Cloud Vendors

  • Cloud Vendor market was $159bn annual run-rate market in Q2, still growing 37% (though slowing).
  • This growth has actually come with pretty good economics. (From this Battery VC deck).
  • One very interesting feature of these vendors is they also happen to run huge cloud based products (think Xbox for example) which means they are customers of their own infrastructure – utilising it and making it better.

Calm Credit Markets

  • One of the clear harbingers of the sharp rally last week was not just very negative sentiment, or the CPI print itself, it was the overly calm VIX index.
  • The VIX spent most of October falling, despite the bearish drum beat.
  • This is also the case in credit land – where things are “surprisingly chilled“.
  • Here’s the US junk bond CDS credit spread index, which remains well below its 2008, 2011 and 2020 peaks, and the shape of the CDS curve, which tends to invert [Pictured] as markets freak out about a rash of near-term defaults.

ROIC Distribution

  • Interesting chart from Mauboussin showing the distribution of ROIC of the Russell 3000 index.
  • The mode is an ROIC of 5 to 10 percent, and the distribution is shaped like a bell between the tails. But nearly 30 percent of the sample are at the extremes of an ROIC of -20 percent or less or 30 percent or more.

Health Data Liberation

  • File this under – things that could radically change the US healthcare market that few are talking about.
  • Federal rules, that took effect 6th of October 2022, mean for the first time patients get unrestricted access to their health data and can choose who else does.
  • “To think that we actually have greater transparency about our personal finances than about our own health is quite an indictment,” said Isaac Kohane, a professor of biomedical informatics at Harvard Medical School. “This will go some distance toward reversing that.”

FedNow

  • FedNow, a faster payments network designed by the Federal Reserve, is nearing launch in 2023 and this is a great explainer/history post.
  • The US lags far behind the rest of the world in faster payments.
  • FedNow could change that (or not) – it for one is cheaper than existing competitors.
  • There is also this chart, showing adoption rates of faster payment systems around the world – those that launched recently had faster adoption (especially if helped along by regulators).
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