Elon Musk’s mystery Tesla buyout funder is Saudi Arabia

Saudi Arabia's sovereign wealth fund is the mystery funder that has offered to finance a deal to take Tesla private, Elon Musk wrote in a Monday morning blog post. The post lays to rest a mystery that has bedeviled Wall Street and the news media since Musk tweeted last Tuesday that he had "funding secured" for a buyout.

"Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private," Musk wrote in his Monday post. "They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil."

In late July, the Saudis purchased almost five percent of Tesla's stock (acquiring more than five percent would have triggered public disclosure requirements). They then met with Musk on July 31 and reiterated their interest in funding a buyout.
"I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed," Musk said. He then met with Tesla's board and told them he was interested in taking Tesla private.

The next step, Musk said, was to approach Tesla's largest shareholders to see if they would be interested in continuing to hold shares in the new, private incarnation of Tesla. But he thought that all shareholders deserved to know about the proposal at the same time—hence his Tuesday tweet announcing his plan to go private.

https://arstechnica.com/cars/2018/08/elon-musk-considering-using-saudi-oil-money-to-buy-out-tesla/

I completely agree. I completely overlooked the fact that if people are that concerned, they could always just buy paper books again. Haha.

Some social problems are blatantly obvious in daily life, while others are longer-term, more corrosive and perhaps mostly invisible. Lately I've been worrying about a problem of the latter kind: the erosion of personal ownership and what that will mean for our loyalties to traditional American concepts of capitalism and private property.

The main culprits for the change are software and the internet. For instance, Amazon's Kindle and other methods of online reading have revolutionised how Americans consume text. Fifteen years ago, people typically owned the books and magazines they were reading. Much less so now. If you look at the fine print, it turns out that you do not own the books on your Kindle. Amazon.com does.

https://www.afr.com/opinion/americans-own-less-stuff-because-of-the-internet-and-thats-a-worry-20180812-h13vkd

That is what I am trying to point out, because your earlier post :
Says otherwise of what you are trying to say now. Even if the buyers will wait and hold their money for awhile I don't think they will have a better deal if they do so as Real Estate properties are still increasing in terms of value.

Let say that you get the whole 200,000$ in the value of cryptocurrencies, why would the buyer still go in that option? What will be the advantage for this people opting to choose cryptocurrency based financing over the traditional banking based financing? I don't think it would be more affordable to the person buying as they still need to be financially capable of paying back those loans, or else they can be screwed over by choosing the more affordable option.

If you are looking for a decline in real estate value, I don't think it will happen soon as the article itself stated that the sold houses/property are still gaining value which means real estate properties are still a positive asset to own. The real estate market having a decline in sales means that they have exhausted most of the people who are wanting to have their own real estate property, we cannot assume that all people living in the US right now want to have their own house as they might be satisfied renting out an apartment or a condo unit to save as much income as they can.

Also I don't think cryptocurrency based financing could be a solution for their problem, because most of the debtors who are availing that kind of loans are also liquidating it back to Fiat. Maybe some of their sold properties might be already bought in this kind of financing and they just don't know about it yet. Also to top it off they must be qualified or in other words financially capable of paying back that loans first before availing that kind of financing solution.

Redfin stock dives after top exec says sudden downfall is expected to continue in August and September

The housing market hit a sudden and “significant” slowdown in the past few weeks that could continue in coming months, Redfin Corp.’s chief executive said Thursday afternoon.

The real-estate brokerage and website company announced second-quarter earnings Thursday afternoon that beat expectations, but the company’s third-quarter forecast came in short of what Wall Street was projecting. On a conference call to discuss the results, Chief Executive Glenn Kelman reported that Redfin had pulled down its forecast after “an unexpected drop in Redfin’s bookings growth in the past three weeks, slowing traffic growth in a weakening real-estate market.”

Redfin RDFN, -22.39%  stock, which fell in extended trading after the forecast was made public, saw that decline accelerate to a loss of almost 10% after Kelman spoke Thursday afternoon, but he did not hold back. He said a decline in U.S. home sales in June was expected to reappear in August and September after a slight relief in July, specifically calling out difficulties in markets on the West Coast that have driven home sales higher in the past few years.



“For the first time in years, we are getting reports from managers of some markets that home buyer demand is waning, especially in some of Redfin’s largest markets,” Kelman said, specifically calling out Seattle, Portland and San Jose as areas where inventory was still tight but did not seem to be pushing prices higher still.

“June sales were down in these markets by double-digits and inventory was up also by double-digits,” he said of the West Coast cities. “The trend is continuing in July and reports are now coming in from Washington, D.C.; Boston; Virginia and parts of Chicago as well that homes there are getting harder to sell.”

Both existing-home sales and new-home sales declined in June, but price gains on the homes that did sell actually accelerated, according to CoreLogic’s Home Price Index for June, which was released earlier this week. Other trackers like the S&P/Case-Shiller national index show decelerating price increases, but were still reflecting double-digit price increases in the San Francisco and Seattle areas. Pending-home sales were also lower than the previous year in June, according to the National Association of Realtors, the sixth consecutive month that metric trailed the previous year.

Redfin’s position as a website used by those who may not be actively looking to buy a home, and a brokerage that actually works with those who are buying and selling, gives it a unique perspective on the housing market. Kelman was clear that he was basing his fears on elements from both, as slowing traffic growth and worrisome rates of closing sales in three of the past four weeks caused the cautious guidance and warning.

“We aren’t entirely sure how much of it is the market and how much of it is us because our guidance is based on a slowdown that only occurred in the last few weeks. It was a significant slowdown,” Kelman said. “It may be that we have a good week this week and a good week next week and we can outperform it. But we are seeing a significant change.

“My guess is that only some of it is driven by the environment. It is definitely changing.”

Despite the concerns, Redfin announced that it is expanding its Redfin Now service that buys and sells houses, which Goldman Sachs analysts have called a “necessary” step for the company as startups using the so-called iBuyer approach proliferate. Goldman downgraded Redfin and rival Zillow Group Inc. ZG, -3.89%  in June.

Zillow also had issues after its earnings report earlier this week, falling 16.3% Tuesday after also announcing a forecast that was weaker than expected. Zillow also has an “iBuyer” program called Instant Offers, and one analyst asked Kelman about what effects greater competition in buying and selling homes between the two online real-estate titans could have.

“Well, first of all we haven’t competed directly with Zillow and its Instant Offers program in any market, we just don’t have overlapping markets. My expectation is that, it will be a price war,” he said. “We’ll probably put more pressure on sales volume than gross margin because rather than take more risk on a property and offer a price that we’re not sure we can beat when we flip the home, we would just have to step back and let someone else have that sale and take that risk.”

Redfin, which went public just more than a year ago, has seen shares decline 26.1% this year, as the S&P 500 index SPX, -0.71%   has gained 6.9%. After its big fall earlier this week, Zillow has still gained 25.1% on the year, and has a market capitalization of $10.3 billion, about five times more than Redfin.

https://www.marketwatch.com/story/housing-market-has-hit-a-significant-slowdown-in-recent-weeks-redfin-ceo-says-2018-08-09

I doubt that drugs has something to do with McGregor not having a good stamina. There are fighters who are really explosive in the first 2-3 rounds, but eventually gets tired after that. Just probably lack of cardio trading as Zabahi mentioned that it can be corrected and there are certain exercise that can greatly improved someone's stamina.

Guys whole market is going down rapidly. Especially see the ETH price. it is crazy.  

How does a decline U.S. Dollar can affect Crypto?

Robert Kiyosaki says, 'I think the dollar is toast because Gold and Silver and cyber currency are going to take it out'.

How likely it is that it will be true?

^  Sure McGregor party's a lot (I heard he's a big coke head) but you really can't throw genetics out of the window on why a human body is the way it is.  There are three basic body types, the endomorph, ectomorph and the mesomorph (in which most are a combination of the two or three types), and each has different characteristics.

Obsolete or not, he still has a point.

Cocaine damages many other organs in the body. It reduces blood flow in the gastrointestinal tract, which can lead to tears and ulcerations.7 Many chronic cocaine users lose their appetite and experience significant weight loss and malnourishment. Cocaine has significant and well-recognized toxic effects on the heart and cardiovascular system.7,16,20 Chest pain that feels like a heart attack is common and sends many cocaine users to the emergency room.7,20 Cocaine use is linked with increased risk of stroke,16 as well as inflammation of the heart muscle, deterioration of the ability of the heart to contract, and aortic ruptures.20

https://www.drugabuse.gov/publications/research-reports/cocaine/what-are-long-term-effects-cocaine-use

How regulations after the financial crisis, along with a heavy-handed Fed, have hurt the middle class.

A few years ago, one of Karen Petrou’s banking clients gave her an unusual assignment: It wanted her to write a paper laying out “the unintended consequences of the post-financial-crisis capital framework.” Petrou is the co-founder of Federal Financial Analytics Inc., a financial services consulting firm in Washington that focuses on public policy and regulatory issues. She is also, as the American Banker once described her, “the sharpest mind analyzing banking policy today — maybe ever.” Whenever I’m writing about banking issues, she’s the first person I call.

Writing that paper caused Petrou to ask a question she’d never really considered before: Did the bank regulations enacted after the 2008 crisis — along with the Federal Reserve’s post-crisis monetary policy — exacerbate income inequality? Her answer, which she laid out in a series of blog posts, as well as a lecture at the New York Federal Reserve in March, was yes. “Post-crisis monetary and regulatory policy had an unintended but nonetheless dramatic impact on the income and wealth divides,” she wrote recently.

That particular sentence was in a blog post devoted to a recent study by the Federal Reserve Bank of Minneapolis that evaluated income and wealth inequality from 1949 to 2016. The study certainly seems to validate her thesis. It shows that between 1989 and 2007, the top 10 percent increased their share of the nation’s wealth by just 5.8 percent. But in just the next nine years, between 2007 and 2016, the richest Americans captured an additional 8.3 percent of the country’s wealth. Meanwhile, those in the 50 percent to 90 percent wealth bracket saw their share of the nation’s wealth drop by 17 percent, and those in the bottom 50 percent saw a 52 percent drop. The single biggest variable that changed after 2007 was the way banking was conducted and regulated.

Petrou has written a book outlining her analysis of the problem — and her proposed solutions — which will be published next spring by Yale University Press. Not wanting to wait that long, I visited her recently to get a sneak preview.

JN: Let’s cut to the chase. How does banking accelerate income inequality?

KP: First, as the country becomes more unequal, there are fewer middle class customers. That means middle class bank products become unprofitable, and banks follow the money. And banking regulations make it worse because the capital requirements imposed after the banking crisis make it a lot more expensive for banks to do a startup small-business loan than go into wealth management. Startup loans are riskier than wealth management, of course, but the capital costs have become prohibitive, and banks don’t lose money on purpose.

JN: Can you really blame the banks for behaving in this fashion?

KP: I’m not blaming the banks. I’m blaming the unintended consequences of the rules. I think the rules unduly penalize equality-enhancing financial services.

JN: Can you give me an example?

KP: Thanks to the new capital requirements, it’s basically impossible for banks to make mortgage loans to anyone but wealthy customers, unless they can send the loan to the GSEs (Fannie Mae and Freddie Mac) or taxpayer-backed Ginnie Mae. And the new capital requirements also discourage banks even from sending loans to the GSEs or Ginnie — if the loan to a low, moderate-, or middle-income borrower is kept on the bank’s books, there’s a very large capital charge at the front end; if it’s sold, the bank still has to hold back-end capital in case the loan defaults and comes back to the bank. Nonbank mortgage originators — which have eclipsed bank lending in the last few years — face none of these capital charges, but they also can make no loans they don’t sell on to investors. Their entire focus is on booking loans for an upfront fee and sending them on to these taxpayer-backed entities. Without capital at risk, these nonbanks (companies such as Quicken Loans Inc.) also have a lot less at risk if loans eventually default. As a result, high-risk mortgage lending is making a comeback. Let me be clear — I’m not against post-crisis capital standards designed to prevent lenders from making high-risk loans that put only the borrower or taxpayer at risk. There’s no quicker way to make Americans even less equal than to expose vulnerable homeowners to foreclosure. What I am saying is that now some lenders — banks — are under rules so tough they can’t support equality-enhancing mortgages and other lenders are totally outside the post-crisis “skin in the game” rules designed to end high-risk, predatory lending. This asymmetry redefines the market in ways risky all over again, to both vulnerable borrowers and the taxpayer.

JN: Would you have said that this was a problem prior to the financial crisis?

KP: If I had known to look for it, I would probably have said it was a problem. It’s common knowledge that income inequality in the U.S. has been getting increasingly worse since 1980. But what I’ve been pointing out in some of my blog posts is that it became hugely worse after the financial crisis. Were there underlying issues pre-2008? Absolutely. But we had more of a middle class even in 2006 than we do now. By a lot.

JN: How does the Minneapolis Fed study add to our understanding of the causes of income inequality?

KP: There are a lot of things that helped bring about income inequality in the US – crummy education, the decline of middle-class manufacturing jobs, technological innovation and so on. But if you look at the Minneapolis Fed data, as well as many other analyses, it happens gradually prior to 2008. Then it actually flattens out in 2008 because rich people lost money in the crash, which narrowed the inequality gap. But starting in 2010, the gap widens dramatically. The one really big change are the post-crisis rules. And, very importantly, the Fed also changed the way money moved.

JN: What do you mean by that?

KP: The Fed did two things with huge inequality implications. First, with its massive quantitative easing, it sucked $4.5 trillion of assets out of the banking system. The idea was that it would empty out the bank balance sheets so that they would start to make loans. And that didn’t happen —initially the banks were too weak, and as they recovered, the rules created significant impediments. If you look at who is getting loans it is large corporations, not small businesses. Second, the Fed’s low-interest policy gave rise to yield-chasing. And what has the stock market done since 2010? Everybody who has money has seen their financial assets appreciate dramatically. Everybody who doesn’t have money, which is the bottom 90 percent, what is their principal source of wealth? Houses? House-price appreciation for expensive houses is way up since 2012. But overall, real U.S. house prices are down 10 percent.

JN: Isn’t the role of Fannie Mae and Freddie Mac to take up the slack and make it possible for people to buy homes?

KP: Yes. But they’re not. If you look at the credit scores of mortgages that Fannie and Freddie are buying, they are way up — the average is something like 740, of a possible 850.

JN: What does the Federal Reserve say about your criticism?

KP: I should stress, first of all, that the Fed certainly didn’t set about to make income inequality worse. It is an unintended consequence of its efforts to stimulate the economy while tightening bank regulations — two goals that are fundamentally incompatible. Essentially, though, the Fed denies that it played a role in income inequality. The Fed is always saying, “Look what we did — record low unemployment!” But that is partly because it takes two or three wage earners in a household to make ends meet now. So, yes, you see more employment, but people are really struggling. The whole Fed view of monetary policy is based on the view that if you stimulate the economy, wealthier people will buy a lot of stuff, and companies will have more money to invest in plants and hire more people. And that is totally not happening.

JN: If you were in charge, how would you solve this?

KP: I have two ideas, and they are both hard. On monetary policy, I really think the Fed needs to step back. It has been essentially running the market, and allocating credit, since 2008. And they don’t mean to be. They really don’t. But they are.

JN: What does it mean to step back?

KP: I think it would mean to taper their portfolio far more quickly than they are. If the economy is in a real recovery, why does the Fed still need to hold $4.5 trillion of the funds that should be out working in the economy and keep interest rates below zero in real terms?

JN: How would it help income inequality?

KP: It would normalize markets. People would hold a lot more money in lower-risk assets as opposed to stock equities, which would start to generate more productive economic activity over time instead of just fueling more speculative betting.

JN: And your second idea?

KP: The Fed needs to let interest rates normalize. Right now, what the Fed calls the neutral rate — the rate that drives their thinking  — is about 2 percent. The previous neutral rate had been 5 percent. Think about that on an inflation-adjusted return. Back in the day when Treasury bills were 5 percent or higher, if I had my savings in that, I could make money in low-risk assets. If you have monetary policy where the rate is 2, that combined with the 2 percent inflation, and you will have a permanently impoverished middle class. My main call in my book is that the Fed needs to think about that.

JN: Anything else?

KP: There is one other thing. When the Fed looks at their data, they think everything is great. Unemployment is low, profits are up, and so on. But the median net worth today is $97,000. In 2004, it was $102,000 — which is actually $140,000 in purchasing power today. Look at the difference! I would argue for an inclusive monetary policy that factors in the real world of higher income people not buying stuff, lower income people with huge debt burden, no middle class, and so on. And with 60 percent of American financial assets outside the banking system, a monetary policy system predicated on banks being the means through which the economy is stimulated, well, it just doesn’t work anymore. So that is what I think.

https://www.bloomberg.com/view/articles/2018-08-06/inequality-why-bank-rules-and-fed-rates-hurt-middle-class

The TradeLens shipping partnership now has 94 partners, despite blockchain skeptics

Did you just get a TV from Tokyo or flowers from France? Blockchain, that potentially disruptive but much-derided technology, might have helped deliver the goods.

A blockchain-based IBM partnership with global shipping colossus Maersk has now expanded to include 94 partners, Big Blue said Thursday. That includes shippers, customs houses, ports and others that have to wrangle paperwork as containers full of goods move around the world.

The result is shipping times that dropped a whopping 40 percent on average, according to Marie Wieck, who leads IBM's 1,600-employee blockchain work.

That's the kind of improvement that every inventory manager and bean-counter in accounting loves. And it ultimately means lower prices for anyone buying that TV or those flowers.

Six decades ago, the standard-size shipping container famously revolutionized shipping. Blockchain could do the same.

"We believe it has the potential to have the same amount of impact on the process," Wieck said.

Wait, what's blockchain again?
Blockchain cuts paperwork-handling hassles by a factor of 10 by making it easier for everyone involved to get bills of lading, sanitary certificates, customs releases, invoices and other necessary documents, Wieck said. Before blockchain's swifter processing, a "container spent more time in the ports than in the ocean" when shipping flowers from Mombasa, Kenya, to Rotterdam in the Netherlands, she said.

Blockchain lets cooperating companies or people share data -- sales transactions or property records, for example -- on a shared network of computers. The information is distributed across all of them instead of isolated on just one, an idea called a shared ledger, with encryption technology writing the data to all the systems in an ever-lengthening series of interlinked blocks.[

Blockchain bakes trust into transactions because a single database eliminates some he-said, she-said disagreements that ordinarily crop up when multiple parties are trying to reconcile two separate databases. Encryption technology ensures that transactions really are between the parties involved.

The blockchain idea grew out of bitcoin and stores transaction data for all other cryptocurrencies, too. But much of the enthusiasm for blockchain is from its use in other domains, everything from voting and lotteries to ID cards and graphics rendering.

Blockchain skeptics
Still, blockchain has plenty of detractors who think of it as a solution in search of a problem.

Vint Cerf, one of the creators of the internet, tweeted a photo of a flowchart for tackling the issue. The top box in the flowchart states: "Do I need a blockchain?" A single arrow points to another box: "No."

The chief executive of Western Union, a partner in a high-profile blockchain money-transfer project from startup Ripple, said in June that so far, "it's still too expensive."

But TradeLens shows there's enthusiasm, too. Among its 94 partners are shippers Pacific International Lines and Hamburg Süd; customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru; and port operators in Philadelphia, Hong Kong, Rotterdam, Halifax, Nova Scotia, and Bilbao, Spain.

IBM rival SAP, a business software maker and another blockchain fan, said that the reality of blockchain is that it's not a get-rich-quick scheme.

Blockchain is a business network, said Gil Perez, SAP's senior vice president of products and innovations. "It is critical for multiple companies to come together and agree on a business process, which is lengthening the adoption of blockchain in the enterprise," he said.

SAP has a blockchain project for shipping, logistics and customs, too, and it's working with partners including the US Customs and Border Protection agency and shipping company UPS.

Logging a million events per day
That work is in the proof-of-concept stage. IBM's TradeLens service is part of IBM's early adopter program, but it's up and running in the real world. It captures more than a million shipping events each day, 154 million in total so far.

"We don't see scalability as a factor at all," Wieck said.

TradeLens for now has been a closed partnership, but that's changing. "We're anticipating opening up general availability for anybody who wants to join later this year," Wieck said. Cryptocurrencies use public blockchains, which means anyone can operate a node on the network and contribute transactions, but TradeLens uses a more restrictive "permissioned" approach with some controls on participation. It maintains the core blockchain idea of distributing data across multiple servers, though.

Also Thursday, IBM opened a programming interface that will let other companies' computer systems interact with the blockchain. IBM charges for access to the TradeLens, offering it online as software as a service and sharing revenue with founding partners.

IBM has found it's needed to make course corrections with TradeLens -- for example, in the types of documents stored on the blockchain and the "onboarding" process to enlist new partners. But when done right, the blockchain greases the wheels of commerce.

"When there is real transparency to all data on the chain, you have less disputes because everybody has seamless visibility," Wieck said. "We feel very comfortable about the model having value for the different types of participants."  

https://www.cnet.com/news/ibm-maersk-tradelens-blockchain-alliance-cuts-shipping-times-40-percent/