HJ

The corollary is that "value" style is more practiced in credit analysis where guys are focused on minimizing downside protection because their upside is getting their principal back. They underwrite to past stresses and trough profit margins, assuming those will be revisited. "Growth" style is practiced more in the tech world where everybody is trying to invent new things or new business models to move away from the past. We've been living in a period of tremendous changes brought on by the advent of internet and mobile phones - ergo the dramatic underperformance of value vs. growth.

For what it's worth, Tsinghua Unigroup, which is one of the major entities in China involved in the semiconductor space defaulted on a couple of small domestic bonds, USD$~200MM. YMTC, considered by some to be an existential threat to the NAND suppliers, is a subsidiary of the Unigroup. The default might end up being just a blip to the operations of YMTC, but is note worthy. As with most things in China, they are opaque until they are thrust right in front of your eyes, and you go "how could I have missed it?".

Good question and one that has been on my mind too. The iFixit teardown offered the following: https://www.ifixit.com/News/46884/m1-macbook-teardowns-something-old-something-new Next to the shiny silver M1 chip on each board you’ll notice two small black rectangles. Those are the new “integrated” memory chips: 8 GB (2x 4 GB) of SK hynix LPDDR4X memory. Apple calls this UMA, or Unified Memory Architecture. If it looks familiar, it might be because you’ve seen one of our recent iPad teardowns. It’s no surprise that Apple copied some of its own homework here. By baking RAM into the M1 package, each part of M1 (CPU, GPU, Neural Engine, etc) can access the same memory pool without having to copy or cache the data in more than one place. So while not Micron it is at least one of the big three - SK Hynix Cheers nwoodman Thank you. That's what I was suspecting, just haven't found any corroborating evidence. There's obviously sophisticated circuitry in the M1 to "unify" the memory, which is getting rave reviews. With Intel falling behind TSM in process technology, it does look like semiconductor design is entering a new "golden era".

A technical question for those of you technically oriented, Apple makes a big deal out of its M1 chip which is a SOC and has a "Unified Memory". How does it affect the prospect of independent memory makers? Do these SOC obviate the need for third party memory makers for these chips?

Here's.a documentary on the live streamers at YY. Like a lot of media stats in China, whether things are fraud or exaggeration is in the eyes of the beholders. 4MM subscriber is also not a huge % of the Chinese population, so while I don't know people who use it, my immediate friends are probably not the right demographic for this. It wouldn't be surprising though if that number is off by a factor of 2-3 (exaggeration), not 10 (fraud). https://www.desire.film/ And this is an interview with the film maker.

So you mean to tell me that if there was a virus that is very contagious and it make people want to leave densely populated cities with high rent, I am supposed to be shocked at that kind of rationale behavior by the upper middle to rich class? Wow, I would've never thought of that. 2008/2009 was scary as well. People tried to jack my tenants. Every 7-10 years, you have to experience some pain in real estate. It's just life. This is round 2 for me with 2008/2009 being more scary in general but NYC holding up better. This round is more specific for NYC. Back in 2008/2009, I was pretty bearish about NYC because all the revenue and profit center that drove that boom was so tied to mortgage packaging. That was totally going to go away. covid is precipitating trends that are not friendly to NYC. the biggest in my mind is the risk that "front office" as well as "back office" of the securities/finance industry will leave NYC. the latter has already mostly happened. covid is encouraging the former. if NYC loses much of the financial sector, then it will be shot to hell NYC lost the Madison Avenue advertising businesses, (think Mad Man), and it was once the fashion capital of US with its garment district, and the media center of the US with all big 3 broadcasters. Finance is obviously hugely important to NYC today, but there are fundamental forces that give NYC its regenerative capacity. Geography, for one, makes immigration benefit NY more than elsewhere in the US, and so are the transportation infrastructure, education institutions, etc. There's reason why finance was centered around NY in the first place. That said, it's going to be on a down hill for a while, especially with characters like AOC having influence over decisions surrounding Amazon HQ2. It'll take a while, but it's more about how it's run that will determine its future than just finance.

A lot depends on how it's managed going forward. Presumably there were good structural reasons for NYC to have become NYC, capital of the world, in the first place, be it institutional or geographical. Some of those reasons are impaired by the aftermath of pandemic, some are not. But clearly the short term is looking quite grim. Whether it go on for a couple of years or a couple of decades depends on how it's managed and how US interact with the world. Longer term, presumably those same advantages that created NYC in the first place will resurrect it, the same way they did after the 70's.

I have the book in Chinese. The segment on Timberland is actually from a talk he gave at Columbia in 2006, translated into Chinese. It's actually on youtube: The book is really a collection of his writings and talks. A big chunk of it is a discussion of the Chinese civilization in the style of Guns Germs & Steel, ergo the name of the book. Enjoy.

Don't know if you can generalize like that. There are many different kinds of insurance companies, P&C, lifers, reinsurers, etc. And many different types of banks. Global SIFI's, small regionals, super regionals, consumer finance, etc. Much like stock market investing, there are many different ways of making money in it, you need to find the one that suits the current environment and your personality.

Those seems to be the most pertinent question and are related. I've seen numbers that show DRAM industry having virtually no growth in revenue terms from the mid 90's until 2013-2014. Basically all the technological advances benefitted the users rather than the producers. Until recently it's been a miserable industry to be in, and now there is the threat of potential government backed uneconomic entrants. How do we know the world is wiling to pay more for memories consistently year in and year out?

Pretty impressive the stock holds at this level. Would have thought the nature of the client base should make it more vulnerable than typical. Compare this with, say, something like Paychex, just seems to be quite out of line. I don't have great insight on the competitiveness of their suite of products, but feels like SME focus, with heavy restaurant exposure should make this quite vulnerable in the current environment?

"I think banks have a way out from defaults if people try to wipe out debts during the covid-19 period. They can just extend forbearance for a long time 6-12 months, if that is what it takes. It would remove any political pressure. If you are not being asked to pay a dime for 12 months, there cannot be any political pressure to forgive debts. FYI - I have less of a concern with Bank of America, I am thinking of card and auto loan focused banks when I asking the above questions. " One thing quite different between mortgage market and credit card / auto loan market is the issue of "servicing" and the presence of government agencies in the ultimate financing of mortgages vs. other consumer lending products. In mortgage servicing, the servicer (which is often times also the loan originator) are required to advance principal and interest to the mortgage bond investors if underlying borrowers don't pay. These advances are ultimately recovered with interest when either the borrower pays back delinquent P&I or the servicer sells the house and is paid back from liquidation proceeds. The US government can mandate a forbearance, and stop foreclosure, but it's the servicers who end up advancing the P&I and be stuck with the bill. Because the agencies have such a dominant presence in the functioning of the US mortgage market, the US government also feels like they have a stick to enforce these servicing behavior. For example, mortgage relief was mandated in the relief bill that was just signed. In auto loans and credit cards, the government is much less involved to start with, so have much less ability or reason to regulate how those loans are serviced and collected. https://www.cnbc.com/2020/04/08/coronavirus-mortgage-industry-fires-back-at-regular-who-refuses-to-help-servicers.html On the flip side, money is fungible from the consumer perspective. During the financial crisis, there was evidence that a lot of people strategically defaulted on mortgage payments, but stayed current on auto loan payments, and some card payments. In addition, car loans and credit card loans are priced for much more credit risk to start with. It's not obvious whether the lenders / servicer will ultimately suffer more pain from card and auto lending or mortgages.

That's an interesting statistic to look at, 27.8% charge off. But I would point out the following: 1) it's over 4 years from March 2009. So it's 2 years of ~10+% charge off followed by 2 years of closer to normal charge off rates. 2) These cards charge interest rates of 12+% to start. While these companies earn something like 3% pretax on the card balances, there's significant marketing and operational spend that can be dialed back in negative macro environment like today. 3) Today's accounting already require them to book all the loans on balance sheet, and have some amount of forward loan losses provisioned on the books. Compared with pre crisis, substantially all of the receivables were off balance sheet going into the crisis, and had no loan loss provisions booked against them to start. This is certainly a hugely negative event. But if it's only a replay of '08/'09, these companies should have little problem going through it. The question of course, is if it will turn out to be significantly worse than '08/'09 over the next 3-4 years, which only time will tell.

Truth is always somewhere in between. That all the frauds were committed by financial institutions during GFC because they were out to screw people, and this time they are out to help is just too simplistic a view of the world. When there's $350 billion at stake, and hundreds of thousands of people / entities involved, there will be bad actors. At some point, there'll be opportunistic politicians rage in the name of "we the people" to raise his/her national profile on things that go wrong from the left and the right. At that point the only thing the banks can hide behind is the guidelines on the origination / monitoring rules that they want government to put out now. Even then, politicians can change goal post down the road if it suits their purpose. None of this is to predict this whole thing will necessarily be poorly executed this go around. Just saying plenty of issues exists in this whole endeavor. There are already people saying this is a give-away to the rich and connected, and they are right in some respects. Such is the nature of human societies at large.

They won't have any risk but they will earn a fee for processing / administering these programs. That's not entirely true. It's true that they aren't supposed to take any credit risks. But plenty of other things could go wrong. JPM didn't think it was taking any credit risk either when taking over Bear Sterns, with Fed as a back stop on the assets they are buying, but then was hit with all the pre crisis mortgage underwriting issues that came back to haunt them. Robo signing, mortgage put backs, fines related to pre crisis conducts, etc. The assumption here is the borrowers are all well intentioned. But there's plenty of incentives to defraud the lenders/governments. And 2 years down the road, some of these stories come to light, banks will be stuck in the middle, government won't reimburse them for frauds, and money is out the door. How about at some point down the road, there's allegation of discrimination in disbursing the loans, money laundering, etc., etc. That's why banks are all looking for guidelines. They can't underwrite and monitor these loans to their traditional standard, yet they could be stuck with fines down the road.