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Cornering Silver Market

Cornering Silver Market
Would you like to entertain yourself with a story about one of the greatest schemes in the history and, maybe, learn a few plays? This story is about three brave autistic brothers, who almost cornered the entire commodity and how one (not so brave, but shrewd) bank did it without anyone noticing. As in any good fable – there’s a moral and a strategy that you could draw from it.
The year is 1971. Nixon temporarily abolishes gold standard. And every temporary government program is never reversed, as you know. Trading price of gold went sky high: from 270s to 800s in two years or so. Enter Hunt brothers, sons of H. L. Hunt, oil tycoon, one of, if not the, richest man in the world at that time. Hunt family was, what one might describe as, right-wing libertarian and anti-globalist. They believed that Keynesian economics and the US shift to the left in the 60s will lead to the debasement of the US dollar and monetary collapse. Thus, return to the gold or silver standard was the way, as they thought. Allegedly, Hunts also had a feud with Rothschild family and other financial speculators, and were resentful towards the US government for doing nothing to protect their oil assets in Libya, confiscated by Gaddafi. So they started their move against America, alpha-silver bug style.
In 1973 Hunts began buying all the silver they could. And, instead of just speculating futures contracts, they actually took delivery. Initial price was $1.5/oz. Silver was shipped to Switzerland in secretive and costly operations and stored in vaults (brothers feared confiscations – remember, private citizens were still prohibited from owning gold in the US).
The following events are quite vivid and include the efforts to create a cartel similar to OPEC, talks with Iran and Saudi monarchs, pump and dump publicity and large scale purchases of miners. But we will spare the details, except one: Hunts even tried to corner the soy market at the same time. Reminds you how WSB slv gang quickly switched to corn gang. But the soy scheme didn't fly and they focused on silver only. Their efforts pumped the price to almost $50/oz by early 1980. At some point Hunts controlled around 230 million oz of silver and the majority of what was traded.

Hunt brothers laughing at your pump&dump effort

Of course, when you are such a smart ass, you become a target. Chicago exchange officials became very concerned citizens by 1979. They started issuing numerous regulations limiting the amount of market share one can accumulate in one hands. As all American concerned citizens, they had financial incentive to do so: Hunts managed to prove that Chicago exchange board members had short positions against silver. Finally, CFTC (Commodity Futures Trading Commission) issued a ruling that basically forced Hunts to liquidate part of their portfolio by February 1980. This sent silver prices down dramatically and brothers started to get margin calls which they could not cover. And so their story ended with bankruptcies and heavy fines for the family. Shortly after, Reagan and Volcker raised interest rates and silver price never recovered to $50/oz ever since.
We skip to the year 2008. Global financial crisis is in full swing. Bear Stearns is royally fucked, as due to all bears. Before the music was over, they mastered paper speculation of futures contracts like no one else. Bear Stearns accumulated world biggest naked short position on silver. What could go wrong? Stonks go up, silver goes down. Until it reversed and silver skyrocketed from $11 to $21. This became one of the margin calls to screw Bear Stearns. JP Morgan is asked by the FED and co. to buy out BS and to save the entire market. Since BS's shorts are now deeply down - JPM gets the whole bank with pennies on a dollar.
But the problem is that JPM themselves have massive naked short position on silver. Combined with BS it will exceed anything permitted by the CFTC. Since Obama administration was in a rush, they push CFTC to grant JPM basically a carte blanche to accumulate any position over the limit for a period of time. Period of time comes due and turns out that JPM not only didn’t trim the shorts significantly – they even bought more shorts at some point. Even with all the fines, it went very much their way, because in 2009 silver dropped. So they pocketed hundreds of millions of dollars.
But come 2011 and silver spiked again, dramatically. JPM, now bleeding cash on shorts, could close short positions, like any of us would do, right? Nope, fuckyall says JPM and starts hedging short futures positions with… physical silver. 'But wouldn’t that be even more control over the commodity?' - you might ask. See, nothing in the rules of CFTC says you can’t do that, because to help cronies speculate with paper futures contracts, made of thin air, CFTC basically started treating physical silver and futures as two different instruments (it’s, actually, even more complicated than that: google difference between physical, eligible, registered and so on).
In the next 9 years JPM becomes the world biggest holder of both short contracts and physical silver. The later they 'loaned' to SLV trust, of which they are custodian. This way upkeep of physical silver, which otherwise would be a liability for hedging, becomes an asset, because we, retards, who own SLV pay the maintenance. People are often confused here, because SLV is issued by Black Rock, not JPM. Well, there is a difference between being an operator of a financial instrument and being a custodian providing backing. Now, to confuse you even more – JPM is one of the major holders of Black Rock itself with 1.6% or sth like that.
By estimates of Theodore Butler, JPM acquired 900 million oz of physical silver since 2011. That’s 4 times more than what Hunts owned. Just shows you, that banks can get a pass with something that even the richest individuals can not. And you have to give it to JPM - their play was very clever. Instead of risking it all on a margin call, they make money on every turn.
As of 2020, JPM still holds both shitton of physical silver and short COMEX contracts. You can call this the most epic straddle of all time. With such mass they can swing prices in any directions and profit from this on any given day. Latest example you’ve seen on the August 11th.
Why am I bothering your poor gambling soul with this wall of text, you might ask? Market makers manipulate the market as they please, what’s new about that? Well, here we come to the conclusions and a strategy. How can a small retard replicate what the big boys are doing?
  1. There will not be a linear up or down with silver and the swings might be dramatic. The reason being not only the sentiment of investors, but the ease of manipulation that is eligible to big players.
  2. If we believe that speculation will throw the price of silver in all directions – it is unwise to go only long or short on silver, especially on a short term;
What shall we do?
a) Only long expiration dates and calls; no weekly expiration, not even monthly. Ideally – at least half year options;
b) Go long on certain silver stocks. Maybe I’ll do a write up on good silver stocks to buy;
c) Sell covered calls on long positions;
d) Buy 1-3 month puts on your long positions as a hedge;
Now, day trade with those positions: on red days sell your puts and buy back covered calls. On green days – reload puts and sell calls. Repeat until lambo.
P. S.: I gathered these facts from the open sources, since these events were of interest to me. Some facts are intentionally oversimplified, google for more details, there are good reads. And feel free to correct me if you know contradictory facts.
P. P. S.: JPM, plz don’t whack me.
submitted by negovany to wallstreetbets [link] [comments]

How the TFSA works

(Updated August 9th, 2020)


You may have heard about off-shore tax havens of questionable legality where wealthy people invest their money in legal "grey zones" and don't pay any tax, as featured for example, in Netflix's drama, The Laundromat.

The reality is that the Government of Canada offers 100% tax-free investing throughout your life, with unlimited withdrawals of your contributions and profits, and no limits on how much you can make tax-free. There is also nothing to report to the Canada Revenue Agency. Although Britain has a comparable program, Canada is the only country in the world that offers tax-free investing with this level of power and flexibility.

Thank you fellow Redditors for the wonderful Gold Award and Today I Learned Award!

(Unrelated but Important Note: I put a link at the bottom for my margin account explainer. Many people are interested in margin trading but don't understand the math behind margin accounts and cannot find an explanation. If you want to do margin, but don't know how, click on the link.)

As a Gen-Xer, I wrote this post with Millennials in mind, many of whom are getting interested in investing in ETFs, individual stocks, and also my personal favourite, options. Your generation is uniquely positioned to take advantage of this extremely powerful program at a relatively young age. But whether you're in your 20's or your 90's, read on!

Are TFSAs important? In 2020 Canadians have almost 1 trillion dollars saved up in their TFSAs, so if that doesn't prove that pennies add up to dollars, I don't know what does. The TFSA truly is the Great Canadian Tax Shelter.

I will periodically be checking this and adding issues as they arise, to this post. I really appreciate that people are finding this useful. As this post is now fairly complete from a basic mechanics point of view, and some questions are already answered in this post, please be advised that at this stage I cannot respond to questions that are already covered here. If I do not respond to your post, check this post as I may have added the answer to the FAQs at the bottom.

How to Invest in Stocks

A lot of people get really excited - for good reason - when they discover that the TFSA allows you to invest in stocks, tax free. I get questions about which stocks to buy.

I have made some comments about that throughout this post, however; I can't comprehensively answer that question. Having said that, though, if you're interested in picking your own stocks and want to learn how, I recommmend starting with the following videos:

The first is by Peter Lynch, a famous American investor in the 80's who wrote some well-respected books for the general public, like "One Up on Wall Street." The advice he gives is always valid, always works, and that never changes, even with 2020's technology, companies and AI:


The second is a recording of a university lecture given by investment legend Warren Buffett, who expounds on the same principles:


Please note that I have no connection to whomever posted the videos.


TFSAs were introduced in 2009 by Stephen Harper's government, to encourage Canadians to save.

The effect of the TFSA is that ordinary Canadians don't pay any income or capital gains tax on their securities investments.

Initial uptake was slow as the contribution rules take some getting used to, but over time the program became a smash hit with Canadians. There are about 20 million Canadians with TFSAs, so the uptake is about 70%- 80% (as you have to be the age of majority in your province/territory to open a TFSA).

Eligibility to Open a TFSA

You must be a Canadian resident with a valid Social Insurance Number to open a TFSA. You must be at the voting age in the province in which you reside in order to open a TFSA, however contribution room begins to accumulate from the year in which you turned 18. You do not have to file a tax return to open a TFSA. You do not need to be a Canadian citizen to open and contribute to a TFSA. No minimum balance is required to open a TFSA.

Where you Can Open a TFSA

There are hundreds of financial institutions in Canada that offer the TFSA. There is only one kind of TFSA; however, different institutions offer a different range of financial products. Here are some examples:


Your TFSA may be covered by either CIFP or CDIC insuranceor both. Ask your bank or broker for details.

What You Can Trade and Invest In

You can trade the following:

What You Cannot Trade

You cannot trade:

Again, if it requires a margin account, it's out. You cannot buy on margin in a TFSA. Nothing stopping you from borrowing money from other sources as long as you stay within your contribution limits, but you can't trade on margin in a TFSA. You can of course trade long puts and calls which give you leverage.

Rules for Contribution Room

Starting at 18 you get a certain amount of contribution room.

According to the CRA:
You will accumulate TFSA contribution room for each year even if you do not file an Income Tax and Benefit Return or open a TFSA.
The annual TFSA dollar limit for the years 2009 to 2012 was $5,000.
The annual TFSA dollar limit for the years 2013 and 2014 was $5,500.
The annual TFSA dollar limit for the year 2015 was $10,000.
The annual TFSA dollar limit for the years 2016 to 2018 was $5,500.
The annual TFSA dollar limit for the year 2019 is $6,000.
The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500.
Investment income earned by, and changes in the value of TFSA investments will not affect your TFSA contribution room for the current or future years.

If you don't use the room, it accumulates indefinitely.

Trades you make in a TFSA are truly tax free. But you cannot claim the dividend tax credit and you cannot claim losses in a TFSA against capital gains whether inside or outside of the TFSA. So do make money and don't lose money in a TFSA. You are stuck with the 15% withholding tax on U.S. dividend distributions unlike the RRSP, due to U.S. tax rules, but you do not pay any capital gains on sale of U.S. shares.

You can withdraw *both* contributions *and* capital gains, no matter how much, at any time, without penalty. The amount of the withdrawal (contributions+gains) converts into contribution room in the *next* calendar year. So if you put the withdrawn funds back in the same calendar year you take them out, that burns up your total accumulated contribution room to the extent of the amount that you re-contribute in the same calendar year.


E.g. Say you turned 18 in 2016 in Alberta where the age of majority is 18. It is now sometime in 2020. You have never contributed to a TFSA. You now have $5,500+$5,500+$5,500+$6,000+$6,000 = $28,500 of room in 2020. In 2020 you manage to put $20,000 in to your TFSA and you buy Canadian Megacorp common shares. You now have $8,500 of room remaining in 2020.

Sometime in 2021 - it doesn't matter when in 2021 - your shares go to $100K due to the success of the Canadian Megacorp. You also have $6,000 worth of room for 2021 as set by the government. You therefore have $8,500 carried over from 2020+$6,000 = $14,500 of room in 2021.

In 2021 you sell the shares and pull out the $100K. This amount is tax-free and does not even have to be reported. You can do whatever you want with it.

But: if you put it back in 2021 you will over-contribute by $100,000 - $14,500 = $85,500 and incur a penalty.

But if you wait until 2022 you will have $14,500 unused contribution room carried forward from 2021, another $6,000 for 2022, and $100,000 carried forward from the withdrawal 2021, so in 2022 you will have $14,500+$6,000+$100,000 = $120,500 of contribution room.

This means that if you choose, you can put the $100,000 back in in 2022 tax-free and still have $20,500 left over. If you do not put the money back in 2021, then in 2022 you will have $120,500+$6,000 = $126,500 of contribution room.

There is no age limit on how old you can be to contribute, no limit on how much money you can make in the TFSA, and if you do not use the room it keeps carrying forward forever.

Just remember the following formula:

This year's contribution room = (A) unused contribution room carried forward from last year + (B) contribution room provided by the government for this year + (C) total withdrawals from last year.


Say in 2020 you never contributed to a TFSA but you were 18 in 2009.
You have $69,500 of unused room (see above) in 2020 which accumulated from 2009-2020.
In 2020 you contribute $50,000, leaving $19,500 contribution room unused for 2020. You buy $50,000 worth of stock. The next day, also in 2020, the stock doubles and it's worth $100,000. Also in 2020 you sell the stock and withdraw $100,000, tax-free.

You continue to trade stocks within your TFSA, and hopefully grow your TFSA in 2020, but you make no further contributions or withdrawals in 2020.

The question is, How much room will you have in 2021?
Answer: In the year 2021, the following applies:
(A) Unused contribution room carried forward from last year, 2020: $19,500
(B) Contribution room provided by government for this year, 2021: $6,000
(C) Total withdrawals from last year, 2020: $100,000

Total contribution room for 2021 = $19,500+6,000+100,000 = $125,500.

Say between 2020 and 2021 you decided to buy a tax-free car (well you're still stuck with the GST/PST/HST/QST but you get the picture) so you went to the dealer and spent $25,000 of the $100,000 you withdrew in 2020. You now have a car and $75,000 still burning a hole in your pocket. Say in early 2021 you re-contribute the $75,000 you still have left over, to your TFSA. However, in mid-2021 you suddenly need $75,000 because of an emergency so you pull the $75,000 back out. But then a few weeks later, it turns out that for whatever reason you don't need it after all so you decide to put the $75,000 back into the TFSA, also in 2021. You continue to trade inside your TFSA but make no further withdrawals or contributions.

How much room will you have in 2022?
Answer: In the year 2022, the following applies:

(A) Unused contribution room carried forward from last year, 2021: $125,500 - $75,000 - $75,000 = -$24,500.

Already you have a problem. You have over-contributed in 2021. You will be assessed a penalty on the over-contribution! (penalty = 1% a month).

But if you waited until 2022 to re-contribute the $75,000 you pulled out for the emergency.....

In the year 2022, the following would apply:
(A) Unused contribution room carried forward from last year, 2021: $125,500 -$75,000 =$50,500.
(B) Contribution room provided by government for this year, 2022: $6,000
(C) Total withdrawals from last year, 2020: $75,000

Total contribution room for 2022 = $50,500 + $6,000 + $75,000 = $131,500.
...And...re-contributing that $75,000 that was left over from your 2021 emergency that didn't materialize, you still have $131,500-$75,000 = $56,500 of contribution room left in 2022.

For a more comprehensive discussion, please see the CRA info link below.

FAQs That Have Arisen in the Discussion and Other Potential Questions:

  1. Equity and ETF/ETN Options in a TFSA: can I get leverage? Yes. You can buy puts and calls in your TFSA and you only need to have the cash to pay the premium and broker commissions. Example: if XYZ is trading at $70, and you want to buy the $90 call with 6 months to expiration, and the call is trading at $2.50, you only need to have $250 in your account, per option contract, and if you are dealing with BMO IL for example you need $9.95 + $1.25/contract which is what they charge in commission. Of course, any profits on closing your position are tax-free. You only need the full value of the strike in your account if you want to exercise your option instead of selling it. Please note: this is not meant to be an options tutorial; see the Montreal Exchange's Equity Options Reference Manual if you have questions on how options work.
  2. Equity and ETF/ETN Options in a TFSA: what is ok and not ok? Long puts and calls are allowed. Covered calls are allowed, but cash-secured puts are not allowed. All other option trades are also not allowed. Basically the rule is, if the trade is not a covered call and it either requires being short an option or short the stock, you can't do it in a TFSA.
  3. Live in a province where the voting age is 19 so I can't open a TFSA until I'm 19, when does my contribution room begin? Your contribution room begins to accumulate at 18, so if you live in province where the age of majority is 19, you'll get the room carried forward from the year you turned 18.
  4. If I turn 18 on December 31, do I get the contribution room just for that day or for the whole year? The whole year.
  5. Do commissions paid on share transactions count as withdrawals? Unfortunately, no. If you contribute $2,000 cash and you buy $1,975 worth of stock and pay $25 in commission, the $25 does not count as a withdrawal. It is the same as if you lost money in the TFSA.
  6. How much room do I have? If your broker records are complete, you can do a spreadsheet. The other thing you can do is call the CRA and they will tell you.
  7. TFSATFSA direct transfer from one institution to another: this has no impact on your contributions or withdrawals as it counts as neither.
  8. More than 1 TFSA: you can have as many as you want but your total contribution room does not increase or decrease depending on how many accounts you have.
  9. Withdrawals that convert into contribution room in the next year. Do they carry forward indefinitely if not used in the next year? Answer :yes.
  10. Do I have to declare my profits, withdrawals and contributions? No. Your bank or broker interfaces directly with the CRA on this. There are no declarations to make.
  11. Risky investments - smart? In a TFSA you want always to make money, because you pay no tax, and you want never to lose money, because you cannot claim the loss against your income from your job. If in year X you have $5,000 of contribution room and put it into a TFSA and buy Canadian Speculative Corp. and due to the failure of the Canadian Speculative Corp. it goes to zero, two things happen. One, you burn up that contribution room and you have to wait until next year for the government to give you more room. Two, you can't claim the $5,000 loss against your employment income or investment income or capital gains like you could in a non-registered account. So remember Buffett's rule #1: Do not lose money. Rule #2 being don't forget the first rule. TFSA's are absolutely tailor-made for Graham-Buffett value investing or for diversified ETF or mutual fund investing, but you don't want to buy a lot of small specs because you don't get the tax loss.
  12. Moving to/from Canada/residency. You must be a resident of Canada and 18 years old with a valid SIN to open a TFSA. Consult your tax advisor on whether your circumstances make you a resident for tax purposes. Since 2009, your TFSA contribution room accumulates every year, if at any time in the calendar year you are 18 years of age or older and a resident of Canada. Note: If you move to another country, you can STILL trade your TFSA online from your other country and keep making money within the account tax-free. You can withdraw money and Canada will not tax you. But you have to get tax advice in your country as to what they do. There restrictions on contributions for non-residents. See "non residents of Canada:" https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4466/rc4466-19e.pdf
  13. The U.S. withholding tax. Dividends paid by U.S.-domiciled companies are subject to a 15% U.S. withholding tax. Your broker does this automatically at the time of the dividend payment. So if your stock pays a $100 USD dividend, you only get $85 USD in your broker account and in your statement the broker will have a note saying 15% U.S. withholding tax. I do not know under what circumstances if any it is possible to get the withheld amount. Normally it is not, but consult a tax professional.
  14. The U.S. withholding tax does not apply to capital gains. So if you buy $5,000 USD worth of Apple and sell it for $7,000 USD, you get the full $2,000 USD gain automatically.
  15. Tax-Free Leverage. Leverage in the TFSA is effectively equal to your tax rate * the capital gains inclusion rate because you're not paying tax. So if you're paying 25% on average in income tax, and the capital gains contribution rate is 50%, the TFSA is like having 12.5%, no margin call leverage costing you 0% and that also doesn't magnify your losses.
  16. Margin accounts. These accounts allow you to borrow money from your broker to buy stocks. TFSAs are not margin accounts. Nothing stopping you from borrowing from other sources (such as borrowing cash against your stocks in an actual margin account, or borrowing cash against your house in a HELOC or borrowing cash against your promise to pay it back as in a personal LOC) to fund a TFSA if that is your decision, bearing in mind the risks, but a TFSA is not a margin account. Consider options if you want leverage that you can use in a TFSA, without borrowing money.
  17. Dividend Tax Credit on Canadian Companies. Remember, dividends paid into the TFSA are not eligible to be claimed for the credit, on the rationale that you already got a tax break.
  18. FX risk. The CRA allows you to contribute and withdraw foreign currency from the TFSA but the contribution/withdrawal accounting is done in CAD. So if you contribute $10,000 USD into your TFSA and withdraw $15,000 USD, and the CAD is trading at 70 cents USD when you contribute and $80 cents USD when you withdraw, the CRA will treat it as if you contributed $14,285.71 CAD and withdrew $18,75.00 CAD.
  19. OTC (over-the-counter stocks). You can only buy stocks if they are listed on an approved exchange ("approved exchange" = TSX, TSX-V, NYSE, NASDAQ and about 25 or so others). The U.S. pink sheets "over-the-counter" market is an example of a place where you can buy stocks, that is not an approved exchange, therefore you can't buy these penny stocks. I have however read that the CRA make an exception for a stock traded over the counter if it has a dual listing on an approved exchange. You should check that with a tax lawyer or accountant though.
  20. The RRSP. This is another great tax shelter. Tax shelters in Canada are either deferrals or in a few cases - such as the TFSA - outright tax breaks, The RRSP is an example of a deferral. The RRSP allows you to deduct your contributions from your income, which the TFSA does not allow. This deduction is a huge advantage if you earn a lot of money. The RRSP has tax consequences for withdrawing money whereas the TFSA does not. Withdrawals from the RRSP are taxable whereas they are obviously not in a TFSA. You probably want to start out with a TFSA and maintain and grow that all your life. It is a good idea to start contributing to an RRSP when you start working because you get the tax deduction, and then you can use the amount of the deduction to contribute to your TFSA. There are certain rules that claw back your annual contribution room into an RRSP if you contribute to a pension. See your tax advisor.
  21. Pensions. If I contribute to a pension does that claw back my TFSA contribution room or otherwise affect my TFSA in any way? Answer: No.
  22. The $10K contribution limit for 2015. This was PM Harper's pledge. In 2015 the Conservative government changed the rules to make the annual government allowance $10,000 per year forever. Note: withdrawals still converted into contribution room in the following year - that did not change. When the Liberals came into power they switched the program back for 2016 to the original Harper rules and have kept the original Harper rules since then. That is why there is the $10,000 anomaly of 2015. The original Harper rules (which, again, are in effect now) called for $500 increments to the annual government allowance as and when required to keep up with inflation, based on the BofC's Consumer Price Index (CPI). Under the new Harper rules, it would have been $10,000 flat forever. Which you prefer depends on your politics but the TFSA program is massively popular with Canadians. Assuming 1.6% annual CPI inflation then the annual contribution room will hit $10,000 in 2052 under the present rules. Note: the Bank of Canada does an excellent and informative job of explaining inflation and the CPI at their website.
  23. Losses in a TFSA - you cannot claim a loss in a TFSA against income. So in a TFSA you always want to make money and never want to lose money. A few ppl here have asked if you are losing money on your position in a TFSA can you transfer it in-kind to a cash account and claim the loss. I would expect no as I cannot see how in view of the fact that TFSA losses can't be claimed, that the adjusted cost base would somehow be the cost paid in the TFSA. But I'm not a tax lawyeaccountant. You should consult a tax professional.
  24. Transfers in-kind to the TFSA and the the superficial loss rule. You can transfer securities (shares etc.) "in-kind," meaning, directly, from an unregistered account to the TFSA. If you do that, the CRA considers that you "disposed" of, meaning, equivalent to having sold, the shares in the unregistered account and then re-purchased them at the same price in the TFSA. The CRA considers that you did this even though the broker transfers the shares directly in the the TFSA. The superficial loss rule, which means that you cannot claim a loss for a security re-purchased within 30 days of sale, applies. So if you buy something for $20 in your unregistered account, and it's trading for $25 when you transfer it in-kind into the TFSA, then you have a deemed disposition with a capital gain of $5. But it doesn't work the other way around due to the superficial loss rule. If you buy it for $20 in the unregistered account, and it's trading at $15 when you transfer it in-kind into the TFSA, the superficial loss rule prevents you from claiming the loss because it is treated as having been sold in the unregistered account and immediately bought back in the TFSA.
  25. Day trading/swing trading. It is possible for the CRA to try to tax your TFSA on the basis of "advantage." The one reported decision I'm aware of (emphasis on I'm aware of) is from B.C. where a woman was doing "swap transactions" in her TFSA which were not explicitly disallowed but the court rules that they were an "advantage" in certain years and liable to taxation. Swaps were subsequently banned. I'm not sure what a swap is exactly but it's not that someone who is simply making contributions according to the above rules would run afoul of. The CRA from what I understand doesn't care how much money you make in the TFSA, they care how you made it. So if you're logged on to your broker 40 hours a week and trading all day every day they might take the position that you found a way to work a job 40 hours a week and not pay any tax on the money you make, which they would argue is an "advantage," although there are arguments against that. This is not legal advice, just information.
  26. The U.S. Roth IRA. This is a U.S. retirement savings tax shelter that is superficially similar to the TFSA but it has a number of limitations, including lack of cumulative contribution room, no ability for withdrawals to convert into contribution room in the following year, complex rules on who is eligible to contribute, limits on how much you can invest based on your income, income cutoffs on whether you can even use the Roth IRA at all, age limits that govern when and to what extent you can use it, and strict restrictions on reasons to withdraw funds prior to retirement (withdrawals prior to retirement can only be used to pay for private medical insurance, unpaid medical bills, adoption/childbirth expenses, certain educational expenses). The TFSA is totally unlike the Roth IRA in that it has none of these restrictions, therefore, the Roth IRA is not in any reasonable sense a valid comparison. The TFSA was modeled after the U.K. Investment Savings Account, which is the only comparable program to the TFSA.
  27. The UK Investment Savings Account. This is what the TFSA was based off of. Main difference is that the UK uses a 20,000 pound annual contribution allowance, use-it-or-lose-it. There are several different flavours of ISA, and some do have a limited recontribution feature but not to the extent of the TFSA.
  28. Is it smart to overcontribute to buy a really hot stock and just pay the 1% a month overcontribution penalty? If the CRA believes you made the overcontribution deliberately the penalty is 100% of the gains on the overcontribution, meaning, you can keep the overcontribution, or the loss, but the CRA takes the profit.
  29. Speculative stocks-- are they ok? There is no such thing as a "speculative stock." That term is not used by the CRA. Either the stock trades on an approved exchange or it doesn't. So if a really blue chip stock, the most stable company in the world, trades on an exchange that is not approved, you can't buy it in a TFSA. If a really speculative gold mining stock in Busang, Indonesia that has gone through the roof due to reports of enormous amounts of gold, but their geologist somehow just mysteriously fell out of a helicopter into the jungle and maybe there's no gold there at all, but it trades on an approved exchange, it is fine to buy it in a TFSA. Of course the risk of whether it turns out to be a good investment or not, is on you.
Remember, you're working for your money anyway, so if you can get free money from the government -- you should take it! Follow the rules because Canadians have ended up with a tax bill for not understanding the TFSA rules.
Appreciate the feedback everyone. Glad this basic post has been useful for many. The CRA does a good job of explaining TFSAs in detail at https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4466/rc4466-19e.pdf

Unrelated but of Interest: The Margin Account

Note: if you are interested in how margin accounts work, I refer you to my post on margin accounts, where I use a straightforward explanation of the math behind margin accounts to try and give readers the confidence that they understand this powerful leveraging tool.

How Margin Loans Work - a Primer

submitted by KhingoBhingo to CanadianInvestor [link] [comments]

DKNG - Fundamental DD Inside - DKNG

This is an example of fundamental DD that takes place at ‘smart’ money institutions based on my professional experience in IBD, Private Equity & most recently at a HF (mods can message me for proof). Not thoroughly fleshed out b/c you autists have limited attention spans, but a summary. Figured I’d take the time to give back to this community that has provided many lolz, & should be a good measuring stick when evaluating other forms of fundamental DD posted here.
DKNG - DraftKings, Inc.: vertically integrated US mobile betting operator that also provides retail sports betting & back-end betting solutions through SBTech. Think of SBTech as the tech ‘market-maker’ for traditional sports betting, they do all the funny math to set the betting odds & seem to be working on back-end solutions for DKNG Casino
The Big Picture
Only ~2% of the ~$90Bn gambling revenues were placed online which is the lowest in the world where betting online is legal. For example, in other countries online gaming activity represents ~6% - ~52% of total gambling revenues, with ~12% being the average.
Wall Street expects online gaming revenue to be $20Bn-$40Bn within the next 10 years. For this to be achieved, the online gambling market will have to achieve a ~30% penetration rate on total country gaming revenues. There is an expectation that this is could be easily achievable given penetration trends overseas - see page 11 of this: https://s1.rationalcdn.com/vendors/stars-group/documents/presentations/TSG-Investor-Day_March-27-2019.pdf
Other catalysts include increasing adaptation of sports betting in more states. States that have both legal sports betting + online sports betting permitted: NV, NJ, WV, PA, IA. Sports betting permitted but no online: DE, MS, RI, MO, AR. Prior to COVID there was ongoing discussions across many States, especially ones with growing deficits to explore how permitting sports betting could create a fresh avenue of tax dollars. Post COVID there is an expectation that these discussions will be given extra focus as many States will be hungry for incremental tax dollars. Important to note that currently 43/50 States allow DFS, but given the small share DFS has on total Gaming Revenues, it increasingly looks like DKNG is banking on traditional sports betting for a variety of reasons, more later. There are entire articles on Google arguing this catalyst so I’ll end this here.
Digging Deeper
DKNG’s main offerings are Daily Fantasy Sports (“DFS”) products & traditional sports book products to its clients. Long story short, a metric to look for in my opinion (that is curiously not reported by management or remarked on) is the hold % in traditional gaming sector parlance or the ‘rake’ & compare it to the ‘traditional’ gaming products like sports betting & Blackjack.
For DFS: DKNG takes ~15% of the prize pool (note: used to be ~6-11% [2]). Curiously, their main competitor FanDuel also has moved up to a ~15% rake recently. Google searches show the smaller competitors have a rake in the ~13% range.
This ‘rake’ has grown ~2x in 6 years, but it has been a delicate move on behalf of management. Why? B/c the more ‘sophisticated’ DFS players (equal to autistic day traders on Robinhood) have noted this increase & based on some Googling, some have moved down market to the smaller players. As a side note, many live casino games have their rules altered to grow the Hold %. For example, Blackjack games with 6:5 payouts on 21 have materially higher Hold % than the traditional BJ rules that pay out 3:2. Given the findings so far, DKNG may not have much room to materially increase its hold % in DFS games in the near-term from current of 15%. More on this later.
Now why the fuck is this important? This is important b/c the typical sports book (ex-Parlays) have a ~5% hold %/rake. Parlays have up to a ~30% hold (which is why it’s commonly known as the sucker’s bet), & just for reference, the average Blackjack table clocks in 14.5%. What this means: Every dollar put into these games, the “House” or DKNG, will take 15% of your money for DFS games, for sports bets they will be pocketing ~5%, up to ~30% if you’re into parlays, & we’ll just use the standard 14.5% BJ hold for the DraftKings Casino platform.
So why the acquisition of SBTech & a foray into the traditional sports gambling market? As you can see previously, the illegal sports betting market is >30x the size of the current daily fantasy sports market. So it’s clear that the DFS providers including DKNG are foraying into the space to capture this user base & hopefully convert them into games that have a higher hold %, such as DFS/DKNG Casino.
As of May 2020, DKNG has achieved a 30% penetration rate on its ~4mm ‘monetized’ DFS clientele to its Online Sports Book (OSB), from the OSB+DFS clientele, DKNG has converted 50% into its DraftKings Casino platform.
Including non-monetized users, user base totals at 12mm. Based on these unit economics: every 1mm of additional users -> 333k monetized users for DFS -> 100k users for OSB -> 50k users for DraftKings Casino.
Some Numbers – Italicized/Bolded the important
Numbers that represent Risks to Long Thesis
Things to look for when going Long
- Progress of additional States legalizing sports betting – specifically, States with DFS already legalized
- Cost structure evolving to a more fixed mix vs. the mostly variable mix currently as this will be the forward figure that determines profitability
- Increasing User Base (Curr.: 12mm) -> Monetized Base (Curr.: 4mm) -> MUP (1Q’20: 0.7mm)
Share Price Target
Given the cost structure of the company, I’m going to base the price targets around Enterprise Value / Revenues (driven by MUPs & ARPUs).
Bear Case MUP: 5mm -> $20.32 - $45.73
Base Case MUP: 5.5mm -> $22.27 - $50.10
Bull Case MUP: 6mm -> $24.21 - $54.47
These MUPs imply a monetized customer base of 28mm – 33mm. At the high-end, this implies that DKNG monetized customer base will equal MGM’s current total user base.
At yesterday’s close of $43.70, DKNG is trading at 3.5x – 4.5x forward Revenues on an expected >5,000 MUPs.
Share Price drivers / considerations:
- Continued multiple expansion
- MUP Growth exceeding beyond targets
Management Team
Jason Robins, 39 – Co-Founder & CEO. Duke BA, started DraftKings from day 1 in 2011. The 2 other buddies he started the Company with are still at DKNG. Dude navigated the Company through the scandal that rocked them in ’15 & ’16, and was the trailblazer in getting DFS labeled as a non-gambling product that enabled it to open in States without a gaming designation. This shit is the stuff that gets people in history books. His accomplishments make him seem like a very competent guy. Has 3 kids now, and only ~3% economic ownership in DKNG but has 90% of the voting power through his Class B share ownership. Also he actively participates in venture investments, sitting on 10 boards.
His comp plan performance bonus target is pretty murky, but main drivers are EPS growth, revenue growth, then a bunch of margin & return metrics, along with share price returns. Overall, very open-ended & it’s safe to say as long as shit doesn’t hit the fan, he will be eligible for his max payouts year over year. I’m assuming the lawyers tried to encompass everything possible for maximum flexibility to justify him earning his max comp as long as DKNG is still around.
Since he’s got voting control of 90%, I’ll end the specific-person overview here, but want to note that they have a very bloated C-suite. 12 folks at DKNG, 8 folks at SBTech, all with C-suite designations. Whereas their main competitor FanDuel, has 3 guys with a C-suite designations & 1 EVP, but is a sub under a larger ParentCo that has its own management team of ~5 guys.
Looking through glassdoor you can see the biggest complaint among employees giving bad reviews is based on management, all of the specific issues they point out IMO are a result of a top-heavy company. Seems like a good starting point to optimize their cost structure, but given Robins' history of sticking this entire thing through with his co-founders since '11 stuff like this doesn't seem to be a part of his playbook. They’re a public company now though, so it’s going to be interesting to see going forward.
If I were to initiate a position in DKNG, the stock would have to fall to the $35-$37 range for me to be a buyer of the stock, and based on this rough intro analysis I'll be considering Put options if it breaches $50. I would not touch Calls at this level.

[1] Susquehanna Research – U.S. Online Gambling 6/27/19
[2] https://rotogrinders.com/articles/bang-for-your-buck-a-look-at-dfs-industry-rake-153302
[3] https://draftkings.gcs-web.com/static-files/8f3a5c5a-7228-45bf-aab2-63604111c48d
[4] Goldman Sachs Research – DKNG Initiation 5/19/20
[6] https://rotogrinders.com/threads/how-many-people-actually-play-dfs-regularly-252044
submitted by IAMB4TMAN to wallstreetbets [link] [comments]

The U.S. Pattern Day Trading Rule in Canada

The PDT rule comes up a lot in the context of Canada.

There is no such thing as pattern day trading in Canada, hence there is no PDT rule. This is so regardless of country of citizenship.

If you are a United States citizen and you reside in Canada, PDT does not apply to you.

We have no equivalent of the SEC as the federal constitution here says securities regulation is a provincial matter, and each province therefore has its own securities regulator; furthermore, margin loans and trading are regulated by the private sector, not by the government.

In Canada the brokers are regulated under both the provincial securities commissions AND the private industry self-regulator, the Investment Industry Regulatory Organization of Canada, (IIROC). IIROC deals with margin and day trading. IIROC is the Canadian version of FINRA and IIROC's rules apply, not FINRA's.

Your province's securities commission's rules, and IIROC's rules jointly apply if you trade in Canada, regardless of whether you trade Canadian or U.S. stocks, NOT FINRA's or the SEC's.

And IIROC has no PDT rule. Furthermore, none of the provincial securities regulators have an equivalent of Regulation T.

So whether you are with a Canadian bank broker like RBC, TD, or BMO, or you're with the Canadian office of a U.S. broker like Interactive Brokers Canada:

submitted by KhingoBhingo to interactivebrokers [link] [comments]

Deutsche Bank - On the Brink of Insolvency

Deutsche Bank - On the Brink of Insolvency
On this week's edition of DDDD (Data-Driven DD; yes this is what I'm going to be calling this), we'll be looking at Deutsche Bank. Once one of the largest banks in the world, it's now a shell of its former self after the 2008 financial crisis.
Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance.
A Brief History of Deutsche Bank (and Deutschland)
Let’s first start with some background around Deutsche Bank, because it has some very interesting history behind it. In particular, it’s somehow taken part in causing some of the worst crises and scandals in world and economic history ever since its founding in 1870. Here’s a brief timeline:
  • Founded in Berlin in 1870 with the original mission to facilitate trade between Germany and foreign nations
  • Rapidly expanded overseas in the late 1800s, opening branches in London, Shanghai, and South America
  • Financed the Holocaust in the 1930s, including the construction of the Auschwitz concentration camp and the Gestapo
  • Broken up to 10 smaller banks after Germany’s defeat in WWII by the Allies, but those banks later merged back together less than 10 years later
  • Acquired a bunch of overseas banks, including banks in the UK and the US, during the 80s and 90s, growing to become one of the largest money management firms in the world
  • Drove the market for CDOs in 2007 and even created CDOs consisting of their bad subprime mortgages, somehow got an A-level rating on them from the rating agencies, and aggressively marketed the CDOs to investors while knowing that their CDOs were shit. Their head of CDO trading, Greg Lippmann, knew about this and told everyone that CDOs were effectively a Ponzi scheme, even shorting CDOs himself through Credit Default Swaps. He then went around to different funds in Wall Street and told them that CDOs were going to collapse and sold them Credit Default Swaps as a way to short the CDO market, creating synthetic CDOs, the asset on the other side of that trade, with them to sell to other investors. This entire scheme was the inspiration for The Big Short, in case you didn’t realize this by now.
  • Also the bank that finances businesses of the current President, which might be worth considering for political motives / implications if something bad happens to Deutsche Bank
  • Today, they focus on Corporate Banking, Investment Banking, Private Banking, and Asset Management
Let’s see how $DB’s performance has been the past few years
$DB, 2002-2020, Monthly
Yikes, it went from an all time high of $140 in 2007 to $6 today in 2020. In terms of their market cap, it went from $70B from its 2007 peak to $13B today. So, what happened? Let’s look at their 2019 SEC annual filing.
10-K Deep Dive
Income Statement (omitted boring parts)
Revenue € 22.4B (Net Interest = 13.7B, Credit Losses = -723M, Commission & Feed = 9.5B)
Expenses € 25.1B (mostly Compensation and G&A)
Net income after taxes €-5.3B (includes 2.6B of losses from taxes)
From their interest income, 19% comes from Corporate Banking, 39% from Investment Banking, 30% from Private Banking, and the rest comes from some other various operations.
So in a good year, in a period of “high” interest rates in the US (at least relative to the past decade), Deutsche Bank is still somehow losing billions. In fact, it states that their slight 4% YoY increase in net revenue income was driven by the fact that the US had a more favorable interest rate environment during that year, and their reduction of deposits in Germany, where they were experiencing negative interest rates.
German Interbank Rates
Negative interest rates mean that banks need to pay the central bank to safely store their reserves with them, making it really hard to make a profit for banks. Luckily they had the relatively high interest rates of the US to make up for it in 2019. With interest rates cut to 0% again, this will be a very different story for 2020, and they’ll likely see even larger losses for this year.
Balance Sheet (omitted boring parts)
Assets € 1.3T
Cash & Central Bank Deposits € 147B
Financial Assets € 531B (Trading Assets - €110B, Derivatives with a positive value - € 333B)
Loans € 430B
Liabilities € 1.2T
Deposits € 572B
Financial Liabilities € 404B (Trading Liabilities - € 37B, Derivatives with a negative value - € 317B)
Long Term Debt € 136B
Equity € 62B
So there’s a few very interesting things here. First, is the fact that their book value is €62B, or $67B USD, giving them a leverage of 26, which is way higher than literally every bank in the United States.
Top 100 US banks, sorted by leverage
What does a bank leverage ratio mean? It’s a quick way to see how well capitalized a bank is, and its ability to withstand negative shocks to its balance sheets without becoming insolvent. It’s harder to think of a more severe shock to the economic systems and people’s ability to pay back loans than a complete worldwide lockdown.
Another thing fishy with their book value is that their market cap is sitting at 13B USD. Even in January, before the stock market crashed it was sitting at 17B USD. That’s a big red flag, because theoretically if Deutsche Bank’s assets were all liquidated today, investors should theoretically be left with €62B, or $38 per share, which is way higher than the stock’s current $6 share price. This should especially be easy because the vast majority of their balance sheet consists of liquid assets or assets that should be easy to liquidate… or are they?
Let’s take a closer look at their derivatives. In their annual statement, they mentioned that they were trying to discontinue their derivatives business, which already helped cause one banking crisis a decade ago. They restructured and put all their “bad” capital, like their derivatives, in its own entity, called the “Capital Release Unit”, with the goal of liquidating these assets to release capital and de-leverage themselves. In 2019, their Capital Release Unit lost a total of €3.9B and held the €333B of derivatives. It also looks like they’re doing a bad job of releasing this specific class of capital, because their derivative assets and liabilities actually increased since 2018. That’s because a lot of these derivatives are not traded in exchanges, but instead over-the-counter with parties that have an ISDA agreement. As anyone who’s watched The Big Short can tell you (so literally everyone else on this subreddit), these OTC derivatives tend to be illiquid and difficult to value due to lack of price discovery.
This is why Deutsche Bank’s book value is more than their market cap, even before COVID-19. There’s doubt as to what some of the OTC derivatives are actually worth. They have a book value of €62B with derivatives supposedly valued at €333B, meaning if the actual net value of these derivatives are 19% or more lower than what they say they are, they become insolvent. This is the bank equivalent of buying SPY puts on margin in Robinhood (yes I know you can’t do that), but not knowing how much your puts are worth until you try selling. If you were like most of wallstreetbets you probably bought SPY puts when SPY was at 220. You know if you tried to sell your puts you might find out that they’re now worth a lot less than you originally bought them for (in the case of OTC derivatives, they can actually have a negative value!), realizing your portfolio value (equity) is below zero and you get a margin call (insolvent). In fact, they’ve allegedly done something similar in 2008 by failing to recognize losses related to the explosion of super senior tranches of CDOs, which may have led to joining Lehman Brothers in the bank graveyard if they did.
Let’s take a closer look at these derivatives, specifically the ones that mature in 2020.
Derivatives maturing in 2020 by nominal value
Type Bilateral Central Counterparty Exchange Traded
Interest €2.5T €8.7T €4T
Currency €4.3T €95B €17B
Equity €98B 0 €184B
Credit €39B €63B 0
Commodity €2.7B 0 €31.9B
First a few things to clarify. Bilateral Clearing is an agreement between some party with an ISDA agreement with the bank, where the bank acts as the counterparty to the derivative being sold. Central Counterparty Clearing is when an institution facilitates an OTC derivative transaction by ensuring both sides of the transaction are financially sound enough and have enough collateral to not default on the derivative, and if any party defaults on the derivative, the central counterparty is now financially responsible for their side of the trade. This was put into place after 2008 when the risk of counterparties like AIG defaulting on credit default swaps became a huge systematic problem.
Also, a nominal value is different from a derivative’s actual price. For example, if you bought a SPY 4/20 220p, the nominal value of your derivative is $22000 (100 shares * $220 per share) but the actual value of your put is $0.
We know that since Dec 2019
  • Interest rates got cut all around the world
  • Currencies exchange rates have dramatically changed since December with oil-exporting countries. For example USD / CAD went from $1.30 to $1.42 during this time period
  • Equity values exploded, even with the bull run we’re currently in
  • A lot of BBB-rated companies got downgraded, and we might see defaults come in, even with the Fed buying bonds
  • Oil is fucked
These recent events will probably change the valuation of these derivatives by a lot, some of which are going to be realized on their balance sheets immediately (eg. exchange traded derivatives) because their valuations can easily be calculated. The key here is that the net losses needs to be below €62B or they become insolvent.
Now, we’re in the age of too-big-to-fail businesses and the US government and Fed bailing out everyone, which is a real risk of taking a short position against $DB, especially considering how connected they are with other US financial institutions by acting as the counterparty or the central counterparty clearing house to many derivatives that they hold. If Deutsche Bank goes under, a lot of other financial institutions are going to have problems. The problem with Deutsche Bank is that it is not a US company and can’t be hence bailed out by the US government. In fact, they weren’t eligible for TARP, the last government-funded bank bailout back in 2008, which is partially why they’ve been a financial mess ever since.
Their Q1 earnings call is on April 29, so we’ll find out how much trouble they are then.
TLDR; DB 5p 10/16
submitted by ASoftEngStudent to wallstreetbets [link] [comments]

What you can do this summer (and how covid might impact admissions) - a guide by Novembrr, former Berkeley & UChicago reader

Note: I began writing this guide before George Floyd’s murder. I vacillated for a long time regarding posting this guide, as it feels privileged to worry about gaining acceptance to elite universities when there are disenfranchised groups of people who don’t have the ability to study, work, and live freely. But I ultimately decided to share this with you guys in the hopes that some would find it helpful.
Covid has completely derailed many of your plans; from summer programs being cancelled to research labs closing to internships being nixed, many of you are looking at a long summer with nothing to do.
And that’s okay. Just as universities are trying to give students grace in what they’re able/unable to achieve in a covid-19 world, extend that grace to yourself. People are dying and, tragically, death might hit close to home for some of you. People are losing their jobs and, again, your family might be impacted. It’s estimated that 1 in 5 children are going hungry during this time; you might be more worried about putting food on your table than improving your resume. You might be trapped in an unsafe, unhealthy environment without the support systems you once had. Social distancing and sheltering in place are impacting the emotional wellbeing and mental health of people worldwide. Focus first on what really matters: the mental, emotional, physical, and financial health of you and your loved ones.
But many of you are wondering how covid-19 might impact your college admissions process, and I am, too. Truthfully, no one knows; college administrators are scrambling to make decisions regarding online vs in-person classes this fall, and admissions officers are trying to determine how to make the admissions process simultaneously equitable/accessible and on-par with the academic caliber of previous classes. Lee Coffin, Vice Provost for Enrollment and Dean of Admissions and Financial Aid at Dartmouth College, said in a recent Harvard Graduate School of Education webinar: “Students are coming into next year’s application process with less information than they might have had, [and] different kinds of data points that frame their academic record. We don’t have all the answers today as to what [the college admissions process this fall] might look like.” He went on to add: “As I try to anticipate the [class of] 2025 reading cycle... how do we start to think and reimagine a college assessment if the high schools are largely giving pass/fail grades right now? If that happens to continue into the fall, a transcript as we know it will look really differently... If you combine that with a lack of testing, we’ve removed a lot of data from what would have typically been our assessment.”
Pass/fail vs letter grades
I want to interrupt my train of thought to address whether you should take letter grades or choose pass/fail, if given the option. Multiple students have told me that their GPA and/or class rank hinges on them choosing pass/fail, even though they’ve earned all As this semester. I would not choose pass/fail to game the system; choose pass/fail (if given the option) if your grades were impacted during this turbulent time. If your grades were on par with your past performance, I’d stick to letter grades. Alongside letters of recommendation, counselors are asked to evaluate students on a few criteria, one of which is character. I worry that students’ characters will be called into question, or that a counselor might call you a “grade grubber” in their letter of recommendation. In contrast, they can talk about your ethical decision to take letter grades, and how you seem to truly love learning solely for the sake of learning (not for a grade or an accolade)—a quality, in my experience, that universities love. Alternatively, if your school is mandating that everyone go pass/fail, and you would have earned stellar grades, ask your counselor to address that fact in your letter of rec.
Ok, back to regular programming.
How might colleges evaluate your achievements?
The question on everyone’s mind lately: How will universities evaluate applicants without test scores and with pass/fail grades? Standardized tests were already flawed—they disadvantaged students from marginalized backgrounds, for instance—but universities clung to them as a way to, in their minds, even the playing field. It’s hard to compare students from, say, an under-resourced rural public school in Iowa to an abundantly-resourced private school in Massachusetts, and so universities try to avoid doing so by evaluating students within “context”: the opportunities of their family, school, and community (i.e., if your high school doesn’t offer AP Calculus BC, you won’t be compared to peers in the high school two towns over who all take BC as freshmen; if your family lives in poverty, your achievements might look different than those of a student from an uber-wealthy community; and so on). I believe that grace has to be extended to individuals impacted by covid-19, as well; if circumstances of covid-19 (your illness, a family member’s illness, a parent’s undeunemployment, lack of access to standardized testing, online courses, etc.) impact your achievements, I cannot imagine an admissions office would not extend leniency.
But at the nation’s most selective universities, everyone cannot be given a pass on everything. So I believe now, more than ever, qualitative components of an application may be heavily weighted in the admissions processes of the nation’s most selective universities.
The webinar’s host, Richard Weissbourd, a Harvard senior lecturer and leader of the Turning the Tide national effort to rethink college admissions, added his opinion: “It seems to me that if you are putting less weight on the SAT, then this is a time where you really can pay attention to the social and emotional strengths—like self awareness, social awareness, self regulation, curiosity, empathy—that we know are so strongly predictive of doing well and doing good in college and beyond.”
So where do you show these qualities? In your letters of recommendation, essays, and extracurriculars.
Getting stellar letters of recommendation
I recommend you seek out recommenders ASAP, as they might need even more time than usual to write your recommendations. Dartmouth’s Dean Coffin, in a 2017 alumni magazine article, said: “In combination with the qualitative data, the teacher recommendations that talk about grit and focus, determination and optimism, as well as the student’s own work and the essays—that’s where it all knits together and you say, ‘This is someone who’s primed for success.’” Don’t just have your teachers rehash your resume; what anecdotes can they provide that will offer detailed insight into your best qualities?
Alongside your teacher letter of recommendations in the Common App, teachers are asked to evaluate your:
  • Academic achievements
  • Intellectual promise
  • Quality of writing
  • Creative, original thought
  • Productive class discussion
  • Respect accorded by faculty
  • Disciplined work habits
  • Maturity
  • Motivation
  • Leadership
  • Integrity
  • Reaction to setbacks
  • Concern for others
  • Self confidence
  • Initiative, independence
  • And overall characteristics
Consider subtly addressing some of these qualities in a letter to your recommender. I recommend reading this Reddit post by u/LRFE. One point where we disagree: I don’t recommend you send your resume to your teachers, unless they ask for it; in my experience, resumes are helpful for counselors so they can put all your achievements into context. However, some teachers erroneously spend more time talking about your extracurricular achievements than your personal qualities and performance in class; your resume will be detailed in your activities list and, most likely, your essays. Your objective personal qualities won’t be detailed anywhere, unless your recommenders provide that insight. Instead of saying:
“Marissa is a talented young lady! Not only does she frequently solo on the saxophone in jazz band, but she earned first place at the DECA regionals competition, is captain of the varsity tennis team, volunteers for National Honors Society, and earned silver in the United States of America Computing Olympiad. Quite the busy bee!”
Your teacher could say:
“Marissa is an incredibly introspective and thought-provoking young person. In a class discussion about The Great Gatsby, she challenged her classmates to reflect on their own privilege. She made reference to current events and incorporated books she read in AP US History (The Autobiography of Malcolm X, The Second Sex). What’s more, she artfully mediated what could have been a contentious discussion between her politically-divided classmates.”
Do you see how the latter example would better say to universities “this student is primed for success”? And, remember, you don’t have to hope that your teacher will write with such detail—you can write them a letter and include anecdotes to remind them of your best moments in class.
Doing something impactful this summer
And as for extracurriculars, it would be great to do something this summer. But what? That’s the million dollar question, but you don’t need a million dollars to do something this summer that will be emotionally or intellectually rewarding and beneficial for your college applications (+ success in college).
  • Build a computer
  • Tinker (take apart and rebuild electronics, “hack” electronics to improve them, rig up devices that solve everyday problems, etc.)
  • Draw/create artwork
  • Lead a social justice initiative (rally teens to protest; provide masks, snacks and water to protesters; create a “voices of our community” newsletter to highlight marginalized perspectives; and so much more)
  • Create birdhouses and offer to install them in neighbors’ yards
  • Conduct science experiments (and/or create science kits, record instructions, and share them with kids in your neighborhood)
  • Offer virtual babysitting, tutoring, language teaching, or music lessons
  • Grocery shop/run errands for at-risk members of your community
  • Build an app that solves a need in your community, like alerting SNAP recipients when SNAP-eligible food is in stock at their local grocery store
  • Start a lawn mowing business
  • Run the social media for a small business floundering in this economic environment
  • Create the website or build an online store for a small business that used to sell only in person
  • Translate important public health information, create a database of healthcare/public resources, or offer to virtually translate conversations with doctors for non-native-speaking members of your community
  • Offer your help negotiating smaller fees for services (like internet/tv) for low-income families
  • Fundraise to buy internet/hotspots/computers for low-income students who are otherwise unable to learn online
  • Create fun learning packets for students and drop them off in “subscribers” mailboxes
  • Do a data visualization project on covid-19 for your community
  • Take online courses via Coursera, EdX, MIT OpenCourseWare, Udemy, Udacity, Lynda.com, Khan Academy, etc.
  • Listen to podcasts associated with your intended major, like this one from MIT
  • Foster or transport shelter animals
  • Foster the pets of those who have been hospitalized
  • Walk the pets of those who are at-risk and cannot be out and about in the community
  • Drive people to routine hospital appointments/work/necessary errands who otherwise would be forced to take public transit
  • Create virtual mental health office hours, where classmates can call in or submit anonymous questions, and where you can host weekly guest professionals to answer those questions
  • Start a themed book club with friends (perhaps related to your major)
  • Fundraise to purchase video cameras for NICUs, labor & delivery, and covid-19 wards where loved ones cannot be present in the hospital
  • Ask to help design the online curriculum for a favorite teacher (even better if related to your intended major)
  • Edit the resumes of recently-unemployed community members
  • Write stories, poetry, a news/politics blog
  • Sew masks and distribute to those in need
  • Propose an independent research project and ask a professor to be your mentor
  • And tons of ideas that I haven’t discovered (you guys constantly amaze me with your ingenuity)
So you want to do research…
It was always difficult for high schoolers to earn coveted spots in research labs, and covid-19 offers even more challenges, with the suspension of many labs. Says Polly Fordyce, an assistant professor of bioengineering and genetics at Stanford, covid-19 is “really destructive. Some people were about to do the last experiment they needed for a paper, or an experiment that would have given them months of data to analyze. And now they’re stalled.” Instead, her colleagues are “thinking creatively about existing data sets we can analyze, reading more papers… doing a paper on data that they weren’t going to write up.”
I want you to think just as creatively. Where, in the past, I have helped many of my students gain research internships at highly-selective universities, don’t count on doing so this summer. Instead, consider devising your own research project—like Fordyce said, using existing data sets and papers—and ask a professor, PhD student, or professional to mentor you.
I’m going to give you some ideas on topics you could analyze. I urge you not to run with one of these projects, because who knows how many other kids read this post and likewise pick the same project. Harvard will likely catch on if 500 kids all have the same research project… Instead, find the subject most closely linked to your interest for some inspiration, reflect on your unique interests, and spend a few days harvesting the internet for some ideas. If you’re truly stuck and need some help, reach out for more information regarding how I work 1-on-1 with students.
So without further ado…
Biology/Public Health
  • Cancer (under)diagnosis in queeobese/minority populations (and the healthcare biases that lead to this issue)
  • How cancer diagnoses are impacted by covid-19 (like this, for instance)
  • The cultural norms that support and the efforts to end genital mutilation worldwide
  • The inhalation of Lysol and the spread of misinformation in public health crises (covid-19, AIDS)
  • The effect of Yelp reviews on prospective patients’ selection of healthcare providers
  • Best approaches to treating individuals with memory loss/eating disorders/etc.
  • Pharmaceuticals’ roles in the opioid epidemic
  • The rise of the female workforce during WWII, and how covid-19 is impacting female workers
  • How businesses’ responses to covid-19 and the Black Lives Matters movement impact their (inter)national reputations
  • The challenges of being male, female, trans, or nonbinary in workplaces dominated by individuals with different gender identities
  • A history of black entrepreneurship
  • Predicted cost impacts of a year without college football for U.S. universities
NOTE: Instead of conducting research, consider pursuing a hands-on project, such as assisting a small business in their social media strategy; starting your own small business or product; or designing a mock product, website, and advertising campaign.
  • Gender and sexuality in Ancient Rome
  • The use of a particular literary device across an author’s body of work
  • History of disease in Roman antiquity
Computer Science
  • How Bay Area tech giants succeed/fail in hiring and supporting minority engineers
  • The effects of avatars’ identities in video games on players’ personal identities in real life
  • Various approaches to introducing children to computer science
NOTE: You can also use computer science tools to analyze a topic in another field—such as using AI to predict a disease.
Cultural Studies/Ethnic Studies
  • Why Black Americans are dying from covid-19 at greater rates
  • Racial disparity in the rate of police killings
  • The societal stereotyping of ethnic first names
  • The challenges refugees face before, during, and after immigration
  • A specific culture’s identity and representation in film
Data Science
There are tons of opportunities here; pick a project that interests you and analyze the data associated with it. Don’t have any data? Check out these sites or reach out to your local librarian for help. Really dig into the data to pose questions, draw conclusions, and pursue a data visualization project.
  • The challenges of living in high-density housing during social distancing
  • How highways bifurcated white and black America
  • Minorities’ pursuit of STEM majors in predominantly white vs historically black colleges and universities
  • The school-to-prison pipeline
  • Menstruation as a barrier to education in India
  • Sex education’s impact on underage pregnancies
NOTE: Consider doing something hands on, like building a drone, robot, or computer; designing a bridge; or building an app or device. Here are some additional ideas from Southern Methodist University and ElProCus. Stanford Alumni Magazine just featured a “multitalented tinkerer”, and you can see some of his projects on [YouTube](alu.ms/akshay).
English Literature
  • Analysis of an author’s use of a literary device across their body of work
  • How spouse/sibling authors draw upon different/similar inspirations (The Brontë Sisters, Simone de Beauvoir and Jean-Paul Sartre, etc.)
  • Analysis of a particular style of writing within books of a certain genre
  • How a book reflects society and beliefs of that time (how slavery is depicted, mental health stigma, etc.)
  • How a book/body of work represents an author’s beliefs (John Milton, John Updike, any other notably-religious Johns?)
  • The representation of a minority group in a genre (i.e., LGBTQ+ within graphic novels)
Environmental Science
  • How murder hornets and other invasive species have impacted indigenous species
  • Differences in the perception of global warming across various societies
  • Modern day impacts of Chernobyl, Fukushima, or other environmental disasters
  • Analysis of climate change policies in the Democratic debates
  • How a Supreme Court decision regarding a natural gas pipeline could impact the Appalachian Trail
Gender Studies
  • Violence against indigenous women and the inadequate response by communities/law enforcement
  • History of achievements of America’s first ladies
  • Gender inequality during stay-at-home orders
  • Overcoming the gender gap in STEM
  • The response to the 1918 Spanish Flu and similarities/differences between today’s response to covid-19
  • A history of un- and under-employment in America
  • How businesses pivot during times of crisis (WWII, covid-19, etc.)
NOTE: There are so many cool topics in history! Here’s a good place to start (though this list is U.S.-centric)
Journalism/Media Studies
  • Partisanship in American media organizations
  • Freedom of the press in [insert country of choice here]
  • The rise and fall of the American newspaper
  • Jazz’s influence on community in Harlem
  • Your favorite musical artist’s influence on a genre
  • What various cultures’ earliest musical artifacts showcase about those societies
Find a cool philosophephilosophy and analyze the person/idea within their time period
Political Science/Law
  • The impacts of gerrymandering on marginalized communities
  • The impacts of social media on voter turnout and behaviors
  • The corrupt misuse of NGO funds in Third World Countries
  • A compare and contrast between two leaders’ approaches to international trade
  • Legal precedence foagainst stay-at-home orders, curfews on protestors, etc.
  • Freedom to/freedom from: the different approaches to personal liberties in various democratic societies
  • Unemployment’s impact on mental health crises during various economic downturns
  • Mental health risks of social isolation
  • Building empathy across political/racial divides
  • The impact of a belief in fixed vs malleable intelligence on children’s achievements
In order to get a research internship off the ground, you must be willing to put in the time and effort to devise a topic in the first place. This is not the sort of summer activity that is going to be handed to you, but it will be so rewarding to drive the project from start to finish (I promise). And if my promise doesn’t come true and you hit tons of speed bumps, well hey, at least you’ll have a great response to any prompts that ask you to address your greatest challenge. ;)
How to approach mentors
You can either organically devise a project you would love to pursue, or first poke around prospective departments at your dream university to see what they’re doing, before creating a spinoff project from one of their research labs. Either way, do some research into who else in the world is doing similar stuff. Remember, it doesn’t have to be a professor—it could be a principal investigator, PhD student, postdoc, or even someone at a company/non-profit). Find their email and reach out to them, outlining something such as the following:
  • What you love about their work/research (I like to start with sincere flattery)
  • How their work/research relates to your interests/experiences
  • Who you are and what research you are conducting this summer (be specific—not “I plan to conduct economics research this summer. Got any ideas?”)
  • Your first ask: Can they recommend books, data, journal articles, etc. to point you in the right direction? (Again, be specific—“know of any bio journals?” is not going to lead to mentors begging to mentor you)
  • Your second ask: Are they or anyone they know willing to mentor you in pursuing this project? You would love occasional guidance on your sources, data, conclusions, paper, etc.
  • A sincere thanks for their time
Keep it short but detailed! And add a catchy subject line to cut through their inbox.
Remember: They don’t owe you. They might not respond. You shouldn’t pester. You shouldn’t spam (multiple people with the same generic email and especially not multiple people in the same department at the same university). Consider reaching out to one or two people at different universities/companies/non-profits simultaneously; if you don’t get any responses after a week or so, consider tweaking your email and reaching out to one or two more individuals.
Shoot to have one to two mentors, focusing only on those who can help you maximize your learning experience and do good work.
What other questions do you have for how covid-19 might impact admissions? What other ideas do you have for summer activities? Happy to weigh in!
And, as a reminder, don’t stress about college if you have other stressors in your life that need your attention first. I personally realized last year, when facing a family emergency, that you shouldn’t fix your leaky faucet if your house is burning down. Put out the fire first, then turn your attention to college. I’m here for you if you need me!
submitted by novembrr to ApplyingToCollege [link] [comments]

The best DApps, which will likely lead the next phase.

The best DApps, which will likely lead the next phase.
Author: Gamals Ahmed, Business Ambassador

One of the key themes in 2020 is the rise of decentralized financing (DeFi), a new type of financing that works on decentralized protocols and without the need for financial intermediaries. Lately, the number of DeFi apps has increased significantly, but many have not been seen or heard by many of us.
In this Article I will be building a list of the best DApps, which will likely lead the next phase. DeFi apps can be categorized into different subcategories such as:
  • Finance
  • Exchange
  • Insurance
  • Gambling
  • Social
And much more…
Note: Some of the projects in the report categorized into more than one section in the types of dApps.
The rise of DeFi Bitcoin (BTC) was the first implementation of decentralized financing. It enabled individuals to conduct financial transactions with other individuals without the need for a financial intermediary in the digital age. Bitcoin and similar cryptocurrencies were the first wave of DeFi. The second wave of DeFi was enabled by Ethereum blockchain which added another layer of programmability to the blockchain. Now, at the beginning of 2020, individuals and companies can borrow, lend, trade, invest, exchange and store crypto assets in an unreliable way. In 2020, we can expect the amount of money held in lending protocols to increase as long-term investors diversify into interest-bearing offers, especially if the market fails to rise towards the 2017/18 highs. On the other hand, active crypto traders are becoming increasingly interested in decentralized trading offers. The increasing level of money security offered by decentralized trading platforms should not only see an increase in trading of DApp users, but also in the number of non-custodial trading and exchange platforms available.
Lending: DeFi allows anyone to obtain or provide a loan without third party approval. The vast majority of lending products use common cryptocurrencies such as Ether ($ ETH) to secure outstanding loans through over-collateral. Thanks to the emergence of smart contracts, maintenance margins and interest rates can be programmed directly into a borrowing agreement with liquidations occurring automatically if the account balance falls below the specified collateral. The relative benefit gained from supplying different cryptocurrencies is different for the asset and the underlying platform used.


Source: https://images.app.goo.gl/SGttwo4JWadHTxYe7
Compound is a money market protocol on the Ethereum blockchain — allowing individuals, institutions, and applications to frictionlessly earn interest on or borrow cryptographic assets without having to negotiate with a counterparty or peer. Each market has a dynamic borrowing interest rate, which floats in real-time as market conditions adjust. Compound focuses on allowing borrowers to take out loans and lenders to provide loans by locking their crypto assets into the protocol. The interest rates paid and received by borrowers and lenders are determined by the supply and demand of each crypto asset. Interest rates are generated with every block mined. Loans can be paid back and locked assets can be withdrawn at any time. While DeFi may seem overwhelming complex to the average individual, Compound prides itself on building a product that is digestible for users of all backgrounds. Compound is a protocol on the Ethereum blockchain that establishes money markets, which are pools of assets with algorithmically derived interest rates, based on the supply and demand for the asset. Suppliers (and borrowers) of an asset interact directly with the protocol, earning (and paying) a floating interest rate, without having to negotiate terms such as maturity, interest rate, or collateral with a peer or counterparty. Built on top of that principle is cTokens, Compound’s native token that allows users to earn interest on their money while also being able to transfer, trade, and use that money in other applications. OVERVIEW ABOUT COMPOUND PROTOCOL Compound Finance is a San Francisco based company, which raised an $8.2 M seed round in May of 2018, and a $25M Series A round in November of 2019. Financing rounds were lead by industry giants including but not limited to Andressen Horowitz, Polychain Capital, Coinbase Ventures and Bain Capital Ventures, Compound Finance is a sector-leading lending protocol enabling users to lend and borrow popular cryptocurrencies like Ether, Dai and Tether. Compound leverages audited smart contracts responsible for the storage, management, and facilitation of all pooled capital. Users connect to Compound through web3 wallets like MetaMask with all positions being tracked using interest-earning tokens called cTokens.
Compound recently introduced a governance token — COMP. It holds no economic benefits and is solely used to vote on protocol proposals. The distribution of COMP has absolutely exceeded expectations on all fronts. Compound is now the leading DeFi protocol both in terms of Total Value Locked and in terms of COMP’s marketcap relative to other DeFi tokens. COMP was recently listed on Coinbase — the leading US cryptocurrency exchange and has seen strong interest from dozens of other exchanges including futures platforms like FTX. Compound’s new governance system is well underway, with close to close to 10 proposals being passed since it’s launch. What’s unique about COMP’s governance model is that tokenholders can delegate their tokens to an address of their choice. Only those who hold more than 1% of the supply can make new proposals. Besides earning interest on your crypto assets, which is a straightforward process of depositing crypto assets on the platform and receiving cTokens, you can also borrow crypto on Compound. Borrowing crypto assets has the added step of making sure the value of your collateral stays above a minimum amount relative to your loan. Compound and DeFi more broadly wants to help people have more access and control over the money they earn and save. While the project has had its criticisms, the long-term goal of Compound has always been to become fully decentralized over time. The Compound team currently manages the protocol, but they plan to eventually transfer all authority over to a Decentralized Autonomous Organization (DAO) governed by the Compound community. For following the project:
Website: https://compound.finance/
Medium: https://medium.com/compound-finance
Github: https://github.com/compound-finance/compound-protocol
DEXs: Decentralized exchanges allow users to switch their assets without the need to transfer custody of basic collateral. DEXs aim to provide unreliable and interoperable trading across a wide range of trading pairs.


Source: https://images.app.goo.gl/sFCUhrgVwvs9ZJEP6
Kyber is a blockchain-based liquidity protocol that allows decentralized token swaps to be integrated into any application, enabling value exchange to be performed seamlessly between all parties in the ecosystem. Using this protocol, developers can build innovative payment flows and applications, including instant token swap services, ERC20 payments, and financial DApps helping to build a world where any token is usable anywhere. Kyber’s ecosystem is growing rapidly. In about a month, the team got an investment and partnered with some of the best projects. ParaFi Capital, a blockchain-focused investment company, has made a strategic purchase of KNC codes. The company will assist the DeFi project by qualifying new clients and improving professional market manufacture. The project’s recent partnerships seem impressive. Includes Chainlink, Chicago DeFi Alliance, and Digifox Wallet.
An important DeFi integration was also made with MakerDAO. KNC can now be used as a DAI warranty. The project has reached a milestone worth $ 1 billion of total turnover since its inception. More importantly, volume on an annual basis is moving and accelerating from $ 70 million in the first year to more than $ 600 million in 2020. Recently five million KNC (about 2.4% of total supply) were burned, improving Kyber’s supply and demand ratio. In July, the Kyber network witnessed a Katalyst upgrade that will improve governance, signature, delegation and structural improvements.
When Katalyst hits the main network, users will be able to either vote directly or delegate tokens to shareholder groups led by either companies like Stake Capital or community members. The KNC used to vote is burned, and in turn, voters get ETH as a reward. This setting creates a model for staking an uncommon contraction for the Kyber network. KyberDAO will facilitate chain governance, like many other projects based on Ethereum. An interesting partnership with xToken has been set up to help less-participating users stake out via xKNC. xKNC automatically makes specific voting decisions, making it easier for users to join and enjoy the return. The pool was created to draw BTC to Curve. Users who do this are eligible for returns in SNX, REN, CRV, and BAL. The more BTC lock on Synthetix, the more liquid it becomes, and the more attractive it is for traders. The project plans to continue expanding its products and move towards more decentralization. Synthetix futures are scheduled to appear on the exchange within a few months. The initial leverage is expected to be 10 to 20 times. The team aims to neglect its central oracle and replace it with one from Chainlink during the second stage of the migration. This will significantly increase the decentralization and flexibility of the platform. For following the project:
Website: https://kyber.network/
Medium: https://blog.kyber.network/
Github: https://github.com/kybernetwork
Derivatives: In traditional finance, a derivative represents a contract where the value is derived from an agreement based on the performance of an underlying asset. There are four main types of derivative contracts: futures, forwards, options, and swaps.


Source: https://images.app.goo.gl/1UsxQ7a3M5veb5sC7
Synthetix is a decentralized artificial asset issuance protocol based on Ethereum. These synthetic assets are guaranteed by the Synthetix Network (SNX) code which enables, upon conclusion of the contract, the release of Synths. This combined collateral model allows users to make transfers between Compound directly with the smart contract, avoiding the need for counterparties. This mechanism solves DEX’s liquidity and sliding issues. Synthetix currently supports artificial banknotes, cryptocurrencies (long and short) and commodities.
SNX holders are encouraged to share their tokens as part of their proportionate percentage of activity fees are paid on Synthetix.Exchange, based on their contribution to the network. It contains three DApp applications for trading, signature and analysis: Exchange (Synths at no cost). Mintr (SNX lock for tuning and fee collection). Synthetix Network Token is a great platform in the ethereum ecosystem that leverages blockchain technology to help bridge the gap between the often mysterious cryptocurrency world and the more realistic world of traditional assets. That is, on the Synthetix network, there are Synths, which are artificial assets that provide exposure to assets such as gold, bitcoin, US dollars, and various stocks such as Tesla (NASDAQ: TSLA) and Apple (NASDAQ: AAPL). The whole idea of these artificial assets is to create shared assets where users benefit from exposure to the assets, without actually owning the asset.
It is a very unique idea, and a promising project in the ethereum landscape. Since it helps bridge the gap between cryptocurrencies and traditional assets, it creates a level of familiarity and value that is often lost in the assets of other digital currencies. This will make Synthetix take his seat in the next stage. On June 15, BitGo announced support for SNX and on June 19, Synthetix announced via blog post that Synthetix, Curve, and Ren “collaborated to launch a new stimulus group to provide liquidity for premium bitcoin on Ethereum”, and said the goal was to “create the most liquid Ethereum — the BTC-based suite available to provide traders with the lowest slippage” In trade between sBTC, renBTC and WBTC. “ For following the project:
Website: https://www.synthetix.io/
Blog: https://blog.synthetix.io/
Github: https://github.com/Synthetixio
Wallets: Wallets are a crucial gateway for interacting with DeFi products. While they commonly vary in their underlying product and asset support, across the board we’ve seen drastic improvements in usability and access thanks to the growing DeFi narrative.


Source: https://images.app.goo.gl/mYPaWecFfwRqnUTx6
It is the startup for consumer game-changing financial technology, which makes decentralized web access safer and easier. The company has built a smart and easy-to-use mobile wallet for Ethereum, which gives users the ability to easily retrieve their encrypted currencies on the go.
Argent Benefits:
  • Only you control your assets
  • Explore DeFi with one click
  • Easily retrieve and close your wallet
  • The wallet pays gas for in-app features, for example Compound and Maker
The Argent crypto wallet simplifies the process without sacrificing security. It is a type of wallet that allows you to keep cryptographic keys while keeping things simple. The Argent wallet is secured by something called the Guardians. If you lose your phone (and your Argent wallet), just contact your guardians to confirm your identity. Then you can get all your money back on another device. It is a simple and intuitive method that can make cryptocurrency manipulation easier to do without experience. Argent is focused on the Ethereum blockchain and plans to support everything Ethereum has to offer. Of course, you can send and receive ETH. The startup wants to hide the complexity on this front, as it covers transaction fees (gas) for you and gives you usernames. This way, you don’t have to set a transaction fee to make sure it expires. Insurance cooperative Nexus Mutual and Argent Portfolio Provider are planning to offer a range of smart and insurance contracts to keep Argent user money safe from hackers. First, the smart contract is designed to prevent thieves from draining the wallet by temporarily freezing transfers above the daily spending limit for addresses not listed in the user’s whitelist. The user has 24 hours to cancel the frozen transfer — very similar to the bank’s intervention and prevent fraud on the card or similar suspicious activities in the account. By contrast, the default coding state is closer to criticism: once it disappears, it disappears. “We are thinking not only of crypto users but also new users — so the ultimate goal is to duplicate what they get from their bank,” said Itamar Lisuis, one of the founders of Argent. For following the project:
Website: https://www.argent.xyz/
Medium: https://medium.com/argenthq
Github: https://github.com/argentlabs/
Asset Management: With such a vast amount of DeFi products, it’s crucial that tools are in place to better track and manage assets. In line with the permissionless nature of the wider DeFi ecosystem, these assets management projects provide users with the ability to seamlessly track their balances across various tokens, products and services in an intuitive fashion.


Source: https://images.app.goo.gl/VP9Xwih6VQ1Zmv2E9
It is a smart wallet for DeFi that allows users to seamlessly manage multiple DeFi applications to maximize returns across different protocols in a fraction of the time. With InstaDapp, users can take advantage of industry-leading projects like Compound, MakerDAO and Uniswap in one easy-to-use portal. Instadapp currently supports dapps MakerDAO and Compound DeFi, allowing users to add collateral, borrow, redeem and redeem their collateral on each dapp, as well as refinance debt positions between the two. In addition to its ease of use, InstaDapp also adds additional benefits and use cases for supported projects that are not already supported. The project focuses on making DeFi easier for non-technical users by maintaining a decentralized spirit while stripping many of the confusing terms that many products bring with them.
InstaDapp has launched a one-click and one-transaction solution that allows users to quadruple the COMP Codes they can earn from using quadruple borrowing and lending. A good timing feature for sure, but this kind of simplification is exactly why Instadapp was created. Its goal is to create a simple interface into multiple DeFi applications running on the Ethereum Blockchain and then automate complex interactions in a way that enables users to maximize their profits while reducing transactions and Ethereum gas charges. To use Instadapp you will need Ethereum wallet and you will also have to create what is called Instadapp smart wallet in which token you want to use. For following the project:
Website: https://instadapp.io/
Medium: https://medium.com/instadapp
Github: https://github.com/instadapp
Savings: There are a select few DeFi projects which offer unique and novel ways to earn a return by saving cryptocurrencies. This differs from lending as there is no borrower on the other side of the table.


Source: https://images.app.goo.gl/4JhfFNxPfE9oxoqV6
Dharma is an easy-to-use layer above the compound protocol. It introduces new and non-technical users to transaction encryption and allows them to easily borrow or lend in DeFi markets and earn interest in stable currencies. You can start by simply using a debit card. Funds are kept in a non-portfolio portfolio, which constantly earns interest on all of your deposited assets. The value of Dharma’s DeFi lending experience is:
  • Easy entry.
  • Simple wallet.
  • High protection.
  • Depositing and withdrawing banknotes.
Dharma, the prominent DeFi cryptobank bank, has made it extremely easy to bring any Twitter user into the crypto world. Dharma users can send money from the Dharma app by searching for any Twitter handle, setting the required amount, and clicking on one button. The Twitter Dharma Bot account can send a unique notification with a link to download the Dharma mobile app. Senders are encouraged to retweet the notification to ensure that the receiver does not lose it.
To raise money, recipients simply download the Dharma app. After creating a Dharma account, users connect their Twitter account to receive access to the money sent. They can choose to transfer money to US dollars and withdraw to a bank account, or leave DAI in a Dharma account where it will earn interest like all Dharma deposits. The submitted DAI will gain interest even before the receiving user requests it while waiting for the claim. In her ad, Dharma demonstrated a number of ways in which the new social payments feature can be used, including tips for your favorite Twitter personalities, accepting payments for goods or services in a very clear way, charitable donations across borders or transfer payments. The Dharma app is available for both Android and iOS. Dharma and Compound
Dharma generates interest by DAI signing the Compound Protocol. Dharma also appeared in the news recently after the release of a specification outlining a Layer 2 expansion solution allowing the platform to expand to handle current transaction volume 10x, ensuring users can transfer their money quickly even in times of heavy congestion on the Ethereum network. Dharma is developing its “core” and “underwriting” contracts within the company. Underwriting contracts are open source and non-custodian, while each loan contract is closed source. This means that the receiving address contains nodes that interact with a script on a central Dharma server.For following the project:
Website: https://dharma.io/
Medium: https://medium.com/dharma-blog
Github: https://github.com/dharmaprotocol
Insurance: Decentralized insurance protocols allow users to take out policies on smart contracts, funds, or any other cryptocurrencies through pooled funds and reserves.

Nexus Mutual

Source: https://images.app.goo.gl/b7HwB8ifvTXwFhrh6
Nexus Mutual uses blockchain technology to return mutual values to insurance by creating consistent incentives with the smart contract symbol on the Ethereum blockchain. It is built on the Ethchaum blockchain and uses a modular system to aggregate smart Ethereum nodes, allowing to upgrade the system’s logical components without affecting other components.
The way Nexus works is members of the mutual association by purchasing NXM codes that allow them to participate in the decentralized independent organization (DAO). All decisions are voted on by members, who are motivated to pay real claims. It sees plenty of opportunities in a gradual transition of Ethereum to Eth 2.0, which is expected to start later this year. Eth 2.0 moves the network from the power-hungry Proof-of-Consensus (PoW) algorithm to Proof-of-Stake (PoS), a way to sign cryptocurrency in order to keep the network afloat. Having a steady return on signature from the Ether (ETH) can be somewhat compared to the way in which insurance companies invest in the real world the premiums they collect.
By setting a strong set of conditions for Nexus Mutual, anyone will be able to bring in and acquire a new form of risk for mutual coverage — assuming that members are willing to share NXM. With this design, the mutual discretion will be able to expand into much broader fields beyond smart contracts. In addition to defining multi-layered term agreements, Nexus Mutual also has some other advantages needed to achieve this visualization. For following the project:
Website: https://nexusmutual.io/
Medium: https://medium.com/nexus-mutual
Github: https://github.com/NexusMutual
Disclaimer: This report is a study of what is happening in the market at the present time and we do not support or promote any of the mentioned projects or cryptocurrencies. Any descriptions of the jobs and services provided are for information only. We are not responsible for any loss of funds or other damages caused.
submitted by CoinEx_Institution to u/CoinEx_Institution [link] [comments]

Levered ETFs, deep dive into one in particular

Not an endorsement of this product (QQQ3), nor am I saying its rubbish, just a breakdown of what it is. Sharing because I looked at it in a bit of detail awhile back when looking at whether it was worth using or rolling my own for a particular need. Also leveraged ETF type products are often 'recommended' but I doubt fully understood.
QQQ3, What is it?
WisdomTree NASDAQ 100® 3x Daily Leveraged is a fully collateralised, UCITS eligible Exchange-Traded Product. The ETP tracks the NASDAQ-100® 3x Leveraged Notional Net Return index, providing three times the daily performance of the NASDAQ-100 Notional Net TR index, adjusted to reflect fees and costs inherent to maintaining a leveraged position in stocks.
Ok, a bit to unpack, but pretty straightforward.
Tracking expectations
NASDAQ-100 TR this is the nasdaq100, with (gross) dividend proceeds reinvested (hence total return).
NASDAQ-100 Notional Net TR index this is the same as above but with only 70% dividends reinvested to simulate a 30% withholding tax on dividends.
NASDAQ-100® 3x Leveraged Notional Net Return index this is the same as above with adjustments that simulate the cost of borrowing to buy more securities (to achieve leveraged positions). The borrowing adjustments are based on overnight (fed funds rate), plus a spread (based on 1Yr US LIBOR Overnight Indicative Spread). This is what this product tracks.
summary: don't expect these products to simply track 3x the underlying, because they're not. the synthetic index it does track has some of the implied financing and tax costs baked in.
Recap on Daily Rebalancing & Volatility Decay
Quick detour to talk about leveraged ETFs in general... if you think the fund needs to maintain a fixed 3x of the daily return, it will be obvious that the fund needs to rebalance each day.
If the underlying index alternates, up 10%, then down 10% for a total of 10 days. The leveraged version would be up and down about 30% and -30% each day. If you start both at a price of 100, you're going to end up with very different values at the end. In fact you'd be up overall after 10 days with the non-leveraged (105.67), but down on the leveraged version (89.15).... volatility decay.
summary: volatility and general sideways trading hurts the levered position more than the unlevered.
Tracking reality
Last 5 years annualised return as of 31 Mar 20
QQQ3: 14.92%
NASDAQ-100® 3x Leveraged Notional Net Return index: 22.92%
summary: Not too hot, but it can't be just the financing costs of borrowing to buy shares because that's baked into the index .
Quick peek under the hood at how tracking implemented in QQQ3
The index this product tracks (NASDAQ-100® 3x Leveraged Notional Net Return) describes factoring in the cost of borrowing to buy levered equity positions. But in reality, how this product actually tracks the index is through the swaps positions with the swap provider (BNP Paribas Arbitrage in this case).
summary: the swap provider presents a counter party risk to the buyer of this product, this wouldn't be the case in physically replicated ETFs where the underlying equities are owned by the fund.
Funds flow & Collateral
Swap provider basically gets the cash from Wisdomtree (the Issuer) when they issue new ETP shares. Swap provider agree to give the index return to the Issuer. The QQQ3 holders don't have any claim against the Swap provider if something goes belly up...
The good news is the product terms say that the swap provider(s) need to be a bank, or any leading dealer, or broker, or financially guaranteed/backed by such. And that provider has to be at least BBB rated (BBB is just about the lowest rating for investment grade before you get into junk rated territory).
But as part of agreement between Issuer and Swap Provider, the Swap Provider needs to post collateral worth 105% (now it can be marketed as 'over-collateralised') of the daily mark-to-market value of the swap. If you take a look at what is posted its not mostly Nasdaq securities, there are some, but there's a lot of Japanese and French companies (if the basket of collateral doesn't behave like the underlying in major downturns, maybe that over collateralising wouldn't be a big enough buffer). On the plus side there is some German and French govt debt.
Restrike Event
In the case of this product, the restrike threshold is defined as a fall or gain of 16.66% that occurs on any given day. If this threshold is met, and it is not yet the end of the day, a restrike event is declared. This means that positions get rebalanced in a way similar to the daily rebalancing. If a large fall triggered the restrike, then following the restrike the impact of a further fall in that same day would be lessened, but so would the effect of a sharp rise/reversal be lessened.
Furthermore, the swap provider is able to pass on swap fees in respect of the additional costs incurred altering those swap positions due to the restrike.
summary: don't expect it to behave normally at the margins.
Severe Disruption Events
By this point I got bored reading - you too probably - but for QQQ3 it means a 25% drop intraday or 25% overnight gap, maybe some other things and could lead to compulsory redemption (the product closing) depending on how the Swap Provider or underlying index is affected.
0.75% annual management fee
But how does the Swap Provider make their money
Could be from lots of things in combination...
submitted by dialectic_duck to UKInvesting [link] [comments]

Alright, neoliberals. I've got a ton of notes from Joseph Stiglitz's "The Great Divide" and "Rewriting the Rules of the American Economy". What have the succs got wrong?

At the same time that I've been browsing this subreddit prolifically (because it's the only political subreddit I've found where something like this thread I've linked gets upvoted), I've done a lot of reading, specifically Joseph Stiglitz's books The Great Divide and Rewriting the Rules of the American Economy. Apparently you guys don't like Stiglitz, so I'm looking for whatever criticism you have to throw at the ideas presented in these two books. Stiglitz seems to agree with you all a lot, so I'm kinda confused. I read these books thinking your ideas and his are one of the same.

The Great Divide

Despite being longer than Rewriting the Rules of the American Economy, I took less notes on this one, since I didn't care as much about retaining my memories of what I read at the time. Anyways, here's everything you guys apparently don't agree with:

Rewriting the Rules of the American Economy

The Current Rules:

Rewriting the rules:

These proposals aim to reduce inequality and improve economic performance by restructuring the rules shaping the economy. It’s a twofold approach: the first move is to tame rent-seeking behaviors that unduly reward those at the top while raising costs for the rest and reducing the efficiency and stability of the U.S. economy. The second part of our agenda seeks to restore the rules and institutions that ensure security and opportunity for the middle class.

Taming the top

Make markets competitive
-We need a 21st century competition law that recognizes that we have moved from a manufacturing to a service and knowledge economy, where different principles of competition are relevant. Restore balance to global trade agreements -Trade agreements written behind closed doors with the active participation of firms but no other stakeholders are failing to deliver the rules we need to manage globalization in a way that benefits all. -Businesses wishing to trade with businesses in the US under the terms of an agreement should be audited and certified by a credible, independent third party such as the International Labor Organization; certification then buys the company a right to trade under the preferential treatment of a trade agreement.
Control health care costs by allowing government bargaining
-Firms from across the health care industry have been allowed to consolidate and expand, reducing competition and raising prices. -By bargaining with drug companies for bulk purchases, the VA pays 40 percent lower prices for prescription drugs than typical market prices. -The federal government should establish a national prescription drug formulary, establishing the cost effectiveness for all prescription purchases covered under all public health insurance plans, not just those for veterans.
Rebalance the rules for bankruptcy by expanding coverage to homeowners and students
-Removing the special protections for derivatives in bankruptcy, a feature that benefits Wall Street but actually makes firms more risky as they rely more on these exotic instruments, is essential in reducing the excessive financialization of the economy. -Removing some of the most burdensome elements designed to make filing for bankruptcy harder will help individuals move on from the misfortunes that can happen throughout life. -A homeowners’ chapter 11, analogous to corporate chapter 11, would keep families in homes and give a fresh start to families overburdened with debt.
Fix the Financial Sector
-The financial sector isn’t doing what it’s supposed to: managing risk, allocating capital efficiently, intermediating between savers and investors, providing funds for investments and job creation, and running an efficient 21st century payments mechanism.
End “too big to fail”
-Banks that are so big that their failure will cause the entire economy to contract don’t need to internalize the costs of their failures and can reap huge benefits from risky bets. They have a perverse incentive to take on excess risk, knowing that should a problem arise they will be bailed out, with losses being borne by others. -Even when banks aren’t too big to fail, they can be too interlinked to fail: with excessive linkages the failure of one institution can lead to a cascade of other failures - stoppable only with a government bailout. That is why interlinkages need to be transparent and regulated. -The Financial Stability Oversight Council should assess large, systemically risky financial firms with an additional capital surcharge above what regulators currently assess under the Basel Accords in order to make failure less likely and more manageable. A surcharge would force banks to internalize the true cost of their risks and improve economic efficiency, while insulating taxpayers from the costs of failed institutions.
Regulate the shadow banking sector and end offshore banking
-Shadow banks are nonbank financial institutions that engage in lending by trading bonds and securities, often by bundling them through a process called securitization. -The SEC should reevaluate and expand on its recent ruling on money market mutual funds, whose vulnerabilities in the 2008 financial crisis sparked a panic. -The Federal Reserve must write clear rules outlining the government’s role in back-stopping the shadow banks. -There needs to be a re-examination of the extent to which shadow banks and offshore financial centers are used to end-run the regulations designed to ensure a safe and sound financial system.
Bring transparency to all financial markets
-Congress should expand the SEC’s mission, and require private equity and hedge funds to disclose holdings, returns, and fee structures. The SEC should provide additional regulatory scrutiny and investor advice on these deals. This will formalize their regulation, making it similar to mutual fund regulations; the competition that will follow from this price transparency will help reduce financial rents.
Reduce credit and debit card fees
-High consumer fees on credit and debit card transactions are one clear symptom of abuse of market power in the financial sector. -These fees are a monopoly rent on the country’s networked payments infrastructure.
Enforce rules with stricter penalties
-In the past decade there’s been a shift away from strict criminal enforcement of financial regulation. Fewer, if any, cases go to court. Instead the SEC and the Justice Department settle with favorable conditions, such as deferred prosecution agreements. Under these agreements, the parties regularly don’t admit to any wrongdoing, or even pay penalties commensurate to their benefits. No individual is held directly accountable. The fines that are paid come from shareholders and are tax deductible; the perpetrators of the offenses aren’t necessarily punished or made to give back the compensation they received as a reward for the extra profits generated by their illegal activities. -Firms promise not to repeat their offenses, but they usually do. -The SEC and other regulatory agencies should instead focus on more strict enforcement, and Congress should hold the agencies accountable if no progress is made. No company should be able to enter into a deal like a deferred prosecution agreement if it is already operating under such an agreement. These agreements should face stricter judicial review and scrutiny, and compensation schemes should be designed so that perpetrators face significant consequences - for instance, a clawback of bonuses and a reduction in retirement benefits.
Incentivize long-term business growth -The rules governing corporations and taxes on capital and top incomes have changed to favor short-term shareholders and CEOs who chase short-term stock price gains above all else. -This has led to greater inequality and has undermined real investments that create long-term growth.
Restructure CEO pay
-Adjust the tax code, which privileges compensation of executives through equity-heavy compensation, particularly stock options. -Eliminate or curtail the performance-pay loophole (by which stock options and other excessive CEO pay receives favorable treatment). This will both address executive pay being too high and discourage CEOs from behaving like financial speculators. -Maintain the $1 million cap on the deductibility of executive compensation reform, eliminate the exception for so-called performance pay, and expand these limits on deductibility to the highest paid executives in a company overall. -The SEC should require corporations to state the value of compensation in simple, easy to understand language. -There should be mandatory shareholder votes on executive compensation on an annual basis(footnote: our current Say-on-Pay rule is non-binding). Enact a financial transactions tax -Short-term financial transactions can contribute to economic volatility without providing any larger benefit to the economy as a whole. -A variant of financial transaction taxes are currently employed without negative consequence in vibrant financial centers like London and Hong Kong. -Congress should pass a financial transaction tax designed to encourage productive investment. Empower long-term stakeholders -There should be a surtax on short-term capital gains given the negative externality of the trading behavior incentivized. -To improve long-term management of corporations, workers must be given a say in corporate governance, specifically by including a representative of employees on the corporate board. -Those managing retirement accounts should be obligated to avoid all conflicts of interest and, especially in the case of worker pensions, ensure the corporations in which they invest act in a responsible way, with good corporate governance, an eye to long-term value, good labor policies, and sound environmental policies.
Rebalance the tax and transfer system
-The United States ranks among the least redistributive countries in the OECD. -Taxes can improve incentives, encourage socially desirable economic behavior, and discourage undesirable behavior like short-termism. -Over the past 35 years, changes to the tax code have prioritized tax cuts and subsidies focused on those at the top, placing a greater tax burden on the rest and causing neglect of critical public investments.
Raise the top marginal rate
-Lower marginal tax rates at the top distort the economy by actively encouraging rent seeking. -A 5 percent increase on the top 1 percent’s current income tax rate would raise between $1 trillion and $1.5 trillion of additional revenue over 10 years. -For an extra $50,000 taxed on every $1 million of a wealthy individual’s income, the United States could make all public college education free and fund universal pre-K.
Enact a “fair tax”
-The preferential treatment of capital gains and dividends - income received almost entirely by the richest Americans - is one of the most important reasons that those at the top pay less than ordinary taxpayers. -Most Americans earn negligible capital income outside already tax-sheltered retirement savings accounts or on home sales - for which a large exemption exists. -Capital gains tax breaks do not spur investment. They reward speculation as opposed to work. -The US should tax capital gains income at the same rate as labor income. -Short-term capital gains should be taxed at an even higher rate to discourage volatile short investments. -The provision for step-up in basis at death needs to be eliminated. This provision allows all of the capital gains earned during an individual’s life to escape taxation when the asset is bequeathed, meaning a small number of wealthy families pass on wealth free from capital gains tax in perpetuity.
Encourage U.S. investment by taxing corporations on global income
-The current tax code allows corporations to defer paying U.S. taxes on profits earned abroad until the profits are repatriated, which has the perverse effect of encouraging corporations to keep profits abroad as opposed to using the funds for U.S. investment. -One option is to replace the transfer price system with a formulaic approach that would tax firms on their global income in a fair and comprehensive way, apportioning those profits to the U.S. on the basis of the economic activity - including sales, production, and research - that occurs here.
Enact pro-growth, pro-equality tax policies
-We should tax things that have an inelastic supply, like land, oil, or other natural resources. -We should tax pollution (including carbon emissions), a move that can raise revenue while improving economic efficiency. -Eliminating agricultural subsidies and noncompetitive bidding processes for the sale or lease of government-owned natural resources or for the purchase of armaments or prescription drugs under public programs would improve efficiency and reduce inequality.

Growing the middle

Make full employment the goal
-The Fed should emphasize full employment as the goal of monetary policy, and Congress should enact a large infrastructure investment to stimulate growth.
Reform monetary policy to prioritize full employment
-The Fed’s prioritization of price stability has caused labor markets to remain slack, kept wages growing slower than productivity, and has brought down workers’ share of economic output. -Contractionary monetary policy has much stronger unemployment effects for low-wage and often minority workers than for the highest earners. -The Fed should resist raising interest rates until wage growth makes up for the lost ground of the Great Recession, even if this means allowing inflation to temporarily overshoot the 2% target. -There is growing consensus that a higher inflation rate will lead to better economic performance, facilitating adjustments in our highly dynamic and ever-changing economy.
Reinvigorate public investment
-Critical public investments today lay the foundation for long-term economic performance and job growth. -Public investments in education, technology, and infrastructure are complements to private investment, raising returns and thus “crowding in” such investments.
Invest in large-scale infrastructure renovation
-America’s failure to keep up what infrastructure it has makes it more costly to do business and for people to go about their daily lives, and leads to more wasted time and more environmental degradation. -Public transit and broadband play a crucial role in connecting all Americans, regardless of income level, with the 21st century local and global job market. -Not only is infrastructure crumbling, it’s unevenly distributed, with distinct areas and communities segregated from the rest of society and without the opportunities that connecting affords. -A comprehensive plan would provide investments in air, rail, and road transportation; public transit; ports and inland waterways; water and energy; and telecommunications and the Internet. Some estimates put the cost of such a project on the order of $4 trillion - well beyond the small sums currently debated but within our means. The investment would yield dividends in the form of more productive businesses, millions of new jobs, and sustainable management of our energy and environmental resources. -Public infrastructure banks could be useful for financing large infrastructure projects.
Expand access to public transportation
-Decades of disinvestment in U.S. infrastructure have resulted in high commuting costs that fall disproportionately on low- and middle-income families and decrease access to jobs. -Only a little over half of Americans have access to public transit. -If more people have better access to jobs, productivity will increase and lives will improve.

Empower workers

Strengthen the right to bargain
-The National Labor Relations Act is flawed. -One flaw in the statute has allowed employers to delay workers’ votes to unionize by litigating each step of the process. Recent rule changes issued by the National Labor Relations Board have attempted to rebalance some of the power, and they provide a positive example of how the statutes can be updated to reflect current challenges. -Stricter penalties are needed to deter illegal intimidation tactics by employers. -Companies seeking to prevent unionization can retaliate by firing workers; if an NLRA violation is found, the employer merely has to reinstate the worker and pay back wages. A ruling like this can take more than three years. -The legal framework should be amended to adapt to the changing nature of the workplace. Today, few employers resemble the large manufacturers the creators of the NLRA had in mind. Corporations like Walmart employ people through outsourcing and subcontracting, bearing little responsibility for the employment relationship. Legal scholars have envisioned new models for defining the employer-employee relationship that would establish clear lines of responsibility within the modern fissured workplace.
Have government set the standards
-State, local, and municipal governments should grant public contracts only to corporations that meet high labor standards and possess strong antidiscrimination/pro-inclusionary hiring practices.
Increase funding for enforcement and raise penalties for violating labor standards
-Charged with enforcing the minimum wage and overtime protections, the Wage and Hour Division of the Department of Labor has seen a third of its inspectors disappear since 1980, despite a doubling of the country’s workforce. -Congress should increase the agency’s budget to reflect growth in the labor market, the low-wage workforce in particular, and recent evidence of systemic wage theft. -Penalties for minimum wage and overtime infractions are insufficient to deter bad behavior. -Minimum wage and overtime violation convictions should pose an existential threat to businesses so managers and owners will think twice before engaging in such behavior.
Raise the minimum wage
-Raising the minimum wage is unlikely to hurt jobs, unless taken to an extreme. -Given the present weakness in aggregate demand, higher wages would stimulate the economy. -Raising the minimum wage could help reduce working poverty and particularly improve prospects for women, their families, and other disadvantaged groups that are disproportionately represented among minimum wage earners. -The minimum wage for tipped workers should be raised to the same floor that applies for all other workers.
Raise the income threshold for mandatory overtime
-The New Deal’s Fair Labor Standards Act requires that workers who work more than 40 hours a week get overtime pay, at a rate of 150 percent of their regularly hourly wage. However, the act exempts some employers, executives, administration, and traveling salespeople, among others. To provide a base level of coverage, the Department of Labor has periodically issued a rule that establishes an income threshold under which any employee must be paid for overtime. -The current threshold of $455 a week, or $23,660 a year, was last updated in 2004, and covers just 11 percent of the salaried workforce. In 1975, 65 percent of salaried workers were covered by overtime rules; if the 1975 threshold had kept pace with inflation, 47 percent of workers in 2013, rather than just 11 percent, would have received overtime. -The Department of Labor should raise the threshold to restore this pillar of middle class income, ensuring that the majority of salaried workers are covered.

Expand access to labor markets and opportunities for advancement

Reform the criminal justice system to reduce incarceration rates
-The United States has the highest incarceration rate in the world. -In addition to incurring direct costs, mass incarceration reduces employment opportunities and wages, and increases dependency on public assistance for a large share of the population. -The total public cost of incarceration was more than $31,000 per inmate in 2010, according to a study by the Vera institute. -Those who have been locked up end up facing lower hourly wages, annual employment, and annual earnings. This burden falls disproportionately on men of color. -In 2008 the US economy lost the equivalent of 1.5 to 1.7 million workers, or roughly a 0.8 to 0.9 percentage-point reduction in the overall employment rate. -Congress should reduce the burden ex-felons face when searching for jobs by expunging certain records after a set amount of time. -Mandatory minimum sentencing particularly targets people of color. -African-Americans and Latinos accounted for 69.8 percent of mandatory minimum sentences in 2010; tackling this issue will effectively reduce part of the inequality inherent in the nation’s sentencing rules. -Congress should allow judges the ability to waive mandatory minimums. -The DoJ should focus on encouraging alternatives to incarceration. -Inaccessibility to quality attorneys results in disproportionately harsh sentencing for the poorest. According to a report from the Brennan Center of Justice, a concerted effort to reclassify nonjailable offenses, increase public defense funding, and improve effectiveness through regular attorney and social worker training would ensure more equitable access to representation. -Onerous fees at every level of the criminal justice system generate severe financial burdens for the poor and create further points of entry back into the incarceration system.
Reform immigration law by providing a pathway to citizenship
-More than 11 million undocumented immigrants live and work in the shadows of the U.S. economy, in every corner of the country and every sector of work. -The broken immigration system is costly to businesses, who face risks of an uncertain labor supply. -Exploitation of undocumented immigrants drives down wages and working conditions throughout the labor market. -The federal government must provide a pathway to citizenship for those already here and simplify the process by which new migrants can continue to come and contribute to America’s economic success. -We should cease the deportation and internment of all but violent criminals and to normalize the legal status of families working, learning, and serving in America. -We should better coordinate the efforts of different parts of government to enforce immigration laws in ways that don’t undermine the conditions for people working here. ICE should take a back seat to the Department of Labor to ensure that unscrupulous employers cannot easily threaten workers with the prospect of deportation by calling in worksite raids. -Congress should ensure that labor laws apply to everyone, regardless of their documentation status.

Expand economic security and opportunity

Invest in early childhood through child benefits, home visiting, and pre-K
-The state run Maternal, Infant, and Early Childhood Home Visiting Program is one of the most effective investments of taxpayer dollars. -One proposal that should be considered is a universal child benefit, a monthly tax-free stipend paid to families with children under 18 to help offset part of the cost of raising kids. -The U.K. recently cut its child poverty rate by more than half through a package of anti-poverty measures, including a universal child benefit. -Congress could immediately expand funding to provide pre-K childcare subsidies to all currently eligible children, expanding access to 12 million children at a cost of $66.5 billion.
Increase access to higher education through more public financing, restructuring student loans, and increasing scrutiny of for-profit schools
-The G.I. Bill helped create the middle-class society that we had aspired to partly by providing free education to returning soldiers. -It’s not true that we can’t afford similar programs, we cannot afford not to ensure that all young Americans get the best education for which they are qualified so they can live up to their potential. -The government should look to follow the lead of Australia and adopt universal income-based repayment, in which repayment consists of a set percentage of future income. Students could then repay their student debts more easily - at much lower transactions costs - through withholding. -Removing bankruptcy protection for those with student loans, particularly in the 2005 policy change under the Bankruptcy Abuse Prevention and Consumer Protection Act, has done nothing to reduce bankruptcy filings resulting in costly defaults. It has extracted money from poor students that goes into the coffers of the banks. The government should restore those protections. -One way to improve outcomes for graduates is to increase scrutiny of for-profit schools, which receive a large share of government-funded loans or government-guaranteed loans while failing to provide students with a quality education. Eighty-seven percent of revenues at for-profits come from federal or state sources, including student loans and Pell grants. Though they teach around 10 percent of students, they account for about 25 percent of total Department of Education student aid program funds. Studies show that those at for-profit schools do poorly compared to those at community colleges. Completion rates are poor, as is success in getting a job.
Make health care affordable and universal
-The health care system is rife with the kinds of market failures that economists have studied extensively, including information asymmetries and imperfections in competition. -Hospitals, physician networks, and health care insurers increasingly operate in conditions approaching monopolies. -Patients largely have neither the medical expertise to perform the cost-benefit analyses necessary for making optimizing choices about the care they need, nor the access to price information for comparison shopping, leaving providers to determine both the demand and supply of health care. -Medicare, with its record of controlling costs and delivering better outcomes, should be opened to everyone. Competition from Medicare’s entry into the insurance exchange would lower premiums for everyone; one study found increased competition on exchanges could lower fees by an estimated 11 percent.
Increase retirement security by reducing transactions costs and the exploitation of retirees, and expanding Social Security
-More people in America will face retirement with inadequate savings, driving down their consumption and/or diverting it from others, or relying more heavily on social transfers. -Expanding the Social Security system to include a “public option” for additional annuity benefits would enhance competition, driving down costs and increasing services. -Research shows that the average 401(k) participant could lose up to a third of future savings in fees. Requiring fund managers to adhere to a fiduciary standard would be an important move in the right direction. -We could require that any pension or retirement account eligible for preferential tax treatment not have excessive transactions costs. Fees on any account could not exceed those on the best-performing indexed funds, unless there were demonstrably higher risk-adjusted returns. -We should remove the payroll cap that limits the amount of revenue Social Security raises to help make Social Security self-sustaining, budget-wise.
Reform political inequality
-Policies favored by the wealthy receive attention, while policy preferences of poor and middle-income Americans are ignored. -People with higher incomes vote more frequently than those with lower incomes and election campaign finance is dominated by a relatively small number of large donors who wield outsize influence. -Voting should be made easy: we should establish a federal system of universal voting that includes automatic voter registration, accepted throughout the country without the need to reregister and without burdensome voter identification requirements; the ability to vote by mail or early in-person on multiple days; the establishment of weekend Election Days or a national election holiday; and online voting when cyber-security concerns are met. -A constitutional amendment could go a long way toward allowing Congress greater leeway to reform campaign finance laws to increase political equality. -We could require shareholders to vote in support of any political contributions before they can be made.
This post is almost as long as Reddit allows, so nice job reading all of this if you have. Now, what's all the disagreement about? How is Stiglitz wrong?
submitted by Skeeh to neoliberal [link] [comments]

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[index] [324] [421] [777] [1936] [2202] [1197] [1957] [2018] [545] [2344]

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