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Nowhere to Hide

    Welcome to the Second Half of this annus horribilis, the worst start to any year since 1982? 1971? 1929? Pick your favorite year, the specifics no longer matter. The headlines are all shouting at us how bad the first half was. The New York Times is fairly typical: “After Worst Start in 50… Read More The post Nowhere to Hide appeared first on The Big Picture.     Welcome to the Second Half of this annus horribilis, the worst start to any year since 1982? 1971? 1929? Pick your favorite year, the specifics no longer matter. The headlines are all shouting at us how bad the first half was. The New York Times is fairly typical: “After Worst Start in 50 Years, Some See More Pain Ahead for Stock Market.” Mohammed El-Erian sums it up well: Further to yesterday’s tweet, some of this morning’s media headlines.#Investors are finding that the notion of “#inflation impacting everyone” applies to them too. A key issue for the outlook is the extent to which a late #Fed will aggressively hike rates into a slowing #economy pic.twitter.com/GDxqPBT9GO — Mohamed A. El-Erian (@elerianm) July 1, 2022   The problem with all of this handwringing: It’s a feature, not a bug, and there is nothing you can do about it. If you want the upside, you must tolerate the uncomfortable downside (more or less). Consider the century of drawdowns as shown in the chart above. If you want to see any kind of long-term returns, putting up with regular decreases in value is simply the cost of admission. You can diversify, but that has not helped very much this year. You can try to time the market, but good luck with that. Few can do it, fewer still with any consistency, and fewer yet will do it on your behalf. You can try to miss the big down days, but then you end up missing the big up days, too. Worse, people who try to time make a hash out of the process, with 30% never returning to risk assets or equities — just move to cash, and * SHEESH*  stay that way for the rest of their lives. Rather than get pulled into this mania, it is much more useful and psychologically healthy to recognize we must accept that drawdown, corrections, bear markets, and crashes are simply part of the process. Indeed, they are a very important part, because bear markets and crashes are where you earn the upside over risk-free treasuries. Risk is what leads to returns — and risk means suffering through markets that fail to meet your expectations. Have a great holiday weekend . . .         Previously: Big Up Big Down Days May 5, 2022 Panic Selling Quantified (March 24, 2022) If You Sell Now, When Do You Get Back In? (March 23, 2022) Stop Listening to Pundits (December 8, 2021) Market Volatility is a Feature not a Bug (February 11, 2019) Pundit Suckitude: Its a feature, not a bug. (July 30, 2013)   The post Nowhere to Hide appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTURE3 min. ago Related News

1970 Mercedes-Benz 280 SL Euro 4-Speed

The weather has been delightful lately, perfect for open-top cruising. What could be lovelier than an evening drive in a Pagoda-topped SL? The Mercedes-Benz (W113) two-seat roadster/coupé was introduced at the 1963 Geneva Motor Show. Production of the 230SL ran from 1963 through 1971, and the larger-engined 280 SL made during 1967-71. MB made 48,912… Read More The post 1970 Mercedes-Benz 280 SL Euro 4-Speed appeared first on The Big Picture. The weather has been delightful lately, perfect for open-top cruising. What could be lovelier than an evening drive in a Pagoda-topped SL? The Mercedes-Benz (W113) two-seat roadster/coupé was introduced at the 1963 Geneva Motor Show. Production of the 230SL ran from 1963 through 1971, and the larger-engined 280 SL made during 1967-71. MB made 48,912 W113 SLs, with 19,440 destined for the US shores. Known as the “Pagoda” the 280SL is an elegant and understated 2-door 2-seater. The soft top also came with a removable hard top. Its one of the lovely cars of the 1960s: Simple, well-proportioned, and built like a bank vault. • 4-speed manual transmission • Fuel-injected, 2,778cc engine six-cylinder engine • M130 engine produced 168 hp @5750 Pagoda ownership was more about understated style and grace than outright speed. The car was a sporty GT, not an outright speedster. When new, the 1970 280 SL, prices ranged from $6,485−$7,909. Adjusted for inflation since 1970, that is the equivalent in 2022 dollars of $50,146.55 – $61,157.91. I have almost bought one of these many times, but never quite found the right car or the right price. If you want a project, you can find one at $25-45k; Clean drivers go for $50-75k; 90-point concourse versions sell for 6 figures plus. I really like the white exterior with a navy blue interior combo like this beauty below (with a clue canvas soft top and removable white aluminum hard top); It was (yet another Reserve Not Met) bid to $62,000 but failed to sell.     Source: Bring A Trailer The post 1970 Mercedes-Benz 280 SL Euro 4-Speed appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTURE5 hr. 3 min. ago Related News

1970 Mercedes-Benz 280SL Euro 4-Speed

The weather has been fantastic lately, which makes me think of open-top cruising. What could be lovelier than this Euro version of the Pagoda-topped SL of the 1960s? The Mercedes-Benz (W113) two-seat roadster/coupé was introduced at the 1963 Geneva Motor Show. Production of the 230SL ran from 1963 through 1971, with the 280SL running 67-71.… Read More The post 1970 Mercedes-Benz 280SL Euro 4-Speed appeared first on The Big Picture. The weather has been fantastic lately, which makes me think of open-top cruising. What could be lovelier than this Euro version of the Pagoda-topped SL of the 1960s? The Mercedes-Benz (W113) two-seat roadster/coupé was introduced at the 1963 Geneva Motor Show. Production of the 230SL ran from 1963 through 1971, with the 280SL running 67-71. MB made 48,912 W113 SLs, with 19,440 destined for the US shores. Known as the “Pagoda” the 280SL is an elegant and understated 2-door 2-seater. The soft top also came with a removable hard top. Its one of the lovely cars of the 1960s: Simple, well-proportioned, and built like a bank vault. • 4-speed manual transmission • Fuel-injected, SOHC 2,308cc six-cylinder engines came standard on 230 SL • 1970:  2,778cc engine produced 180 hp for the 280 SL Pagoda ownership was more about understated style and grace than outright speed. I have almost bought one of these many times, never quite finding the right car. They go for $25-45k in need of work. Clean drivers go for 50-75k, and concourse versions sell for 6 figures. I really like the white exterior with a blue exterior like this beauty below (Blue canvas soft top and removable white aluminum hard top); It was (yet another Reserve Not Met) bid to $62,000 but failed to sell.     Source: Bring A Trailer The post 1970 Mercedes-Benz 280SL Euro 4-Speed appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTURE5 hr. 15 min. ago Related News

Cost of Admission

We discuss how to optimally navigate a volatile market…   The Cost of Admission for an Investor  Source: Bloomberg, June 30th, 2022   The post Cost of Admission appeared first on The Big Picture. We discuss how to optimally navigate a volatile market…   The Cost of Admission for an Investor  Source: Bloomberg, June 30th, 2022   The post Cost of Admission appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTURE19 hr. 14 min. ago Related News

Revisiting Peak Inflation

    A month ago, I asked: Has Inflation Peaked? There were persuasive indications that at least in terms of three major drivers of inflation — Automobiles, Homes & Wages — we had seen the end of broad price increases. My colleagues Tracy Alloway and Joe Weisenthal, only slightly tongue in cheek, pointed out some… Read More The post Revisiting Peak Inflation appeared first on The Big Picture.     A month ago, I asked: Has Inflation Peaked? There were persuasive indications that at least in terms of three major drivers of inflation — Automobiles, Homes & Wages — we had seen the end of broad price increases. My colleagues Tracy Alloway and Joe Weisenthal, only slightly tongue in cheek, pointed out some other specific items that had seen their prices top and roll over: Rolex watches, Graphics chips, Industrial metals, Bored Apes, Trucking, Yeezys, Shipping rates, Used cars, (Some) houses, and Lumber. It’s not that any of these items are so significant, but rather, the kinds of across-the-board price increases seen in 2H 2021 and most of 1H 2022 have begun to ease. Broadly speaking, we see these 6 large categories as showing encouraging price moderation: 1. Commodity prices: Lumber, Copper, othwer iundustrial metals off substantiually from their peaks; even Energy is off its highs. 2. Inventory: Target, Walmart and other retailers have accumulated lots of stuff; too much stuff that will lead to discounts in the near future;   3. Home Prices: Bidding wars are falling, sales over ask dropping. Homes are staying on the market longer, and more are offering price redcutions. More supply is coming as well. 4. Wages: An increasing number of layoffs, especially in the hottest sectors (Tech, warehouses, crypto, AI and autonomyous driving) suggests a reduced ability to demand higher wages. 5. Automobiles: Production is rising, and invetory of new cars is improving.  6. Travel: Airline ticket prices have been falling during June, see also here Apollo Group’s Torsten Slok notes: “The bottom line is that inflation may stay elevated for another month or two, but given the trends listed above, the probability is rising that inflation going into the second half of this year could come down faster than the market currently expects.” I concur. The official economic data is released on a lag, and we are likely already a month or two past peak inflation.       Previously: Who Is to Blame for Inflation, 1-15 (June 28, 2022) Has Inflation Peaked? (May 26, 2022) Normalization vs Inflation (March 14, 2022) Goods Versus Services (June 3, 2022)     Source: From Chips To Rolexes, 10 Things Where Prices Are Actually Going Down By Joe Weisenthal and Tracy Alloway Bloomberg, June 28, 2022   The post Revisiting Peak Inflation appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 29th, 2022Related News

Who Is to Blame for Inflation, 1-15

    Who is to blame for the rampant inflation the United States (and the entire world) have been experiencing over the past 12 to 24 months? Which individuals and institutions can we hold accountable for the highest consumer price increases in 40 years? A variety of people have been asking this question lately. The… Read More The post Who Is to Blame for Inflation, 1-15 appeared first on The Big Picture.     Who is to blame for the rampant inflation the United States (and the entire world) have been experiencing over the past 12 to 24 months? Which individuals and institutions can we hold accountable for the highest consumer price increases in 40 years? A variety of people have been asking this question lately. The last time we saw an issue generating this much interest and confusion was when the country tried to understand who was to blame for the Great Financial Crisis (GFC). The approach I used in assigning blame for the 2008-09 financial crisis was based on the premise that the world is complex and ascertaining actual causation is a challenge.1 We can use the same approach to the causes of inflation. People seem to like simple, binary answers to complex questions. Econ-Twitter will tell you “It’s the Fed’s fault; Blame Biden, no, it’s Trump’s fault.” But the world is a much more complicated place, not easily broken into clear black and white answers — at least, if you value accuracy. Over-simplified faultfinding is more suitable for ideological slogans that fit on bumper stickers than actual economic analysis.2 Prices change from moment to moment, but the factors that drive those changes can be years or even decades in the making. We tend to overlook this, caught up as we are in the here & now. The reality is many things have contributed to the current inflationary pressures. Here are 15 or so drivers of rising prices, roughly in order. Most of the blame goes to those at the top of the list, the bottom of the list are very modest but real contributors: Inflation Blame 1. Covid-19 2. Congress 3. President Biden CARES Act 3 4. President Trump CARES Acts 1+2 5. Consumers (overspent without regard to cost) 6. Consumers (shift to Goods) 7. Russian Invasion of Ukraine 8. Just in Time Delivery (supply chains) 9. Fed/Monetary Policy 10. Wages/Unemployment Insurance 11. Home Shortages 12. Semiconductors/Automobiles 13. Corporate Profit Seeking 14. Tax Cuts (2017) / Infrastructure (2022) 15. Crypto Let’s delve into each of these: Covid-19: The global pandemic – and the response by governments to the deadly and unknown pathogen – created a unique moment in history. A majority of the workforce was unable to go to their offices or workplaces. Essential workers scrambled to service 100s of millions of people stuck at home. This began a cascade of reactions that dramatically changed the structure of the economy, with lasting ramifications. Without the pandemic, there is no massive fiscal stimulus, no WFH, and no supply chain disruption. Fiscal Stimulus: CARES Act 1, 2, & 3 represent the single largest government response to a crisis — ever. Unprecedented in size and scope, the first CARES Act was a $2.2 trillion stimulus bill signed into law by President Trump on March 27, 2020. Next up, CARES Act II was a $900 billion extension of the original stimulus and was signed into law by President Trump on December 27, 2021. CARES Act 3 (aka The American Rescue Plan Act of 2021) was a $1.9 trillion economic stimulus bill signed into law by President Joe Biden on March. 11, 2021.3 It poured even more fuel on an already smoldering fire. The first CARES Act legislation was the largest economic stimulus package in U.S. history at more than 10% of U.S. gross domestic product; together with parts II ($900B) and III ($1.9T), and the fiscal stimulus was ~$5 trillion. This is almost seven times the amount of the American Recovery and Reinvestment Act of 2009, the $831 billion signed into law by President Obama in February 2009 in response to the Great Financial Crisis. All of this fiscal spending was approved by Congress – so while you can argue over the apportionment between Biden & Trump, it is Congress that controls the spending of government, and so deserves much of the blame. Goods versus Services: The work from home (WFH) phenomena led to a shift in our consumptive habits: Fewer Services, more Goods. Out: Travel, restaurants, entertainment, vacations, elective (non-emergency) medical care. In: Everything that makes nesting, homeschooling, and WFH more tolerable, from computers and desk chairs. Home extensions and renovation led to a massive increase in demand for lumber, landscaping materials, raw building materials, appliances, and furniture. The shortage of starter yeast revealed just how radically consumption had changed. The pandemic lockdown moved the consumer towards goods and away from services. Pre-pandemic, consumers spent 38.7% on Goods, but a whopping 61.3% on Services. In 2020, the demand for Goods rose 20% globally, but production increases were barely 5%. Prices rose accordingly. As an economy, we suddenly began buying food via Instacart/Amazon/Target/Walmart instead of going out to eat; we bought Peletons vs. a gym membership; we purchased large screen TVs instead of going to the movies; we bought cars and Winnebagos instead of going on vacation. Perhaps it’s a good sign that used Pelotons can be found on eBay for a fraction of what they cost new. Russian Invasion of Ukraine: Foods and energy prices were already elevated pre-invasion, but Putin supercharged their prices. Until this war ends, energy prices will likely remain elevated as will grain and other foodstuffs. Consumers: People driving during rush hour complain about being “stuck in traffic.” They are not stuck in traffic, they are traffic. A similar paradigm applies to inflation: Consumers who continue to buy Homes and Cars despite substantial price increases are not suffering from inflation, they are (in part) a driver of inflation. Think about the purchases of homes or used cars, despite price increases that range from substantial to outright ridiculous. When you buy a good, despite big increases, demand can be described as “inelastic.” So you (over)pay an inflated price in order to get the necessitated item. It may feel like you’re suffering from inflation but (just as in traffic) but recognize you are also a source of inflation. Just in Time Delivery/ Inventory shortfall: In the relentless effort to become more efficient and profitable, warehousing inventory became anathema to corporate managers. This dramatically reduced inventory costs but required logistics and supply chains to be incredibly robust. As it turns out, they were not. Semiconductors (Autos): Reopening a temporarily closed chip fab is a complicated expensive process. In 2021, the shortage of New and Used Cars was among the largest contributors to price increases. Housing: We underestimated demand for single-family homes, and then underbuilt them for a decade. Suddenly lots of people wanted one. The large price increases on admittedly smaller volumes are the result. The Eviction Moratorium also plays into this; the unintended consequences may be that landlords are raising apartment rents in order to catch up on lost revenues from nonpaying renters from 2020-21. For some context, BLS reports that in 2021, on the days they worked, 38% of employed persons did some or all of their work at home; 68% did some or all of their work at their workplace. Compare that to the pre-COVID-19 pandemic era on 2019: Workers were less likely to work at home (24%) and much more likely to work at their workplace (82%). Wages: For the past 4 decades, the bottom half of the wage scale lagged dramatically. The minimum wage contributed to Deflation. But nothing is forever, and the circumstances of that power dynamic have turned. Workers,especially the bottom half of paid employees, seem to have gained the upper hand. (We discussed this in April of 2021). Unemployment Insurance: When you give Americans $1.4 trillion in Unemployment, they tend to not want to work for $8 or $10 an hour. And, they form new businesses in record numbers. Fed/Monetary Policy: ZIRP QE did nothing for inflation for a decade-plus, so it’s hard to have them at the top of the list. (I know this back of the list placement will infuriate Fed haters, but I am aiming for accuracy). But once the fiscal stimulus kicked in, the Fed was somewhat behind the curve. At the very least, thru should have been normalizing rates back in 2021. Tax Cuts / Infrastructure: For the sake of completeness, I am including the Tax Cuts and Jobs Act (TCJA) ($1.1 trillion, annually, from 2018 forward) and the 2022 Infrastructure bill (minimum $1.1 trillion over 10 years). I do not believe these are big contributors to the current bout of rising prices, but it’s just that much more fiscal fuel for the fire. Corporate Profit Seeking: I am not in the camp that seeks to place blame on rising prices in companies seeking to increase their revenue and profits. However, as a consumer of goods, one cannot help but notice substantial price increases in items that have very little to do with input costs, supply chain snafus, or semiconductor production shortfalls. While transportation costs affect all goods, some of the price rises we’ve seen are simply people taking advantage of inflation to raise their own prices. You can’t have a capitalist system where companies, shareholders and their management are rewarded for profitability and not end up with some dubious behavior/profiteering on the margins. But I doubt it adds up to very much, best guess maybe 5-10% of the increases (if anyone has data showing more, I’d be curious to see it). Crypto: Why is crypto on this list? 4 Because massive gains led to a series of big spends – from $100 million mansions as Hedge funds and VCs cashed in; but do not ignore the starter homes, where Redfin found “11.6% of people buying homes for the first time said that selling investments in cryptocurrency had helped them save for a down payment.” Lamborghinis have been sold out for 2 years, and (anecdotally) crypto profits are driving at least some of that. Some of the larger dealerships are accepting crypto as a form of payment. ~~~ The world is complex, but the human mind seems to prefer simplicity, even at the expense of accuracy.  As much as we want to point a finger at a single person – whether it’s for partisan reasons or simply as a way of expressing our angst – this is simply not how economies in the real world actually work. The truth is we have many factors leading to higher prices – and some of them are showing signs of peaking…     Previously: Goods Versus Services (June 3, 2022) Normalization vs Inflation (March 14, 2022) $1.395 Trillion Peak Unemployment Insurance (March 4, 2022) Structural or Transitory? (November 23, 2021) How Everybody Miscalculated Housing Demand (July 29, 2021) Elvis (Your Waiter) Has Left the Building (July 9, 2021) The Inflation Reset (June 1, 2021) Shifting Balance of Power? (April 16, 2021) Who is to Blame, 1-25 (June 29, 2009)     _____________ 1. That approach eventually led to the book Bailout Nation. 2. I considered the causation question in the aftermath of the financial crisis, and found numerous people and institutions to blame. Fed Reserve Chairman Alan Greenspan was top of the list, the Federal Reserve’s monetary policy was #2, and the Fed (again) as bank regulator was #11. I originally titled that chapter of Bailout Nation Blame 1-25 but ended up with a list of 33 but could easily have made it 50. 3. The Tax Cuts and Jobs Act of 2017 was signed into law by President Trump on December 22, 2017 and put ~$1.125 trillion into the economy 2 years before the pandemic. 4. I left out very tenuous to demonstrate players, such as the anti-vaxxers, who delayed the reopening of the economy, and Facebook/Twitter and other social media, who spread their misinformation. Crypto is here due to housing and cars, but I put it at the bottom of my list. At a certain point, the impact of modest factors attenuates rapidly.   The post Who Is to Blame for Inflation, 1-15 appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 28th, 2022Related News

Transcript: Jonathan Miller

The transcript from this week’s, MiB: NAME, TITLE, 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. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast,… Read More The post Transcript: Jonathan Miller appeared first on The Big Picture. The transcript from this week’s, MiB: NAME, TITLE, 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. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest, Jonathan Miller. I’ve been reading his research and writing about real estate, and appraisals, and home price trends, and anything related to residential real estate for, I don’t know, it’s got to be close to 20 years. He is the co-founder of Miller Samuel. His data analytics and research powers are the back end of some of the biggest real estate agencies in the country. He always has a tremendous amount of insight as to the current state of the market and the best way to contextualize what’s going on in real estate. And we really talked about everything from aspirational pricing to our markets at a peak, and when markets do peak and rollover in real estate, why it takes so long for prices to adjust. Newsflash, sellers are anchored via the endowment effect to their own value of their home prices which lag the actual market for a long time. We talked about the death of cities being greatly overstated and why it’s so challenging to convert all that excess office space into residential properties. If you are at all interested in real estate, buying a house, selling a house, renting an apartment, owning a condo or co-op, or just want to know what the heck is going on with real estate today, you will find this conversation to be absolutely fascinating. So with no further ado, my conversation with Jonathan Miller. ANNOUNCER: You’re listening to Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Jonathan Miller. He is the CEO and co-founder of Miller Samuel, a real estate appraisal and consulting firm he first founded in 1986. His data and analytics powers, many of the largest brokerage firms reporting and information about the state of the housing market. He is our returning champion. I think you and Scott Galloway are tied for the most Masters in Business appearances. Jonathan Miller, welcome back to Bloomberg. JONATHAN MILLER, PRESIDENT, CEO, CO-FOUNDER, MILLER SAMUEL INC.: Great to be here. Barry. Thanks. RITHOLTZ: So — so let’s just talk a little bit about your background. You co-found Miller Samuel in 1986. What led you to the appraisal real estate and consulting business way back then? MILLER: Well, initially, I worked for a management company that was bought by Marriott back in the mid-80s. And I said, well, what am I going to do with myself? And I got my real estate license, and I became a r.....»»

Category: blogSource: THEBIGPICTUREJun 27th, 2022Related News

The Man Who Broke Capitalism

If everybody in America read this book there would be a revolution: “The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy“ About fifteen years ago my dream died. You know, where the stars align and you become rich and famous. Because… Read More The post The Man Who Broke Capitalism appeared first on The Big Picture. If everybody in America read this book there would be a revolution: “The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy“ About fifteen years ago my dream died. You know, where the stars align and you become rich and famous. Because I realized there was no way I could do what I did and become rich. And by modern standards even entertainers are not rich. You can’t earn billions by singing. Now you want to argue with me. Yes, there is Paul McCartney, but he started eons ago. As for Dr. Dre, he made his money on headphones. But I don’t want to go any deeper here, because this is just what the rulers of this country want, for the hoi polloi to be distracted with petty arguments. My mother always told me I wasn’t the one. There was always someone smarter, more connected, who knew more. As for my father? He was so internalized from a rough upbringing that all he could do was rage. And then try to make up for it by being loving. He was an outsider, and knew it and owned it. If I was looking for instructions on how to be a man in society, they would not come from him. But he constantly poured out business advice, telling me to dig beneath the surface, for things were frequently not what they appeared to be, what everybody was telling you they were. So I went to college in the dark ages, when the goal was to be a doctor or a lawyer, so you’d be set up for life, so your parents wouldn’t have to worry about you. I just read in the “Times” this morning that pay for public defenders is so bad they’ve got to take second jobs to make ends meet, never mind since Watergate lawyers have never been respected again. And although you read about MDs making beaucoup bucks, the truth is most are making a good living, far from seven figures, many not even mid six figures, working for the corporation, the paperwork will bury you otherwise. If you’ve got an independent practitioner, you’re one of the few. So things started to change in the eighties, with Reagan. He’s another person who has to be torn down from his pedestal. This guy ruined the economy forever, single-handedly opened the door for income inequality. And Clinton, after losing traction after the ’94 election, stopped being progressive and endorsed right wing tropes, eliminating welfare benefits. And then the Supreme Court gave the presidency to Bush and it was all over. Not that any of the foregoing people is that powerful. It’s the corporations that rule this world, and now they’re multinational, beholden to nobody. And their CEOs are seen as laudable titans. Michael Eisner did a great job rescuing Disney from the doldrums, but was it worth a billion dollars? By time he exited the company he was its largest shareholder. How can that be? You go from being an employee to that big an owner? You see executive salaries are way out of whack. And we can credit Jack Welch for that. Jack Welch, the manager of the CENTURY! That’s what they called him. For meeting Wall Street analysts’ numbers year after year. When I was in law school, my girlfriend’s father gave her a subscription to the “Wall Street Journal.” I saw this as a negative, because of its right wing politics. But as I read it I became more and more familiar with business. It’s a different paper now, the business coverage is often better in the “Times,” but if you read it on a regular basis you’ll get an idea of what is going on. Then you’ve got to connect the dots yourself. So we’re in the go-go nineties, after the traction of the eighties, and this Welch guy is suddenly an icon and I look a little deeper and I say there is no way this can be true, this guy is obviously cooking the books. But what did I know? Isn’t that exactly what my parents told me, I was an inferior outsider looking in, sans all the facts, these people were GIANTS! Well it turned out it was true. Now everybody knows. We can ask whether Welch literally cooked the books, as in outright fraud, but it’s clear that financial shenanigans were employed to meet Wall Street’s numbers, SO THE STOCKHOLDERS WOULD BE REWARDED! Let me tell you how this worked, it’s not too hard. Welch invested heavily in finance. And then he would buy and sell stuff to make his numbers every quarter. Jeffrey Immelt, his successor, ultimately missed his numbers and his excuse was they couldn’t get the usual financial transactions done in the last two weeks of the quarter! I’m chuckling just writing this. People oftentimes reveal their bad behavior if you just let them talk long enough. So, used to be corporations were a partnership with the public, the essence was its products, and the employees were seen as an asset. But not under Neutron Jack. First thing he did was fire employees. Not only causing them to lose their jobs, but decimating entire communities. This made the numbers look better. And when the numbers looked bad, he just bought stuff. You’d be stunned how CFOs can work the books. The recipe was simple: downsize, make deals and financialize. End result? GE stock kept going up and up. As for GE itself? It’s being broken up in the wake of Welch’s efforts. There’s no there there anymore, at least not much. And did I mention Welch made HUNDREDS OF MILLIONS OF DOLLARS in the process? Let’s dig a little deeper. Economist Milton Friedman said a corporation’s only obligation was to its shareholders, to make them money. So America became a casino, all the jobs were shipped overseas and the business of many of these companies was finance. But it gets worse. These companies were making so much dough that they increased dividends and repurchased their shares to make their stock go ever higher. AND THIS IS STILL HAPPENING! That’s right, you cut until you create a cache of cash, and then you distribute it and buy back shares to make your stock go up AND YOU ARE HANDSOMELY COMPENSATED FOR THIS! You’re making money, but the corporation?? But it gets even worse than this, GE was seen as the bedrock of management skills, you wanted a GE titan in charge. So all these corporations brought in GE talent which then employed the exact same recipe. Can you say BOEING?? People died there, but Welch’s protégés ruined one company after another, while they made tens of millions, hundreds of millions of dollars in the process. Even Warren Buffett, the Oracle of Omaha, he was down with firings too, after all he’s an investor first and foremost! In other words, just about every CEO who is praised, who struts around like a king, and they’re essentially all men, is a crook out for himself. Truly. As for knowing how to run a company? They know how to cook the books and make the stock price go up. The underlying company? WHO CARES! They ultimately get fired and get golden parachutes worth tens of millions of dollars on top of all that money they got paid while they were ruining the company! Everybody inside knows the above. It’s a club, and as George Carlin said, you’re not in it. Prior to Welch CEOs were not making these outrageous salaries. But Jack convinced Wall Street the pay packages were worth it, after all, look how much money he made for them! Forget building, never mind sustaining the underlying company. One of the other things all these Welch acolytes do to save money is cut R&D, research and development, i.e. the longevity of the company. It gets worse and worse. Welch fires 10% of the employees every year, resulting in a cutthroat worker environment. No one will take the time to help anybody else, they need to keep their numbers up, they can’t waste any effort. And it’s not only Welch, how about Jeff Bezos and Howard Schultz? Things are so bad in America that workers are starting to unionize. Not only the uneducated laborers, but the college educated who can’t get a better job themselves, get on the corporate gravy train. And rather than embrace unions, Amazon and Starbucks fight them all the way, they don’t want to give up an iota of power. That’s right, the corporation rules and you’re a fan, after all, who else is there to believe in, musicians hawking perfume and clothing, trying to suck the tit of corporations which laugh at these “singers,” who don’t realize they’re the tools that are being used. Rather than rebelling against corporations, people EMBRACE THEM! Get tattoos of them. And their leaders, who call themselves “rock stars,” are looked to for answers about anything and everything, tell us they know better, when in truth they’re clueless and helped cause the problems to begin with! Watch “Borgen,” politics is a professional game. You’ve got to negotiate for a result. Instead we’ve got bozos in Congress who believe stonewalling steers the country forward. Hell, they should close down for a week and watch the last season of “Borgen.” As I said, people on the inside know all this. But there’s never been a book that’s laid it all out, put it all together in such a damning way. One guy, Jack Welch, set in motion a transformation of society much bigger than the social issues discussed on TV, that too many Americans make their voting decisions upon, if they vote at all. As for planning for the future? Just in time inventory programs made it so when the pandemic hit…there were no supplies. Yes, to cut costs, to increase the numbers, to make the stock go up, the corporate CEOs took everything off the books. Jobs were outsourced. Someone else built the parts, they held the inventory. Boeing stopped making almost all of its planes in-house and turned over manufacture to outside vendors. Why? Not because Boeing was doing a bad job, but to save money, to make the numbers look good, to make the stock go up, so the CEO could get ever richer! As for the problems this caused… Well, hundreds of people ultimately lost their lives, not that these execs are contrite when this happens. That was another one of Welch’s credos, fight back, don’t own it, it’s not your fault if there’s even a problem to begin with! But almost no one will read “The Man Who Broke Capitalism.” Because they don’t read books to begin with. Unless they’re genre tomes, romance, mystery, if that! Or self-help from these same guys who ruined the economy to begin with! And “The Man Who Broke Capitalism” is not the easiest read, it’s far from tough, it’s highly readable, you’ve just got to be interested. And it’s not even that long. And it doesn’t matter if you’re left or right, Democrat or Republican. This isn’t a political issue, other than the government letting these companies rape and pillage without even paying any taxes, barely regulated. Everybody is affected by what these companies do. Be the first on your block. Read “The Man Who Broke Capitalism.” You won’t stop talking about it. We’ve got to start somewhere.   ~~~ Visit the archive: — Listen to the podcast: — @Lefsetz — Subscribe to the LefsetzLetter The post The Man Who Broke Capitalism appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 26th, 2022Related News

MiB: Jonathan Miller on Residential Real Estate

  This week, we speak with Jonathan Miller, who is CEO and co-founder of the real estate appraisal and consulting firm Miller Samuel. He is an adjunct associate professor at Columbia University’s graduate school of architecture and planning. he also serves on the Mayor’s Economic Advisory panel and the New York State Budget Division Economic… Read More The post MiB: Jonathan Miller on Residential Real Estate appeared first on The Big Picture.   This week, we speak with Jonathan Miller, who is CEO and co-founder of the real estate appraisal and consulting firm Miller Samuel. He is an adjunct associate professor at Columbia University’s graduate school of architecture and planning. he also serves on the Mayor’s Economic Advisory panel and the New York State Budget Division Economic Advisory Board. His research and analytics powers the back end of some of the larger real estate brokerage firms. We discuss the pullback in real estate demand due to rates almost doubling; contact volume is down, and has been trending that way since March. The collapse in inventory is also to blame, as has the fall in affordability. During most real estate slowdowns, sales activity slows immediately, as inventory rises. But prices tend to take a few years to reflect the new market, awaiting seller capitulation. Miller hopes we might see a faster adjustment given the recent big runup in home equity. He also explains why it is so challenging to convert urban office towers into residential buildings. Big cities like New York and San Francisco find themselves with a surplus of office buildings that are running about 2/3rds empty, while there are acute shortages of residences at most price points. A list of his favorite books is here; A transcript of our conversation is available here this week. 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. Be sure to check out our Masters in Business next week Perth Tolle with founder of Life + Liberty Indexes, index provider and sponsor of the Freedom 100 Emerging Markets ETF. The first-of-its-kind strategy uses personal and economic freedom metrics as the primary factors in its investment process. Prior to forming Life + Liberty Indexes, Perth was a private wealth advisor at Fidelity Investments in Los Angeles and Houston and had lived and worked in Beijing and Hong Kong, where her observations led her to explore the relationship between freedom and markets.     Jonathan Miller Favorite Books Fins: Harley Earl, the Rise of General Motors, and the Glory Days of Detroit by William Knoedelseder   The Reckoning by David Halberstam The post MiB: Jonathan Miller on Residential Real Estate appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 26th, 2022Related News

Pagani Huayra Codalunga, Grandi Complicazioni

Last week, we looked at the Ford F150 Lightning. I had the EV truck for a week and drove it around every day, range anxiety be damned. This week, we are going in the opposite direction: The Pagani Huayra Codalunga Grandi Complicazioni. The Pagani Huayra Coupé was the starting point, the design allowed even better… Read More The post Pagani Huayra Codalunga, Grandi Complicazioni appeared first on The Big Picture. Last week, we looked at the Ford F150 Lightning. I had the EV truck for a week and drove it around every day, range anxiety be damned. This week, we are going in the opposite direction: The Pagani Huayra Codalunga Grandi Complicazioni. The Pagani Huayra Coupé was the starting point, the design allowed even better aerodynamics and decreased weight. Codalunga is Italian for ‘longtail.’ The project itself came out of discussions between clients and Pagani ‘s designer. The company made just five of these bespoke supercars at €7 million ($7.4m), pre-sold. It began four years ago, no delivery date has been announced yet, but I assume deiveries will occur sooner than later. The specs of the supercar, are, well super: -2,822 pounds 5980cc Twin-Turbo V12 (36 Valves) -840 horsepower -811 lb-ft of torque. -Carbon TItamium Monocoque The “basic” ($1m) Huayra Coupé the Codalunga is based on has ~100 less HP and weighs ~150 pounds more — it does 0-60 mph in 2.7 seconds. No 0-60 times on the Longtail yet, but it should be < 2.5 seconds. It looks like a nice ride…   Source: Pagani See Also: Road and Track, Jalopnik, Motor1     ~~~ The post Pagani Huayra Codalunga, Grandi Complicazioni appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 24th, 2022Related News

Good-Bye Robin Hood

  Early last year, I wanted to learn more about what was going on with the day trading crowd — meme stocks, YOLO, Reddit, etc. — so I opened a Robinhood account. It was an eye-opening experience to see how trading had become “gamified.” (I entered less than a dozen orders and got executed on… Read More The post Good-Bye Robin Hood appeared first on The Big Picture.   Early last year, I wanted to learn more about what was going on with the day trading crowd — meme stocks, YOLO, Reddit, etc. — so I opened a Robinhood account. It was an eye-opening experience to see how trading had become “gamified.” (I entered less than a dozen orders and got executed on fewer than half of them). Keep in mind, my career began on a trading desk, where we used everything from Instinet to Bloomberg to SOES to Nasdaq Level III. I’ve traded stocks, options, ETFs, mutual funds, and bonds. I know my way around trading programs. In terms of interface and user experience, Robinhood was less like those professional products — it was closer to CandyCrush than it was NQDS. It was obvious to see what was coming; as we discussed before the market began to roll over, too many people began to think trading was easy: “How do we make money day trading from home? We only buy stocks that are going up; if they don’t go up, we won’t buy them.” If only… Understanding what is “Luck” and what is “Skill” is challenging. Indeed, as Dunning-Kruger showed, metacognition — the ability to self-evaluate your own skill set — is itself a discrete skill. Your metacognition in a particular ability improves as your abilities in that particular field improve. The good news is that these sorts of trading apps never presented the kind of systemic risk we saw in the 2008-09 GFC; the bad news is that lots of folks traded too much and lost some money. Some traded large amounts and lost a lot of money while a few traded everything and lost it all. Despite the ironclad economic rule “There is no such thing as a free lunch,” people tend to forget. While I might not be the experience level1 or the generation that RobinHood is targeting, it is easy to see how addictive this could become. On the desk, you had to learn to recognize when you were trading for profits or for the adrenaline or dopamine rush. It was easy to see how the algorithms behind phone trading apps were targeting this same limbic system response. That could become a problem for some people. I have nothing against Robinhood,2 but they were yet another compliance report I had to fill out, and it is simpler to maintain a personal account with one of RWM’s custodians (Schwab, Fidelity, or TD) than a third-party app. One other thought comes to mind: You end up with a very different product when financial people deploy technology than when technology people roll into finance.     Previously: One-Sided Markets (September 29, 2021) Wrong Side of the Trade (April 15, 2022) My Worst Trades (September 7, 2021)     _________ 1. It has become legendary how easy it was to game the options trading approval algo, but rather than do that I filled the RH Options application honestly.  Trading experience: 30 Years; Options experience: 25 Years. Assets: $3 billion dollars. Amusingly, I was not approved for RH option trading. 2. Other than missing their seek round in 2014 or 15. At the time I passed on RH, I called it “The dumbest investment idea I have ever heard.”   The post Good-Bye Robin Hood appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 24th, 2022Related News

Transcript: Dr. Charles Strom

     The transcript from this week’s, MiB: Dr. Charles Strom on Antibodies & Early Cancer Detection, 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 .....»»

Category: blogSource: THEBIGPICTUREJun 22nd, 2022Related News

The Challenging Middle

Percentage of S&P 500 Stocks Above Their 200-Day Moving Average    We now enter the most challenging part of the bear market: The tedious middle. This is the portion of the bear cycle where we’ve fallen far and long enough to have scared off the BTFD crowd. There is an excess of bears. More importantly,… Read More The post The Challenging Middle appeared first on The Big Picture. Percentage of S&P 500 Stocks Above Their 200-Day Moving Average    We now enter the most challenging part of the bear market: The tedious middle. This is the portion of the bear cycle where we’ve fallen far and long enough to have scared off the BTFD crowd. There is an excess of bears. More importantly, a variety of technical indicators are near as oversold as they ever get. It is encouraging to those who are hoping the worst of it is behind us. So we rally. I suspect this may not be anything more than a relief rally, a way to work off a deeply oversold condition. We discussed this concept generally ~two months ago in “Too Many Bears.” It’s a bottom, but is it THE bottom? I dunno… Consider a few indicators that most of the time, are not especially informative, but at extremes, can be very useful: • Away from 200 day Moving Average: S&P 500 was 16.9% below its 200-dma, a fairly dramatic move below its trend line. • Percentage of stocks above 200 day moving average: Only 11.3% of the S&P 500 stocks are trading over their 200-dma last week. This is a fairly deeply oversold level. • Volatility: The VIX rose to 31.1 last week – elevated, but not the sort of capitulatory levels we have seen prior. • Put/Call Ratio: Rose above 0.80 – higher than average, but not at historical extremes (e.g., 2020, 2018, 2010. 2008-09, 2000-02 etc.). • Consumer Sentiment: At 59.4%, it is below the 1990 (65.5%) and 2001 (82.7%) lows but above the 2008 (55.3%) and 2011 (55.8%) levels. Markets are deeply oversold, but not necessarily at the sorts of levels that have been permanent lasting levels. That lowers the probability that this rally is sustainable, and raises the chance it’s merely a bear market relief rally. Over the weekend, I must have seen a dozen historical analogies, all of which seem to know where and when to buy: Prior market action during inflationary cycles, what the 2nd year of the presidential cycle (or midterm markets) do, average pullback during Fed rate hiking cycles, median drawdowns during recessions, average length/depth of corrections, etc. I am sure there are many others. Be wary. This present cycle is so unusual – pandemic lockdown, fiscal stimulus, overdue wage increases, inflation spike, supply chain issues, ongoing global pandemic, and a Fed overreaction (even panic) – that prior cycles do not fit very neatly. Be cautious of any analyst or forecast that has way too much confidence in its favorite historical analogue. One last thought: The key to whether this is the bottom or a bottom is how markets trade during an oversold rally: Do we get a one-day wonder? An intraday reversal where the strong futures can’t be sustained? Can the market put together a string of days and weeks where the sellers are exhausted and the buyers drive prices higher on expanding volume? Or, have we merely become so oversold has the rubber band been pulled so far to one direction that we get a snapback that fails to hold? We will know soon enough. My suspicion is we haven’t done quite enough work on the downside to have a true bottom — that’s just a gut feel, also take it as my educated guess.     Previously: Too Many Bears (May 3, 2022) One-Sided Markets (September 29, 2021)   The post The Challenging Middle appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 21st, 2022Related News

Origins of Latte Nonsense

    “Buy Yourself a F*^king Latte” was one of the more popular pieces I wrote in 2019. It was a debunking of a ridiculous claim by Suze Orman that buying coffee was like “peeing $1 million down the drain.” Uh, no. Another silly spending scold, guilting people into not buying things they can easily… Read More The post Origins of Latte Nonsense appeared first on The Big Picture.     “Buy Yourself a F*^king Latte” was one of the more popular pieces I wrote in 2019. It was a debunking of a ridiculous claim by Suze Orman that buying coffee was like “peeing $1 million down the drain.” Uh, no. Another silly spending scold, guilting people into not buying things they can easily afford is one thing. That is bad enough, but consider the hypocrisy of these folks who themselves buy the sorts of overpriced baubles they counsel against. Helaine Olen (MiB; see endnote here) has been calling out these folks for longer than any else I recall. But I never knew where these absurd finger-wagging anti-Latte scolds came from. Until now. Here is Mark Dent of The Hustle: “The idea that fewer lattes could solve millennials’ financial woes has been around for more than 20 years and can be traced to one man: a financial adviser and author named David Bach. “Are you latte-ing away your future?” Bach asked in a 1999 book. “Everyone makes enough money to become rich. What keeps us living paycheck to paycheck is that we spend more than we make on stuff we don’t need.” Bach’s formula featured some questionable math. (The annualized returns on the Dow Jones, for instance, were ~9.7% between 1949 and 1999 — not 11% — and even assuming the latter rate, Bach’s own “Latte Factor Calculator” shows that saving $5/day for 40 years wouldn’t produce anything close to $2m.)” Now we know who to blame for this ongoing BS… Aside from the bad math and overall silliness of the Latte nonsense, the real issue is it ignores the much bigger concern about median wages. Despite recent gains, median wages have not kept up with bigger ticket items like homes over the past half-century: Focusing on minutia while ignoring much bigger concerns may be a great plotline for an episode of Seinfeld, but it is a terrible way to engage in financial planning…     Previously: Buy Yourself a F*^king Latte (April 5, 2019) Kawhi Leonard, Please Buy a New Car (January 17, 2020) ‘Never Buy a Boat’ and Other Misguided Financial Advice (October 3, 2015) Advise accordingly ( January 15, 2020)     Source: ‘Just stop buying lattes’: The origins of a millennial housing myth by Mark Dent The Hustle, June 18, 2022   The post Origins of Latte Nonsense appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 20th, 2022Related News

The Brian Wilson Movie

The Brian Wilson Movie.....»»

Category: blogSource: THEBIGPICTUREJun 19th, 2022Related News

MiB: Dr. Charles Strom on Antibodies & Early Cancer Detection

  This week, we speak with Dr. Charles Strom, former Medical Director for Genetic Testing at Quest Diagnostics. He has spent the past 30 years in the fast-changing field of genetic testing, and did groundbreaking work in pre-implantation genetics while at the Reproductive Genetics Institute, and served as a faculty member at the University of… Read More The post MiB: Dr. Charles Strom on Antibodies & Early Cancer Detection appeared first on The Big Picture.   This week, we speak with Dr. Charles Strom, former Medical Director for Genetic Testing at Quest Diagnostics. He has spent the past 30 years in the fast-changing field of genetic testing, and did groundbreaking work in pre-implantation genetics while at the Reproductive Genetics Institute, and served as a faculty member at the University of Chicago, where he also earned his doctorate and medical degrees. Currently, he is CEO and co-founder of Liquid Diagnostics, which uses new technology to analyze ultra-short DNA fragments in saliva and blood, We discuss how the latest medical technology can look for specific disease markers in antibodies in saliva — a much less invasive process than biopsies or blood draws. There are also genetic markers for specific types of cancers, which are difficult to detect otherwise. As an example, 80% of lung cancers are detected when they are in phase 3 or 4. At that stage, it is too late to successfully treat the disease, and the outcome is invariably poor. If at-risk patients have these (or other) cancers detected earlier, the prognosis improves dramatically. He explains how during the pandemic, Liquid Diagnosis added Covid-antibodies to their test kit. Rather than merely determining if a patient is positive or negative for Covid, they can determine quantitative antibody levels. This creates a substantial tool for determining how at risk an individual or entire city or region is. High levels of antibodies suggest a city can withstand a new surge, low levels indicate potential higher levels of infection, hospitalization, and mortality. Dr. Streom notes that in public health, everybody is considered the same. But that turns out not to be the case. If you can determine your antibody level, you can decide if you need a second or third booster. People with high levels of Covid antibodies should feel free to do whatever they were doing pre-covid and can postpone another booster until cold & flu season. Those with low antibodies should get a booster immediately. A list of his favorite books is here; A transcript of our conversation is available here Monday. 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. Be sure to check out our Masters in Business next week with Jonathan Miller, discussing real estate, home sales, rentals, and whether cities are dead or not. Miller is the CEO and co-founder of Miller Samuel, whose data and analytics on real estate have become the standard for the residential real estate appraisal and brokerage industry.     Buck Strom’s Favorite Books Shoeless Joe: The Inspiration for FIELD OF DREAMS by W.P. Kinsella Bach’s Goldberg Variations (Once Upon a Masterpiece) by Anna Harwell Celenza A Harry Bosch Novel (20 book series) by Michael Connelly The Lincoln Lawyer by Michael Connelly The post MiB: Dr. Charles Strom on Antibodies & Early Cancer Detection appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 18th, 2022Related News

Ford to Tesla: “We got it from here”

  The most fascinating thing about Tesla is how the electric vehicle maker forced the entire automotive industry forward. Elon Musk deserves much of the credit, but it’s easy to overlook the contributions of Amazon‘s Jeff Bezos. Over the past 25 years, Amazon has cut a devastating swath across the entire retail sector, as stores,… Read More The post Ford to Tesla: “We got it from here” appeared first on The Big Picture.   The most fascinating thing about Tesla is how the electric vehicle maker forced the entire automotive industry forward. Elon Musk deserves much of the credit, but it’s easy to overlook the contributions of Amazon‘s Jeff Bezos. Over the past 25 years, Amazon has cut a devastating swath across the entire retail sector, as stores, malls, wholesalers, and retailers watched profit margins shrink and their customers abandon them in droves. Legacy automakers saw the devastation wrought by Amazon and decided they were having none of it. They would not allow Musk to do to them what Bezos did to the retailers. Despite being calcified, bureaucratized, century-old legacy automakers, they reacted quicker than retailers did. The result is a burgeoning EV market with dozens of new models for sale today and many dozens more coming over the next 36 months. This is how the $40,000 Ford F150 Lightning came to be. I spent a week with this behemoth and it’s quite a spectacular vehicle, very different than my usual rides. I will share a few thoughts about the F150 Lightning, my expectations for how it will do, and what the future might bring for EVs, Tesla, and legacy automakers. One other thing: Wherever we went, the Lightning attracted attention. people came up to us in parking lots outside of restaurants at the beach and wanted to ask about the F150. Once these become more common, I expect the attention will fade. The Lightning This is a full-sized pickup truck, with the same dimensions as the traditional Ford F-150, the best-selling vehicle in America for the past 40-plus years. If a pickup is your regular drive, you will feel right at home in this vehicle. The Lightning comes in four flavors: Pro ($39,947), XLT ($52,974), Lariat ($67,474) and Platinum ($90,874). My tester was a maxed-out Platinum with a $94k sticker. It’s a high-quality Luxo-barge, with excellent fit and finish and all sorts of great tech. The dual-motor extended-range battery cranked out 580 horsepower (about the same as my BMW M6) and 775 lb-ft of torque. On a full charge, you can expect 300 miles for the Platinum (320 miles for the Lariat). How you drive has a huge impact on range. With the truck fully loaded and driving a careful 55 mph east got much better gas mileage than I did stomping it on the way home with an empty pickup bed. The base version at $40k is a whole lot of truck for the money: AWD, dual motors good for 452 horsepower and 775 lb-ft of torque and a range of 230 miles. Ford noted more than half of the pre-orders were the midrange models. It’s handsome, as far as pickups go. The light bars front and back and the charge port on the driver side (the one on the passenger side is a dummy) are the only external cues this is not your usual internal combustion engine (ICE) F-150. The immense vertical touch screen in the center of the dashboard is another clue. Driving I normally don’t drive a pickup truck or even a full-sized SUV. I tend towards low-slung, high-horsepower fun machines; my past three utility vehicles were a BMW X4, Porsche Macan S, and Honda Crosstour. It took a little getting used to something of this size and heft. Slide 1,500-1,800 pounds of battery underneath and you have a 6,855 pound vehicle that handles rather differently than a sports car. It takes more than a gentle thumb to move the steering wheel of this beast through any sort of turn. Bringing the behemoth to a dead stop requires planning and anticipation. This is a genuine issue because the Lightning accelerates to 60 mph in just 4 seconds. It pains me to say this, but it’s testimony to the superiority of the EV platform versus traditional ICE just how fast this truck is. The Platinum is a very comfortable ride with all of the creature comforts and luxury settings you would expect from a near 6 figure truck. If your usual SUV is an Acura or Lexus, you will find yourself surprisingly comfortable in the Lightning. Space The F150 is huge inside. Grab handles on the A pillars make it easy to pull yourself into the driver or passenger seat of the spacious cabin. The rear seats of the Crew Cab were spacious for even the largest inhabitants. They fold up, in case you need even more space. The five and a half feet bed (67.1 inches) swallowed up a big 4 burner grill, a 6 foot outdoor table, and a disassembled Roman hammock, along with other assorted stuff for our drive out to the beach house. But the show-stopper was the “Frunk” – the massive front trunk that was about the size of a normal passenger car trunk. I tossed a few overnight bags and other goods in it with plenty of room to spare. Features and Options I really liked the wonderful driver assist / lane keep / cruise control. It works well, nearly invisibly, and only requires you stare ahead at the road – hands on the wheel or not. But look at the giant center screen for more than moment and it nags you to pay attention. about that screen: My beef is the same one I’ve had with every EV I’ve driven: controls buried two or three screen layers in that would have worked better as physical buttons. In fact, I would prefer if all EV makers had a simple strip of climate controls as physical buttons including heated and cooled seats and ventilation recirculation. Before you “OK, Boomer” me, it is obvious to someone who has been driving longer than you have been alive that this is going to cause accidents — it’s just too distracting. Probably less damage than cell phones have caused, but there will be accidents nonetheless. But the center screen is fast and responsive, with Ford’s trademark giant volume knob bottom center. The bottom 2 inches of the screen is reserved for climate controls. It’s as good an automobile infotainment screen as any I’ve seen, regardless of price. There are outlets and charging ports everywhere: In the front, the back, the frunk, the pickup bed. This is a vehicle that expects to be busy at work sites. Range and Charging The truck arrived 85% charged and I thought I would top it off. I plugged the truck’s charger into an extension cord running into the garage and the orange light came on which I assumed meant it was charging. It was not as I discovered the next morning. a quick search of the Ford message boards and I discovered that I needed to make sure the plug was clicked into place and when that occurred the charging light turned blue. Chalk it up to a newbie error. A regular 120-volt source of power adds only a few miles of range per hour. Overnight gets you barely 30-40 miles. At the beach, we were able to snag primo parking at the chargers. I use the app “EV Connect” and added another 35 or so miles of range for $6 over 2 hours. I had no idea at the time that this would be a bargain with gas over $5 a gallon. By now, you probably have heard you can run your entire house off of a fully charged truck for 3 days. I was amused by how much of my usual vocabulary has been driven by a lifetime of experiences with ICE: “Step on the gas, fill up the tank, exhaust note, engine – all phrases that served as constant reminders this is a new era. ~~~ Would I buy a Ford F-150 Lightning or any other EV today? I have no need for a pickup truck so the Lightning is out of the question for me. However, I have no doubt that this is going to be a massive seller for Ford. I suspect this is likely to be the vehicle that gets middle America to adopt electric vehicles. As to other EVs, what I like seem wildly overpriced relative to their ICE competitors: Porsche Taycan, Audi GT eTron, even the Lucid Air and Tesla Plaid are quite expensive,  even with gas over $5 a gallon. That’s before we install a 240 charger in the garage here and at the beach house. As of today, I am not an ideal customer for pure EVs, much more inclined toward hybrids. We were looking at winter homes pre-covid – if the housing market returns to sanity we would want an SUV we can load up for the trip back and forth down the coast without the need to plan around charging. My shortlist includes new versions of Defender 110 or the HSE Sport available soon in the US; the UK versions are high-performance hybrids garnering high double-digit MPG. If BMW ever decided to share their X5 hybrid technology with the X6, I would add that to our shortlist as well. And ever since I totaled my wife’s Panamera 4S (T-boned at 5 mph) the hybrid version of that vehicle has been on my list also. We are in the transition period from ICE to EV – a hybrid would serve my family’s needs well. Spending a week with the Ford F-150 lightning left me with no doubt about a few things: -The truck is going to be a huge hit (even if I don’t feel the need to be an early adopter). -The transition to EVs is going to happen much faster than people expect; -Ford has gotten its game together and is going to be a serious challenger to Tesla. They’re fit and finish is vastly superior, but Tesla still has the edge in terms of software and programming. -Don’t be surprised to see an electrified version of the smash hit Bronco within two years also. -We are already past peak ICE, but they will stay on the road for another 10 to 20 years after initial sale; -Credit to Elon Musk (and Jeff Bezos) for driving us into the future. EVs are here, and the future is coming fast. Faster than you might think…     Previously: Ford vs Ferrari Tesla (January 6, 2022) 2021 Mustang Mach E (December 18, 2020)   The post Ford to Tesla: “We got it from here” appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 17th, 2022Related News

Ford to Tesla: We got it from here

  The most fascinating thing about Tesla is how the electric vehicle maker forced the entire automotive industry forward. Elon Musk deserves much of the credit, but it’s easy to overlook the contributions of Amazon‘s Jeff Bezos. Over the past 25 years, Amazon has cut a devastating swath across the entire retail sector, as stores,… Read More The post Ford to Tesla: We got it from here appeared first on The Big Picture.   The most fascinating thing about Tesla is how the electric vehicle maker forced the entire automotive industry forward. Elon Musk deserves much of the credit, but it’s easy to overlook the contributions of Amazon‘s Jeff Bezos. Over the past 25 years, Amazon has cut a devastating swath across the entire retail sector, as stores, malls, wholesalers, and retailers watched profit margins shrink and their customers abandon them in droves. Legacy automakers saw the devastation wrought by Amazon and decided they were having none of it. They would not allow Musk to do to them what Bezos did to the retailers. Despite being calcified, bureaucratized, century-old legacy automakers, they reacted quicker than retailers did. The result is a burgeoning EV market with dozens of new models for sale today and many dozens more coming over the next 36 months. This is how the $40,000 Ford F150 Lightning came to be. I spent a week with this behemoth and it’s quite a spectacular vehicle, very different than my usual rides. I will share a few thoughts about the F150 Lightning, my expectations for how it will do, and what the future might bring for EVs, Tesla, and legacy automakers. One other thing: Wherever we went, the Lightning attracted attention. people came up to us in parking lots outside of restaurants at the beach and wanted to ask about the F150. Once these become more common, I expect the attention will fade. The Lightning This is a full-sized pickup truck, with the same dimensions as the traditional Ford F-150, the best-selling vehicle in America for the past 40-plus years. If a pickup is your regular drive, you will feel right at home in this vehicle. The Lightning comes in four flavors: Pro ($39,947), XLT ($52,974), Lariat ($67,474) and Platinum ($90,874). My tester was a maxed-out Platinum with a $94k sticker. It’s a high-quality Luxo-barge, with excellent fit and finish and all sorts of great tech. The dual-motor extended-range battery cranked out 580 horsepower (about the same as my BMW M6) and 775 lb-ft of torque. On a full charge, you can expect 300 miles for the Platinum (320 miles for the Lariat). How you drive has a huge impact on range. With the truck fully loaded and driving a careful 55 mph east got much better gas mileage than I did stomping it on the way home with an empty pickup bed. The base version at $40k is a whole lot of truck for the money: AWD, dual motors good for 452 horsepower and 775 lb-ft of torque and a range of 230 miles. Ford noted more than half of the pre-orders were the midrange models. It’s handsome, as far as pickups go. The light bar’s front and back and the charge port on the driver side (the one on the passenger side is a dummy) are the only external cues this is not your usual internal combustion engine (ICE) F-150. The immense vertical touch screen in the center of the dashboard is another clue. Driving I normally don’t drive a pickup truck or even a full-sized SUV. I tend towards low-slung, high-horsepower fun machines; my past three utility vehicles were a BMW X4, Porsche Macan S, and Honda Crosstour. It took a little getting used to something of this size and heft. Slide 1,500-1,800 pounds of battery underneath and you have a 6,855 pound vehicle that handles rather differently than a sports car. It takes more than a gentle thumb to move the steering wheel of this beast through any sort of turn. Bringing the behemoth to a dead stop requires planning and anticipation. This is a genuine issue because the Lightning accelerates to 60 mph in just 4 seconds. It pains me to say this, but it’s testimony to the superiority of the EV platform versus traditional ICE just how fast this truck is. The Platinum is a very comfortable ride with all of the creature comforts and luxury settings you would expect from a near 6 figure truck. If your usual SUV is an Acura or Lexus, you will find yourself surprisingly comfortable in the Lightning. Space The F150 is huge inside. Grab handles on the A pillars make it easy to pull yourself into the driver or passenger seat of the spacious cabin. The rear seats of the Crew Cab were spacious for even the largest inhabitants. They fold up, in case you need even more space. The five and a half feet bed (67.1 inches) swallowed up a big 4 burner grill, a 6 foot outdoor table, and a disassembled Roman hammock, along with other assorted stuff for our drive out to the beach house. But the show-stopper was the “Frunk” – the massive front trunk that was about the size of a normal passenger car trunk. I tossed a few overnight bags and other goods in it with plenty of room to spare. Features and Options I really liked the wonderful driver assist / lane keep / cruise control. It works well, nearly invisibly, and only requires you stare ahead at the road – hands on the wheel or not. But look at the giant center screen for more than moment and it nags you to pay attention. The center screen was fast and responsive, with Ford’s trademark giant volume knob bottom center. The bottom 2 inches of the screen was reserved for climate controls. It’s as good an automobile infotainment screen as any I’ve seen regardless of price. There are outlets and charging ports everywhere: In the front, the back, the frunk, the pickup bed. This is a vehicle that expects top be on work sites. My only beef is the same one I’ve had with every EV I’ve driven: controls buried two or three screen layers in that would have worked better as physical buttons. In fact, I would prefer if all EV makers had a simple strip of climate controls as physical buttons including heated and cooled seats and ventilation recirculation. Before you “OK, Boomer” me, it is obvious to someone who has been driving longer than you have been alive that this is going to cause accidents — it’s just too distracting. Probably less damage than cell phones have caused, but there will be accidents nonetheless. Range and Charging The truck arrived 85% charged and I thought I would top it off. I plugged the trucks charger into an extension cord running into the garage and the orange light came on which I assumed meant it was charging. It was not as I discovered the next morning. a quick search of the Ford message boards and I discovered that I needed to make sure the plug was clicked into place and when that occurred the charging light turned blue. Chalk it up to a newbie error. A regular 120 volt source of power adds only a few miles of range per hour. Overnight gets you barely 30-40 miles. At the beach, we were able to snag primo parking at the chargers. I use the app “EV Connect” and added another 35 or so miles of range for $6 over 2 hours. I had no idea at the time that this would be a bargain with gas over $5 a gallon. By now, you probably have heard you can run your entire house off of a fully charged truck for 3 days. I was amused by how much of my usual vocabulary has been driven by a lifetime of experiences with ICE: “Step on the gas, fill up the tank, exhaust note, engine – all phrases that served as constant reminders this is a new era. ~~~ Would I buy a Ford F-150 Lightning or any other EV today? I have no need for a pickup truck so the Lightning is out of the question for me. However, I have no doubt that this is going to be a massive seller for Ford. I suspect this is likely to be the vehicle that gets middle America to adopt electric vehicles. As to other EVs, what I like seem wildly overpriced relative to their ICE competitors: Porsche Taycan, Audi GT eTron, even the Lucid Air and Tesla Plaid are quite expensive,  even with gas over $5 a gallon. That’s before we install a 240 charger in the garage here and at the beach house. As of today, I am not an ideal customer for pure EVs, much more inclined towards hybrids. We were looking at winter homes pre-covid – if the housing market returns to sanity we would want an SUV we can load up for the trip back and forth down the coast without the need to plan around charging. My short list includes new versions of Defender 110 or the HSE Sport available soon in the US; the UK versions are high performance hybrids garnering high double-digit MPG. If BMW ever decided to share their X5 hybrid technology with the X6, I would add that to our short list as well. And ever since I totaled my wife’s Panamera 4S (T-boned at 5 mph) the hybrid version of that vehicle has been on my list also. We are in the transition period from ICE to EV – a hybrid serves my family’s needs well. Spending a week with the Ford F-150 lightning left me with no doubt about a few things: -The truck is going to be a huge hit (even if I don’t feel the need to be an early adopter). -The transition to EVs is going to happen much faster than people expect; -Ford has gotten its game together and is going to be a serious challenger to Tesla. They’re fit and finish is vastly superior, but Tesla still has the edge in terms of software and programming. -Don’t be surprised to see an electrified version of the smash hit Bronco within two years also. -We are already past peak ICE, but they will stay on the road for another 10 to 20 years after initial sale; -Credit to Elon Musk (and Jeff Bezos) for driving us into the future. EVs are here, and the future is coming fast. Faster than you might think…     Previously: Ford vs Ferrari Tesla (January 6, 2022) 2021 Mustang Mach E (December 18, 2020)   The post Ford to Tesla: We got it from here appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 17th, 2022Related News

Too Late to Sell, Too Early to Buy…

    Right now across the country brokers and advisors are getting phone calls from their clients: “I need to sell some stock.” Why? In order to feel better about this market/economy/Fed/whatever. Year-to-date, SPX is down 22.9%, the Russell 2000 has fallen 23.1%, while the Nasdaq has dropped 31.8%. The most damage has taken place… Read More The post Too Late to Sell, Too Early to Buy… appeared first on The Big Picture.     Right now across the country brokers and advisors are getting phone calls from their clients: “I need to sell some stock.” Why? In order to feel better about this market/economy/Fed/whatever. Year-to-date, SPX is down 22.9%, the Russell 2000 has fallen 23.1%, while the Nasdaq has dropped 31.8%. The most damage has taken place in the most speculative names. It is that funny part of the cycle, and one of the most challenging. The problem: We are at the “Tween” portion of the market. If you are an active trader looking to manage your risk exposure, well it’s probably too late to be a broad seller of stocks. Especially if you FOMO’d yourself into the wilder side of the Meme/WFH/FAANMG equities. And if you are a long-term investor, how much more do you believe we will fall? Enough to make up for the tax hit you will take as a seller here after the huge run-up in 2020-21? To be a seller here means you believe 3 things: 1. The S&P will drop another 25-30% from here already down -23%; 2. Your capital gains taxes will be less than the rest of the drop; 3. You will be able to get back in and at or near the lows. Color me skeptical that the average investor has calculated any of the above and can execute all three flawlessly. As to Bonds, if you shortened your duration earlier in the year, you did not avoid drawdowns, but it is somewhat less painful; TIPs and Munis have been doing much better than corporates and long-dated Treasuries. (We own all of them). But with bonds down double digits along with equities for the first time since 1981, there were very few places to hide. I have little opinion on commodities, cryptos, and currencies – they trade differently than the asset classes that have intrinsic value. The “Tween market” is where some people change their minds. It’s been almost 6 months, so investors are recognizing this isn’t a short BTFD pullback. The cavalry that came to the rescue in March of 2020 has hung up their spurs. In their place, a somewhat panicky Federal Reserve that is belatedly giving up its belief that inflation is transitory, ironically as it nears its peak. Instead of the Cavalry riding to save the day, a team of people wearing white coats are sedating – and possibly euthanizing – the patient. Will the whitecoats raise rates high enough to slow down demand and put the brakes on inflation? Will the patient survive, or will it be anti-inflationary mercy killing? We may one day look upon 75 bps as “Volker Lite.” Regardless, here we are. The contrarian in me is just starting to get that itch to buy here, but it’s not a full-throated “Gotta gotta gotta get some” like 2020 or 2009. Instead, my inner logician senses it’s probably too early.     Previously: Capitulation Playbook (May 19, 2022) Secular vs. Cyclical Markets, 2022 (May 16, 2022) Panic Selling Quantified (March 24, 2022) Bull & Bear Markets   The post Too Late to Sell, Too Early to Buy… appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 16th, 2022Related News

Questions: Recessions & Bears, Crypto & Crashes

    Tomorrow is my first full day back at work after a week of leave with family; I am slowly easing myself into my regular routine. There are so many crosscurrents that I thought a few “food for thought” questions might help the process. These are meaty issues, some of which I hope to… Read More The post Questions: Recessions & Bears, Crypto & Crashes appeared first on The Big Picture.     Tomorrow is my first full day back at work after a week of leave with family; I am slowly easing myself into my regular routine. There are so many crosscurrents that I thought a few “food for thought” questions might help the process. These are meaty issues, some of which I hope to address in greater detail in the coming weeks. 1. Bear Market: Recessions usually see Bear markets accompany them, but not always. The New York Times chart above shows the history of the two. Our first question: Will this Bear bring on a recession? 2. Inflation: Are we near peak inflation? Will the bite on consumers slow consumption, and therefore prices? Does the worlds return to the Deflationary regime anytime soon? Does the FOMC believe inflation is monetarily based? Do they think rates are the driver? 3. Bonds: What are the ramifications of the bond bull market, which began in 1982, ending? 4. Recession: Will the economy suffer a growth slowdown? Can the Fed cool the economy just enough to curtail demand-driven inflation without creating a full-on contraction? Is a soft landing possible/probable? Is the plan simply to crimp demand just enough to allow supply chains to normalize? 5. Crypto: Does Crypto present a systemic risk? Is this an asset class that will spill over into the rest of the economy, e.g., Housing/Mortgages in the mid-2000s? Or, is this more like the collapse of a single 3 trillion-dollar company? 6. Cyclical versus Secular: Will this be a long and drawn-out secular bear market, e.g., 1966-82 or 2000-2013? Or will this be a cyclical bear within a secular bull, e.g., 1998, 2010, 2018, 2020? 7. Earnings: Profit growth has been healthy the past decade; can profits grow with higher — or much higher — rates? 8. Retail Sales: How does the consumer respond to inflation and a general slowing? How will they adjust to increased supply? What do higher rates do todemand? 9. Housing: Are enough homes being built to balance the demand? How long will a decade of undersupply affect the housing market? What do 6%+ mortgage rates do to the demand side of the equation? 10. War/Russian invasion of Ukraine: Will this war end anytime soon, or is this another Afghanistan that will run for years? Will it spill over into Europe? What does this mean for Russia as a nation? These are the questions I am asking myself. I don’t know the answers, but I will continue to explore all of them…       Previously: Capitulation Playbook (May 19, 2022) Secular vs. Cyclical Markets, 2022 (May 16, 2022) Panic Selling Quantified (March 24, 2022) Bull & Bear Markets   Source: What Happens When Stock Markets Become Bears By William P. Davis, Karl Russell and Stephen Gandel New York Times, June 13, 2022   The post Questions: Recessions & Bears, Crypto & Crashes appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJun 15th, 2022Related News