Fastest Home Price Growth in 15 Years

This morning’s Case-Shiller report said that home prices rose at their fastest pace in 15 years. Over the 12-month period ending in March, home prices increased by 13.2%. In the 12-month period ending in February, prices were up 12%.

Amazon sad it’s buying MGM. This is interesting news from the standpoint of business history.

Louis B. Mayer was the CEO of MGM (and the second M). He was the titan of Hollywood and the highest-paid man in America.

Oddly, MGM was a subsidiary of Loews. Marcus Loew ran a theater company. He bought Metro Pictures. Then Goldwyn pictures, and finally Mayer Pictures. Loew put Mayer in charge.

From the 1930s through the 1950s, MGM used its star system to help establish the Golden Age of Hollywood. Mayer was forced out in 1951, and soon television took its toll on the movie business.

In 1948, there was a landmark anti-trust case, U.S. vs. Paramount, wherein the Supreme Court said movie studios couldn’t own the theaters. In fact, that case is often used as a good example of “vertical integration.”

That means if you own business A, you can’t use your position to get control of business B. I can make Eddy Cars, but I can’t say they only run on Eddy Gas.

The effect of this decision is that Loews had to sell off its theaters business.

Now with Amazon buying MGM, the content maker and content distributor are being brought back together again.

I was not aware of this but there are firms in Asia that allow 100-to-1 margin accounts for crypto trading.

Brian Kelly, CEO of BKCM, pointed to firms in Asia such as BitMEX allowing 100-to-1 leverage for cryptocurrency trades. Robinhood does not allow traders to use margin for cryptocurrency, and Coinbase only allows it for professional traders.

“You get this crowd factor — everybody’s liquidation price tends to be somewhat near everyone else’s– when you hit that, all of these automatic sell orders come in, and the price just cascades down,” Kelly, told CNBC.

Bitcoin traders liquidated roughly $12 billion in levered positions last week as the price of the cryptocurrency spiraled, according to bybt.com. This mass exodus wiped out about 800,000 crypto accounts.

“Selling begets more selling until you come to an equilibrium on leverage in the system,” said JMP analyst Devin Ryan. That selling begins to “compound” as leveraged positions are liquidated, because they can’t meet those margin requirements, he said.

“Leverage in the crypto markets — particularly on the retail side — has been a big theme that accentuates the volatility,” Ryan added.

Posted by on May 25th, 2021 at 10:48 am


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