Nueva Democracia: JAN 15-10 2022 Part 1-2 SIT ECON y POL

JAN 15-10 2022 Part 1-2 SIT ECON y POL

ND denounce- debacle y propone State-Social + Capit-compet in Eco

ZERO HEDGE ECONOMICS

by Tyler Durden

From lending to investment banking, and private equity to hedge funds... this complex ecosystem consists of a number of important sectors, which can lead to lucrative career avenues.

Corporate finance is a key pillar on which modern markets and economies have been built. And, as Visual Capitalist's Aran Ali details below, this complex ecosystem consists of a number of important sectors, which can lead to lucrative career avenues.

From lending to investment banking, and private equity to hedge funds, the graphic above by Wall Street Prep breaks down the key finance careers and paths that people can take

See Chart

https://cms.zerohedge.com/s3/files/inline-images/Corporate-Finance-Explained.png?itok=tU9sZnk2

Let’s take a further look at the unique pieces of this finance ecosystem.

The Lending Business

Lending groups provide much needed capital to corporations, often in the form of term loans or revolvers. These can be part of short and long-term operations or for events less anticipated like the COVID-19 pandemic, which resulted in companies shoring up $222 billion in revolving lines of credit within the first month.

Investment Banking

Next, is investment banking, which can split into three main areas:

Mergers and Acquisitions (M&A): There’s a lot of preparation and paperwork involved whenever corporations merge or make acquisitions. For that reason, this is a crucial service that investment banks provide, and its importance is reflected in the enormous fees recognized. The top five U.S. investment banks collect $10.2 billion in M&A advisory fees, representing 40% of the $25 billion in global M&A fees per year.
Loan Syndications: Some $16 billion in loan syndication fees are collected annually by investment banks. Loan syndications are when multiple lenders fund one borrower, which can occur when the loan amount is too large or risky for one party to take on. The loan syndication agent is the financial institution involved that acts as the third party to oversee the transaction.
Capital Markets: Capital markets are financial markets that bring buyers and sellers together to engage in transactions on assets. They split into debt capital markets (DCM) like bonds or fixed income securities and equity capital markets (ECM) (i.e. stocks). Some $41 billion is collected globally for the services associated with structuring and distributing stock and bond offerings.

The top investment banks generally all come from the U.S. and Western Europe, and includes the likes of Goldman Sachs and Credit Suisse.

Sell Side vs Buy Side

Thousands of analysts in corporate finance represent both the buy and sell-sides of the business, but what are the differences between them?

One important difference is in the groups they represent. Buy-side analysts usually work for institutions that buy securities directly, like hedge funds, while sell-side analysts represent institutions that make their money by selling or issuing securities, like investment banks.

According to Wall Street Prep, here’s how the assets of buy-side institutions compare:

See Chart:

Buy side institution: Total assets

https://cms.zerohedge.com/s3/files/inline-images/fin1.JPG?itok=cb89j0Sn

Also, buy-side jobs appear to be more sought after across financial career forums.

Breaking Down The Buy Side

Mutual funds, ETFs, and hedge funds all generally invest in public markets.

But between them, there are still some differentiating factors. For starters, mutual funds are the largest entity, and have been around since 1924. Hedge funds didn’t come to life until around 1950 and for ETFs, this stretched to the 1990s.

Furthermore, hedge funds are strict in the clients they take on, with a preference for high net worth investors, and they often engage in sophisticated investment strategies like short selling. In contrast, ETFs, and mutual funds are widely available to the public and the vast bulk of them only deploy long strategies, which are those that expect the asset to rise in value

Private equity (PE) and venture capital (VC) are groups that invest in private companies. Venture capital is technically a form of PE but tends to invest in new startup companies while private equity goes for more stable and mature companies with predictable cash flow patterns.

Who funds the buy side? The source of capital roughly breaks down as follows:

See Chart:

https://www.zerohedge.com/s3/files/inline-images/fin2.JPG?itok=MaHkDEl4

[ Open this art to see the original chart blocket ]

Endowment funds are foundations that invest the assets of nonprofit institutions like hospitals or universities. The assets are typically accumulated through donations, and withdrawals are made frequently to fund various parts of operations, including critical ones like research.

The largest university endowment belongs to Harvard with some $74 billion in assets under management. However, the largest endowment fund overall belongs to Ensign Peak Advisors. They represent The Church of Jesus Christ of Latter-day Saints (LDS), with some $124 billion in assets.

Primary Market vs Secondary Market

One of the primary motivations for a company to enter the public markets is to raise capital, where a slice of the company’s ownership is sold via an allotment of shares to new investors. The actual capital itself is raised in the primary market, which represents the first and initial transaction.

The secondary market represents transactions after the first. These are considered stocks that are already issued, and shares now fluctuate based on market forces.

Tying It All Together

As the infographic above shows, corporate finance branches out far and wide, handles trillions of dollars, and plays a key part in making modern markets and economies possible.

For those exploring a career in finance, the possibilities and avenues one can take are practically endless.

SOURCE: https://www.zerohedge.com/personal-finance/so-you-want-career-finance

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Value Human Capital under threat:

HOSPITAL SYSTEM DROPS RACE-BASED COVID TREATMENT POLICY AFTER LAWSUIT THREATS

“It’s amazing that we even need to say it, but doctors should treat the individual patient, not the skin color.”

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All protection to the rich, but:

HOW GOLDMAN IS CONVINCING ITS CLIENTS NOT TO FREAK OUT ABOUT FED RATE HIKES

by Tyler Durden

BUT: Yet even Goldman admits that "the CURRENT INFLATION-LED HIKING CYCLE may prove more challenging for equities."

Rate hikes are now just right around the corner and traders are freaking out, but not so fast according to Goldman.

Following the FOMC meeting in mid-December, and especially last week's FOMC minutes and the subsequent jawboning by various Fed officials,, it has become clear that the Fed will not only double the pace of tapering but also signaled three hikes in 2022. As a result, virtually all sell-side economists - even stern holdouts such as Morgan Stanley and Bank of America - have raised their forecast from three hikes in 2022 to four – with the first hike now expected to occur in March. Their forecast reflects the greater sense of urgency on behalf of FOMC participants towards quelling inflation, which rose to a four-decade high of 7% as measured by the latest year/year CPI. Why this urgency? Because as one can imagine, Biden was very clear in what Powell's mandate was when he was renominated: "crush inflation as it is crushing my approval ratings", because as BofA's Michael Hartnett noted on Friday, "US INFLATION IS UP FROM 1.4% TO 7.0%, while Biden's approval rating is down from 56% to 42% past 12 months."

See Chart:

Inflation an Economic & Political problem

https://cms.zerohedge.com/s3/files/inline-images/inflation%20biden_0.jpg?itok=yDNheA0H

But why is the Fed rushing to hike when a growing chorus of economists now agrees with us that the Fed is hiking right into a recession (or alternatively, hiking to create a recession) an observation that was validated by Friday's dismal retail sales data... and even without validation, the endgame is clear: as David Rosenberg noted recently, every time the US has had 5%+ inflation, it ended in recession.

[ The answer to thus WHY by political analyst is: The Govt prefer to die in WW3 than to die from the CV pandemia they festered. THE RIGHT QT IS : will American accept their genocide and suicide? ]

David Rosenberg said:

Inflation is 7% and the last time this happened, we had a double-dip recession. Prior to the pandemic, 5%+ inflation presaged all seven recessions over the past sixty years. Les jeux sont faits. #Economy #Inflation #DavidRosenberg #RosenbergResearch #RRMacro

See Chart: tweeted

https://pbs.twimg.com/media/FI_qzuxWYAY1sOF?format=jpg&name=small

Well, according to Goldman's David Kostin, the unprecedented strength of the labor market has made the Fed more sensitive to high inflation and less sensitive to slowing growth. Alongside rising inflation, the Fed has also cited strong employment data as a catalyst for earlier liftoff and balance sheet reduction. The unemployment rate now stands at 3.9%, falling slightly below the FOMC’s 4.0% median estimate of its long-term level (although looking ahead, Kostin notes that surveys of workers and businesses indicate wage growth is expected to slow to about 4% this year).

To be sure, the market already reflects this and real and nominal rates have both jumped in anticipation of the upcoming tightening cycle. Since the December FOMC meeting, the 10-year US Treasury yield has surged by 26 bp to 1.77%. Consistent with historical experience, equities have struggled amid this rapid rise in yields, and the fastest-growing and longest-duration pockets of the market - i.e., the biggest bubbles such as profiless tech names, the ARKK ETFs, SPACs and so on - have de-rated most.

As a quick aside, perhaps the main reason for the equity puke in the past two weeks is not so much the jump in absolute yield in the past month, but the speed of the move. As Goldman showed in a separate report earlier this week (also available to professional subs), regardless of the level of interest rates, equities react poorly to sharp changes in the interest rate environment, and the past week has been no exception: "Historically, equity prices have declined when interest rates rose by two standard deviations or more. This is true for both nominal and real interest rates across both weekly and monthly periods. The two standard deviation threshold was exceeded on both horizons last week, and the accompanying equity weakness followed the usual historical pattern."

See Chart:

Equities typically struggle when rates rise more than 2 standard deviations

https://cms.zerohedge.com/s3/files/inline-images/equities%20stuggle.jpg?itok=eymfWu3Z

See more chart and go to the last one:

So after all that, if Goldman clients aren't running for the hills, maybe the will BTFD after all, and for them, Kostin writes that investors "should balance their exposures to Growth and Value" as Goldman's rates strategists expect yields will continue to rise, a dynamic that should support Value over Growth, UNLESS OF COURSE WE ENTER STAGFLATION at which point all is lost (incidentally, as noted last week, Goldman expects nominal 10-year yield to hit 2.0% by year-end 2022 (with real rates rising to -0.70% almost where they are now) and 2.3% by the end of 2023).

See Chart:

https://cms.zerohedge.com/s3/files/inline-images/gs%2010y%20foreccasts.jpg?itok=KowOLSsY

From a growth perspective, Goldman economists expect the waning of the Omicron wave to lift GDP growth from 2% in 1Q to 3% in 2Q, supporting Value stocks. But they expect growth will slow to a 2% pace by 4Q 2022, the type of environment that generally supports Growth stocks. Translation: yes, growth stocks are getting crushed now, but as soon as the current whisper of a recession/stagflation becomes a chorus, watch as "growth stocks" (i.e., the bubble/bitcoin baskets) explode higher and surpass their previous all-time highs.

In short, Goldman's current recommended sector overweights reflect a barbell of Growth and Value:

Info Tech remains the bank's long-standing overweight due to its secular growth and strong profit margins.
Financials should benefit from rising interest rates
Health Care combines secular growth qualities with a deep relative valuation discount.

Finally, from a thematic perspective, Goldman continues to recommend investors own highly profitable growth stocks relative to growth stocks with low or no profitability. To this, all we can add is that with low growth stocks having been absolutely nuked by now, the highest convexity when the recessionary turn comes, will be precisely in the NO PROFITABILITY GROWTH SECTOR, WHICH WILL DOUBLE IN NO TIME ONCE THE COMING RECESSION/EASING CYCLE BECOMES THE DOMINANT NARRATIVE.

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SOURCE: https://www.zerohedge.com/markets/how-goldman-convincing-its-clients-not-freak-out-about-fed-rate-hikes

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SUPERMARKETS SLASH HOURS AS WORKERS CALL OUT SICK; STORE SHELVES REMAIN BARE

"Layering in Omicron vacancies on top of that makes it very, very stressful."

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LIQUIDITY'S EFFECT ON VOLATILITY

If markets have loose liquidity conditions, no amount of Trump tweets or White House shakeups will cause volatility. And if liquidity conditions are tight, no amount of good news can save markets from volatility.

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US DOMESTIC POLITICS

Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption.

Quick News 1:

BREAKING JAB...

BY williambanzai7

Turning Disease Into Profit..

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Quick News 2:

LIBERTY, FINANCE, COVID & OTHER BULLSHIT

BY quoth the raven

There's been no shortage of chaos to start 2022...

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Quick News 3:

A BOTTOMS-UP SOLUTION TO THE NATION’S HOUSING PROBLEM

BY 24Richie

Solutions imposed from above by governments are doomed to failure

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LEAKED FAUCI FINANCIALS EXPOSE HOW MILLIONAIRE DOCTOR PROFITED FROM PANDEMIC

Did you know Dr. Fauci owns a stake in a San Francisco restaurant?

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VIRGINIA'S NEW AG FIRES CIVIL RIGHTS DIVISION, WILL START PROSECUTING CASES DROPPED BY 'SOCIAL JUSTICE' DAS

"I've been told incoming AG @JasonMiyaresVA just FIRED the entire civil rights division in the Attorney General's office..."

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The creation of new fake virus continue: now children are the target. This is terrorism!

RSV MORE PREVALENT THAN COVID-19 IN COLORADO CHILDREN: CHIEF MEDICAL OFFICER

"RSV is very contagious and very prevalent in the school system as well as throughout daycare centers and in homes..."

….

YES this is terrorism & US Courts said nothing, as long as their kids No touched

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POLITICIZING COVID-19 FROM THE START

Politicizing the pandemic is a euphemism. In truth, thousands of Americans have died needlessly because of weaponized disinformation about China's culpability, vaccines, useful drugs, lockdowns, racial preferences, and long-care facilities...

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DEMOCRATS MOVING AWAY FROM LOCKDOWN RESTRICTIONS OVER FEARS OF BEING CRUSHED POLITICALLY

“People have run out of patience.”

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THE OATH KEEPERS: WHAT THE INDICTMENT SAYS (AND DOES NOT SAY) ABOUT 'JAN 6'

...the indictment does not offer the long-sought proof of an insurrection to fulfill the narrative of many commentators and politicians...

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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)

Global depression is on…China, RU, Iran search for State socialis, D rest in limbo

WHICH NATION HAS THE MOST 'POWERFUL' PASSPORT?

...the answer is not USA.

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