Lending cash – Ibook Linux http://www.ibooklinux.net/ Fri, 23 Sep 2022 17:37:39 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://www.ibooklinux.net/wp-content/uploads/2021/06/ibook-150x150.png Lending cash – Ibook Linux http://www.ibooklinux.net/ 32 32 Citi to cut lending to buyout funds as new capital rules bite https://www.ibooklinux.net/citi-to-cut-lending-to-buyout-funds-as-new-capital-rules-bite/ Fri, 23 Sep 2022 16:52:36 +0000 https://www.ibooklinux.net/citi-to-cut-lending-to-buyout-funds-as-new-capital-rules-bite/ Citigroup is slashing the amount it lends to asset managers, including private equity firms, as the U.S. bank rushes to meet tough new capital rules, according to people familiar with the matter. The type of lending Citi is moving away from is known as underwriting financing, a niche but important business for Wall Street banks […]]]>

Citigroup is slashing the amount it lends to asset managers, including private equity firms, as the U.S. bank rushes to meet tough new capital rules, according to people familiar with the matter.

The type of lending Citi is moving away from is known as underwriting financing, a niche but important business for Wall Street banks that want to develop strong ties with trading clients, especially private equity groups. investment.

Citi’s existing book totals about $65 billion and the bank is preparing to reduce it to about $20 billion in the coming months, one of the people said.

There is a high demand for loans from buyout groups in particular, who use money pledged by fund investors as collateral for short-term bank loans to strike deals before receiving money from their donors.

Citi declined to comment.

Citi’s move underscores the impact of new capital requirements put in place by the Federal Reserve that threaten to cut lending from major US banks. This week, Jamie Dimon, chief executive of JPMorgan, warned that the rules posed a “significant economic risk” that would restrict the flow of credit to American businesses and consumers.

Citi, like JPMorgan and Bank of America, is forced to increase its reserves this year because it has been designated a global systemically important bank, which requires it to hold more capital relative to its weighted assets. depending on the risks.

Banks can meet the requirements by retaining more earnings or raising new capital, but most choose to reduce the amount of assets on their balance sheets.

It comes amid a restructuring of the bank under chief executive Jane Fraser, who is also leaving many of the bank’s overseas retail operations. The lender is grappling with a 2020 consent order with US banking regulators under which it agreed to upgrade its processes and technology.

Citi has started alerting some of its biggest private equity clients to the impending changes, according to people briefed on the conversations.

A leading private equity firm said most major Wall Street banks are still engaged in subscription financing, but Citi – which has been one of the top three players in the sector – is cutting back.

Another buyout official interpreted the move as a sign that Citi may be embarking on a broader reconsideration of its role in the lucrative but risky market for providing credit to private equity groups.

Subscription lines carry minimal risk but do not tend to generate high returns. Instead, banks are offering them to cultivate relationships with buyout companies in hopes of winning more lucrative business later, the executive said.

“Citi was an outlier,” they said, adding that the bank had a large subscription line business but a smaller presence in buyout financing.

“As a ‘loss leader’ or safe, low-profit business for building relationships, it’s a great business.” But as a standalone business with no follow-up activity, it’s poor,” they said.

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Inside the Ring Road: Media Goes Nuclear https://www.ibooklinux.net/inside-the-ring-road-media-goes-nuclear/ Wed, 21 Sep 2022 22:03:26 +0000 https://www.ibooklinux.net/inside-the-ring-road-media-goes-nuclear/ NEWS AND NOTICES: Not the kind of headlines everyone wants to see. They are there however, following the Russian President Vladimir Poutine‘s warns on Wednesday that it could resort to nuclear weapons as the situation with Ukraine turns dire. Here are some of the last 24 hours: “Putin Just Doubled His Nuclear Threat: What It […]]]>

Not the kind of headlines everyone wants to see. They are there however, following the Russian President Vladimir Poutine‘s warns on Wednesday that it could resort to nuclear weapons as the situation with Ukraine turns dire. Here are some of the last 24 hours:

“Putin Just Doubled His Nuclear Threat: What It Means” (Forbes); ‘Putin is again flirting with the grim prospect of nuclear war – this time he might mean it’ (The Guardian); “Biden Condemns Putin’s ‘Irresponsible’ Nuclear Threats” (The Washington Post); “Putin escalates war in Ukraine and launches nuclear threat to West” (Reuters); and “If a nuclear attack hits New York, these fallout shelters won’t protect you” (The Gothamist).

But wait. Two weeks ago there were similar headlines. Here is just one example among many, published on September 3: “Russian official issues stern nuclear warning to US: ‘chess game’ of death” (Newsweek).

And then there’s this from March 15: “Putin’s nuclear threats are a wake-up call to the world. (Atlantic).

Let’s not forget this headline dated December 14, 2021: “Russia threatens to bomb Europe as tensions escalate” (The Daily Express).

And let’s not forget that New York City released an official public service announcement on July 11 detailing how to survive a nuclear attack. He urged people to “come in, stay inside and stay tuned”.

ALWAYS CHARMED BY CASH

Those old greenbacks aren’t out of fashion yet. Alliant Credit Union surveyed 2,000 American adults and found that 51% had “hard cash” hidden in their homes, averaging $1,010. Nearly 6 in 10 Americans — 58% — prefer to keep their cash savings “just for emergencies.”

The survey was conducted by the Chicago-based Financial Cooperative from August 10-19 and released Monday.

Meanwhile, 29% said they find cash useful for lending money to people they know, while 17% prefer using mobile payments and 15% opted for cashless checks. ‘Ancient. Another 43% use cash for small purchases like coffee, while 39% reserve their cash for grooming appointments and 35% use it for small “non-critical” emergencies.

“What I think we’re seeing here is not that cash is disappearing. Instead, its uses are evolving,” Chris Mooredirector of deposits and payment product strategy at the credit union, said in a statement.

“Seeing that people still choose to use cash for savings, emergencies and loans to friends and family shows us that the value of cash is that it is liquid and instantly available,” he said.

How useful is it? The survey also revealed that fundholders store an average of $70 in paper notes in their wallet.

NEVER A BORING MOMENT

Billionaire Jeff Bezosfounder of Amazon, donated $200 million to the Smithsonian Institution, $130 million of which is earmarked for the development of the future Bezos Learning Center at the Smithsonian National Air and Space Museum.

Five design proposals are already under consideration. There is also scrutiny from a top animal rights group. It would be People for the Ethical Treatment of Animals – PETA – which has a simple suggestion for the final design.

“PETA just sent a letter to museum director Christopher Browne urging him to ask the winning design firm to use bird-friendly design and use non-reflective glass so as not to contribute to loss of bird life,” the organization advised in a statement to Inside the Beltway.

“Buildings kill up to a billion birds each year in the United States. The reflective surfaces described in the design proposals would lead to a disturbing and unbearable increase in deaths – especially because Washington is located along a road major migration that many species follow to travel south to warmer climates,” the group said.

“Reflective glass windows result in deadly collisions, while animal-friendly design elements such as masking films and ultraviolet patterns can save countless bird lives,” said Ingrid Newkirkthe group’s long-time chairman.

“Since many of the National Air and Space Museum’s engineering marvels were inspired by the flight of birds, it is critical that the museum design design that allows birds to safely share the sky. security,” she said.

MONITOR THE BOX

“Many Americans believe politics has entered into the process of counting the nation’s votes, with potentially significant ramifications for the upcoming election. They think it’s at least somewhat likely that some state or county officials will refuse to certify election results for political reasons,” CBS News reports in a new poll.

He revealed that 32% of those polled said there had been “widespread fraud” in the 2020 election; 40% said there had been “a few isolated incidents” of fraud, while 28% believed there had been no voter fraud.

“Six in 10 Americans believe that the politicization of election rules and attempts to overturn official election results are major problems with America’s voting and electoral system,” CBS’s analysis of the results noted.

This CBS News/YouGov survey of 2,985 American adults was conducted August 29-31 and released Sunday.

SURVEY OF THE DAY

• 59% of US airline passengers say someone kicking the back of their seat is one of the “most annoying behaviors” during a flight.

• 59% say “drunk and disruptive” passengers are among the most annoying; 48% cite those who smell bad, due to poor hygiene or too much cologne.

• 47% cite inattentive parents; 40% name passengers who eat stinky food in flight.

• 40% name passengers who “lean on pig armrests”; 38% mention those who recline fully in the seat in front of them.

• 29% cite passengers who talk too much; 29% also cite those who board the plane or disembark “out of turn”.

• 28% mention those who listen to music too loudly; 24% name passengers who take their shoes off.

• 22% cite those who flirt with them, other passengers or flight attendants; 20% cite passengers getting up for overstretching.

• 18% name those who use the overhead bins several rows away from their seat; 14% cite “too affectionate couples”.

• 13% cite passengers who “demand too much of flight attendants”.

SOURCE: A Vacationer.com survey of 1,098 American adults conducted online Aug. 6 and released Monday. “Respondents were able to select as many actions from a provided list as they found irritating,” advised the pollster.

• Contact Jennifer Harper at jharper@washingtontimes.com.

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Flathead Business Journalists | Daily Inter Lake https://www.ibooklinux.net/flathead-business-journalists-daily-inter-lake/ Sun, 18 Sep 2022 07:02:31 +0000 https://www.ibooklinux.net/flathead-business-journalists-daily-inter-lake/ FEC Raffle Stands for Food Banks Representatives from Kalispell, Columbia Falls, Whitefish, West Shore, Libby and Veterans food banks gathered at Flathead Electric Cooperative on Friday, September 9 to celebrate the results of this year’s Ribeye raffle. Organized by the co-op to support local food banks, the 2022 Ribeye Raffle raised $22,725 in cash and […]]]>


FEC Raffle Stands for Food Banks

Representatives from Kalispell, Columbia Falls, Whitefish, West Shore, Libby and Veterans food banks gathered at Flathead Electric Cooperative on Friday, September 9 to celebrate the results of this year’s Ribeye raffle.

Organized by the co-op to support local food banks, the 2022 Ribeye Raffle raised $22,725 in cash and approximately 1,000 pounds of meat to donate to the seven food banks.

As part of its commitment to community members owning the co-op, Flathead Electric purchases beef, lamb and pork each year at the 4-H and FFA (Future Farmers of America) Market Sale at the Northwest Montana Fair. Most of the meat goes to food banks, except for the best steaks, which are raffled off. This year, the co-op purchased beef from Clara Giffin and Tristen Cheff; the lambs of Cadance Jones and Wyatt Bernier; and the pigs of Dylan Benson and Bentley Braaten.

The winners of the raffle were announced on August 23. Dana Brown and Susan Gudmunson, both of Columbia Falls, each received about 60 one-inch-thick Montana sirloin and rib eye steaks worth more than $500.

Will Tutvedt, the Co-op’s Community Outreach Specialist and organizer of the Ribeye Raffle, is delighted with the results of this year’s raffle and shared, “It’s just amazing; when we started the Ribeye raffle, we raised about $1,000 every year. The pandemic shutdown forced us to sell our sales online, and that turned out to be the best thing that could have happened to the Ribeye Raffle. Ticket sales increased to over $10,000 the first year they were online and surpassed $20,000 for the first time this year. Our members are so generous and as a co-op we are happy to be able to organize this effort and give to our community food banks in such a meaningful way.

Over the past seven years, Ribeye Raffle has raised $52,386 in cash and donated approximately 6,000 pounds of meat to food banks in Kalispell, Columbia Falls, Whitefish, Bigfork, Lakeside, Libby and Veterans. Ticket sales are closed for 2022 but will be available in summer 2023 for purchase online, at the Co-op’s Libby and Kalispell offices, and at the Co-op’s booth at the Northwest Montana Fair.

WCU announces additions to leadership team

Whitefish Credit Union has announced the following five additions to the management team.

• Jennifer Archer has been promoted to Senior Vice President of Lending Operations. Archer most recently served as vice president of credit administration supporting the loan portfolio. She joined Whitefish Credit Union in 2005 and held several positions within the credit union before overseeing lending operations. Archer serves on the board of Women Who Wine, a local nonprofit that highlights and raises funds for other nonprofits. She graduated from Flathead High School and is currently attending CUNA Management School, a leadership program for credit union executives.

• Cory Coopman has been promoted to Senior Vice President of IT and Project Management. Coopman joined the credit union as vice president of information technology in 2018 and brings more than two decades of deep experience managing and improving information technology systems. Coopman graduated from Arizona State University with a business degree in computer information systems, and he actively volunteers in the community coaching youth sports.

• Cheryl Mintz recently joined Whitefish Credit Union as Senior Vice President of Human Resources. She holds an MBA and JD from Tulane University, with additional certifications in mediation and arbitration. Mintz is a certified member of the Montana Bar Association and has extensive experience in multiple industries. She holds a private pilot license, a diving license and a black belt in judo. In her spare time, she has supported numerous charities and is a Soprano II member of the Glacier Symphony Chorale group.

• Matt Venturini has been promoted to senior vice president of loans. Venturini started with Whitefish Credit Union in 2011 as a credit analyst. After six years at Glacier Bank, he joined the credit union as Vice President, Head of Home Lending before being promoted to his current role overseeing all aspects of Whitefish Credit Union lending. Venturini graduated from Flathead High School and earned a degree in finance from Concordia College. He is Chairman of the Board of Habitat for Humanity Flathead Valley.

• Josh Wilson has been promoted to Senior Vice President of Marketing. Wilson has worked for Whitefish Credit Union since 2017, previously serving as vice president of marketing. He has over sixteen years of financial services experience and is an adjunct instructor in West Virginia University’s Data Marketing Communications and Digital Marketing Communications graduate programs. Josh received his master’s degree from West Virginia University.

Riley recognized for his work with H&R Block

Celina M. Riley of Kalispell has just been named one of 25 people nationwide to be recognized for the 2022 Henry Bloch Awards for Excellence in Customer Service for H&R Block. Riley is bold and always working to grow H&R Block’s presence in her area.

Each recipient has been chosen to go above and beyond in customer care and reflect the behaviors and purpose of H&R Block: to provide help and inspire trust in our customers and communities around the world.

Mann Mortgage wins award for connecting buyers with down payment assistance

Kalispell-based Mann Mortgage received the HomeNow Top Lending Institution award from MoFi, a nonprofit that has served Montanans for more than 30 years.

Mann Mortgage won the award because its loan officers helped connect the most homebuyers in Montana to MoFi’s HomeNow down payment assistance program in 2021. HomeNow helps increase access to property among Montanese who have good income and good credit, but need help with the down payment. Mann Mortgage has received the award five years in a row since 2016, when HomeNow down payment assistance was first offered.

Based in Kalispell, the company also has branches in Billings, Bozeman, Great Falls, Helena, Missoula, Polson, Stevensville and Whitefish.

“HomeNow’s down payment assistance has been an extremely valuable resource for Mann Mortgage,” said Steve Paulson, Branch Manager for Mann Mortgage in Kalispell. “Many of our clients throughout the state of Montana would not have been able to achieve their dream of homeownership without the program, and we feel both privileged and proud to be Montana’s Lender of the Year. MoFi for the fifth consecutive year.”

Homebuyers can access HomeNow down payment assistance through a participating mortgage lender. It comes in the form of a deferred loan at 0% interest. Buyers can receive up to 5% of their total loan amount, and assistance can be used for both down payment and closing costs. The program is not limited to first-time home buyers. Since launching the program in late 2016, MoFi has helped nearly 600 Montana residents become homeowners.

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Reuters Reports Major US Banks Suspend Crypto Lending Plans Amid Tough SEC Guidelines https://www.ibooklinux.net/reuters-reports-major-us-banks-suspend-crypto-lending-plans-amid-tough-sec-guidelines/ Fri, 16 Sep 2022 16:04:00 +0000 https://www.ibooklinux.net/reuters-reports-major-us-banks-suspend-crypto-lending-plans-amid-tough-sec-guidelines/ U.S. Securities and Exchange Commission (SEC) guidelines on crypto custody could keep banks out of the industry due to the cost of implementation, Reuters reported on Sept. 16. According to the report, SEC accounting guidelines state that public companies holding crypto assets on behalf of their clients should recognize those assets as liabilities due to […]]]>
xeggex

U.S. Securities and Exchange Commission (SEC) guidelines on crypto custody could keep banks out of the industry due to the cost of implementation, Reuters reported on Sept. 16.

According to the report, SEC accounting guidelines state that public companies holding crypto assets on behalf of their clients should recognize those assets as liabilities due to the high level of risks associated with the industry.

This focus, however, poses a major problem for banks looking to offer crypto custody services.

Banking regulations include strict capital rules, which require banks to hold cash to cover all liabilities on their balance sheets.

Banks trying to offer crypto custodial services to their customers would need more cash on hand as crypto assets will be reported as liabilities. This could prove too costly for many of these banks, forcing them to put their crypto product offering plan on hold.

So far, banks like Bancorp and State Street are reconsidering their digital asset offerings because of the costs.

State Street Digital head Nadine Chakar said:

“We have a problem with the premise of doing this because it’s not our assets. It shouldn’t be on our balance sheet.

A Bancorp spokesperson revealed that the bank has stopped accepting new clients for its crypto custody services due to regulatory requirements.

Reuters, citing unnamed sources, said the SEC did not consult with banking regulators before issuing the guidelines, with one source saying:

“Lenders building crypto offerings have had to ‘stop moving forward with those plans pending further action from the SEC and banking regulators.’

While the SEC has attempted to justify its guidance on several occasions, stakeholders such as US Representative Trey Hollingsworth, the American Bankers Association, the Bank Policy Institute and the Securities Industry and Financial Markets Association have challenged it.

According to lenders, the SEC is using its directive to prevent banks from getting involved in crypto custody services.

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Grants a lifeline for many small businesses https://www.ibooklinux.net/grants-a-lifeline-for-many-small-businesses/ Thu, 15 Sep 2022 00:13:00 +0000 https://www.ibooklinux.net/grants-a-lifeline-for-many-small-businesses/ NASHVILLE, Tenn. (WSMV) – Nashville’s small businesses still need help to keep going and it’s evident with how quickly the $9 million in grants from the metropolitan government have disappeared. In February, Metro allocated $20 million to help small businesses in Davidson County. Of that amount, $9 million was for grants requested by small businesses […]]]>

NASHVILLE, Tenn. (WSMV) – Nashville’s small businesses still need help to keep going and it’s evident with how quickly the $9 million in grants from the metropolitan government have disappeared.

In February, Metro allocated $20 million to help small businesses in Davidson County. Of that amount, $9 million was for grants requested by small businesses and Pathway Lending, the organization that oversees distribution, said the money was gone quickly.

Pathway Lending said more than 1,400 small businesses have applied for the grant and 468 have received money distributed from the grant. Companies that were awarded grants received approximately $17,500.

For many small businesses, these funds have been a lifesaver.

“It was a real blessing when this money became available,” said Mike Turney, one of the owners of Papa Turney’s Barbecue in Hermitage.

Turney said her family didn’t get any of the PPP loans the federal government had available at the start of the pandemic, and they were devastated. Then they were surprised but grateful for the grant from Metro.

The family-owned Nashville Shores Marina in Hermitage said it’s not easy to keep the grill going and customers coming through the door.

“Cash flow for one thing and I guess one of the biggest things was labor,” Turney said. “There were no employees and people were jumping from job to job for pennies. You could pay $20 an hour and they would quit that job for $20.50.

He said they did not lay off anyone and did not reduce the wages of any employee.

“What we’ve decided to do is pay the people who work with us, pay them well and treat them well, and we’ve been able to settle in with some great people who stay here with us,” he said. said Turney.

The Nashville Small Business Stimulus Grant money has been big for the barbecue. Mike Turney said it helped buy a fridge to increase their storage space.

“You have meat suppliers who may have a special on the brisket or the ribs, but if you don’t have the storage room, even if you have the money, you can’t capitalize on that opportunity,” said said Turney. “That’s what those fridges were giving us at that time.”

“We opened the grants on June 29, and by July 15 the money was pretty much gone from the entire pool,” said Thomas Sheffield, director of the Nashville Opportunity Fund with Pathway Lending. “This really puts too much emphasis on the need for help for the small business community.”

Even though the grant money has run out, Pathway Lending said there are $9 million in loans Metro has available now for small businesses to apply for.

“The wonderful thing about these loans is that they are 2% interest loans,” Sheffield said.

Pathway said small business borrowers will pay 2% fixed interest on loans up to $200,000 and there is no deadline to apply. Pathway said businesses that received the grant will not be able to obtain the percentage loan.

Turney encourages companies to contact Pathway Lending to help them determine what their needs are.

“See what’s available there, because there are still things out there to help those businesses that need help,” Turney said. “Do your research and call and ask the questions.”

Turney is happy to keep his doors open, but knows the small business journey isn’t easy.

“I had several friends who in the last year just gave up,” Turney said. “They just decided I had to feed my family, so I better sell the business and close the business and go for plan B to take care of my family.”

Pathway Lending hopes more financial help will come to Davidson County small business owners.

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Prediction: 3 stocks that could be worth more than Tesla by 2035 https://www.ibooklinux.net/prediction-3-stocks-that-could-be-worth-more-than-tesla-by-2035/ Tue, 13 Sep 2022 09:21:00 +0000 https://www.ibooklinux.net/prediction-3-stocks-that-could-be-worth-more-than-tesla-by-2035/ The stock market offers only one guarantee to investors: change. Over time, it is only normal to see different industries and sectors dominate the broader market, as well as the largest companies by market capitalization being replaced by innovative, fast-growing companies. In 1999, Lucent Technologies, nokiaand General Electric were three of the 10 largest publicly […]]]>

The stock market offers only one guarantee to investors: change.

Over time, it is only normal to see different industries and sectors dominate the broader market, as well as the largest companies by market capitalization being replaced by innovative, fast-growing companies. In 1999, Lucent Technologies, nokiaand General Electric were three of the 10 largest publicly traded companies. Today, Nokia and GE rank 390th and 125th respectively among the largest publicly traded companies in the United States. Interestingly, Lucent isn’t even a public company anymore. It was acquired by Alcatel in 2006, which in turn was acquired by Nokia in 2015.

History suggests that many of today’s biggest companies are likely to drop in market capitalization rankings at some point in the future – and that includes the electric vehicle (EV) maker You’re here (TSLA 1.58%).

Image source: Getty Images.

Tesla has delivered jaw-dropping returns over the past decade

Among S&P500-publicly traded companies, none has generated a greater return over 10 years than Tesla (15,220%). In fact, no other S&P 500-listed company is even halfway to the returns Tesla has delivered to its loyal shareholders over the past decade.

The company has benefited from its successful construction from the base to mass production. Even with semiconductor chip shortages and China’s zero-COVID strategy negatively affecting production at the company’s Shanghai gigafactory, Tesla is on pace for its first year with more than a million electric vehicle deliveries. With the company opening two new gigafactories this year, sustained double-digit annual production growth is expected for the foreseeable future.

Tesla also pushed decisively in the earnings column. With the company no longer dependent on selling renewable energy credits to other automakers to get into the black, Wall Street felt more comfortable placing a high valuation multiple on Tesla.

These could be among the largest companies in the world by 2035

But even the biggest companies can falter. Tesla’s valuation is an eyesore in a generally commoditized industry where forward price-to-earnings ratios are routinely in the single digits.

Additionally, CEO Elon Musk has become a huge liability to the company. His actions have caught the attention of the Securities and Exchange Commission on more than one occasion, and his predictions of when new electric vehicles or innovations will debut have rarely, if ever, materialized.

The following is a prediction of three stocks that could reasonably be worth more than Tesla by 2035.

The logical choice: Berkshire Hathaway

Of the thousands of publicly traded companies with a market capitalization lower than Tesla’s today, Warren Buffett Berkshire Hathaway (BRK.A 0.75%) (BRK.B 0.96%) seems like the logical choice to eventually overtake the king of electric vehicles in North America by 2035, if not much sooner.

While past performance is no promise of future results, Warren Buffett offers a track record like few other fund managers. During his 57 years as CEO of Berkshire Hathaway, he led the company’s Class A shares to an average annual return of 20.1%. In another context, shareholders have doubled their money every 3.6 months, on average, for almost six decades.

One of the reasons Berkshire Hathaway has performed so well for so long is Warren Buffett’s penchant for filling his firm’s investment portfolio with cyclical stocks. The Oracle of Omaha is well aware that recessions are an inevitable part of the business cycle. Likewise, he fully understands that periods of economic expansion last considerably longer than such downturns. As such, he has loaded Berkshire Hathaway’s investment portfolio with companies that can benefit from the natural expansion of the US and global economy over time.

Dividend stocks are another unsung hero in Berkshire Hathaway’s investment portfolio. Over the next 12 months, Buffett’s company is on track to collect about $6.07 billion in dividend income, the vast majority of which comes from just five stocks. Publicly traded companies that pay a dividend are often profitable, proven, and have a rich track record of outperforming their non-paying counterparts.

A final feather in Berkshire Hathaway’s hat is its aggressive stock buyback program. Warren Buffett and Executive Vice President Charlie Munger have overseen $62.1 billion in stock buybacks since July 2018.

A person sitting in a cafe holding a credit card above a portable POS card reading device.

Image source: Getty Images.

If everything went well: Visa

The second stock with the innovation capability to overtake Tesla in market capitalization, if all goes well, is the payment processor Visa (V 0.70%). Visa would have to add $516 billion to its existing market capitalization just to match Tesla.

Although cyclical, Visa brings a number of competitive advantages that could reasonably allow it to become a trillion dollar business. For starters, Visa benefits from the aforementioned disproportionate amount of time the US and global economy spends expanding, versus contracting. As economies grow over time, consumer and business spending increases. More spending equals higher fees collected by Visa.

Visa also finds itself in pole position in the United States, the largest consumer market in the world. In 2020, it controlled 54% of the credit card network’s purchase volume. Moreover, none of the four major payment processors in the United States increased their share of credit card network purchase volume more than Visa after the Great Recession.

Another reason for Visa’s consistent outperformance is its loan avoidance. The problem with entering the lending arena is that it would expose Visa to defaults and possible write-offs in the event of a recession. Since the company sticks strictly to payment processing, it doesn’t have to set aside capital to cover loan losses when the domestic and global economy weakens.

Finally, don’t overlook Visa’s growth avenue. Since most global transactions are still conducted in cash, Visa has the ability to move organically or acquisitively into underbanked regions of the world.

The long shot: Salesforce

A third title that could be worth more than Tesla by 2035, which is a bit more low-key than the other two companies on this list, is the provider of cloud-based customer relationship management (CRM) software solutions. Selling power (RCMP 1.87%). It is considered a bit difficult to overtake Tesla given that its current market capitalization of $163 billion is far behind Tesla ($939 billion). Again, 13 years is a considerable amount of time to bridge that gap.

Without getting too technical, CRM software is what consumer-facing businesses use to improve existing customer relationships and improve sales. It is used to monitor product/service issues, as well as online marketing campaigns, and can aid in predictive analytics to determine which existing customers are most likely to purchase a new product or service.

Aside from global CRM software sales growing by double digits, what has made Salesforce such an intriguing investment is its steady market share gains in the CRM space. Not only has Salesforce been the world’s leading CRM vendor for nine consecutive years, but its share of the CRM market has steadily increased. In 2021, it accounted for 23.8% of the global share of CRM applications, more than four times that of its nearest competitor.

Salesforce’s rapid growth is also a function of co-CEO and co-founder Marc Benioff’s targeted acquisition strategy. The buyouts, which include MuleSoft, Tableau Software and Slack Technologies, have expanded the company’s ecosystem and provide many opportunities to cross-sell solutions to new companies.

If Salesforce can maintain its annual growth rate of around 20%, it could have a real shot at overtaking Tesla by 2035.

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2 big dividends for retiring in splendor https://www.ibooklinux.net/2-big-dividends-for-retiring-in-splendor/ Sun, 11 Sep 2022 15:00:00 +0000 https://www.ibooklinux.net/2-big-dividends-for-retiring-in-splendor/ izusek/E+ via Getty Images Co-produced with “Hidden Opportunities” Without a doubt, 2022 has been a scary year for retirees. Stocks plunged and posted nauseating volatility. Bonds, which traditionally hold the fort when stocks falter, also fell. Analysts say 2022 is the worst year to retire, but let’s face it, Wall Street has a reputation for […]]]>

izusek/E+ via Getty Images

Co-produced with “Hidden Opportunities”

Without a doubt, 2022 has been a scary year for retirees. Stocks plunged and posted nauseating volatility. Bonds, which traditionally hold the fort when stocks falter, also fell. Analysts say 2022 is the worst year to retire, but let’s face it, Wall Street has a reputation for scaring you not to hang up your boots.

Author search

Author search

Fear sells, and Wall Street knows it.

[There’s] much more money made from selling abilities rather than investing abilities. – warren buffet

Let me entertain you with some positive data from Goldman Sachs (GS). The data below shows that high yields provide above-market returns during high inflation regimes.

chart

Goldman Sachs dividend forecast

Additionally, the investment management firm expects dividends to be higher in the S&P 500 over the next decade. The projection is reassuring for income-oriented investors and is based on historical trends. Over the past two decades, dividends have been the only form of capital return showing steady growth with minimal volatility.

Yardeni

Yardeni

Today we are discussing two picks with yields of up to 8.7% to produce liquidity in this scary market. Without further ado, let’s dive into the recommendations.

Pick #1: JPS, yield 7.2%

The International Monetary Fund (“IMF”) regularly assesses the impact of global shocks on the financial system through its Global Banking Stress Test. The recent test applied with parameters used for a pandemic-like economic event showed an encouraging picture of the resilience of international banks.

Fitch, IMF

Fitch, IMF

With global financial institutions well positioned to weather the economic storms, it’s worth noting that this sector is the largest issuer of preferred securities, a powerful tool in an income-oriented investor’s arsenal. (Source: Nuveen)

Nuvean

Nuvean

Today we will be reviewing Nuveen Preferred & Income Securities Fund (JPS). JPS is a CEF (Closed-End Fund) which aims to invest at least 80% of its assets under management in preferred securities and other income-generating securities, including hybrid securities such as contingent capital securities. Notably, ~86% of securities in JPS’ portfolio retain investment grade ratings, indicating the superior quality of its overall composition.

JPS Fund Page

JPS Fund Page

~65% of the fund is made up of securities issued by banks, insurance companies and capital markets. Global and national regulators are closely monitoring the health and lending potential of these entities to avoid a 2008-like event.

table

SJP Annual Report

JPS is made up of 235 stocks with an average coupon of 6.2%. The fund’s top 10 positions are preferred securities of major global banking names and represent approximately 34% of the total portfolio.

Nuvean

Nuvean

Today, the fund is trading at an attractive 8% discount to net asset value, making it a bargain for income investors and retirees. The fund’s current monthly distribution of $0.0435/share translates to an annualized return of 7.2%.

It should be noted that JPS has paid out $16.79 in distributions since its inception in 2002. In recent years, preferred stocks have struggled with low yields as low interest rates have driven up preferred stock prices. , putting downward pressure on cash flow.

It’s been a similar story for all fixed income investments. While investors are trained to view higher prices as a “good” thing, for fixed income investors higher prices lead to lower cash flow and lower future returns. Rising interest rates are “bad” for prices, but great for future returns when investing in fixed income securities. For many years, dividends and interest from fixed income investments have declined due to high prices and lower yields.

Despite this difficult environment, JPS outperformed the preferred ETF iShares (PFF), as well as ETFs covering other debt classes like high yield bonds, investment grade bonds and treasury bills.

Chart
Data by YCharts

As we look to the future, yields are increasing. Money invested today receives higher dividends from preferred stocks and higher interest from debt. As JPS reinvests principal, it will be reinvested at higher returns, creating a turning point from recent downtrends.

Some worry about a repeat of 2008, terrible for banks. Yet banking firms are much better prepared to weather a sharp recession and maintain their lending capabilities than they were in 2008.

JPS, with its portfolio of quality preferred stocks from the financial services sector, outperformed its benchmarks during a difficult period for fixed income securities. With fixed income securities priced much more attractively today, the prospects for future returns are better.

Choice #2: BST, yield 8.7%

Rising interest rates hurt growth stocks, especially those in the technology sector, due to high valuations and low (or non-existent) dividend payments. Higher rates reduce cash flow and inhibit reinvestment in product innovation and growth prospects. This fear caused the tech sector to plunge in 2022.

But Mr. Market is an ineffectual forward-thinker who tends to swing from pessimism to optimism at the slightest sign of improvement in the macro economy. After all, that’s how markets have behaved during rate hikes for the past ~30 years. They pick up somewhere in the middle of the rate cycle and leave investors wondering.

Dow Jones data

Dow Jones data

BlackRock Science and Technology Trust (BST) is a CEF in which at least 80% of the total assets consist of equity securities issued by science and technology companies. Due to its high exposure to software, semiconductors and the IT sector, this CEF resembles the NASDAQ index but is designed to reward income investors with large distributions. (Source: BST semi-annual report)

BST semi-annual report

BST semi-annual report

Born at the end of 2014, just before the previous rate hike cycle, BST achieved returns comparable to major market indices, with the most significant advantage being that the bulk of the returns were cash distributions instead capital gains.

Chart
Data by YCharts

Let’s look at the revenue generated by BST compared to the S&P 500 and the Nasdaq

Portfolio Viewer

Portfolio Viewer

BST comprises 115 holdings, with its top holdings being among the biggest global names in technology. Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), and Amazon (AMZN) are wide-moat companies, and the majority of us interact with their products or services on a daily (or hourly) basis. These four companies represent 17.2% of BST’s portfolio.

Blackrock BST

Blackrock BST

When technology takes a beating, it presents a great opportunity to start buying BST. CEF trades at par with NAV and has an attractive yield of 8.7% with its monthly distributions of $0.25/share. Importantly, BST has maintained a steadily growing payout since 2014, with its current monthly payout 150% higher than its initial return. The CEF has also paid out at least three special dividends during its 8-year tenure, making it a strong ally for income investors.

If you like the long-term growth prospects of technology but want reliable and growing dividends on your investments, BST is a great fit for your portfolio.

The time of dreams

The time of dreams

Conclusion

A typical American working life lasts about 42 years. With over four decades of work experience and even more significant life experience, do you still have to rely on Wall Street analysts to tell you when to retire?

Although dividend-paying stocks are not immune to market price action, when sentiment is bearish it is an opportunity to buy bigger yields on the cheap. These dividends are not intended to offset temporary capital losses, but are intended to provide stable income for your needs. You could withdraw that money to support your retirement lifestyle or reinvest it to buy more stocks.

Our HDO portfolio is designed to achieve an average return of over 8% from high-quality, dividend-paying securities. As long as dividends are coming in, we worry less about everyday prices, except when we buy the sale at the dividend store. The deal in the store is on and these two big returns will fly off the shelves. Grab them before the next person and start taking control of your financial well-being with passive dividend income.

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How to get the best mortgage rate? (September 2022) https://www.ibooklinux.net/how-to-get-the-best-mortgage-rate-september-2022/ Wed, 07 Sep 2022 22:51:39 +0000 https://www.ibooklinux.net/how-to-get-the-best-mortgage-rate-september-2022/ Housing and real estate prices, in general, have risen quite sharply after many global impact events that have taken place over the past few years. This has also led to soaring interest rates for home loans, and in this case, it is crucial to do your research and find the best possible mortgage rate before […]]]>

Housing and real estate prices, in general, have risen quite sharply after many global impact events that have taken place over the past few years. This has also led to soaring interest rates for home loans, and in this case, it is crucial to do your research and find the best possible mortgage rate before you move.

After all, your mortgage rate will directly influence how much you’ll have to pay each month for a long number of years to come, not to mention the total amount you’ll pay over the life of your loan. Interest rates are influenced by a number of factors, from your credit score, to the down payment you can afford, to the term of the loan, the total value of the home you want to buy, etc

So, to help you find the best possible deal, we’ve put together a guide on what to do to get the lowest mortgage rate on the market today.

Get the best rate for your mortgage

If you’re considering your options for your next mortgage, your priority should be finding the best deal available and making sure you can get your loan application approved. There are three things you need to focus on – having the best credit rating you can get, maximizing your income, and finally – making sure you have assets, which can mean a lot.

To ensure all of this, we recommend the following seven-step process that you should consider following.

  1. Boost your credit score
  2. Build a strong employment record
  3. Set aside as much money as possible for your down payment
  4. Understand how the debt to income ratio works and what yours is
  5. Try getting a 15-year fixed rate mortgage
  6. Compare offers from several lenders
  7. Block your rate

Now, let’s take a closer look at each of these steps and see what they mean and include.

1. Boost your credit score

Your first step will be to increase your credit score. While a low credit score won’t automatically prevent you from applying for a loan or even getting one, your chances of getting one will be reduced if your credit score is low. At the very least, even if you get the loan, a better credit score can lead to a lower mortgage rate and generally more economical borrowing terms.

Basically, your credit score is always an important factor, whether you’re taking out a loan or renting an apartment, looking for a job, and in hundreds of other scenarios. From what we’ve seen, the best mortgage rates are always received by those with high credit scores, typically 740 or higher. Your goal is to make lenders confident in your ability to pay your dues on time, and the more they trust you, the lower your interest rates will be.

Obviously, that means you can improve it by paying other things on time, like your bills, credit card balances, etc. You can increase it further by making sure you don’t spend more than 20-30% of your credit limit. It’s basically about responsible spending and timely payments. Stick to them and your credit score will improve in no time.

One way to increase your score is to apply for a secured credit card.

2. Build a strong employment record

Another thing that will make you more attractive to lenders is the guarantee that you will have at least two years of stable employment and regular income, preferably from the same employer. This way they don’t have to worry about whether you’ll be able to make regular payments. For this purpose, you may need to submit pay stubs at least 30 days prior to your mortgage application.

It is also a good idea to prepare W-2s from the previous two years. Proof of any bonuses or commissions is also a good thing to have. Now, if you’re self-employed or work part-time multiple times and your payments are split, things can get a little more complicated. However, it is not impossible to obtain good interest rates even under these circumstances. Anyone who is self-employed will likely need to provide their business documents and provide tax returns, income statements, etc.

Even graduates who are just beginning their careers or those who have been out of work for some time can be included, provided they have a formal job offer in hand, provided the offer includes the amount they are entitled to. Will be paid. And while gaps in your work history can be problematic, they won’t necessarily disqualify you. However, the length of the gaps is important, so lenders won’t pay too much attention to any interruptions in your working relationship due to things like illness. A simple explanation will cover it, and you’ll be fine. However, gaps that last six months or more will make it harder to get approved.

3. Set aside as much money as possible for your down payment

Down payment is mandatory for most mortgages, and generally speaking, the more money you can afford to pay down, the lower your rates will be. Lenders offer much better terms to those who can cover around 20% of the loan with a down payment. Of course, they will also accept lower down payments, but if you can afford less than 20%, this will usually require you to pay private mortgage insurance as well, and this can range from 0.05% to 1%, or even more than the original loan amount, per year.

In other words, if you can save the money to cover 20% or more with your down payment, you’ll avoid a lot of extra payments and a lot of trouble for yourself, so that’s definitely something to think about.

4. Understand how the debt to income ratio works and what yours is

In lending, there’s something called the debt-to-income ratio, or DTI. Essentially, this compares your debt to the amount of money you earn. To be even more specific, the ratio compares your total monthly debt payment to your gross monthly income to determine whether you can afford the payment or not.

Generally speaking, the DTI should be as low as possible, as lenders prefer to work with those with higher incomes. If your monthly debt is only a small portion of your salary, it increases your chances of being able to pay regularly and on time. On the other hand, the higher your DTI, the more your income must be allocated to paying off the debt, which leads lenders to wonder whether you will prioritize paying your dues before other needs or not.

Usually, lenders avoid making loans whose monthly payments would require more than 28% of the borrower’s monthly income, so your overall DTI must be less than 36% to be considered seriously. This is also where different types of loans should be considered, as conventional loans can be received for a maximum DTI of 45%, while maximum FHA loans require the DTI to be less than 43%. As always, there may be exceptions, but that’s not something you should count on.

5. Try getting a 15-year fixed rate mortgage

The most common fixed rate mortgages tend to be for 30 years. However, if you think your new home will be long-term and you are confident in the stability of your cash flow, we recommend that you consider a 15-year fixed rate mortgage. This way, you’ll pay off your house sooner and pay off your debts in half the time you normally would. Another thing to consider is to opt for a 15-year term if you are refinancing a mortgage.

6. Compare offers from several lenders

As mentioned earlier, you should consider different mortgages in order to find the best deal, no doubt about it. However, once you have decided on a mortgage, you should also consult several lenders, their terms, requirements, etc., as you will find that these aspects may differ from company to company. Studies have shown that borrowers can save $1,500 on average by getting just one additional rate quote and $3,000 on average if they get five.

In other words, it may pay to look beyond your bank or credit union and shop around a bit.

7. Lock your rate

Finally, we recommend that you lock in your rate as soon as possible. This is because the closing process can be lengthy, often taking several weeks. It’s during these weeks that rates can fluctuate, and you might end up paying more than expected because of this. It doesn’t hurt to ask your lender to lock in your rate, because then you’ll know exactly how much you have to pay. And while there may be a charge for this service, you’ll likely pay less than you’d have to set aside if rates go up at the wrong time.

What’s your next step?

Now that you know all of this, you can research different loan opportunities, compare rates, and take one step closer to securing an affordable mortgage. That said, here’s what to expect next.

After applying for a mortgage loan, you will receive a loan estimate within three days, generally. This estimate will detail all the details of your mortgage, including things like closing costs. However, keep in mind that these are only estimates for now and that the final figures may be different depending on the market evolution at the time of the signing of the agreement.

Next, your lender will review your application to determine if they should approve the mortgage. During this time, you may receive requests for additional documentation or additional questions. Be prepared for this and be as responsive and detailed as possible to improve your chances. Do not try to hide anything and maintain your financial and professional situation. Also, do not apply for new credit, do not make major purchases and above all do not try to change jobs during this period.

Then, if your mortgage is approved, you’ll be one step closer to closing and buying your new home. However, if your loan is declined, you should try to understand what led to this decision and then reapply with another lender once you have dealt with what caused the original lender to reject you. However, we recommend that you wait a bit before trying again, as this could hurt your credit score.

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FinAGG Raises $3M in Pre-Series A Funding https://www.ibooklinux.net/finagg-raises-3m-in-pre-series-a-funding/ Tue, 06 Sep 2022 07:41:16 +0000 https://www.ibooklinux.net/finagg-raises-3m-in-pre-series-a-funding/ Opinions expressed by Entrepreneur the contributors are theirs. You are reading Entrepreneur India, an international franchise of Entrepreneur Media. FinAGG Technologies, a Noida-based fintech offering cash flow-based supply chain finance, has raised $3m in a Series A funding round led by BlinC Invest. The round also saw participation from existing investor Prime Venture Partners. The […]]]>

Opinions expressed by Entrepreneur the contributors are theirs.

You are reading Entrepreneur India, an international franchise of Entrepreneur Media.

FinAGG Technologies, a Noida-based fintech offering cash flow-based supply chain finance, has raised $3m in a Series A funding round led by BlinC Invest. The round also saw participation from existing investor Prime Venture Partners. The company will use the fund to launch new products, expand current products to new cities, increase lending partnerships and invest in technology.


business document

“We are very happy to find a fund that understands our space so well and we are ready to start the next chapter of our journey with BlinC Invest. We hope to leverage their combined experience and unique partnership philosophy to create fintech products that will fill the many gaps in MSME finance today and will cater to businesses that form the backbone of the Indian economy,” said Nipun Kohli, Co-Founder and CEO of FinAGG.

FinAGG believes that the financing gap for Indian MSMEs is just the tip of a very large iceberg and is committed to helping these businesses scale their businesses by providing innovative financing solutions. The company has partnered with more than 15 leading brands and has paid out over INR 1,200 crore till date, according to the company in a statement.

“The FinAGG team has a strong pedigree and is well positioned to create unique financing solutions for the ecosystem as a whole. FinAGG’s world-class technology with deep anchor integration will enable MSMEs to achieve a working capital cash flow at the click of a button. We are also excited to join Prime Venture in this journey,” said Amit Ratanpal, Founder and Managing Director of BlinC Invest.

Founded in 2020 by Nipun Kohli and R. Srinivasan, FinAGG is a new era supply chain platform focused on providing closed-loop credit solutions to distributors, retailers and MSMEs through its proprietary “Quick Cash Flow” platform.

According to reports, global supply chain finance volumes have grown significantly over the past few years, reaching $1.8 trillion in 2021 and are expected to grow at a CAGR of 17%.

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What is AID? – The Defiant https://www.ibooklinux.net/what-is-aid-the-defiant/ Fri, 02 Sep 2022 06:11:25 +0000 https://www.ibooklinux.net/what-is-aid-the-defiant/ After Terra’s stablecoin UST collapsed in May and wiped out $60 billion in market capitalization, it has become increasingly urgent to see how stablecoins are supported. DAI, one of the first stablecoins, is one of the most important such tokens in DeFi. On a spectrum between fully algorithmic and backed by cash reserves, DAI stablecoin […]]]>

After Terra’s stablecoin UST collapsed in May and wiped out $60 billion in market capitalization, it has become increasingly urgent to see how stablecoins are supported. DAI, one of the first stablecoins, is one of the most important such tokens in DeFi.

On a spectrum between fully algorithmic and backed by cash reserves, DAI stablecoin falls somewhere in between. Let’s learn more about DAI.

Origin and purpose of the DAI

DAI stablecoin is supported by MakerDAO, a DeFi lender. Founded by Rune Christensen, the Maker Foundation launched open-source MakerDAO in 2014 to lead decentralized finance. Like other protocols, Maker works on Ethereum smart contracts to replicate traditional finance without intermediaries such as banks.

As a lending protocol, MakerDAO lacked a key element – ​​digital money but not as volatile as cryptocurrencies. This is where stablecoins come in.

MakerDAO launched the DAI stablecoin in December 2017 to be a reliable collateral for loans and to transfer crypto funds without price fluctuations.

By 2022, DAI had become the fourth-largest stablecoin by market cap, surpassing $7 billion. Since launch, DAI’s outstanding supply has remained below $11 billion.

Source: The Block

DAI is the most widely used stablecoin when it comes to integrating decentralized applications, or dApps. It supports 400 dApps and wallets.

Additionally, DAI is managed separately by the Maker Foundation, which is the coordinating body that manages the MakerDAO ecosystem through decentralized governance powered by MKR governance tokens.

As an additional layer of security that is not fully decentralized, there is the Dai Foundation, based in Denmark. This non-profit foundation is the custodian of Dai and Maker trademarks and open source IP copyrights.

The Importance of Stablecoin Collateral

Stablecoins use collateral to protect against market volatility. When the Federal Reserve started raising interest rates in April 2022, it triggered a sell-off in the market. This in turn removed the price of Terra’s LUNA coins, the primary collateral for Terra’s UST stablecoin.

Eventually, this sparked a classic bank run, in which investors sold off their LUNA coins, monopolizing the UST stablecoin. These types of stablecoins are backed by another cryptocurrency instead of fiat currency such as the US dollar, which is what Tether (USDT) and USD Coin (USDC) do.

In other words, stablecoins run the gamut between centralized (fully backed by cash stored in traditional banks) and decentralized (backed by other cryptocurrencies). Where is DAI on this spectrum of collateralization?

How is DAI supported?

DAI is unique in that it is backed by multiple stablecoins and cryptocurrencies. By far, the largest share of DAI’s support consists of centralized stablecoins USD Coin (USDC) and Pax Dollar (USDP), followed by Ethereum (ETH), Wrapped Bitcoin (WBTC), and dozens of other cryptocurrencies. .

Distribution of DAI guarantees. Source: Statista

Some of the cryptocurrencies in this green collateral bar are Basic Attention Token (BAT), Compound (COMP), TrueUSD (TUSD), 0x (ZRX), Decentraland (MANA), Chainlink (LINK), Gemini Dollar (GUSD), Uniswap (UNI), and others.

Overall, one could say that DAI is a hybrid algorithmic stablecoin, largely centralized but flexible enough to become fully decentralized.

How does DAI typing and stability work?

As an ERC-20 token, DAI can not only be purchased on major exchanges such as Binance or Coinbase, but also on decentralized exchanges like Uniswapl. Because MakerDAO is an open-source protocol on Ethereum, which itself is the most decentralized blockchain outside of Bitcoin, anyone can issue DAI stablecoins.

This is not something USDC and USDT users can do, as they are both tightly regulated by centralized companies, Circle and Tether, respectively. To generate new DAI stablecoins, users need to borrow it by simply opening Maker Collateral Chests. This option is available through Oasis dApp, one of MakerDAO’s hundreds of dApps within its ecosystem.

DAI chest generation corresponds to bull and bear market cycles. The average size of a DAI safe is around $100,000. Source: Dune

Using the Oasis dashboard, borrowing involves posting ETH-based collateral. This creates a smart contract called a vault, holding these assets as an escrow. Once a DAI loan is paid off, it is paid into the user’s wallet. In other words, DAI is created by borrowing crypto funds (minting), and it is dissolved by repaying loans (burning).

Source: Dune

Therefore, DAI’s collateral aligns with the collateral that borrowers post to fund the loans. Since the collateral includes volatile cryptocurrencies, these deposits are always over-collateralized – the deposit is more important than the loan.

Additionally, MakerDAO’s native governance token, MKR, serves as a stability regulator. All MKR token holders can use their tokens to set the DSR – DAI savings rate. In extreme market conditions, even if regular overcollateralization is not enough, MKR holdings would be used as another source of liquidation.

As a reward for this service, MKR holders receive an interest payment also available through Oasis dApp.

A legal action

In early August 2022, an agency of the US Treasury Department sanctioned Tornado Cash as a suspected money laundering operation. This means that any person or company connected could be subject to legal action.

But what did Tornado Cash do to deserve such a harsh penalty? It is simply an open-source protocol to make online transactions private, especially on Ethereum. Much like the Signal Messenger app makes conversations private using end-to-end encryption (E2E), Tornado Cash conceals the wallet address involved in crypto transfers.

For example, if you want to send someone an anonymous gift, you can use Tornado Cash. Similarly, if you were to donate to a polarizing cause, such as a donation to a Ukrainian charity, you would use Tornado Cash as Vitalik Buterin (co-founder of Ethereum) did.

Although making Ethereum transactions private is legal, it is possible for money launderers to abuse it. To avoid being sanctioned, managers of centralized stablecoins like the USDC had to act.

Circle CEO Jeremy Allaire explained why he had no choice but to immediately block the wallets of users who interacted with Tornado Cash.

Therefore, MakerDAO founder Rune Christensen considered dropping the USDC collateral and converting it to ETH. This would mean that even DAI’s soft peg to the USD (via USDC) would be removed.

Source: Official MakerDAO Discord

In the years to come, this will be the space in which the fate of DeFi will be decided. If there is no fully decentralized stablecoin, the likelihood of financial privacy is very low. The US government may continue to sanction other platforms if it determines that they enable money laundering.

The whole purpose of a DeFi ecosystem is in jeopardy. Instead, it would simply be a more efficient online version of a traditional financial system with little financial privacy.

As the largest dApp platform, Ethereum is at the center of this battleground, with DAI as the engine. In other words, if the DAI stablecoin continues to be backed by vulnerable centralized stablecoins, demand could collapse.

Series Disclaimer:

This article in the series is intended for general guidance and informational purposes only for beginners participating in cryptocurrencies and DeFi. The content of this article should not be construed as legal, business, investment or tax advice. You should consult your advisers for all legal, business, investment and tax implications and advice. The Defiant is not responsible for lost funds. Please use your best judgment and exercise due diligence before interacting with smart contracts.

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