Category: OUR BLOG

The UK government plans to abolish the inheritance tax in 2024. This means that heirs will not have to pay tax on property inherited.

The current inheritance tax rate in the UK is 40% for estates exceeding £325,000. The abolition of the tax will have significant implications for investors, both within the UK and internationally.

This will give investors more freedom to manage their property. They will be able to transfer their assets to heirs without additional bureaucracy, leading to increased investments in long-term assets such as real estate and stocks.

Moreover, the abolition of the tax could make the UK a more attractive place to live and do business. As a consequence, it could attract foreign investors and boost the country’s economic growth.

However, there are also some potential drawbacks to the abolition of the tax.

For instance, this action could lead to an increase in economic inequality. Wealthy heirs will benefit more from the abolition of the tax than poorer heirs.

Another disadvantage is that the UK government will lose about £25 billion a year as a result of the abolition.

What’s your opinion on this news?

The recently released movie “Dumb Money” narrates the events related to GameStop in early 2021. This story became a symbol of a new era in investing, where social networks and communities, such as Reddit, can influence financial markets.

The “Short Squeeze” Mechanism

   Hedge funds profit from falling stock prices by short selling borrowed stocks with the intention to buy them back later at a lower price. When retail investors began to buy GameStop shares en masse, their price sharply increased. This forced hedge funds, which had short positions, to buy back the shares at high prices to stop their losses, further accelerating the rise in share prices.

Role of Retail Investors and “Roaring Kitty”

   Retail investors, united through forums like Reddit’s r/wallstreetbets, began buying and holding the shares, despite price fluctuations. This “hold and not sell” strategy helped maintain high demand and share price. An investor known as “Roaring Kitty” became one of the symbols of this movement, influencing the decisions of numerous retail investors.

Context of the Story

   Before this event, hedge funds often practiced short selling of shares of companies they considered overvalued or outdated. This often led to exacerbating financial problems for such companies, including bankruptcy. However, in the case of GameStop, retail investors were able to mobilize sufficient capital through social media to counter this strategy of the hedge funds.

Changes on Wall Street

   This case demonstrated that Dumb Money can no longer be underestimated and that Wall Street now has to consider the activity of retail investors in social networks as a significant factor. It shows that market power is not exclusively in the hands of large institutional investors.

The events around GameStop exposed the complex dynamics of modern financial markets, where a combination of technology, social media, and collective actions of retail investors can have a significant impact. This case has been a lesson for all market participants about the importance of transparency, information accessibility, and that even small investors can play a key role in the world of big money.

The beginning of December 2023 proved to be an exciting time for the cryptocurrency market, especially for its most popular currency, Bitcoin. In a short period, Bitcoin’s value sharply increased, sparking widespread interest among investors and cryptocurrency commentators. Let’s consider several possible factors that could have influenced this sharp increase.

In recent years, we have seen growing interest and adoption of cryptocurrency by various institutional players, such as large corporations and banks. Possibly, insiders spread news about further adoption and integration of Bitcoin into major financial institutions and companies. This has led to increased investor interest and confidence, resulting in the rise in Bitcoin’s value. 

Political and economic events traditionally have a significant impact on the cryptocurrency market. The reasons here can be endlessly debated. 

Technical analysis and trading also play an important role in the movement of cryptocurrency prices. The increase in volatility and the rise in Bitcoin’s price could have attracted the attention of traders and analysts, who made large purchases and stimulated further growth in Bitcoin’s value. This can create a cycle of self-fulfilling predictions and attract more traders to the market. 

Meanwhile, Bitcoin continues to update its values compared to 2022! Are you keeping an eye on the rate?

Let’s talk about the underwear index, skyscrapers, and explain what baseball has to do with it all.

The Phillies Index

This is one of the more dubious and even humorous items, akin to “if you wash your car, it will rain.” It was once noted that victories by Philadelphia’s baseball teams in the World Series always preceded a crisis.

When the Philadelphia Athletics became the champions in 1929, the Great Depression began, and after their 2008 victory, a financial crisis ensued.

The Skyscraper Index

The situation here is a bit more serious. Construction and the economy are closely linked, and if the building process inevitably goes upwards – from the foundation to the completed skyscraper, then financially, it follows a quadratic function curve. Construction requires loans and investments, marking an economic peak. But as construction concludes, there’s a decline.

The Men’s Underwear Index

As long as sales are stable, everything is fine. A decrease in sales indicates that men are starting to save even on such items to preserve whatever savings they can.

The Recession Index

In 2002, The Economist magazine counted the number of articles with the word “recession” and found a pattern.

If the number sharply increases, a real crisis occurs. The index proved accurate: its signs coincided with the beginnings of recessions in 1981, 2001, and 2008.

The global financial system has faced a series of events that have impacted European banks in 2023. The crisis in the USA and Switzerland, as well as prolonged periods of high rates, have created three main risks for European financial institutions.

The bankruptcy of major financial institutions in the USA and Switzerland could have far-reaching consequences for European banks. This creates uncertainty in the financial markets and can lead to a reduction in trust in the banking system as a whole. European banks, especially those with close ties to the crisis companies or dependent on them, may face a high risk of default and capital loss.

Prolonged periods of high rates can put significant pressure on European banks. High rates complicate access to financing and increase credit costs for banks. This can negatively affect profitability and overall financial stability of banks. Higher borrowing costs can also increase the risk of loan defaults and raise the level of arrears.

The crisis in the USA and Switzerland can lead to a weakening of the regulatory environment in European countries. In conditions of financial instability, some governments may be forced to relax regulatory requirements or postpone reforms to support the banking system. This can create additional risks and reduce the transparency and stability of bank operations.

Loan issuances in European banks have fallen tenfold. Despite warnings from the ECB, eurozone banks remain in a winning position from the rate hike cycle. How long will this trend continue?

The Rise of Driverless Taxis: Cruise and Waymo Lead the Way

Significant growth in autonomous ride services highlights industry shift.

 Cruise and Waymo significantly increased their driverless ride services in San Francisco this year, with Cruise logging twice the number of passengers and trips compared to Waymo by August. Both companies accelerated their driverless taxi operations in 2023, transitioning to fully driverless rides, marking an industry inflection point. Cruise reported a fivefold increase in monthly passengers, reaching almost 66,000 in August, while Waymo saw its monthly passenger tally rise from about 3,300 in January to 28,100 in August. This surge indicates growing exposure and loyalty among riders, with both companies claiming tens of thousands awaiting paid driverless rides. Cruise, currently suspended by the Department of Motor Vehicles, and Waymo, operating through a waitlist, are navigating challenges in the evolving landscape.

 Walmart Global Tech’s Major Move: Occupying Meta’s Sunnyvale Campus

Walmart Global Tech, the digital arm of global retailer Walmart, has taken over an entire campus that is leased to Meta Platforms in Sunnyvale

SETI Institute’s Galactic Boost: A $200 Million Quest for Extraterrestrial Life

Late tech mogul’s generous endowment propels alien research forward.

Late tech mogul left South Bay nonprofit $200 million for alien research. Franklin Antonio, co-founder of Qualcomm, left a substantial $200 million grant to the Search for Extraterrestrial Intelligence (SETI) Institute upon his passing. The SETI Institute, a leading space exploration nonprofit, plans to utilize the funds for postdoctoral fellowships, grants, educational initiatives, and the advancement of research capabilities. Antonio’s philanthropic legacy includes contributions to science education and a $200 million grant to a high school seniors’ program. The endowment ensures the SETI Institute’s core programs are permanently supported, fostering global partnerships and groundbreaking research. Antonio, known for his technical expertise, played a crucial role in upgrading the Allen Telescope Array, a radio telescope used by the Institute.

San Francisco Triumphs as APEC Host: A Fusion of Culture and Technology

City’s diversity and tech prowess clinch the prestigious global summit.

San Francisco secured the hosting rights for the Asia-Pacific Economic Cooperation summit, beating other major U.S. cities. Matt Murray, the U.S. State Department’s senior official for APEC, highlighted San Francisco’s rich history, cutting-edge technology, and sustainability focus as key factors. The city’s diverse population, including over a third being Asian residents, and its prominent tech companies like Meta, Google, Uber, and OpenAI contributed to its selection. The 20,000-person event is anticipated to have a $52.8 million economic impact on the city, providing a boost post-pandemic. San Francisco’s logistical readiness, including Moscone Center’s expansion and airport connectivity, played a pivotal role in the decision. Murray acknowledged a strong partnership with Mayor London Breed’s administration in bringing APEC to the city.

Forging a Path for Responsible AI: Tech Leaders Unite in San Francisco

Startups and investors collaborate on ethical AI development guidelines.

Tech leaders, backed by U.S. Secretary of Commerce Gina Raimondo, introduced responsible AI guidelines for startups and investors in San Francisco. These voluntary commitments, spearheaded by Responsible Innovation Labs, involve 35 companies and investor groups, emphasizing responsible AI practices from the outset of product development. The principles cover organizational buy-in, transparency, risk and benefit planning, product safety testing, and ongoing improvements. While welcomed by some, including the Biden administration, venture capitalist Marc Andreessen expressed dissent. The voluntary framework is part of broader AI regulation efforts, aligning with recent executive orders from President Biden and California Governor Gavin Newsom.