NO STRINGS ATTACHED NEWS THAT MAINSTREAM JUST WON'T COVER.
Sen. Kamala Harris (D-CA) ended her bid for the White House on Tuesday amid dropping poll numbers and reports of turmoil in her campaign.
http://feedproxy.google.com/~r/breitbart/~3/faH_Apm1oIU/
Deutsche Bank Breaks Down How Tomorrow's Election Will Impact UK Markets
A team of Deutsche Bank macro analysts led by Oliver Harvey has produced its latest note economic note about Brexit expounding on the bank's near-to-medium-term view on the outlook for British markets.
The bulk of the note is an examination of how the Conservative policy manifesto stacks up against Labour, while also examining how each party's platform might impact longstanding economic trends in Britannia, including weak productivity (since the crisis, the UK has exhibited the most tepid productivity performance of any major economy, according to the OECD's data)...
...and a standard of living that hasn't yet recovered to surpass its pre-crisis peak.
And let's not forget about taxes. Labour hopes to hike the capital gains tax on investment income, while also raising the inheritance tax and several other levies.
Looking further down the road, DB's team said they "find it difficult to be bullish sterling until more detail is provided on Brexit outcome." Strategists are increasingly expressing trepidation about Boris Johnson's insistence that the Conservatives won't allow an extension of the next meaningful Brexit deadline (that is, the Dec. 31, 2020 deadline to finish trade-deal talks)
In the near term, the biggest risks are related to the outcome of Thursday's vote. Conservatives are ahead in the polls, but it's likely they won't win an outright majority. So, the first question is what kind of coalition will they form? Two possible iterations are: an alliance with the DUP and/or Brexit Party, or a minority government with the support of the Liberal Democrats. In the event of the former we would be very negative on the pound and bullish UK rates.
Neither route is free of problems for the Tories. The DUP (Democratic Unionist Party) has been a persistent thorn in No. 10's side since last summer, and both they and the Brexit Party have criticized Johnson's deal. If they win enough seats, they could try to force Johnson to scrap the deal and push for another round of negotiations, which would probably infuriate both the EU27 and the British public. If the Conservatives end up partnering with the Lib Dems, they might need to commit to a second Brexit referendum in order to pass Johnson's deal. In the short term, at least, this would present a more optimistic outlook for the pound and UK markets more broadly.
In terms of growth, a Conservative majority followed by implementation of the government's Brexit deal in January could trigger a bounce in consumer sentiment, in turn lifting growth in the short term. It probably goes without saying, but however the Tories choose to handle the situation, the composition of the governing coalition will be of critical importance to markets.
For example, DB's team believes business investment would rise if the government (presuming a Tory plurality) agrees to extend the Dec. 2020 deadline, thereby increasing the chances of a lasting trade deal that's agreeable to both sides.
Polls have consistently shown Conservatives with a sizable lead. But as DB shows, there's not much of a relationship between the percentage of the vote and number of seats won.
Still, Labour's program of massive public spending hikes is attractive to the average Joe who is tired of austerity and eager for better broadband access.
Labour's party manifesto is ambitious, and includes nationalizing the broadband arm of BT Group (formerly British Telecom) to bring free broadband to all of Britain before 2030. The manifesto also calls for much higher regional investment to help smooth out the stark economic inequalities between various regions.
Johnson's Conservatives are way ahead in the polls. But as investors learned during the Brexit referendum, polls can't always be trusted.
And anybody who agrees with DB's long-term skepticism about the pound can probably pick up some OTM puts for a reasonable price.
Tyler Durden Wed, 12/11/2019 - 21:25 Tags PoliticsIs It Garbage Or Is It Art?
Authored by Ryan McMaken via The Mises Institute,
Artwork Made from Old Bananas Shows Value Is SubjectiveLast week, Miami art gallery Art Basel sold, for $120,000, a piece of art composed of a banana duct taped to a wall. At least one other identical piece sold for a similar amount. A third piece was priced at $150,000. The banana used in the display is a real banana, and on Saturday, a performance artist named David Datuna ate some of it.
Datuna's stunt merely illustrated what everyone should have already known: the value of the artwork had almost nothing to do with the banana itself. Its value came not from the amount of labor that went into it or from the cost of the physical materials involved. A spokeswoman for the museum summed up the real source of the item's value, noting, “He [Datuna] did not destroy the artwork. The banana is the idea.”
In other words, the people who purchased the art weren't actually purchasing a banana and tape. The person who purchased the art was buying the opportunity to communicate to peers that he or she was rich enough to throw around $120,000 on a work of art that would soon cease to exist. This was a transaction that involved purchasing status in exchange for money. The banana was only a tiny part of the exchange.
Moreover, the transaction offered the opportunity for the gallery, the art seller, and the art buyer to all further increase their status by being the topic of discussion in countless news articles and discussions in social media. As was surely anticipated by the artists and everyone else in the banana sale, the media could be counted on to act as if this art was something new, outrageous, or exciting. "Art world gone mad," the New York Post announced on its front page. Hundreds of thousands of commentators in various social media forums chimed in to comment on the matter.
One wonders, however, how many times this shtick can be repeated over and over until people lose interest. Apparently: many times. After all, this sort of art is not a new thing. For decades, avant-garde artists have been using garbage and other found objects to create art. And people with a lot of disposable income have been willing to pay a lot of money for it. It's all basically an inside joke among rich people. And regular people have the same reaction over and over again.
But there's absolutely nothing at all that's shocking, confusing, or incomprehensible from the point of view of sound economics. Transactions like these should only surprise us if we're still in the thrall of faulty theories of value, such as the idea that goods and services are valued based on how much labor and materials went into them. That's not true of any good or service. And it's certainly not true of art.
Is It Garbage or Is It Art?In fact, two identical items can be valued in two completely different ways simply if the context and description of the objects changes.
According to the Daily Mail, a 2016 study suggests that people value ordinary objects differently depending on what they are told about the objects:
"According to the new research, being told that something is art automatically changes our response to it, both on a neural and a behavioural level."
In this case, researchers in Rotterdam, the Netherlands, told subjects to rate how they valued objects in photographs. When told that those objects were "art" people valued them differently.
In other words, the perceived value of objects could change without any additional labor being added to them, and without any physical changes at all.
The value, it seems, is determined by the viewer, and we're reminded of Carl Menger's trailblazing observations about value:
Value is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men.
One moment the viewer may think he's looking at garbage, which he has likely learned is of little value. When told that said junk is really "art," the entire situation changes. (Of course, we would need to see their preferences put into real action via economic exchange to know their preferences for sure.)
The change, as both Menger and Mises understood it, is brought about not by changes to the object itself, but by changes in context and in the subjective valuation of the viewer.
A glass of water's value in a parched desert is different from that of a glass next to a clean river. Indeed, a glass of water displayed in a museum as art — as in the case of Michael Craig-Martin's "An Oak Tree" — is different from water found in both deserts and along rivers. Similarly, the value of a urinal displayed in a museum as art — as with Marcel Duchamp's "Fountain" — is different from a physically identical urinal in a restroom.
The Daily Mail article attempts to tie the researchers' observations to the theories of Immanuel Kant on aesthetics. But, one need know nothing about aesthetics at all to see how this study simply shows us something about economic value: it is, to paraphrase Menger, found in the "consciousness of men."
And it is largely due to this fact that centrally planning an economy is so impossible. How can a central planner account for enormous changes in perceived value based on little more than being told something is art?
Is a glass of water best utilized on a shelf in a museum, or is it best used for drinking? Maybe water is best used for hydroelectric power? Exactly how much should be used for each purpose?
When discussing the problems of economic calculation in socialism, Mises observed that without the price system, there simply is no way to say that a specific amount of water is best used for drinking instead of being used for modern-art displays. Nor is the fact that people need water for drinking the key to determining the value of water. (See the diamond-water paradox.)
In a functioning market, consumers will engage in exchanges involving water in a way that reflects how much they prefer each use of water to other uses. At some moments, some consumers may prefer to drink it. At other moments, they may prefer to water plants with it. At still other moments, they may want to contemplate an art display composed of little more than a glass of water. The price of water at each time and place will reflect these activities.
Without these price signals, attempting to create a central plan for how each ounce of water should be used is an impossible task.
Do we need to know why people change their views of object when told they are art? We do not. Indeed, were he here, Mises would perhaps be among the first to remind us that economics need not tell us the mental processes that lead to people preferring different uses for different objects, although we can certainly hazard a guess. It's unlikely that the buyer of the taped banana bought it because he or she planned to eat it.
But even if we are wrong about the buyer's motivation, the fact remains that the buyer valued the banana at $120,000 for some reason — and the value was subjective to the buyer.
Similarly, we can't know for sure why each individual values water for drinking over "art water" or vice versa. And a government planner or regulator — it should be noted — can't know this either.
Tyler Durden Wed, 12/11/2019 - 21:05IATA Slashes 2019 Global Airline Profit Forecast Amid Mounting Macroeconomic Headwinds
As the global economy continues to decelerate into year-end, the International Air Transport Association (IATA) is out with a new report warning that airline profits are expected to fall much faster than thought in 2019, with slowing likely to continue through 2020.
IATA placed most of the blame for the slowdown on the trade wars that have stymied global growth and led to investment uncertainties.
Reuters noted that IATA slashed its 2019 net profit forecast to $25.9 billion, a 5.1% drop from 2018.
IATA warned that the global airline industry could see a trough, but that was contingent on whether "trade optimism" continued.
IATA slashed its 2019 revenue forecast to $838 billion from the $899 billion and said it could see an improvement to $872 billion for 2020. Still, again, the optimism was contingent on a trade resolution between the US and China.
"Slowing economic growth, trade wars, geopolitical tensions, and social unrest, plus continuing uncertainty over Brexit, all came together to create a tougher than anticipated business environment for airlines. Yet the industry managed to achieve a decade in the black, as restructuring and cost-cutting continued to pay dividends," said Alexandre de Juniac, IATA's Director General and CEO.
De Juniac stated that he believes the global economy will bottom in the near term, and 2020 could be a brighter year. Though he might be mistaken, betting on an economic rebound based on "trade optimism" -- considering structural declines in the global economy were present several quarters before the trade war started. With China's credit impulse failing to turn up significantly, we don't dispute the idea that stabilization could be seen in the global economy in 2020. Still, the bet of a massive rebound seems far fetched at the moment.
"It appears that 2019 will be the bottom of the current economic cycle, and the forecast for 2020 is somewhat brighter. The big question for 2020 is how capacity will develop, particularly when, as expected, the grounded 737 MAX aircraft returned to service and delayed deliveries arrive," said De Juniac.
IATA said airlines' net profit per passenger dropped to $5.70 this year from $6.22 in 2018, with the industry's overall net profit margin expected to slide to 3.1% this year from 3.4% in 2018.
The report noted that the sharpest contractions in the industry came from air freight, where a 3.3% decline in freight demand over the year was the most significant decline since the financial crisis.
The OECD has recently warned that the global economy is rapidly decelerating at a pace not seen since the financial crisis as monetary policy via central banks becomes ineffective so far to spark growth.
The world economy could slow by as much as 2.9% this year and next, the OECD said. It added that growth could turn up to 3% in 2021.
The consolidation of the global airline industry is underway. A bankruptcy wave has been spreading across the industry at a pace never seen before.
Airline bankruptcies generally start to gain pace right before an economic downturn, and during a recession, which means the latest surge in bankruptcies, from companies like India's Jet Airways, British travel group Thomas Cook and Avianca of Brazil, suggests 2020 could be a challenging year for the global economy.
The International Bureau of Aviation (IBA) warned: "2019 has seen the fastest growth in airline failure in history," with about 17 carriers filing for bankruptcy protection as of Sept.
The Reuters Global Airline Index peaked when the global economy started to slow in 4Q17.
The S&P500 Airlines Index shows resistance in the possible form of a double top.
Sin Taxes & Other Orwellian Methods Of Compliance That Feed The Government's Greed
Authored by John Whitehead via The Rutherford Institute,
“Of all tyrannies, a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”
- C.S. Lewis
“Taxman,” the only song written by George Harrison to open one of the Beatles’ albums (it featured on the band’s 1966 Revolver album), is a snarling, biting, angry commentary on government greed and how little control “we the taxpayers” have over our lives and our money.
If you drive a car, I'll tax the street,
If you try to sit, I'll tax your seat.
If you get too cold I'll tax the heat,
If you take a walk, I'll tax your feet.
Don't ask me what I want it for
If you don't want to pay some more
'Cause I'm the taxman, yeah, I'm the taxman.
When the Beatles finally started earning enough money from their music to place them in the top tax bracket, they found the British government only-too-eager to levy a supertax on them of more than 90%.
Here in America, things aren’t much better.
More than two centuries after our ancestors went to war over their abused property rights, we’re once again being subjected to taxation without any real representation, all the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little concern for the plight of its citizens.
Because the government’s voracious appetite for money, power and domination has grown out of control, its agents have devised other means of funding its excesses and adding to its largesse through taxes disguised as fines, taxes disguised as fees, and taxes disguised as tolls, speeding tickets and penalties.
With every new tax, fine, fee and law adopted by our so-called representatives, the yoke around the neck of the average American seems to tighten just a little bit more.
Everywhere you go, everything you do, and every which way you look, we’re getting swindled, cheated, conned, robbed, raided, pickpocketed, mugged, deceived, defrauded, double-crossed and fleeced by governmental and corporate shareholders of the American police state out to make a profit at taxpayer expense.
We have no real say in how the government runs, or how our taxpayer funds are used, and no real property rights, but that doesn’t prevent the government from fleecing us at every turn.
Think about it.
Everything you own can be seized by the government under one pretext or another (civil asset forfeiture, unpaid taxes, eminent domain, so-called public interest, etc.).
That house you live in, the car you drive, the small (or not so small) acreage of land that has been passed down through your family or that you scrimped and saved to acquire, whatever money you manage to keep in your bank account after the government and its cronies have taken their first and second and third cut…none of it is safe from the government’s greedy grasp.
And then you have all of those high-handed, outrageously manipulative government programs sold to the public as a means of forcing compliance and discouraging unhealthy behavior by way of taxes, fines, fees and programs for the “better” good.
Surveillance cameras, government agents listening in on your phone calls, reading your emails and text messages and monitoring your spending, mandatory health care, sugary soda bans, anti-bullying laws, zero tolerance policies, political correctness: these are all outward signs of a government—i.e., a societal elite—that believes it knows what is best for you and can do a better job of managing your life than you can.
This is tyranny disguised as “the better good.”
Indeed, this is the tyranny of the Nanny State: marketed as benevolence, enforced with armed police, and inflicted on all those who do not belong to the elite ruling class that gets to call the shots.
So-called “sin taxes” have become a particularly popular technique used by the Nanny State to supposedly discourage the populace from engaging in activities that don’t align with the government’s priorities (consuming sugary drinks, smoking, drinking, etc.).
Personally, I don’t think the government really cares how its citizens live or die: they just want more of the taxpayers’ money, and they figure they can rake it in by using sin taxes to appeal to that self-righteous segment of every society that sees nothing wrong with imposing their belief systems on the rest of the populace.
Examples abound.
For instance, a growing number of cities and states (Washington DC, Philadelphia, San Francisco, and Seattle, among others) have adopted or considered imposing taxes on sugary drinks, as much as a dollar more for a two-liter bottle of soda, supposedly in the hopes of forcing lower-income communities that struggle with obesity and diabetes to make healthier dietary choices by making the drinks more expensive.
The faulty logic behind these sin taxes seems to be that if you make it cost-prohibitive for poor people to pursue unhealthy lifestyle choices, they’ll stop doing it.
Except it doesn’t really work out that way.
Study after study shows that while sales of sugary drinks decreased sharply in cities with a soda tax, sales figures spiked at stores located outside the city. In other words, people just shopped elsewhere.
You won’t convince former New York mayor Michael Bloomberg of this, however. Bloomberg, a 2020 Democratic presidential hopeful, believes the government needs even greater tax powers in order to force Americans—especially poor people—to make smarter lifestyle choices. “When we raise taxes on the poor, it’s good because then the poor will live longer because they can’t afford as many things that kill them,” stated Bloomberg.
Folks, this right here is everything that is wrong with the power-hungry jackals that aspire to run the government today: by hook or by crook, they’re working hard to frogmarch the citizenry into complying with their dictates, because they believe that only they know what’s best for you.
It’s this same oppressive mindset that’s been pushing social credit systems (here and in China) that reward behavior deemed “acceptable” and punish behavior the government and its corporate allies find offensive, illegal or inappropriate.
It’s the same mindset that supports the government’s efforts to compile a growing list—shared with fusion centers and law enforcement agencies—of ideologies, behaviors, affiliations and other characteristics that could flag someone as suspicious and result in their being labeled potential enemies of the state.
It’s the same mindset that has government agents spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports using AI eyes and ears, social media, behavior sensing software, and citizen spies to identify potential threats.
It’s the mindset behind the red flag gun laws, growing in popularity as a legislative means by which to seize guns from individuals viewed as a danger to themselves or others. “We need to stop dangerous people before they act”: that’s the rationale behind the NRA’s support of these red flag laws, and at first glance, it appears to be perfectly reasonable to want to disarm individuals who are clearly suicidal and/or pose an “immediate danger” to themselves or others.
And it’s the same mindset that allows squadrons of AI censors to shadowban individuals for expressing their unfiltered, politically incorrect opinions and beliefs on social media: all in an effort to keep them in line.
Rounding out this dystopian campaign to impose a chokehold on the populace is a technology sector that has been colluding with the government to create a Big Brother that is all-knowing, all-seeing and inescapable. It’s not just the drones, fusion centers, license plate readers, stingray devices and the NSA that you have to worry about. You’re also being tracked by the black boxes in your cars, your cell phone, smart devices in your home, grocery loyalty cards, social media accounts, credit cards, streaming services such as Netflix, Amazon, and e-book reader accounts.
Clearly, those helping to erect the prison walls that now enclose us purportedly for our own good are not people that understand the concept of freedom or individual rights.
Unfortunately, this is what happens when you empower the government and its various agencies, agents and corporate partners to act in loco parentis for an entire nation.
All of the incremental bricks that have been laid over the years as part of the police state’s prison wall—the invasive surveillance, the extremism reports, the civil unrest, the protests, the shootings, the bombings, the military exercises and active shooter drills, the color-coded alerts and threat assessments, the fusion centers, the transformation of local police into extensions of the military, the distribution of military equipment and weapons to local police forces, the government databases containing the names of dissidents and potential troublemakers—have helped to acclimate us slowly to a life in prison.
Funded with our taxpayer dollars and carried out in broad daylight without so much as a general outcry from the citizenry, these prison walls have been sold to us as a means of keeping us safe behind bars and out of reach of danger.
Having allowed our fears to be codified and our actions criminalized, we now find ourselves in a strange new world where just about everything we do is criminalized.
Even so, how did we go from enacting laws to make our world safer to being saddled with a government that polices our social decisions? As with most of the problems plaguing us in the American police state, we are the source of our greatest problems.
As journalist Gracy Olmstead recognizes, the problem arose when we looked “first to the State to care for the situation, rather than exercising any sort of personal involvement… These actions reveal a more passive, isolated attitude. But here, again, we see the result of breakdown in modern American community—without a sense of communal closeness or responsibility, we act as bystanders rather than as stewards.”
Olmstead continues:
[Communitarian libertarian Robert] Nisbet predicted that, in a society without strong private associations, the State would take their place — assuming the role of the church, the schoolroom, and the family, asserting a “primacy of claim” upon our children. “It is hard to overlook the fact,” he wrote, “that the State and politics have become suffused by qualities formerly inherent only in the family or the church.” In this world, the term “nanny state” takes on a very literal meaning.
Unfortunately, even in the face of outright corruption and incompetency on the part of our elected officials, Americans in general remain relatively gullible, eager to be persuaded that the government can solve the problems that plague us, whether it be terrorism, an economic depression, an environmental disaster, how or what we eat or even keeping our children safe.
We have relinquished control over the most intimate aspects of our lives to government officials who, while they may occupy seats of authority, are neither wiser, smarter, more in tune with our needs, more knowledgeable about our problems, nor more aware of what is really in our best interests.
Yet having bought into the false notion that the government does indeed know what’s best for us and can ensure not only our safety but our happiness and will take care of us from cradle to grave—that is, from daycare centers to nursing homes—we have in actuality allowed ourselves to be bridled and turned into slaves at the bidding of a government that cares little for our freedoms or our happiness.
The lesson is this: once a free people allows the government inroads into their freedoms or uses those same freedoms as bargaining chips for security, it quickly becomes a slippery slope to outright tyranny.
Nor does it seem to matter whether it's a Democrat or a Republican at the helm anymore, because the bureaucratic mindset on both sides of the aisle now seems to embody the same philosophy of authoritarian government, whose priorities are to remain in control and in power.
Modern government in general—ranging from the militarized police in SWAT team gear crashing through our doors to the rash of innocent citizens being gunned down by police to the invasive spying on everything we do—is acting illogically, even psychopathically.
When our own government no longer sees us as human beings with dignity and worth but as things to be manipulated, maneuvered, mined for data, manhandled by police, conned into believing it has our best interests at heart, mistreated, and then jails us if we dare step out of line, punishes us unjustly without remorse, and refuses to own up to its failings, we are no longer operating under a constitutional republic.
Instead, what we are experiencing is a pathocracy: tyranny at the hands of a psychopathic government, which “operates against the interests of its own people except for favoring certain groups.”
So where does that leave us?
Having allowed the government to expand and exceed our reach, we find ourselves on the losing end of a tug-of-war over control of our country and our lives. And for as long as we let them, government officials will continue to trample on our rights, always justifying their actions as being for the good of the people.
Yet the government can only go as far as “we the people” allow.
Therein lies the problem: we have suspended our moral consciences in favor of the police state.
The choice before us is clear, and it is a moral choice. It is the choice between tyranny and freedom, dictatorship and autonomy, peaceful slavery and dangerous freedom, and manufactured pipedreams of what America used to be versus the gritty reality of what she is today.
Most of all, perhaps, the choice before us is that of being a child or a parent, of obeying blindly, never questioning, and marching in lockstep with the police state or growing up, challenging injustice, standing up to tyranny, and owning up to our responsibilities as citizens, no matter how painful, risky or uncomfortable.
As author Erich Fromm warned in his book On Disobedience, “At this point in history, the capacity to doubt, to criticize and to disobey may be all that stands between a future for mankind and the end of civilization.”
As I make clear in my book Battlefield America: The War on the American People, if you have no choice, no voice, and no real options when it comes to the government’s claims on your life, your movements, your property and your money, you’re not free.
Personally, I’d rather die a free man having lived according to my own dictates (within the bounds of reasonable laws) than live as a slave chained up in a government prison.
Tyler Durden Wed, 12/11/2019 - 20:25 Tags PoliticsVisualizing The Dramatic Rise And Fall Of Cannabis Company Stocks
The unprecedented expansion of cannabis across North America took the investment world by storm, as investors raced to cash in on the “green rush”.
Yet, as Visual Capitalist's Imam Ghosh details below, even as changing regulations unlock new opportunities, it seems as though the cannabis stock bubble has already burst - at least temporarily.
Today’s visualization dives into the roller coaster of cannabis company stock valuations over the past few years, and which companies remain standing in this hazy market.
The North American Marijuana Index tracks the equally-weighted stocks of leading companies operating in the legal cannabis industry in U.S. and Canada. Companies listed on the index must have at least 50% of their business strategy focused on the legal industry, including ancillary operations that support companies and consumers.
At the tail-end of 2017, the promise of upcoming legalization in two immense markets—California state and Canada—had investors all fired up. The index’s low (105.31 on June 27th, 2017) shot up almost three times to 358.93 by January 8th, 2018.
Things took a sharp turn in the second quarter of 2019, as the expectations for cannabis company stocks encountered a harsh reality post-legalization.
What are the reasons behind such a nosedive? Could the cannabis industry still make a comeback in 2020? We look at some opposing perspectives to answer these questions.
So Much For the Green RushThe cannabis industry is experiencing significant challenges. In the U.S., legal cannabis faces high taxes—come the new year, consumers in California will see an 80% mark-up on their cannabis at checkout, up from 60%.
North of the border, federal legalization led to immense consumer demand for Canadian cannabis—but supply can’t keep up. To make matters worse, retail stores are slow to roll out, which means Canada is feeling the crunch.
Steep prices, and difficulty purchasing products post-legalization, allow the black market to thrive. It’s clear many cannabis companies have taken a big hit as a result.
According to the Marijuana Index, here are the 10 biggest companies in the space now:
Only one company outside of North America—and even the cannabis sector—lands on this list. The UK-based Big Pharma company GW Pharmaceuticals is steadily growing its industry presence, as it currently holds 41 cannabis patents in the U.S. and Canada combined.
Still, even these big players have seen their valuations drop since the industry was at its peak. Unless the aforementioned issues are ironed out, investors may continue to pull their dollars from the cannabis industry.
A psychological shift has taken place from everyone wanting to own (cannabis) to everyone involved now feeling burned. I think many investors are now over it.
- Chris Kerlow, portfolio manager at Richardson GMP
On the flip side, some investors aren’t calling it quits quite yet.
Long-Term Prospects Are HighWhile cannabis seems plagued with issues, some argue that these are simply short-term growing pains and will be solved as the industry matures.
Particularly in the U.S., experts predict that cannabis sales could reach immense heights in the next decade:
$30 billion by 2025 (New Frontier Data)
$50 billion by 2029 (Jefferies Group LLC)
$75 billion by 2030 (Cowen Inc.)
$100 billion by 2029 (Stifel Financial Corp)
Compared to a benchmark of $13.6 billion today, these numbers may seem ambitious—but they’re backed by major industry trends. 2020 could well be the year the market stabilizes, as consumers explore an array of retail options and vote with their wallets.
What’s more, key players in consumer industries—from alcohol and tobacco to beauty and fitness—are making big bets in cannabis and CBD-infused products. A higher number of partnerships could spark the next uptick for the industry’s potential.
The marijuana business is not for the faint of heart. But this is a big long-term game.
- Mark Zekulin, CEO of Canopy Growth Corp.
An Eye on What’s to ComeIt’s clear there are differing viewpoints on the future of cannabis companies and their respective investors. As this snapshot of cannabis stocks unfolds and transforms in 2020 and beyond, could companies potentially buck the current trend and bounce back? Or will stocks continue to go up in smoke?
Tyler Durden Wed, 12/11/2019 - 20:05 Tags Business Finance
