, “I thought you would want to have a little conversation.” ELLIOTT: I’m going to note that down for my future reference. RITHOLTZ: Right, thought you would like to have a chat … ELLIOTT: Yes, yes. RITHOLTZ: … and don’t want to make you drive too far. That’s … ELLIOTT: Yeah, that’s not — it’s really courtesy. RITHOLTZ: So let’s talk about some of your favorite columns of recent days starting with I mentioned EVs and Harleys. Let’s combine that. ELLIOTT: Oh, yeah. RITHOLTZ: Harley … ELLIOTT: LiveWire. RITHOLTZ: Yeah, tell us about that. ELLIOTT: Yeah. Cool bike … RITHOLTZ: No clutch, right? ELLIOTT: No clutch. You don’t — no gears, no oil to replace … RITHOLTZ: Wow. ELLIOTT: … none of that. No rumble, no growl. It does have a … RITHOLTZ: What do they do for a sound to … ELLIOTT: It does have a sound, you know? It’s like a whirring sound. RITHOLTZ: Right. ELLIOTT: It’s — if you’re a Harley guy who’s going to need the — the loud pipes … RITHOLTZ: Right. ELLIOTT: … you’re going to object probably to this vehicle. RITHOLTZ: So as a kid … ELLIOTT: Yes. RITHOLTZ: … running dirt bikes, the expression I always loved was loud pipes saves lives. ELLIOTT: Sure, sure. RITHOLTZ: So what do you do about that? ELLIOTT: To which I say if you’re relying on your loud pipes to keep you safe … RITHOLTZ: Yeah. ELLIOTT: … your — that’s (inaudible). RITHOLTZ: You’re in trouble, right. ELLIOTT: Yeah. You got to be heads up. And — and honestly, you can do everything right and you can still get in a lot of trouble … RITHOLTZ: Right, right. ELLIOTT: … on a motorcycle. So I think, yes, loud pipes are — can be nice, but that should not be your safety plan. RITHOLTZ: The — the problem is when people see you coming … ELLIOTT: Yes. RITHOLTZ: … they see a little blip instead of a big car. Your brain … ELLIOTT: Yes. RITHOLTZ: … assumes you’re further away. ELLIOTT: Yes. RITHOLTZ: So the pipes kind of compensate for that. ELLIOTT: Potentially. And I would say on this — the LiveWire one, there is a noise associated with .....»»

Category: blogSource: TheBigPictureAug 2nd, 2022

Transcript: Graham Weaver

     The transcript from this week’s, MiB: Graham Weaver, Alpine Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business… Read More The post Transcript: Graham Weaver appeared first on The Big Picture.      The transcript from this week’s, MiB: Graham Weaver, Alpine Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Graham Weaver is the founder and partner at Alpine Investors, a private equity firm, focusing on software and services. Graham has a really interesting background, both engineering at Princeton and essentially launching a PE firm while he was a graduate student at Stanford. Everybody knows the story about Michael Dell launching a computer business out of his dorm room in Texas. This could be the first PE firm I’m familiar with, that got started in a dorm room. What makes Graham so interesting is while everybody else in the world of private equity is focused on the analytics and crunching numbers and creating econometric models that will tell you where to invest, I think they’ve found a very different model that has been extremely successful for them, where the key focus is on talent. How do we find the best talent, put them in place running our investment companies and allow them to generate the sort of returns that you don’t really generate by just looking at a model? I found our conversation absolutely fascinating and I think you will also. With no further ado, my discussion with Alpine Investors’ Graham Weaver. Let’s jump right into this, starting with your background. When I hear someone has an engineering degree, I tend to think of venture capital, not private equity. Tell us a little bit how you went the PE route instead of the VC route. GRAHAM WEAVER, FOUNDER AND CEO, ALPINE INVESTORS: Well, I actually started in private equity right out of undergrad. I really didn’t know the difference between private equity or consulting, or anything. I had zero knowledge of that. And I was fortunate to end up in Morgan Stanley’s private equity group, I loved it and I’ve kind of been at it ever since. RITHOLTZ: Really interesting. So is it from Princeton to Morgan Stanley, and then Stanford, or am I getting the order right? WEAVER: Yeah. When I was at Princeton then I went to Morgan Stanley in their private equity, then I worked at a firm called American Securities for a couple years, and then went to went to business school after that. RITHOLTZ: And somewhere in the middle of this, there’s a pig farm in Missouri that I am having a hard time figuring out what a pig farm has to do with private equity. WEAVER: So the very first deal I worked on, so I come out of school, I’m wearing my Cross pen and my lapel, and I’m like wearing a tie and — RITHOLTZ: All buttoned down. WEAVER: Exactly. And I think I’m a big shot being on Wall Street, and I get shipped out to this pig farm in Missouri which was a deal Morgan Stanley had invested in. They’ve invested a total of a billion, almost a billion dollars of debt and equity, and then suffice to say was not going well. So not that I was going to go save it as a 22-year-old analyst, but I’ve got shipped out. I lived in a CFO’s basement for about five months, and we did everything we could, but it turned out not to be a great investment. RITHOLTZ: So there’s not big money in pigs? WEAVER: Well, it turns out hog prices are wildly cyclical. And you know, there’s the expression, how does a six-foot man drowned in a river that averages five feet? You know, it’s because there’s parts of the river that are deeper. Well, you know, we build our whole model on hog prices being $47 and when we then — RITHOLTZ: And that’s what they average, right? WEAVER: That’s what they average. RITHOLTZ: But that doesn’t tell you how much they swing up and down. WEAVER: It turns out — yeah, they went to $18 and we had $700 million of debt, and that didn’t — RITHOLTZ: $18? WEAVER: That didn’t go well. So yeah. RITHOLTZ: That’s the old joke. It’s not the price, it’s the volatility. WEAVER: Yeah, it was rough. But it was a — that was my introduction to the glamorous business of private equity. RITHOLTZ: And you didn’t turn around and say, “I want nothing to do with this?” WEAVER: I had the time of my life. RITHOLTZ: Really? WEAVER: It was so fun. RITHOLTZ: How was — how was sleeping in the CFO’s basement — was his house on the pig farm? WEAVER: It was. Yeah, it was. The whole entire town smelled like a pig farm and everyone — RITHOLTZ: Which was not especially delightful? WEAVER: It’s not. No, it turns out. And pretty much everyone in the town worked and had some affiliation with the pig farm. The CFO was also a Morgan Stanley guy, and he was probably 27. So neither of us had any idea — RITHOLTZ: So many years, years of experience over you? WEAVER: Yeah, yeah. Exactly. Neither of us had any clue what we were doing. But it really wouldn’t have mattered when your revenue gets cut by like 80%, there’s just not a lot you’re going to do to turn that around. RITHOLTZ: So there’s a cliche about tech firms being started in dorm rooms. How does a private equity firm start in a dorm room? WEAVER: So I show up at Stanford, and I’m in my first week of class. And then similar as today, you have to take these core classes in your first year, which are just not that — you know, they’re just fundamental. They’re not that exciting. So the first class I sit down, and there’s this 25-year-old who’s never worked a day in his life. He’s a PhD student. He’s never taught before, and he’s kind of just reciting out of this strategy book. And I just thought to myself, oh, my God, what have I signed up for? So I had this idea that I was going to go try to buy a business. And I had — you know, in your first three years as an analyst, you basically build a financial model. But I had the confidence of someone I thought I was much more — much better than I was. So I convinced an owner — I started cold calling companies in a sector that I had looked at previously, and I convinced this owner to sell me his business, and then I had to go raise the money, most of which was debt and the little bit of equity that was needed. I financed with credit cards. So that was literally how I started, not your typical private equity founding story. RITHOLTZ: How did that initial PE transaction work out? WEAVER: I did a total of three labeled deals with some add-ons, lost money on one, made money on — or lost a little bit of money on — loss — made a little bit of money on the second one. And then the third one was a total homerun, which actually just sold this year, 20 years later. So that that one turned out well. RITHOLTZ: 20 years? That’s impressive. That’s not the typical private equity holding period. WEAVER: Yeah, well, it was just me. I was the — it was just my — RITHOLTZ: So you could afford to be patient. WEAVER: And it was awesome. It was great. That one — RITHOLTZ: What space was that at? WEAVER: It was the — we had these companies that made these little labels that went on products, like for example in Trader Joe’s private labels things, we made all those labels. It’s a totally unsexy business. RITHOLTZ: Right. WEAVER: But it was very consistent and — RITHOLTZ: And it’s profitable. WEAVER: It was really profitable. And no one wakes up and says, “You know, I’m going to be a hero because I’m going to save half a cent on my label.” So it tends to kind of like just clip along like a bond. RITHOLTZ: Right. WEAVER: So it turned out — it turned out well, but I mean, I had absolutely no idea what I was doing. And so I made every mistake you can imagine. RITHOLTZ: And it still worked out. When you launched in 2001, you started with $50 million, $55 million, something like that? WEAVER: Yeah. RITHOLTZ: And now it’s up to $8 billion close to eight funds. WEAVER: Yeah. RITHOLTZ: And your most recent fund just closed about $2 billion, more or less? WEAVER: Yeah, about 2.4. Yeah. RITHOLTZ: All right. So that’s real money, 2.4. Obviously, you’re doing something right. The track record has to be attractive. Is it the same investors rolling over, or new and different investors? Who is the clientele for this? WEAVER: In the very early days, it was a number of individuals because no institution was going to back — RITHOLTZ: Right. Well, you have to have a certain track record, be around for certain length of period, be able to check all of their due diligence boxes, and that takes time and money. WEAVER: Yeah. And I checked zero of those boxes. RITHOLTZ: Right. Dorm room, check. What else? What else we got? WEAVER: Yeah. Track record. RITHOLTZ: How old is he? 22? WEAVER: No. RITHOLTZ: Sure. Let’s write him a big check. WEAVER: Exactly. I checked no boxes. And that took me like almost a year to figure out. I went to all these institutions and I never got past the first meeting anywhere. And then I found a number — really two individuals who, thank God, I still owe everything to these two. One, I don’t know if I can — RITHOLTZ: Sure. You can say whatever you like. WEAVER: So, one was Tom Steyer, who ran for president. RITHOLTZ: Oh, sure. WEAVER: He was one of the early ones. And then Doug Martin from the Stephens family. And they were just the two best investors you could ever have. They were supportive. And most importantly, they were supportive after Fund I which was not a good fund. So that’s the reason we’re still in business today. RITHOLTZ: Why not good fund, just performance wise, or was it — because when you launch in ’01, we’re still in the early days of a massive downfall in technology, media, Internet straight across the board. Not — you know, it’s not — unless it’s a distressed fund, that’s not the ideal time to launch. WEAVER: Yeah. I would love to say that it was the market, but it wasn’t. It was self-inflicted. RITHOLTZ: Yeah. WEAVER: It was me making a lot of dumb mistakes, being overconfident, you know, and just investing in companies that looked great in the spreadsheet and didn’t — what looks great in the spreadsheet is low purchase price and a lot of leverage. That looks — always looks good in a spreadsheet, but the — RITHOLTZ: Leverage is the problem. WEAVER: The qualitative — yeah, the leverage is the problem and the qualitative things about is it a quality business? Those things you can’t model in a spreadsheet. And so, I just made a lot of dumb mistakes. And actually the whole fund, overall, lost money. I would highly, Barry, not recommend having your first fund when you launched and lose money. It was a — RITHOLTZ: Probably not the best long-term strategy? WEAVER: Yeah. It was anchored around our neck for pretty much a decade. RITHOLTZ: So that raises the question, if the first fund was a bit of a stiff, how did you raise money for the second fund? WEAVER: Well, thankfully, we were — I really communicated a lot with Doug and Tom, and they understood. They could see us getting better. You know, they could see us making a lot of improvements, fixing a lot of the things that we got wrong. And both of them were pretty seasoned investors, both of them had had mistakes they’ve made before. And so they, you know, thank God, were really supportive. And then it wasn’t like immediately we started knocking out of the park either, but we started getting better and better. And then really around the time of the recession was when we really completely transformed and became kind of the business that we are today. RITHOLTZ: And it’s a little bit of a cliche, they’re not so much investing in a fund as they’re investing in you as the manager. Obviously, they saw something that was, “Hey, needs a little seasoning, but there’s a lot of potential here.” WEAVER: Yeah. They saw someone who was willing to literally run through walls and run through a burning building to make it work, and I almost literally did. I mean, it was that — we were — and not just me, but our whole team was really committed to try and make it work, and I think they saw that. RITHOLTZ: Quite interesting. (COMMERCIAL BREAK) RITHOLTZ: I have to talk a little bit about your growth rate. You began with $54 million. All-in, you’re $8 billion in assets totally. Obviously, a lot of that is not just growth, but new investors coming along. But still that’s a — as a PE company, Alpine has really seen quite a corporate growth trajectory. Tell us what led to this success rate. WEAVER: Yeah. So when the recession hit, we were in — we were not well positioned. We didn’t — RITHOLTZ: Now, when you say recession — WEAVER: Yeah. RITHOLTZ: — because some of our audience is, you know, older than 25, I’m assuming you mean, ’08. ’09, the financial crisis? WEAVER: ’08. ‘0. RITHOLTZ: Okay. WEAVER: Yes. RITHOLTZ: Not the one in 2020. WEAVER: Right. RITHOLTZ: And not the one that maybe happened sometime in 2022 and certainly not 2000. WEAVER: That’s right. RITHOLTZ: So the great financial crisis — WEAVER: So great financial crisis happens. We were — we invested the last dollar from our third fund two weeks before — two weeks before Lehman Brothers blew up. RITHOLTZ: Wow. WEAVER: And so we were out of money and we had — it took us forever to raise the next fund. But that period, where we didn’t have any money, turned out to be the most important period for us. RITHOLTZ: Why? WEAVER: Because we started deciding we were going to look at our own business, you know, kind of like rather than working in the business, we’re going to start working on our business. So I hired an executive coach — RITHOLTZ: Really? WEAVER: — and he helped — he really helped me kind of redefine the business that I truly was in, which I’ll come back to. We hired a consulting and coaching firm for our whole organization. And so, we really started doing some soul-searching for lack of a better word. And then — and from that, we really, you know, changed our strategy and developed kind of a new playbook. RITHOLTZ: So let me interrupt you there because that you raise something that I’m fascinated by. So first, what leads you to say, “We need a pro to come in and show us how to do this?” And second, how do you even go about finding an executive coach? That sounds like, man, that’s a consulting field fraught with, you know, let’s be polite and just say high risks. WEAVER: Yeah. It’s a great question. And I am a huge fan of executive coaching. I’ve had a coach since 2009. RITHOLTZ: Wow. WEAVER: I talk to a coach every week or every other week since ’09. RITHOLTZ: No kidding? WEAVER: And we, at Alpine, have 23 coaches that are part of our — they’re 1099 folks, but they’re part of our ecosystem that’s available to our people at Alpine and our executive. So I’m just a huge fan of coaching. And basically what I love about coaching is you create space away from the busyness of the day to day. You ask yourself a bunch of really important questions. You know, what do I want? What success look like? What do I want in — what does a five-year plan look like? And you actually have to really burn some energy and some thinking time, thinking about those answers, which are really hard answers, which most of us never spend time thinking about. RITHOLTZ: Was it just in the midst of the crash and recession that you said, “Hey, maybe we just need a little help. We’re not — we don’t have the professional background to run the business. We know the investing side, but the business side is something very different.” How did you get to that — WEAVER: Yeah, 100%. I mean, I think one of the benefits of phase planning in your first fund is that you get some humility. RITHOLTZ: Right. WEAVER: And you — I’ve always just been open to learning from people that are smarter and better than I am. And so, coaching was an exercise — back then in 2009, it was not very well known and it was definitely an exercise in humility of saying, “I think I need some help.” RITHOLTZ: That’s the old joke. Experience is what you get when you don’t get what you want, right? WEAVER: Yeah. Exactly. Yeah. RITHOLTZ: So once you make the decision, “Hey, we want to bring in a professional to show us ways to improve our business methods,” how does one go about finding a business coach? WEAVER: So I had an introduction from a friend and then we had a number of lunches, and his business wasn’t going well in ’09 either, as you could imagine, so — RITHOLTZ: Well, who’s on — and other than people doing distressed debt investing, whose business was going great in ’08? WEAVER: Yeah. Exactly. Nobody. So — RITHOLTZ: Then in short sellers, everybody else was in trouble. WEAVER: So we had this awesome conversation. I can still — it’s one of these conversations you can still remember where you are and what you — you know, exactly the moment. So we had — this is actually after I brought him on. We have this awesome conversation where I said, “Hey, I have to” — his name is JP Flaum, and I said, “Hey, I have to cancel our coaching engagement. I’m just too busy,” which was like we’ve already decided ahead of time that that was no go. I had to stick with the — we made an agreement. RITHOLTZ: Right. WEAVER: So he texts back immediately says, “No, we’re having it.” So I get on the phone, he says, “Well, what’s — you know what’s so crazy that you’re so stressed?” I said, “Oh, my God, JP, you know, I got to fly to Dallas and fix this. And then I got to — you know, we got to deal we’re about to lose and then we lost a huge customer in Chicago. And then I got to go to D.C.” and then, you know I’m going on and on. And he said, “Okay, well, let’s kind of slow down and chill out. Let’s talk about Dallas. What’s going on there?” “Well, we — you know, we just missed our bank projections a second time,” and I’m going on and on. And he starts saying, “Well, tell me about the CEO in Dallas.” I’m like, “What does that have to do with anything? You know, we’re in the middle of the Great Recession,” like, blah, blah, blah. You know, it’s not — you know, it’s the markets or whatever. Anyway, it comes to points, he says — well, eventually, he says, “Well, how would you — how would you rate that CEO, you know, A, B, C?” I was like, “Oh, he’s probably a B.” He said, “Well, Graham, in one of our engagements, you said you wanted to build the greatest private equity firm of all time. Are you going to — are you going to do that with a B CEO?” And I just — it like hit me between the eyes. And then he asked me another question, he said, “And Graham, if you’re someone who keeps a B CEO” — RITHOLTZ: What does that make you? WEAVER: — “how would you rate yourself as a CEO?” RITHOLTZ: Right. WEAVER: and I just — like, it stopped me dead in my tracks. And that was really this light bulb that went off, that ended up having us — having me realize I’m actually in the talent business. That’s the fundamental business that I’m really in. And that was like ’09 that we came to that realization, and then started completely redesigning our firm to like build our companies around talent, build our firm around talent, build our investment strategy around talent. So that was just a huge turning point. RITHOLTZ: So let’s talk about that because all of your investments eventually get a CEO that’s been trained at Alpine and has the benefit of all of this coaching, all of this training, all of this expertise. It’s not that you’re just looking for attractive balance sheets, it’s where can we put someone in charge to move the needle by taking our expertise and applying it to this business model. Is that what you mean by when you say, you’re in the talent business? WEAVER: Yeah. I think that’s what I mean. There are two parts of it. One is our investment strategy, which is what you described the others, how we run our own firm. But sticking with what you were talking about, Barry, the investment strategy, we found that the single most important investment decision we make is the management team. And it’s more important than the price we pay. It’s more important than the leverage levels. It’s more important than the prior growth rate. And so, we just said, “Well, if that’s really the most correlated, most effective, or most important criteria, you know, let’s make sure we get that right. And so let’s actually kind of build our own CEOs and put our own CEOs in so that we can make sure that we’re getting a world-class person to run each one of our companies.” RITHOLTZ: So in some ways, this is almost parallel in the public markets to activist investing, where they identify a very attractive business that isn’t quite living up to potential, right? WEAVER: Yeah. RITHOLTZ: And they say, “Hey, with a few management changes, we can turn this into a really good business.” On the private equity side, I’m assuming the conversation is something like, “We want to either buy 30%, 40% of your business or your entire business. But regardless, we want one of our professionals to come in and manage it.” WEAVER: Yeah, that’s right. A lot of the companies we’re buying don’t have management. You know, it might be a corporate carve-out. It might be a management team that wants to retire, or exit. And that’s great. So there’s never any conflict. We’re totally transparent. We’re not doing hostile deals, nothing like that. It’s always the transaction that the seller wants to do is they want to retire. So it’s always very friendly. But we — there aren’t a lot of private equity firms that want to go through the process of changing management because it’s very, very hard to do. RITHOLTZ: And that’s the value add that you guys bring. WEAVER: That’s a big part of it. Yeah. RITHOLTZ: Yeah. That’s really quite fascinating. So there’s a quote of yours I have to lead with, which I find really intriguing quote, “People create returns, not deals, not price.” That’s a huge statement, considering most of the analyst community, especially private equity, is so analytical and modern driven. You’re saying this is a people business. WEAVER: Yeah, 100%, Barry. I think that if you want to do something different than people, you have to have some fundamental belief that’s different than what other people believe. And our belief is that returns come from people. They come from talent. And I think maybe one of the reasons why people shy away from that is it’s hard to analyze, it doesn’t fit in a spreadsheet, and it’s incredibly hard to manage. It’s a lot easier to manage the hard numbers, the financial statements and things than it is to, you know, really manage a team of people. RITHOLTZ: So we were talking earlier that you appoint the CEO at these purchased businesses that you’ve trained yourself. Tell us a little bit about what that in-house training looks like. WEAVER: So a lot of the CEOs we’re hiring, we’re bringing right out of MBA programs, and they have five years of experience typically before they go into business school. And that could be anything, that could be they’re in the military. They could have been in consulting firm. They could have been in investment banking. And we have success with any of those — any and all those backgrounds. So — and they’ve just been in two years of business school, so we don’t want to put them back in business school. But what we’re really teaching them, the fundamental thing we’re teaching them is how to hire, how to build their team, how to set a vision, how to create priorities, how to get everyone in their organization excited and aligned behind what they’re trying to do. Those are things that not a lot of business schools teach. It’s one of the things I try to teach in my class, but it’s something that we bring in — it’s the biggest thing we bring in that training program that we do. RITHOLTZ: Hiring has been described as the most difficult aspect of building a company versus everything else. WEAVER: 100%. RITHOLTZ: How do you teach good hiring? WEAVER: You can actually, to some extent, make hiring a science. And the simple — I could talk for you — I could talk for three hours about this, but I’ll try to do it in about two minutes, which is you build a scorecard for what you want that role — in that role, a specific list of outcomes you want that role to do. And then as you’re assessing a candidate, you’re looking for very specific evidence that they’re going to be able to perform against that scorecard. And you have two things, you’re looking for attributes and experience. Those are the two different parts of the interview process. RITHOLTZ: But we all know what experience is. Define what attributes mean. WEAVER: So attribute is about who somebody is versus what they’ve done. So an example for us, when we’re hiring young people to become CEOs, we’re looking at, you know, do they have a will to win? Do they have emotional intelligence and self-awareness that they can get along with people? And then did they have grit? Can they — are they going to be able to see things through after getting kicked in the teeth, because they’re going to get kicked in the teeth. So those are the three attributes that we’re looking for. Those are wildly more important than experience, because they’ll get experienced quickly. And you can teach experience, you can’t teach those three things. You can’t teach, you know, the will to win. They’re kind of coming to us with that or not. RITHOLTZ: That’s an — that’s an intrinsic aspect of the personality. You either have it or you don’t. There’s no way you’re going to learn that. WEAVER: Not in a period of time, or we don’t know how to teach it if it is writable. RITHOLTZ: Right. WEAVER: Yeah. RITHOLTZ: Really, really interesting. So you mentioned your class, let’s talk about the management course that seems to be related to that, CEOs-in-Training. Tell us about that. WEAVER: Yeah. So the CEO-in-Training is the — that’s the name for the people that we’re hiring. Did you want to talk about that, or the class itself? RITHOLTZ: Both, either/or. WEAVER: Okay. All right. So the CEO-in-Training is the name we give to those people we’re hiring right out of business school. We’re giving them that experience — training that I mentioned, and then we’re putting them right in. A lot of them are CEOs on day one of add-on acquisitions, and they get the reins and they’re — you know, they’re off to the races. And you know, there aren’t a lot of positions out of business school that you can become a CEO within — you know, right when you graduate. So we’re — we’ve designed that and it’s been — it’s been a homerun. We — I underestimated how amazing these students would do and the roles that they’ve done. And it’s been fantastic. RITHOLTZ: Do you end up hiring people right out of your classes or — WEAVER: Yeah. I mean, I don’t — RITHOLTZ: So this is really devious recruitment. WEAVER: I don’t interview anybody from Stanford, period. I don’t even know if they applied. I keep a wall between — RITHOLTZ: Right. WEAVER: — you know, my teaching and recruiting. But I will say probably teaching there has helped the Alpine brand. RITHOLTZ: Sure. WEAVER: And helped me — and more importantly, helped me understand what students are capable of, which is a lot, and what they want, which is they want to be the boss right away. And I think — so it’s helped — it helped me learn a little bit more about how to build a program that the students want to actually do. RITHOLTZ: So one of the things the CIT program does is to try and increase underrepresented individuals in PE. Tell us a little bit about what diversity does for your business. WEAVER: Yeah. Well, it’s awesome what we can do. If you — the great thing about hiring for attributes over experience is that we can actually have a huge impact on diversity. So for example, if I said we’re hiring a CEO to run a healthcare software business and our criteria is they have to have done it for 20 years. RITHOLTZ: Right. WEAVER: Then I’m — that battle has been won or lost 20 years ago. RITHOLTZ: Right. WEAVER: Yeah. I could hire someone who’s a diverse candidate from one of my competitors, but I haven’t really created any value. If I hire someone right out of business school, let’s just use women as an example and that woman wouldn’t have necessarily seen a path to become a CEO, and I can provide her a clear path, then I can actually increase the number of women that become CEOs, which is exactly what we’ve done. We have over 50% of our CEOs-in-Training that we’ve hired have been women. About 30% to 35% have been underrepresented minorities. And so we have — we can have a — we can really move the dial on creating more diversity in CEO ranks. RITHOLTZ: That’s really kind of interesting. Let’s talk a little bit about software and services, why focus on those areas in particular? WEAVER: So one of the things that we figured out, which probably took us way too long to figure out, is if you buy recurring revenue, there’s just a lot fewer things that go wrong. So we’re not unique in focusing on recurring revenue, but that we turn the dial in around that Great Recession time, and decided that was all we were going to do. RITHOLTZ: And so it’s less focused on winning that one big sale and it’s more about building a business that has a fairly steady revenue stream? WEAVER: That’s right. And then if you marry that with what I was saying before, about putting young people to run them, recurring revenue is really helpful because in the first year, they have a big learning curve. And you — RITHOLTZ: Right. WEAVER: You know, they — we need them to have a little bit of a cushion for them to get up to speed. So recurring revenue helps a ton because it does take a little while to learn how to be a CEO. RITHOLTZ: That’s really interesting. Software obviously has been really hot over the past couple of years. Any chance that that changes or slows down, or is software just the driver of the future? WEAVER: I mean, I think software is the driver of the future. And I think anything, even the driver of the future can get overpriced. RITHOLTZ: Sure. WEAVER: And you can overpay for any asset. And I think in the last few years, you know, people have gotten a little ahead of themselves with some of the multiples that were paid. But I don’t think that changes fundamentally that I think software — you know, software is here for a long time and it’s got a lot of really exciting trends. (COMMERCIAL BREAK) RITHOLTZ: I’m going to ask you a question. I’m going to have you put this back earlier in the hiring discussion because I missed something and I want to come back to it. You’ve discussed episodic versus programmatic hiring. Explain the difference between the two. WEAVER: Yeah, great question. So I might have made up those two terms, but — RITHOLTZ: Well, that’s why it jumped out at me. I don’t know what either those things are. I have to ask that question. WEAVER: I think I did make them up, but — so episodic hiring is what everyone does. Okay. We need a — RITHOLTZ: We have an opening. WEAVER: Yeah. RITHOLTZ: Fill this — go to LinkedIn — WEAVER: Exactly. RITHOLTZ: — put out an ad, get me somebody here. WEAVER: Exactly. Or yeah, we’ll hire Russell Reynolds to get us a CFO, whatever. That’s how everyone hires. That is two problems — well, a number of problems. One is it’s slow, and two is it’s expensive. And three is it actually doesn’t even work that well. Like, the hit rate is pretty low. The hit rate across the board in hiring statistically is about 50%, but that’s measured as are they still there in three years? Not this they — were they successful? So it’s even worse than that. So that’s the problem with episodic hiring. So programmatic hiring is you’re going to hire the same role a lot, and so how do you make that more of a program? So for example, you know, we’re hiring 17 people from business schools that start next month, or we’re hiring 27 undergrads to be interns who will matriculate into full time roles. And so, there’s a group of people that are graduating. You can kind of have a class of folks. You can give them way more training. You can build a whole program using the — to use the programmatic term around that, and it’s just a lot more effective. That’s two roles that we do at Alpine, the CEOs-in-Training and then the analysts. But then in our companies, you know, in some cases, that’s engineers, technicians, where that’s their recurring hire that they’re doing. And we’re helping them build programs to start with people who don’t know how to do those functions, and bring them up, you know, through training to learn those. RITHOLTZ: Really quite interesting. WEAVER: And you can scale — you can just scale a lot better, and you have a way higher hit rate doing that. RITHOLTZ: So you’re constantly maintaining a pool of either potential hires or actual employees that you’re waiting to promote? WEAVER: Absolutely. Yeah. RITHOLTZ: Before we get into the current market environment for private equity, I have to circle back to you teaching at Stanford, at the graduate school, tell us a little bit about the courses you teach and what students learn. WEAVER: So I teach two courses there. I teach — they’re both — they’re both basically similar. One is for first years, and one is for second years, but they’re both centered around entrepreneurship. And the idea of the courses is that there’s lots of classes on analysis and accounting and finance; and there aren’t a lot of classes around how to actually manage people, lead people. And I’m talking the nitty-gritty stuff of literally like what to say, if you have to fire someone. My students have to rule — my students will say, “Oh, I would just fire that person.” I said, “Okay, great. I’ll be them and you tell me.” RITHOLTZ: Right. Fire me. WEAVER: Fire me, and then they have to do it and they realize — RITHOLTZ: It’s harder than it looks. WEAVER: It’s a lot harder than it looks. So they’ll say — RITHOLTZ: That’s why people just cheat and send email. He’s so mortified. WEAVER: Yeah. That would not be something we teach. We do not — we not teach people to send an email. RITHOLTZ: So tell us about the role-playing. What does that — WEAVER: So we — so the student will actually play the protagonist in the case, and I’ll play the antagonist for lack of a better word of the other characters. And then they’ll fire me, or they’ll have to demote me, or they’ll have to tell me that they no longer want to be my partner, or whatever the situation is that they’re trying to get through. And then we’ll play around with it. And they’ll realize, you know, some things they do right, some things they do poorly. And then the entrepreneur about whom we’ve written the case is in the class, and so then they’ll chime in and say, “Well, wow, this is — you did this this way, this is why I didn’t do that,” or “I wish I would have done it that way. Instead, I did this.” So it’s a really — it’s a really, really fun class. It’s — and it’s something that they don’t get anywhere else where they actually have to kind of implement the stuff they’re talking about. RITHOLTZ: So aside from firing, what else do you teach them? WEAVER: So everything, we actually teach a lot on hiring. We have whole modules and playbooks and videos and things I’ve made and we do a class on that, which is really important. We talk about complex partnership issues, things with your board. They have to sell stuff. They have to fundraise, how to make an offense and defense deck to sell — to sell something, you know, a whole list of basically things that entrepreneurs are going to have to face in their life. RITHOLTZ: Really intriguing. I have to imagine having been a graduate student at Stanford, it’s deeply satisfying teaching there. WEAVER: It’s a blast. I started off as a case guest, where they wrote a case about me buying stuff in my dorm room, and I was a case guest and I kept — I would come home all energized. And it was my favorite day of the year. And then when the — Irv Grousbeck, who wrote the case about me, who’s a legend at Stanford, when he — he called me one day and said, “Hey, you know, I’m going to stop teaching this class, would you want to teach in?” And my first response was, “No, I have a job, you know, and I can’t,” but I didn’t say that. I said, “Hey, I’ll think about it.” And then, thankfully, everyone I was around was like, “Graham, you have to do this. And it’s your favorite thing you do.” And we figured out a way to make it work. So it’s a blast. RITHOLTZ: That sounds like — that sounds like it’s a lot of fun. WEAVER: One more thing I would just add is what I realized after a few years is I’ll teach students all about entrepreneurship, and we have this great class. And then they go take a job, you know, in consulting or investment banking; they never become entrepreneurs, even though that was what they wrote their essay about and that was what they’re excited about. So I added to the class a whole part on, okay, wait a second, what is it you really want to do with your life? You know, what’s holding you back? How’d you make a plan to go do that? What are your limiting beliefs? What are the things — what are your fears? So we have a whole thread, probably 25% of the class is on those things because I’m like what’s the point of teaching people to be entrepreneurs if they don’t become entrepreneurs? RITHOLTZ: Right. WEAVER: So I’ve invested a lot into, like, personal growth. And that’s a really, really fun part of us, too. RITHOLTZ: Are any of those skill sets transferable to consultants who arguably — WEAVER: Oh, 100%, a 100%. RITHOLTZ: — they’ll be working with other entrepreneurs and maybe haven’t been exposed? WEAVER: Yeah, a 100%. It wasn’t so much that I have anything against consulting, it was just that the student at the beginning of the class said, “My goal is to do X, and then they don’t do X.” That was all. RITHOLTZ: So tell us a little bit about your approach, what’s your process like to finding a potential acquisition target. And since we look at both private and public markets, what do you think of in terms of valuation? How do you come up with a number? WEAVER: Yeah. Yeah, great questions. We have a large team that looks for potential companies. We have actually 52 people at Alpine and in our portfolio companies that are looking for deals. RITHOLTZ: 52? WEAVER: 52. RITHOLTZ: So that’s a lot of people. WEAVER: Yeah. RITHOLTZ: How big is the firm overall? WEAVER: Overall, if you include the CEOs-in-Training and we have — RITHOLTZ: And your 1099 consultants. WEAVER: We probably have roughly 200. RITHOLTZ: All right, so that’s a — WEAVER: Yeah. RITHOLTZ: That’s a decent size. WEAVER: The 52 also includes a number of people that are working at the company who’s doing sourcing, but they’re doing the same thing. They’re calling companies, looking for investments. So we have 52 people looking for deals, and then a lot of those conversations are directly with founders. And what we’re trying to do is figure out — the way we think about it is we can pay a price, that we can hit our target returns, which I can’t talk about on, you know — RITHOLTZ: Right. WEAVER: But if we can hit our target — RITHOLTZ: We all have compliance departments. WEAVER: So we can pay a price so we could hit our target returns with like a 70% base case. And then we need there to be a lot more upside to that than downside. So we want there to be like a case where we could hit many multiples of our target returns. And so based on that, we kind of back into a price. And then where we get in trouble or where things get turned down at Investment Committee is when everything in the world has to go perfectly to hit that target. RITHOLTZ: Right. WEAVER: Because I’ve been in this business for 28 years, and when you start pricing in perfection, that’s a time when you realize you’re overpaying. RITHOLTZ: Right. WEAVER: So that’s — it’s that 70% probability and less a margin of safety thing that you really — as someone who’s like a little bit more senior at our firm, I have to bring that to the discussions. RITHOLTZ: Yeah. That perfect 10 stuck at landing, those are the outliers. You certainly can’t rely on that. WEAVER: Exactly. You can’t underwrite to that, for sure. RITHOLTZ: Yeah. So when you look at this macro environment, it seems to be pretty supportive of economic expansion generally. How closely do you pay attention to things like, hey, the Fed is raising rates pretty rapidly, maybe they’re going to cause a recession next year? WEAVER: We pay attention to it to some extent. If you go back to the ’08 crisis — RITHOLTZ: Now, that’s a recession. WEAVER: Yeah. And we’re just in a very different position. I think we’re way underbuilt on housing. So you know, I don’t see — RITHOLTZ: Wildly. WEAVER: Wildly underbuilt on housing, so I don’t see — you know, I don’t see things happen — you know, crashing there. I think we have — the consumer isn’t as leveraged as they were back in 2008. Businesses aren’t as leveraged as they were. I just think it’s a lot healthier. On the flip side, we also don’t have — the Fed can’t print money like they did in ’08 because of inflation. But I think, generally, it just feels like we’re a lot healthier than we were back then. RITHOLTZ: Right. You’re singing my song. I’m in the exact same place. I’m kind of perplexed by all the recession chatter. I mean, what are we? 27, 28 million new jobs in this year? That’s not what you usually see. Although, to be fair, some past recessions, we were creating jobs right until the moment it stopped and the bottom dropped out. But you know, it really depends on how aggressive the powers that you’re going to get about inflation. So here’s the question related to that in ’08, ’09, let’s say the naysayers are right and the end of this year or 2023, we see something more than just a mild shallow recession, we see a real recession. How does that affect the companies you look at? And do you start doing, for lack of a better phrase, distressed private equity investing? WEAVER: You know, I think that what we’ve been trying to do over the last 14 years is underwrite companies that would do well in a recession. So hopefully, we’re going to — our company is going to hold up well in that time. In terms of what we look for, it does open up the door when — you know, when there is a recession, there’s a lot more different things that are for sale at different prices. And I think one of the great assets is if you have a whole team of managers that you can put in to run distressed things, you have a lot of options open to what you can look at. So there — you know, there will be a lot more interesting things to do with, you know, if that happens. Certainly, we don’t wish that on the economy. RITHOLTZ: On anybody else. And then, finally, I have to ask about the way you score software companies and services companies, you use a metric. I really am not familiar with eNPS. Can you tell us a little bit about that? WEAVER: Yeah. So I think in general, that there are leading indicators and lagging indicators. Lagging indicator is revenue EBITDA. Those are lagging indicators. But yet, a lot of managers, they try to manage to lagging indicators. It’s like — and that’s just not very effective. So what we try to do is develop what are the leading indicators that are going to predict success. And the number one most important leading indicator, you’re not going to be surprised to hear me say, is talent. So if you tell me, “I’m on the board of your business, and we’re starting to build the world-class management team, I can tell you in two years, we’ll have a homerun investment.” So one of those leading — two of those leading indicators related to talent are employee net promoter score, which is the eNPS. RITHOLTZ: Meaning how employees rate their employee? WEAVER: Exactly. Yeah. Would they — would they recommend this company to a friend? And we measure that every quarter for every one of our companies. We measure it at Alpine. We measure it for a whole bunch of different groups within Alpine. And then retention is the other big one. So if we can be managing those and getting those right, those are leading indicators that are going to help us set up, you know, the revenue EBITDA that come later. And those are hard things to manage. Getting those metrics right takes a lot of work. That’s actually where I spend most of my time at Alpine, believe it or not, is making sure that we’re creating an environment where the best people want to be and stay. And most people again in the finance world, they don’t think about kind of squishy, soft metrics like that, but they should be. RITHOLTZ: Well, because they have a really outsized impact on the performance of a company. WEAVER: Absolutely. That’s my view is they have — they have the biggest impact. RITHOLTZ: And my last question before I get to our favorite questions we ask all our guests, so a little bit of a curveball, you are a captain on a national championship rowing team. WEAVER: I was. Yeah. RITHOLTZ: Tell us about that. WEAVER: So — RITHOLTZ: You look like you row. WEAVER: So I came to college not even knowing anything about rowing. I didn’t even know that the boats went backwards till I got in a boat. RITHOLTZ: Well, it’s not that they’re going backwards. It’s just that you’re facing backwards. WEAVER: Exactly. Yeah. I didn’t even know that. So I started as a novice, I walked on the team. And it seemed like everyone else on the team had rowed before, so I was horrible, absolutely horrible. I got cut, and then just kept kind of — and so there’s a funny story where the coach says, “Okay, these are the people who are going to boats. The rest of you are, quote, “land warriors.” And you’re a land warrior means you go on the rowing machines. And so that night when he kind of posted the boats and I wasn’t in the boat, he said, “All right.” So I did this calculus, and I’m like, okay, well, gosh, all the land warriors are going to show up before class. You know, classes — first class is at 9:00. So they’re going to show up at 8:00, but — so I got to show up at 7:00. No, no, no, everyone is going to think that, so I’ll show up at 6:00. So I show up the next morning, zero people. And one of the guys is like, “Hey, idiot, land warrior is another way to say you got cut.” But I still stayed as a land warrior, and kept getting better at — getting my Erg times better and better over time. And it was one of the greatest things I ever did. I had a great time and — RITHOLTZ: And when were they national champions? WEAVER: My senior year, I was — RITHOLTZ: So by then, you’re on the team? WEAVER: By my — yeah, by my senior year, I was pulling one of the best Erg times in the nation at the rowing machine — RITHOLTZ: Erg time? WEAVER: On the concept to rowing machine like you see in the gym, they actually have a standard test, which is 2000 meters which you submit, you know, nationally. And by my senior year, I had one of and maybe a few times the number one Erg time in the country, and I was elected captain by my teammates of our team. And then that year, we were supposed to have a rebuilding year because we lost all these seniors and we actually won the whole thing. RITHOLTZ: That’s amazing. WEAVER: So it was awesome. RITHOLTZ: Wow. That’s really amazing. (COMMERCIAL BREAK) RITHOLTZ: Let’s jump to our favorite questions that we ask all of our guests, starting with what kept you entertained during the pandemic lockdown? Tell us what you were streaming. WEAVER: I went on this whole Buddhist thing during the pandemic and I started reading a lot about Buddhism and streaming Buddhism, and it was — it was amazing. RITHOLTZ: Meditating or — WEAVER: Meditating and just kind of learning about Buddhism, and you know, why we all suffer and how to — you know, how all these thoughts we have in our head, our own imagination. And I went on this whole kick during the pandemic, which was phenomenal. I highly recommend it. And basically, the concept is that your reality is going through a filter. And everything that’s happened externally, you’re telling yourself a story about what that means, and whether that’s good, or whether that’s bad. And that that’s really — your reality isn’t what’s happening, it’s the story you’re telling yourself and that you have complete control over that story. RITHOLTZ: Right. That’s the classic narrative fallacy. WEAVER: Yeah, that’s the narrative fallacy. And that’s kind of the fundamental premise of Buddhism, which is your suffering is coming, not from what’s happening, but the story you’re telling yourself. So I went on this long, you know, meditating and reading, and kind of journaling about that. And that was — that was a lot of fun. RITHOLTZ: So the — we had this old joke about, we had a softball team here over in Central Park and we had the Buddhists playing the stoics and the game never finished. Everybody just sat down instead of having a long conversation. But I’m right there with you. You mentioned your — two of your mentors, who were some of your earliest investors. Are there anybody else you want to mention as mentors? The professor at Stanford you referred to also. WEAVER: Yeah. I’ll — both of those, Tom Steyer. Doug Martin and Irv Grousbeck were super important in my life. I’ll talk about Irv. He is probably if you had — there’s probably literally, Barry, a hundred people you could have on this podcast that would list Irv as one of their most important people. RITHOLTZ: Really? WEAVER: Yeah. RITHOLTZ: Wow. WEAVER: He a professor at Stanford and just, you know, makes time for folks. He built an incredible business. And he just has this, you know, unwavering moral code. He was an early investor. He’s the one who asked me to teach at Stanford. And I just — I just find the way he set up his life and his — just the way he treats other people, you’re always the most important person in the world when you’re with him. And so, I’ve definitely learned a lot from him. RITHOLTZ: Really interesting. Let’s talk about books. What are some of your favorites and what are you reading currently? WEAVER: I — it’s funny, I ended up rereading like the same 10 books. In terms of my favorites, I read — I have some I read currently too, but “Good to Great,” Warren Buffett’s Biography “Snowball,” Steve Jobs biography by Isaacson, Walt Disney’s biography by Neal Gabler, “Switch” by Dan and Chip Heath, “Made to Stick” by Dan and Chip Heath, Buffett’s annual letters. Like, those are like — I reread those and every time I reread them, I get kind of reenergized. And we’ve modeled a lot of our business and a lot of my life around some of the things I learned in some of those books. And a lot of those required reading and help. RITHOLTZ: I can imagine. What are you reading currently? WEAVER: And right now, I started getting on this Brene Brown kick. I don’t know if you’ve read some of her stuff, but “The Gifts of Imperfection” I’m reading right now, which is just phenomenal. She is — I actually downloaded it on Audible so I get to hear her talk about it. But she has just this incredible way of talking about things that other people don’t talk about, like shame and how to — how to deal with the things you’re not good at, and how to be intellectually honest and admit when you don’t know things. And she’s — I love her work. RITHOLTZ: What’s the title of the book you’re reading currently? WEAVER: “The Gift of Imperfection.” RITHOLTZ: It sounds really — WEAVER: Yeah, it’s phenomenal. It’s phenomenal. RITHOLTZ: Before I forget, just as an aside and you could edit this out. So I went to law school with a guy named Lawrence Cunningham, who was the first person who recognized, hey, all these letters from Warren Buffett, they’re really fascinating, deep stuff. He bound them. WEAVER: Yeah. I bought that book. I own that book. RITHOLTZ: That book has been like a perennial bestseller. WEAVER: Yeah. RITHOLTZ: And it’s — you know, the old joke about the two economists walking down the street. One says, “Is that a $100 bill on the floor?” And the other says, “No, if it was a $100 bill, someone would have picked it up.” It’s the same theme with that. WEAVER: He picked it up. Yeah. RITHOLTZ: These have been around for literally — WEAVER: Yeah. RITHOLTZ: I mean, I think he first started in like ‘90 or ‘92, something like that. And Buffett had been around for 30 years by then already, or 25 years, nobody had thought of doing that. WEAVER: And you know what, like, it doesn’t matter if it’s crypto or software valuations or the Internet. The stuff Buffett writes about is still the right stuff. RITHOLTZ: Fundamental common sense, block and tackling. WEAVER: You’re going to discount the cash flows back and decide what you can pay. You’re going to put a premium on the discount rate if the stuff is a lot more uncertain. It’s this — it is exactly the right formula today and it was 50 years ago, and it will be 50 years from now. And anytime that there’s something new, where people says this time, it’s different, you should be really skeptical. RITHOLTZ: Always. All right. Our final two questions, what sort of advice would you give to a recent college or business school graduate interested in a career in private equity? WEAVER: Well, I’ll start with the first part, just general advice, and then I’ll go the private equity. But, you know, as you can imagine, I actually give this advice all the time teaching. But the first thing that I think a lot of people graduating don’t ask is like, what they — what do I want? What is five years from now, 10 years from now, if I could — if I knew I wasn’t going to fail, what would I want to do with my life? And they can start with that question. And then start working backwards from that about what job you should take now and next year and five years from now. Instead, a lot of people just think, “Oh, these firms are interviewing on campus, and I’ll go here, I’ll go here.” And that’s okay. But if you know where you want to be 10 years from now, it will inform which firm you go to work and what skills you’re trying to acquire. So I think — I think that would be my advice is like, in 10 years, you will — you can do almost anything you set your mind to and so give yourself permission to really answer that question, what do I want to do in 10 years? RITHOLTZ: Why does it matter if you quote, “know you wouldn’t fail?” WEAVER: Yeah. RITHOLTZ: Just to open the set of possibilities or — WEAVER: Because — yeah, I always frame it as if you knew you wouldn’t fail, what would you do? Because without that, people already jumped to, “I can’t do this,” like subconsciously in the mind. RITHOLTZ: Fear of failure, is that big really? WEAVER: Fear of failure is so powerful. RITHOLTZ: Even amongst really high performing talent — WEAVER: I think it’s even — RITHOLTZ: I mean, Stanford graduate students, I have to think that’s the cream of the crop out there. WEAVER: In some ways, it’s almost more prevalent because they have had so much success, and they don’t — you know, they have this incredible track record. But I would say the number one thing that Stanford Business School students or really just about anyone in the world, it’s the same thing, which is their subconscious mind defaults to fear and fear of failure. RITHOLTZ: That’s fascinating because when I have discussions like this with colleagues or friends in Europe, the thing — or even Asia, the thing that makes United States so unique in the developed economy world is that failure isn’t a scarlet letter, especially in Silicon Valley. It’s almost a badge of honor. Look at all the VCs that list all, “Hey, we missed Apple and Cisco. We invested money in Pets.com. Look how terrible we are, except for our 40% compounded returns.” It’s a badge of honor to say, “We tried this face planted, brush yourself off and moved on.” WEAVER: But when you’re starting out your career and you don’t have anything to fall back on, and you haven’t yet had the success that you can look back, it’s really scary for people. And the thing that they miss is they underestimate what they could really do in 10 years and they underestimate themselves. They forgot what got them in that seat at Stanford Business School. RITHOLTZ: Sure. WEAVER: And they compare themselves to, you know, their roommate or their classmate or something. RITHOLTZ: So the other half of the question is advice about private equity. WEAVER: Yeah. I would say — I would say if someone is interested in a career in private equity, I would — I would say all private equity is not created equal. And there are — literally, like probably a thousand different models, and figure out, you know, go talk to a bunch of companies that are doing private equity in a whole bunch of different ways, and figure out what resonates with you and your interests and your superpowers, and where are you going to line up because it’s, it’s a very diverse industry. And you know, there are some firms that are making their money based on, you know, hardcore fundamental analysis. You know, we’re making our money on talent. There’s others that are, you know, doing cost cutting. There’s a whole bunch of different ways and one or more of those is going to line up a lot better with what you’re excited about. RITHOLTZ: And our final question, what do you know about the world of software services in private equity today that you wish you knew 28 years or so ago, when you were first getting started? WEAVER: Well, two things. The first thing is I wish I knew that it was going to work out fine. So I was so stressed and I put so much pressure on myself, that I wish — if I could go back and tell myself anything, it would be like, “Hey, Graham, you know, it’s going to be okay,” because I went through a lot. RITHOLTZ: That’s a really — that’s a really interesting answer because, you know, we just don’t realize how much we freak ourselves out and very often, unnecessarily. What’s the second thing? WEAVER: The second thing would be I would — if I could have realized earlier on just how important the world of talent is, and how that was really the thing that drove performance because that that would have saved me a decade. RITHOLTZ: It sounds really like you’ve honed in on exactly what makes your business work and really quite fascinating. Graham, thank you for being so generous with your time. We have been speaking with Graham Weaver, founder and partner at Alpine Investors. If you enjoyed this conversation, well, be sure to check out any of our previous 400 discussions that we’ve had over the past eight and a half years. You can find those at iTunes, Spotify, wherever you feed your podcast fix. We love your comments, feedback and suggestions. Write to us at mibpodcast@bloomberg.net. Sign up for my daily reading list @ritholtz.com You can follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Robert Bragg is my audio engineer. Atika Valbrun is my project manager. Sean Russo runs all of our research. Paris Wald is my producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio. END   ~~~   The post Transcript: Graham Weaver appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureJul 26th, 2022

A 3-way game of geriatric chicken featuring Trump, Biden, and Bernie has younger Democrats and Republicans itching for change

President Joe Biden, 79, insists he's running for reelection. Donald Trump, now 76, wants a rematch. But don't count out Bernie Sanders, 80, either. Joe Biden, Donald Trump, and Bernie Sanders are all top top contenders for the 2024 presidential election.David L. Ryan/The Boston Globe via Getty Images; Chip Somodevilla/Getty Images; Tom Williams/CQ-Roll Call, Inc via Getty Images The 2024 presidential race is already coming into view. It looks as though the two oldest presidents in history are readying for a rematch. And don't count 80-year-old Bernie Sanders out entirely. The 2024 presidential campaign, at this earliest of stages, is becoming an epic game of 3-way geriatric chicken. In one corner is Joe Biden, who at 79 insists he's running for reelection despite being the oldest president in nearly 250 years of US history. Sen. Bernie Sanders is in another corner. A top political advisor for the 80-year-old socialist has said he'd make a third attempt to win the White House as a Democrat, but only if Biden doesn't run. And the biggest wild card of them all is Donald Trump. At 76, the man who before Biden held the designation of being the oldest president in US history appears intent on getting his old job back for the power and prestige, for revenge, and perhaps to even pardon himself should it come to that.No one can lay exclusive claim to a spot on their respective party primary ballots. But each of those three men do hold an outsized sway right now over their party's leadership apparatus in what could be an otherwise wide-open presidential campaign. To many observers, the three have created a power vacuum unlike anything seen in modern US history. It's also the case that Trump and Biden have the most say in the entire matter."Maybe they can have a meeting and shake hands and agree that neither would run," Trent Lott, the former Senate GOP leader, told Insider in an interview where he acknowledged the desire for fresh faces in the next crop of 2024 presidential candidates. That's a growing sentiment. Mitch McConnell, the current Senate Republican leader, recently predicted there would be a "crowded" field for the GOP in 2024. Others worry that if Trump, Biden, and Sanders don't get out of the way then everyone else on the bench may need to wait even longer to forge their own path to the White House. "I think it's time to get a fresh look at some new candidates," Utah Republican Gov. Spencer Cox, 47, said in an interview. Added presidential historian Douglas Brinkley: "It's a sad state when the parties can't put up candidates in their 40s, 50s, and maybe in their 60s, but they're having to resort to people in their 70s and 80s. It stunts the outgrowth of democracy. You lose years on that kind of safe strategy."Joe Biden and Donald Trump exchange words at the final presidential debate of 2020.Chip Somodevilla / POOL / AFPThe sole candidate who can beat Trump?Biden won the presidency in the first place by making the argument that he was the sole candidate among the Democrats who could beat Trump. It's an argument he's ready to try to make again as Trump flirts with another run, even if there are now many new headwinds including his own abysmal public approval rating, soaring inflation, and angst from inside the party that Democrats failed to deliver on an ever-growing list of demands from the economy to climate change to safeguarding democracy. It's also the case that Sanders' 2024 aspirations remain in their own holding pattern until Biden makes his own formal declaration of his intentions.After spending stretches of the 2020 presidential campaign in his basement, Biden sought to portray himself as a youthful, active commander-in-chief.But that hasn't always worked out. Conservatives gleefully highlight his every misspoken word or verbal stumble as evidence of mental decline. Biden tumbled from his bicycle during a June ride in Delaware. And after a lengthy swing through the Middle East, Biden returned to Washington with an unexpected parting gift: COVID-19. —Kevin Liptak (@Kevinliptakcnn) June 18, 2022 Biden would be 86 years old when, in 2029, he'd complete a second term. It's a fact the White House doesn't want to talk about. "That is not a question that we should be even asking," White House press secretary Karine Jean-Pierre responded in June when asked on CNN about Biden's health and stamina.  Biden recently snapped at a reporter during a White House picnic for lawmakers when asked if he should skip a second term because of public opinion polling that says he shouldn't run. "They want me to run," the president remarked. "Read the poll. Read the polls, Jack. You guys are all the same. That poll showed that 92% of Democrats, if I ran, would vote for me."Age is likewise something neither Trump nor Sanders are keen to discuss."78 is not old," Trump told a New York Post gossip columnist this week ahead of the funeral for his ex-wife, Ivana, who died earlier this month after a fall at the age of 73.Although Sanders hasn't spoken publicly about his 2024 intentions, a recently leaked memo written by a top political advisor described a scenario in which he'd jump in if Biden didn't. Asked recently about the age of America's overall leadership, Sanders snapped to Insider: "The issue facing America is not age. It is the power of a handful of billionaires who to a significant degree, control the economic and political life of the country."Votes are tabulated on the set of ABC-TV's news coverage of the 1972 presidential election between President Richard Nixon and the Democratic nominee, George McGovern. Nixon won 49 states and captured a second term.Hulton Archive/Getty Images'George McGovern syndrome'What's driving all three men — who'd all otherwise be well into their retirements — to stay engaged? Experts cite ego as a major factor for both Biden and Trump."The fact they both made it to the White House makes them think they both know how to get to the White House," said Brinkley. "Once you have power, it's very hard to let it go." Biden's insistence on staying in office also likely stems from his own awareness of history. In particular, he has a longstanding fear that Democrats nominating a more liberal candidate such as Sanders would mean giving Republicans a better shot at winning the White House."The problem with the Democratic party is George McGovern syndrome," said Brinkley, referencing the anti-war nominee Democrats ran in 1972 against the incumbent GOP President Richard Nixon. McGovern won a single state — Massachusetts — plus the District of Columbia. Incidentally, 1972 is the same election cycle when Biden, at age 29, was first elected to the US Senate.This history in mind, Democratic brass are likely to continue to coalesce against the likes of Sanders — or even a Rep. Alexandria Ocasio-Cortez of New York — as a party standard-bearer.Mark Longabaugh, a longtime Democratic operative who worked on Sanders' 2016 and 2020 campaigns, said Trump is the singular driving force behind what happens to the rest of the field. If the ex-president ultimately enters the race, Biden will find it even easier to stick around. "I think Trump is at the center of the decision just because of the way Biden and Biden's core supporters have positioned him as the only one to defeat Trump," he said.But Longabaugh also said he's not completely convinced any of them will enter the 2024 primaries. "I think there's a lot of doubt on all three of those and whether they square off again in 2024," Longabaugh said. "I can be dead wrong and Biden and Trump are in, and that's that, and we've got a general election. But I just see a lot more play on the playing field than is conventional wisdom." That's a view that Cox, the 47-year-old first-term Utah governor, said he hopes plays out."A lot can change over the next year, year and a half," he said. "I'm certainly hoping that there are governors on both sides of the aisle, other candidates, who are willing to step up and challenge the status quo that are going to say, 'Hey, look, for the good of our country, we're not going to stand aside and we're going to go to battle here because we think that we have a vision to offer.'"That Democratic bench could include Vice President Kamala Harris, 57; California Gov. Gavin Newsom, 54; Transportation Secretary Pete Buttigieg, 40; and Illinois Gov. J.B. Pritzker, 57.Potential Republican challengers for 2024 include well-known names such as former Vice President Mike Pence, 63; Florida Gov. Ron DeSantis, 43; former South Carolina Gov. Nikki Haley, 50; former Secretary of State Mike Pompeo, 58; and Sens. Ted Cruz of Texas, 51; Marco Rubio of Florida, 51; and Tom Cotton of Arkansas, 45.Lott, the former Senate GOP leader, said it was important for new people to assume leadership at the highest levels of government. His own career in politics lasted from the time he was age 32 until he turned 67. "You have to know when to hold `em," said Lott, who left public office to work as a lobbyist, "and when to fold `em."Read the original article on Business Insider.....»»

Category: dealsSource: nytJul 23rd, 2022

Transcript: Antti Ilmanen

      The transcript from this week’s, MiB: Antti Ilmanen, Co-Head, Portfolio Solutions, AQR, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters… Read More The post Transcript: Antti Ilmanen appeared first on The Big Picture.       The transcript from this week’s, MiB: Antti Ilmanen, Co-Head, Portfolio Solutions, AQR, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ; HOST; MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest, Antti Ilmanen is AQR’s Co-head of the Portfolio Solutions Group. He is the author of a new book, “Investing Amid Low Expected Returns: Making the Most When the Markets Offer the Least.” He has an incredible CV full of all sorts of awards and has worked at all sorts of places like Salomon Brothers and Brevan Howard before ending up at AQR. If you’re at all interested in value investing, factor investing, understanding how your starting condition leads to future returns that might be better or worse than historical averages, you’re going to find this to absolutely be a master class in investing. I found it absolutely fascinating and I think you will as well. With no further ado, my conversation with AQR’s Antti Ilmanen. Welcome to Bloomberg. ANTTI ILMANEN. CO-HEAD, AQR’S PORTFOLIO SOLUTIONS GROUP: Thanks, Barry. I’m really looking forward to this. RITHOLTZ: Same here. So, first, I found the book to be quite fascinating, very in depth and you managed to take some of the more technical arcana and make it very understandable. We’ll circle back with that. Let’s start just by talking about your career. You began as a central bank portfolio manager in Finland. ILMANEN: Yes. My really first stroke of luck, I think, was getting that job. Before that, I had been nerdy kid with interesting esoteric things like royal family trees or track and field statistic trading. And when I was studying in university economics, I did not really get the passion. The passion came when I went to invest the country’s foreign exchange reserves there and it was very much global government bond markets. So, thinking about macro picture. And then nor later I had, I don’t know, much interest then on single stock picking. So, thinking about the big picture. And there were some lovely, lovely things like I was there in October ’87 crash. I saw two-year yields falling in one overnight from 9.5% to 7.5%. You don’t see those movements anymore. RITHOLTZ: That’s a giant move. Yes. Absolutely. ILMANEN: Yes. Anyway, so that was a great learning experience. And then my second related stroke of luck was that Professor Ken French came there. RITHOLTZ: Really? Dartmouth, ILMANEN: Yes. He came to educate us in 1989 and teach us what we were doing, what we should be doing and I was just an enthusiastic kid there. Well, by that time, I was already almost 28 then. And he — when I was expressing some interest about studying in the U.S., he was saying, you should do it soon. He said, you’re old enough to do that. And a few months later, I was in the U.S. and it was so lucky in my life because there I met then Cliff Asness and John Liew who later founded AQR. So, as my fellow students, I met my wife there. She was MBA student from Germany and would have left a few months later. RITHOLTZ: University of Chicago? ILMANEN: University of Chicago. So, all of these lucks sort of was related to my wonderful first jobs. RITHOLTZ: Right. And Gene Fama teaches there and his research partner is Ken French. ILMANEN: Yes. Yes. Both Cliff — actually, all three, Cliff, John and I’m, we had Fama and French as our dissertation chairman and that’s a small source of pride. RITHOLTZ: Right. Little intimidating. So, you go from Chicago, is that how you ended up at Salomon Brothers? ILMANEN: Yes. So, that relationship actually already started when I was a portfolio manager, right? Finally, in a faction (ph) like one of these. Michael Lewis’ Liar’s Poker’s good guys was one of my sales contacts there. RITHOLTZ: Really? ILMANEN: Yes. Yes. He didn’t have many good guys with one of us. Anyway, so — and I got to know people like Marty Leibowitz before I went to Chicago and I think he helped — he may have again had a hand somewhere there. And so, when I finished my studies, it was pretty clear that I wasn’t sort of up academic enough. I wanted to go to either buy side or sell side. I even talked to GSAM somewhere, Cliff and John were, didn’t go there. I sort of thought from my ’80s experience that buy side is dusty. Wrong choice. Anyway, I then went to Salomon Brothers, did laundry search for a couple of years and yield curve strategies then moved to Europe, that was always a deal with my wife, to be a bond strategist at Salomon for many years. Initially, very discretionary but gradually becoming more and more systematic and eventually returned from this customer-oriented role to prop trading for a while. RITHOLTZ: And then how did you end up with Brevan Howard. ILMANEN: Yes. So, I think that from these times when I was strategist, I was talking to my — to great people like earlier on some LTCM and then various other people, including Allan who came actually from Salomon. And so, somewhere, all three sort of invited me to try to be a mini-Cliff, a very systematic trader with a small team there at Brevan Howard which was in some sense great but it is sort of misfit because it’s a very discretionary place. RITHOLTZ: Right. ILMANEN: And so, trying to do systematic in that environment was harder and I think none of us were doing extremely well, none of us were doing extremely badly. But it just didn’t become a great success. RITHOLTZ: Just not a great fit. ILMANEN: Yes. Yes. Yes. But it was — on the other hand, it was just a great place, well, first to try it but the second thing is when 2008 came along, it was one of the few places that we’re making money. So, it was very comfortable vantage point for that environment. RITHOLTZ: How did you go from being a Mini-Cliff Asness to maxi-Cliff Asness? ILMANEN: Yes. So, I had stopped that systematic trading. What I had been talking with those guys often of possibly joining. It was a matter also of them opening Europe office because that’s where I was physically. And so, that was approaching. It also helped that I was — I basically decided to write this book “Expected Returns” and when I wrote it, they asked Cliff to write the foreword for it. And by the way, like if you check sometime the first word he has there, like it was — I was sweating when I read that and it’s that by telling that, first time I met Antti, I thought he was insane and I was right. So, that was a little stressful but it turns out very nice. But anyway, so that experience reminded, I think, both of us how aligned our thinking is based on this common background and that somehow, I think, motivated them to offer and me to say yes to the idea of joining them. Really, what I would think is getting to my natural home and that happened in 2011. ! So, you’ve been there for more than a decade. You’re now cohead of portfolio solutions. What is that role like? What you — what’s your day-to-day work like at AQR Capital? ILMANEN: Yes. So, the Portfolio Solutions Group advises mainly institutional clients on all kinds of challenges that they have and thinking about the expected returns, portfolio construction, risk management, et cetera. And then in addition, we write lots of papers. I speak in many conferences. And then in addition to that, I’ve had a hand in designing and improving some of our strategies especially related Style Premia that was something I was quite passionate about when I joined. And by now, I’m co-head, the guy who has collaborated very closely with me, Dan Villalon, has taken more and more over the day-to-day running of the thing and I took time to write the second book recently and now I’m talking about it. And I think with my age, I’m happy to sort of move to part-time status, I think. RITHOLTZ: So, in the book, Cliff Asness, again, does the introduction and he says, you overshare a great characteristic for someone in research but he sometimes says he’s afraid you’re going to reveal the secret sauce. What — explain oversharing of financial research. ILMANEN: Yes. So, this is — this is related to all of us having this University of Chicago experience where we were really taught the value of being open and putting your research out there for public scrutiny to improve it then to educate. But, of course, there are possible downsides to that and that has been always a question. So, I’m not and we are not writing about all the proprietary strategies that we have but we are talking quite openly about some things like, again, style factor investing, alternative risk premia, things that are relatively widely known and I have this — I don’t know, yes, I’m sort of leaning that was of being too transparent than the — and then somebody may have to control me a little. RITHOLTZ: So, let’s just talk a little bit about two of the key themes in the book. The first is alpha, it’s the holy grail but also elusive and costly. Explain. ILMANEN: Alpha is something we all aspire for but in reality, the evidence is very limited that most investors can deliver alpha. Moreover, there’s a lot of is good resource by others who send us showing that much what people think is alpha, can be explained by either hedge funds running — RITHOLTZ: (Inaudible). ILMANEN: Lots of equity correlation. RITHOLTZ: Right. ILMANEN: More than correlation to these various styles that are not quite market beta but it’s certainly not pure alpha either. So, somehow, this type of demystifying, I think, is helpful. But it’s clear that investors tend to be managers and investors tend to be overconfident in their ability to find that elusive alpha. RITHOLTZ: So, I’m glad you brought that up because there’s another bullet points in the last chapter of the book which strikes me — let me read it, quote, “Discipline, humility and patience as a key to investing success.” That sounds more like behavioral finance than factor investing. ILMANEN: Yes. Yes. So, one other founder, David Kabiller, he’s always had this very good point that good investment results require good investment strategies and good investors. And so, we wrote the paper together almost a decade ago on bad habits and good practice and really thinking about those. Certainly, it does definitely get to behavioral advices. In general, I think behavioral finance literature focuses way too much on how you can exploit other people’s mistakes as opposed to looking into mirror and reducing your own mistakes. RITHOLTZ: Really quite interesting. So, let’s talk a little bit about some of the concepts about expected returns. You mentioned in the beginning of the book lower asset yields and richer asset prices have pulled forward future returns. In other words, a lot of the gains we’ve seen in the 2010s, and I would guess ’21 and ’22, weren’t so much based on that multiple end of earnings but future multiples that were pulled forward into that time period. Explain that. ILMANEN: It’s always good to think of starting yields and valuation sort of two sides of the same coin. So, starting yields of all major assets were coming down in the last decade and last decade — actually, several decades. So, something that I try to make investors see that they naturally think of this way also of expected returns with bonus. But when they think of equities or housing, they sort of look at the rearview mirror and think historical various returns. That can be distorted by this returning (ph) or cheapening quite a lot. So, I think it’s helpful to think that all of these long-owned investments are priced by thinking of expected cash flows discounted by a common discount rate, riskless part, and some various asset specific premia. And now, when this common discount rate has been at all-time lows and was coming down for decades. So, that was making everything expensive at the same time whatever happened to the expected cash flows and other premia. And so, that situation has gotten us to this sort of everything bubble some say and I think it’s — bubble is a bit wrong word there in the sense that there is a fundamental story behind it. The low real years that were influencing all kinds of investments. RITHOLTZ: It makes a lot of sense. You wrote this book in 2021 or at least finished it in 2021 and you described in the book what you see as an, quote, “investment winter ahead.” I have to say that seems pretty pressing considering since you handed the book in to be published last year. Markets have pretty much done nothing but roll over and head south in 2022. Was this just lucky timing or were you little pressing in? ILMANEN: I’ll put it largely to lucky timing. So, the story I was always saying that we know that we got these low expected returns give those slow starting yields and by the way, related to what you’re saying, I really like another statement. We borrowed returns from the future — RITHOLTZ: Right. ILMANEN: — when we were — when we are capitalizing everything at those expensive levels. RITHOLTZ: Makes sense. ILMANEN: And so, that’s locked in low future returns, we just didn’t know whether that’s going to materialize through slow pain staying in this slow expected return world or fast pain cheapening. And so, then in the book, I was saying that I don’t really have a strong view on this one. But in conclusions, I did put there that it just seems that stars are aligning for some fast pain and it wasn’t just high valuations but there was a catalyst. There was this — basically, the inflation problem was seemingly getting as close to the day when Fed finally has to make some hard choices. And so, that I got right but I would say that I was really lucky because I could have written in six months earlier. And in general, I’ve had other market timing calls. I’m not famous for being good at marketing. I don’t know anybody who is. There are no old gold market timers for most billionaire list. RITHOLTZ: Right. There’s old and there’s old but there’s not both. Let’s talk a little bit about the pushback to low expected returns. Following the financial crisis and the Fed cutting rates, economy and the market starts recovering in late 2009 and then 2010 and we kept hearing from a lot of different value corners, hey, everything is richly priced. Bonds are the most expensive. They’ve been in 30 years. Stocks are pricey. Lower your return expectations. But yet, the 2010s, so, returns and equities and bonds close to double historical averages. How do we explain why that advice took so long before it started to work? ILMANEN: So, I think there is a fair risk that we — anybody who was talking like that is thought that’s the boy who cried wolf and losing credibility then by this time. And I think that would be sad because I think sometimes, it’s going to really work and this year really looks like it can be — can be that sometime. And I felt always somewhat good that we were — at least we were not pushing for — we were not predicting mean reverting valuations that would have made things worse. RITHOLTZ: Right. ILMANEN: We were saying let’s be really humble about any market timing use of this stuff but low starting yields do anchor expected returns lower. But it’s true that — and what we saw then in that decade that rich things can get richer and that’s going to take quite a long time. And so, actually, my favorite quote is to think about what happened to S&P 500, the Shiller PE that went from mildly above historical average 20 to double and widely above average 40 in 10 years’ time and that type of thing gives you, well, basically seven percent annual returns prorated then. And so, that’s the key reason. And something similar happened, real yields and bonds were already low. There were even lower rental yields on equities, credit spreads, anything you look at had basically tailwinds from these falling years and that re-pricing then gave high returns and that — there’s a danger that people then look at the rearview mirror and become complacent just at the wrong time. RITHOLTZ: Right. So, let’s talk a little bit about that. How significant was the ultralow rates of the Federal Reserve to making all of these different asset classes richly valued and continuing to generate strong returns right up until the Fed started raising rates? ILMANEN: So, I think — so short term, what happened this year was really there was a catalyst of inflation and Fed tightening but the long-term story was always about valuations. And the important thing, as I said, is related to this common part low real yields. And should we blame Fed for that or should we blame somehow greedy investors? I’d buy more the stories that there was this fundamental effects, most important probably savings but excess savings coming from pension savers, also another story that when the wealthy were getting a bigger share of the pie, their savings rates are higher. There are research on both transmits which explained why we’ve gotten this exceptional savings glut which was then pushing all assets yields lower and creating this. And Fed and investors were basically then responding to that situation rather than driving it. RITHOLTZ: Now, we heard a lot about the savings plot from then Chairman Ben Bernanke in the early 2000s. Is this savings glut qualitatively different than what we saw two decades ago? ILMANEN: Yes. It’s the same idea. So, always when you think of real yields, you think of, okay, there’s some — there’s either an issue with investments or savings and it’s a balance between those two. And he was highlighting that there probably is more coming from the saving side and then he was emphasizing that this is China and often emerging market foreign reserves. Those types of excess savings were sort of the culprit for the conundrum in 2005 or whatever it was. And I think that story still has some legs but sort of the key culprit then became demographics and retirement savers and the latest story now is in the sort of the one percent. RITHOLTZ: So, the flipside of that, if there’s a savings glut, meaning big uptick in demand for that paper, does that also suggest we have a dearth of high-quality sovereign paper of bonds issued by countries like the U.S. or the UK or is it just whatever the existing supply of paper is what it is and it’s the demand that has spiked? ILMANEN: Yes. I think that demand has been driving things and, well, the supply has been there. Like there’s been plenty of supply as well to cater for it and really given the need for that to cover the public deficits that’s owned. But again, I think if one thinks of what sort of started this among fundamental forces, I choose to go with that savings glut. That’s my best reading of the literature. RITHOLTZ: Makes some sense. So, you wrote the prior book a decade ago, 2011 the “Expected Returns.” In the decade between that book and this book, what have we all learned, what has the markets taught us, and how did you work that into the new book? ILMANEN: Well, I like the — I like the basic framework still in the book but I think certainly, it was a terrible decade for all kinds of contrarian strategies and I have become even more humble. It’s sort of funny that I wrote my dissertation 40 years ago on duration timing and I talked about all kinds of market. I mean, every decade, I become more humbled about the endeavor and yet, even as I told like in the — at the end of this latest book, I’m still mentioning stars are aligning and it might be. So, the temptation is there but I think we — the main point I want to say is I think what we should really try to think of investing as a strategic effort, good diversification as opposed to some great technical timing course (ph) that doesn’t do well. So, I think that would be — and partly relearned through the difficulty of contrarian timing strategies. Then another thing which was very important in this decade was there was a growing interest in these diversifying return sources. But I think by now, the most popular one is related to illiquid investments whereas my favorites were then and are still now more liquid strategies, barrier style premia value investing trend following and so on and so. RITHOLTZ: So, one of the interesting things you talked about in the book is that we continue to find more data not just the decade of data that went by but historical data or old data going back to the 1800s. I have to ask, where is this — do we call it ancient? Where is this 19th century data coming from and how can you apply it to investing in the 21st century? ILMANEN: Yes. So, the first point is that we accrue out of sample new experience so slowly that it’s sort of painful to do that waiting and therefore, it is helpful supplementary source to get some old data source. Most early studies were done with data since 1960s to ’90s and then it was extended to beginning of CRSP data, 1926. And now, we’ve had people going further back and I am — so I haven’t been one of those in the archives but I’m one of those looking at that data and studying it critically and seeing what we can learn from there mainly whether you get similar patterns. I do love it when I find that some strategies have worked persistently over different centuries pervasively across different countries and asset classes and robust with different specification. So, that makes me more confident. But I do — I have recognized and that’s something I say in the book as well that when people see my 100 and 200 years of data there, some would just roll their eyes and — RITHOLTZ: Why is that? ILMANEN: Why do — why do I care about 200 years of data? I really cared about last three years with my old portfolio. RITHOLTZ: Well, obviously, that’s a very specific samples that you want to go way beyond that but it raises — people rolling their eyes, raise the question, how reliable is that data, how accurate is it, can we have confidence that it’s been cleanly assembled? Because the technology of the 1800s little more manual than today. ILMANEN: All fair. So, I would just — I’ll just say, well, first, I’ll say you just do the best you can. RITHOLTZ: Sure. ILMANEN: And I think — so, there’s some value in that data but the — there are data problems, there are investability questions even if the data we’re finding maybe liquid and do foreign diversification or something like that. Actually, before first — well, maybe you could, that was pretty international era. And then there’s whole criticism that the world has structurally changed and that criticism has more bite the further back you go. So, I think for all these reasons, we should be skeptical but I still like it as a supplementary evidence not as main motivation for anything. RITHOLTZ: So, you mentioned diversification earlier. In the last section of the book, you write an ode to diversification. Tell us about that. ILMANEN: Sure. I do think — it’s a cliché but diversification is pretty close to a free lunch and it is a wonderful, wonderful aid to improving portfolios. I think it’s much easier to improve your risk-adjusted returns through good risk diversification than by getting somehow greater insights in one particular strategy. And so, I write about it both — I do know, the simple maths about it how you can double shop ratios for uncorrelated strategies and then remind that it’s really difficult to find for uncorrelated strategies in long-only world. You may have to get to long-short world to take advantage of those types of opportunities. And then the flipside of that, I am saying that diversification has got some critics of the diversification order or that diversification phase when most needed. And so, when I think — I can counter those to some extent. But I think there are challenges. Good risk diversification often then requires you to use some shorting and leverage and there are limits to how much people want to do that. There’s unconventionality issues and then there’s this what we’ve highlighted in recent years that you sort of inherent, you lack stories. And so, it’s very sort of, I don’t know, math oriented or algebra-oriented type of thing as opposed to great stories which drive most investment passions. RITHOLTZ: Right. Right. That makes a lot of sense. You mentioned free lunch. You talked about rebalancing arguably another free lunch. Tell us your thoughts on rebalancing. ILMANEN: Yes. So, rebalancing, I think, is a way of ensuring that you can retain your risk targets and you can retain your diversification. So, I think of it primary years that there’s a follow-up question whether you can get better returns and then how you do it and so on and I talk a little. I think I wouldn’t be too strict on rebalancing. I think like one good idea is to be somewhat lazy with rebalancing strategy. RITHOLTZ: So, that means one year? ILMANEN: Yes. Something like that or maybe four times a year but part of the portfolio. RITHOLTZ: Right. ILMANEN: So, you’re sort of averaging. You don’t get so dependent on when you did it during the year. RITHOLTZ: Right. ILMANEN: So, that type of thing. But basically, if you are a little lazy or patient with rebalancing, let the near-term momentum play out then you might get closer to the time when there’s mean reversion advantages. So, you’re trying to play a little bit disadvantages that tend to be in the financial markets with momentum and mean reversion. RITHOLTZ: So, let’s talk a little bit about low expected returns. We already talked about the impacts on Fed rates. What else goes into driving valuation factors that can lower future expected returns? ILMANEN: It really depends on what horizon we talk about. So, monetary policy macro conditions are very important for short term but I think I’d like to focus and I do focus in the book mainly on long-term expected returns. And then it is — RITHOLTZ: Long term being three, five, seven years? ILMANEN: Five to 10 years, something like that. And, yes, it’s interesting, if you go even further then sort of valuations even don’t matter. So, everything gets diluted. RITHOLTZ: Right ILMANEN: And then you have to think about what some theoretical long-term return. But sort of for 10 years ahead then starting yields and valuations are essential and again — so, I think those are very helpful anchor for thinking about those returns even though you can get these very ugly forecasters like what happened in the last decade. But when such a thing happens, then it pretty much stores problem for the future. So, last decade, as its reach on its adjustment, you’re going to have even more problems in those future returns. And I think the only way you can sort of solve the low-expected return problem here is — at least for risky assets is that they would be this much faster growth, this techno optimism that you hear in some quarters. And there, I’d say, could be but we’ve had wonderful technological advances last hundred years and two percent real growth is pretty much as good as it gets. RITHOLTZ: And that’s interesting thing because you talked in the book about very often mom-and-pop investors, individual investors, tend to confuse GDP growth with expected returns. Academically, we know there’s almost no correlation between the two, is there? ILMANEN: It’s surprising that whether you look at over time in one country or you look at across countries, the relation is very modest and my favorite poster boy in that one is China, which had this 30 years of very fast GDP growth. RITHOLTZ: Massive. Massive growth. ILMANEN: And for equity investors, it was really sorry story. RITHOLTZ: Yes. No. It’s a lost opportunity. If you piled into China in 1990, you missed a lot of opportunity elsewhere in the world. ILMANEN: Yes. RITHOLTZ: It’s quite amazing. ILMANEN: Yes. And there are some stories why that’s — why that’s the case, Like basically, one logic is a GDP growth doesn’t capture how the IE shared between corporates and so on and there’s different sector compositions, there’s public versus unlisted sectors. All kinds of questions like this that can then mechanically explain why this happens. But it is — it’s a weird result and it’s understandable and I think it commonly motivates people to look for those fast-growing countries and taking it for granted that that’s a good equity investment. RITHOLTZ: So, when we’re thinking about various asset classes, how does cash work into that allocation strategy, is that a legitimate asset class or is it just a drag on future returns except for years like 2022. ILMANEN: Well, even in 2022, again, the relative sense, cash, is, of course, doing fine but the real returning cash is whatever minus five percent. It just happens to be better than even more — RITHOLTZ: Right. ILMANEN: — various results. And so, I think one interesting thing is you sort of — you need to have some market timing ability, I think, to make cash useful and use it almost as an option. And then it matters whether you have got some interesting yield levels. Twenty years ago, you had that three, four percent real return on cash. RITHOLTZ: Right. ILMANEN: Not around in this situation. So, I do think that the main story with cash like you said that there’s something about the drag and it dilutes. It’s not to diversify or it dilutes the performance. It would be good if you have got some great market timing skills. But let’s be humble about it. Often, I’d even say that cash may be best used as basically on the other side like you want to use for leverage for some long-short strategies. And so, that maybe helpful answer on what you do with that. RITHOLTZ: In the book, I like the way you described certain investor type based on their future liabilities. So, pensions, endowments, defined benefit plans, you point out that they’re particularly sensitive to low-expected returns. Tell us what makes them so susceptible. Is it the future liabilities they have? Why is merely the concept of lower expected return so problematic for them? ILMANEN: Yes. Well, I think it is — it is for any investor, but if you have made some commitments for the future, then it is maybe more legally binding and — and that — that makes it better than for somebody who can — who can basically adjust expectations or try to just leave through these things without — without sort of recognizing the low expected return until — until somewhere far into the future. RITHOLTZ: So, let’s talk about far into the future. How long should we expect lower returns for? Is this a question quarters or years and decades ? Is this cyclical? Does it eventually turn on? Tell us a little bit about the duration of expected returns? ILMANEN: Sure. So, the main story of the book is about low — those low starting years and therefore, we are talking of long-run story. Then I’m — I’ll sort of turn in to more speculative punditry by thinking about the current situation where I do think that we are now in this fast pain situation where we will probably get more, where we will surely get more monetary policy tightening and I suspect that the latest — latest market positive is on yield so it’s maybe way too optimistic. I think — I think you will need — you will need more tightening to control inflation. And again, this is — this is a speculative talk here. So, I think fast pain will be with us for various risky assets but I — I think there will be a limit to it because of the structural forces. I refer to the savings glut. I think that’s not going away anytime soon, and therefore, there’s going to be a lead on how far yields can rise and that — and basically, those bond yields, they have been underwriting high valuations and all other on stocks and real estate and so on and those rising years have been very important in cheapening those other asset classes. And so, I think there’s gong to be more pain on that front but not too much. I don’t think we will get so much higher yields and cheaper asset valuations that we would sort of solve all of the long run problem of low expected returns. We will — we will still get some pain, but we’ll — I think the slow pain will be with us quite a long time. RITHOLTZ: So, let me see if I can explain that. If I — if I understand that. We’ve had a savings glut that has put a cap on interest rates which means that the cost of capital has been very low and therefore that allowed us to speculate in real estate, in inequity, and that allowed valuations to go high and what’s going to determine how much those multiples compress is how high rates end up going up? Am I oversimplifying that? ILMANEN: No, no, that is — that is right. And again, we have gotten now the cyclical situation where — where basically their inflation problem forced finally central banks to act quite aggressively then on, well, Fed, anyway, on the interest rate front and then how much more they have to do is going to be important in the near-term, but I just don’t see a scenario where they would raise rate so much that we will get back to the kind of four, five percent expected real return, so 60-40 portfolios which used to be there, we are about half of that nowadays. We’ve come from the lows but we are still like, let’s say, 60 to 40, two percent real yield is roughly the number as opposed to the four plus long run. RITHOLTZ: So, we’re recording this the first week of July. The Fed has already raised 75 basis points on top of their previous 50 basis points. For a while, the consensus is that the end of July, I think it’s the 27th, that meeting seem to be 75 basis points. It sounds like fears of recession might drive that down to 50 basis points, but clearly, there’s no consensus there yet. How far do you think the Fed’s going to go in tightening and do we run the risk that we’re behind the curve in 2021? Are we running the risk that they’re getting ahead of themselves in 2022? ILMANEN: Yes. First, as a qualifier here that … RITHOLTZ: Nobody knows. ILMANEN: Nobody knows and we don’t trade on my views, we don’t, like, this is — this is — that’s important. Then it is — it’ s incredibly difficult. But, yes, we certainly do think about those — those issues will attend and my — I’m pretty much in, let’s say, Larry Summers camp there thinking that it’s very hard to get the immaculate disinflation here and you will need — Fed needs to do more to get that information into control. And if it does, either if it acts more or financial markets drop enough, then there’s going to be some pretty bad outcomes to risky assets without that I think we are — we are going to continue to have that inflation problem. And this — there’s a narrow path how it could go in a more benign way and market seems to be clutching that straw right now. RITHOLTZ: So, what would make you change your mind? What would lead you to say, oh, I’ve been too cautious about future expected returns and because A, B, and C happen, I think we could get a little more confident. ILMANEN: Yes. So, I — I think the long horizon estimates are very difficult to change. The starting yields are heavy anchor. So, I think it would be — it would really require the growth environment to change. Again, I mentioned earlier a technological progress, those types of things. So, short term, anything can happen. But somehow, you have to have this type of idea with a greater Internet usage globally and all kinds of technological progress moving us from the two percent to three, four percent real growth … RITHOLTZ: Which is hard to do. ILMANEN: Hard to do. Has not happened. RITHOLTZ: Right. And then you mentioned earlier the cheapening, if stocks got much cheaper, that could potentially change it, the starting valuation, but do — do we really think that’s a likely probability? ILMANEN: Yes. I would be surprised that we would get that much cheaper. And again, the economic logic I have is the savings glut somehow that basically real yields are not going to allow that — we have too, I don’t know fragile economy, too fragile financial markets to — allow that much cheapening. And we usually would — we might be talking of 40-50 percent further — further force that … RITHOLTZ: Right. And that — that seems pretty unlikely from, at least with the state of the world today, obviously that can change any — anytime. That — that’s really, that’s really quite interesting. So, lets’ talk about some things that seem relatively cheap. Cliff Asness, in the foreword of the book wrote, quote, “Value premia seems record cheap today.” That was the end of 2021. Is value premia still cheap today value premium is still very cheap and it’s been a lovely year in the sense that we have had positive returns and yet the value spread this forward-looking measure of how cheap value stocks versus growth stocks has remained wide. And partly, it is that you get some pullbacks like we have recently — recently gotten, but also, you — we are basically rotating into new value stocks and growth stocks and — and the fundamentals have actually further had sort of favorable developments favoring value stocks versus growth stocks. So, for all these reasons, we see that value stocks, the way we tend to trade them, are as cheap or even cheaper than they were at the worst times during the dot-com bubble. And it is important to just distinguish. I’ve wrote about this in a blog recently that that dot-com bubble was very much about tech versus others and across sectors, we haven’t gotten to the new highs. But we tend to focus on within industry stock selection in our value strategies and with that, the key story of this recent bubble was really the markets favoring these disruptive profitless growth companies within every sector and that opportunity remain still very wide and we would love seeing like pretty good performance behind ascendant, very good runway because those values spreads remain quite wide. RITHOLTZ: And in the U.S., I’ve noticed that small-cap value is done much better than the large-cap companies and then emerging markets, small-cap value, last I looked, it might have even been green for the year, might’ve been positive returns for the year, why are small cap doing so well in the value spaces here? ILMANEN: When it often happens, like you just — you just get bigger movements in good and bad on the small caps than large caps. RITHOLTZ: So, I mentioned the quote from Cliff, he’s a big character. What’s it like working with him? ILMANEN: It’s mainly, it’s great. Though, if you had him with us here on this studio, I think you wouldn’t hear much of me and that’s just as well because he is — he is faster on his feet than his — he’s wittier, so that’s in everybody’s benefit. But it — so seriously, it does help that our investment thinking investment beliefs are so similar. So, I really rarely have got any — any, any ways to second-guess anything he says or does. So, that’s great. And then, most importantly, I do love his ethical antenna and his kind of truth-telling obsession that he has. I mean, sometimes there’s — there are overshoots that, but it’s really — it’s a reason for me why I love to work in AQR more than any other place in financial … RITHOLTZ: Because of Cliff? Usually, you get a guy who’s quantitatively oriented, you tend not to get that sort of articulateness and you also tend not to get that sort of sense of humor which is very, very specific to him. He’s a very funny guy. ILMANEN: He is. Yes. And I — a bit mixed feelings because there’s no way to beat him on those things. But that’s OK. RITHOLTZ: That’s very funny. So, let’s talk a little bit about the things that have changed since you wrote this book. What’s going on in the current market? Is it just confirming what you’re expectations were for — for future returns? Tell us a little bit about how 2022 has, now that is half over, how has this impacted the general premise of the book? ILMANEN: Yes. I think overall, I feel totally blessed that we got — the book came out at the time when markets where roughly acting the way the title was saying, talking about low expected returns. We’ve got low realized returns so that sounds — sounds great. And it also turns out that some of our strategies, value strategy trend following these types of strategies are doing very well, so — so I’m getting like great, great response. But of course, things have some — some things have happened as expected related to inflation central tightening, but then I had no idea of what, the geopolitics Russia, Russia-Ukraine or the greater split we have between U.S. sphere and China and so and so. And I don’t have — I don’t have great insights to this. For us, when I think of the long run expected returns, the key story is that as it’s have cheapened, as one would — one would have expected in this situation and — and the question is whether there’s going to be more, I think it’s — it is interesting that we’ve had — we’ve seen the biggest moves in bonds, smaller moves. When I think of yield, yield space, not price space, but in yield space, equity yields have risen more and then illiquidity yields have risen, so far, very little. And of course, there is a smoothing effect. And so, that’s a — but I do expect that there’s going to be an an issue. I saw in March when — when equities didn’t instantly respond to rising yields, it reminded me of Wiley Coyote running over that cliff and sort of waiting for gravity to hit and I think something like maybe still happening with the private assets, that they are sort of waiting, waiting to price things. RITHOLTZ: So let’s talk a little about that. There’s been a lot of discussion about private markets and the illiquidity premium. They get — what are your thoughts on this? Should nontraded assets get an illiquidity premium? ILMANEN: Yes. So, I’ve written a lot about it. Cliff, of course, also and more wittily on this. And I think it is — it’s dangerous that people think too automatically. That if I invest in illiquid investments, I’m going to earn an illiquidity premium. I think after equity premium, that’s probably the second most confident statement people would have on longer expected returns. And data doesn’t really support it. So we’ve done lots of empirical evidence on this. And so, the logic why the data is then, so maybe disappointing is, I think, that — that people somehow confuse — they — they think that the illiquidity is the only important feature. So, yes, I think it is fair to require illiquidity premium for locking your money for 10 years, but then there’s these other characteristics, like — characteristic, lack of mark-to-market, the smoothing service — services, I call it. And that may totally offset the amount of excess return that you get. So, if there’s a two, three percent required illiquidity premium for forward-looking money, we might accept the same return for public and private equities because with the private equities, you don’t get the great volatility. RITHOLTZ: Now, you also show a chart in the book that shows how the bottom third of illiquid markets have, you know, by definition, they’re underperforming the top third but that gap has just been widening and it seems like in addition to whatever illiquidity premium are in private markets, there also seems to be a pretty substantial, I don’t know if I want to call this quality factor, but the best of the illiquid investments seem to really dramatically outperform the bottom. That spread is much bigger than we might have anticipated, otherwise. ILMANEN: So, apart from thinking about illiquid’s overall, one of these great sailing points there is the wide dispersion between outperformers and underperformers and to me, that’s such a lovely example of investor over confidence that when people see this, this person, they think, the upside is for me, the downside is for someone else. And so, clearly, this opportunity involves some risk as well and it is -it’s somehow that that industry doesn’t seem to have anybody getting that downside. So, sorry. I do think that some investors have got a decent claim to expect to get those top quartile right, let’s say to half managers but for others, I think it’s a somehow, it’s better to just think, OK, if we get the industry level returns, that’s reasonable. RITHOLTZ: So, Will Rogers used to always advise people only buy stocks that go up. If they don’t go up, don’t buy them. Does the same thing apply to private markets? Only invest in private markets that outperform. If they don’t outperform, stay away from them. ILMANEN: Yes. Yes. RITHOLTZ: If only it was that simple. ILMANEN: Hindsight, it’s great. But it is — and so, I would say, just positively, there that historically, in particular, if we look at private equity, it has a great 35-year history of outperforming S&P 500 by a three percent or something like that every year and that’s after five, six percent fees. That gross alpha is just mindboggling in some sense. But looking ahead, we should be much more: cautious because the gap has already been much narrower the last 15 years and it seems to be narrower because the money was flowing in because of the popularization of the Yale model. Since then, the forward-looking opportunity has been much narrower and realized opportunity has been much more — much more modest and the fees, are the good old fees. So, I think next decade will be one disappointing than we’re from. RITHOLTZ: Right. And when we look back to the early days of that outperformance, there were a tiny fraction of the number of funds then. What is it? Like 10,000 private equity funds that used to be — that used to be numbered in hundreds, not thousands. ILMANEN: Yes. Yes. RITHOLTZ: Same as the hedge fund and the venture capital world, success has attracted a lot of capital which leads to underperformance. ILMANEN: Yes and one further thing is these questions were already relevant a few years ago, but private equity did very well the last few years and I saw Dan Rasmussen wrote quite nicely, so recognize — I mean, that’s rare and lovely one somebody does. It’s postmortem on my mistake, that’s what he did there and he said that he got it so wrong because they — private equity like hedge funds and especially venture capital, were pushing a lot into the growth sector and that worked very well for a few years and I think to the extent that we are right about the value versus growth, that benefit will turn into advantage, I think, in the coming years and so. RITHOLTZ: Really, really interesting. We haven’t talked about a couple of other alternatives. Credit spreads, commodities, what else are you thinking about in the alt space? ILMANEN: Yes. I think commodities is the most interesting case. And so, I’ve got a double positive story on that one. The first one is the obvious one when we look for inflation hedging investments, they are pretty much the best there is. And so, most portfolios that invest — most constituents of anybody’s portfolio, stocks, bonds, and so on, they have what this disinflationary tilt that was helpful for a long time recently. And so, if you want to have a pretty neutral portfolio, you should have some allocation to commodities. Then the second point is that many investors think that you don’t earn a positive long-run reward on commodities but the data says otherwise. Basically … RITHOLTZ: Really? ILMANEN: Yes. Diversified combination of commodity futures has earned something like three, four percent long run reward and that’s a — it’s a weird thing and I — and I focus on it in the commodity sector telling that it’s part of it is related commodity, role maybe, but important part is related to diversification return. So, basically, this is getting very geeky, but let me just try. Commodities, on a single — single commodity base have a 30-40 percent volatility which means that that that type of volatility hurts compound returns a lot and — and when you combine lowly correlated commodities together, you can reduce that volatility roughly half and you can get this volatility drag much smaller. And so, for — if as the evidence suggests, that a single commodity has pretty much not outperformed cash in the long run, portfolio of them has done it because of this saving on this volatility drag, thanks to diversification. RITHOLTZ: So, it’s a basket of energy and industrial metals and precious metals and foodstuffs and not just … ILMANEN: And lots of — lots of, yes. And lots of single one of them. And so, again, you get — commodities, these types of effects happen in any investment. On your equities, on your bonds and so on, it just doesn’t matter so much with them because the correlations tend to be higher or volatilities, lower commodities have got this glorious combination of high volatility and low correlation that makes this really matter. RITHOLTZ: Very, very interesting. Let’s talk about ESG. There have been some estimates that it’s now over $20 trillion. You talk a little bit about ESG investing. Tell us about your thoughts. ILMANEN: Yes. So, it clearly growing force and I would argue also, largely a force for good, but the expected return impact is debatable. And so, Cliff wrote already a blog a few years ago highlighting this simple logic that, one logic is constraints always should have a cause. But another logic is that if you want to be virtuous and you want to raise the discount rates for sinful companies, well, you do that by maybe investing less, less in the more even — in some cases, you could, you could short them. And so, if you do that and you raise their discount rate, you also raise that discount rate, this flipside of expected return. RITHOLTZ: Makes them more attractive. ILMANEN: Yes. Yes. So, somebody else is willing to basically buy those sinful companies than we’ll earn higher returns. So, that is pretty much long-run story that should happen when investors really like something for nonmonetary reasons and that includes ESG. Then the, I think, the reasonable counterargument is that we may be in a transition phase here where we are getting the repricing. How do we get to those higher discount rates? Well, we get it basically by making those — those companies cheaper and then we can debate now whether we are in early innings or late innings on — on that question. So, in the long run, I think there will be some cost and I think most investors who are ESG oriented should be willing to take some, of course, as a flipside of their virtuous investing. But in between, they might get sort of the win-win outcome that they so like. RITHOLTZ: Now, you weren’t getting the win-win outcome the past six months, especially if you were low carb and low oil, any of the energy stocks have just done spectacularly the past year, is that going to be the long-run trade-off? Is that — if you’re staying away from some of these, you take a chance that there’s a big move up in a sector that you’ve reduced your exposure to? ILMANEN: Yes. I — that possibility always exists. And now, we — now that we had it, I think it is going to raise more discussions in some organizations than how to deal with any financial trade. I must say that in Europe, I think that investors will largely stay with their ESG beliefs and there’s not going to be questioned if they — if they think they — there’s some financial cost that’s okay. In the U.S., there’s more doubts and it has become such a political issue … RITHOLTZ: Right. ILMANEN: … that it’s going to be , I think, harder. Just, I — everything or anything I can say on this one, I think is that — is that there was a sort of easy travel towards more ESG for the last few years. And now, I think we are — we are in a world where it’s going to be harder. I think the trend is still the same but it’s going to be more jagged going ahead and maybe especially so in U.S. RITHOLTZ: And before I get to my favorite questions, I got to throw a curveball at you, Cliff Asness mentioned you like to go in a 120-degree sauna and jump out and roll around in the snow? Is this Finland — Finnish sort of thing? Tell us about your heat and cold habits? ILMANEN: That is — that is exactly what we do for cheap fun. And sadly, there are fewer opportunities with the global warming. But yes. RITHOLTZ: So, how hot does the sauna get? ILMANEN: I was thinking whether you are talking Fahrenheit or centigrade. RITHOLTZ: Fahrenheit. ILMANEN: But, yes, I knows we are talking, so say.. RITHOLTZ: Not boiling water? ILMANEN: You want to know, in centigrade, now we do go close to … RITHOLTZ: Forty degrees? Thirty-five degrees? ILMANEN: I don’t know. We go to 80-100 degrees. Definitely so. RITHOLTZ: In centigrade? ILMANEN: Yes. Yes, yes, yes. RITHOLTZ: So, that’s like 160-180 … ILMANEN: You’ll do the translation there. RITHOLTZ: Wow. ILMANEN: But I — I think of, you know, the I do my Fahrenheit and Celsius not in that area. RITHOLTZ: But still, 80 degrees is very — you’re just — that’s very warm. ILMANEN: Yes, it’s nice to sweat. RITHOLTZ: And then when you jump into the snow, isn’t that a little bit of a shock to the system? ILMANEN: Yes. Well, or you go to a polar, icy — well, you go into icy water. RITHOLTZ: Sure. ILMANEN: That’s even better but that’s hard. But, yes, it’s great fun when you can rarely do that. Yes. RITHOLTZ: Quite interesting. All right. So let’s jump to our favorite questions that we ask all of our guests starting with what have you been streaming these days? Tell us about your favorite — whatever kept you entertained during the pandemic or whatever podcast you listen to. ILMANEN: Sure. Sure. Yes, I thought about this in recent months when I have had you asked these questions. And by the way, I’ve gotten some good tips. I got “Le Bureau” and “Call My Agent,” the French ones, and some Israeli shows in from here. So, thanks for those. RITHOLTZ: “Fauda.” Yes. “Fauda” was … ILMANEN: Yes, yes, yes. Yes. RITHOLTZ: That’s why I ask it because I get to speak to people who have interesting sensibilities. I want to hear what they’re seeing and hearing. ILMANEN: Yes. Well, so, as a first none albeit or none interesting answer, I think recently, “Better Call Saul,” looking forward to the last few episodes. But — so that’s been great. But I thought that I’d rather highlight then less well-known older series. So, my favorites, I think, in last 10 years were sort of slow burn, “The Americans,” the Russian spies. That one or “Rectify.” It was a story of from the southern U.S. and just, I think — I think lovely stories. Got to take time for those. And likewise, then in podcasts, I listen a lot to history. And so, beyond investing. And I’ll just — well, on near investing, I would say Tim Harford’s “Cautionary Tales” is fun and Zingales and Bethany McLean “Capitalisn’t” has got very thoughtful topics. So, I think they are — they are good but I love — in history area, I love Dan Carlin, Mike Duncan, Patrick Wyman. And there’s a British show called “Rest is History” which just always makes me laugh. RITHOLTZ: That’s a good — that’s a very interesting list. Let’s talk about some of the mentors who helped to shape your career. ILMANEN: Sure. So, obviously, I told the dissertation chairman, Fama and French, so they’ve been very influential in many ways. But I would especially then highlight Marty Leibowitz, so all — before, during, and after Solomon years. So, and he’s such a mentor that it is — it’s wonderful to have known him for decades. RITHOLTZ: What about books? What are some of your favorites and what are you reading right now? ILMANEN: Yes. So, I am a voracious reader. Lots of investing fiction, nonfiction, all kinds of things. I thought I — I will highlight from fiction really big one. Hillary Mantel’s trilogy on Thomas Cromwell, “Wolf Hall.” I was thinking, I think maybe I heard in your show also “The Three Body Problem,” very different, sci-fi, the Chinese one. So, I think that was great. And then on nonfiction, I — I think the most impressive book I read in last couple of years was Joe Henrich’s, “The WEIRDest People in the World.” So, this is — WEIRD is Western Educated rich democratic. And it’s basically telling how different the people who are most often studied in various psychological studies, they invest in university students, how different they are from most cultures and then it’s explaining why things went that way. And it’s — it’s most parts of the story are very interesting. But again, a very long book. RITHOLTZ: Really, really intriguing. ILMANEN: Yes. And currently, Zach Carter, I think, is the author. The book on price — “Price of Peace.” Yes. RITHOLTZ: Good. That’s a good, that’s pretty good list. What sort of advice would you give to a recent college graduate who is interested in a career in either investing finance, value, quantitative, investing, how would you advise them? ILMANEN: I’ll go with the old-fashioned saying. Don’t sacrifice your ethics, that integrity matters. RITHOLTZ: Good — that’s really good advice. And our final question, what do you know about the world of investing today that you wish you knew 30 or so years ago when you were first getting started? ILMANEN: Yes. I thought — I’ll say this lightly that bond yields can go negative, you know. Didn’t expect that to happen but the funny thing is that I thought that, really, I would have then expected that do coincide with bearish equity markets. But in 2010s, it actually happened with — with a big bull market. So, it wasn’t that — that equities pushed equity weakness, pushed bond yields down, but it was that low bond yields pushed equities up. So, so causality went that way and that’s a pricing. So, I think that’s — that’s one. And then, another serious, serious is, is how important and how hard patience is. So, with all of these ideas, I talked about this long-run strategies and you just — it doesn’t matter too much if you don’t have the stickiness. So, I think one has to really calibrate one’s investment to the amount of patience one can reasonably expect to have. RITHOLTZ: Really, really intriguing. We have been speaking with Antti Ilmanen, cohead of portfolio solutions at AQR. If you enjoy this conversation, well, check out any of our previous 400 or so podcasts. You can find those at iTunes, Spotify, wherever you get your favorite podcast. We love your comments, feedback, and suggestions. Write to us at mibpodcast@bloomberg.net. You can sign up for my daily reading list at ritholtz.com. Follow me on Twitter, @ritholtz. I would be remiss if I did not thank the crack team that helps with these conversations together each week. Justin Milner is my audio engineer. Atika Valbrun is my project manager. Sean Russo is my head of research. Paris Wald is my producer. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Antti Ilmanen appeared first on The Big Picture......»»

Category: worldSource: nytJul 19th, 2022

Amalgamated Bank CEO On Tackling Gun Reform

The following is the unofficial transcript of a CNBC interview with Priscilla Sims Brown, Amalgamated Bank (NASDAQ:AMAL) President & CEO, from the CNBC Evolve Global Summit, which took place today, Wednesday, July 13th. Video from the interview will be available at cnbc.com/evolve. Amalgamated Bank CEO On Tackling Gun Reform: Track Gun Purchases Through Merchant Codes […] The following is the unofficial transcript of a CNBC interview with Priscilla Sims Brown, Amalgamated Bank (NASDAQ:AMAL) President & CEO, from the CNBC Evolve Global Summit, which took place today, Wednesday, July 13th. Video from the interview will be available at cnbc.com/evolve. Amalgamated Bank CEO On Tackling Gun Reform: Track Gun Purchases Through Merchant Codes ANDREW ROSS SORKIN: Tyler, thank you for that introduction.  Priscilla, it is great to see you.  There is so much to talk about.  You have been one of the most outspoken CEOs on so many different issues, very controversial issues, and I want to get to all of those.  Before we even get into that, though, I do want to unpack a little bit of what we’re seeing in the economy right now, specifically because of the CPI data that we just had this morning.  Let me get your sense of where we are and maybe where we’re headed. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more PRISCILLA SIMS BROWN:  Well, I can't say that I'm an economist or able to prognosticate, Andrew, but it certainly doesn't sound good for the average American, at least in the near term, as relates to inflation.  We're very concerned about that.  As a socially responsible entity, we certainly think that those who are unbanked, underbanked and otherwise vulnerable stand to really be impacted the most by this, and we're looking at opportunities to help them. But before we go too far into anything, I just want to thank you, Andrew, because you've certainly opened our eyes, dating back to 2018, to some of the problems that we can, within our swim lane, address in banking, particularly as it relates to guns. ANDREW ROSS SORKIN: Well, thank you for that.  And we're going to get to guns in just a moment.  Before we go there, I just want to ask you this.  And it relates to inflation in terms of how you see it.  A lot of people look at inflation, actually, as a regressive tax, especially on the American worker; but, at the same time, when you think about the tools that the Federal Reserve has, in almost a perverse way, to try to dampen demand, they have to make everything else more expensive.  How do you think the American public should think about that dynamic? PRISCILLA SIMS BROWN:  That's a very good question.  I think it certainly is true that inflation spikes are potentially a necessary impact here.  I think the everyday person, the person who doesn't have a lot of options and can't make a lot of choices because they spend their day working and they make enough to pay their bills, I think those individuals are really concerned and should be as we go forward.  I think it's really important for us to not only look at how we provide literacy for that community, but also how we do more as a financial services industry to support that community as we go forward. ANDREW ROSS SORKIN: Priscilla, you focused so much on social issues.  One of the things -- and as you know, I've written about many of those issues and think that they are uniquely important.  But some of the latest polling shows that people these days care more about jobs, the economy inflation, than social issues.  And how do you think we should all square that? PRISCILLA SIMS BROWN:  Look, I think those things are interrelated.  You can't ignore what's going on in the economy and think that it doesn't hurt the most vulnerable the most. So the social issues that we talk about are inextricably linked to what's happening today in the economy, as well.  When we talk about a woman's reproductive rights, when we talk about the economic impact of that, we talk about what happens to communities when there's gun violence, all of those things are linked to consumer confidence, they are all linked to people's ability to just survive and thrive.  And you really -- what we're helping people to understand, we hope, is that you really can't separate them. ANDREW ROSS SORKIN: Right.  Do you see a shift, though, among CEOs in America about speaking out?  And the reason I raise this issue is I think over the last several years there really was a movement taking place in large part lifted by employees who were pushing their executives to speak out on issues like voting rights, on issues like Roe v. Wade, LGBT issues, so many, Black Lives Matter and others. And yet over the past, say, 12 months, there appears to have been a shift back in part because politicians, specifically on the right, have started to use whatever leverage, in some cases economic leverage they have against those companies, I'm thinking Disney in Florida and Governor DeSantis, for example. PRISCILLA SIMS BROWN:  Yes, that's a great example.  I'm sure people are taking note of that and other actions. Look, I think every evolution, every change occurs in steps.  We take steps forward, we take steps back.  We generally move in the direction of this -- of the new change.  And I think in this case, Pandora's box is open.  Not only did employees and individuals ask of their employers and the businesses with whom they do business to act responsibly, they also demanded that you not only talk about it, but you actually take action.  And whether that's in climate, whether that's related to all of the social issues we've just mentioned, in all of these cases, employees and consumers want to see real action.  And I think that that, over time, will continue.  It doesn't mean we won't, at points, have resistance to that change.  And it will come from all sectors, and that resistance will have moments of glory. But I do think over time we'll move in the right direction. ANDREW ROSS SORKIN: You offered some nice comments towards me around some of the coverage of guns and those issues that have been confronted in the country at the top of this segment. I want to offer them back to you, because unbeknownst to me, it appears that you've taken up that cause, in fact, and applied to one of the standards organizations to try to deal with this issue in terms of how guns are financed through credit cards, though thus far unsuccessfully. Tell us about that. PRISCILLA SIMS BROWN:  Yeah, and I want to say that this goes a little bit to your last question in that there are things that all of us can do within the areas that we focus in our businesses. In my case, and in the case of those of us in the banking and financial services industry, that relates to payments, it relates to car purchases. So every entity, every retailer, has a merchant code associated with that business, and that merchant code doesn't go to the SKU level.  It doesn't tell us what you purchased within that business, but it tells you that you've made a purchase from a particular type of business. We're all used to and actually benefit from the use of merchant codes and other information, the use of data to prevent fraud, to prevent things like human trafficking, to prevent mortgage fraud. When you get a text message or a call from your bank, either from your -- the bank that holds your bank account or from your credit card company that asks you whether or not you made the charge that was just made on your card, that is the result of using intelligence and data in order to identify aberrations or patterns that are inappropriate or unusual or worthy of at least the question. In the case of gun stores, there are no merchant codes.  While there are merchant codes for the hair salon and the shoe shine place and every other retailer, there's no merchant code for gun stores.  If we did have a merchant code for gun stores, we could detect patterns that would indicate that there had been something unusual going on. So straw purchases, for example, if I asked you to buy a gun for me because I can't legally buy that gun, and you do so and the gun costs $1,000, and $1,000 then comes into your account from me within a day, that's an aberration. And if we saw those patterns, we would file what's called a suspicious activity report.  The appropriate legal and law enforcement entity would find that and then take action that they would deem appropriate.  It wouldn't be appropriate for us to go any further than that, but at least we would identify that suspicious activity. In the case of a number of these mass shootings that have occurred, there were a lot of merchants being -- a lot of purchases being made of guns and ammunition on credit cards by the perpetrators of these crimes. ANDREW ROSS SORKIN: Thus far, the standards organization has denied creating one of these codes. PRISCILLA SIMS BROWN:  Yes. ANDREW ROSS SORKIN: And we should note that Visa and American -- or MasterCard have employees on the board of this that have to approve it, and at least I can suggest in my own reporting of this issue, that they have been against creating a merchant category code for gun stores.  Do you know why? PRISCILLA SIMS BROWN:  Well, they've given several reasons.  We think every one of those reasons would be something that could be managed. So one of the reasons they give is, what about the stores that don't -- that sell things other than guns and ammunition, you know, a big-box store that sells other kinds of apparel and things, for example.  Their concern is that somehow this disadvantages the small store that only sells these guns. We think the answer for that is you can certainly have more than one merchant code, including one for those that are pure play gun stores and those that aren't.  So there are a number of ways that we could manage this problem if we wanted to. ANDREW ROSS SORKIN: Are you surprised that there's been this pushback? Because the other component of the reporting that I would suggest is the case is that there's such an anxiety, a political anxiety frankly, by some of the credit card companies and even some of the banks about going down this road because they are worried, specifically in red states, that they will be prevented from doing business there. We've seen this now in the state of Texas, for example, that has made it very difficult for Citigroup and J.P. Morgan to underwrite municipal bonds, for example, without committing to a letter saying that they don't discriminate in any way against guns or anything else.  The state of Louisiana has put together its own bill related to this.  So you're starting to see this across the country. PRISCILLA SIMS BROWN:  Yes.  I think those people who are concerned about that should listen to my friends who are legal gun owners, because what I'm hearing is that people own guns for a couple of reasons.  One is sport.  When they own guns for sport, or if they own guns for protection, they are doing so in a legal manner, and they want to be sure that guns are only used in legal manners. And so I think many of those friends would tell you that they'd love to see a merchant code.  They would be a lot more comfortable -- in fact, feel less pressure -- if they knew that the gun purchases that were made were made legally. ANDREW ROSS SORKIN: Right.  I also want to just pivot the conversation to the issue of unions.  Your company's largest shareholder is Workers United, which is an affiliate of the SEIU, of course, and there is what appears to be a movement across the country, at least anecdotally when it comes to headlines, for increase in the unionization movement. Having said that, the numbers don't support it, and I'm trying to square that circle and understand what we really think is happening right now. PRISCILLA SIMS BROWN:  Look, I think this is certainly a market where workers are concerned about their rights.  We see it not only in the proliferation of union votes; we see it in every way.  We see it in earnings going up.  We see it in unemployment.  We see it in the movement of people among employers. So there's a lot of activity going on, and workers care about making sure that they have the quality of life and the compensation they deserve for their work. I do think the numbers are going up.  You have a lot of entities voting for unions.  They still have to get through the process, right?  They still have to put contracts in place.  Those contracts then have to be voted on. So there's a little bit of a lag effect, perhaps, in the pure number of union members, but I do think the numbers are going up. ANDREW ROSS SORKIN: What do you tell skeptics of the union movement?  And, specifically, a number of them point to, for example, Workers United's efforts inside Starbucks.  This is a company that has been remarkably progressive, I think, over the years. When you look at benefits, I think it is literally in the 100 percent -- you know, it ranks a hundred percent on benefits relative to any of its peers, and yet they have become a target of the unions.  And some people look at that and say, you know what?  This isn't really actually about making workers' life better, this is a political power grab to some degree. PRISCILLA SIMS BROWN:  Yeah, Andrew, this isn't my area of expertise.  I'm not involved in the union movement. We certainly are proud to be a bank that was founded by workers 100 years ago, who were part of the Amalgamated Clothing Workers Union.  We're really pleased to have members of Workers United on our board. But I would say that I think every situation is a bit different.  I can't speak to Starbucks specifically; I'm just not involved, I'm just not knowledgeable.  But I would say that, in every situation, you're going to have healthy conversation going on that, in the end, will result in what's best for workers, because I think that's where the power base is moving. ANDREW ROSS SORKIN: Let me bring it back to, then, the banking industry, but also ESG, which I think is a component part of what your bank is trying to represent. One of the things, and it goes to guns and goes to so many other issues, is there's a view among some, and this is probably the critical view, of whether banks should be in the business of de-platforming, or "debanking" is the phrase, certain industries or certain types of products, depending on their social implications. How do you think about that? PRISCILLA SIMS BROWN:  Yeah, look, I think people do care about where their money sleeps at night, as many say, and they do care about making sure that their investments are being placed in ethical places, whether that is related to climate, whether it's related to any number of other areas.  And I think that that is a right that investors should have.  I think if you are concerned about that, if your values are strong in some particular areas, you should have the right to invest and have your money be placed to support those businesses. I also think that the growth in ESG reflects really a strong movement toward people caring that it isn't just the return, but it's also the quality of the return.  And I think as this movement continues, you'll start to see higher returns in these particular areas. ANDREW ROSS SORKIN: How much do you think about your bank and how it approaches differentiating itself from a J.P. Morgan or Bank of America or any other bank in the country when it comes to the social issues, versus the product, meaning how you price the mortgage, what the app looks like, all of the sort of day-to-day issues that banks and their customers deal with? PRISCILLA SIMS BROWN:  Yes, of course.  The customer experience is important, no matter what entity you are.  Customers' expectations around that experience are growing, and we certainly face that challenge as do a number of other banking institutions and fintechs, in fact, everyone does.  I think that that's important.  I think the changing buyer behavior is really important.  It also presents for us real opportunities with so much data available to us about customers.  We actually have the opportunity to not only serve customers better by looking at a myriad of factors when we think about mortgages, when we think about other financial products, but we also have the ability to help our customers make better choices. So to the extent that a customer is looking to do something that is inconsistent with their buying practices, we should have the ability to suggest to them that they might do things slightly differently. So I think the definition of product is really moving more into service and relationship with our customers. ANDREW ROSS SORKIN: Priscilla, I want to thank you for the conversation, for the work that you're doing, and I look forward to following your progress.  We're at quite a moment, and your bank is a microcosm of so much of it.  Thank you. PRISCILLA SIMS BROWN:  Well, we're happy to see everyone else coming to this realization, as well, and we think we're all better if everyone starts to think more about ESG. ANDREW ROSS SORKIN: Thank you so very, very much.  I'll send it back to Tyler. Updated on Jul 14, 2022, 4:13 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJul 14th, 2022

Wynn Resorts, Sands And MGM Resorts CEOs On The Industry’s Future

The following is the unofficial transcript of a CNBC interview with Craig Billings, Wynn Resorts (NASDAQ:WYNN) CEO, Robert Goldstein, Sands Chairman and CEO, and Bill Hornbuckle, MGM Resorts International (NYSE:MGM) CEO, from the CNBC Evolve Global Summit, which took place today, Wednesday, July 13th. Video from the interview will be available at cnbc.com/evolve. Interview With […] The following is the unofficial transcript of a CNBC interview with Craig Billings, Wynn Resorts (NASDAQ:WYNN) CEO, Robert Goldstein, Sands Chairman and CEO, and Bill Hornbuckle, MGM Resorts International (NYSE:MGM) CEO, from the CNBC Evolve Global Summit, which took place today, Wednesday, July 13th. Video from the interview will be available at cnbc.com/evolve. Interview With Wynn Resorts, Sands And MGM Resorts CEOs CONTESSA BREWER: So I want to thank you for joining me today. Part of the reason I wanted to invite you, Craig billings, Bill Hornbuckle, Rob Goldstein, to this conversation is because you’re all leading companies that are iconic global casino brands whose imprint of the founders are clearly visible, not just in your properties or just in Las Vegas but around the world. I guess I’ll just begin with can you set the scene for me about where we are when we know that people are here and they’re enjoying what Las Vegas has to offer and the demand is persistent in spite of rising inflationary pressures. Bill, what are you seeing – what do you see for the next half of the year and where’s the industry going? if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2022 hedge fund letters, conferences and more Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. BILL HORNBUCKLE: I do believe there's been a change. I do believe that how people are going to experiences how they think about travel, how they think about whether there was initially Covid money or not, how they think about what they want to do with their free time is a creed to Las Vegas and to us in a large way. And we're seeing it. Is there a recession around the corner? Time to tell. You wouldn't know by looking at this place last night, or what we've experienced over the last couple of quarters. And I think about the environment we're in today in employment and getting people to come to work. It's an interesting environment that we're all in. But I'm extremely optimistic about the space, about the experience economy, and where we belong in it. And so you know, I'm very positive, generally speaking. BREWER: What are you seeing right now, Craig? CRAIG BILLINGS: We spent much of the Covid period really just continuing to invest. Invest in our people, invest in our business, and that's borne fruit. And I think we see that every day both in our customer satisfaction surveys and in our numbers. So it's been great over the course of the past few months. On the founder point that you raised, you know, obviously, our founder changed very rapidly. Our founder left very rapidly. And for us, it was really there were kind of three buckets of things that we had to think about. The first was what needed to change very quickly – certain points on governance, the board, etc. The second is that which would never change, really that founder’s mindset, that sense of ownership all the way down to the line level, accountability and our design and development capabilities. And then that which we could evolve. And that's really a multi-year journey. And so much of what we've seen over the course of the past six months is the fruit of that evolution. So you see it in our food and beverage program, you see it in the way we use social media, you see it in our entertainment program. And so we've started to see, you know, that bear fruit and really it's early days in that evolution. BREWER: What do you think? ROB GOLDSTEIN: Well, I’m not in Las Vegas anymore. We sold our properties as you well know, and these guys know. Thrilled to see the rebound of Las Vegas. I’ve been a citizen here for almost 30 years and very proud of the city. A huge fan of it. We are experiencing a different situation because we're Asia- bound. Macao we both have properties – all of us have properties there and it's struggling, as you know. For me, having been with Sheldon Adelson for decades, it's a very difficult time for us emotionally. We sold Las Vegas, it was very hard for me. We sold it for different reasons than people understand. And I think, you know, Sheldon did something that I'll never forget during the Covid time when everybody else was laying people off and I had made a proposal to the board to follow suit. And he tapped me on the shoulder like this. He said, “Rob, not doing that.” I said, “Not doing what?” He said, “I'm not laying people off.” I thought he was confused. So I took him aside explained to him. He said, “I'm not confused.” He said, “I'm not laying people off.” He had a very strong belief in culture and people. And that today resonates with us since we succeed him and try carry on the legacy both in Macao and Singapore. Maybe again in the U.S. at some point. BREWER: But it's really expensive. I mean, if you're in an industry that – GOLDSTEIN: Yes, very expensive. When I told him how much it was, he was very sweet. He said, “Rob I can afford it. We can afford it.” And he said, “I'm not going to fire people. They have made me very wealthy, it's my time to give back to them.” And Sheldon, I had the privilege of watching him on two fronts. Very much a believer in culture and longevity and sustainability with the staff, with the people working with us. And secondly, a big believer in strategic thinking. Sheldon never did anything – whether it being Macao, Singapore, Pennsylvania, Las Vegas, any jurisdiction we tried to go to his first thought was, “what do I bring the table strategically? Why am I different?” And he did it here in Las Vegas and he authored this whole MICE strategy which people thought was hilarious – BREWER: Which is basically convention business, right? Making this – GOLDSTEIN: Yeah, I'm sorry. Yes, convention-based group business was Sheldon's calling card. He grew up in it through Comdex. But my point is all these people we are referencing had a strong strategic perspective of a people, culture thought process. And say what you want about those. Different people have different perspectives. And I think so the fellas that we all came to work for they saw things a different way. They had huge vision and a huge appetite for risk. BILLINGS: Steve was a true founder at heart in every way. And you know, the way that he ran the business was as a founder. Very high accountability, very small corporate staff. And you have to make sure that that continues. And you have to actually take that legacy, be a steward to that legacy, and evolve it. And I think Rob, you said that, too. You can't be afraid to evolve it and make sure that you can meet changing consumer needs and changing consumer trends and stay relevant. But you have to maintain the core and soul of who the business is and who the team is. BREWER: Did that make a difference for Wynn when we saw this massive hiring squeeze when everybody around the nation were desperate for workers? Did that soul of Wynn make a difference in how you were able to retain talent? Attract talent? BILLINGS: No doubt. No doubt it did. I mean, we similar to what Rob was talking about, we too, didn't lay anybody off during the shutdown because you can't reassemble our team in a short period of time. It takes years and years and years to do. And so when we reopened, we actually had a team that was energized, that felt great about where they worked. And our turnover has reflected that. BREWER: You know, it strikes me too, that you're seeing all this boom here. I just can't get over that you can look at Encore Boston Harbor and see that it is out earning any single property you have in Macao. The thought of that before the pandemic would have just been impossible to imagine. That there's been sort of this reversal of fortune. HORNBUCKLE: You know what has been interesting in our business I'm sure, you know, technology and Covid drove us to a couple different places. Even if you go look at this gaming floor, and everyone's doing this. The way we position games just for distance and safety. But we create these unique pods that sit out here now. Well guess what? People enjoy them. And it's worked. And it's brought particularly the type of games that are now demonstrate out here, it's brought millennials to the table in a way that they have not been before in our industry. And so at least we have seen historically, not only here, but universally across all of our properties domestically, we have more millennial business than we've ever had by like 20%. It is a compelling and interesting thing. BREWER: Do you think that the younger people who may not have been really exposed to casinos and gambling before the pandemic, are they drawn by the digital technology? I mean, now there are games where you can sit and only interact with the machine the way that most of us are now used to interacting with our phones, right? So you can sit in a casino where you're near other people but not actually be interacting with a human being. BILLINGS: I think when you smash together the proliferation of sports betting and i-gaming, and the demographic that is engaging with sports betting in particular, which is a younger demographic, you think about the fact that all the effort, time and money that we've spent as an industry here in Las Vegas, investing in non-gaming amenities and things that bring people here despite the casino, all those are going to come together naturally and have a spillover effect that are going to cause consumers – some consumers – to find an affinity for what's on the casino floor. I think it's just a natural happenstance of all of those things. BREWER: I'm really interested if the draw is the experience, if that's the thing that people are hungry for, how does digital play into that yen for experiences? HORNBUCKLE: Look, for a brand like ours, it gives us a chance to connect 360 days a year. It gives us a chance to have a constant dialogue with a customer. It gives them exposure and ultimately a reward mechanism like any loyalty program to be participating in. Yeah, I can do this. I can bet the Mets at home because I’m from New York and I enjoy the Mets and it ultimately translates into something more for them. It's pretty straightforward in that context. And it works. It's big enough scale now. This thing has grown to a point where there is absolute connectivity – the notion of a simple omnichannel relationship with the customer. And what we have all seen is to the extent a customer participates in all three activities, their activity with us is far superior than what it was historically. BILLINGS: Look, sports betting isn't new. I mean people have been betting on sports online for years and years and years. So now you have the opportunity to bet with a brand that you trust and a brand that oftentimes has other physical assets that you can interact with and be entertained by. And so it is a pretty compelling proposition over the longer term. You know, the past couple of years have been interesting for a whole bunch of reasons in sports betting. I think there was a race to get to market and to acquire customers at any cost. I think the industry is becoming increasingly more disciplined in terms of how they approach that, which is great, you know, for us to see. But that omnichannel relationship is important. And I really believe it's a winner in the long run. BREWER: Rob, Sheldon Adelson was such an opponent of internet gambling and invested in it and really was vocal about it and made sure that with all of his political connections, he made it clear where he stood on it. Have you decided to take a very different approach? Have you turned the company in a direction that is very different from what he saw and thought? GOLDSTEIN: Sheldon, the underpinning of his thinking may be different than most people realize. He was a big believer that young people were at risk. He had young boys. He felt people were on their phone at the ballgame. He felt the wrong people could access it. And Bill mentioned 24 hours a day you can bang one in your phone and lose money. And it bothered Sheldon from a pure moral perspective. I know people don't want to believe that, they think he was protecting his land base. The fact is our business has been 90% Asia forever. And so it doesn't affect us because Asia does not have digital gambling. And so it's a nonevent for us from that perspective. So that was Sheldon’s mindset. Would we go into it? Sure we would. We would definitely – and I think Sheldon later in life came to realize it could be managed perhaps. And if it's profitable and we saw the right path, we would pursue it. I'm watching it. It's fascinating to watch what Bill's going through and Craig's been through it and the people at Caesars. And it's fun to watch and see where it goes. I believe it will be very profitable in the long term but there’s some impediments to getting there. BREWER: I overheard you asking Bill about the sort of the backlash in Europe to sports gambling and the way that net there are now very serious limits on how people gamble. Are you guys worried that in your digital venture there could be a backlash here? HORNBUCKLE: Well, let me back up. Backlash in many of those markets – they were gray markets – save the UK. So they weren't regulated at all. They were kind of regulating, they used to call them. So when they are — and again in Germany is a great example – as it's getting regulated, some of the constraints and some of the restrictions are clearly more than they were without any regulations. UK is taking a look at time on device, spending limits, all of the things that would obviously drive addictive behavior. There are, particularly because it's an automated world, there's a lot of things that can be put into play that protect people, that keep things in check, that help responsible gaming in a universal way. And so it is being adopted there. It's going to be transitional to here. We're already starting to put many of those things in play. We've learned from our partner Entain into our BetMGM products. And so yeah, if somebody – you always have to be mindful of it. We do not want to take anyone's last dime full stop. It is not in our business interest to do that. And so we're all mindful of it. On the other side of the coin, we just bought a company will hopefully close next month called LeoVegas. You know, it's a company that's based in Sweden. They have a great footprint, we think great technology. We are very focused on a digital growth pattern not only here domestically, obviously with BetMGM in Canada and ultimately rest of world. We see it as a – not an unlimited because nothing is unlimited, but from a platform where we stand in the scale we have, there's only so many places to go and do what we do and keep our brands true in terms of brick and mortar. And so for us it's a big piece of the next horizon. BREWER: I want to talk a little bit about international too, because you all have international properties and aspirations. I'm especially interested in when going in and co-developing an integrated resort in the Middle East, again, you know, groundbreaking in so many ways. Can you talk about growth internationally and especially where we now see the geopolitical landscape changing. Where we're seeing a lot of uncertainty about what, you know, superpowers, former superpowers, rising superpowers can and will do. BILLINGS: So I think over the course of the past 20 years, you've seen both consumers and governments embrace IRs. I mean, tax revenue, tourism, great experiences, there's all kinds of reasons to support integrated resorts. And I think you are going to continue to see that. I think it'll be interesting to see how the industry – if we do see a proliferation – how the industry keeps pace. I mean, all of us together only have so much development capacity over the course of any given year. And it's not like there's 100 companies like ours. So that'll be interesting to see. But you know, specifically with respect to the UAE, the UAE is obviously a very progressive, transformative place and they're doing a lot of things. A lot of things socially, a lot of things from a legal and regulation perspective. And so we're really excited about that opportunity. You know, puts our brand within 95% of consumers if they want to take an eight hour flight or less. And so it's a meaningful extension of our brand. It's a meaningful opportunity for our team to put their imprint on the company. It's the first property we will do subsequent to Steve. And so it's a very, very important event for us. And I feel great about it. BREWER: Talk to me a little bit about Asia and your feeling now that you sold Las Vegas ahead of this massive rebound. I know because you've told me on multiple occasions that you truly believe in the future of Macao and Singapore. But the Covid restrictions are still at present and an obstacle. GOLDSTEIN: Most of Asia's opening, I mean, Japan's opening, Indonesia, Malaysia, Korea, Vietnam. The market is opening. The biggest challenge there is employees and airlift getting in and out of these countries are still challenging into Singapore. But Singapore is, you know, leading the way in terms of it's a great government, great place to operate. We're thrilled to be there. At its peak was a $1.7 billion property. My guess is that we'll do better than that in the future. Macao I feel even I find it funny that people question Macao's return. Of course it's been a hard couple of years no question. We employ 33-34,000 people. We've not laid anyone off, we’ve been paying them for 30 months. And it's a tough time. You got to basically hunker down and wait for it to turn. But the idea it doesn't turn is kind of hard to imagine it's going to turn probably this year or next. And when it does, Macao will go back to making – you know, we made at the peak $3.5 billion EBITDA. I think we’ll make a lot more than that in the future there. BILLINGS: I agree with Rob. The only thing that keeps me up at night about Macao is the state of my team. I mean, you know, they've been essentially trapped there for years. GOLDSTEIN: Yeah. Brutal. BILLINGS: It's very, very difficult and I appreciate everything they do for us. It is a difficult time to be there. But if you think about the latent demand across the border, you think about the importance of Macao frankly within the Greater Bay area, we're huge, huge bulls on Macao just like Rob. HORNBUCKLE: Again, for the audience, I mean, Macao was seven, eight times Las Vegas in scale. I mean, okay? So it comes back half to begin with and then some and then some. I just, it's the largest gaming market in the world bar none, and it will forever be. BREWER: Are there lessons that you learn from reacting to the pandemic that now you apply toward climate change or geopolitical risk, or the threat – I mean, especially with digital businesses, the threat of cyber attack? BILLINGS: We have always really as a company tried to stay as nimble as possible and have paid dividends during that period. So we were incredibly transparent with our people. And we really empowered our folks to help us adapt, plan, and frankly, just get scrappy. There were many times when we just had to get scrappy and deal with things in the moment. And so I think that reflects within the team, whether we start talking about recession, or geopolitical events that are changing, you know, changing the demand profile – if that happens at some point. I think that that nimbleness particularly as we flexed it during Covid will pay dividends. And so I really believe we are more wired as a company, particularly here in Las Vegas and in Boston than we ever have been. HORNBUCKLE: And we obviously had to take a different approach. I had the unfortunate task of laying off 62,000 employees over Covid. It was painful, but it was costing us 300 million a month. And so we just didn't have the liquidity and the ability to sustain. Now the good news is by and large, we had about half of them back in nine or 10 weeks. But it did present an opportunity because we weren't as nimble at this scale. It's hard to be this nibble at this scale. We did take the organizational opportunity to kind of rethink about the structure, think about the organization, what we were focused on, what we should be focused on. I think one thing that Las Vegas and all of these properties at scale are really good at is corralling around an event, championing it, getting something accomplished in terms of you know, like we've spent $21 million on plexiglass. It was amazing how quickly we all got into that business of making the right environment. And on and all the testing and all of the things that go into something with those kinds of logistics. These companies are just wired to do. We do the convention – the thing about convention business every day, it's that same kind of psyche about task and orientation and go. BILLINGS: Difficult things at scale. HORNBUCKLE: Yeah. And so we are good at that generally. So it enabled us to get quickly into this. So we went up and down, in a matter of three months we had closed everything and we opened it all again. We were in massive Covid protocols in the context of what we're doing, how we're letting customers interact with us. Digitalization, you know, something we planned for 10 years to get silly check in in on a mobile device did it in three months because we had to do it. You know and to this day 25% of our people using it now. It's a big deal. It's a big change. GOLDSTEIN: Necessity. HORNBUCKLE: Yeah, necessity. The reservations 30% of our people are now making reservations online. Because guess what? They checked in digitally and so there's been a lot of benefits and for us, particularly as an organization, we learned a lot, we did a lot. It was little bit more in command and control as a culture I want to set going forward, but we had to just get it done. And so there's a lot of taking some that have been meaningful, but painful. BREWER: The other interesting thing is that we seem to be at this inflection point in the nation, the political divide, the issues over guns and abortion and racial equality. And I'm just wondering where you stand on taking a stand. Your predecessor Bill, felt very comfortable standing up and talking about his political position. Do you think that there's a place for that as the head of a publicly traded company or what's the risk? HORNBUCKLE: Take any issue. Take abortion. 30% of the people are adamantly, you know, thinking that what just happened is appropriate. I don't want to lose 30% of our customers. I think we have an obligation to our stakeholders to be very responsible, be moderate, be measured. Having said that, we employ 62,000 employees across the system who have values who care. That issue alone has impacted some of our employees in Mississippi and Ohio and other states that we operate, so we have to pay attention. Making political statements as the CEO however, I don't know that it's in everyone's best interest. Putting policies in play, doing things that are appropriate for staff and ultimately the communities that I care about not making statements and eventually – Black Lives Matter I put a statement out because I thought it was important to. It got a lot of social media. Good news and not so good news. It's not a place I think that we want to find this company. BILLINGS: I agree with Bill. I think the – I lump it, I put it together with ESG. You know, consumers, particularly younger consumers want companies to stand for something and they want them to do it authentically. And I think that authenticity is what’s really important. So figuring out what you can do for your employees, for your communities, and to reduce your impact on the planet that you can really do. That's what it's about. And it's not about marketing. It's not performative. It's doing. And so, I agree, I don't think it's about wading into politics. I think it's about having an impact. GOLDSTEIN: I will say that I can’t add a thing to that. Well said. I think it's about policies, but I think I'm not sure for public companies, CEOs, that's a role I would take on my political views shouldn't matter. They're not important, in my opinion. Important to me, my family but not to my shareholders. And I think it's better we address – I think Bill and Craig’s comments about your employees and how you think about them. They're our constituents and we want to make sure we're responsive to them and our customers. But my political views I think are not relevant in a public forum. BREWER: Is there a canary in the coal mine about recession coming? Jim Moran has mentioned to me that – he said, “I totally missed the onslaught of the great financial recession of 2007, 2008, 2009 because in our last quarter – fourth quarter of 2007, we had our best quarter ever lifted by the luxury properties like Bellagio.” HORNBUCKLE: Those were good days. GOLDSTEIN: Good days. We remember those days. BREWER: He said, “I should have been looking at Circus Circus.” We've already heard some of your competitors talk about that lower demographic. HORNBUCKLE: We have a pretty obviously broad view on this because we have properties all over the country and obviously we have every marketplace here in Las Vegas as well. We have not seen it, particularly here in Las Vegas. Now, what's happened over the last 18 months has literally been historic and so records. But if you look about how we thought we'd be performing against how we are performing, we're exactly where we thought we would be. We're not naive to think that consistent gas prices, consistent increase in inflation is not going to impact our business. It hasn't yet. BILLINGS: I would agree with Bill. We're in a similar situation. Now how much of that is our customer type? I don't know. But I do think that the industry particularly here in Las Vegas is better prepared strangely, because of because of Covid, frankly, to know the levers that we need to pull to make it through whatever does happen. BREWER: I wonder what keeps you up at night. I'm curious about it. Generally, when you look at your whole company, if there's a thing that you see as a niggling challenge that you haven't quite figured out. BILLINGS: I really have two things to do in my job. Take the legacy. We talked about it earlier. Take the legacy that I've been handed, and make sure that I both maintain it and evolve it and grow the business. And grow the business for us often means development. So when I get up in the middle of the night, it's thinking about those two things, which aren’t, you know, existential threats to our business, rather they are the opportunities for our business. So there is no one particular point that I would think about. BREWER: So you sleep like a baby? BILLINGS: Definitely not. Definitely not. But it's not an existential threat that keeps me up at night. HORNBUCKLE: You know, if you had asked me that question two years ago – BILLINGS: It would be a different answer. HORNBUCKLE: Completely different. We're just in such a different place as a company. Our balance sheet, just how we are capitalized, what we're doing, how we're thinking about going forward. We've just done such an amazing reversal in so many respects, got fortunate in timing, and made some smart moves I think ultimately – we’re sitting on $4.5B in cash. And so we're all operators. We’ve been doing this a long time. The day to day is not the concern. It is the things that are outside our control. So while I don't have the same pressure they do in Macao,  we still have Macao pressure and that's not in our control. Water at Lake Mead, we're going to do everything we can. That's a longer term, you know, just the general environment, what's going to happen over time. You wake up at night and think not only about yourself and the company but your employees and the community. Those are real issues. The continue of social divide of politics and what it's doing to our employees and customers. Not a great place. We're just not in a great place in America in that context. GOLDSTEIN: I do sleep like a baby. I’m up every two hours. At our company, we went through the most dramatic couple of years. It's hard even to even fathom. We lost Sheldon. We lost our business in Macao temporarily. We went to closure in Singapore. And of course, we sold Las Vegas. But looking back on it, we’re in a great place liquidity wise. We got lots of money in the bank. We're very solid. The business climate in Singapore is coming back beautifully. The whole city state. Our license renewals recently we're on the right path. Macao which was a big impediment to the future and that's been resolved looks like to me. And so the one thing we can't do much about is waiting for Covid resolution in China which is inevitable. And when that happens, I think our company returns to a very nice place and hopefully it's sooner than later. But other than that, I don't think about – the bigger issues Bill referenced, I mean, it's painful to watch this country. I'm the oldest guy in the room probably here and I think it's for me it's hurtful and painful to watch this country go into such huge divide on so many issues and it's sad and I hope we can find a way out. We'll get through it. We'll figure it out. But that doesn't keep me up at night because I'm not – I can't solve it. But it sure does make me feel sad. BREWER: The thing about gaming is that figuring it out has been sort of the MO of the industry, of the town, of the leaders. Do you think that there's a takeaway for other industries and other leaders about the adaptability and the flexibility in the innovation of gaming? GOLDSTEIN: Yeah, there's a definite lesson in terms of the same lessons any manager – they are professional managers. How do you apply into evolving environments that change all the time? It's never easy. How do you manage your employee base? How do you manage your customer base? How do you think and stay nimble and stay focused? Life is full of challenges. The only constant is change, right? And these things change every day. Managing these behemoths, these monster buildings, is a really good lesson for any manager and I think it does translate beyond our industry. HORNBUCKLE: And one of the reasons it could and should is, and you know, we are the melting pot of America. We get 40 million visitors, we get everybody that comes here. We know a lot about customer behavior today. And I think we're adept at reacting to that. And I think there's a lot to be learned from that for others. So they're very complex businesses. They're interesting as hell. We've been doing this for a long time because we love it. Hasn't killed us yet, but it’s trying. GOLDSTEIN: It will, Bill. HORNBUCKLE: No one is getting out alive. BILLINGS: I can’t speak for gaming as a whole, obviously, but you know, part of what we do is we really steadfastly do not over corporatize. We have a very small corporate staff. We push a lot of decisions down to the asset, to the property level, to the individual line level. And now, to be fair, we're blessed with quite a small geographic portfolio. Okay, we essentially have four assets. So I think that's easier for us to do than some others in the industry. But you talk about evolution and you talk about change. You have to cascade that down throughout the entire business. And the more your people understand and own their respective pieces of the business, the easier that is to do. And the more you centralize it, the harder that is to do. So it's been in ways heartening and inspiring to go through Covid and to watch what our teams were able to do and what they were able to accomplish and it really was them. HORNBUCKLE: We have a mantra I've been on for about 18 months. A culture of Yes. Given scale, things happen and it's easy to wake up one day and have policies in play and why aren’t we – why are we saying no to a customer. Well, because 15 years ago this happened. And you just wake up one day, you just have this monstrosity of a bureaucratic thing. Culture of Yes down to the line level employees, please say yes to a customer. We will protect you, we will give you the security you think you need, we will honor that decision, and ultimately we'll make it right for both the customer and you. Big deal in these scale places because if you don't, it just, you know, you got 4,000 rooms, you got 8,000 customers, you got 25,000 people in the building every day. Bumping into people all the time and giving and empowering employees to make those decisions is essential. BILLINGS: No doubt. HORNBUCKLE: Essential. BILLINGS: No doubt. BREWER: I just want to thank you again, like you all have very busy schedules and things to do. Thank you for making time for us, Craig, Bill, Rob. GOLDSTEIN: Thank you. HORNBUCKLE: Pleasure. BILLINGS: Thank you. Appreciate it. About CNBC: CNBC is the recognized world leader in business news, providing real-time financial market coverage, business content and general news consumed by more than 544 million people per month across all platforms. The network's 15 live hours a day of news programming in North America (weekdays from 5:00 a.m. - 8:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries. Updated on Jul 13, 2022, 4:59 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJul 13th, 2022

LIVE: 143 last-chance deals for Amazon Prime Day 2022: up to 60% of Amazon Echo devices, air purifiers, and more

Amazon Prime Day 2022 is your chance to save big on items from all categories, but it ends at midnight. Here's what to shop before prices go back up. Hollis Johnson/Insider,Amazon Prime Day 2022 ends today, July 13, at midnight PT.We're working hard to highlight all the best deals as they go live. Insider Reviews' team of expert reporters and editors have vetted each of the deals below — because a heavy discount doesn't mean much if the product on sale isn't any good. We've found great deals on QL ED TVs, Amazon Kindles, and household essentials, like paper towels.For even more deals, check out the best competing Prime Day deals from Target and Walmart, as well as category-specific deals from Amazon like tech, gaming, fashion, and beauty.All the deals below are live now and in stock.When you buy through our links, Insider may earn an affiliate commission. Learn more.Razer DeathAdder gaming mouseRazerRazer's signature gaming mouse is on sale for nearly 60% off during Prime Day 2022. The DeathAdder's eight buttons and RBG lighting are fully customizable, and the wireless version is on sale for 60% off too. mophie 3-in-1 Wireless Charging Pad (7.5W, Fabric Black)AmazonWireless chargers provide an easy and convenient way to charge your phone without the hassle of using a cable. This 7.5W charging pad isn't as powerful as the 15W version, but it's more than worth the price, especially with this discount.GE Opal Nugget Ice MakerAmazonThe Opal Nugget Ice Maker does one thing and does it well: It makes chewable nugget ice. And with this 26% discount, it's the lowest price we've ever found it for.Samsung Jet 60 Flex Cordless Stick VacuumSamsungThis cordless vacuum from Samsung is unbelievably light, letting you easily maneuver it around your home or apartment. And at $180, this is the lowest price we've ever seen the vacuum go for.Osmo Genius Starter Kit for iPadOsmoThe Osmo Genius Kit helps enhance math, science, and drawing skills with hands-on digital learning. This is one of the best prices we've found it for on Amazon.Amazon Echo Dot (latest 4th-gen)AmazonThe latest, fourth-generation Echo Dot gets a new, spherical shape. The smart speaker with Alexa can play music, set timers, and preform all sorts of other tasks. It has a smaller footprint than the Echo, so its sound won't be as robust. At $20 for Prime Day, the Echo Dot is at the lowest price we've ever seen it. Amazon Basics Nespresso Coffee Pod HolderAmazonOrganize your coffee set-up with a pod storage drawer from Amazon. It's a simple and effective way to keep your espresso and coffee sorted, and you can even place it right under your Nespresso machine. On Prime Day, you can get it for the lowest price we've seen.Frida Mom Adjustable Nursing PillowAmazonThough this deal is not for everyone, it's a great price on a product that rarely sees discounts. This pillow has removable layers to adjust as babies grow up so moms will always be in the most comfortable position. Sengled LED TV Backlights (8 piece kit)AmazonThis set for installing LEDs behind your 45-75 inch mounted TV comes with eight LED strips of varying sizes so you can install them to fit your setup. Once they're up, you can use an app and Bluetooth connection, or Alexa, to change the colors. During Prime Day, take 40% off the full price; this is an all-time low.Dyson PureCool TP01 Air Purifier and Fan with HEPA filterDyson's TP01 Air Purifier and Fan with HEPA filterThe Home DepotAn ultra-quiet, state-of-the-art fan with a built-in air purifier, Dyson's TP01 is great for stuffy spaces and crowded indoor get-togethers. This is close to the best price we've ever seen for the TP01, which fluctuates a lot but generally sticks in the $400 range.Vital Proteins Chocolate Collagen Peptides PowderAmazonTwo scoops of Vital Proteins collagen peptides in your favorite drink every day supports healthy hair, nails, skin, bones, and joints. Get a 13.5 ounce tub for just $15 during Prime Day.Orolay Thickened Down JacketAlyssa Powell/Business InsiderWhile winter is still a few months away, the Orolay Women's Thickened Down Jacket, also known as "the Amazon coat," is on sale starting at $89. That's a 45% discount off the original price. We named the viral jacket as the best affordable women's winter coat in our buying guide.Braun MultiQuick Immersion Hand BlenderAmazonThe Braun MultiQuick Immersion Hand Blender is affordable, durable, and incredibly simple to use, and works well for everything from soup to whipped cream. Right now, you can take $20 off the price as part of a Prime Day deal. Moccamaster KBGVAmazonThe Dutch-made Moccamaster KBGV is easily one of the most sophisticated home coffee machines on the market, touted for its impressive copper boiling heating element and glass hardware. While typically spendy, it's down to $245 for Prime Day, making it an enticing buy for any discerning coffee drinker.Legend of Zelda: Breath of the WildTargetBreath of the Wild isn't just one of the best Zelda games, it's one of the best games in years, period. This game's price usually stays the same, still retailing for $60 years after release, but right now it's down to $40.Ninja NJ601AMZ Professional BlenderAmazonThis powerful blender will make fast, efficient work of your ingredients and make large enough batches for multiple people. Priced at $70 this Prime Day, it matches an all-time low. Furbo 360-degree Dog CameraTomofunFurbo's newest treat-tossing dog camera rotates 360-degrees so you can keep an eye on your pet anywhere in the room. The 1080p camera has 4x zoom along with night vision. At $147 for Prime Day, this is the lowest price we've seen it go for. Bose Quiet Comfort 35 II HeadphonesBoseThe Bose QuietComfort 35 II are still excellent headphones and exist alongside the newer Bose 700 as a more affordable wireless noise-canceling option. This is the best price we've seen for them.23&Me DNA KitHollis Johnson/Business InsiderThe 23andMe DNA Ancestry + Health Kit tells you which illnesses you're predisposed to and gives you a full look at your ancestry. Right now during Amazon Prime Day, you can get your own kit for just under $100, matching the best deals we've seen in the past.Cricut EasyPress 2 (9x9)CricutCricut's heat press is easy to use, with digital temperature and timer controls. The 9x9 size is perfect for items like t-shirts, tote bags, and other medium-sized items. Right now, the Cricut EasyPress 2 is at an all-time low price of $99.Columbia Benton Spings Fleece JacketAmazonThe Columbia Full Zip Up is a versatile piece of outerwear, great as a layer or a light jacket. Select colors are over 50% on as part of Amazon Prime Day.Petsafe Drinkwell Pagoda Pet FountainAmazonIf you want a visually appealing pet fountain, we suggest Petsafe's Drinkwell Pagoda Fountain. Available in four different colors, it provides a source of continuous filtered water for your pet. The fountain has been going for its retail price since February, so this is a solid deal to score now.Yogi Bare Teddy Yoga MatAmazonThe Yogi Bare Teddy is machine washable without sacrificing quality or durability over time and use. Our pick for the best washable yoga mat is currently 20% off.Black+Decker Dustbuster AdvancedClean Handheld VacuumAmazonA powerful portable vac that is ideal for quick cleanup jobs, but you might be tempted to use it to vacuum your entire home. This 34%-off deal matches the best prices we've seen on this dustbuster.Solo Stove Bonfire with StandAmazonThe Solo Stove is one of the most popular fire pits on the market because it's designed to significantly reduce smoke, making s'mores nights even more enjoyable. Be sure to check the coupon box for an extra 5% off at Amazon.Moen Velocity Two-Function RainshowerMoenThe elegant design, sturdy metal construction, and wide coverage area justify the high price tag of the Moen S6320 Velocity Two-Function Rainshower. This is the best price we've seen on our top pick for the best rainfall shower head in over a year.Ember Temperature Control Smart Mug 2AmazonThe Ember Temperature Control Ceramic Mug 2 is a smart mug that keeps your drink at the optimal temperature. This bit of luxury is pricy, but during Prime Day, it's 27% off the usual cost.Philips Sonicare DiamondClean Smart 9500 Electric ToothbrushAmazonThe DiamondClean Smart 9500 is one of the most advanced toothbrushes ever made. It features five cleaning modes at three intensities and app integration. At 41% off, this is a stellar deal.Mrs. Meyer's Liquid Dish Soap in Basil (3 Pack)AmazonMrs. Meyers' basil-scented dish soap not only smells just as good as the brand's laundry detergent, but it shouldn't hurt the birds or the bees. It's rare to see this three-pack go on sale for under $9.Stasher Silicone Reusable Storage Bag (4 Pack)AmazonStasher bags are healthy and eco-friendly alternatives to plastic storage bags. The food-grade silicone is microwave and dishwasher safe, as well as being BPA-, PVC-, and latex-free. Grabbing this four-pack for 30% off makes these reusable bags an even better deal.Coleman Sundome Four-Person Camping TentAmazonIf you're planning a summer camping trip, one of our favorite tents from Coleman is discounted on Amazon Prime Day and comfortably fits four people. We typically see this on sale for between $70 and $80, so now is a good time to save.Philips Hue White and Color A19 LED Smart Bulbs (3 Pack)AmazonThis three-pack of Philips Hue smart LED light bulbs is a decent way to to start turning your home smart. These bulbs work with Amazon Alexa, Google Assistant, and Siri digital assistants. At 44% off, this usually pricey item is a little more affordable.Logitech driving wheels for Xbox, PlayStation, and PCAmazonLogitech's driving wheel controllers are designed for use with racing simulation games like Forza Horizon 5 and Grand Turismo Sport, and will give players real time feedback with responsive pedals and a steering sensor.The G920 Driving Force works with Xbox and PC while the G Dual-Motor is exclusive to PlayStation consoles, so be sure to pick the right one.Tommy Hilfiger Long Sleeve Stretch Oxford Button DownAmazonA well-fitting oxford shirt is a welcome addition to any man's wardrobe, and Tomy Hilfigure's button downs are 30% off during Prime Day, matching their usual sale price.Logitech c615 webcamLogitechThis entry-level webcam is nearly 60% off for Prime Day and will help you improve your video quality during remote work calls or at-home streaming. The c615 can be attached to a tripod and features a 360-degree swivel feature.PlayStation 5 DualSense controllerLiving room with a Sony PlayStation 5 home video game console and DualSense controller alongside a television.Phil Barker/Future Publishing via Getty ImagesSony's latest controller includes a built-in microphone, haptic feedback, and adaptive triggers. Even if you don't have a PlayStation 5, the DualSense controller is compatible with Apple and Android phones and PCs too.The DualSense magnetic charging station is also on sale for 33% off too.NordicTrack iSelect Voice-Controlled DumbbellsAmazonThis is an amazingly low price for a set of smart dumbbells that have only gone up in price from third-party sellers over the past few years.Jabra Elite 85t True Wireless Bluetooth Earbuds, Titanium BlackJabraNoise-cancelling earbuds can be expensive, so this is a great deal for some of Jabra's best earbuds.Waterpik WP-660 Aquarius Water FlosserWaterpikThis Waterpik flosser has steadily gone down in price over time, but this is still a great deal, and close to the lowest price we've ever found for it.Blueair Blue 311 AutoBlueairThis is the lowest price we've ever seen the Blue 311 Auto hit on Amazon. If you were waiting to buy, the time is now.Levi's Women's "Ex-Boyfriend" Trucker JacketAmazonThis is a great price for this Levi's jacket, which doesn't usually drop below $60.GoPro HERO8 Black BundleAmazonGoPro cameras can be expensive, even for the older models. Although it's a few years old, the GoPro HERO8 Black is still a fantastic action camera and still a great buy at this price.TP-Link AX3000 Wi-Fi 6 RouterAmazonTP-Link routers are in high demand, and can carry an equally high price. This is a great price for a Wi-Fi router, which is always worth investing in.SanDisk 256GB microSD card with adapterAmazonThis is a fantastic price for a lot of storage space, and it's the lowest price we've seen in ages.HOTOR Car Trash CanAmazonThe HOTOR car trash can gives you a convenient place to throw things away, even while on the go. It was already cheap, but this discount makes it an even better buy.Anker PowerCore Essential 20K portable chargerAmazonAnyone who finds themselves constantly hitting a low battery when traveling needs a portable charger, and this PowerCore model from Anker is one of the best.Google Nest Cam Indoor/Outdoor Battery (2021)AmazonElegant design, reliable performance, and wireless battery power make the Nest Cam Outdoor a tempting option to add peace of mind and checking in on your home's exterior when you're away. The current $120 deal is the best we've seen for this excellent smart home camera.TCL 65-inch QLED Roku TVAmazonThe 6-Series delivers some of the best picture performance in its price range, with advanced features like local dimming with Mini LEDs. This TV has never dipped below $900 before now, so the current $700 price tag is an all-time low.35% off all Otherland candlesOtherlandOtherland's entire collection is discounted 35% during Prime Day 2022. Lifestraw Personal Water FilterLifestrawTime and again, the Lifestraw is a huge hit on deal days like Prime Day and makes the list of the top items purchased by our readers each year. Right now, it's at the lowest price we've seen all year — a 63% discount.Philips Premium Digital Air FryerCASEZY/Getty ImagesThe Philips Premium Digital Air Fryer is our top-rated pick in our guide to the best air fryers. It heats up within seconds, turning out evenly cooked, crispy food with greater efficiency than an oven and even many other air fryers. At 20% off, this is the lowest price we've seen in months.Amazon Kindle OasisHollis JohnsonAmazon revolutionized the e-reader with the Kindle Oasis' daring design, great page-turn buttons, sharp screen, and giant ebook library. It rarely sees price drops, but right now it's down to only $175, matching the previous all-time low.De'Longhi Nespresso Vertuo Plus with Aeroccino3AmazonThis bundle includes the Nespresso machine and an Aeroccino3 milk frother, making an ideal setup for the regular hot latte drinker. Right now, the bundle is only $151 as part of a Prime Day deal. This is an all-time low price. Anker Nano Pro ChargerAmazonNew iPhones no longer come with a power adapter, so you'll need to buy your own. Anker's Nano Pro Charger is smaller than Apple's power adapter, but it delivers a super fast charge. It can charge your iPhone to 50% in just 25 minutes.Calvin Klein Cotton Stretch Boxer Briefs 3-PackAmazonThese Calvin Klein boxer briefs are stretchy and moisture wicking for optimal comfort. At just under $25 for a 3-pack, now is a great time to stock up.Echo Dot Kids 4th GenAmazonAs the kids' version of one of Amazon's most popular devices, the 4th Gen Echo Dot Kids combines the power of Alexa with easy to use parental controls. You'll also get one year of Amazon Kids+ for free.Apple Watch Series 7 GPS (45mm)AmazonMuch more than a timepiece, the Apple Watch can also be used for keeping track of workouts, making phone calls, sending text messages, setting timers and alarms, counting calories, and more. The previous lowest price we've seen is $359, so this is an excellent new all-time low price.Sony 55-inch A80J K OLED 4K TVSonySony's A80J OLED is one of the best 4K TVs to buy if you prioritize picture quality. It delivers stunning HDR images powered by an advanced processor. The 55-inch model is down to $1,000, which is an all-time low for this size.Amazon Fire HD 8 Tablet (32GB)AmazonThe latest model of Amazon's already-inexpensive Fire HD 8 tablet series is available for just $45 — a 50% discount. HAUS of Collections Makeup KitAmazonThis three-piece kit regularly goes on sale, but never before has it been below $20. You can get the collection for an all-time low price in the following colors: rose b*tch, rockstar, dynasty, future Hollywood, metalhead, and whiskey.  Dash Mini Waffle MakerDASH/AmazonThe Dash Mini Waffle Maker is small but mighty. It's very easy to use and clean and perfect for a quick breakfast. This is the lowest price we've seen on an already budget appliance.EZ Tofu PressAmazonMake squeezing excess water out of tofu easier with the EZ Tofu Press, which can shorten the hour-long process to just 15 minutes. Right now, it's on sale for 33% off.Spin-Clean Record Washer SystemAmazonThe Spin-Clean uses a wet solution and brushes to clean both sides of a record at once. Down to $68 during Prime Day, this is a solid deal for a must-have kit for record-collecting music lovers. Fire TV Stick LiteAmazonThe Fire TV Stick Lite is a slightly pared-down version of the standard Fire TV Stick. It supports 1080p streaming but comes with a less advanced remote than the regular model. Down to $12, it's $6 cheaper than the best deal we'd seen before.Zinus 12 Inch Green Tea Memory Foam MattressAmazonZinus is one of our favorite budget brands, and the 12-Inch Green Tea Memory Foam Mattress is one of the most popular mattresses on Amazon. Willow 3.0 Wearable Breast PumpAmazonThis wearable, in-bra breast pump has no cords, wires, or bottles — so you can pump hands-free. It's dishwasher safe, has customizable suction levels, and an app that will track your volume in real-time among other smart features. This is the lowest price we've seen in a while and a worthwhile deal, but not the lowest price ever. Apple iPhone 13Antonio Villas-Boas/InsiderVerizon and AT&T are taking $700 off the iPhone 13, essentially reducing its price down from $800 to $100. The deals from each carrier require that you sign up for an unlimited plan and trade-in your old device. Yogasleep Hushh Portable White Noise MachineAmazonThe Yogasleep white noise machine is small enough to travel anywhere with you and comes with a baby-safe clip for fastening it to a stroller, car seat, or crib. You'll find three soothing sounds and a night light in this version. This isn't the lowest price we've ever seen, but it's close to it.iRobot Roomba i7+ Robot VacuumiRobothe Roomba i7+ is just awesome. It has powerful suction, a charging dock that automatically empties the dustbin, and a feature-rich app. This is $100 less than the previous best price for it.Gigabyte 2022 Aorus 15-inch Gaming LaptopGigabyteThis model of Gigabyte's Aorus gaming laptop is designed for high graphical fidelity and high framerates, offering one of the most balanced specs in a gaming laptop. $600 off this model makes this an incredibly good deal for a gaming laptop of this caliber.Bounty paper towelsrblfmr / ShutterstockPaper towels are essential in most households. Bounty is a great choice because of its high absorbency, durability, and texture that's great for scrubbing out tough stains. Softsoap aloe vera hand soap, 1-Gallon RefillWalmartSay goodbye to the cracked, dry skin that comes after washing your hands. This Softsoap hand wash is fortified with aloe vera, a natural moisturizer that leaves your hands feeling soft and supple.15% off sitewide at BrooklinenBrooklinenSave 15% sitewide at Brooklinen during the Surprise Savings Event. 30% off all Laneige skincareSephoraFor a limited time, you can take 30% off all of Laneige's skincare products, including their cult favorite Water Sleeping Mask, Lip Sleeping Mask, and Lip Glowy Balm.30% off an Atlas Tea Club samplerLily Alig/InsiderRight now, you can save 30% on three different tea samplers from Atlas Tea Club, the makers behind one of our favorite coffee subscriptions.  On/Go One at-Home COVID-19 Rapid Antigen Self-TestAmazonIt's always a good idea to keep COVID-19 rapid antigen tests handy. These at-home tests from On/Go are FDA-approved.Dell 2022 XPS 13 Plus 9320 with 4K OLED, 12th-gen Core i7, 16GB RAM, 512GB SSDBest BuyThe latest XPS 13 Plus from Dell is a redesign of its popular premium laptop, with a powerful Intel processor and MacBook-like 'touch' keys. $1450 for this model with a 4K OLED display, a powerful 12th-gen Core i7 processor, and a generous 16GB RAM is a good deal for Dell's popular XPS laptops, which tend to be more expensive than the competition.Coleman Airbed Cot with Side TableAmazonCamp in comfort with this queen-sized inflatable mattress, which comes with a raised cot and a pump for easy inflation. It's ideal for couples who are looking to camp cozy — and even includes a side table with a cupholder so you can relax with a drink after a long day of hiking. Ring and Blink security camerasChip Somodevilla/Getty ImagesFrontline Plus for Dogs (6 Treatments)ChewyFrontline Plus for Dogs is one of our top picks for dog flea prevention. It kills adult fleas, flea eggs, flea larvae, ticks, and chewing lice on contact. While this isn't the best deal we've ever seen on flea medication, it's $10 less than what you'll typically pay. Be sure that you're only purchasing medication sold and shipped by Amazon to avoid counterfeits.Paw Patrol Chase's 5-in-1 Ultimate Police CruiserAmazonPaw Patrol toys were on every kid's wish list last holiday season, and it's safe to say the characters will be popular well into next year. Chase's Cruiser is on sale for Prime Day, bringing it under $70. Adidas Grand Court SneakerAmazonRanked as a number one bestseller for women's tennis shoes, the Grand Court Sneaker is designed in Adidas' signature style. Right now, you can snag a pair at a discounted price.Crest 3D White Whitestrips Dental Whitening KitWalmartThe classic 3D Whitestrips take only 20 days of use to complete a full treatment and also come with two sets of "1 Hour Express" strips for more last-minute whitening sessions. Right now, you can take 35% off the price of a box. Casper Sleep Original PillowCasperThe Casper Original Pillow offers the loft and support that side sleepers need but with the soft and fluffy feel of a down alternative. Right now, you can get the pillow for $45.50, the lowest price we've ever seen it at.LifeStraw Go Water Filter BottleAmazonThis LifeStraw bottle uses activated carbon to filter out bacteria, microplastics, chlorine, and other harmful particles from your water. It can hold 22 ounces, but it's easily refillable and the carbon filter can clean up to 100 liters of water. Ninja Foodi 9-in-1 Pressure Cooker and Air Fryer with Nesting Broil RackAmazonA smaller version of the standard 6.5 quart Ninja Foodi, this model has all of the functions of its larger sibling but with a more compact footprint. It's a good option for smaller households. Right now, you can grab one at the lowest price we've seen. Elden Ring for XboxAmazonElden Ring is a new game from the creators of Dark Souls, FromSoftware, in collaboration with George R.R. Martin. For a limited time, you can take 24% off the price of the Xbox Series X game. This marks the lowest price we've seen for the game, which was released in February.Revlon One Step Volumizer Hair DryerAmazonThis hybrid hair dryer brush has two heat settings and works to dry and style hair at the same time. We've tested it and found that it's a great alternative to the pricey Dyson Airwrap, though it has fewer functions. Right now, you can take 55% off the Revlon One Step. Coop Home Goods Original PillowCoop Home GoodsThe Coop Home Goods Original Pillow offers thoughtful features like adjustable fill, a washable pillow cover, and an unparalleled 100-night trial that make it the best choice for most people. This 20%-off deal is a rare one that makes our favorite pillow even better.Samsung Galaxy Watch 4AmazonThe Samsung Galaxy Watch 4 is the obvious choice for Android users looking for a comprehensive, quality, premium smartwatch experience. However, it's a shame that the ECG feature is limited specifically to Samsung phone owners. It's currently available for only $175, matching worthwhile deals we've seen in the past, and only a few dollars more than the all-time low.Bose Noise Cancelling Headphones 700AmazonThe Bose 700 headphones feature advanced noise cancellation technology with level adjustments, a comfortable design, and support for Google Assistant and Amazon Alexa. This is the lowest price we've seen on these headphones.Google Nest ThermostatGoogleGoogle Nest makes some of the best smart thermostats you can buy. This model lets you control your home's temperature via the internet or through a mobile app. It can also learn your preferred temperature settings over time. Right now, shoppers can save 31% on the Google Nest Thermostat.Amazon KindleAmazonThe Kindle allows you to download countless books straight to your device. This model has a front light that makes it better suited for nighttime reading. Down to $50 for Prime Day, this is a great deal and matches the best price we've seen for this version.iRobot Roomba 692 Robot VacuumAmazon If you've never had a robot vacuum before, the Roomba 692 is a good one to start with. It's powerful enough to keep floors and carpets clean and detects dirtier parts of your floor to clean them more thoroughly. Right now, it's at the lowest price we've seen.Lodge Cast Iron SkilletAmazonYou can make stovetop pizza in almost any decent pan, but a seasoned cast iron skillet is the best choice for even cooking and great flavor. We've seen the price dip a bit lower on this Lodge skillet, but you're still saving 33% on an already affordable pan.Mario + Rabbids Kingdom BattleNintendoIf there's one thing that Nintendo die-hards know, it's that their first-party games almost never go on sale — and especially not for this much. Mario + Rabbids Kingdom Battle is a wildly fun strategy game, and we've never seen it at a price this good.KitchenAid K45SS 4.5-Quart Classic Series Stand MixerAmazonThe KitchenAid K45SS 4.5-Quart Classic Series Stand Mixer is an ideal choice for beginner bakers. It's affordable and can handle most mixing tasks. Though we've seen this mixer on sale for less, the price has only dipped this low once in the last six months.Roku Streaming Stick 4KRokuRoku's Streaming Stick 4K plugs right into your TV's HDMI port, giving you access to streaming apps with up to 4K resolution playback. It's currently down to $29.99, a dollar more than the all-time lowest price we've seen.FitbitThe Fitbit Charge 5 features the brand's signature health and exercise tracking tools, and comes with a free six-month Fitbit Premium membership. This is the lowest price we've ever seen the Charge 5 sell at.Theragun MiniTherabodyIf you're looking for a percussive punch in a smaller package, check out the Theragun Mini. This is a great price for an equally great massager.Cuisinart AirFryer Toaster OvenTargetThis Cuisinart air fryer is over half off at Target, which is the best price we've found it at. It's not the fanciest air fryer on the market, but at about $100, it's a great start for anyone looking to step into the air fryer world.LEGO Star Wars Luke Skywalker's X-Wing Fighter kitAmazonThis LEGO Star Wars kit comes with 474 pieces to let you build your own version of Luke Skywalker's iconic X-Wing Fighter ship. LEGO kits have only gotten more expensive over the past few years, so even this $10 drop is a welcome sight.25% off Casper memory foam dog bedDavid Slotnick/Business InsiderThis hybrid memory foam bed made our list of best dog beds and comes in three sizes. While the fabric isn't waterproof, the bed's cover is machine washable. This 25% discount is the best price we've seen on the Casper Dog Bed since April.50% off Fire HD 8 Kids tablet for Prime membersAmazonPrime members can get 50% off the Fire HD 8 Kids bundle. This tablet comes with a protective case to protect from drops, and also includes a one-year subscription to Amazon Kids+, a service with books and interactive apps for children.The Fire HD 8 Kids Pro is meant for slightly older kids age 6 to 12, so it comes with a different case but is otherwise the same. Prime members can also buy it on sale for 50% off during Prime Day.32% off Apple AirPods ProCrystal Cox/Business InsiderAirPods Pro are the premium version of Apple's best-selling earbuds, adding noise-cancelling technology and silicone tips for a softer in-ear fit.Dyson Ball Animal 2 pet vacuum cleanerAmazonWe speak from experience when we say that the Dyson Ball Animal 2 is a beast when it comes to picking up pet hair from the carpet. While the best deal here isn't coming from Amazon, it's still a great price for an immensely powerful vacuum.Amazon Fire HD 10 tabletAmazonAmazon is offering the 32GB Fire HD 10 tablet — currently the latest model on the market — for half off the regular price. We reviewed the Fire 10 earlier this year and found that it was a great option if you're looking for a device to stream movies or shows on.Ninja Foodi 10-in-1 Pressure Cooker and Air FryerAmazonThe Ninja 6.5 quart 10-in-1 Foodi model is a versatile all-around air fryer, and this is the best price we've seen for it since Black Friday. It'll let you roast vegetables, bring baked goods back to life, and even cook meat — all without taking up too much countertop space.Insignia 39-inch HD Smart Fire TVInsigniaAmazonThis Insignia HD TV comes with Amazon's Fire TV system built right in, giving you easy access to apps like Netflix, HBO Max, and Hulu. It only features a 720p screen — a far cry from the 4K quality that most high-end models boast these days — but with this Prime Day deal, it's definitely worth the price.Beats Studio3 Wireless HeadphonesAmazonThe Beats Studio 3 Wireless are a great set of noise cancelling headphones, especially for iPhone users who think the AirPod Max are way too expensive. At $175, it's tough to beat these wireless headphones for sound quality, features, and value.Apple 10.2-inch iPad 2021Antonio Villas-Boas/InsiderThe standard 10.2-inch iPad from 2021 is our top tablet choice for most people due to its excellent performance and its relatively affordable price tag. Right now it's down to $300, this matches the previous all-time low.JLab JBuds Air wireless earbudsAmazonThe JLab Audio JBuds Air offer a nice design, are relatively comfortable, and sound surprisingly good despite their budget price — and they're totally wireless. They're already an excellent deal at their full price, so $20 off makes these an easy recommendation.Dell 2022 XPS 13 Plus (9320) with 4K OLED, 12th-gen Core i7, 16GB RAM, 512GB SSDDellThe latest XPS 13 Plus from Dell is a redesign of its popular premium laptop, with a powerful Core i7 processor, generous memory, storage, and MacBook-like 'touch' keys. $1450 for this model with a 4K OLED display is a good deal for Dell's popular XPS laptops, which tend to be more expensive than the competition running Windows.Apple Watch Series 7 GPS (41mm)AppleMuch more than a timepiece, the Apple Watch can also be used for keeping track of workouts, setting timers and alarms, counting calories, and more. Right now, you can get the latest Apple Watch model for only $284, marking a new all-time low price. Amazon Fire TV Stick 4K MaxAmazonThe Fire TV Stick 4K is designed to be 40% more powerful than Fire TV Stick 4K. It also adds Wi-Fi 6 support. This Prime Day deal is an all-time low price.Apple TV 4KAppleThe 2021 Apple TV 4K has an improved processor, updated Siri remote, and support for WiFi 6. Right now, you can pick it up for 33% off, which is an all-time low price for the streaming device.Kindle Kids EditionHollis Johnson/Business InsiderThe Kindle Kids Edition pairs a basic Kindle with a kids-only operating system, so kids can have access to thousands of books without distractions. It comes with a two-year warranty and a one year free subscription to Amazon Kids+, even if you already have a paid subscription. Ahead of Prime Day, you can snag this model for just $50, which is an all-time low price.Amazon Fire TV 43-Inch 4 SeriesAmazonIf you're looking for an entry-level TV, this Fire TV is an excellent choice. It supports 4K Ultra HD resolution and has modern smart TV functions.Amazon Fire TV 55-Inch Omni SeriesAmazonThe Omni Series might not be the best in picture quality for 55-inch TVs, but packs tons of smart TV functions like hands-free Alexa, video calling, and built-in Fire TV.Insignia 24-Inch HD Smart TVAmazonWe typically wouldn't recommend a 720p TV, but at only 24-inches, this HD Smart TV from Insignia is perfect for compact, casual viewing.Pioneer 43-Inch 4K UHD Smart TVAmazonFeaturing Dolby Vision picture quality and Fire TV's latest software, this 4K Ultra HD TV is a great entry-level option.Apple Watch SE 44mm GPSAmazonThe Apple Watch SE balances modern smartwatch features and affordability. On sale, it's an even better deal.Amazon Kindle Essentials BundleAmazonAmazon's cheapest Kindle features a 6-inch screen with a built-in front light, battery life, and storage for thousands of books. This Kindle bundle includes a power adapter and a printed cover for 50% off heading into Prime Day.Amazon Kindle Unlimited Subscription (2 Months)AmazonAmazon Prime members can get two months of Kindle Unlimited for $5. The subscription will auto-renew to $10 a month after two months.Amazon Fire TV CubeAmazonIf you're in the market for a powerful all-in-one streaming device that can support high-end AV formats, the Fire TV Cube might be what you're looking for. Simply connect it to your current TV to unlock an array of smartwatch features.Amazon Echo + Sengled Bluetooth Color BulbAmazonIf you're looking for better sound quality than the Echo Dot, the fourth-gen Echo is the device you'll want. It also comes bundled with a Sengled color bulb. Luna ControllerAmazonAmazon's Wi-Fi-enabled controller is designed for the Luna cloud gaming service. This particular gamepad promises to reduce delay when streaming, compared to a standard Bluetooth controller.Amazon Halo BandAmazonAmazon's fitness tracker often sees discounts throughout the year, but $45 is the lowest price we've seen for it yet. The Halo Band tracks your steps, heart rate, and sleep. It also comes with a free six-month subscription trial.Amazon GlowAmazonAmazon's Glow is a video calling device with an 8-inch vertical screen and a projector that displays 19-inch touch-enabled interactive books, games, and drawing apps.Samsung Galaxy Buds 2SamsungWith incredible sound quality and noise-canceling technology, Samsung Galaxy Buds 2 are the perfect headphones to pair with your Samsung phone. Turtle Beach Recon 70 Gaming HeadsetAmazonThe Turtle Beach Recon 70 Gaming Headset can take your gaming experience to the next level with quality audio and a comfortable fit.Skullcandy Sesh Evo Wireless In-Ear HeadphonesAmazonWith a built-in Tile, you'll be able to track your headphones whenever they get misplaced.Instant Pot Duo CrispJames Brains/InsiderThe Instant Pot Duo Crisp is a pressure cooker, slow cooker, air fryer, and sous vide machine all in one, making it one of the most useful and economical small appliances we tested. We recommend them to everyone from beginner cooks to experienced chefs.Ninja BL770 Mega Kitchen SystemAmazonThe 72-oz. Total Crushing Pitcher pulverizes ice to snow in seconds for creamy frozen drinks and smoothies with a powerful 2-plus horsepower motor.Vitamix Explorian BlenderWilliams SonomaAt $60 off the usual price, this Vitamix Explorian Blender is a great deal we only see a few times a year. Anova All Metal Sous VideAmazonThis precision cooking tool circulates water to the exact right temperature for dishes like chicken, fish, beef, vegetables, eggs, and more.Ninja AF101 Air FryerAmazonThis four-quart Ninja Air Fryer is an excellent choice for limited counter space. At less than $100, it's worth adding to your kitchen if you don't already have an air fryer.Nespresso Aeroccino3 Milk FrotherNespressoThe Aeroccino3 has three milk froth settings, including one to make cold foam for iced lattes or cappuccinos. Right now, you can get the milk frother for just under $70, which is an all-time-low price. Prettygarden Women's Floral Summer DressAmazonFeaturing an all-over floral pattern, this dress is perfect for summer fashion.IUGA Workout Shorts for WomenAmazonMade from a breathable four-way stretch material, these shorts are great for all kinds of workouts, or just layering under an oversized tee or button-down. A side phone pocket add a bit of functionality.Crocs Flip Flop SandalsAmazonIf you love Crocs' original clogs, you'll love the Flip Flops, too. They are just as soft and comfortable, but better suited for summer.Hanes Beefy Short Sleeve T-Shirt 2-PackAmazonThe Hanes Beefy is a wonderful everyday T-shirt, and with plenty of colors to choose from, you can stock up on all your favoritesDockers Perfect Classic Fit ShortsAmazonWith a 9.5 inch inseam, the Dockers Perfect Classic Fit Shorts fall right above the knee.Amazon Essentials Performance Midlayer Quarter-ZipAmazonAvailable in a variety of colors and sizes ranging from XS to XXL, this quarter-zip from Amazon Essentials is designed for hiking and outdoor activities.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 13th, 2022