Another day, another vaccine candidate

Astra-Zeneca announced today that it too had a very effective vaccine against SARS-Cov2. Who knew that it’d be so easy? The market didn’t react much, and just ground higher. Maybe it would have been five percent lower if the announcement had not been made. Who can tell?

Traditional valuation metrics considered outdated

Hayden capital have written a note saying that DCF approaches to value are wrongheaded. Well, that’s sort of true, in the short run. It’s true that the radical uncertainty of the real world makes valuing something by mechanically discounting cash flows according to a zero coupon curve is flawed. Using a higher rate as a way of allowing for uncertainty about the future cash flows is even more flawed. However, I somehow feel that sacrificing consumption today does require some sort of mechanism to compare the sacrifice against the consumption in the future in a comparable, risk-adjusted, basis.

Student housing CMBS’s looking sick

This article argues that student housing mortgage backed securities are not a good place to be. The whole situation of US (and UK) student loans seems pretty terrible. The problem is that the Fed may be able to inflate the problem away, so it’s hard to know how to take advantage of the situation.

Wrap

Another vaccine and risk on knows no bounds. Unloved sectors like airlines, energy and value all catch a bid. Precious metals forget all about looming inflation as money flows into income-generating assets. Agricultural commodities benefit modestly ($DBA up 0.78%). Miners are crushed. Bitcoin retraces a bit. The Turkish Lira suddenly reverses as investors wonder whether 15% interest rates are politically sustainable. Brazilian Real dropped 0.9% against the dollar today. Brazil had excessively high interest rates, so it was coming. The JPY dropped 0.71%. This alone confirms the risk-offness of today.

Inequality

I haven’t embedded from this source before. Hope it works. The point is that the late 70’s were the trough of inequality in the UK. After a long downward trend, once I became an adult, inequality started to increase and shows no sign of reversing. This eventually will have political consequences, I feel.

(Sorry, this embedded iframe won’t display from my server (although it’s fine locally). You can see the original here. If you know why this is happening, please tell me!)

This trend is not unique to the UK.