The near-term outlook for commercial real estate (CRE) has become increasingly complicated due to rising interest rates along with lingering fears of a recession. Banks today are facing a greater pressure on CRE Asset valuations (on their Balance Sheet) as higher interest rates have resulted in tighter credit standards with regulators more closely monitoring the quality of CRE loans. A tighter lending market, along with declines in real estate investment trust (REIT) stocks, have negatively affected yield expectations on CRE and price declines / distress in certain asset classes are underway. Due to decreasing asset values, some properties coming
Category: Financial Markets
Bitcoin, Cryptocurrency, Financial Markets, Securities and Exchange Commission, US Regulators, US Stock Market
Washington DC Federal Court of Appeals ruling: Does this open the door for Spot Bitcoin Exchange-Traded Fund (ETF) availability soon?
(Posted September 2023) A three-judge panel of the District of Columbia Court of Appeals in Washington, DC ruled recently that U.S Securities and Exchange Commission (SEC) was wrong to reject an application from Grayscale Investments to create a spot bitcoin exchange-traded fund (ETF) which would track its underlying market price, giving investors exposure to the digital asset, without having to buy the currency. The SEC has denied all proposed bitcoin ETFs, including Grayscale’s, on the grounds that they do not meet its bar for preventing market manipulation. Grayscale Investments sued the SEC for rejecting their application, in response to
Key consideration to accurately value Digital Assets for successful M&A Transactions
For any existing enterprise, acquiring the appropriate digital asset as a part of an inorganic M&A will generally lead to increased growth, revenue and greater market share which can be expressed in clear quantitative metrics when driven by clear business case. New technology disrupts markets and generally require a fresh set of metrics to calculate the value that digital assets being considered for this acquisiion. Consequently, calculating M&A risk accurately in such instances is crucial to avoiding overpayment and losses down the road along with steps to focus on steps that will improve the odds of a successful M&A
The Secure Act 2.0 – Highlights of rule changes related to 401(k) and other Retirement Accounts
(Posted February 2023) The Secure Act 2.0 has some noteworthy provisions related to rules changes for 401(k) and other Retirements Accounts. It may be noted that this law was passed towards the tail end of earlier 116th Congress, and many of the affected entities and institutions are still unpacking all the provisions in the Act. Several of the Act’s provisions came into effective immediately, after President Biden signed into law this SECURE 2.0 Act of 2022 as part of the Consolidated Appropriations Act, 2023, on December 29, 2022. Based on what we have seen in the provisions of this Act, Congress
Fed Speak: Pause vs. Pivot
(This post was posted in Nov 2022) The Federal Reserve’s November 2022 statement contained dovish language, but Fed Chair Powell warned investors not to expect the Fed to stray from its full focus on fighting inflation. Upside inflation led the U.S. Federal Reserve to hike its policy rate by 75 basis points (bps) for a historic fourth time. This brought the fed funds rate up to a 3.75%–4% range, meaningfully above the Fed’s 2.5% median long-run estimate, as inflation continues to justify monetary policy with the objective to tame inflation. In spite of continued inflation, the Fed also indicated
Irrational Exuberance 2.0: Another Tech Bubble a la circa 2000?
Posted Aug 27, 2020 We are watching the US Stock Market indices rising dramatically in the last few weeks, with Tech Stock Prices leading the charge upwards. We are almost back to March 2020 levels. This Bull Market has been fueled by dramatic rise in stocks of Tech Titans like Amazon, Tesla, Apple, Facebook, Twitter to name the notable few. In fact, Tesla’s stock has been on a tear since March and is now up ~600% leading to a humorous remark making the rounds “Tesla Bears – stay in your caves” which aptly sums up this irrational exuberance sentiment.
Anti-Trust, Big Tech, Big Tech Breakup, Corporate Governance, Financial Markets, Tech Leadership, US Regulators
Big Tech Breakup – Considerations and Reality – Our Thoughts
Netflix is an amazing digital success story – starting out almost 15 years ago as a predominantly DVD subscription service, Netflix was able to pivot along the way and take advantage of rapidly evolving mobile technology and ever-improving internet speeds to become one of the largest video distribution networks on the planet. The success of Netflix is an excellent example of “creative destruction,” a term originated in the 1940s by economist Joseph Schumpeter, who described it as the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new
Economics, Financial Markets, US Federal Government Oversight, US Fiscal Policy, US Monetary Policy, US Stock Market
Fed’s Good Call today – Thank you for signaling a more data driven, cautious and market-friendly approach
(Published January 30, 2019) We are extremely delighted and relieved, in equal measure, that the Federal Reserve held its key interest rate steady today. “The case for raising rates has weakened somewhat,” Fed Chairman Jerome Powell said at the post FOMC Meeting news conference. He also indicated that a “wait and see attitude with patience is warranted”. “The U.S. economy is in a good place, and the current policy stance is appropriate” he said, but added there’s growing evidence of “crosscurrents,” such as slowing growth in China. “In light of global economic and financial developments and muted inflation pressures, the
“To Raise or not to Raise (Rates) is the Question….” – Conundrum facing the Fed this month
Published December 10, 2018 “To Raise or not to Raise (Rates) is the question…” – would best describe Federal Reserve’s position, if we were to apply the Bard of Avon’s immortal quote from Hamlet, to the likelihood of hiking the Interest Rate in their December 19 FOMC Meeting. Trade war fears along with the specter of a possible economic slowdown have sent markets down significantly in the last couple of weeks. Consequently, it is reported by CME that Investors currently see a 73.2% chance of a rate hike following the December Fed meeting, while a week ago, the probability for
US Stock Market correction – Is this specific Geopolitical Event the trigger for this round of Financial Crisis?
Published December 7, 2018 We are now deeply in the middle of serious US Stock Market slide with all indices down viz. Dow, NASDAQ, S&P 500 and the stocks in firm correction territory. Based on where we are, it appears that the Bears have invaded Wall Street and the Bulls are in full retreat. The TV and Financial Press is full of analysts and experts providing various reasons for this correction. The initial cause attributed by experts to this stock market slide may be characterized as a Global Synchronized Slowdown as opposed to Global Synchronized Growth that led to frothy