AK Global

In this episode, we discuss negative interest rates and the implications of the negative interest rate policy recently pursued by Denmark’s Jyske Bank.

Topics include:

Global negative yielding debt

EU pensions mandate to hold negative yielding sovereign debt

Ways to avoid negative interest

Negative interest rates in Denmark

Negative interest rates in Switzerland

Links:

https://www.marketwatch.com/story/that-near17-trillion-pile-of-negative-yielding-global-debt-its-a-cash-cow-for-some-bond-investors-2019-08-22

https://www.youtube.com/watch?v=ElxmkyQkbbU

https://www.businessinsider.com/jyske-bank-denmark-negative-interest-savings-over-million-2019-8

https://www.reuters.com/article/us-ubs-group-negative/ubs-plans-to-charge-rich-clients-for-swiss-cash-deposits-idUSKCN1UQ26A

Very simple episode where we candidly share our frustrations with gold bugs and Austrian economists. While we are frustrated we share their core views of the world and think they have it right except for bitcoin. Enjoy.

Source material: https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch02.htm

1. Centralisation of the means of communication and transport in the hands of the State.
   1. Radio communication unregulated until The Radio Act of 1912
      1. formally known as "An Act to Regulate Radio Communication" (37 Stat. 302), is a United States federal law which was the first legislation to require licenses for radio stations
   2. The Radio Act of 1927 (United States Public Law 632, 69th Congress) replaced the Radio Act of 1912
      1. increased the federal government's regulatory powers over radio communication
      2. oversight vested in a newly created body, the Federal Radio Commission (FCC)
      3. first legislation to mandate stations show they were "in the public interest, convenience, or necessity" in order to receive a license
   3. Communications Act of 1934
      1. “The act established a legal basis for regulating wired and wireless communications on a nationwide and worldwide basis. The Federal Communication Commission was founded because of the act; it replaced the Federal Radio Commission. Because of the act, the U.S. government could regulate new media technologies such as television and mobile phones. Moreover, the act permitted the regulation of commercial communication corporations such as private radio and television companies.”
   4. 6 companies control all US media https://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6
   5. List of administrations in control of transportation by creation date https://en.wikipedia.org/wiki/United_States_Department_of_Transportation
   6. The Federal Aviation Administration (FAA) regulates all aspects of civil aviation
      1. Its powers include the construction and operation of airports, air traffic management, the certification of personnel and aircraft, and the protection of U.S. assets during the launch or re-entry of commercial space vehicles.
2. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.
3. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.
4. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
5. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c.
   1. https://en.wikipedia.org/wiki/Education_in_the_United_States
   2. By state law, education is compulsory over an age range starting between five and eight and ending somewhere between ages sixteen and eighteen, depending on the state. This requirement can be satisfied in public schools, state-certified private schools, or an approved home school program.

Description:

In the current zeitgeist we are told that “capitalism” is failing us as well as being responsible for the increasing wealth gap between the “haves and the have nots.” In this episode we focus on the US primarily. We will use the 10 planks of Karl Marx’ Communist Manifesto (1848) to try and ascertain if the US truly is a capitalist nation or if it is far more Marxist in character than people are often lead to believe.

Topics include:

Communication

Transportation

Education

Bitcoin

Since the 2008 financial crisis stock buybacks have been at historically elevated levels. These levels have accelerated at an even greater pace since the Trump Tax cuts. In this episode we explain what stock buybacks are and the consequences of this poorly understood corporate policy.

Topics include:

What stock buybacks are and how they work

A short history on stock buybacks

Decrease in stock ownership by households and individuals

Majority of stocks owned by wealthiest Americans

Executive compensation packages

Margin and corporate debt to GDP at all time highs

Unintended consequences of stock buyback policy

Links:

https://realinvestmentadvice.com/wp-content/uploads/2019/04/Stock-Buybacks-2019.png

https://www.investopedia.com/articles/02/041702.asp

https://finance.yahoo.com/news/7-reasons-stock-buybacks-illegal-172253787.html

https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx

https://finance.yahoo.com/news/the-richest-1-own-50-of-stocks-held-by-american-households-150758595.html

https://www.nytimes.com/2018/02/26/business/tax-cuts-share-buybacks-corporate.html?module=inline

https://www.nytimes.com/2019/02/25/business/stock-market-buybacks.html

https://fred.stlouisfed.org/series/BCNSDODNS

https://www.advisorperspectives.com/dshort/updates/2019/08/20/margin-debt-and-the-market-up-0-98-in-july

News regarding the repo market has seemingly died down as of late; however, things have become far more interesting despite the lack of headlines. In this episode we give you an update on the current state of the repo market with special attention to the Fed’s extension of term and overnight purchases. In addition, we briefly discuss the reigniting of QE (quantitative easing) in the form of treasury purchases by the Fed. At the end we dive into just how and why the Fed's policies are dangerous, and describe how bitcoin and gold are better to build a financial system on.

Links:

Fed links

https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/repo-reverse-repo-agreements/repurchase-agreement-operational-details

https://www.newyorkfed.org/markets/opolicy/operating_policy_190920

https://www.newyorkfed.org/markets/opolicy/operating_policy_191004

https://apps.newyorkfed.org/markets/autorates/tomo-results-display?SHOWMORE=TRUE&startDate=01/01/2000&enddate=01/01/2000

Why this is QE

https://www.seeitmarket.com/qe-by-any-other-name/

Balance sheet

https://fred.stlouisfed.org/series/WALCL