Buttonwood

For fixed-income investors, hell is other bondholders

As Argentina shows, investors have much to fear from their less predictable brethren




Although old enough to feel nostalgic about classic video games, Buttonwood was never a fan of Pac-Man. Yes, eating pellets and eluding colourful ghosts made a change from shooting waves of space invaders. 

But the game never grabbed him. And its name made no sense. The original, "Puck Man", was apparently altered to stop arcade vandals changing the p to an f.

Emerging-market investors may share those cool feelings. To them, “Pac-Man” is the name for a divide-and-rule strategy pursued by governments seeking to puck their bondholders. 

Fear of the tactic haunted Argentina’s $65bn-debt talks, which have eventually come to a deal that most bondholders looked likely to accept by August 28th, after The Economist went to press.


A government that cannot pay its debts typically offers to swap its bonds for new ones with gentler terms. Under modern “collective-action” clauses, it can group together any bond series it wants to exchange and take a vote of all their holders. 

If a large majority agree to the swap, it becomes binding for all. This stops a few mercenary creditors free-riding on the generosity of others by holding out for a better deal, hoping that the government will pay them more once it has paid everyone else less.

The absence of such provisions allowed a colourful group of hold-outs to chase Argentina for almost 15 years after its default in 2001. At one point, nml Capital, a hedge fund, managed to prevent Argentina paying any creditors until it paid them all, a legal feat that upset other bondholders almost as much as it upset the government.

Creditors do not always see eye to eye. A stingy minority may antagonise everybody else. Similarly, a pliable minority who are desperate for a deal may not share the interests of the harder-headed majority. 

The Pac-Man strategy exploits this difference. Consider the following case, based on a blog post by Mitu Gulati of Duke University and Mark Weidemaier of the University of North Carolina at Chapel Hill. 

Suppose the government needs two-thirds of investors (weighted by principal) to agree to swap 200 bonds. The bonds are equally split into two varieties, pink and red. About 67% of pink bondholders support a swap. But only 33% of red ones do. If all vote together, the swap fails (only 100, or half, vote in favour).

Suppose instead the government first makes an offer to pink investors. This separate offer will succeed and become binding on all pink bondholders, including the 33% who voted against. 

Next, the government makes a second, slightly sweeter offer to both red and pink. All pink holders will support the second offer, because it is a little better than the earlier deal to which they are all now bound. 

With 100% of pink votes in its pocket, the government needs only a third of the red votes to get a two-thirds majority of the two groups combined. 

The swap succeeds. 

A government that could not gobble up two ghosts at once can devour both—after first chewing and regurgitating one.

In practice, the Pac-Man strategy is not easy. Votes are hard to predict. And Argentina had to clear a second threshold to swap its newer bonds. As well as winning a two-thirds majority overall, it had to win a 50% share of each legally distinct bond included in the swap. If the 50% bar was not met for even one bond series, the entire swap would fail.

To overcome this problem, Argentina proposed "redesignation". It would make an offer, count the votes, and then, if necessary, declare some bonds ineligible for the swap after all, allowing it to disregard their votes.

Creditors immediately cried foul, arguing that redesignation was underhand and unfair. But although Argentina’s proposal breached the spirit of its contracts, it did not violate the letter. It merely interpreted the terms to its best advantage—something its more troublesome bondholders, such as nml Capital, have previously done with brio. 

The government’s proposal this year was “aggressive, creative, and right there in the documentation”, says Anna Gelpern of Georgetown University. Instead of complaining, creditors should have said, “Oh crap, you read the contract better than I did.”

In the end, redesignation was not necessary. Argentina sweetened its offer enough to win over the creditors (and agreed to make redesignation harder in the future). By seeking compromise, the government proved something Pac-Man fans have always known: you can sometimes stop a ghost from chasing you for a bit by taking a step in its direction.

Low Rates Forever!

The Federal Reserve takes a leap into the monetary unknown.

By The Editorial Board


Federal Reserve Chairman Jerome Powell delivers a speech on Aug. 27. / PHOTO: LIU JIE/ZUMA PRESS


Jerome Powell’s Federal Reserve on Thursday released a long-awaited review of its policy framework, and it’s a mixed bag. On the upside, the central bank will no longer throttle the economy whenever “too many” Americans have jobs. On the downside, the Fed may never raise interest rates again.

The Fed was overdue to rethink how it pursues its dual mandate of full employment and price stability. Most obviously, the two goals no longer appear to conflict in the way monetary economists once assumed.

Starting in the 1980s, the U.S. economy achieved unprecedented low unemployment without an uptick in consumer prices as orthodox theory had predicted. Instead, as Mr. Powell noted in announcing the new strategy, business cycles now seem more likely to end in financial panics than in inflationary spikes that trigger interest-rate increases.

One happy result is that the Fed is all but abandoning the discredited Phillips Curve, the theory that policy makers must trade off between employment and inflation. The Fed previously tried to head off inflation by raising rates whenever it thought the unemployment rate was falling too far—whatever that meant—but now the Fed will wait for inflation to appear before acting.

Abandoning the Phillips Curve is a win for the economy, but it comes at a substantial cost in this review as the Fed also is overhauling its inflation target. Since the Fed adopted inflation targeting in the late 1990s and early 2000s (and formalized a 2% target in 2012), policy makers have viewed the target as a ceiling.

No longer. The Fed now will aim to achieve “average” inflation of 2%, meaning it will tolerate periods of faster price rises to compensate for periods when inflation falls short. Mr. Powell believes such a symmetrical target is necessary to “anchor” inflation expectations.

This is a political minefield because the definition of the inflation time period will always be open for debate. Mr. Powell and future Fed chairs will face pressure to maintain low rates to compensate for some protracted period of low inflation, or because a Senator or Twitter-happy President “believes” inflation will fall below target in the near future.

That increases the economic risk that the Fed might end up looking through inflation until it’s too late. Having effectively admitted it no longer fully understands the relationship between economic growth, employment and inflation, the Fed still promises to decide in real time when its healthy above-target inflation has become dangerous. If the central bank gets this wrong, it could be forced to raise rates much higher, much faster than it would want.

The more glaring problem is the long list of questions the Fed didn’t review. The most important is Mr. Powell’s observation, offered without elaboration Thursday, that business cycles now end in destructive financial crises. The Fed thinks this is a regulatory problem to be solved with stricter capital rules and stress tests.

It might instead ask whether its preference over two decades for “looking through” rising asset prices such as oil, gold and housing to keep rates low is contributing to financial instability instead of economic growth. Without exploring this question, the Fed has adopted a strategy with a built-in bias for low rates. The result is almost certain to be more financial manias, panics and crashes.

There are other unanswered questions. For instance, the Fed now assumes that the economy’s natural rate of growth, and thus its natural interest rate (“r-star” in the lingo) are in a natural decline for demographic or other reasons. Mr. Powell cites this as a justification for the Fed’s new symmetrical inflation target.

Well, what if there’s nothing natural about falling growth because the Fed’s policies are causing it?

Research suggests sustained low rates can dent an economy’s growth potential by steering investment to unproductive uses, sustaining zombie companies, rewarding corporate financial engineering instead of capital expenditure, and contributing to asset booms and busts. It’s a shame the Fed has decided to double down on its low-rate, quantitative-easing bets before such a self-examination.

The Fed says its review is a result of careful study, including a national listening tour in which officials met with ordinary Americans. The truth is that it’s a leap into the monetary unknown and potentially a very expensive one.

domingo, septiembre 13, 2020

WHAT NEXT FOR GREAT CITIES / PROJECT SYNDICATE

|

What Next for Great Cities?

In the era of COVID-19, megacities that lack competent management are bound to share the same fate as the great cities of the past. But competent management means addressing not just the virus but also deeper sources of malaise such as poverty and unaffordable housing.

Harold James

james171_Victor J. BlueGetty Images_NYCcoronavirus


PRINCETON – Has COVID-19 killed the megacity? The pandemic certainly is reshaping globalization, turning the hubs of the pre-2020 global economy into epicenters of contagion and leaving their future hanging in the balance. But the crisis also has simply highlighted megacities’ existing vulnerabilities and accelerated processes that were already underway.

By the start of this century, cities like London, New York, and Hong Kong had become central nodes in the global flow of money, people, and ideas. They were not just financial centers but also cultural metropoles, hives of creativity that depended on the bankers’ wealth and patronage. Entrepreneurs and innovators flocked in, hoping to remake themselves and the world.

But megacities also need a wide range of other workers with different skill sets. Hence, immigrants flocked to them, too, pursuing fortune or merely new opportunities for their children. Many dreamed of joining the creative elite. In due course, thriving global cities became melting pots.

This inevitably created new tensions with the hinterland. People in suburbs or rural areas came to see urban life as unattainable or undesirable. The popular mobilization behind Brexit was driven partly by these constituencies’ resentment toward an increasingly multicultural, wealthy London, whose success, they suspected, was coming at their expense. Even upper-middle-class professionals complained that they could not afford life in London.

Likewise, US President Donald Trump’s supporters in the south, southwest, and Midwest define themselves in contrast to places like San Francisco and New York City. “Make America Great Again” means toppling the coastal elites. And, of course, the clash of cultures between Hong Kong and mainland China since 1997 has been glaringly obvious, owing to the “one country, two systems” arrangement.

In each case, exorbitant property prices in the megacities have poisoned the social well. High-quality housing is attainable only for the global elite, leaving all other residents in overcrowded conditions or outside the city core. Workers with ephemeral or seasonal jobs often have no real housing to speak of, and a growing epidemic of homelessness began well before the pandemic. Many people must rely on inadequate and unreliable public transportation to commute long distances. University and high-school students lack proper accommodation.

With COVID-19 came the fear of infection and a mass exodus of the wealthy. The local economies in upper-income neighborhoods collapsed. The pandemic brought a new kind of social polarization as service workers in health care, public transportation, and retail were forced to expose themselves to the risk of infection or sacrifice their earnings.

By contrast, knowledge workers simply started telecommuting and ordering in, lacking nothing but opportunities for physical mingling. The new divide between remote and front-line workers highlighted the sharp class distinctions that many had long preferred to ignore.

More recently, the virus has fueled a search for alternatives to the high-cost megacities of the pre-pandemic era. For knowledge workers, technology makes remote employment attractive and easy, eliminating unpleasant commutes and the expenses of city life. Why not work and live wherever one wants?

Of course, revulsion to dangerous, overcrowded cities is nothing new. The most catastrophic pandemic on record, the bubonic plague in mid-fourteenth century Eurasia, prompted a similar flight. To read Boccaccio’s accounts of self-indulgent young Florentine aristocrats fleeing for the hills of Fiesole is to link past and present. In the event, the plague triggered a long-term shift and intensified the class conflict in Florence, as ordinary workers turned against the urban elite.

But the most striking historical parallel for the decline of megacities today is Venice. Well before the current crisis, Italian and European politicians frequently invoked the sinking lagoon city as an allegory for the absence of reform. As immortalized by Thomas Mann’s novella Death in Venice, the city has long represented a universal predicament. After reaching the height of its fortunes in the late sixteenth century, it suffered a long decline, owing to shifting trade routes, new competition from poorer but more dynamic cities, and proximity to disease.

And yet, Venice could also be a model for the post-COVID megacity. As modern economic historians remind us, the city’s story is not just one of industrial and commercial collapse in the seventeenth century. Rather, production of the most iconic Venetian goods shifted to the hinterland – to smaller towns such as Treviso and Vicenza – leading the Venetian Republic to build a new political relationship with the surrounding territories.

Today, pre-existing political conflicts have hampered the overall response to the pandemic. By their very nature, global cities were particularly vulnerable to the virus, and when it struck, their leaders and national authorities began blaming one another. London Mayor Sadiq Khan has regularly attacked British Prime Minister Boris Johnson’s shambling lockdown strategy. New York City’s mayor is in a three-way struggle with the governor of New York and Trump, who himself has used US cities’ crisis to deflect attention from his own mismanagement. In Hong Kong’s case, the virus created cover for China to assert its authority over the territory with a sweeping new security law.

A revival of real democracy is often thought to be the best solution to the problems associated with technocratic globalization. But if democracy is to have any appeal, democratic governments will have to be more effective in addressing not just the virus but also deeper sources of malaise such as poverty and unaffordable housing. Without competent management, megacities are bound to share the same fate as the great cities of the past. London and New York could sink in their own way. But, this time, there would be no renaissance in the hinterland.


Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Unión.

A New Bull Market For Precious Metals

Crescat Capital
Long/Short Equity, Global Macro, Precious Metals



Summary

- US equities today trade at truly record valuations, a full-blown mania. Speculative asset bubbles are ripe for bursting.

- The precious metals mining industry is the one clear industry to directly benefit from this monetary and fiscal indulgence.

- The lack of investment in exploration and new gold and silver discoveries is setting up an incredibly bullish scenario for metals.


Central banks are facing a serious predicament. After decades of ongoing accommodative monetary policy, the world is now sitting at record levels of debt relative to global GDP. In our view, there has never been a bigger gulf between underlying economic fundamentals and security prices.

We are in a global recession, but equity and credit markets still trading at outrageous valuations. Markets are trading on a perverse combination of Fed life support and rabid speculative mania. Meanwhile, demand for gold and silver, which is fundamentally cheap, is starting to take off as central banks are engaged in new record easy monetary policies.

Ongoing easy monetary policies in the face of today’s asset bubbles in stocks and fixed income securities has a high probability of leading to a self-reinforcing cycle that drives investors out of these over-valued asset classes and into under-valued precious metals. Here are just some of the reasons Crescat is selling richly valued stocks at large and buying undervalued gold and silver including mining companies today:

- The economy is now reaching credit exhaustion with record amounts of government and corporate debt relative to GDP worldwide.

- The debt burden ensures weak future real economic growth.

- Monetary debasement is the only way to reduce the debt burden. Fiat currencies are now engaged in a race to the bottom.

- Global monetary base expansion to suppress interest rates creates a supercharged environment for gold and silver.

- The global economy is in a severe recession with structural underpinnings beyond Covid-19.

- Unemployment has spiked an historic 6.7% in just five months from 3.5% to 10.2% even after settling back from temporary 14.7% Covid-19 lockdown levels.

- US equities today trade at truly record valuations, a full-blown mania. Ongoing policy rescue has perverted both free market accountability and price discovery creating a simultaneous zombie economy and stock market bubble which is unsustainable. Speculative asset bubbles are ripe for bursting.

- During the 1970s precious metals bull market, 10-year real yields got as low as -4.9%. We strongly believe we are headed in that direction and again with a long runway, especially with Jay Powell’s new signaling from Jackson Hole.

- A colossal $8.5 trillion of US Treasuries will mature by the end of 2021 and will need to be refinanced. Our government’s own central bank, the Fed, is the only entity capable of swallowing its debt guaranteeing new record levels of money printing to top today’s already historic levels.

- Precious metals became a forgotten class among large allocators of capital in the extended expansion phase of the last busines cycle.

- With $15 trillion of negative yielding bonds, equities’ earnings real yields at a decade low, and corporate bonds near record prices, gold and silver are being rediscovered for their tactical as well as strategic risk reducing and return generating properties in prudently balanced portfolios.

- The precious metals mining industry is the one clear industry to directly benefit from this monetary and fiscal indulgence. The aggregate market value of this industry still is almost 3 times smaller than Apple’s market cap.

- Precious metals are now trading at historically depressed levels relative to money supply; overall stocks, on the other hand, are the complete opposite.

- After a decade-long bear market, precious metals miners have been reluctant to spend capital.

- Now, they have historically low equity dilution, clean balance sheets, and record free cash flow growth.

- The lack of investment in exploration and new gold and silver discoveries is setting up an incredibly bullish scenario for metals as supply is likely to remain constrained for an extended period at the same time while demand is poised to explode.

- The year-over-year change in gold prices just broke out from a decade-long resistance. Last time we saw such strong appreciation was at the early stages of the 1970s gold bull market.


Financial markets simply cannot withstand higher interest rates. We believe the Fed has been forced into a new mandate, to suppress yields at all cost. This dynamic of expanding the monetary base to purchase assets and manipulate rates lower is an explosive mix for precious metals.

The break of the gold standard in 1971 was just as impactful as the Fed’s recent unlimited QE policy. Back then, it marked a period of lack of financial and fiscal discipline that triggered a frenetic 10-year bull market for gold. This time, we have arguably even stronger macro drivers for precious metals. As we show in the chart below, we have been in a clear trend of structurally increasing government deficits.



The S&P 500 real earnings yield is at its lowest level in a decade. Prior lows were also times that gold outperformed equities. In the early 2000s, for instance, the gold-to-S&P 500 ratio went up by 120% over 3 years. Even in 2010, a bull market for stocks, gold outperformed by 50%.

The difference this time is that stocks have never been so overvalued at the same time as the economic growth outlook has been so challenged. We believe strongly this is the perfect time to buy gold and sell stocks. And when we say “buy gold”, we also include silver and precious metals mining stocks where there is even more upside exposure (both alpha and beta) to a macro move up in gold.



The debt quandary the US government faces also adds tremendously to our views on precious metals. From a funding perspective, 71% of all Treasuries issued in the past year matures in less than 12 months, resulting on Treasury Bills outstanding to surge to $5 trillion! The US Treasury is hoarding a record of $1.79 trillion of this cash.

A similar buildup happened back in 2008-9. A major difference this time is the fact that Treasury Bills outstanding are almost $3.3 trillion higher than their cash balance. In such scenario, average maturity of government debt has dramatically declined to 64 months. As a result, there is a tsunami of $8.5 trillion of Treasuries that will be maturing by the end of 2021 ensuring astronomic levels of money printing in the near term.




Skeptics of Crescat’s long gold thesis often say real yields can’t move any lower. This is often because this are looking at the TIPS market which only dates back to 1997 and real yields are already at their lows for this time frame. Therefore, some investors assume interest rates when adjusted for inflation expectations have never been lower.

That, unfortunately, fails to include one of the most important analogs to today’s set up, the decade of the 1970s. Back then, 10-year yields less inflation measured by CPI twice reach as low as about -4.9%. Those moments of large and declining negative real interest rates drove two of the US most significant surges in gold, silver, and precious metals mining stocks in US history.

In today’s conundrum, corporations and governments are historically indebted and can’t take higher nominal yields, ensuring that strong monetary stimulus is here to stay to drive real yields lower, just like Jay Powell has promised.




A major narrative shift is underway. The old times of precious metals being perceived just as haven assets are probably over. With $15 trillion worth of negative yielding bonds, record overvalued stocks and a historically leveraged global economy, investors will likely begin to look at gold and silver, especially mining companies, with a fresh pair of eyes: growth and value.

Precious metals miners are the only industry where we are seeing strong and sustainable growth in revenues and future free cash flow at still incredibly low valuations today. Investors are starting to take note. Silver mining stocks, for instance, have already started to outperform even the market darlings, tech stocks. We believe this is only the beginning of a new era for precious metals.




The mining industry built a reputation of being capital destroyers since it peaked in 2011. But today this skepticism is no longer warranted. It is mind blowing that gold prices have just hit record highs and the larger mining companies have barely engaged in share dilution.

In aggregate, the top fifty gold and silver miners by market cap that trade in Canadian and US exchanges have only issued close to $266 million in equity in the last twelve months. That was the second lowest amount of 12-month equity issuance in the last 3 decades. These companies have also just paid down $200 million of debt in the last quarter.




We have also noticed extremely conservative capital spending by miners. Throughout history, the CAPEX cycle for the industry tends to follow gold and silver prices incredibly close. Logically, this makes sense. As metal prices move higher, these businesses become more optimist and therefore focus on advancing their projects.

This time, however, even though gold and silver prices have moved significantly higher, companies remain reluctant to spend capital. This level of divergence never happened in prior bull markets for precious metals.

This is fundamentally bullish for entire asset class as we expect the supply of gold and silver to stay constrained for longer. It is also fundamentally bullish for Crescat’s activist investment strategy in the industry where we we can deploy capital into undervalued companies with big, highly economic projects that are ripe to move forward in current macro environment.




Precious metals miners have never looked so financially strong. If the industry were a sector, it would have the cleanest balance sheet among all sectors in the S&P 500. The median company in the S&P 500 today has historically high total debt to assets of 35%.

Top miners, on the other hand, have only 12%. For such capital-intensive businesses, today’s healthy industry-wide capital structure is nice set-up to kick off a new secular bull market in precious metals mining.




We think it is important to get a sense of the both the value and growth opportunity today to see the incredible appreciation potential ahead of us. When we look at the ratio of gold and silver miners to global equities, it is still is near all-time lows and appearing to form a very bullish base, similar to what we saw back in early 2000s.

Mining stocks meanwhile are about to become free cash flow growth machines. Juniors with a large scale, high grade new deposits, carry mind-blowing NPVs and IRRs. It is far and away the industry with the strongest combination of deep value and high growth opportunity for today’s macro environment.



In contrast to the value and growth prospects for miners, it is shocking to see Apple’s (AAPL) market cap still about 3.5 times the size of the entire precious metals industry. If anything, this reflects the level of skewness to the upside for gold and silver stocks in the near and medium term. This is the only industry to truly benefit from today’s world of unlimited QE and deficits.




As we show below, Apple’s stock price appreciated at a much faster growth rate than its underlying free cash flow on a rolling twelve-month, forward-looking basis. The stock price is way ahead of its fundamentals. Apple is just one the many poster children for the manic speculation and excess in today stock market at large. Stocks like Microsoft (MSFT), Tesla (TSLA), and Netflix (NFLX) show similar looking disconnects.



With stock market indices making new highs, the narrowing breadth is ominous, especially in the tech-laden NASDAQ Composite.



The valuation of US stocks at large based a combination of eight factors compiled by Crescat is the most over-valued ever. We believe that the stock market is more over-valued than in it was in 1929 and higher than 2000.




To think that the stock market does not have any downside risk because the Fed has its back is absurd. False hope in the Fed’s ability to sustain these market valuations is perhaps the sole remaining illusion holding this market up. If your are in the crowded investor camp that believes easy monetary policy can prevent a market crash this time around because the Fed is engaged in easy monetary policy unlike the Great Depression, do yourself a favor and look up what happened to stock prices and multiples during the 1973-1974 bear market.

Easy monetary policies, as we have shown herein, are much more likely to drive investors out over-valued stocks and into under-valued precious metals. One precious metal that we are most excited about today is silver.

Throughout history silver has played an important role in the monetary system. Its recent price surge made a lot of investors question the sustainability of this move, but in the grand scheme of things, silver remains near all-time lows relative to size of the US M2 money supply.

The chart below is analytically important as it zooms out the still-early stages of what could be an incredible upsurge.



We have also recently noted that gold prices on a year over year basis just broke out from an over decade-long resistance. This is an important validation of our precious metals’ thesis. In our view, this looks a lot like the beginning of a late 70’s bull market.



Even after the largest liquidity infusion seen in history, equity markets are not only overvalued relative to their fundamentals but also relative to money supply. On the chart below, the S&P 500-to-M2 money supply ratio recently formed a double top from the insane tech bubble levels. It also still it well above peak of the housing bubble. For investors looking for bargains, it is not in the stock market at large. In our view, precious metals are almost solely the place to be today.




How does it all end? Colossal monetary dilution.

None of us own enough gold. It is not just the US dollar that will be challenged. It is all the global fiat currencies of highly indebted countries.

The Chinese yuan for instance is in an even worse predicament than the US dollar.

Chinese and Hong Kong banks are the most levered financial institutions in the global markets today. Chinese banks hold close to $43 trillion worth of highly inflated assets compared to China’s $14 trillion nominal GDP, an imbalance significantly greater than US and European banking imbalances that precipitated the Global Financial Crisis in 2008.

Chronically troubled, the top four Chinese banks have been under pressure for years now and have significantly been diverging to the downside relative to the Chinese stock market at large, similar to US banks in 2007. We believe that China, formerly the growth engine of the global economy responsible for 60% of global GDP from 2009 to 2019, has finally reached credit exhaustion.




All fiat currencies are in a race to the bottom versus gold today. The macro environment is one of global synchronized monetary debasement.




Gold and silver mining stocks have essentially been through a ten-year bear market since peaking in 2011. We believe that the bear market ended with the lows in March of this year, especially for smaller cap, exploration-focused mining companies. These stocks at large successfully held above their early 2016 lows in a double-bottom retest and still represent exceptional value today.

The new precious metals bull is now firmly off and running. Our analysis shows that it is still very early in the cycle as we have laid out herein. Future Fed and global central bank money printing should continue to take the world by storm to prod this bull now more than ever.

We encourage you to get positioned now. Just like at the end of last month, we have a handful of new deals already on deck for funding and more coming our way soon. We would appreciate your commitment of capital now to help us seize these outstanding opportunities.

We believe that the early investors in this space are the ones who will reap the big rewards.