Scary Economic Trends to Worry about in 2019

Fourth, the main fiscal remedy for an overheated real estate market is to raise interest rates. To explain, higher interest rates increase mortgage costs which can discourage real estate purchases.

Notably, the Federal Reserve raised interest rates on 20 December 2018, which is spooking Wall Street. An interest rate hike can backfire because it could not discourage real estate speculation.

Thus higher interest rates can lead to a zombie real-estate market. Higher-interest rates cause zombie real-estate because people will wait for rates to buy or fall to list properties.

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Dollar General (DG) symbolizes everything wrong with America’s economy

Under these circumstances, it is easy to how Dollar General grew to over 15,000 stores in 44 states. A shrinking middle class and wage stagnation keep creating more customers for Dollar General (DG).

Interestingly, Mr. Market likes Dollar General’s ethically questionable business model. For instance, Dollar General Corp (NYSE: DG) shares were trading at $98.85 on 24 December 2018.

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Is Disney (DIS) a Monopoly?

The monopoly charges will fly against Disney (DIS) because of all the popular characters it will soon own.

For instance, Disney owns all the comic book and animation rights to all the Marvel superheroes. That includes Spider-Man, Captain America, Iron Man, The Wolverine, The X-Men, The Defenders, Luke Cage, Venom, The Avengers, Nick Fury, Ghost Rider, The Hulk, Thor, The Fantastic Four, The Submariner, and Deadpool to name a few.

Additionally, Disney will get the movie rights the X-Men, Wolverine, and Deadpool when it acquires 21st Fox. Hence Disney owns the Marvel and Star Wars universe.

However that is just the tip of the iceberg. For example, Disney will acquire Buffy the Vampire Slayer; and all the Buffyverse characters such as Angel, by purchasing 21st Century Fox. In addition, to Buffy, Disney will also own The Simpsons, Archer, The Aliens, The Planet of the Apes, and Predator through Fox.

This character monopoly gives Disney vast power. For example, Disney forced Sony to add Spider-Man into the Marvel Cinematic Universe.

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Bernie Sanders wants a $15-an Hour Wage at Walmart

The $15 an hour minimum wage could have killed 20,000 temporary jobs at Amazon.

To clarify, Quartz estimates Amazon will hire 100,000 temps for holiday season 2018. In contrast Amazon hired 120,000 temporary workers for holiday seasons in 2016 and 2018.

Amazon no longer needs the 20,000 temps because of its deployment of Kiva robots in fulfillment centers, Citi analyst Mark May theorizes. In particular, Kiva robots eliminate workers who pull merchandise from the shelves.

Instead, the robots literally bring the shelves to the workers who pull and pack and the goods for shipment. Quartz claims, Amazon cut the time needed to pull and pack an order from an hour to 15 minutes with robots.

To be fair to Bernie, Amazon would have deployed the robots with or without the $15 wage. In fact, the robots could have made the $15 wage possible by reducing the size of the labor force. Amazon is paying workers more because it has fewer of them thanks to robots.

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Volkswagen plans to build 50 Million Electric Cars

Volkswagen AG (VWAPY) plans to build 50 million electric vehicles (EVs) within the next few years. In particular, VW claims to have enough batteries to power 50 million EVs.

“We have bought batteries for 50 million vehicles,” Volkswagen chief executive Herbert Diess supposedly claims.The German language publication Automobilwoche reported the claim. Unfortunately, I have not located an English language translation of that interview.

Unfortunately, news reports did not say where Volkswagen is getting the batteries. However, Electrek reports that Volkswagen’s battery factory in Braunschweig or Brunswick, can produce 500,000 battery packs for electric vehicles a year. Thus, Volkswagen is already beating Tesla at its own game.

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Five Myths about Stablecoins

“When an investor focuses on short-term investments; he or she is observing the variability of the portfolio, not the returns – in short, being fooled by randomness.” – Nassim Nicholas Taleb.

Therefore stablecoins, like most cryptocurrencies are a purely speculative asset. Stablecoin speculators bet that these assets will work as advertised. If stablecoins fail the speculators will lose their money.
Thus, stablecoins are an inherently risky asset based on unproven technologies and business models. Thus only people who can afford to lose money should buy stablecoins.

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General Motors Builds All-Electric Camaro

Notably, the eCOPO concept is apparently built upon the frame of a conventional Chevy Camaro. Thus, the only difference between the electric Camaro and its gasoline brother is the engine.

For instance, the eCOPO’s engines will fit in the housing for the gasoline Camaro’s LS motors. Additionally, the eCOPO appears built for drag racing. Thus, GM is proving it can go head to head with Tesla Motors and win.

This is bad news for Tesla because GM could easily replicate any model it brings out. Therefore, the whole rationale behind Tesla, bringing out unique electric vehicles is called into question.

However, Elon Musk could view the eCOPO as vindication of his work at Tesla. To clarify, Musk’s major goal at Tesla is promoting electric vehicles not building a car company. Under those circumstances, the eCOPO vindicates all of Musk’s sacrifices at Tesla.

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Is Square (SQ) Making Money?

Importantly, Cash is a money-transfer app accepted by big retailers. Recode claims Walmart (NYSE: WMT), America’s biggest retailer, and McDonald’s (NYSE: MCD) were the biggest recipients of Cash payments. That indicates Cash is reaching a mass market with ordinary people.

CNBC claims 33.5 million people had downloaded Cash in August 2018. If that is true, Cash has more users than Venmo. Additionally, Venmo they have downloaded Venmo 32.9 million times.

In detail, Cash supposedly lets you send money instantly in exchange for a 1.5% fee. Notably, Square (SQ) offers a personalized Cash Card that allows for ATM withdrawals and provides discounts at some merchants.

Therefore, a huge opportunity at Square is to offer POS devices integrated with Cash. To explain consumers could pay with Cash, receive Cash-based rewards points, and use Cash at ATMs. A Terminal that allows Cash users to receive change in paper cash will be a popular product.

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Why Microsoft is Giving Away Patented Software

Microsoft (NASDAQ: MSFT) can easily afford it. On June 30, 2018, Microsoft Corp reported a gross profit of $20.343 billion on 2nd Quarter revenues of $30.085 billion. Therefore, Microsoft can afford to give away patents.

Microsoft could distribute the software through GitHub; which it purchased for $7.5 billion in June. Notably, the OIN announcement came right before the European Commission approved the GitHub deal. To explain, Microsoft needs Commission approval to operate GitHub in the European Union.

GitHub is the perfect place to distribute the OIN patents because it is the world’s largest open-sourced software repository. In detail, GitHub serves 1.8 million organizations and 28 million software developers.

Unfortunately, news articles do not say which software will be released on GitHub.

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