Video commentary for March 9th 2023
Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: US money center banks rolling over. Tesla extends decline, dollar pauses, gold rebounds, emerging market outperformance ebbing, Yen firms, copper and ol ease, risk of a retracement of the October-March rally rising.
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SVB Plunges Most Since 1998 on Stock Offering, Securities Sales
This article from Bloomberg may be of interest. Here is a section:
The firm said it had sold about $21 billion of securities from its portfolio with a plan to reinvest the proceeds, which will result in an after-tax loss of $1.8 billion for the first quarter. SVB also announced offerings for $1.25 billion of its common stock and $500 million of securities that represent convertible preferred shares. Additionally, General Atlantic committed to purchase $500 million of common stock, taking the total amount being raised to about $2.25 billion.
The offering is expected to price Thursday after the market closes and trade on Friday, according to a person familiar with the matter.
“The improved cash liquidity, profitability and financial flexibility resulting from the actions we announced today will bolster our financial position and our ability to support clients through sustained market pressures,” the company said in a letter to stakeholders.
Eoin Treacy's view
This year has been characterised by a series of mark to market events although that is not how they have been described. When alternative asset managers default on properties because that is the quickest route to renegotiate terms, that is effectively marking the portfolio to market. Silicon Valley Bank (SVB) selling $21 billion of positions in smaller companies and hard to value startups is a similar development.
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Taiwan suspects Chinese ships cut islands' internet cables
This article from AP may be of interest to subscribers. Here is a section:
The cables had been cut a total of 27 times in the past five years, but it was unclear which country the vessels hailed from, based on data from Chunghwa Telecom.
Taiwan’s coast guard gave chase to the fishing vessel that cut the first cable on Feb. 2, but it went back to Chinese waters, according to an official who was briefed on the incident and was not authorized to discuss the matter publicly. Authorities found two Chinese ships in the area where the cables were cut, based on automated identification system data, similar to GPS, which shows a vessel’s location.
“We can’t rule out that China destroyed these on purpose,” said Su Tzu-yun, a defense expert at the government think tank, Institute for National Defense and Security Research, citing research that only China and Russia had the technical capabilities to do this. “Taiwan needs to invest more resources in repairing and protecting the cables.”
Eoin Treacy's view
The Wall Street Journal reported two weeks ago that the USA is planning to increase the number of troops stationed in Taiwan by several hundred over the coming months. Taiwan will also increase the number of troops it sends to the USA for training by several hundred.
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US probes Tesla Autopilot, steering wheels that can come off
This article from AP may be of interest. Here is a section:
U.S. safety regulators are turning up the heat on Tesla, announcing investigations into steering wheels coming off some SUVs and a fatal crash involving a Tesla suspected of using an automated driving system when it ran into a parked firetruck in California.
The National Highway Traffic Safety Administration said Wednesday it is launching a special crash-investigation team to probe the Feb. 18 crash involving a Tesla Model S and a ladder truck from the Contra Costa County fire department.
The firetruck probe is part of a larger investigation by the agency into multiple instances of Teslas using the automaker’s Autopilot system crashing into parked emergency vehicles that are tending to other crashes. NHTSA has become more aggressive in pursuing safety problems with Teslas in the past year, announcing multiple recalls and investigations.
Eoin Treacy's view
There has been a lot of talk over the last few years about Tesla’s batteries lasting as much as a million miles. Little discussion has taken place about whether the vehicle would still be drivable even if the battery is still capable.
One of the biggest bugbears drivers have with Tesla is the low build quality. When the driving wheel falls off in the middle of the journey, it is reasonable to assume one’s perception of the value of the vehicle declines.
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Eoin's personal portfolio: stock market index short initiated February 7th 2023
Eoin Treacy's view
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
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