Fed's Goolsbee: Need to Wait and See on Inflation Impact of Tariffs
Federal Reserve Bank of Chicago President Austan Goolsbee discussed inflation nearing the central bank's 2% target and the potential inflation impact of trade tariffs Tuesday at the Corridor Business Journal Mid-Year Economic Review in Cedar Rapids, Iowa. (Source: Bloomberg)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
10 minutes ago
- Yahoo
Jim Chanos Sees Big Short in Saylor's Strategy, But Others Aren't So Sure
(Bloomberg) -- Buy Bitcoin, short Michael Saylor's Strategy. That's the latest call from legendary short-seller Jim Chanos, who sees the arbitrage play as a no-brainer. Others aren't so sure. ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Next Stop: Rancho Cucamonga! The Global Struggle to Build Safer Cars US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn NYC Residents Want Safer Streets, Cheaper Housing, Survey Says The trade has long been on the radar of Wall Street hedge funds, drawn to the premium Strategy's shares enjoy relative to the value of the company's Bitcoin holdings — a gap that topped 200% last year. The discrepancy stems from Saylor's self-styled Bitcoin treasury strategy, through which he has tapped capital markets to buy more and more of the world's biggest cryptocurrency, in turn attracting billions of dollars from retail investors. In the eyes of many arbitrage specialists, the yawning spread is unsustainable — in fact, it's already begun to narrow, but they see further opportunity to profit. 'I haven't seen an arbitrage like this in this size in years, years and years,' Chanos said during a recent interview on the Risk and Return podcast, referencing the trade he disclosed on CNBC in early May. It's one of a series of sophisticated trading strategies around the complex capital structure of Saylor's firm, formerly known as MicroStrategy, and the growing ecosystem of crypto investment vehicles. Some market players see parallels to the once-popular 'widow-maker' pair trade involving Bitcoin and the Grayscale Bitcoin Trust, but with fewer constraints. There are still risks involved, though. Chanos, known for his prescient bet against Enron Corp. 20 years ago, emphasized that his current favored trade isn't a wager against Bitcoin or Strategy, but rather a mirror of Saylor's own playbook: selling equity and raising capital to buy more digital assets. The core opportunity, he said, lies in the divergence between Strategy's market price and the company's Bitcoin-adjusted book value. 'The fact of the matter is, this is a Bitcoin holding company,' Chanos said on the podcast explaining the premium dislocation. Buying Strategy shares at their current price of around $400, he said, is effectively equivalent to buying Bitcoin at about two times its value — 'paying around $220,000 for Bitcoin that trades at $110,000. But the company is doing everything it can to close that spread, which is great — there's a catalyst.' A growing number of copycats have also started pursuing similar crypto-treasury strategies, further shifting supply-demand dynamics, Chanos added on the podcast. The investor didn't respond to a request for comment, nor did representatives for Strategy. On a basic level, the premium as measured by Strategy's market capitalization relative to its Bitcoin holding value stands at 70%, according to Bloomberg calculations. Taken a step further — adding in other dilutive securities the company has employed in its massive capital raising in the last year and removing the value of Strategy's legacy software business — and investors are paying a premium for the stock that's nearly double the value of the firm's Bitcoin holdings. If Bitcoin rises but Strategy's premium compresses — or if share dilution outpaces gains— Chanos' trade would turn a profit. Yet like any arbitrage, the spread may widen before it narrows, as seen in the GBTC trade around 2021. Premium Warranted? Some analysts and retail believers argue that a substantial premium in Saylor's firm is warranted, placing it in a unique category. First of all, Strategy offers investors exposure to a zero-fee Bitcoin vehicle, offering an edge over comparable exchange-traded funds. What's more, the company demonstrated an ability to use leverage to grow Bitcoin per share over time, an added value for investors buying the stock instead of the ETFs or underlying crypto, according to TD Cowen analyst Lance Vitanza, who believes Strategy's Bitcoin per share will increase by 26% this year. 'I expect MSTR will trade around its recent historical premium, either side of 100%, for the foreseeable future,' he said, referring to Strategy's ticker. Timing — when to enter and exit the wager— remains a key variable around returns, given the spread's ongoing volatility. In March 2024, Kerrisdale Capital Management promoted a similar pair trade in a letter titled 'Know When to HODL, Know When to FODL,' in a nod to crypto lingo. The firm still stands by its thesis, but 'I don't have the trade on now,' said founder Sahm Adrangi. 'When we put out the report, the premium was much higher and it made sense at that point. Is it going to zero? I don't really know,' he said, declining to specify when the firm closed the position. To Chanos and other fans of the trade, Strategy's ample market capitalization — now over $100 billion — and deep float make it relatively easy to maintain the short leg. For hedge funds, new borrows are being priced at a fee of 0.3 percentage point, according to data from S3 Partners. This helps to keep the cost of carry manageable while waiting for the spread to narrow. The inexpensive terms are likely to persist, given the stock's roughly 250 million free floating shares, and that only 11% is currently sold short, said Sam Pierson, director of research at the firm. But that doesn't eliminate the risk that the borrowing dynamics could change — potentially becoming more expensive and less stable, especially for individual investors, said Victor Haghani, chief investment officer of Elm Wealth and founding partner of Long Term Capital Management. There's a lot of demand for borrowing shares related to convertible arbitrage wagers and leveraged short ETFs, he added. Another source of uncertainty is the potential for an unexpected corporate event, such as a merger that might shift the company's fundamental business, complicating premium estimates and muddying the existing trade. 'Say if all of a sudden Strategy is part of something that is twice as big — then when you try to look at the valuation relative to the Bitcoin it holds, you can't really say that much anymore because now there's a business with revenues,' Haghani said. Still, he is confident of the spread's long-term convergence. 'My expectation is that in four or five years at the longest, the premium will be zero or even negative,'he said. 'I think this is a good trade, a good one possibly for hedge funds, but it's not one I'd want to put on in my personal account for the risks involved and my disadvantaged position relative to hedge funds in running the trade.' --With assistance from Tom Contiliano. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P.
TechCrunch
12 minutes ago
- TechCrunch
Introducing Bounce, a tool to move your following between Bluesky and Mastodon
A major development showcasing the potential for the open social web was unveiled Thursday at the online conference known as FediForum. From the makers of Bridgy Fed, a tool that connects decentralized open social networks, like Mastodon and Bluesky, there now comes a new project known as Bounce that will allow users to migrate their social network followers across networks powered by different protocols. This is a significant step towards making the open social web a more viable alternative to the locked-in ecosystems provided by tech giants like Meta, Snap, Google, TikTok, and X — and where you may be able to delete your account and export your data when you leave, but not actually migrate your account to a new app. Today, Mastodon, Bluesky, and other social services that run on their protocols (ActivityPub and the AT Protocol, respectively) allow users to move their accounts within their protocol network. That means a Mastodon user can migrate their account to another Mastodon server, while Bluesky allows users to move their accounts and data from one Personal Data Server (PDS) to another. (The latter is still a work in progress because you can move off of Bluesky's PDS but not back to it!) However, it hasn't been possible for users to move their accounts or retain their followings by moving from one network to another. Now led by a nonprofit called A New Social, the makers of Bridgy Fed have developed technology that will make this type of migration possible. Techcrunch event Save now through June 4 for TechCrunch Sessions: AI Save $300 on your ticket to TC Sessions: AI—and get 50% off a second. Hear from leaders at OpenAI, Anthropic, Khosla Ventures, and more during a full day of expert insights, hands-on workshops, and high-impact networking. These low-rate deals disappear when the doors open on June 5. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you've built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | REGISTER NOW Image Credits:Bridgy Fed diagram (A New Social) The tech builds on Bridgy Fed to allow users to 'move' their Bluesky account to their Mastodon profile's bridged account (an account that listens for your Mastodon posts and then replicates them on Bluesky so your Bluesky followers can see them), then take the bridged account and 'move' it to the user's Mastodon profile. How all this works under the hood is technically complicated because both platforms have different ways of handling migrations. That's why Bridgy Fed has to function as something of a middleman, enabling the transition with servers of its own, custom-built for the purpose of bridging and moves. Currently a proof-of-concept, the technology will launch into beta in a few weeks — but not for the casual user. 'I don't want to go as far as saying it's a tech demo, but it was really important to prove that this is possible,' says New Social's CEO and executive director, Anuj Ahooja. There are some complications at present, too. You can't move back to Bluesky's PDS because the social network hasn't built out that technology yet, for starters. Also, if someone on Bluesky who isn't bridged interacts with your 'moved' account, you won't see that once you're on the Mastodon side. But the team is working on developing a feature that will notify you of off-bridge interactions, Ahooja says. In addition, Bounce alerts you to how many of the people you follow aren't bridged, so if they ever do bridge, you can re-follow them. Image Credits:Bounce screenshot (A New Social) Ultimately, the team hopes the technology in Bounce would be obscured from the everyday open social user, who could instead decide simply what app they want to use and then go through a few short steps to move their following. And while today, Bounce supports Bluesky, Mastodon, and Pixelfed (an ActivityPub-based photo-sharing app), the longer-term goal would be to support any open social platform and protocol, whether that's a long-form blogging platform like Ghost, or even other networks like those running on Nostr or Farecaster. 'We're trying to create an interface for the open social web to handle some of these tougher movements that you have to make,' explained Ahooja. 'So, if you're unhappy with something Bluesky is doing — or even if you're not unhappy, but you feel like a platform on the ActivityPub side is doing something that you really needed to do…[you could] do these couple of clicks on Bounce,' he added. Bounce is the third project from A New Social. In addition to Bridgy Fed, the organization also launched a settings page a few weeks ago that makes the process of preparing to bridge easier and allows you to set a custom domain for your account. The overall goal at A New Social is to shift the power of social networks back to the people, not the platform makers, by giving them tools that let them move their account, their followings, and leave if a platform ever fails them in some way. This motto of 'People not Platforms' is now emblazoned on merch A New Social sells, like tees, hoodies, hats, cups, and stickers that help monetize its efforts, alongside its Patreon.
Washington Post
14 minutes ago
- Washington Post
Prince George's teachers union votes no confidence in superintendent
The Prince George's County teachers union issued a vote of no confidence Wednesday in schools Superintendent Millard House II, citing concerns that his leadership has caused 'widespread dysfunction' across Maryland's second-largest school system. About 80 percent of voting members supported the action, the union said, which was conducted via a virtual vote. The vote came as the union is bargaining over its latest contract with the school system. Its current agreement expires June 30.
