Nearly time to bid farewell to 2020. Never been prouder to be a @FT science writer - nor more grateful to be able to carry on working. A short, indulgent (sorry!) thread on writing covid...

Starting on Jan 8 with a mystery pneumonia https://t.co/d21b1e3gr4 via @financialtimes

A realisation at the end of Jan that this could be ‘the

...and that healthcare might need rationing. Except I thought this would be a one-off in the spring first wave. Never dreamed we’d be in a worse place nearly a year later.

Remember, we have yet to pay the ‘Xmas mixing’ dividend

But at least a vaccine was in the works. The road was shorter than I thought 😂...free to

...but, until it arrived, we had to learn to operate in a new landscape of risk (free to read)

Insights of a noob:

10 things I've learned from 18 months in the financial services industry.

👇🧵

1/ The financial industry is set up to extract value from you - the key is to learn how to extract value from it.

2/ An understanding of compounding is essential - it can be your best friend, or your worst enemy.

Negative compounding is a thing, it occurs from the buildup of fees and taxes over time (there is a link to an article which explains this in more detail in point 9).

3/ Behaviour is everything - you are an emotional creature not a robot.

@MavenAdviser summed it up perfectly in a recent podcast, 'financial success takes place between your ears, not on a computer screen'.

4/ Behaviour is everything - familiarise yourself with @behaviourgap.

Over the long term markets do not lose money, however investors do.

A study found that over a 20 year period ‘the average investment return was 11.81%. The average investor return was 4.48%.’

First Chartstravaganza of the year … hoping for a better 2021!

Please comment, like and share. And of course … follow us!

Every Sunday, twenty charts, let’s go.

20. Investment Banking

(@ft)

19. Emerging Markets Flows

(@exantedata)

18. Population Growth

(@wellsfargo)

Why You Should Give Out Your Best Content for FREE to Land More Clients and $$$ (In ONE PDF)

If you’ve taken @PaikCapital “The Agency Course” this is a MUST READ

-THREAD-

What the hell are you talking about?

Yes, you heard me, you will get more clients when giving out your best content for free.

And it’s all in ONE pdf.

Hang with me..

Now, here’s why you should do this

Basically…

You will create an authority feeling around yourself as an agency to your niche when you do this.

You will be the go-to agency in this area.

People will then WANT to work with you

You will be the master among the people who do the same thing as you.

That's why you want to give it all away, reveal all your “super-secrets”.

In one pdf.

Let’s take an example

Let’s say that you’re running an agency that’s helping eCommerce businesses increase sales with Facebook ads.

When prospects (eCommerce owners) come onto your landing page, you want to collect their email addresses because they can become future clients, right?

I don't always like that freedoms are enshrined in process; checks & balances. It's not perfect; sometimes those processes are used to oppress (voting in the South). The principle though is freedom that goes through process prevents passions of mobs (yesterday's domestic terror)

Can process be misused? Yes, absolutely, thus the need for well-informed voters/participants in civic life. But are the people who attacked the Capitol oppressed by misused process? Even many other Republicans say, no; by end of day that number had grown.

Their sense of grievance is real - and preyed upon. For other circumstances in their lives it's possible sense of grievance is justified; rust belt poverty is brutal for instance. But feeling wronged & being wronged are different.

There isn't evidence of the will of the people being suppressed in this election. It is a nauseating twist to witness, that a group of people carrying Confederate flags into the Capitol building claim oppression by broken process.

In the C-Span livestream & photos yesterday, & the footage that emerged shortly after, it was apparent the crowd was a mix of near-tourist rural supporters, known white supremacists, & militia-like aggressors. At least 1 of those groups isn't interested in sharing fair process.

As part of the BC Basic Income project, my team and I were tasked with trying to understand the system of income and social supports available to BC residents. We developed these visualizations which have proven very popular

Pair these with our paper that goes through a detailed description of the system of income and social supports in BC here

TLDNR? There are 194 programs offered by the various governments that are available to support BCers in various stages of life and crises. The federal government offers more supports in terms of money, the province more in terms of basic services.

While complexity has disadvantages, a big advantage is that the multiple points of entry actually means that there are multiple ways a person can be assessed for assistance for all these programs better capturing those that fall through cracks in other programs.

Given that the fed tends to offer cash programs and BC tends to offer basic services and we were asked if BC should offer a basic income, naturally this begs the tradeoff question then should BC replace its services with income supports. Our answer was unequivocally no.

@BORIS_WATCH @Joe_Mayes Non-tariff barriers are other conditions/criteria which, even though are not tariffs, may end-up having a tariff-like effect, that is an increase of costs and, thus, of the price paid by the buyer (e.g. a theoretical example, a requirement that all beer exported to Belgium) 1/

@Joe_Mayes 2/ In the theoretical example, a beer exporter would be forced to change his supplier of bottles or to invest in a separate bottling line for its production deemed for export to Belgium. Hence, the extra costs that will have to be covered (usually by the end-customer).

@Joe_Mayes 3/ Even though it might seem ridiculous, there are many real examples of such „disguised restrictions”. Under the EU Law they are prohibited in the relations between the EU member states because they hamper the free movement of goods.

@Joe_Mayes 4/ Coming back to the confusion created by the foggy official communication, this comes probably from the terminology used (sometimes incorrectly), insufficiently explained and superimposed on the promises made in 2016 (we will have the same conditions like we were in the SM etc)

@Joe_Mayes 5/ So, in international trade, charging import/export tariffs is the norm. There are also quotas and contingents (e.g. the quantities of a given product the exporters from country A are allowed to export to country). The quotas are also used by the EU.

The Charity Tax Group and @CFGtweets have submitted Budget representations to @hmtreasury calling for an improved tax system for #charities in the aftermath of Brexit and COVID #charitytax 1/ https://t.co/mCiCpSQj2g

Existing charity tax reliefs should be protected & tax compliance and administration simplified. Protecting existing business rates & VAT reliefs is crucial as is future-proofing tax systems and legislation #charitytax #budget2021 2/

COVID-related support measures, such as the #JobRetentionScheme, #ExpandedRetailDiscount & temporary #5percentVAT rate on hospitality, hotel & holiday accommodation and admissions have helped many charities * should continue where possible while lockdown restrictions continue 3/

We call on Government to review the structural distortions caused by the VAT system resulting in significant #irrecoverableVAT for #charities. We also call on the Government to protect VAT reliefs and exemptions in the aftermath of Brexit #charityvat /4

We call on the Government to protect #charity #businessrates relief in England (worth almost £2bn) following the recent “Fundamental Review”. Compliance measures are important but should be targeted and proportionate #budget2021 /5

□■□■ Islamic Banking □■□■
In 1983, the first Islamic Bank (the Bank Islam Malaysia Berhad) was established in Malaysia through the introduction of the Islamic Banking Act. They are not recognised by a number of non-Islamic nations, including India.

In late 2008, a committee on Financial Sector Reforms, headed by former RBI governor Raghuram Rajan, had stressed on the need for a closer look at the issue of interest-free banking in the country and supported Islamic Banking system in India.

The RBI had in February, 2016 sent a copy of the IDG report to the finance ministry and recommended an "Islamic window" in conventional banks for gradual introduction of Sharia-compliant banking.

As per report:-
"In our considered opinion, given the complexities of Islamic finance and various regulatory and supervisory challenges involved in the matter and also due to the fact that Indian banks have no experience in this field, Islamic banking may be introduced in India.

"Initially, a few simple products which are similar to conventional banking products may be considered for introduction through Islamic window of the conventional banks after necessary notification by the government," it had said in a letter to the ministry.

How'd funds fare in 2020 when viewed through an ESG lens? We assign Globe Ratings, w/'High' (ie 5 globes) going to funds whose holdings court less ESG risk and vice versa for 'Low' (1 globe). Tldr: Funds w/higher ESG ratings beat their M* idx more often than those w/lower ratings

Given this, it's not too surprising that higher ESG-rated funds generated larger avg. excess returns (vs. M* cat. index) in 2020 than lower ESG-rated funds, meaning there was a better payoff to investing in funds that courted less ESG risk. That said, caveats apply...

1st caveat: When we look at success rates by 'intentionality' (ie, is strategy intentionally aiming to incorporate ESG, etc), we find success rates don't vary much by rating. In other words, success didn't depend as much on whether fund was actually *trying* to minimize ESG risk

Along those lines, there was a better payoff to minimizing ESG risk among non-intentional than intentional ESG funds. That is, there was a wider spread in the avg. excess return of higher- and lower-ESG rated non-intentional funds than there was among intentional funds. Nuanced.

Worth noting there are relatively few 'intentional' ESG funds. Of 4,000+ funds I examined, ~460 were classified 'Sustainable Investment--ESG Overall' as of 12/31/19, the starting point for the study. So, non-intentional funds drive the results.

Southampton’s 2019/20 financial results covered a “successful” season when they improved their position in the Premier League from 16th to 11th under manager Ralph Hasenhüttl, but their finances were significantly impacted by COVID-19. Some thoughts follow #SaintsFC

#SaintsFC pre-tax loss widened from £41m to £76m, as revenue fell £23m (15%) from £150m to £127m and profit on player sales decreased £7m from £21m to £14m, while total expenses grew £5m. Loss after tax increased from £34m to £62m.

#SaintsFC £23m revenue fall was driven by broadcasting’s £19m (17%) decrease from £113m to £94m, mainly due to 6 Premier League games being played after 30 June accounts close. Match day was also down £2.6m (15%) to £14.5m, while commercial dipped £1.1m (6%) to £18.7m.

#SaintsFC wage bill fell slightly by £1m (1%) to £114m, while other expenses were £9m (24%) lower at £29m. On the other hand, player amortisation rose £6m (11%) to £57m and there were £10.8m exceptional costs (player impairment £6.4m and onerous contracts £4.4m), up from £2.3m.

#SaintsFC £76m loss before tax is 2nd highest to date in 2019/20 Premier League, only surpassed by #EFC £140m, but better than #THFC £68m and #MUFC £21m. Due to the pandemic, it is likely that other clubs will also post substantial losses when they publish their 19/20 accounts.

This is part 3 of my guide to managing burnout in your staff. I'll link parts 1&2 at the bottom.

Today, I'll be concentrating on the longer term. This is the organisationally hard part as you'll be battling both internal inertia and finances.

1/

The first two parts were:
1. Managing burnout today
2. Managing tomorrow

Each incremented up in organisational challenge, moving from operations to crisis planning, and now to future planning to help build organisational resilience

2/

This follows the same format as before, I'll provide a skeleton for local plans with some suggestions on ways to do that.

The aim is to create an organisation capable of minimising burnout, and to provide structure to those who need help.

3/

In part 1, I showed 5 ways to help today, these are the same for planning long-term:

Rest
Recovery
Reserves
Rotation
Rehabilitation

They follow much the same principles, you just have a lot longer to get them right! These are suitable for all sizes of organisation.

4/

BEFORE YOU START

This must have senior ownership, it's not acceptable to delegate this to a HR team, facilities/estates or lower level managers. If you're too important to manage your staff wellbeing then you're in the wrong job.

Let's start with information gathering:

5/

Follow up post on GME answering common questions (e.g. if they short is still >100% of float, wouldn't that cause another short

1/ Official short interest is only posted twice per month. Daily estimates by data firms (e.g. S3 Partners) can be inaccurate, especially if there is high intraday volume and volatility

2/ De-grossing suggests that hedge funds facing existential loss likely to have already covered.

Short positions opened in last 3 days was ~35M shares all above $300 suggesting that the cost basis has been reset. The original shorters have likely covered already.

3/ There is a staggering 1.38m put options open vs. 233k call options. This 1.15m net put exposure means that MM likely owning ~11m shares short for delta hedging. These shares are unlikely to be squeezed

4/ Short squeeze and gamma squeeze likely to have already occurred. Continued share price increases likely driven by new investors joining WSB/RH. Buying of GME has now expanded beyond US to other countries.

Just did an assessment of our #health #finances. After a ten-year personal experiment with a health savings account (#HSA) and our employer's high risk insurance option: GOOD CHOICE. I'm definitely not an expert, but if you're curious, here's our experience (a thread):

Our life situation made us right for an HSA. I was single for half the first 5 years, married for the 2nd, when married, both of us on HSA. No children, overall pretty healthy. Here's an article about who an HSA is good for:

I deducted the maximum savings every year from my employer (which I believe was about $6,000). This went into our HSA. For medical expenses, if we had the extra cash, we used it rather than our HSA (as the HSA grows exponentially tax-free, which is a freaking good deal).

Due to the HSA, my hubby and felt free to pursue alternative health care options and therapies that would NOT have been covered under typical medical insurance (invisalign, chiropractor, contact lenses). We ended up skipping or get the cheapest dental/eye coverage.

It also made me think twice about expensive medical procedures: when I had gastro issues several years ago, my doc recommended a colonoscopy. I saw the price & thought, heck, I'm going to try a food elimination diet first. Voila! Problem solved and no need for the procedure.

After needlessly arguing over the effect of discount rate and inflation, I decided to analyze its impact on the credit market myself. I used SBP monthly data from its website (stock). Flow data would have been better but I worked with what was available.

A thread.

Government borrowing was impacted by the discount rate. At 13.25%, GoP borrowed appears to have stopped increasing. As the size of private-sector borrowing is smaller than GoP borrowing, we will look at private-sector borrowing separately.

Private sector borrowing: stand-alone and starting the left axis from Rs.3 trillion so that changes are visible. It appears private sector borrowing kept increasing till Dec 18 when the discount rate was raised to 10%.

SBP started decreasing discount rate in March 2020 along with some other initiatives to spur growth. But now it was too late. Pandemic had struck. Private sector borrowing continued to fall. You can read about SBP initiatives here

The impact of SBP discount rate is obvious here if we look at it YoY. Credit to Private sector continued to grow till Dec 2018. Growth in credit clocked at 16% and 21% in 2017 and 2018. After that SBP's moves up or down stopped having any impact. 4% growth in 2019 and 0% in 2020

Did you know that you can send a follow-up email sequence from @gumroad?

It's called a workflow, and here's how to use it to make $$$...

1) Set up a free product (pay what you want, $0+)
Keep it high value and very short.
A single page summary or plan of some sort is good.

Tell them in the product that they'll get more by email.

2) Set up your workflow under Customers => Workflows.

Here's what to send...

#1 Sent Immediately:
Remind them of what they'll be able to do if they ACT on the freebie
Tell them they'll get more useful stuff over the next few days
tell them how to recognise your emails

#2 Optional same day
Keep this super light and breezy, like an email to your friends

If you have a higher level service, ask if they're interested

Ask what they're working on, people love talking about this

#3 The paradigm shift

Tell them there's a reason why what they're doing isn't working
Hint at a missing piece, a conspiracy against them (Big Pharma), or just dumb advice accepted as common wisdom

This is the setup for your product which solves the problem

On Monday, we submitted a letter to the US Treasury on the proposed rulemaking by FinCEN. We are committed to working with FinCEN to facilitate the adoption of digital assets along with widespread compliance and AML regulations.

Some highlights from the letter:

The limited time to provide comment deprives FinCEN of important feedback from the industry, resulting in less effective rules that create significant barriers to widespread compliance. This is a sharp departure from ordinary comment procedures and established practice.

The proposed rule raises serious practical and technical concerns that reveal robust industry feedback and industry engagement is necessary before effective implementation is possible. Some key concerns raised in our letter include….

The recordkeeping and reporting requirements mandate that Virtual Asset Service Providers differentiate between hosted and “unhosted” wallets without defining these terms and acknowledgement of the challenges faced in differentiating transactions that involve unhosted wallets.

A mandate that VASPs obtain name, address, and other unique counterparty info to unhosted wallet transactions would be the first Bank Secrecy Act rule commanding an institution to obtain specific info about customers’ counterparties with whom the institution has no relationship.