Rising cost and reduced availability of property insurance are starting to impact new home sales (according to survey of homebuilders) – especially in CA and FL.
Excellent analysis of how banks got themselves in a bad position this rate-rising cycle.
So much to learn – capitulation led banks into buying MBS that suffer from negative convexity “trapping” (by rising rates extending weighted average lives) banks into low-yielding assets, not enough capital to take losses, held-to-maturity accounting choice requiring marking everything to market (“tainting the book”), the head fake from a higher portion of floating assets pulling forward net interest margin gains.
The result – a worrying state of affairs with funding rates having a long way to go hurting earnings for a long time. This isn’t good for the credit outlook either.
“As you can see, transaction prices for sports franchises have been marching upwards for the last two decades, with NBA and NFL teams registering the biggest increases, but have seen breakaway surges in the last few years.”
Disney is planning to charge $35 for its standalone ESPN service.
As a result, The Information now calculates that after all the prices rises for streaming a permutation of the main “channels” starts to cost $90 per month … the price of Comcast’s cable package.
Data for the UK suggests we have hit saturation point.
“The growth of SVoD household penetration slowed in 2022, and this continued into early 2023 as the rising cost of living, combined with SVoD service price rises, put greater strain on household budgets.“
Interesting conversation (need sign up, grab two-week trial here) with Ted Seides and Frederik Gieschen on going back as far as Ancient Rome, on how institutional investing evolved and progressed, with lessons for the future.
What if drug development could one day be like engineering?
Artificial intelligence has the potential to make this a reality, as is so well explored in this accessible Forbes profile.
One of the most exciting parts they highlight is de novo protein design i.e. building proteins from nothing (this is a nice post about it from Derek Lowe).
Three excellent questions about the future of semiconductors and AI.
“First, is AI additive to the semis market? Will purchases of AI chips increase overall demand for semis, or will they merely replace purchases of other chips?
How will the market for AI Inference semis play out? How big will it be and who will win share?
Can Nvidia be displaced from the market dominance it currently enjoys?“
“There seems to be an unwritten rule on Wall Street: If you don’t understand it, then put your life savings into it.” Lynch.
“If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get.” Munger.
“When you want to test the depths of the stream, don’t use both feet.” Chinese proverb.
