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The Daily Ten – Toyota says Electric Cars are over-hyped, Imax doubles down on China, Bitcoin price hits $23K…

December 17, 2020by Steve NsonNews

The Daily Ten – Toyota says Electric Cars are over-hyped, Imax doubles down on China, Bitcoin price hits $23K…

December 17, 2020 by Steve Nson
Thursday, December 17th, 2020

The Daily Ten

1. Covid-19 Closed Borders and a Once-Hot Apartment Market Crumbled | WSJ

Australia has been hit hard by sagging demand because immigrants and foreign students have been shut out

SYDNEY—A year ago, a studio apartment in central Sydney was in such hot demand from foreign students and expat workers that landlords could often find a tenant within days.

Adam van Rooijen’s inner-city apartment in Potts Point was recently vacant for six weeks.

“No one is really moving anywhere,” said Mr. van Rooijen, 37, who bought the investment property in April, just after Australia shut its border to international arrivals, closed swaths of commerce and restricted people’s movement in response to the coronavirus pandemic.

Median rents in Potts Point, near Sydney’s harborside, are down 24% since March. Mr. van Rooijen tried engaging a real-estate agent and listing the property on Facebook Inc.’s Marketplace platform, alongside secondhand lawn mowers and coffee tables. He eventually accepted a 17% cut in rent to fill the property.

Apartments are turning out to be the big losers in a pandemic-fueled reordering of the global property market. Record-low mortgage rates, work-from-home arrangements and a desire for more space have driven demand for houses at the expense of apartments. According to Redfin Corp. , an online real-estate platform, the average price discount for condos in the U.S. has widened to a record 17.3% this year.

In Australia, the pandemic’s impact on the apartment market has been worsened by the government’s response. Border restrictions imposed in March effectively locked out immigrants and foreign students, who are more likely to rent apartments than houses. Population growth in the 12 months through June, 2021—the government’s fiscal year—is projected to be the slowest since World War I.

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2. Toyota’s Chief Says Electric Vehicles Are Overhyped | WSJ

Akio Toyoda says converting entirely to EVs could cost hundreds of billions of dollars and make cars unaffordable for average people

TOKYO— Toyota TM 1.47% Motor Corp.’s leader criticized what he described as excessive hype over electric vehicles, saying advocates failed to consider the carbon emitted by generating electricity and the costs of an EV transition.

Toyota President Akio Toyoda said Japan would run out of electricity in the summer if all cars were running on electric power. The infrastructure needed to support a fleet consisting entirely of EVs would cost Japan between ¥14 trillion and ¥37 trillion, the equivalent of $135 billion to $358 billion, he said.

“When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?” Mr. Toyoda said Thursday at a year-end news conference in his capacity as chairman of the Japan Automobile Manufacturers Association.

He said if Japan is too hasty in banning gasoline-powered cars, “the current business model of the car industry is going to collapse,” causing the loss of millions of jobs.

Advocates of EVs say they can be charged at night when electricity demand is low and, over time, can grow in tandem with other green technologies such as solar power.

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3. Imax Doubles Down on China With New Deal as Theaters Buzz Again | Bloomberg News

Imax Corp. sees the potential to add at least 400 theaters in China by 2023, as the cinema chain operator looks to expand its footprint in a country that’s emerged as the world’s largest movie market this year.

The Ontario, Canada-based firm known for massive screens in its movie halls, has signed a deal with its Chinese partner Guangzhou Jinyi Media Corp. for five new locations and upgrades at seven existing ones, it said in an email. Imax, which has about 700 theaters in China, sees the possibility of expanding its network by more than 50% over the next three years, it added.

The theater chain is stepping up its commitment in China as the Asian country rebounds strongly from the coronavirus pandemic-induced slowdown while the outbreaks continue to ravage the U.S. and Europe. While both U.S. and China contributed about a third of IMAX’s global box office in 2019, the latter has surpassed the U.S. as the world’s top film market this year underscoring its importance for movie hall operators.

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4. What Happens When the 1% Go Remote | Bloomberg City Lab

It doesn’t take very many ultra-wealthy Americans changing their address to wreak havoc on cities’ finances. 

The 1% are on the move. Tom Brady and Gisele Bündchen bought a $17 million teardown on Miami Beach’s ultra-exclusive Indian Creek island. Jared Kushner and Ivanka Trump, who are said to have plunked down $30 million for a lot, may be their neighbors. Recently it emerged that hedge fund Elliott Management Corp. is moving its Manhattan headquarters to South Florida, and that private equity giant Blackstone Group Inc. will open an office there. Goldman Sachs Group Inc. is reportedly considering relocating part of its asset management operations to the region, too. It’s not just happening on the East Coast. In the last few months, the venture capitalists David Blumberg and Keith Rabois decamped from the San Francisco Bay Area to Miami. All of this prompted Silicon Valley venture capitalist and startup guru Paul Graham to tweet:

Austin is having something of a moment as well. Elon Musk is trading Los Angeles for the Texas tech hub, where his new $1 billion Cybertruck factory is under construction. Larry Ellison announced that Oracle would move its headquarters there from Silicon Valley. DropBox Inc. CEO Drew Houston and Splunk Inc. CEO Douglas Merritt reportedly took steps to relocate from the Bay Area to Austin, too.

Some residents of pricey cities like New York, L.A. and San Francisco might say good riddance to the uber-rich whom they blame for growing unaffordability and inequality in their cities. But their cities will pay a literal price for their departures. It doesn’t take very many one-percenters changing their address to wreak havoc on cities’ finances.

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5. China rental company’s shares have cratered 76% this year as the shine of debt-fueled growth fades | CNBC

GUANGZHOU, China — A more than 76% share price collapse for its parent company since its initial public offering this year. Questions about its financial health. Clashes between users of its platform. Danke, a Chinese residential rental company, has a debt-dependent business model that is showing signs of strain.

Danke, owned by U.S.-listed Phoenix Tree Holdings, denied last month that it is bankrupt, even as it faces backlash from the landlords and tenants it serves. Phoenix Tree identifies Danke as the “primary focus of our business” within SEC filings posted on its website and uses the Phoenix Tree and Danke names interchangeably in filings including its quarterly financial results.

Danke, founded in 2015, leases properties from owners on a long-term basis, refurnishes them, and then rents them out. The business model entails getting more money back from renters than Danke has paid to lease the apartment. Danke touts itself as a tech company, claiming that data, artificial intelligence and its IT infrastructure are the “backbone” of its business.

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6. 45 of 50 biggest U.S. companies turned profit since March | Axios

2020 has been an awesome year for Corporate America, but not so much for Working America.

The big picture: 45 of America’s 50 biggest publicly traded companies have turned profits since March, while nearly 8 million Americans have fallen into poverty since June, the WashPost reports in a pair of striking stories.

“At least 27 of the 50 largest firms held layoffs this year, collectively cutting more than 100,000 workers,” according to a WashPost analysis.

“[T]he increase in poverty this year … is the biggest jump in a single year since the government began tracking poverty 60 years ago. It is nearly double the next-largest rise, which occurred in 1979-1980 during the oil crisis,” reports WashPost’s Heather Long.

That gap extends to CEOs versus regular consumers, Axios’ Dion Rabouin reported earlier this week.

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7. Bitcoin price hits $23K as on-chain analyst says $55K is the ‘next landmark’ | Cointelegraph

The price of Bitcoin has cut through another critical resistance range putting $100,000 in play, on-chain data suggests.

The Bitcoin price (BTC) has surpassed the $21,000–$22,000 resistance range to rise above a new high of $23,000 on Dec. 17. Meanwhile, on-chain analyst Willy Woo now says $100,000 is a “ridiculously low” target.

The $21,000 level was particularly important for Bitcoin to continue its rally in the near term. Exchange heatmaps showed stacked sell orders at around $21,000 to $21,500, which meant BTC price had to break through to see a broader uptrend.

Bitcoin enters price discovery

Exchange heatmaps show no visible resistance levels and areas with large sell orders above $22,000. In the short term, this means the probability of BTC continuing its rally is high.

Due to the optimistic market sentiment and the sell-side crisis, Woo said the BTC Top Cap Model shows $100,000 is a “ridiculously low target.”

He said:

“We are not at the all-time-high juncture where the BTC Top Cap Model starts curving upwards. Let’s see how high she runs in 2021. $100k is a ridiculously low target at the current trajectory. $55k is the next landmark -> Bitcoin becomes a $1T macro asset bucket.”

Woo emphasized $55,000 as the milestone price for Bitcoin because it would mean BTC would have hit 10% of gold’s market cap.

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8. Modular Construction Meets Changing Needs in the Pandemic | The New York Times

The process of creating prefabricated units that can be quickly assembled has shifted as developers turn to medical buildings, affordable housing, data centers and even a Chick-fil-A restaurant.

When the University of Denver reopened for classes this fall, there was a new building on campus next to the student athletics center: a coronavirus testing center created using modular construction.

Students and staff can either walk up or drive up to have their temperatures screened or to receive a virus test at one of six windows at the center, a 40-foot-long building manufactured out of state in a factory and shipped to Colorado on a flatbed truck. Proponents say the method is faster and greener than conventional construction.

“With modular, we can build more quickly and have better quality control, while reducing waste and our carbon footprint,” said Andrew Ahrendt, director of national manufacturing at PCL Construction, a group of independent general contracting companies that manufactured the testing site, known as the Citizen Care Pod.

Modular construction has been growing in popularity among developers as a method for building multifamily housing, hotels and workplaces. The pace of hospitality and office projects has slowed in 2020 as a result of the pandemic, and many developers have turned instead to medical buildings, affordable housing and data centers.

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9. How do home tests for coronavirus work? Where can I get one? | Washington Post

The Food and Drug Administration on Wednesday authorized another rapid coronavirus test for home use, this one called Abbott BinaxNOW — the third such test to be authorized in recent weeks. And more home tests are coming, with at least two dozen companies racing to develop versions.

These rapid tests allow people to test themselves at home and know within minutes whether they have the novel coronavirus, which causes the illness covid-19. They could be a vital component in stanching the spread of the virus — especially in the crucial months before most Americans are vaccinated against the pathogen.

But to truly make a difference, experts say, the tests first must become much cheaper and more widely available.

What home tests are available? How much do they cost? When can I get one?

For months, consumers have been able to buy home collection kits. But these are quite different from the new rapid home tests. The older home collection kits usually sell for $110 to $150 at retailers such as Costco, Walmart or at testing companies, including LabCorp and Quest Diagnostics. With collection kits, people swab their nostrils or spit saliva into a vial and send the sample for processing at a lab. The companies say it takes 24 to 48 hours to get results.

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10. San Diego judge allows strip clubs to stay open, indicates restaurants could also reopen | Los Angeles Times

A San Diego County Superior Court judge ruled Wednesday that two strip clubs can remain open and operating during the most recent COVID-19 shutdown orders from the state, a decision that appears to extend to the county’s beleaguered restaurants and allow them to reopen to some extent.

The ruling by Superior Court Judge Joel Wohlfeil came in a case filed by two San Diego strip clubs. And while the clubs prevailed in earning an injunction that allowed them to continue to offer live dancing, the judge went a significant step further and said the injunction can apply across San Diego’s restaurant sector, which has been crushed by the COVID-19 pandemic.

Wohlfeil’s ruling prevents local officials from enforcing the latest set of restrictions that went into effect in San Diego County on Dec. 3, not only against the two strip clubs — Pacers and Cheetah’s — but also “San Diego County businesses with restaurant service” that abide by health and safety protocols that “are no greater than is essential” to control the spread of COVID-19.

The ruling is effective immediately. What it means, however, is unclear.

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