Month: January 2018

A few days ago, an experienced, well-respected individual in the Greater Seattle Area posted this on LinkedIn and I thought I might as well put some of the thoughts in the back of my mind on paper. P.S. I am looking at this from the financial market perspective and not from the technical/AI perspective. I … Continue reading Chinese “venture capital” Startup

Earnings season is right upon us once again. Back in Nov 2017, I wrote about the an line item we should review from these systematically important bank’s earning, the credit loss provisions.  After all, we have fully shifted to a credit-based economy in which US consumer credit-based spending now consist of 70%+ of our annual … Continue reading Credit Loss Provisions – Directional Barometer for Growing/Declining Risks on Bank’s Balance Sheet

This one probably won't cause systematic shocks through the global financial market but one we need to observe the effects closely as public companies from all across the world is now borrowing against their own stocks, not tangible assets, as collateral aka HNA Property Holdings LLC (10% majority holder of Deutsche Bank and Hilton Hotels and … Continue reading Systematic Shocks? Importance of Mattress Firm (aka Steinhoff International)

Interesting daily observation this weekend: Crude oil price has been increasing drastically for some quarters now but price adjustments at Texas gas stations remains flat for 4-8 weeks now. DO YOU THINK? (1) crude oil price already baked into the consensus? OR (2) time to switch to a Prius/hydrogen fuel cell car? One major implication behind … Continue reading Gas Price versus Crude Oil Price? Inelastic demand for Gas and Impact on Consumer Discretionary

Let me know your thoughts about the three points below: China slowly on its way to free floating currency. Banks that contribute to #Yuan's fxing decide on the use of "countercyclical factor" based on their own decision, said #PBOC late Tue in response to report that PBOC told lenders to suspend use of countercyclical factor … Continue reading RMB Yuan-Based Dollar Trade? Implications on Floating Chinese Yuan Currency

Tuesday Breakfast Morning Read: Impulse response to 1% increase in policy rate from Bank for International Settlements – BIS.  Monetary transmission is stronger in economies where debt is high. A possible explanation for the stronger effects of monetary policy when debt is high is the larger change in the debt service ratio (DSR) following a monetary policy … Continue reading Impulse response to 1% increase in policy rate from Bank for International Settlements – BIS

Recently, Steinhoff Internationals announced the closing of 200 Mattress Firm stores around the US (acquisition just happened a few years ago in which they paid a 100%+ premium above previous day's closing price). But debt binge financing has been utilized for the massive M&A spree. This one probably won't cause systematic shocks through the global … Continue reading Shadow Financing – Stock-Based Debt Financing

In many ways, text messages is still the dark web of sharing and commerce. Unlike social shares and link tracking, it's extremely difficult to know what's going on in folks' private text conversations. But it's clear that a lot of activity goes on there––and it's no surprise that brands (smart ones at least), would be … Continue reading SMS Text – Retail Conversion Funnel

If you want to understand government deficits, you need to see the sea change in business behavior since 2000. Business sector has gone from being a net borrower to being a net lender (meaning capex less than cash flow), which also coincides with corporations engaging in these so called EPS "financing engineering", most of which … Continue reading EPS Financial Engineering Won’t Result in Competitive Advantage