Fidelity mid cap growth index fund

Passive Indexing Community for Long-Term Lazy Investors

2011.05.09 05:00 misnamed Passive Indexing Community for Long-Term Lazy Investors

Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify and let compounding grow wealth. Jack founded Vanguard and pioneered indexed mutual funds. His work has since inspired others to get the most out of their long-term stock and bond investments by indexing. Active managers want your money - our advice: keep it! How? Investing in broad-market (MF or ETF) indexes, diversified between equities and fixed income. Buy, hold, rebalance, and stay the course!

2023.06.09 10:25 Routine-Attention119 The Benefits of Annuities: How They Can Boost Your Retirement Income

The Benefits of Annuities: How They Can Boost Your Retirement Income
Securing a comfortable retirement requires careful planning and smart financial choices. An annuity, offered by the Arrigo Agency, can be a valuable tool in boosting your retirement income and providing financial peace of mind. In this blog post, we will explore the benefits of different types of annuities and how they can contribute to your long-term financial well-being.
  1. Fixed Deferred Annuity: Predictable Growth and Tax Advantages With the Arrigo Agency's fixed deferred annuity, you can replace market uncertainty with the predictability of guaranteed interest rates. Sleep easy at night knowing exactly what your money is earning. Additionally, this annuity provides tax-deferred growth, allowing your investment to grow without being taxed until you start receiving income.
  2. Single Premium Immediate Annuity: Predictable Income for Life The Arrigo Agency's single premium immediate annuity is designed to convert a lump sum of money into a predictable stream of income. By structuring your payments according to your preferences, you can create a reliable income source. This annuity can help you keep more of what you make, as it may make your tax liability more manageable.
  3. Index Deferred Annuity: Balancing Risk and Reward Protect your principal while still participating in market gains with the Arrigo Agency's index deferred annuity. This annuity is tied to an index, allowing your investment to benefit from potential market growth. It provides the upside potential without exposing your investment to losses during negative economic periods. Additionally, the growth is tax-deferred, ensuring your earnings can compound over time.
  4. Access to Your Funds and Optional Benefit Riders The Arrigo Agency understands the importance of flexibility in accessing your funds. Depending on the annuity type, you may have options for partial withdrawals or conversions to income payments. It's essential to note that these options are subject to taxes and surrender charges, so it's advisable to consult with our experienced professionals for guidance.
Additionally, the Arrigo Agency offers optional benefit riders to further enhance your annuity. For example, the Lifetime Income Rider guarantees that you will never outlive your income, even if your annuity value falls to zero. These riders provide an extra layer of financial security, ensuring a stable income stream throughout your retirement.
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2023.06.09 09:58 tareekpetareek Byju's got sued by its lenders in the US. Then it sued its lenders in the US. Here's a fun read about what happened

Original Source: (my newsletter Boring Money -- please visit the link if you'd like to subscribe and receive similar posts in your inbox)
Four years ago I read an article in The Ken titled The making of a loan crisis at Byju’s. The gist of the story was that Byju’s was an edtech doing phenomenally well selling its digital courses to parents of young students. But these courses were expensive and these parents were poor. So it was also selling them loans to buy these courses. Only, without telling them. Parents would expect a course (which could be cancelled) but would end up with a loan (which couldn’t be cancelled).
Three days ago, Byju’s went to court in New York. Here’s the headline from TechCrunch: Byju’s sues ‘predatory’ lenders on $1.2B term loan, won’t make further payments.
Byju’s is a company that, arguably, made a business out of giving out predatory loans. Now it’s sued its own lenders and accused them of being predatory. I’m not saying that this is poetic justice but.. okay, scratch that. This is poetic justice! If Shakespeare were a finance writer this is the kind of stuff he would come up with.

Everyone wants to lend to Byju’s

In 2021, interest rates were low, loans were cheap. Tech startups were doing great, edtech startups were crushing it. Byju’s, not one to be left behind, had raised a lot of money but money was cheap so it also wanted to borrow. It wanted a $500 million loan from lenders in the US, which it wanted to use to acquire companies there. Instead, it ended up borrowing more than double—$1.2 billion—because lenders practically wanted to throw money at this overachieving edtech startup from India. [1]
The way a term loan such as this works is:
  1. A company goes to an investment bank and asks for a loan
  2. The bank syndicates this loan to investors, who become the lenders. Everyone comes together in a room and negotiates the specifics of the loan (which can be quite complex, as we’ll see)
  3. The loan goes through and everyone’s happy. Presumably, the company likes its lenders, the lenders like the company
  4. The original investors might sell the loans they own to other investors. The company’s only talking to an administrative agent representing the lenders, so over time it might not even know who its lenders are
In November 2021, prominent investment managers such as Blackstone, Fidelity and GIC had gone overboard to lend money to Byju’s. By September 2022, Byju’s lenders were desperately selling [2] their loans at a 36% discount on the principal. (Today, Byju’s debt is at a 20% discount, which is also bad.)
It’s likely that Blackstone, Fidelity and other of the OG lenders aren’t Byju’s’ lenders any more. They’ve almost certainly sold off their loans at a loss. Better get paid something than get paid nothing.

Dealers of the dead

If a company’s debt is being sold at a 36% discount, it’s because investors think that the company is unlikely to repay its loans. If you buy such a loan, you potentially stand to gain a lot—because of the discount—but well, you might also just lose everything.
If you’re a regular investment management company, like Blackstone, you don’t want to invest in such a loan. Your investors gave you this money to get predictable returns. If they wanted risk, they’d ask you to buy stocks. You don’t want to get into a fight with your borrower. If you feel they will not pay you back, you take a loss, sell the loans, move on.
If you’re a distressed debt investor, your entire business is to buy such distressed loans from regular investment managers like Blackstone. You’re going to get nasty borrowers who are unlikely to want to repay their loans but that’s okay. Because you’re nasty too. You spend less time on financial models, more in courts and around lawyers. You like to fight to get your money back. Sometimes you might lose, but the times you win, you win big. The wins cover your losses and some more.
Blackstone and the others sold Byju’s’ loans in desperation, and they were almost certainly bought by distressed debt investors. We don’t know who they are exactly, but Byju’s has indicated that one of them is Redwood Capital, a New York-based distressed debt investor.
If you’re a distressed debt investor, this is how it works:
  1. You get a loan for super cheap
  2. If the company repays its loan, great! You make a lot of money
  3. But the company isn’t likely to repay, which is why you got the loan for cheap in the first place
  4. So it’s in your best interest to not let the company die a slow death. Instead, you want to kill the company quick. You take the company to court ASAP and take all the money you’re owed while it’s still there
If the new investors waited, say, for a year, and took Byju’s to court after it had actually defaulted on its repayments—there might not be any money left! Byju’s may have given all the money to Lionel Messi or maybe laundered it away someplace the lenders wouldn’t find it. If you’re a distressed debt investor, you want to get Byju’s to court and get the court to force it to do whatever it takes to pay you back.
Last month, Byju’s’ new lenders sued Byju’s in the Delaware Court of Chancery [3]. We’ll get to the official reasons for this lawsuit in a bit, but what’s important is that Byju’s was not being sued because it defaulted on a payment. It hadn’t. It was being sued because the distressed debt investors expect it to default sooner or later, and they would prefer dealing with it sooner rather than later.

Lenders go for the kill

Usually, the finer details of corporate loans such as Byju’s’ aren’t public. But thanks to the multiple lawsuits we know quite a bit here.
The loan was made to Byju’s’ US entity and it was secured with guarantees from multiple Byju’s companies. From Byju’s’ lawsuit this week against its creditors (which I will get to), here are the guarantors:
  1. Byju’s entities in India and Singapore
  2. Byju’s’ US and Singapore acquisitions; companies including Oros, Epic, Great Learning, and Neuron
  3. Whitehat India, Byju’s’ famous Indian acquisition
That’s a lot of companies guaranteeing a loan! Byju’s’ Indian entity is the parent of all the other guarantor companies, so having it as a guarantor should’ve been enough. I guess the rationale here was that it would be nice to have some non-Indian companies in the mix too, we do know how efficiently Indian courts work.
Apart from Byju’s the parent company itself, Whitehat was the only other Indian company guaranteeing this loan. The problem was that Whitehat itself, on paper, had negative net worth. It had probably taken loans of its own and did not have enough assets to cover them. In practice, this would be irrelevant, because Whitehat was owned by Byju’s and it would cover any of Whitehat’s liabilities. But, apparently, RBI regulations require Indian companies with negative net worth to take its approval before guaranteeing a loan. So even though Whitehat was a guarantor, the guarantee was meaningless until RBI granted its approval.
Yeah, well, RBI didn’t grant its approval. From the lawsuit:
Plaintiffs, Borrower, and Lenders had a call on or around October 6, 2022, to discuss the Whitehat Guarantee. In a good faith effort to negate any impact of the new regulations, Plaintiffs and the Borrower offered to move all assets out of Whitehat India into other subsidiaries of the Parent Guarantor that are Guarantors to the Credit Agreement, or are owned by Guarantors of the Credit Agreement.
Lenders rejected this proposal without justification.
In October 2022, after Byju’s’ debt was already sold to the distressed debt investors, the company spoke to its lenders and informed them that it was unable to get RBI’s approval for Whitehat to be a guarantor. Instead, it offered to move Whitehat’s assets into other companies and then use those companies to guarantee the loan. Which would really have been the same thing. But the lenders refused! Why?!
Continuing from the lawsuit:
Lenders subsequently asserted that an event of default under Section 8.1(e) of the Credit Agreement (an “Event of Default”) had occurred due to the failure to procure the Whitehat Guarantee.
Oh, that’s why. Byju’s’ lenders—distressed debt investors that wanted Byju’s dead ASAP—used the fact that Whitehat couldn’t be a guarantor of this loan to claim a default and use it as a reason to take Byju’s to court in the US. Honestly, I’m impressed. The Whitehat guarantee was redundant to begin with, but the lenders had found an out and their official reason #1 to take Byju’s to court.
Oh, there’s another thing. In June 2022, The Ken reported that Byju’s’ financials for 2021 had been held up by its auditors because of certain, umm, creative accounting. By this time, Byju’s should have ideally filed even its 2022 financials. It was very late! From the lawsuit:
The FY’21 Audit was delivered to the Lenders on August 30, 2022. It did not contain a “going concern” qualification or any similar qualifications about the Parent Guarantor’s ability to continue into the future.
However, the FY’22 Audit could not begin until the FY’21 Audit had been completed, and the Parent Guarantor’s business has continued to grow rapidly
Byju’s’ 2021 financials were held up because auditors weren’t giving the company their go ahead, so of course its 2022 financials were held up as well.
On or around August 29, 2022, Shearman & Sterling, LLP (“S&S”), counsel for GLAS, sent a letter to Byju’s Alpha and Think & Learn requesting certain financial disclosures from Plaintiffs and Borrower, and asserting that the failure to deliver this financial information was a breach of the Credit Agreement.
Rather than actually suffering any damage from the delayed FY’22 audit, Lenders opportunistically used this unintentional and non-material delay to exert pressure on Plaintiffs and the Borrower to extract onerous economic concessions.
I love it! Byju’s’ financials were delayed. Its agreement with the original lenders said that the company must share its audited financials with them. Byju’s wasn’t able to do that. The lenders found their official reason #2 to take Byju’s to court.

Byju’s sets up an offence

Before the lenders sued Byju’s last month, Byju’s tried its best to negotiate a deal. It gave the lenders an assurance of the company’s financial health, gave them concessions worth “tens of millions of dollars” and requested (pleaded) to take back their claims of Byju’s defaulting.
The lenders refused. They asked for either the full principal back or two-thirds of it, with an increment of 7% (!!) in the interest rate. Byju’s, of course, said no.
At this point, Byju’s knew that the lenders weren’t going to negotiate realistically. So it prepared its own offence. From the lawsuit:
The Credit Agreement prohibits transfers or assignments of the Lenders’ interests in the Term Loans to “Disqualified Lenders.”
The Credit Agreement includes in its definition of Disqualified Lender “[a]ny [] Person (including an Affiliate or Approved Fund of a Lender) whose primary activity is the trading or acquisition of distressed debt,” and “those banks, financial institutions and other Persons separately identified by name . . . on or before the syndication . . . (which may be updated . . . from time to time . . .)”
In its agreement with the original lenders, Byju’s had put in a clause restricting its loan from being transferred to distressed debt investors. This is a risky clause to agree with, because it’s only these folks that buy loans that turn sour, but the original lenders had gone with it.
On information and belief, the entire course of Lenders’, and Defendant’s, bad-faith conduct has been driven by these distressed-debt lenders, who were never meant to have been lenders in the first place, and who acted with the intent of causing harm to Borrower and Plaintiffs. Meanwhile, Borrowers and Plaintiffs were initially unaware that the lenders were in fact being controlled by distressed debt dealers, and were therefore unable to take action to prevent their bad-faith plan from being implemented.
In its lawsuit this week, the crux of Byju’s’ argument is based on the fact that its loan is owned by distressed debt investors who were not eligible to be owning its debt in the first place. Also interesting is that Byju’s doesn’t seem to know who these lenders are. In its post-lawsuit statement, Byju’s named Redwood as one of the lenders, but it’s not named anywhere in the lawsuit.

Now what?

If push comes to shove, does Byju’s have the cash to pay off its lenders?
Last month, Byju’s transferred $500 million out of its US entity. The lenders had filed their lawsuit and there was a chance the court would freeze Byju’s’ US entity’s assets, so this was a precautionary move. So Byju’s has this $500 million. But that seems about it. Byju’s has been in the news saying that it’s trying to raise $700 million to pay off its debt. Yeah, between the horrible edtech market and the colourful lawsuits Byju’s is in, good luck with getting investors to donate their money to Byju’s.
But of course, Byju’s is now suing its lenders too. It does have an agreement that says that its debt can’t be held by distressed debt investors. So it’s not a frivolous suit.
Can Byju’s win? Sure. It would still have to pay its debt eventually. And it’s not straightforward. There are probably tens or even hundreds of lenders. It’s apparent that the distressed debt investors are the guiding force behind the lenders’ lawsuit, but it’s definitely not necessary that they form the majority of the lenders. In which case, Byju’s’ whole lawsuit falls apart.
The lenders are saying Byju’s defaulted by not keeping its part of the agreement, even though it had technically paid its dues. [4] Byju’s is saying that the lenders shouldn’t be the lenders in the first place and must be disqualified. We’ll see who’s right.

[1] It was a 5-year loan with a floating interest rate of 6% over Libor. Think of it as 6% over this magical interest-rate called Libor that some fancy-pants banks set amongst themselves everyday. Back in November 2021, Libor was at 0.25% and this was a 6.86% interest loan for Byju’s (the floor for Libor was 0.75%). Today, Libor is at about 5.64% and it’s an 11.6% loan.
[2] Multiple reasons for the investors to sell. One, interest rates went up and cash became more dear. If they had money stuck with Byju’s, it was money not being lent out to someone else. Second, edtech all around the world was in trouble. Kids were back in school and people didn’t think much of them anymore. Third, Byju’s as a company was showing its red flags.
[3] What a cool name!
[4] Until now, that is. Byju’s filed its lawsuit this week the same day it was supposed to make a $40 million interest payment.

Original Source:
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2023.06.09 09:00 LEMONIUM9962 The Hustle Karma: Empowering Decentralized Labor and Collaboration

Welcome to the future of work! Today, we dive into the innovative world of Hustle Karma, a groundbreaking project-management collective that is transforming decentralized labor. Discover how this DAO (Decentralized Autonomous Organization) is revolutionizing resource allocation, recognizing diverse forms of labor, and fostering collaboration among peers.
Empowering Decentralized Labor
In the realm of economics mechanism design, resource allocation is crucial. Hustle Karma, part of the 0L Network, pioneers a paradigm shift by valuing and allocating resources to skilled labor. Unlike traditional networks that over-index on capital and influence, Hustle Karma empowers individuals to contribute their expertise and be fairly compensated. This radical approach ensures that labor becomes the driving force within the ecosystem, with capital and influence naturally following skilled workers.
Collaborative Project Management
Hustle Karma is not just about running a peer-to-peer protocol—it is a collaborative project-management collective that brings human peers together. By defining, operating, and participating in granting programs, DAO members play a vital role in shaping the ecosystem's strength. Whether it's software engineering, graphic design, data science, technical writing, translation, or even Discord moderation, Hustle Karma provides a platform for diverse roles to contribute and thrive. The structure is simple, allowing for growth and innovation, as individuals can submit tasks and existing programs or individuals can add bounties.
Decentralization in Action
True to its decentralized ethos, Hustle Karma operates with no centralized safety net or external funding. The power to build and sustain this ecosystem comes from the many individuals who actively participate within it. This self-sufficiency emphasizes the importance of recognizing and compensating the essential workers—the backbone of this labor-centric economy. Every task completed and bounty rewarded propels the network forward, solidifying its position as a living ecosystem that continually evolves and progresses.
Towards a Collaborative Future
Hustle Karma represents the first step towards a productive and decentralized labor force. With its initial operations on an Airtable database, the DAO's long-term vision includes transforming into an on-chain Smart Contract. The goal is to streamline and optimize the project-management process, enabling seamless collaboration, tracking of work, and timely release of bounties. As the network expands, so does the scope of work, offering opportunities for individuals with varied skill sets to contribute and be recognized. By celebrating the diverse forms of labor required, Hustle Karma paves the way for a truly collaborative network.
In the era of decentralized networks, Hustle Karma stands out as an innovative force, revolutionizing how work is performed, recognized, and compensated. By empowering decentralized labor and fostering collaboration, this project-management collective is shaping the future of work. Join the movement and be a part of this labor-centric ecosystem that knows no bounds. #HustleKarma #DecentralizedLabor #Collaboration
0L Network Twitters
0L Network Discord Server
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2023.06.09 08:12 david12795 How does my portfolio look now - thoughts?

This is what my contribution looks like



Domestic stock 34.8%
Foreign stock 12.5%
Bonds 3.3%
Short term 49.4%

I have also decided to do a targeted fund, as a newbie, i feel it is easier to have something done automatically while giving me the chance to play with my portfolios. I chose FDEWX (Fidelity Freedom® Index 2055 ) as my targeted funds since I would be retiring around that year. Thoughts?
submitted by david12795 to Bogleheads [link] [comments]

2023.06.09 07:44 aaluu_tikki Are these MFs good for long term?

Are these MFs good for long term? submitted by aaluu_tikki to IndianStreetBets [link] [comments]

2023.06.09 06:19 Complex_Elk_842 Question- Potential difficulty in starting a small/mid cap asset management firm?

I’m looking to start my own shop- have experience in portfolio management, mainly in mid-cap equities, and considering making the leap and creating a couple mutual funds/etfs.
For background, I have the CFA, have been fairly successful in research and business development for my current firm, and potentially have a few other charter holders who would come on board as co-pm’s on a strategy. We’d mainly look at Smid growth companies but potentially would venture into an all cap growth fund.
I guess my question is how difficult it is to get started- we’d obviously need distribution, and we’d all be willing to travel to sell our fund(s), but what is the “secret sauce” to achieving scale and growing aum for a new strategy? I’m very tempted to leave my stable salary to explore this unknown.
submitted by Complex_Elk_842 to FinancialCareers [link] [comments]

2023.06.09 04:54 RangeSea7591 Hedera co-founder shared his price predictions

Hedera co-founder and ex-president Tom Trowbridge provided some extremely revealing insights into the mindset of the Hedera execs in what I believe is the first and only time Hedera bigwigs have ever made a price prediction (a detailed one at that). Actually makes me wonder if he got in trouble for being so candid.
The figures Tom uses are specific and realistically achievable. What's particularly interesting to me is they attempted to find a faiintrinsic value for HBAR at a specific TPS level. Something similar to valuing stocks using 'earnings per share', he presents an 'earnings per coin' model - which makes sense as in the long run, as treasury runs dry TPS fees will fuel staking rewards. Every Hbar staked will earn a certain amount of additional Hbar per day/week/year.
Some other things of note:
  1. He used 0.0001 as the average fee which from current empirical evidence is somewhat low though at 9K TPS is likely more realistic.
  2. He used 20m USD as the annual costs of running the network which to me seems unrealistically low - what do you guys think of this? This figure is also where he derives his 6K break even TPS from (6000 TPS x 31500000 seconds in a year x 0.0001 avg fee = 19m)
  3. He stated the network becomes self funding at around 6K TPS. This was a couple years ago, considering high inflation of the past few years as well as point 2 above, I believe this figure today is much higher.
He derives a 'intrinsic' value of HBAR of 28c at 100K TPS, that's using a conservative 2% return and assuming the network remains static at that TPS (i.e. no further growth) - this gives us a good baseline to start. The intrinsic value is easy to calculate as we have all the figures and of course if you feel 2% is too conservative you can plug in a higher figure. (If I recall the 2% was used because it's the NASDAQ long term average).
When factoring growth it gets much more speculative but he guesstimates a high of up to 100c? In other words 100K TPS Hedera should be valued at minimum 28c (the intrinsic value) and maximum ~100c (factoring for growth).
Feel free to skip over this section as below are my personal thoughts on Tom's numbers:
I believe 20m seems unrealistically low as an annual expense figure, I realize the GCs may offset costs, but for a network that's apparently aiming to become a key world infrastructure this figure seems minuscule. (Just for some context, Wikipedia's 2020/2021 budget was ~150m though I understand they are quite different business models). Hence I believe the figure for the network to become self funding is higher - much higher especially when you add inflation into the equation, the further out the break-even date, the higher the break-even TPS figure will need to be.
If we look beyond the daily deluge of good news and exciting developments, and focus on cold hard figures and follow the money, it certainly gives me some context in which to ground my expectations. When Atma temporarily went down, TPS dropped to sub 50 and even then most of that was paid for using grant HBAR from the Foundation (e.g. Adsdax). So realistically speaking, we're maybe averaging 10 TPS that actually brings money into the network. We can confidently assume Atma (and upcoming TCB) are genuine in their intentions to utilize Hedera and will eventually pay for their use, so lets just say we're already achieving 1K real paid for TPS - this is still a long way off from Tom's 100K. Tom himself even states in the interview that "Hedera is nowhere near getting to 10 clients of this size [10 x 9K TPS clients]" - though this was a couple years ago, and safe to assume some progress must have been made since. This is why I believe whilst HBAR is a long term profitable buy, in it's current state it is NOT undervalued and will take many years to reach a STABLE price of 100c or even 50c.
I am sure others will disagree and may argue the 'but so and so coin achieved less yet was worth $$$' - and this is a fair and accurate observation, however outside of BTC and ETH all others only experienced short term pumps. Unless you are prepared to do some trading and more importantly manage to nail the timing - it all eventually falls back down to reality.
Algorand being a recent example, once considered a 'darling of rcc' with a far higher market cap and ranking than HBAR, in recent months has been slowly dropping down the leaderboard as investors come to the realization that good news and promise doesn't automajically equate into money and success (Staci's professionalism (or lack thereof) certainly didn't help so at least we have one up on them in that regard). The whole crypto industry is over valued - yes even after the crash(es) - For long term holders such as myself, short term pumps don't benefit us.
Thanks for taking the time to read my post, and I always value and look forward to reading peoples thoughts both agreeing and disagreeing.
Edit: Fixed some wrong numbers
submitted by RangeSea7591 to Hedera [link] [comments]

2023.06.09 04:44 QuestforFI Sell or Keep 2 Year Rental Home with Cap Gains Exemption Expiration Coming

We started renting out our house two years ago unexpectedly (I am not a real estate expert) when we decided to not sell because we weren't getting what we felt like were fair offers in a really competitive market. Our best offer was in the mid $650ks when a house with the same floorplan sold slightly over $710k about a month before. We had already started the closing process on another mid $750k house, which we now live in, and we didn't want to lose it for various reasons. I'm a little over 12 months from the 3 year capital gains exemption deadline and I am unsure of whether I should sell my rental within the next 12 months or keep it (probably for a very long time). We were the first residents and had lived in it just over 2 years. Here are some financial details that are relevant.
The numbers seem to indicate I should keep this, but I feel like I've only seen the positive side on being a landlord. I haven't experienced a real estate market in which I haven't found renters. I have had pretty low maintenance renters and I haven't had many expenses due to the age of the house.
If I did sell, I would use the proceeds to pay off some of the mortgage on my current loan (decrease debt) and invest the remainder.
Are there things that I'm not thinking about that I should think about?
Thanks for your feedback!
submitted by QuestforFI to personalfinance [link] [comments]

2023.06.09 04:29 Bubzoluck [30 min read] The Opioid Epidemic before the Opioid Epidemic - Exploring Morphine Derivatives and the First Opium War (Part 1)

[30 min read] The Opioid Epidemic before the Opioid Epidemic - Exploring Morphine Derivatives and the First Opium War (Part 1)
Hello and welcome back to SAR! I have written and rewritten this post a few times now and I think I have landed on a format I am happy with. When we talk about the impact of medicine on history its important to get the context right, and I think I have found a way to talk about our topic. So what is it? No chemical is more important to the world of medicine than Opium, okay maybe Penicillin, but today we will say its Opium. Principally an analgesic (anti-pain), the Opium Poppy allowed for humans to take away pain in great degrees and further development on the natural chemicals has opened up surgery and post-op recovery. While we tend to look at the recent Opioid Epidemic as the only issue regarding Opiates, history reveals to us a very similar precursor. Also please head over to u/jtjdp post about morphine derivatives here! She does an amazing job explaining the higher level concepts of medicinal chemistry that I just wouldn’t do justice. Alright, enough quibbling, let’s get to the good stuff.
Disclaimer: this post is not designed to be medical advice. It is merely a look at the chemistry of medications and their general effect on the body. Each person responds differently to therapy. Please talk to your doctor about starting, stopping, or changing medical treatment.

How Much do you Know About Pain?

To be alive is to feel pain, and emo sentiments aside, this is one of the biggest biological properties of the central nervous system. When you think about it, how does the body take external stimuli and allow you to recognize it? The answer is the sensory nervous system which is responsible for sensing many different types of stimuli: temperature, pressure, pain, and chemicals. These sensory neurons carry the information from the extremities and transmit it up the spinal cord into the brain for processing. From there the brain alerts you to the issue allowing you to correct whatever problem is causing the pain. Let’s take a look:
  • We call these receptors Nociceptors and activation of these neurons in the periphery leads to a signal being sent towards the spinal cord. Those peripheral nerves eventually complex with the Dorsal Horn of the spinal cord and interface with the central nervous system to transfer the pain signal. This signal is then sent Ascending to the Thalamus where the pain signal is recognized and initiates a response (such as pulling your hand away from the hot stove). But that’s not the full story, the brain also sends signals back down Descending to modify the incoming signal and dampen it. Its this modifying that makes pain fade over time when you aren’t focusing on it—otherwise the brain would be overwhelmed by the repetitive signal and continuously think injury is still happening. Now let’s divide this process into its two parts, first up the Ascending pathway.
  • As the Action Potential travels from the periphery towards the Spine it causes the influx of Calcium into the Presynaptic Neuron. This neuron is what carries the original signal to then transfer into the Spine for further traveling. Eventually we reach the Synapse where the finger-nerve and spine meet and we get the transfer of information via Neurotransmitters. In this case, two chemicals are released: Glutamate and Substance P (which literally stands for Substance Pain). Glutamate will activate two receptors (AMPA and NMDA) which are Excitatory and stimulate the continuation of the pain signal up to the brain. Substance P activates the NK1 receptor which enhances the frequency of the pain signal (the throbbing) and the intensity of the pain burst. So to simplify, Glutamate allows the signal to be passed up to the brain but depending on the strength of the original pain signal more or less Substance P is released which modulates the strength and attention-grabbing nature of it. Okay great, we sent the pain pathway up and it will get processed in multiple different parts of the brain. But the brain can’t have that signal stinging it so it must send information back down to dampen that pain signal. This is where that aforementioned Descending pathway comes in. Above you can see how the blue line reaches down out of the brain and back into the spine to turn ‘off’ the signal. This is the basis of Analgesia or pain relief.
  • Okay so now we have to divide the action of the Descending pathway which acts to dampen and modulate the original signal coming into the brain. Now, normally at rest this Descending neuron is inhibited so any fresh incoming signal is not inhibited from the get go but once that pain signal does come in, we get the good stuff! In response to pain the brain releases substances called Endorphins which activate the mu Opioid Receptor (MOR) located on the Descending pathway. Now MOR are inhibitory in nature so they are inhibiting the inhibitory resting state of neurons, or in other words, are allowing the Descending neuron to activate. And this is an important fact to recognize, Opiates do not inhibit pain, they inhibit the physiology of the nervous system that prevents modulation of the pain signal.
    • Once the inhibition is inhibited, the Descending neuron is free to release two neurotransmitters onto the nerve that was carrying the original pain signal. Both Norepinephrine and Serotonin are released to activate their respective receptors which inhibit the release of Substance P and Glutamate thus decreasing the incoming pain signal. Likewise MOR receptors are found directly on the incoming nerve and further prevent the release of Glutamate and Substance P as well as being found on the Ascending neuron preventing the activation of the NMDA/AMPA and NK1 receptors. The result: dampened incoming signal and decreased pain sense being sent to the brain.

The Stars Align in the Shape of a Poppy
To start our story about Opiates we need to turn to the great precursor—Opium. Opium itself is not a chemical but rather a really thick liquor (called latex) that contains a high concentration of Morphine (and some Codeine). There are 38 species of Poppy plants but only two produce Opium is great enough supply that it is worth farming them and humans have been cultivating these varieties for as long as we have known about the plants. When humans settled into Mesopotamia (near modern day Iraq), Poppies were one of the few plants grown in plots as large grain or vegetable fields (meaning that they were thought of as valuable as food). Throughout the Greek age of medicine (pre-500 BCE) through the Islamic medicinal revolution (500 BC-1500 AD), Opium was a major component of treatment, assisted suicide, and poison. In fact its through the rise of the Muslim Caliphates that we see the export of Opium to other parts of the world, especially through the Mediterranean Sea once the Crusaders return. Opium trading to the East via the silk roads was an almost continuous affair since time immemorial and Pakistan was a major growing area for the Eastern Poppy trade.
  • By the time after the Crusades (11-13th centuries), we start to see the West’s fixation on Opium. For many reasons Europe didn’t develop many psychoactive plants to the same degree as more humid/hot climates like Africa, the Middle East, and India. This is why the importation of Opium (and also Marijuana) was such a trade commodity and staple in the development of Western medicine. During the Renaissance and the revival of Greek philosophy we start to see the re-fascination with Opium and by the 1600s we see merchants importing Laudanum into Europe for recreational and medicinal use. The standard use of Tincture of Opium (which is Opium dissolved in ethanol, a DEADLY combination) was a particularly favorite preparation which was prescribed to the lowest day-worker all the way up to kings.
    • The importation and use of Opium exploded in the late 1700s once the British conquered a major Poppy growing region of India. This region (western India and most of Pakistan) was originally slated to grow cotton like the American colonies but the region wasn’t wet enough to sustain the plant—it could however grow copious fields of Poppy plants to create Opium. Throughout the 18th century the British Raj became the largest exporter of Opium to Europe and after the discovery that Mercury and Arsenic may not be safe, Opium took over their duties. By 1780 almost all major remedies incorporated the use of Opium in some capacity and with the huge supply, it was incredibly cheap.
  • Poppy wasn’t only important to the British for its medicinal properties but also to bolster the huge amount of loss they were incurring in global trade to one trade partner—China. After she made contact with China in the mid-1500s, Britain starting to import HUGE amounts of tea as the Brits became literally addicted to the substance. By 1800 a full 15% of the ENTIRE British Empire’s revenue was being spent on importing tea, that’s 30 million pounds per YEAR, leading to a massive trade deficit. This means that more money was being sent to China literally enriching a foreign country while the British public was getting their fix on the black stuff. Oh and just in case you think things haven’t changed, Britain still accounts for 42.6% of the world’s tea consumption—seriously Brits, ever heard of coffee? Anyways, all this money leaving the British economy to be spent on non-Empire sustaining commodities was a major national security risk for the British. It would be different if they were importing gunpowder like the Dutch were or Silver as the Spanish had but literally they were consuming the riches they were spending the money on.
    • Remember too that the British were not in the best position by the turn of the 19th century—they had just lost their colonies in the Americas, involvement in the Napoleonic Wars killed a generation of men, and the push to develop industries over public health led to a focus on fast growth rather than smart growth. One of the results of the Napoleonic Wars was the British occupation of the Island of Java which developed a very potent Opium which was traded with Chinese merchants regularly. Soon British merchants realized they could rebalance the trade deficit by selling Javanese Opium into China but the small island was unable to produce enough Poppies to meet the demand. So Britain turned to another one of its colonies, India.
  • India by the end of the 1700s was a bit of a challenge. The British hold on the subcontinent was firm but they couldn’t grow the cash crops they wanted. Indian cotton was nothing compared to Egyptian or Southern American (i.e. Virginia/North Carolina/Georgia) cotton and the Indian tobacco was known for being bitter. But by the 1770s the British government realized that Poppy was an easy crop to grow and the demand across the border with China was an easy market; British traders brought their cargo to small islands off the coast of China where it was sold for silver. Initially the Chinese didn’t mind the sale of Opium in their territory—when the British traders collected the silver from the sale they would almost immediately use it to buy Chinese goods, thus driving tax revenue for the Chinese government.
  • But if you buy Opium, people are going to use that Opium. By the 1810s all trade with foreigners was restricted to just one port, Canton, and slowly the city started to develop a habit for the drug. The use of mind altering substances was curtailed pretty quickly for hundreds of years in China—the Ming Dynasty banned tobacco in 1640 and the Qing banned Madak (a powdered Opium containing tobacco) was similarly banned in 1729. But by 1790 more and more Chinese citizens were becoming addicted to the substance; what started as a recreational drug slowly became a crippling addiction that took hold over Canton. For a rigid society, the crippling Opiate addiction was a moral corruption for the Qing government and forced them to curtail Opium importation in 1780 and then an outright ban in 1796.
  • Knowing just how devastating the Opium was having on the inhabitants of Canton, as well as how it spread further inland, British merchants kept peddling their drug. Older ships with larger hulls were converted into floating warehouses and parked just outside of navigable waters. Once set up, Opium smugglers would pull up, purchase the Opium and avoid any oversight by the Chinese government to prevent the sale of the drug. Following their mother country, American merchants started to sell Turkish Opium, an inferior variety, at a much cheaper rate leading to drug peddling competition with more and more tons of Opium being sent into China. This drove down the price of Opium considerably which ultimately increased the demand.
    • This demand eventually led to reversal of trade, meaning that more silver was leaving China to pay for Opium than the British were using to pay for Chinese goods. American and European traders could show up in Canton with holds full of Opium, sell it off for a profit, and then make a tidy silver profit to bring back to Europe. Likewise the importation of cheap machine-made cotton, furs, clocks, and steel into China driving down domestic profits.

Let’s Look at the Drugs a Bit
Stepping away from the history a bit, let’s introduce the Family. Okay so we understand how pain is sent to the brain and how it modulates but there is so much more to the mu Opioid Receptor and that’s not the only kind of Opioid receptor that we have. The two most clinically useful receptors are the Mu and Kappa Opioid Receptors (KOR) because they result in analgesia but there is a Delta Opioid Receptor (DOR) that is worth mentioning. The majority of the Opiates that we know and love are Mu agonists but there are some very interesting Kappa agonists that are worth mentioning as well.
  • Above is a chart that shows the binding affinities of select Opiates to the Mu receptor. The smaller the number is, the more tightly they bond. Now affinity is different than potency—potency is a measure of how much drug (in g) is required to produce the same effect. So even though morphine has a higher affinity than fentanyl, fentanyl has a MUCH more potent effect (which is why it can be so dangerous, you only need a little). Now many of the opiates cause the same effect so I want to spend more time on what makes them all so different:
  • First up we have the 5-Ring Morphinians which are derived from the natural product Morphine. These structures have 5 component parts: an aromatic benzene ring (A), a completely saturated bridge ring (B), a partially unsaturated ring with an alcohol attachment (C), a piperidine heterocycle above the rest of the structure (D) and finally a ether linkage between the top and bottom of the structure to keep it fairly rigid (E). Truthfully we are only going to focus on two locations—firstly the top alcohol (red circle) can be methylated to form Codeine, a natural Prodrug of Morphine. A Prodrug is one that is biologically inactive but goes through an initial metabolism once ingested that makes it active.
  • In fact it’s this initial metabolism of Codeine that makes it very interesting. In order for Codeine to exert any pain relief it needs to be converted to Morphine which actually exerts the desirable properties. This is done by the liver enzyme CYP2D6 which is a pretty minor pathway for Codeine—only about 10% of the Codeine is actually converted to Morphine to have some action. Because of this 2D6 dependent pathway we have to be careful about administering drugs that might inhibit the 2D6 pathway because that would mean we are preventing codeine from being active. Drugs like Fluoxetine (Prozac) and Paroxetine (Paxil) are strong 2D6 inhibitors and so if we administered Codeine to someone taking this drug they’d never get any benefit from the Codeine. In addition there are genetic/ethnic differences that pharmacists can account for such as 2D6 activity. If you are someone with very little 2D6 activity then you would also not convert Codeine to Morphine and thus get no action from the drug—this may be a reason why some people say Codeine doesn’t work for them. Another reason could be that they are Rapid Metabolizers and quickly convert the Codeine to Morphine and thus get a massive hit quickly after ingestion—in that cause you’d need a much smaller dose than another person for the same effect.
  • A different drug that is the opposite of Codeine is Hydromorphone (Dilaudid) which has a Ketone on ring C. This ketone and the lack of the double bond on this ring increases the lipophilicity of the drug and increases its ability to penetrate into the brain and thus have a greater effect. In fact Hydromorphone is 5-10x more potent than Morphine due to its greater ability to penetrate into the brain and increased receptor affinity for the mu receptor. Because the A ring OH is not capped with a methyl group, we don’t need to rely on 2D6 to metabolize Hydromorphone into an active drug form which again increases the activity of this drug compared to Codeine.
  • So combine these two structural changes—the capped OH on ring A as seen in Codeine and the increased affinity found with the ketone in Hydromorphone and we get Hydrocodone (Norco, Lorcet). Well in this case you’d get a drug that has very good affinity for the mu receptor (better than codeine) BUT is still reliant on the small 2D6 pathway for activation (worse than morphine). In this regard only about 10% of Hydrocodone is active at a time. We can see this effect in the relative doses for equivalent effect: to match the effect of 30mg of Morphine, we’d need only 7.5mg of Hydromorphone (more active) but need 200mg of Codeine (less active).
  • This brings us to our last drug of this class, Oxycodone which has a special OH group found on Ring B. What you’ll notice is that Oxycodone has that capped OH on ring A so it requires metabolism through 2D6 just like Codeine and Hydrocodone. When it is uncapped it becomes Oxymorphone which has 3 times as much effect as Morphine BUT that extra OH makes Oxycodone an exclusive Mu receptor agonist. Unlike the other drugs which may go to other receptors causing side effects (more on this later).
  • Next up I want to look at some Mu opioid receptor Antagonists or those than inhibit the function of the opioid receptor. Looking at the first two drugs, Naloxone and Naltrexone, we can see that they have the structure similar to Hydromorphone so they would have incredible brain penetration and affinity for opioid receptors BUT they contain that funky Nitrogen tail. Now normally there is a short methyl tail that is required for the function of Morphine but by adding a bulkier tail the drug is able to fit inside the receptor but prevent activation. What’s most important about these two drugs is that they have much more affinity for the receptor than other opiates. We can see this effect in the graph above: when no Naloxone is present, Fentanyl occupies the opiate receptor about 75% of the time. But as soon as Naloxone is administered that number drops swiftly (within minutes)--this is because Naloxone has a higher affinity for sitting in the receptor than Fentanyl. Think of it like the bully Naloxone coming up and pushing the poor defenseless Fentanyl off the swings so the bully can play on it (except in this instance Fentanyl is causing an overdose and we need to save someone’s life).
  • Buprenorphine is similar but it is a Partial Agonist instead of being a full antagonist. Buprenorphine is not a 5-ring Morphinian byt a 6-ring Oripavine that has a few different modifications. The biggest additions is that it has the bulky Nitrogen tail found in full Antagonists but it has this funky C ring tail which fights the antagonism. The result is a tug of war between the antagonism of the Nitrogen tail and the agonism of this new C-ring tail resulting in Partial agonism—so if you took Buprenorphine you’d notice a markedly decreased pain relieving ability but importantly there is a ceiling effect, its much harder to overdose on Buprenorphine than other full agonists. In addition in the second graph we can see that Buprenorphine has the greatest affinity for the receptor than our other agonists which prevents someone from taking a more potent opiate while taking Buprenorphine. In this case the bully is already sitting on the swing and scaring away the other kids thus preventing them from having a turn (and potentially causing an overdose). This does mean that if someone was taking a more potent drug (like Fentanyl) and then took Buprenorphine, it would cause withdrawal just like Naloxone or Naltrexone.
  • Speaking of withdrawal, let’s take a look at how that happens. Remember that the pain signal is caused by the activation of AMPA and NMDA receptors from the peripheral nerve. AMPA is a type of receptor called a G-Protein Coupled Receptor or GPCR which in this case is linked to an Excitatory G-protein which leads to the activation of the nerve. When AMPA is activated, the G-protein (Ga) activates an enzyme called Adenylate Cyclase (AC) which increases the production of pro-activity cAMP—or in simpler terms—when AMPA is activated, it leads to an increase in levels of pro-pain molecule cAMP. The Opioid receptor is also a GPCR but it is linked to an inhibitory G-protein which prevents the action of Adenylate Cyclase and thus leads to a decrease in cAMP levels. So Opiates prevent pro-pain cAMP signaling from continuing.
    • In the second graph we can see how tolerance forms. Initially (A), Adenylate Cyclase and cAMP levels are not affected by having opiates even though their ability to push along the pain signal is blocked. After a few hours, the leftover cAMP is degraded and cAMP levels start to drop significantly (B). In response to these levels going down, the activity of Adenylate Cyclase starts to increase and increase (C) which raises the level of cAMP. This rise in Adenylate Cyclase activity opposes the action of the opiate which necessitates the need for increased doses of Opiates and is why tolerance forms. As sustained inhibition of Adenylate Cyclase continues, the body upregulates Adenylate Cyclase activity to create more cAMP and to combat this we increase the dose.
    • Now what if after years of taking an Opiate we suddenly administer Naloxone, an Opiate antagonist. Well after weeks to months of taking an Opiate, the level of Adenylate Cyclase activity is WAY above baseline. When you administer the antagonist, suddenly Adenylate Cyclase is able to produce a TON of cAMP that normally is blocked which leads to a MASSIVE amount of downstream signaling. The result is intense nausea and vomiting, stomach cramps, fever, anxiety, insomnia, and cravings. Thankfully the withdrawal process ends after about 72 hours but is one of the worst experiences someone can go through which is why proper down-tapering of Opiates is extremely important.

A Change in Trade Policy
Oh, you’re still here. Neat! So by the 1820s the Qing dynasty was running into many problems regarding Opium. Firstly they needed the Opium taxes to fund their efforts to put down the White Lotus Rebellion and retain power. But after almost 30 years of trade the effects on Chinese communities could not be ignored along with local officials operating under the imperial trade department, the Hong, profiting from bribes to allow Opium. Regardless of initial efforts things were getting out of hand for the Qing government. In 1800, about 4000 chests of Opium or 560,000 pounds entered the country but by 1830 that number exploded to 20,000 chests or about 3 million pounds. But more than the amount of Opium actually entering the country was the incessant rudeness of the British government to open trade.
  • One of the “problems” for the British traders was how clamped down trade was with China. By 1800 all trade was limited to just Canton and the Hong was a strict master of trade. Foreigners were not allowed to appeal decisions made by the Hong and only Chinese traders could sell goods further inland than Canton. Traders chafed against this extreme oversight and sent hundreds of letters to the Hong requesting special dispensations which were summarily denied. Things changed significantly in 1834 when the Chinese trade was de-monopolized away from the East India Company allowing any private trader to get involved in the Eastern trade.
  • In August of 1834, the British sent Lord William John Napier to Macau as superintendent of Chinese trade with the explicit order to follow all Chinese regulations. Thinking he knows best, Napier decided that the restrictive Chinese trade system was too restrictive and sent a letter to the Viceroy of Canton. This was unheard of—NO foreign traders were allowed to speak directly with Chinese officials and the Viceroy refused to accept it. So why not double down by ordering two British ships to BOMBARD two Pearl River forts as a show of force? Luckily Napier died of Typhus almost directly after else it would have resulted in a full blown war.
  • In 1839 the Qing government appointed Lin Zexu as the Opium czar to completely eradicate the Opium trade from China. Lin banned the sale of Opium in China completely, set up rehabilitation centers for those affected by the drug, and put addicts to work to distract them while detoxing. Lin demanded that all Opium supplies must be surrendered to Qing authorities and any Chinese citizen disobeying the order would be punishable by death. He even went as far as closing the Pearl River Channel, trapping British traders in Canton and seizing their Opium warehouse stockpiles.
  • The replacement for Napier was Admiral Sir Charles Elliot who protested the seizure of the Opium stockpile but knew that they could do nothing. He ordered all Opium ships to flee and prepare for battle which caused Lin Zexu to beseige a group of traders inside a Canton warehouse. Elliot convinced the traders to cooperate with the Chinese government and surrender their stock, saying that the British government would compensate for the lost Opium (which he had no authority to do). During April and May 1839 the British (and American) traders to surrender 20,000 chests of Opium which was burned for three days outside Canton. Following the burning, trade resumed to normal except no more Opium was allowed. Like many other instances of the government removing legitimate sale of a drug, the black market increased markedly.
  • In July 1839 a new scandal rocked the British-Chinese trade system; two British sailors became drunk and beat a man death outside of his village. In response, Superintendent Elliot arrested the two men and paid compensation to the villager’s family for the loss of the man but Elliot refused to hand over the sailors to the Qing government. Lin Zexu saw this as a blatant disregard for Chinese law—afterall traders needed to understand that they can’t just come to China and violate Chinese law as they saw fit. Elliot offered to hold a trial on a British ship in front of Chinese officials to show that the men would not get off free. This incident would start the smoldering.
    • On September 4th, Elliot sent two ships to Kowloon to buy food and provisions from Chinese peasants. While approaching the harbor, three Chinese war junks gave permission to the two British ships to trade but that permission was rescinded by the commander of Kowloon fort. Elliot fumed against the slight and said that if the British were not allowed to trade by 3pm, he would fire on the fort. 3pm passed and the British opened fire on the fort causing the Chinese junks to return fire. The fighting continued for 7 hours until nightfall and Elliot had to prevent the British officers from pressing the attack, thus ending the Battle of Kowloon. Having driven off the Chinese ships, the British purchased the supplies they needed while the Kowloon commander claimed that both ships were sunk and 50 British sailors killed.
    • The reaction in Britain was about as much as you expect. Prime Minister Palmerston sent out letters to the Governor General of India to prepare marines to invade China and another letter to the Chinese Emperor telling him that Britain would send a military force. He sent a letter to Superintendent Elliot to set up a blockade on the Pearl River and capture Chusan Island. He also instructed Elliot to accomplish the following objectives:
      • Demand the respect as a British envoy from the Qing Government.
      • Secure the right for British law to be doled out on British subjects
      • Get recompense for destroyed British property, especially the illegal drugs that they destroyed
      • And most important, End the Canton System thus opening up China to free trade for the first time, ever.
Alright this is where we will leave things off for now, on the brink of war with China. Stay tuned!
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2023.06.09 03:25 je_veux_sentir CBA puts odds of a recession in 2023 at 50%

From their release today
We downgrade our economic forecasts following the change of RBA call
■ We forecast GDP growth to be 0.7%/yr at Q4 23 and 1.9%/yr at Q4 24.
■ Broadly flat real household consumption over the remainder of 2023 sits at the heart of our forecasts for the economy to grow significantly below trend and be in a per‑capita recession for the remainder of this year.
■ We put the odds of a recession in 2023 at 50% as the lagged impact of the RBA’s rate increases continues to drain the cash flow of households that carry debt.
■ We expect the annual rate of inflation to decline to 3.8% by late 2023 (our forecast is for underlying inflation to be 3.6%/yr in Q4 23).
■ We expect the unemployment rate to grind higher over 2023 to end the year at 4.4% and to be 4.7% by mid‑2024.
■ Our economic forecasts are conditional on one final 25bp increase in the cash rate in Q3 23 for a peak this cycle of 4.35%. They are also conditional on 125bp of policy easing in 2024.
■ Monetary policy is now deeply restrictive, which means by definition the economy will slow materially from here. A recap of our updated RBA call
Earlier this week we updated our RBA call in light of the 25bp rate hike at the June Board meeting, RBA Governor Lowe’s speech today and the Q1 23 national accounts.
We now expect one further 25bp increase in the cash rate for a peak of 4.35% and see it most likely at the August Board meeting. The risk is a 25bp rate hike earlier in July. There is also a risk of 25bp rate rises in both July and August, which would take the cash rate to 4.6%.
We also pushed out the timing of the start of rate cuts from Q4 23 to Q1 24 – we expect 125bp of easing in 2024 (50bp of rate cuts in Q1 24 and 25bp of easing in each of Q2 24, Q3 24 and Q4 24, which would take the cash rate to 3.10% at end 2024).
See here for our detailed note on our updated RBA call.
Our updated RBA call means that we have downgraded our assessment of the economic outlook.
Tighter monetary policy means weaker economic growth
Previously we expected GDP growth to slow to 0.9%/yr in Q4 23. That forecast was conditional on a peak in the cash rate of 3.85%.
As a result of our change in RBA call we have downgraded our forecast for GDP growth to 0.7%/yr in Q4 23.
With annual population growth expected to be ~2.0% in 2023, we expect Australia to be in a per‑capita recession over the year (recall that per‑capita GDP growth was negative in Q1 23 – see here).
Household consumption grew by just 0.2% in Q1 23. But the detail highlighted the current tough period for many households.
Growth in essential spending increased over the quarter (1.1%), while discretionary spending fell by 1.0%. It is no wonder consumer sentiment is sitting in the doldrums. We expect consumer sentiment, as measured by the Westpac/MI survey, to sink further in June when the data is published next week (13/6).
Our expectation is that real household consumption is essentially flat over the rest of 2023. Against a backdrop of 2.0%/yr population growth that implies a solid negative fall in consumption per capita. Indeed it would not surprise us to see a quarter or two of negative growth in total household consumption.
Monetary policy works with a lag. Only around half of the RBA’s already delivered 400bps of policy tightening have hit the household sector. As the lagged impact of rate rises continues to hit home borrowers mortgage repayments will rise to a record high as a share of household income (see facing chart). This will have a negative impact on household consumption.
Nominal income growth will continue to be supported by wages growth, which we expect will lift to 3.9%/yr in Q3 23. But this will not be enough to offset the ongoing drag on the consumer from rising mortgage repayments.
An expectation that rental inflation will continue to lift will also hit the large number of households that rent. While rents are effectively a transfer payment within the household sector, many investors will be faced with higher mortgage repayments. So a good chunk of the money transferred from tenants to landlords will exit the household sector (note that the Government also taxes rent as it is considered income to the landlord).
What about the savings?
A large stock of savings were accrued during the pandemic. But the savings were not distributed evenly. As the facing chart shows, the bulk of the savings amassed during the pandemic sit within the older cohort of society.
We do not expect this demographic to draw down on their savings swiftly. Rather they are likely to spend these savings in a protracted way over many years. The upshot is that we do not anticipate a speedy injection of the accrued savings back into the economy.
Households as a collective tend to draw down on savings when they are feeling positive about the economic outlook. That is not the case right now. The anxiety being felt in the household sector as a whole is showing up in very weak readings of consumer sentiment – historically consistent with a major negative economic shock or recession.
The savings rate fell to a below‑average 3.7% in Q1 23. It can fall further. Based on our forecast profile for household consumption and household disposable income, we expect the savings rate will hit a floor of ~2.5% in H2 23.
Weaker growth means higher unemployment
Our downgraded assessment of economic growth means we mechanically upwardly revise our forecast for the unemployment rate. We see the unemployment rate increasing to 4.4% by end‑2023.
It is likely that measured productivity growth will stay weak over coming quarters as there is a lag between slowing economic activity and rising unemployment.
Initially firms will keep workers on the books as demand slows. This weighs on measured output per hour worked. Output (i.e. production) slows faster than the demand for inputs (i.e. labour). So productivity remains weak and unit labour costs stay elevated for a period of time. But this dynamic does not last indefinitely.
Once demand has slowed for a sufficient period of time some firms will respond by decreasing the hours they require their staff to work. A reduction in headcount also occurs. This is expected to happen in the discretionary parts of the economy where spending is forecast to contract. These outcomes are being engineered by restrictive monetary policy in order to drop the rate of inflation.
1Business investment still looks good
The most recent capex survey was a decent one. Investment intentions were firmer than we anticipated. But not all strong data is bad data just because the objective is to drop inflation. Indeed firmer capex plans should be welcomed.
Business investment lifts capital deepening (where the capital per worker is increasing in the economy). This improves productivity (output per hour worked). There has been a lot of focus lately on weak productivity in the economy. So firming capex intentions are good. The RBA wants to see productivity rise. And higher investment is an ingredient required to lift productivity. In the long run business investment is disinflationary as the productive side of the economy is expanding. It also makes sense to have a decent investment outlook given annual population growth is 2%.
Our home price call is unchanged
According to CoreLogic, Australian property prices rose for a third consecutive month in May. The 1.4% increase in the 8 capital city benchmark index over the month followed a 0.7% increase in April and a 0.8% lift in March (see here).
The turnaround in property prices over the last three months has been nothing short of remarkable given the RBA has continued to lift the cash rate over that period.
In April we upgraded our home price forecasts. Our point forecast is for home prices to lift by 3% in 2023 and a further 5% rise in 2024. We have not changed this forecast despite the change in our RBA call.
The RBA recently cited home prices as feeding into their decision to lift the cash rate “services price inflation is proving persistent here and overseas, and the recent data on inflation, wages and housing prices were higher than had been factored into the forecasts. Given this shift in risks and the already fairly drawn‑out return of inflation to target, the Board judged that a further increase in interest rates was warranted.” (our emphasis in bold).
But the RBA is facing an uphill battle to change the outlook for home prices by lifting the cash rate as monetary policy tightening is behind the big drop in building approvals.
Further rate hikes reduce borrower capacity, which should by itself put downward pressure on home prices. But rate hikes also decrease the rate at which new homes will be built. This further exacerbates the mismatch between the underlying demand for housing and supply. The circularity here means we do not think our change of RBA call for a higher terminal rate alters the outlook for home prices.
There is light at the end of the tunnel
Readers may feel like there is a pessimistic tone to this note. That is understandable. Economists don’t take pleasure in downgrading the outlook for economic growth and upwardly revising their forecasts for unemployment. But there is light at the end of the tunnel.
Once the proverbial ‘inflation dragon’ is slayed monetary policy will be able to move away from a deeply restrictive setting to a more neutral one. Rate relief will arrive to the household sector in the future and we expect that to happen in early 2024.
As interest rates are cut it will free up cash for those borrowers that have a mortgage. And the demand for credit will begin to lift. As this happens economic momentum will start to pick up and the upward trend in the unemployment rate will wane. Consumer sentiment and spending will lift.
Our expectation is that the unemployment rate will peak at 4.7% in mid‑2024 before grinding back down to 4.5% in late‑2024. This is below the pre‑pandemic level of ~5.0%.
Ultimately we will not be able to hold onto all of the gains we made in employment over the pandemic. And the RBA readily acknowledges this as they see some lift in the unemployment rate as a necessary condition to return inflation to target.
But if we end up with inflation back to target, unemployment at ~4.5% and wages growth at ~3.5% by the end of 2024 then Australia will have done a lot better over the period ahead than many other economies.
There are risks of course in both directions. And the economic data coupled with the decisions of the RBA Board over coming months will give us a better sense of the balance of these risks.
Our full suite of economic forecasts will be in the Weekly Perspective today.
submitted by je_veux_sentir to AusFinance [link] [comments]


Wyoming Governor Signs Bill in Support of Rare Earth Industry
Rare Element Resources Ltd. (the “Company” or “RER”) (OTCQB: REEMF) is pleased to announce the completion of the funding agreement for the previously announced $4.4 million grant from the Wyoming Energy Authority (the “WEA”). The WEA grant is a cost reimbursement award for future expenditures related to construction of the Company’s rare earth processing and separation demonstration plant to be located in Upton, Wyoming. The plant is also supported by the U.S. Department of Energy (the “DOE”) through a previously announced $21.9 million financial award. The funding provided through the DOE and WEA programs is expected to cover more than half of the estimated project costs.
In further support of the rare earth industry in Wyoming, earlier this year, Governor Mark Gordon signed a bill into law to advance the process for Wyoming to assume certain licensing and regulatory aspects of the rare earth industry. The unanimously approved bill seeks to amend the existing agreement state status between the state and the U.S. Nuclear Regulatory Commission (the “NRC”) to allow Wyoming the permitting and regulatory authority related to rare earth element source materials. Once approved by the NRC, Wyoming will have primacy for the NRC’s licensing of Wyoming-based rare earth processing facilities.
“We are very pleased with the many affirmative steps that the state of Wyoming is taking in support of the rare earth industry and the Company. The Bear Lodge Project has one of the highest-grade rare earth deposits in North America, and its location positions Wyoming to be a key player in developing a domestic rare earth supply chain,” Brent Berg, President and CEO of RER, stated. “Construction of the demonstration plant is the next step in advancing the Company’s innovative recovery and separation technology, developed with our world-class technology partner, General Atomics. The plant will provide data critical for the design of a commercial facility. The state’s legislative initiative will have licensing efficiency benefits for commercial-scale rare earth operations. We applaud Wyoming’s forward thinking and goal of economic diversification and appreciate its ongoing support of the rare earth industry and the Company.”
The rare earth processing and separation demonstration plant project, led by General Atomics, has completed the final design and is progressing licensing and permitting, with the final significant license expected this summer. Procurement of equipment has been underway for the last several months. The total 40-month timeline, which commenced in October 2021, includes commencement of construction in the second half of 2023 with operations expected to start in mid-2024.
“Rare earth elements are of the utmost importance to our country’s energy security and something we must continue to advance in order to achieve equal footing in this global market,” said Rob Creager, Executive Director of the Wyoming Energy Authority. “Wyoming has an opportunity to be a leader in providing these critical resources to our country. We are committed to the continued support of projects like these that will propel not only our own communities but our entire nation forward.”
The demonstration plant will utilize the Company’s proprietary recovery and separation technology and is expected to produce high-purity neodymium/praseodymium (Nd/Pr) oxide that is key in producing high-strength permanent magnets. These magnets are the driving technology in numerous defense, medical and green technologies, including the manufacture of electric vehicles and wind turbines. Data generated from the demonstration plant will be used in the design and completion of an economic evaluation for a full-size commercial plant and Bear Lodge Project, as well as validate the cost and environmental benefits of the process over traditional recovery methods.
Rare Element Resources Ltd. is a publicly traded, strategic materials company focused on delivering rare earth products for technology, energy, and defense applications by advancing the Bear Lodge Critical Rare Earth Project in northeast Wyoming. Bear Lodge is a significant mineralized district containing many of the less common, more valuable, critical rare earths that are essential for high-strength permanent magnets, electronics, fiber optics, laser systems for medical technology and defense, as well as technologies like electric vehicles, solar panels, and wind turbines.
General Atomics is a privately held company engaged in the development and production of advanced technology products and systems for the energy and defense sectors. Rare Element Resources’ majority shareholder, Synchron, is an affiliate of General Atomics.
Wyoming Energy Authority advances Wyoming’s energy strategy by driving data, technology, and infrastructure investments. Focusing on an “all-of-the-above” energy mix, the WEA’s strategy includes products from legacy industries, along with the newer players advancing renewable energy and opportunities in hydrogen, advanced nuclear, geothermal, and rare earth elements. The WEA was created in 2020 by the Wyoming State Legislature by merging the Wyoming Infrastructure Authority and the Wyoming Pipeline Authority.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of securities legislation in the United States and forward-looking information within the meaning of securities legislation in Canada (collectively, “forward-looking statements”). Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are usually identified by our use of certain terminology, including “will,” “believes,” “may,” “expects,” “should,” “seeks,” “anticipates,” “plans,” “has potential to,” or “intends” (including negative and grammatical variations thereof), or by discussions of strategy or intentions. Such forward-looking statements include statements regarding the rare earth processing and separation demonstration plant, the estimated costs of the plant, the plans and timing for the design, licensing, construction, and operation of the plant, the plant’s expected utilization of the Company’s proprietary technology, the licensing of Wyoming-based rare earth processing facilities, and the Company’s ability to realize the grant funding. Factors that could cause actual results to differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this news release include, but are not limited to, the ability to obtain demonstration plant licensing and permits, inflation and supply chain issues, ability to meet the requirements of the WEA grant funding and timing of the funding, and other matters discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and our other periodic and current reports filed with the U.S. Securities and Exchange Commission (the “SEC”) and available on and with the Canadian securities commissions available on

View source version on
Rare Element Resources :
Please contact Brent Berg at +1 720-278-2460 or [[email protected]](mailto:[email protected]) , for additional information.
Wyoming Energy Authority :
Please contact Honora Kerr at +1 970-270-1014 or [[email protected]](mailto:[email protected]) , for additional information.
Universal Site Links
submitted by Then_Marionberry_259 to Treaty_Creek [link] [comments]

2023.06.09 00:42 JustinSueFeena When would Fidelity Freedom® Index 2040 hold a majority in bonds?

Hello, all. I've invested in Fidelity Freedom® Index 2040 Fund Investor Class
When would FBIFX hold a majority of its portfolio in bonds? Where would I find that information in its summary page or prospectus?
Thank you.
submitted by JustinSueFeena to fidelityinvestments [link] [comments]

2023.06.09 00:26 Yavero The LLM battle for funding intensifies as Cohere lands $270 Million in Funding from Tech Heavyweights.

The LLM battle for funding intensifies as Cohere lands $270 Million in Funding from Tech Heavyweights.
The round was led by Inovia Capital, with participation from NVIDIA, Oracle, Salesforce Ventures, Index Ventures, and others.
This brings Cohere’s total funding to $435 million, according to Crunchbase.
submitted by Yavero to AILinksandTools [link] [comments]

2023.06.08 23:48 massettawm "Helium Explained: Past, Present, and Future" & Total Helium (TOH.v TTLHF), the only publicly traded producer of helium

"Helium Explained: Past, Present, and Future An Essential Element's Untold Journey" from The Deep Dive introduces the helium opportunity, detailing its history, industrial uses, the helium shortage 4.0 and more:
With no substitutes and a limited supply, the global helium market is forecast to grow ~50% over the next 5 years as helium plays an essential role in a range of industries bringing a critical component of various applications including MRI machines, semiconductor manufacturing, and fibre optics.
However, the $4.4 billion helium market is facing a supply shortage due to helium's significant demand, resulting in a supply crisis that is squeezing prices higher.

As the only publicly traded producer of helium, Total Helium (TOH.v TTLHF) is positioned to be a top supplier of helium in North America & yielding significant returns with its strategy of acquiring already producing assets to eliminate a large amount of risk.
TOH is on track to have 20 wells by the second quarter of 2023, with plans to scale up to over 150 wells at its 27,000-acre Pinta South Project located in Arizona's Holbrook Basin, a major and helium-rich field site, where gas concentrations are ~5-8% which is significantly higher than the average helium concentration of up to 3%.
For more information on Pinta South, check out TOH CEO Robert Price on Proactive providing an operational update on the project:
Notably, TOH has partnered with the largest industrial gas company in the world, Linde ($LIN, $170+B market cap), who committed to fund the pipeline expansion for the project and pay $500/Mcf for the first 10 wells
This partnership solidified robust economics for the project as TOH's two wells have already produced 50,000mcf of helium at 8% which amounts to over $9M of helium in three years just from the partnership.
With this, TOH provides a compelling investment opportunity to capitalize on a high-growth industry and is strongly positioned to support the rapid growth of America’s high-tech industries that depend on helium.
For more information, check out this deep dive from Energy and Gold:
Posted on behalf of Total Helium Ltd
submitted by massettawm to EducatedInvesting [link] [comments]

2023.06.08 23:44 massettawm "An Essential Element's Untold Journey" & the only publicly traded producer of helium, Total Helium (TOH.v TTLHF)

"Helium Explained: Past, Present, and Future An Essential Element's Untold Journey" from The Deep Dive introduces the helium opportunity, detailing its history, industrial uses, the helium shortage 4.0 and more:
With no substitutes and a limited supply, the global helium market is forecast to grow ~50% over the next 5 years as helium plays an essential role in a range of industries bringing a critical component of various applications including MRI machines, semiconductor manufacturing, and fibre optics.
However, the $4.4 billion helium market is facing a supply shortage due to helium's significant demand, resulting in a supply crisis that is squeezing prices higher.

As the only publicly traded producer of helium, Total Helium (TOH.v TTLHF) is positioned to be a top supplier of helium in North America & yielding significant returns with its strategy of acquiring already producing assets to eliminate a large amount of risk.
TOH is on track to have 20 wells by the second quarter of 2023, with plans to scale up to over 150 wells at its 27,000-acre Pinta South Project located in Arizona's Holbrook Basin, a major and helium-rich field site, where gas concentrations are ~5-8% which is significantly higher than the average helium concentration of up to 3%.
For more information on Pinta South, check out TOH CEO Robert Price on Proactive providing an operational update on the project:
Notably, TOH has partnered with the largest industrial gas company in the world, Linde ($LIN, $170+B market cap), who committed to fund the pipeline expansion for the project and pay $500/Mcf for the first 10 wells
This partnership solidified robust economics for the project as TOH's two wells have already produced 50,000mcf of helium at 8% which amounts to over $9M of helium in three years just from the partnership.
With this, TOH provides a compelling investment opportunity to capitalize on a high-growth industry and is strongly positioned to support the rapid growth of America’s high-tech industries that depend on helium.
For more information, check out this deep dive from Energy and Gold:
Posted on behalf of Total Helium Ltd
submitted by massettawm to wallstreetbets2 [link] [comments]

2023.06.08 23:38 2FatC Short Squeeze: $EXPI

Full Disclosure: I own $EXPI.
eXp is a digital realty brokerage company that traded down as interest rates went up and home purchasing stalled this year. Its PE ratio remains in the nosebleed seats.
16.88% of eXp's small float of 75.8M shares was sold short.
Yesterday after market close, news broke that eXp World Holdings would join the S&P SmallCap 600 effective prior to opening of trading June 14. An "uh oh" moment for the shorts.
In the stampede for the exits, the stock jumped from its Wednesday closing price of $16.69 to close today at $20.14. Volume traded was over 5M shares. Average volume is about 700k shares.
I point the squeeze out, not because I expect more large upward moves in the stock price, though it could happen, but instead to highlight an example where a reasonably logical short position can turn into a rout.
Consider this: eXp is a tiny, niche tech play on the digitization of real estate brokerages where the brick/mortafranchise model is undergoing change. Trading volume is low, though volume has grown in the 3 years I've owned the stock. Note: Low volume and less than 100M shares in the float.
By comparison, Zillow's:
Given what we know about home prices, wages, and interest rates, shorting eXp (and Zillow and Redfin) makes sense, though the low trading volume and size of the float should be considered. eXp does pay a dividend but it's tiny at eighteen cents/yr.
So yes, a logical short candidate. Until positive news like the company is now included in the S&P SmallCap 600. And the short sellers need to find an exit door.
Some facts about Standard & Poor's SmallCap 600:
Other ETF's that track the S&P SC 600:
All this to say, mind the risks when going long small caps and also going short. Headline news risk can hurt on small companies with thinly traded stock. Be aware. Beware.
I may or may not take advantage of the squeeze between now and June 14. I do not see the macro real estate market in the US "snapping" back like a rubber band so I do expect macro conditions to weigh on eXp over the next 6 mos. or so. But that's just this person's opinion so take it with a grain of salt.
submitted by 2FatC to DeercreekvolsBlog [link] [comments]

2023.06.08 23:21 FIREDupFIREdown Is this the power of compounding interest?

I was reviewing my excel sheets and I noticed that I haven't made a lot of money in the last 9 years (mental health issues).
In the last 9 years, I averaged $11,000 before taxes. My lowest was $500 in 2018 (stopped working at the start of the year). I spent 6 out of the 9 years living at home. I started at 21 with $40,000 from a trust my grandfather started (it was in the SP 500).
I always contributed to my Roth IRA. 8 out of the 9 years I maxed the contribution.
I think what happened is that I was selling when the market exploded in value. At the same time, my income increased ($45,000 in 2021, $55,000 in 2022). In 2021, I sold half of my index funds and DCA'd into 2022 and 2023.
Right now, due to the explosive gains and modest income increases, I have $310,000.
And I'm somewhat confused. How did this occur with my low income? Is this the power of compounding growth?
submitted by FIREDupFIREdown to Fire [link] [comments]

2023.06.08 23:07 dhhsha First investment.

I’m going to start out my first investment on vanguard and would like to keep it simple. Would like the opinions of others.
While I have been research I have found that the ftse global all cap index fund is probably what I’m looking for and many people think it is a decent fund.
However I would like to invest in the ftse emerging markets fund and would like to know if it is a decent idea to have both of those funds as my only investments.
I am aware that overlapping investment funds is not ideal. Would someone be able to give there opinion on if there is any point of investing in emerging markets if I already have the ftse global all cap.
Sorry if this is a blatantly obvious question. Thannks
submitted by dhhsha to Bogleheads [link] [comments]

2023.06.08 23:04 FIREDupFIREdown Is this the power of compounding interest and getting lucky?

I was reviewing my excel sheets and I noticed that I haven't made a lot of money in the last 9 years (mental health issues).
In the last 9 years, I averaged $11,000 before taxes. My lowest was $500 in 2018 (stopped working at the start of the year). I spent 6 out of the 9 years living at home. I started at 21 with $40,000 from a trust my grandfather started (it was in the SP 500).
I always contributed to my Roth IRA. 8 out of the 9 years I maxed the contribution.
I think what happened is that I was selling when the market exploded in value. At the same time, my income increased ($45,000 in 2021, $55,000 in 2022). In 2021, I sold half of my index funds and DCA'd into 2022 and 2023.
Right now, due to the explosive gains and modest income increases, I have $310,000.
And I'm somewhat confused. How did this occur with my low income? Is this the power of compounding growth?
submitted by FIREDupFIREdown to leanfire [link] [comments]

2023.06.08 22:43 BigSpongEnergy Social media, as a whole, is not a very sustainable concept.

So, over the past few years, there have been a lot of complaints about how websites like Tumblr, Twitter, Reddit, YouTube, Twitch (although they're a more recent participant in the "Put foot in mouth" competition), Facebook, etc have decided to run. Whether it's how they handle NSFW content, how they handle content moderation, monetization, whatever, there's been a lot of complaints. Moreso on websites that focus on video sharing primarily. The situation, as I see it, works like this:
So now we're in a position where policies like the GDPR restrict how profitable the users are, meaning they no longer print money just by using your website, and a lot of people (dare I say most, even) are using software to block ads. And to make matters worse, those investors have finally gotten tired of running on empty promises of massive payoffs; they want their returns now. And they want them to keep getting bigger. You're left with 2 options: Spend even more money trying to create the most foolproof adblock detector out there, hoping and praying nobody can make an adblock detector blocker, or...start charging a subscription fee for your website.
Some companies have gone with a hybrid approach. They offer "premium" services, to get people to pay every month, but still let people access the website for free if they want to, and they've gotten more aggressive with ads. But it's still not good enough for the investors. And it never will be. There'll always be a demand for exponential growth, because that's what was promised, and unless websites start charging for access in general, that kind of money will never come to be.
I'm not saying policies like the GDPR are bad. I'm not discounting people's opinion about ads being annoying. I agree with that mindset, and I wish the US had a version of the GDPR. But if we continue down this path, social media, as a whole, is going to collapse. Some people seem to be under the impression that it can continue operating, at no cost to the users, with minimal ads, and minimal to no data harvesting, and that's just not true. You can't have your cake and eat it, you gotta pick one or the other.
submitted by BigSpongEnergy to TrueUnpopularOpinion [link] [comments]

2023.06.08 20:31 100_PERCENT_BRKB The Nasdaq-100 has returned to where it was at the first 0.25% rate hike in 2022. The market was then expecting the Fed funds rate to rise to about 1% (not the 5%+ we got). In effect, rising interest rates, quantitative tightening, slowing growth, etc., had little or no impact on the index

The Nasdaq-100 has returned to where it was at the first 0.25% rate hike in 2022. The market was then expecting the Fed funds rate to rise to about 1% (not the 5%+ we got). In effect, rising interest rates, quantitative tightening, slowing growth, etc., had little or no impact on the index submitted by 100_PERCENT_BRKB to brkb [link] [comments]

2023.06.08 20:05 ZestycloseDiscount43 Review mutual fund portfolio

Review mutual fund portfolio
Hi guys, Please review my mutual fund portfolio. I have two less funds which I started 3 years back. Shall I rotate the money(as 3 years getting over) or keep doing sip in elss?
submitted by ZestycloseDiscount43 to IndianStreetBets [link] [comments]