Bubblicious Markets and Big Tech’s Monopolistic Behavior

Published on
December 11th, 2020
Duration
41 minutes


Bubblicious Markets and Big Tech’s Monopolistic Behavior

Daily Briefing ·
Featuring Jack Farley, Weston Nakamura, Ash Bennington, and Ed Harrison

Published on: December 11th, 2020 • Duration: 41 minutes

Real Vision managing editor Ed Harrison welcomes senior editor Ash Bennington to discuss water futures, “bubblicious” market froth, and potential anti-competitive behavior by Big Tech. After Ed and Ash give their brief review of political news, Ed shares his analysis of the recent IPOs of DoorDash and Airbnb with Ash noting parallels between current market conditions and those that preceded the Dot-com bubble. Ed and Ash then explore the significance of the recent addition of water futures to the CME exchange. In the intro, Jack Farley and Weston Nakamura embark on a chart-filled journey on the Nikkei 225, the Japanese Yen, and currency pairs. For greater details and more charts from Weston and Jack, check out their conversation in the Real Vision Exchange: https://exchange.realvision.com/post/follow-up-to-my-daily-briefing-intro-with-weston-nakamura-s-galore-5fd3f00fffc3b852f6b03a2b.

Comments

Transcript

  • PG
    Philippe G.
    16 December 2020 @ 13:26
    Sam Zell...looking forward to it...hopefully the discussion will include his thoughts on WFH vs. office, urban exodus (or not)!!
  • AC
    Alex C.
    15 December 2020 @ 08:51
    More info on water would be great. Could consider adding regenerative agriculture, is this a viable solution for economics and food scarcity.
  • TW
    Troy W.
    15 December 2020 @ 04:10
    There is no shortage of water. There is a shortage of available water in certain jurisdictions. I live in Australia in an area that relies 100% on desalinization. The only issues globally are "the will" to build infrastructure and to own the huge energy bill and associated emissions that desalinization requires and emits. Water is just like food in that there is enough for everyone yet not everyone has access to it. I think water futures could be traded although I think the market could be manipulated far easier than say Pork bellies.
  • PP
    Patrick P.
    13 December 2020 @ 03:52
    Yeah ..Airbnb has been in business since 2008 nary a profit... So let's take a losing 12 year old company public----- a company that has to give away product at a loss......so the morons of the world can run the price up to nosebleed levels.... Hey how about another losing idea ...NEVER made a nickel... Yes!! Doordash ... 8 years old ... terrible business model ... (deliver food at a loss).,... can we find more morons ?? Yes we can. LMAO
    • JM
      Justin M.
      14 December 2020 @ 21:53
      People aren't buying ABNB for the last 12 years; they are buying it for the next 12 years.
  • BA
    Bhagwanta A.
    13 December 2020 @ 03:53
    I believe, Roul should come every Friday and give his update.
    • MT
      Mike T.
      14 December 2020 @ 13:25
      you could probably have Raoul call you every day IF you pay up the required level of fees.
  • MH
    Martin H.
    14 December 2020 @ 02:25
    'potable water'
  • MA
    Melanie A.
    13 December 2020 @ 20:06
    Would love to hear more on water, thanks
  • GF
    Gordon F.
    12 December 2020 @ 21:52
    I am a civil engineer, retired, who spent most of my career in water and wastewater treatment and environmental compliance. I am no expert on desalinization, although I understand the basics, but with respect to water supply in general, we are not faced with a water shortage except in specific locations. To compound the problem we have a culture of treating water as an inexpensive resource, and are fully accustomed to having it delivered, safe for drinking, to our taps in almost any quantity we are willing to pay for (and we scream if the price goes up very much). And we don't expect only enough for drinking and bathing, we expect to be able to water lawns and even golf courses with potable water, although golf courses now often use treated wastewater. Don't get me started on subsidies for agricultural use, and any efforts to remove those subsidies meet fierce resistance. In general, if you have adequate sources of energy, you can produce the potable water needed. This may be by desalinization, building pipelines and pumping it in from distant locales, building reservoirs to store it through dry seasons, etc., but in most cases, careful applications of more energy can solve the problem. But it won't be cheap. So yes, let's have more discussion on water.
    • DD
      Doug D.
      13 December 2020 @ 19:36
      Another Civil Engineer here. Agreed. Prices are low. Notwithstanding perceived environmental feelings towards it, Energy contributes to the costs per acre foot costs for Desalination.
  • MF
    Michael F.
    12 December 2020 @ 08:59
    Raoul hasn't been on this show for quite a while. Would be useful to get his updated thoughts an markets and the economy. Probably too much focus on bitcoin lately.
    • DG
      David G.
      13 December 2020 @ 06:17
      A few weeks ago Raoul suggested that investors wait for a 20% pull back in bitcoin before entering to new positions. Bitcoin is now experiencing resistance and some pullback, but it has not pulled back 20% that level is about $14-15k. I'm not in bitcoin so I don't remember. TLT is a March 170 call position he has, and TLT is consolidating at a trendline that started in Oct. of 2018. it also completed a Higher low on its daily chart. I added to my March 161 call position at that time. What comes out of congress in the weeks to come is a huge catalyst one way or another, that we are all waiting on. I'm not personally following the economic numbers, because I don't know when the market will start to care about them. However, I would imagine that as long a the Covid numbers are getting worse, the economic numbers will continue to worsen, unless stimulus, from congress or the fed offsets it. The Dollar(DXY) started to break down, but it too seems like it is in a wait at see mode this week, as the breakdown has taken a pause from its drop from the 92 level and did not proceed all the way down to it's 2018 low. Purely speculation on my part, but we could be witnessing the 2nd half of a rare diamond top, as we work through insolvency. Debt is monetary supply, and defaults wipe out debt, and thus monetary supply. Less monetary supply means each dollar is worth more, all things being equal. That is what Raoul is waiting for. Gold, as it pertains to it's short term fate is waiting around for what comes out of Washington I believe, just like the Dollar is. However, I would have a hard time telling you, how much stimulus will be required for Gold to make a new high in the short run. We may not see new highs in gold and silver in the short run until we see new and significant "blood in the street," that forces more aggressive Fed actions. Cheers!
  • DG
    David G.
    13 December 2020 @ 05:33
    I'm looking for a partial decline in terms of the megaphone top in the S&P as a clear signal for significantly higher levels to come in 2021/2022. As far as the bubble, unlike 2000 everyone has easy access to the largest casino in the world, alone with more fed easy money. The significantly higher volumes of dumb money, funny money, global money, and passive money, may lead us to break the 2000 cape number, if the central banks can prevent an uncontrolled unraveling/deleveraging before the cape record is reached. The March fed intervention, and subsequent bounce, is going to reinforce bad behavior until an equal and opposite force is applied; Newton's first law of motion.
  • DG
    David G.
    13 December 2020 @ 05:13
    I really learn so much on this platform. I get to know, what I previously wouldn't have known to investigate. Of equal importance, I don't feel like I'm ever fed propaganda. Biases and strong opinions at times from quest, but you balance it. Like the old journalism that Dan Rather spoke of during the Aftermath. You guys are like the NPR of business news! A true fifth estate of business news. I'm not sure how lucrative this business is at this point, but the effort is much appreciated; thank you!
  • HN
    Hassan N.
    13 December 2020 @ 03:43
    Water is the most important thing in life we take granted. Def want to get more info on this
  • so
    steven o.
    13 December 2020 @ 02:33
    Ash has more hair than Ed. Just sayin' (i have less)
  • VF
    Vassilios F.
    13 December 2020 @ 01:13
    I think Benedict Evans (former Andreesen Horowitz guy) has the most nuanced and interesting take on tech monopolies and regulation. If Real Vision is going to have a convo about tech monopolies and US/EU regulations, get him to come on for a chat. https://www.ben-evans.com/benedictevans/2020/10/31/market-definitions-and-tech-monopolies
  • DT
    David T.
    12 December 2020 @ 22:38
    DB still needs to find itself
  • RM
    Robert M.
    12 December 2020 @ 17:50
    With a $350 billion market cap, is bitcoin seriously impacting rebalancing of portfolios by institutions? Just having a hard time grasping that this small of an asset class is playing a serious role in finance beyond individual investors.
    • EO
      Eric O.
      12 December 2020 @ 19:20
      Think about it the other way around. If institutions only have a 2% allocation to crypto, or some similar asset categorization and it goes up 30% in a month, they will be selling bitcoin at the end of the month. Furthermore, because the their portfolio is larger than the capitalization of bitcoin, the amount they need to sell will be more than the average daily volume of bitcoin. Try a simulation, it is plausible.
  • WT
    William T.
    12 December 2020 @ 00:03
    Jack, I've noticed you're developing an annoying habit of aggressively interrupting your guests before they finish conveying their thoughts. May I suggest you save your follow ups until they're finished, and if they're rambling, there are nuanced ways to get them back. The art of the interview.
    • JF
      Jack F. | Real Vision
      12 December 2020 @ 01:05
      Hi William, always appreciate the feedback and I have tons to learn about the art of the interview. In this case, know that we had severe time constraints (intro is supposed to be 3-5 minutes), and we had a lot of charts to get through.
    • BB
      Bhaumik B.
      12 December 2020 @ 03:32
      Jack, i think what most people here are trying to suggest is while there are time constraints and those are well appreciated, when you rush onto such things, it doesn’t serve any purpose any which way.
    • JF
      Jack F. | Real Vision
      12 December 2020 @ 04:19
      That’s a fair point, Bhaumik. You should check out the long-form interview on The Exchange, where Weston and I had more time to go into greater detail
    • DS
      David S.
      12 December 2020 @ 18:05
      Mr. Farley you are doing great. I have been working on my tennis forehand for years. In perspective these helpful hints are important but nuance. Your passion to learn and share is making you successful. DLS
  • TC
    Tim C.
    12 December 2020 @ 03:15
    There are issues with tech in terms of monopolistic competition, but I feel like this discussion is a bit misguided. 1. Apple and Microsoft aren't monopolies. Apple doesn't have sufficient market share and what they do is harvest a return off providing an amazing ecosystem (which forced google to compete). Microsoft is basically a conglomerate. 2. Google and Facebook have paying customers. They are advertisers. It's not a lot different from TV. TV chums people to watch their programming and the advertisers foot the bill. Difference is it like watching a plurality of TV channels all at once with advertising tailored specifically to the individual watching across all those channels (TV/Cable could get there too). The artifact is the political slant. The real question is what to do about the feedback loop created by this that blocks competition. 3. The tech ecosystem is complicated. Startups are often designed to be acquired, and they often provide a lot of innovation. Killing that is probably not good. Figuring out how to apply rules around it... hard...
    • AB
      Ash B. | Real Vision
      12 December 2020 @ 06:35
      Interesting points, Tim. Thanks for the post.
    • DS
      David S.
      12 December 2020 @ 17:54
      It is always important to look at the whole picture. Thanks. DLS
  • AW
    Abhijit W.
    12 December 2020 @ 02:10
    Jack - it would be nice to let Weston finish his thoughts.
    • JF
      Jack F. | Real Vision
      12 December 2020 @ 02:50
      We had very limited time. Here is our full interview: https://exchange.realvision.com/post/follow-up-to-my-daily-briefing-intro-with-weston-nakamura-s-galore-5fd3f00fffc3b852f6b03a2b
    • AW
      Abhijit W.
      12 December 2020 @ 16:00
      Thanks Jack
  • TC
    Thomas C.
    12 December 2020 @ 14:36
    Not a very useful discuission.
  • CP
    Christian P.
    12 December 2020 @ 12:44
    CME's addition of water as an exchange commodity is important. Historically, water was viewed as a "public good" and was not priced like other commodities. Interesting mention of desalination, which requires massive amounts of electricity. Perhaps the pricing of water as a commodity will facilitate a more economic approach to water management ... e.g., efficiency, infrastructure maintenance and more dense housing.
  • LF
    Lisa F.
    12 December 2020 @ 11:05
    Amazon’s anti-competitive practices are much more sinister than favoring their own products in search. They manipulate the buy-box, so that I can list brand-name products below Amazon’s price but still can’t get the sale unless a buyer goes to the trouble to click on ‘other sellers’ and choose my store. Not only that, if I experience too much success with a product listing (painfully earned by investing in both market research and Amazon’s expensive proprietary advertising) Amazon can 100% confiscate my listing with no warning by converting it to Pantry’s Subscribe and Save. It’s like having HAL from 2001 for a business partner.
    • WT
      William T.
      12 December 2020 @ 12:07
      You don't achieve market dominance without fornicating alot of people
  • CW
    Chase W.
    12 December 2020 @ 06:48
    Hi Ed, On hospitalizations, this is worth noting: Covid-19 hospitalization rates are dropping. That’s terrible news. https://www.washingtonpost.com/outlook/2020/12/07/covid-hospitalization-rates-dropping/
    • EH
      Edward H. | Real Vision
      12 December 2020 @ 09:59
      Chase, thanks for that. Not good, unfortunately
  • MC
    Michael C.
    12 December 2020 @ 01:20
    Yes to more content regarding water. Thank you
    • MC
      Michael C.
      12 December 2020 @ 01:24
      Someone who knows a lot about desalination technology and what it takes to make it economical would be a good guest.
    • AB
      Ash B. | Real Vision
      12 December 2020 @ 02:27
      Agreed, Michael. That would be interesting.
    • mw
      michael w.
      12 December 2020 @ 02:49
      It will be the major crisis of this century. Hopefully human ingenuity can come up with a solution.
    • LS
      Lewis S.
      12 December 2020 @ 06:37
      Desalination is cool (and expensive) but I think something people are looking past is groundwater recharge. By stopping runoff water and redirecting it into the ground (instead of draining it off into waterways like we usually do) dead wells and springs can come back to life. India seems to be leading the way with this.
    • mt
      mitchell t.
      12 December 2020 @ 09:33
      I would love to see more on water, specifically how dropping costs in renewables (i.e. solar in hot dry places) will make desalination more feasible/cost effective.
  • RB
    Richard B.
    12 December 2020 @ 09:32
    Im much more interested in Raoul's updated view on strong USD, on which much of his narrative was built. Time to face the music
  • sh
    steve h.
    12 December 2020 @ 01:29
    lookin good Billiyray
    • AB
      Ash B. | Real Vision
      12 December 2020 @ 02:26
      Looking good Lewis?
    • LS
      Lewis S.
      12 December 2020 @ 06:33
      hey thanks ash
  • TM
    Tushar M.
    12 December 2020 @ 05:21
    Yes on the water content!!!
  • PS
    Patrick S.
    12 December 2020 @ 02:26
    Ash and Ed on RVDB feels like home base.
    • AB
      Ash B. | Real Vision
      12 December 2020 @ 05:15
      Thanks, Patrick. Always good to come back from cryptoland to host the Briefing.
  • RN
    Rohit N.
    12 December 2020 @ 01:53
    Great catch on Water and would be great to get more content on it. Thanks
  • WS
    William S.
    12 December 2020 @ 01:37
    Nice lead in from Jack F...and...the Lookin Goood Billy Raay.!!
  • IN
    I N.
    12 December 2020 @ 01:30
    If the Professor needs to talk to somebody about desalination as an industry and the stakes in it, maybe ping Brian Sullivan, former inventor, investor, and early entrant to the water purification & desalination space who also ran a gubernatorial campaign in Minnesota. Given history, he may have good perspective on the (speculative) market for it as well as policy. https://www.linkedin.com/in/brian-sullivan-6202621/
  • DK
    David K.
    12 December 2020 @ 01:07
    Talking about water scarcity, if either of your enjoy SciFi, you might like to read the book by Paolo Bacigalupi called "The Water Knife" written in 2015.
  • WM
    William M.
    12 December 2020 @ 01:02
    An absolutely Bubblicious Daily Briefing! Great as always!
  • BH
    Bernard H.
    12 December 2020 @ 00:46
    Excellent start to the weekend - I started laughing as Ed got up from his chair :)
  • BK
    Brian K.
    12 December 2020 @ 00:30
    YES, MORE TOPICS ON WATER. For example, the outcome like Cape May has been facing the last decade. The impact on society as a whole. How Governments weaponize it. The future value of water as a commodity.
  • JH
    Jacqueline H.
    12 December 2020 @ 00:27
    Regarding the water issue, you need to look into both desalination (in Calif there's a plant on Catalina Island. See also Escondido and Carlsbad) AND water recycling being done at water treatment plants. The Recycled water is not potable, but used for irrigation, cooling towers, and can be used for toilet flushing if the plumbing is isolated (e.g. purple piping) within the structure.
  • dw
    douglas w.
    12 December 2020 @ 00:00
    Weston's cool, lets keep him in the mix!
  • AG
    Amol G.
    11 December 2020 @ 23:17
    Thanks a ton Jack and Weston for the awesome intro!