Ciao,
Durante il fine settimana mi sono cimentato nella costruzione di due pannelli fonoassorbenti per il mio salotto. Hanno un telaio in legno, rivestimento isolante in lana di roccia ed un tessuto di copertura. Sono facili da realizzare e c'è un notevole risparmio economico nel costruirseli autonomamente rispetto ad acquistarli.
​
Esporrò quanto fatto per costruirne uno 64X64cm.
Materiali: - Legno OSB 1.5cm (2 listelli 64cm, 2 listelli 61cm - Profondità 12cm. 2 "rinforzi" 61cm - profondi 1.5cm)
- Lana di roccia 10cm
- Telo interno TNT
- Telo esterno seta lino
- Viti per legno
- Tasselli/Ganci
- Trapano
- Cacciavite
- Forbici
- Graffettatrice
​
il legno è stato fatto tagliare direttamente dove l'ho acquistato per comodità, non sarei stato in grado di segarlo precisamente a casa non avendo strumenti adatti.
​
Procedimento: é stato imbastito il telaio in legno praticando due fori con il trapano ed una punta fina per ogni lato, senza questa precauzione è molto facile rovinare il compensato avvitando le viti. In seguito è stato avvitato il quadrato esterno.
Si sono inseriti i due listelli di rinforzo per il telaio, servono sia a dare rigidità al telaio che a sorreggere la lana di roccia durante l'assemblaggio/trasporto.
E' stato rivestito il retro del quadrato con TNT e graffettato sui lati, utile questo passaggio per inglobare la lana di roccia ed evitare che una volta in casa esca del materiale.
La lana di roccia è stata tagliata a misura (62.5X62.5cm) ed inserita all'interno della cornice. Successivamente anche la parte frontale è stata rivestita con TNT.
Si è provveduto a rivestire la parte frontale con un tessuto esterno di lino per dare una parvenza di estetica al pannello e si sono avvitati i due ganci per il muro.
Per il fissaggio sono stati applicati due piccoli tasselli con rispettive viti in sporgenza su cui appoggiare i ganci.
​
Il costo dei materiali per il quadretto è di circa 30€.
Qualche foto del procedimento e risultato.
EDIT: telo esterno è in lino.

I'm taking the Babypips forex course and got stuck with one thing about converting the pip value of a pair to your account currency. So, according to Babypips:
"If the currency you are converting to is the counter currency of the exchange rate, all you have to do is divide the “found pip value” by the corresponding exchange rate ratio:
.813 GBP per pip / (1 GBP/1.5590 USD)
Or
[(.813 GBP) / (1 GBP)] x (1.5590 USD) = 1.2674 USD per pip move
If the currency you are converting to is the base currency of the conversion exchange rate ratio, then multiply the “found pip value” by the conversion exchange rate ratio.
Using our USD/CAD example above, we want to find the pip value of .98 USD in New Zealand Dollars. We’ll use .7900 as our conversion exchange rate ratio:
0.98 USD per pip X (1 NZD/.7900 USD)
Or
[(0.98 USD) / (.7900 USD)] x (1 NZD) = 1.2405 NZD per pip move"
Please, somebody explain to me when I have to sell found pip value(1st case with GBPJPY) to get a value in desired currency and when I have to buy account currency for found pip value (2nd case USDCAD).
Extremely appreciate your answers!

Forex Cards are trending nowadays as many people oftenly plan to travel to foreign countries. These cards are a medium of making payments in dining, shopping, or wherever you want to spend money.
If you don’t have a forex card, try to issue it as early as possible because it is a golden opportunity for people who frequently plan to go abroad. There are unlimited banks that offer the facility of forex cards in India, but we have mentioned some of them. Let’s go through them one by one:-

HDFC Regalia ForexPlus Card

You don’t need to be worried about currency exchanges when planning a trip to or studying in the US. HDFC Regalia ForexPlus Card comes up with USD currency. Furthermore, the currency exchange charges are zero. You can block your card through internet banking for temporary reasons if you are not traveling for the time being.
Features of Regalia ForexPlus Card

• Contactless Payment
• Delivery of cash in emergency cases, such as you have lost your card.
• Accepts at International Airports, including India
• Insurance coverage ranges between Rs. 50000 to 5 lakhs.
• You can access the card at lounges of international airports.

Fees & Other Charges
You must pay some charges when issuing the Regalia ForexPlus Card. However, some of the major charges & fees that are being levied by HDFC are mentioned below:-

• Card Issuance Fee Rs.1000
• Application Fee: 500/+ GST
• Reload Fee: Rs.75 per reload
• Re-issuance of Card Fee: Rs.100 per card
• ATM Cash Withdrawal: USD 4.00
• Balance Enquiry: USD 0.50

Also Read: Fortrade review

MakeMyTrip HDFC Bank ForexPlus Card

Forex Plus Card by HDFC is one of India's best cards as it suits students and workers who work abroad. Having this card only provides the convenience of currency available in your wallet or account, but it is also loaded with lots of features that are mentioned below:-
Features of ForexPlus Card by HDFC

• Secure and Fast Transactions are possible only because of a Chip & PIN at the POS.
• You can change your ATM pin according to your convenience.
• Backup Card only on request
• You can block your card for temporary reasons
• Insurance coverage upto 25 lakh
• You can load upto 22 currencies in one single and enjoy your trip.
• Avail MMT Black Membership

Fees & Other Charges
The fees and other charges being levied by HDFC Bank ForexPlus Card are mentioned below:-

• Joining Fees: Rs. 500 (plus applicable taxes)
• Issuance Fee: Rs. 500 (plus applicable taxes)
• Cash Withdrawal Charges: USD 2
• Reload Fee: Rs. 75
• Cross-Currency Usage Fee: 2% of the transaction amount

Axis Bank Multi-Currency Forex Card

Axis Bank Multi-Currency Forex Card is India’s best card that is suitable for people who are living in abroad for studies or planning a short trip abroad. You can store upto 16 different currencies at a time in a single card. Having this card in your hand makes your trip memorable, and at the same time, you are stress-free.
Features of Multi-Currency Forex Card

• Get Cash in Emergency
• Safe & Secure
• Shop and Roam Across the Globe with one card
• You can block the card anytime
• Get a 15% discount on various restaurants
• On every spend of 5 USD, you will get 2 reward points

Special Features Applicable Only For Student

• No charges on ATM transactions
• No charges on Issuance and reload fee i
• 1% cashback on ECOM/POS transactions
• Complimentary TripAssist service

Fees & Other Charges

• Issuance Fee: Rs.300 + taxes
• Reload Fee Rs.100
• Add-on Card Fee Rs.100 + Taxes
• Encashment Charges Rs.100 + Taxes
• Cross Currency Fee: 3.5%
• Balance Inquiry: No Charges

ICICI Bank Sapphiro Forex Prepaid Card

Sapphiro Forex Prepaid Card by ICICI Bank comes under the category of premium card which is charging very high on issuing a card, i.e., Rs. 2,999 in the initial year Rs. 999/annum chargeable second year onwards).
Features

• You can avail of discounts while booking the hotel/flight tickets.
• Can access the card at international airports lounges.
• Insurance coverage of up to Rs 2 lakhs in case you have lost cards
• You can contact the customer support team 24/7 in case of losing the card.

Charges & Other Fees

• Issuance fee: 2,999 + taxes
• Annual Membership Fee: Rs. 999 + taxes
• Foreign Currency Mark-Up Fee: Nil
• Cross-Currency Usage Charges: Nil
• Cash Advance Fee: USD 2

Conclusion

If you are planning for a short trip, working or studying abroad, the above card helps you at every stage. Furthermore, Forex cards make your trip stress-free because you don’t have to convert your country's currency into foreign currency. With a single forex card, you can roam to different foreign countries across the globe.
These cards accept various currencies at a time, allowing you to do shopping in any corner of the world. The main advantage of issuing a forex card is that you will get decent rewards, discounts, or bonuses while shopping or dining. But, every bank offers different features on forex cards.
More Related Articles At: Trending Brokers

I'm taking the Babypips forex course and got stuck with one thing about converting the pip value of a pair to your account currency. So, according to Babypips:
"If the currency you are converting to is the counter currency of the exchange rate, all you have to do is divide the “found pip value” by the corresponding exchange rate ratio:
.813 GBP per pip / (1 GBP/1.5590 USD)
Or
[(.813 GBP) / (1 GBP)] x (1.5590 USD) = 1.2674 USD per pip move
If the currency you are converting to is the base currency of the conversion exchange rate ratio, then multiply the “found pip value” by the conversion exchange rate ratio.
Using our USD/CAD example above, we want to find the pip value of .98 USD in New Zealand Dollars. We’ll use .7900 as our conversion exchange rate ratio:
0.98 USD per pip X (1 NZD/.7900 USD)
Or
[(0.98 USD) / (.7900 USD)] x (1 NZD) = 1.2405 NZD per pip move"
Please, somebody explain to me when I have to sell found pip value(1st case with GBPJPY) to get a value in desired currency and when I have to buy account currency for found pip value (2nd case USDCAD).
Extremely appreciate your answers!

As title says, I have a chunk of Euros in cash and would like to deposit into my Swedish bank account. These Euros bills are not shady or anything, I was paid back a debt in euros, can prove source and everything. The bank I am with has told me they do not accept cash EUR. What is the most efficient way to convert my EUR bills to SEK and into my bank account? SEB literally told me over the phone that they do not have a solution for me and recommended I google for a solution....
Forex is a large ripoff, and limited to a certain amount per month. Even once I have some SEK from that, I cannot easily deposit the money into my bank account which isn't great.
Is there a better alternative?
EDIT: Added 'cash' and 'bills' to make the post more clear.

NovaTech is an offshore forex and crypto trading institution located in Beachmont Kingstown, Saint George.
​
NovaTech essentially lets you trade forex and crypto either automatically or manually. If manually you can use their MetaTrader5 application to manually trade on your own. I wouldn't suggest doing this unless you know what you're doing when it comes to trading.
​
You can automatically invest your money and let them trade it for you with their automated trading and their manual professional traders. To have the trading done automatically, you have to set up a PAMM account. A PAMM account is a new thing that allows someone to let someone else do their forex trading for them. You can learn about them here on Investopedia.com https://www.investopedia.com/articles/forex/010715/how-forex-pamm-accounts-work.asp
​
On average, NovaTech returns 3% per week. I say on average because it's not always exactly 3% every week. The lowest I've heard of is 0.65% and the highest I heard of was about 4.2%. If you're not familiar, 3% per week is A LOT, A LOT OF MONEY. Especially if you reinvest it and compound it. To put things into picture for you, the S&P 500 (The Market) historically yields (returns) only 8% per year annually. That means if you were to invest all of your money into the market, after a year, you would only earn an 8% return.
​
This may sound to good to be true, and because of this many people automatically call it a scam. Well trust me, it's not. I know someone who has been in this for at least 2 years, possibly even 3 years by this point. He has never had a single issue with NovaTech and he has made a ton of money. He found out about it, tested it for 6 months. Then told someone else. After a year, he told his brother. His brother is married to my moms best friend. The brother and his wife told my mom about it, so I checked it out with her. They were involved with this for 6 months before telling us and they never had an issue. I'm now making enough money on a weekly basis that I haven't had a job since March '22 and live completely off of my investment income.
​
Now I need to put this into perspective for you, because I have never heard of NovaTech losing money. So for a forex trader, 3% per week is not a lot of money. That's next to nothing for them. I trade forex myself. When I was taught, you are taught to never risk no more than 2% of your entire account balance per trade and that you should try to make 8% per day. Most forex traders I know do this easily. NovaTech uses automated trading AND they have professional traders trading the funds of the investors on behalf of the company.
​
They set really risk adverse standards and have a strategy that allows them to make money every week consistently whether the market goes up or goes down. I know that is it 100% possible to do this, because when I trade forex, I usually open 2 trades per position, one long and one short. This way I can make money whether the market goes up or down and I either just close the opposite position or or I reopen the 1st position and wait for the initial 2nd position turn into a profit as well. A lot of forex traders I know also do this, which is why we can make 8% per day very easily.
​
I started with only $1000 in NovaTech to try it out just to make sure I wouldn't lose all of my money. I made many deposits after a period of time and I have almost always reinvested my profit each week to keep it growing. I now have $53K in my account and earn about $1500 per week right now. I mostly re-invest my weekly profit, but when I need to, I just make a withdrawal for money to live off of it I need it if I'm not profitable with my other manual trading.
​
To get started, you need to enroll. It's best to have a sponsor. I will be your sponsor. https://frankgray.novatechfx.com/enroll/
​
After you enroll and sign up, you can get started.
​
Next, you need to fund your PAMM account. To do this you have to deposit crypto to NovaTech, then they credit your account. They convert your crypto, I use BTC (Bitcoin), into USDT. USDT (United States Dollar Tether) is a pegged crypto currency. Every $1 cryptro token (coin) of USDT is pegged to $1 United States Dollar. This is how they are able to keep your deposited amount in the form of dollars that are not subject to price risk of crypto currency itself. They trade USDT against other crypto currencies to do crypto forex trading. Here's a quick video on how to fund your account:
You can skip the first part about signing up and paying for an account. You either no longer need to pay for an account or it's free if you're sponsored. I'm not exactly sure about this because I was sponsored. Like to funding account: https://youtu.be/-DDrvwI3ZBg
​
The money you deposit get put into your "trading account". That is the account that the computers and traders use for trading funds. They payout your weekly profit into the "bonus" account. You can "upgrade your account" to reinvest your weekly profit in your bonus account into your trading account. NovaTech pays weekly profit every Friday. That's right, Friday is payday. I typically reinvest my Friday payday bonus account profit right back into my trading account on Friday.
​
This is important because if you want to reinvest, it's best to do it the day you get paid, because they start using the funds in your trading account the next day. You only get credited profit for the amount that you have in your trading account because that is the amount that goes into the pot of funds for all of the trading to earn profits.
So if you wait until Monday to deposit and reinvest your weekly payout, you don't start earning money on those funds until the day you deposit so you lose 2 days of trading and making money. This will yield you less than the average of 3% per week on those paid-out funds.
​
Just so you know and don't get sketched out, they have a really shitty website and really shitty servers because they are not in the United States, but Saint George. I thought this was a red flag but then I got used to it. On payday Fridays, every Friday, the website is super slow and times out a lot because so many people are on it and reinvesting or withdrawing their funds. So I either reinvest first thing in the morning at like 7am or 8am or I wait until the evening after 6pm and then the website is usually fine.
​
Here are some videos from NovaTech's website about them:
https://youtu.be/1p6_84OeMhY - Intro
https://youtu.be/ZddZuo7aTw4 - Is Bitcoin the only crypto worth buying?
https://youtu.be/NBTd5gNAjKU - Message from the Founder and CEO

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What was the most Ridiculous Valuation of a Stock in your lifetime? ^{Industry Discussion}
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• metal666coffee

GM expects EV profits to be comparable to gas vehicles by 2025, years ahead of schedule ^{Company News}
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StockMarket

• Major_Bandicoot_3239

#RIPTwitter trends on Twitter as thousands reportedly resign from platform ^News
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• predictany007

RIP Twitter is trending on Twitter after hundreds of its employees resigned due to Elon Musk's ultimatum: "Agree to work long 'hardcore' hours or leave the company." Do you think this will have an impact on Tesla if Twitter collapses? ^Discussion
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• YungChaky

Current situation about FTX - We are living though an historical event lads, prepare to see more red market ^Crypto
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investing

• pranaman

What causes inflation????
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• Adventurous-Value-69

Is it a good idea to just buy a lot of 1 etf when starting out?
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• spacecatbiscuits

As just a general schlub, how do you evaluate management?
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• jaystockknowhow

Stock EVIO Inc. (EVIO) ^{DD (New Claims/Info})
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• jaystockknowhow

Stock Bantec, Inc. (BANT) ^{DD (New Claims/Info})
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UndervaluedStonks

wallstreetbets

• axoticly

NANCY PELOSI STEPS DOWN 🤡 ^Meme
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• GazelleOk5652

Canadians have lost more than $131 billion investing in cannabis companies, could have just got really high for year straight. ^Loss
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• Gary6587

Vix 2008 vs 2022 , courtesy twitter. ^Chart
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market_sentiment

• nobjos

FTX's bankruptcy filing report is incredible 🚨🚨
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• kawashmunga

Credit Card Plays
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Bull Call Spead - choosing strikes and expiry
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ITM Covered calls on inverse ETFs.
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• Round-Ad6240

Mmtlp, do you think the squeeze has begun? Or after S1? ^{:Gains: Gains :GainsGirl:}
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Fission Uranium Corp- Very high grade drill results - but still cheaper (EV/lb) than peers ^{:DDNerd: DD :DD:}
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AppTech Payments Corp. ($APCX) DD Recap ^{:DDNerd: DD :DD:}
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SoftBank’s quiet finance chief Yoshimitsu Goto to take Son’s place in spotlight ^News
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Interview with John Malone ^{Interview/Profile}
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• JFWestofChester

$NWBO - Positive Phase 3 Results published in JAMA ^News
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• ConsulHorkos

ARDX adcom results ^{DD Request}
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TZIELD™ (teplizumab-mzwv) approved by FDA as the first and only treatment indicated to delay the onset of Stage 3 type 1 diabetes (T1D) in adult and pediatric patients aged 8 years and older with Stage 2 T1D ^Discussion
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Shepard tone optimization ^Strategy
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New algo trading software ^News
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how difficult is converting a python code to IBKR ^Strategy
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Forex

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It’s not figuring out how to trade that makes it hard.. ^OTHEMETA
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Win rate or profitability. Which do you think is a better indication of a good trading system? ^Questions
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Mark Douglas Trading in the zone ^Questions
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Stock Market recap for 11-17-2022 ^Shitpost
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Daily Discussion Thread - November 18th, 2022
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Queuing up a stock purchase that will be executed at the start of "pre-market" hours? ^{Be smart for me}
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After listening to the story of SBF, I remembered where I have seen his face before.
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El Salvador To Buy 1 Bitcoin (BTC) Per Day Starting From November 18 ^NEWS
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Background:
Context: I live in Malaysia, working in a VHCOL area, living in a HCOL area. I’ve lived here most of my life and I’m single, work a full time job, and this is my first money diary. I decided to write this to force myself to take a good look at my financial situation and hopefully motivate myself to go harder at improving it.
Quick note about currencies: since I’m in Malaysia, I earn Malaysian Ringgit (pronounced with a hard G) and the local currency is abbreviated to RM. The only time I’ve converted currencies is in the post title. For brevity in the money diaries sections, I’ll be using the dollar sign for what I typically spend even though it’s in local currency.
​

Section One: Assets and Debt

Retirement Balance (and how you got there): $165,000~ from regular retirement contributions over the past 12 years.
Savings account balance: $57,000~
Brokerage account balance: $17,000~
Checking account balance: Fluctuating between $500-2000.
Credit card debt (and how you accumulated it): None, paid off in full every month.
Student loan debt (for what degree): None.
Anything else that's applicable to you: I have about $45,000 invested in various bonds, stocks, unit trusts and forex. I bought my little car last year and it cost $50,000, fully paid off.
​

Section Two: Income

Income Progression: I’ve worked in a variety of industries and companies, mostly in marketing and marketing-adjacent roles.

• Graduated aged 21 and the job market was shaken up in the wake of the global financial crisis. To stay afloat, I got a job as a writer in a failing publication house for $24,000/year and dabbled a lot in marketing because there wasn’t much writing to be done and my colleague in the marketing team was severely overworked. I was rejected several times for an internal transfer to the marketing team and was told that the editorial team needed me (it didn’t).
• My first real job in marketing came two years after that and it paid $26,400/year. I stayed there for 3-ish years and got a promotion to assistant manager which paid $37,200, but ended up leaving because of personal reasons alongside frustration at terrible work conditions at this supposedly international-scale brand.
• My next move was to a start-up, starting at $46,200 doing social media and content creation, and when I left 6 years later in the midst of COVID, I was taking home $93,600/year as content lead.
• I switched companies late 2021 for $112,200. My current role is a slight step-down in terms of responsibility but pays a bit more. Less work and more money, what’s not to like?

Main Job Monthly Take Home: $9350 basic, $7500 after deductions. Mandatory deductions include social security ($20), employees provident fund, like a 401k ($1000), and income tax ($750).
Side Gig Monthly Take Home: I really should stop sitting on my hands and start a side gig for real.
​

Section Three: Expenses

Expenses are paid monthly unless otherwise stated.

• Rent: So… I live rent-free with my parents (yeah yeah).
• Electricity: $100-200
• Apartment maintenance fees: $400 which includes water
• Health insurance premium: $298
• Internet: $97
• Cellphone: $40-$45
• Subscriptions: Just my share of Spotify Family, about $45 per year. I’m one of those people who got a Netflix trial subscription and never got addicted enough to continue with it.
• Pet expenses: I have a 13-year-old cat who was recently diagnosed with thyroid issues. Scans, hospitalization fees and medication costs are shared between myself and my parents and I’ve contributed about $1300 this year so far.
• Car payment / insurance: $1100/year for insurance.
• Parental savings contribution: $300 monthly.
• Entertainment: I actively aim to spend about $500 per month on spending time with my parents doing something they enjoy. They enjoy eating, so we dine out somewhere nice whenever our schedules allow.
• Petrol: $100-150 per month depending on how often I drive.
• Savings contribution: Varies between $1000 to $5000 per month.

​

Section Four: The Diary

​

• Monday

🌤️ Had trouble getting to bed at my usual hour last night and woke up a little groggy and not particularly ready to start the week. I allow myself 10 minutes of snooze time and miraculously get to work by 8.50am.
The office smells musty as usual - my fault actually. The work culture here is that everyone’s responsible for their own cleaning which has led to undesirable tasks such as vacuuming being left by the wayside.
Long story short, on one of my vacuuming sprees, I left an essential part of our office handheld vacuum cleaner by the restrooms (outside), which was disposed of by the building’s janitors. I actually offered to buy a replacement vacuum cleaner but my boss said she was planning to buy one soon, and not to worry about it. It’s been four months and I’m tempted to just buy the vacuum cleaner and suck it up (har har), but I’m keeping my eyes fixed on my financial goals for now.
Also this morning, I pay for the printing of a display board ($300) and hang on to the receipt to file claims. My company manages a takeaway place and the board needed an update.
☀️ The morning is full of meetings and catching up on emails and I eat the lunch I made this morning. Not sure if it’s the same across the country but in my city, it’s really common to go out for lunch with your colleagues and eat together on a daily basis, which gets tiring especially in smaller offices. My plans to buy coffee from this excellent café downstairs are thwarted by paperwork. A friend dropped by my office to pass me a book I asked her to buy that was delivered to her place in London and I paid her $50 for it.
🌙 Meeting my friends for dinner near my office tonight. We’re having Japanese ($69) and I call for a ride ($13) home.
Daily total: $432
​

• Tuesday

🌤️ Traffic this morning is horrible. I’m skipping breakfast so I’m not too late for work and end up ordering a cauli rice bowl ($22) from a cafe for late breakfast/early lunch. I join my colleagues for lunch-lunch, which is paid for by the company, and when we get back to the office I grab a piccolo latte from my fave cafe ($9). One of the main reasons I decided to eat a meal earlier is because I don’t eat pizza (or most carbs, for health reasons currently) and I already know that my colleagues just can’t comprehend or actively try not to understand it, so I just work around it. My mom texts me about a water filter cartridge ($394) that needs to be replaced so I send her the money.
🌛 In the evening, I’m going into the city to attend an art event that I was invited to. Food is served, and while most of it looks unappetizing, I pick up a whole squid on a stick, some veggies, and a bottle of juice. I get a ride home ($17) and eat a bit of cheese before going to bed.
Daily total: $444
​

• Wednesday

🌤️ Another surprisingly dreary morning and I’m the first one in the office again. I make myself a cup of coffee using a drip coffee pack and hunker down for a long day of making slides. I’m feeling a mild stomach ache, probably due to last night’s food?
☀️ Lunch is at my desk, a chicken salad that’s probably more chicken than salad. To stretch my legs, I wander downstairs and find the Korean supermarket that somehow I’ve never been to despite having worked in the building for 6 months. Things are a little bit more expensive than other supermarkets here but they have an interesting selection of imported goods.
🌙 It’s been a hectic day at work and I leave at 6pm. There’s this month’s maintenance bill waiting for me and it’s $791 for July and August. I somehow misplaced last month’s bill and didn’t end up paying it till this month. The evening is spent making dinner and watching The Game Caterers on Youtube.
Daily total: $791
​

• Thursday

🌤️ I arrive at work a little later than expected and get right to it. My office complex has a weekly market where people can buy street food and other stuff. It tends to get super busy by noon and I plan to get some fried chicken from one of the stalls but I get caught up in work and by the time I get downstairs, it’s past 12 and there’s a line of at least 10 people. I can’t be bothered to stand under the hot sun just to get some greasy food, so I return to yesterday’s Korean supermarket and pick up two cups of instant seaweed soup ($3.80). I go back up to my office to have one of those cups plus my packed lunch, a tuna salad.
☀️ My mood is strangely low this afternoon and I resisted the urge to go back down and get my fried chicken till the last minute (3.45pm) when I decide to take an extended break and go downstairs to see if there’s any leftover food. When I get to the stall, there’s two pieces of fried chicken, one fried squid and one corn dog left! I get the chicken ($10.50) and find a secluded spot at the back of the building to eat it al fresco, standing up. It’s slathered with powdered chilli pepper so it’s hard to eat it all in one sitting so I cave and bring it back upstairs.
🌓Not sure if it was the fried chicken or the weather but I develop a headache towards the end of the day, and decide to do some light yoga (Yoga with Kassandra!) and mat exercises before making chicken stew for dinner. My dad asks me to help him pay for a couple of bills online, but he reimburses me with the cash, because he’s pretty old school like that.
Daily total: $14.30
​

• Friday

🌤️ It’s a hectic morning and it flies by pretty quickly. For printing again, I shell out $72.50 for some flyers and display signs. When my colleagues go out at 11.30am to get McDonald’s before the lunch rush, I quickly eat most of my packed lunch so I can have the lunch hour to myself. I honestly just tolerate them on a good day so I take any opportunity to have some me-time whenever possible.
☀️ Originally I wanted to get a manicure but I forgot to make an appointment and there are no nail artists available till later, so I end up wandering the aisles of the grocery store and buying some canned mackerel and other food ($35.40). Towards the end of the day, my boss insists we leave at 6pm to have a good weekend because next week is gonna be crazier than this past week.
🌓 It rains as I leave the office and traffic is intense so I’m super tired when I get home. Not in the mood to make dinner at all, but I take a power nap and make sure I get some food in me - beef ball soup with veggies and toast. My friend sends me photos from Monday night’s meetup and we chat before bedtime.
Daily total: $107.90
​

• Saturday

🥗 I sleep in till 9.30am, then roll around in bed catching up on Kendall Rae videos while playing Slay the Spire before my stomach scolds me for not feeding it. Lunch is spicy chicken mayo lettuce boats and I lounge around until I suddenly remember that I wanted to buy some whey protein isolate. I spend almost an hour researching what’s best, then end up buying some sample packs for about $60.
🌅 In the evening I watch a few episodes of A Discovery of Witches (starring Matthew Goode!) and make dinner for myself - pork chop and coleslaw. My boss gave me some kind of smoked salt that’s meant to be eaten with fish but since I don’t eat fish, I have it with the pork. I browse Reddit before bed and pass out after midnight.
Daily total: $60
​
Sunday
👵 My parents and I are going to visit my grandmother for lunch today so we get ready pretty early to head to her favorite takeaway noodle place before all the food is sold out. I give my mum $50 to help cover lunch. The drive to grandma’s is about an hour, and when we get there, I order delivery ($14 for curry soup) from a place nearby. This is just for myself, since I’m not a fan of tofu and noodles. We spend most of the day hanging out there and get home after dinner. Usually we dine out on the weekend, but since nobody’s in the mood to pick a place and get dressed to leave again, we eat random leftovers from the fridge.
Daily total: $64
Total Weekly Spend: $1913.20
​
Reflection:
It’s been an strange week. I'm actually slightly surprised that this week alone racked up that much of spending, but then again a large chunk of that was for a bill that I missed out on last month. It's definitely an unusual week in my life in the sense that there are quite a few spends on work-related stuff that I'll be paid back for at the end of the month. The spending on food, entertainment and transport is pretty typical though.
I am actively trying to reevaluate where I am in life and where I'm going, and writing this so I can see my day to day spending (and spending intents - which I edited out lol) is part of this. Guess I'm just at that point in life or that time of the yeamonth/week where I'm feeling down about not owning my own home (like my friends) or working for some fancy company (like my friends).
What I'd really want to work on is a side hustle but I'm completely clueless as to where to start or what to do. I'm concerned about being able to commit the amount of time and energy into something, and mental energy is something I'm usually running low on. I'm not dissatisfied with my day job, but I'd like to be able to transition out of it in the next... 10 years? At the same time, I'm just trying to be a little kinder to myself and stress out too much about eventual retirement. Thank you all for reading!

Hi all.
Ive been tossing around the idea of putting up this post for a while now. Its the sort of thing that I wish someone had posted back when I started, or began to delve into crypto.
My background on why you should, or shouldn't listen to me (obligatory NFA statement here). Im a regular working guy, I have a family I support, I wanted to learn trading first forex, then some stocks and slipped into crypto...I bought my 1st crypto (BTC) in 2018 right after BTC broke under 10k, I bought in at around 4k... I was impatient/scared of the "dip" and sold for a loss somewhere along the line shortly afterwards... I later bought in on the hype early 2021. I kept averaging in as ETH broke above 2k, 3k, 4k... I kick my ass here bc it was fully-unhinged-pandemonium in here and I should have bailed (i was greedy)... I got wiped TF out, heavy following SNL hype. I was overextended and put in more than I could afford... I sold for a loss, licked my wounds and liquidated my account. Except for some BTC/ETH that I sent to blockfi that was a PITA and i didnt want to move it...
Ok, so whats different now? and what am I doing differently? Ive changed my focus from chasing price/watching charts. Simply put im staking and LPing. Why? because it has pulled my emotions out of the game now... When it was just me watching charts i could pull $ at any time and any progress was just unrealized gains until I did (I never took profits, I was greedy like that). Now Im working an APR approach where the asset price means less...
Now my approach is Cosmos centered. Im going to reference those projects bc thats what I know and am working...
My top 3 bags are
ATOM
JUNO
EVMOS
Runners up (that Im building): SCRT, AKT.
Pooling (on Osmosis) ATOM/OSMO, JUNO/OSMO, EVMOS'OSMO. All of these w superfluid staking.
On these projects, w current staking APRs Im pulling about $4-$5 per day out of the market. Its not life changing, but its net + income of about $120/month. These funds are reinvested to compound my positions.
So for the past weeks Ive been letting my staking rewards build up... I took it all and converted it to USDC. Ive been doing this every day w/ Staking/Pooling rewards. As we dipped I have "free" money to scoop up some ATOM. Since were all a little red today Im letting my rewards just chill unclaimed, once price recovers ill trade the rewards to USDC and leave that sit for the next wave of red days...
Im also doing my bi-weekly deposit of $50-$75 (whatever I can afford) into ATOM on the CEX which I promptly trade for USDC and let it sit idle for dips like today... So now my average is down, my token count is up and Im making money every day...
Im open to any dialogue. if youre new especially, Id be happy to let ya pick my brain... Ive definitely been stupid money. Ive made rookie mistakes. and i have had my head on backwards while being convinced that its on straight... But this system seems to be working for me, for now.
TL;DR : Staking on cosmos = daily money = peace of mind on turbulent days.
Edit: And dont panic sell!

I made a currency conversion before requesting withdrawal (I bought enough EUR for the withdrawal).
But nevertheless automatic currency conversion occurred. Why?
I am with the Hungarian branch (Interactive Brokers Central Europe Zrt). My base currency is EUR.
(The automatic currency conversion when withdrawing funds is a relatively new feature.)
I think this is a bug and it's triggered when the withdrawal is initiated too shortly after the trade to buy currency was executed. So next time I will try withdrawing after the currency is settled (to prevent unwanted currency conversion).
The answer from IB:

As per our records you made a EUR.USD currency conversion on 09-11-2022. Please note that Forex trade settlement generally takes place on the second business day following the transaction (Trade Date plus two business days: T+2). In this case the settle date was 14-11-2022.
Our records also show that you have placed a withdrawal request in Client Portal on 09-11-2022. However, the funds were not settled at the time you placed this request. Kindly note that as of Monday, 17 October, you can make withdrawals in EUR, USD and your home country currency (as long as your home country currency is a supported currency as well). You can make these withdrawals even if there are no positive balances in these currencies. IBKR will automatically check the availability of the currency. If there are no sufficient funds available in the requested currency, IBKR will automatically convert positive balances in the supported currencies to the requested one.
Since the funds were not settled, hence there was no sufficient balance in EUR in your account. Therefore, IBKR made a currency conversion so that you could withdraw funds in EUR from your IBKR account.
Kindly note that your withdrawal request has been processed and the funds have been sent to your bank account on 10-11-2022.

Please note that I received the transfer in my account on November 10th. The system reported that the withdrawal request was received on November 9th, but it was actually received on November 10th at my time (according to the Bulgarian time zone). So waiting for settlement does not apply when doing automatic currency exchange. But the currency that is not settled is not considered available by the system and an automatic currency exchange is initiated, which makes no sense.
So, to avoid the double conversion we must wait for the cash (from the manual currency conversion) to settle or use the automatic currency conversion.

This was originally posted at https://brettongoods.substack.com/p/pakistans-next-crisis-is-guaranteed

TL;DR

1. Pakistan’s current economic crisis is caused by a spike in oil and gas prices leading to a sharp drop in foreign exchange reserves. The government has reserves worth a month of imports and would not have met their debt commitments without an IMF bailout.
2. This is not the first IMF bailout for Pakistan: it’s the 23rd! The problem is not only about this specific crisis, but that the Pakistani economy has extremely poor policy that makes economic growth almost impossible. It is inevitable then, that economic crises happen so often.
3. The reason why this happens is because the Pakistani elite do not want it! They do not have the incentives to increase economic growth whether due to corruption, military control of the government and or general incompetence. Until this changes, it is very likely that Pakistan will have low economic growth, and inevitably more crises like this

From Crisis to Crisis

The current economic crises in Pakistan and Sri Lanka (both articles from Noah Smith, recommended) might seem like they’re because of this moment. It might seem as if the crisis is because of a specific action taken by a specific person (like the Sri Lankan debt binge in 2019), or because of some unlucky event (like the Russian invasion of Ukraine which raised food and energy prices). But when you look at the economic history of post independence Pakistan, it doesn’t seem like this was a one off thing. The country has had 23 IMF bailouts since independence, and it doesn’t seem as if any of them has led to structural change.

The imports go boom

The immediate reason for Pakistan’s crisis is simple: they will run out of foreign exchange reserves and not have much to pay their foreign currency debts. They will run out of foreign exchange reserves because their central bank sold most of them in defending the currency’s value.
The central bank had a problem: in 2022, the Russian invasion of Ukraine led to higher energy and food prices. Pakistan’s largest import is petroleum, its second largest is gas and its third largest is crude oil. The current spike in oil prices from about $70/barrel to $120/barrel and spike in natural gas means that the country’s import bill increases. It is very hard to have a lesser quantity of oil and gas because it’s so important to several functions like electricity and transportation, so consumers end up accepting the price increase in the short term. So, for countries that have to import these products, it ends up in a higher import bill for them. Pakistan’s imports in June are up 16% over May’s, and 24% over last June’s.
​
The problem is that when your imports exceed your exports (and in the absence of foreign investment), this usually leads to the currency depreciating. Pakistan not only has had more imports than exports, but also has had declining foreign investment, which means that there is strong selling pressure on the currency. Fewer people want to buy Pakistani rupees and more want to sell them. The State Bank of Pakistan tried to reduce the effect of this by buying Pakistani Rupees and selling foreign currency. But the selling pressure was so strong that they were close to running out of money. In August 2021 the SBP had about 20 billion USD of foreign exchange reserves. On 15th July, they had only 9.3 billion of reserves.
The problem is that in the last month, Pakistan imported about $7.8 bn of goods and services and exported only $2.9 billion worth of items. It is likely that the import bill increases, due to increasing gas prices, and the currency depreciates more. Should the SBP want to defend the currency’s value, they’ll be facing stronger selling pressures and will have to spend more to defend the currency’s value.

Paying the money back

The other problem is that Pakistan has a serious external debt problem. The country has about $100 billion in foreign denominated liabilities, out of which $81 billion is government debt. Out of that $81 billion, about a billion comes due in less than a year. It is almost guaranteed that the numbers from the PBS in the link above (from March) are an understatement, as the government has been borrowing rapidly in the financial markets.
The problem is that the massive fall in the PKR’s value has meant that it takes a lot more PKR than it used to to pay the foreign denominated debt. The Pakistani government will have to spend much more on debt payments than it used to.
It is unlikely that the government will not have the money to pay its debts over the long run. Financial markets have recognised this and Pakistani bond prices have fallen about 40% in the last few months. It is possible that the country won’t have enough foreign exchange reserves to make foreign bond payments, and if it does, it will be at the expense of spending the money somewhere else important.
See Bloomberg for more on it
Some facts about the economy make it almost inevitable that they will have foreign exchange crises.

Power Problems

For almost all countries that do not produce fossil fuels at home, they end up importing them. This is true for China, Japan, India and Germany. (America became a net exporter of oil in 2019, but might return to being a net importer this year). Pakistan has multiple problems in its energy sector. The first is that everytime the price of oil and gas increases, their import bill also increases.
A higher import bill is one problem. The government taking the cost of imports on the fiscal makes it worse.

More Money More Problems

Every government faces political problems when energy prices rise. But Pakistan is probably unique in trying to solve those problems with subsidies that are unsustainable. In the previous fiscal year , there were power subsidies of about 378bn PKR versus a budgetary allocation of only ~150bn PKR. In this fiscal year, they would be about 500bn PKR making about 5% of the budget.
The problem here is clear. When the government commits to subsidising fuel if the price goes up, it takes an implicit liability on its budget. If fuel prices go up, it has to increase spending at the same time when the balance of payments is facing stress. This will make fuel cheaper, and instead of rationing the quantity of fuel via higher prices, will encourage its consumption leading to a higher subsidy cost. The government is converting a balance of payments problem to both a balance of payments problem and a fiscal problem.
You can model the Pakistani government as sort of being short the price of oil and natural gas, and that has been a terrible trade so far.
The government seems very committed to keeping them, in light of the upcoming elections in 2023 (although they do know the risks themselves).

Power Problems II

And along with the subsidies, the other problem is that for the same political reasons, the previous government refused to increase energy prices even after the Russian invasion of Ukraine, and only when the new government came did they increase the price of power (and that too barely)
The other problem is that many of the subsidies that the government promises to power distribution companies do not get paid. This paper estimates it at about 12% of GDP, although the IMF puts it at around 6% of GDP. Regardless of the actual number, this is a serious problem! If power distribution companies do not get the subsidies they are promised, they are unable to make payments to anyone up the supply chain. Which makes the existing problem of higher prices worse by increasing the number of problems in transmitting electricity.

The Budget Problem

Along with the Power Problems, Pakistan has another serious problem. It does not collect very much in taxes, but spends as if it did. To cover the difference the government borrows money, usually in foreign currency.

We Don’t Pay Taxes Here

Pakistan has a low tax to GDP ratio of about 13% which is far lower than comparable countries (Thailand at 17%, India at almost 18% and Turkey at 18%). There are a few reasons why this happens. The first is that the government is under political pressure to give exemptions to political supporters, especially right before elections. Along with that the direct tax base is very narrow. Only 2.9 million Pakistanis pay income tax out of a population of 220 million people. There are also several exemptions to the sales taxes which reduce the amount of revenue
The current sales tax system is also very fragmented with provinces collecting services tax and the federal government collecting the goods tax. The system as a whole is cumbersome and hard to deal with. Along with that, there are several negative effects of the current tax system. There is no mechanism to claim tax credits on inputs, and so exporters face higher costs compared to other countries

The Debt Problem

For many countries of Pakistan’s development level, it is generally harder to borrow large amounts at long durations domestically. The local debt markets wouldn’t be able to support large amounts at long durations and even if they did, the interest rates would be much higher. So, governments choose to borrow in foreign currency above. As said above, they have about 80 billion in foreign debt (which is an understatement given it is likely that the government has borrowed more in the last year).
The sharp fall in the Pakistani rupee’s value means that the cost of servicing the debt too would have increased, and put a further strain on the already limited foreign exchange reserves.
The foreign debt creates a serious foreign exchange constraint for Pakistan. The country has to generate enough foreign currency to service its debt or risk defaulting on it and being cut off from the financial markets.
The oil spike is bad luck, subsidising oil during the oil spike is bad policy, the long term problem of low tax collections are worse than that, but borrowing money in foreign currency to fund expenditures is the ultimate sin. Debt by itself is not bad, but the problem is that Pakistani governments are using it to spend it on expenditures and not productive investments.
All of these make foriegn exchange crises more likely. The reason why other countries manage to avoid this is because they have economic growth that keeps money flowing in. A very good way to avoid repeated economic crises is to have consistent economic growth.

The Growth Problem

And the previous 1600 or so words are only hinting towards what is Pakistan’s biggest problem. Its economy is unproductive, and is not growing to the extent to which its political aspirations ask for. It is not wrong for Pakistani voters to ask that they don’t spend over half their incomes (see the CPI basket here) on food and energy. But the problem is that their incomes are not growing fast enough.
There are three parts to this. First, productivity growth in Pakistan has been low and declining. Second, this is caused in large part by onerous government regulation and command of the economy. Finally, everything described above is a symptom of the above two problems.
A small caveat: Pakistan is not very poor, but has had slow growth relative to its neighbour India, and Bangladesh (which was part of the country from 1947-71).

Productivity is (almost) everything

For an economy to grow, you need capital and labour. More machines and more people, make countries richer. But the problem is that only adding more machines and people can’t go on forever. Countries also have to use them productively. It makes little sense to have increasing use of factors like capital and labour if they’re not being used productively. Except for a few periods, this has been the case in Pakistan. Most economic growth has come from adding more resources to the Pakistani economy, and it is only in a few decades that economic growth has come from productivity improvements rather than adding capital and labour.
You can see examples of this in multiple places, but I’m going to focus on one extreme one: exports. Pakistani exports are concentrated in a few low value products and in very few firms. The top 25 firms make about a quarter of Pakistan’s total exports, and all of them in textiles. Exports are good because they cause firms to compete in the global market and make them more productive. They also lead to foreign exchange earnings which help the balance of payments problem.
The productivity problem also shows up in the size of firms. Just like India, Pakistan has too many small firms. As this World Bank article notes, the average small firm in Pakistan has only two employees.
And the diagnosis of the problem is that the Pakistani economy has a productivity problem.

Big Government, Big Problems

The Pakistani government bears responsibility for their low productivity in two ways. First the onerous regulation that pervades much of the economy keeps the country poor, and corruption high. Second, the state owned enterprise sector takes up too much capital and is very unproductive.

Regulation

It is very hard to start a firm in Pakistan. It takes about 17 days and costs about 6% of your annual income. This makes new firm entry very hard, and means that existing firms are protected and more productive new firms don’t enter the market. And even after they do start it, running one is difficult. Regulatory laws are poorly enforced and government inspectors are commonly corrupt.
The tax system also makes it harder to export. States and provincial governments have a mix of indirect taxation powers which leads to regulatory uncertainty for firms. Many times products are taxed twice by both of them and they can’t claim credits for it. The GST does not allow firms to deduct input GST costs which makes them disadvantaged globally. It is also very hard to import capital goods in Pakistan because of the tariffs involved in importing them. This reduces exports because these imports are used to produce items that will be exported again later.
Worst of all, the uncertainty leads to a focus on low value exports (about 60% of exports are textiles comprising simple linen, knitwear etc and another 20% is food like rice and fish).

Capital Sucking SOEs

Pakistan has a problem: its state owned companies are very unproductive. The usual problems for all state owned companies exist here. SOE managers are poorly motivated, poorly incentivised and poorly run.
Out of 213 SOEs, only 85 are commercial (for making money) versus strategic (for some national purpose like energy security for example). Non financial commercial SOEs had assets amounting to 44% of GDP but generated only 0.4% of employment. Despite having 44% of GDP in terms of assets, their revenues amounted to only 14% of GDP. Revenues aren’t counted in GDP though, profits are. The net profit of Pakistani SOEs has been negative since 2014 and over one third of them have consistently lost money.
Credit too is extended to the SOEs far above the private sector. Bank loans to the government and SOEs grew at more than double the rate of private sector bank loan growth from 2019 to 2021. To add to all of this, SOEs have contingent liabilities of more than 7% of GDP which would be a burden on the government budget if the contingencies occur.

The Reform Problem

Nothing I’ve said above is new. Pakistani economists have been lamenting for years that structural reforms aren’t happening. Here is former Pakistani Finance Minister Shaukat Aziz all the way back in 1999

Pakistan was in severe economic crisis. We were known as a "one-tranche country". We used to take one tranche from the IMF. We were constantly in Fund programs. We would violate all the conditions of the program and it would be stalled, and then we would go back. This was the routine more or less. We had severe balance-of-payments problems. We did not know how to meet our foreign exchange expenses beyond a certain day. Our debts were technically in default; some were past due and no new credit was available from the market Source: Asia Society

IMF reports have said this since 2001 (from when the first digital reports are available). And even today, the need for structural reforms is well known. Here is Atif Mian from last week: https://twitter.com/AtifRMian/status/1549803193634283525
So why aren’t Pakistani politicians taking action? After all the problems are clear. Their solutions too are clear. It is just not clear how they can implement them and stay in power.

Elections make it difficult

It is almost an article of faith that getting re-elected for a government requires cheap energy and food prices. After all, they form a majority of Pakistan’s consumption basket. And to be fair to the government, they did try. They signed natural gas deals in 2015 with Russia and one with Qatar this year. And the Russian invasion did make it difficult by increasing oil and gas prices which in the extreme cases led to blackouts and rationing. Pakistani politicians have the strongest incentive to do anything and everything to get the lights back on. It is unsurprising that they chose to subsidise oil and gas and put price controls.

The Elite Bargain

The deeper problem beyond the impulse to subsidise energy is that the Pakistani establishment does not have an elite bargain that leads to good economic policy. What does that mean? In every country the major political parties and other important stakeholders (the public, military and the media) agree on a set of norms.
They agree on the goal of the government (in China that was very explicitly to get powerful via economic growth), and to a lesser extent, the means to do it. In Pakistan, the problem is that it is each for himself. The major political parties do not take the actions needed to increase economic growth (like reducing the regulations for businesses or reducing the import tariffs) because they do not see the point in it.
Sometimes there are important stakeholders that prevent reform. The Pakistani Army via the Fauji Foundation and other trusts controls several businesses (one of the first search suggestions in the dropbox is “Fauji Foundation cement”), and they have a great deal of political power in the country. The army is widely believed to control the government from the inside, and it would not be surprising if they had stopped trade liberalisation to protect their core financial interests.
Pakistani politicians themselves make large amounts from corruption, and it would make sense for them to keep the show running as it is because it personally benefits them. A more liberalised economy would lead to their existing sources of rent being destroyed and new people coming in place.

Conclusion

I’m more or less convinced that unless the government has a change of heart and decides to fight the special interests that force it to have such poor economic policy, these crises are inevitable.
And I’ll leave you with this meme to end it
​
I write at brettongoods.substack.com. Follow me on Twitter at @PradyuPrasad

This was originally posted at https://brettongoods.substack.com/p/pakistans-next-crisis-is-guaranteed
TL;DR

1. Pakistan’s current economic crisis is caused by a spike in oil and gas prices leading to a sharp drop in foreign exchange reserves. The government has reserves worth a month of imports and would not have met their debt commitments without an IMF bailout.
2. This is not the first IMF bailout for Pakistan: it’s the 23rd! The problem is not only about this specific crisis, but that the Pakistani economy has extremely poor policy that makes economic growth almost impossible. It is inevitable then, that economic crises happen so often.
3. The reason why this happens is because the Pakistani elite do not want it! They do not have the incentives to increase economic growth whether due to corruption, military control of the government and or general incompetence. Until this changes, it is very likely that Pakistan will have low economic growth, and inevitably more crises like this

From Crisis to Crisis
The current economic crises in Pakistan and Sri Lanka (both articles from Noah Smith, recommended) might seem like they’re because of this moment. It might seem as if the crisis is because of a specific action taken by a specific person (like the Sri Lankan debt binge in 2019), or because of some unlucky event (like the Russian invasion of Ukraine which raised food and energy prices). But when you look at the economic history of post independence Pakistan, it doesn’t seem like this was a one off thing. The country has had 23 IMF bailouts since independence, and it doesn’t seem as if any of them has led to structural change.
The imports go boom
The immediate reason for Pakistan’s crisis is simple: they will run out of foreign exchange reserves and not have much to pay their foreign currency debts. They will run out of foreign exchange reserves because their central bank sold most of them in defending the currency’s value.
The central bank had a problem: in 2022, the Russian invasion of Ukraine led to higher energy and food prices. Pakistan’s largest import is petroleum, its second largest is gas and its third largest is crude oil. The current spike in oil prices from about $70/barrel to $120/barrel and spike in natural gas means that the country’s import bill increases. It is very hard to have a lesser quantity of oil and gas because it’s so important to several functions like electricity and transportation, so consumers end up accepting the price increase in the short term. So, for countries that have to import these products, it ends up in a higher import bill for them. Pakistan’s imports in June are up 16% over May’s, and 24% over last June’s.
The problem is that when your imports exceed your exports (and in the absence of foreign investment), this usually leads to the currency depreciating. Pakistan not only has had more imports than exports, but also has had declining foreign investment, which means that there is strong selling pressure on the currency. Fewer people want to buy Pakistani rupees and more want to sell them. The State Bank of Pakistan tried to reduce the effect of this by buying Pakistani Rupees and selling foreign currency. But the selling pressure was so strong that they were close to running out of money. In August 2021 the SBP had about 20 billion USD of foreign exchange reserves. On 15th July, they had only 9.3 billion of reserves.
The problem is that in the last month, Pakistan imported about $7.8 bn of goods and services and exported only $2.9 billion worth of items. It is likely that the import bill increases, due to increasing gas prices, and the currency depreciates more. Should the SBP want to defend the currency’s value, they’ll be facing stronger selling pressures and will have to spend more to defend the currency’s value.
Paying the money back
The other problem is that Pakistan has a serious external debt problem. The country has about $100 billion in foreign denominated liabilities, out of which $81 billion is government debt. Out of that $81 billion, about a billion comes due in less than a year. It is almost guaranteed that the numbers from the PBS in the link above (from March) are an understatement, as the government has been borrowing rapidly in the financial markets.
The problem is that the massive fall in the PKR’s value has meant that it takes a lot more PKR than it used to to pay the foreign denominated debt. The Pakistani government will have to spend much more on debt payments than it used to.
It is unlikely that the government will not have the money to pay its debts over the long run. Financial markets have recognised this and Pakistani bond prices have fallen about 40% in the last few months. It is possible that the country won’t have enough foreign exchange reserves to make foreign bond payments, and if it does, it will be at the expense of spending the money somewhere else important.
See Bloomberg for more on it
Some facts about the economy make it almost inevitable that they will have foreign exchange crises.
Power Problems
For almost all countries that do not produce fossil fuels at home, they end up importing them. This is true for China, Japan, India and Germany. (America became a net exporter of oil in 2019, but might return to being a net importer this year). Pakistan has multiple problems in its energy sector. The first is that everytime the price of oil and gas increases, their import bill also increases.
A higher import bill is one problem. The government taking the cost of imports on the fiscal makes it worse.
More Money More Problems
Every government faces political problems when energy prices rise. But Pakistan is probably unique in trying to solve those problems with subsidies that are unsustainable. In the previous fiscal year , there were power subsidies of about 378bn PKR versus a budgetary allocation of only ~150bn PKR. In this fiscal year, they would be about 500bn PKR making about 5% of the budget.
The problem here is clear. When the government commits to subsidising fuel if the price goes up, it takes an implicit liability on its budget. If fuel prices go up, it has to increase spending at the same time when the balance of payments is facing stress. This will make fuel cheaper, and instead of rationing the quantity of fuel via higher prices, will encourage its consumption leading to a higher subsidy cost. The government is converting a balance of payments problem to both a balance of payments problem and a fiscal problem.
You can model the Pakistani government as sort of being short the price of oil and natural gas, and that has been a terrible trade so far.
The government seems very committed to keeping them, in light of the upcoming elections in 2023 (although they do know the risks themselves).
Power Problems II
And along with the subsidies, the other problem is that for the same political reasons, the previous government refused to increase energy prices even after the Russian invasion of Ukraine, and only when the new government came did they increase the price of power (and that too barely)
The other problem is that many of the subsidies that the government promises to power distribution companies do not get paid. This paper estimates it at about 12% of GDP, although the IMF puts it at around 6% of GDP. Regardless of the actual number, this is a serious problem! If power distribution companies do not get the subsidies they are promised, they are unable to make payments to anyone up the supply chain. Which makes the existing problem of higher prices worse by increasing the number of problems in transmitting electricity.
The Budget Problem
Along with the Power Problems, Pakistan has another serious problem. It does not collect very much in taxes, but spends as if it did. To cover the difference the government borrows money, usually in foreign currency.
We Don’t Pay Taxes Here
Pakistan has a low tax to GDP ratio of about 13% which is far lower than comparable countries (Thailand at 17%, India at almost 18% and Turkey at 18%). There are a few reasons why this happens. The first is that the government is under political pressure to give exemptions to political supporters, especially right before elections. Along with that the direct tax base is very narrow. Only 2.9 million Pakistanis pay income tax out of a population of 220 million people. There are also several exemptions to the sales taxes which reduce the amount of revenue
The current sales tax system is also very fragmented with provinces collecting services tax and the federal government collecting the goods tax. The system as a whole is cumbersome and hard to deal with. Along with that, there are several negative effects of the current tax system. There is no mechanism to claim tax credits on inputs, and so exporters face higher costs compared to other countries
The Debt Problem
For many countries of Pakistan’s development level, it is generally harder to borrow large amounts at long durations domestically. The local debt markets wouldn’t be able to support large amounts at long durations and even if they did, the interest rates would be much higher. So, governments choose to borrow in foreign currency above. As said above, they have about 80 billion in foreign debt (which is an understatement given it is likely that the government has borrowed more in the last year).
The sharp fall in the Pakistani rupee’s value means that the cost of servicing the debt too would have increased, and put a further strain on the already limited foreign exchange reserves.
The foreign debt creates a serious foreign exchange constraint for Pakistan. The country has to generate enough foreign currency to service its debt or risk defaulting on it and being cut off from the financial markets.
The oil spike is bad luck, subsidising oil during the oil spike is bad policy, the long term problem of low tax collections are worse than that, but borrowing money in foreign currency to fund expenditures is the ultimate sin. Debt by itself is not bad, but the problem is that Pakistani governments are using it to spend it on expenditures and not productive investments.
All of these make foriegn exchange crises more likely. The reason why other countries manage to avoid this is because they have economic growth that keeps money flowing in. A very good way to avoid repeated economic crises is to have consistent economic growth.
The Growth Problem
And the previous 1600 or so words are only hinting towards what is Pakistan’s biggest problem. Its economy is unproductive, and is not growing to the extent to which its political aspirations ask for. It is not wrong for Pakistani voters to ask that they don’t spend over half their incomes (see the CPI basket here) on food and energy. But the problem is that their incomes are not growing fast enough.
There are three parts to this. First, productivity growth in Pakistan has been low and declining. Second, this is caused in large part by onerous government regulation and command of the economy. Finally, everything described above is a symptom of the above two problems.
A small caveat: Pakistan is not very poor, but has had slow growth relative to its neighbour India, and Bangladesh (which was part of the country from 1947-71).
Productivity is (almost) everything
For an economy to grow, you need capital and labour. More machines and more people, make countries richer. But the problem is that only adding more machines and people can’t go on forever. Countries also have to use them productively. It makes little sense to have increasing use of factors like capital and labour if they’re not being used productively. Except for a few periods, this has been the case in Pakistan. Most economic growth has come from adding more resources to the Pakistani economy, and it is only in a few decades that economic growth has come from productivity improvements rather than adding capital and labour.
You can see examples of this in multiple places, but I’m going to focus on one extreme one: exports. Pakistani exports are concentrated in a few low value products and in very few firms. The top 25 firms make about a quarter of Pakistan’s total exports, and all of them in textiles. Exports are good because they cause firms to compete in the global market and make them more productive. They also lead to foreign exchange earnings which help the balance of payments problem.
The productivity problem also shows up in the size of firms. Just like India, Pakistan has too many small firms. As this World Bank article notes, the average small firm in Pakistan has only two employees.
And the diagnosis of the problem is that the Pakistani economy has a productivity problem.
Big Government, Big Problems
The Pakistani government bears responsibility for their low productivity in two ways. First the onerous regulation that pervades much of the economy keeps the country poor, and corruption high. Second, the state owned enterprise sector takes up too much capital and is very unproductive.
Regulation
It is very hard to start a firm in Pakistan. It takes about 17 days and costs about 6% of your annual income. This makes new firm entry very hard, and means that existing firms are protected and more productive new firms don’t enter the market. And even after they do start it, running one is difficult. Regulatory laws are poorly enforced and government inspectors are commonly corrupt.
The tax system also makes it harder to export. States and provincial governments have a mix of indirect taxation powers which leads to regulatory uncertainty for firms. Many times products are taxed twice by both of them and they can’t claim credits for it. The GST does not allow firms to deduct input GST costs which makes them disadvantaged globally. It is also very hard to import capital goods in Pakistan because of the tariffs involved in importing them. This reduces exports because these imports are used to produce items that will be exported again later.
Worst of all, the uncertainty leads to a focus on low value exports (about 60% of exports are textiles comprising simple linen, knitwear etc and another 20% is food like rice and fish).
Capital Sucking SOEs
Pakistan has a problem: its state owned companies are very unproductive. The usual problems for all state owned companies exist here. SOE managers are poorly motivated, poorly incentivised and poorly run.
Out of 213 SOEs, only 85 are commercial (for making money) versus strategic (for some national purpose like energy security for example). Non financial commercial SOEs had assets amounting to 44% of GDP but generated only 0.4% of employment. Despite having 44% of GDP in terms of assets, their revenues amounted to only 14% of GDP. Revenues aren’t counted in GDP though, profits are. The net profit of Pakistani SOEs has been negative since 2014 and over one third of them have consistently lost money.
Credit too is extended to the SOEs far above the private sector. Bank loans to the government and SOEs grew at more than double the rate of private sector bank loan growth from 2019 to 2021. To add to all of this, SOEs have contingent liabilities of more than 7% of GDP which would be a burden on the government budget if the contingencies occur.
The Reform Problem
Nothing I’ve said above is new. Pakistani economists have been lamenting for years that structural reforms aren’t happening. Here is former Pakistani Finance Minister Shaukat Aziz all the way back in 1999

Pakistan was in severe economic crisis. We were known as a "one-tranche country". We used to take one tranche from the IMF. We were constantly in Fund programs. We would violate all the conditions of the program and it would be stalled, and then we would go back. This was the routine more or less. We had severe balance-of-payments problems. We did not know how to meet our foreign exchange expenses beyond a certain day. Our debts were technically in default; some were past due and no new credit was available from the market Source: Asia Society

IMF reports have said this since 2001 (from when the first digital reports are available). And even today, the need for structural reforms is well known. Here is Atif Mian from last week: https://twitter.com/AtifRMian/status/1549803193634283525
So why aren’t Pakistani politicians taking action? After all the problems are clear. Their solutions too are clear. It is just not clear how they can implement them and stay in power.
Elections make it difficult
It is almost an article of faith that getting re-elected for a government requires cheap energy and food prices. After all, they form a majority of Pakistan’s consumption basket. And to be fair to the government, they did try. They signed natural gas deals in 2015 with Russia and one with Qatar this year. And the Russian invasion did make it difficult by increasing oil and gas prices which in the extreme cases led to blackouts and rationing. Pakistani politicians have the strongest incentive to do anything and everything to get the lights back on. It is unsurprising that they chose to subsidise oil and gas and put price controls.
The Elite Bargain
The deeper problem beyond the impulse to subsidise energy is that the Pakistani establishment does not have an elite bargain that leads to good economic policy. What does that mean? In every country the major political parties and other important stakeholders (the public, military and the media) agree on a set of norms.
They agree on the goal of the government (in China that was very explicitly to get powerful via economic growth), and to a lesser extent, the means to do it. In Pakistan, the problem is that it is each for himself. The major political parties do not take the actions needed to increase economic growth (like reducing the regulations for businesses or reducing the import tariffs) because they do not see the point in it.
Sometimes there are important stakeholders that prevent reform. The Pakistani Army via the Fauji Foundation and other trusts controls several businesses (one of the first search suggestions in the dropbox is “Fauji Foundation cement”), and they have a great deal of political power in the country. The army is widely believed to control the government from the inside, and it would not be surprising if they had stopped trade liberalisation to protect their core financial interests.
Pakistani politicians themselves make large amounts from corruption, and it would make sense for them to keep the show running as it is because it personally benefits them. A more liberalised economy would lead to their existing sources of rent being destroyed and new people coming in place.
Conclusion
I’m more or less convinced that unless the government has a change of heart and decides to fight the special interests that force it to have such poor economic policy, these crises are inevitable.
And I’ll leave you with this meme to end it
I write at brettongoods.substack.com. Follow me on Twitter at @PradyuPrasad

In this post I’ll teach you 3 things that have made me $35.8k (profit) on a $5k ad spend within 1 month…
I just did this as an experiment… and ended up doing a 7X cash return on ad spend.
The 3 things are: 1) How to build a Facebook Group that produces multi-5-6 figures per month in Cash Flow 2) How to drive minimum 10-15 Leads PER DAY to that Group 3) How to convert those Leads into “high-paying” customers
What is the advantage of this method? Well… you’re able to get instant sales AS WELL AS build long term trust & authority in your market…
With this method you’re going to convert MORE leads into customers than ever before…
You see there are 2 types of people who buy: 1) People who buy on a whim… they buy impulsively (that’s only 2%-3% of your market) 2) The other 97% buy based on TRUST…
With this method your sales are going to skyrocket because we are going to help you build tremendous trust in your market –– so get ready for some good times!!

The beauty of this method is you get to leverage two marketing channels: Organic + Paid

If you’ve read my previous posts you know I’m OBSESSED with Lead Generation and making copious amounts of money, in a short period of time.
I don’t believe in struggling for months and years to generate the cash flow required to enjoy life.
That’s why I previously created the Sales Letter Funnel (if you don’t know what this is, please read my previous posts after you finish this).
The Sales Letter Funnel works so well… not only because it generates a lot of money… but because it works FAST!
There is literally no other funnel you can launch and make $20k in under a week - so unless you hate money, please go and read my posts (after you read this).
The Sales Letter Funnel has helped me produce mad results for businesses…
I even had a Home Remodeling company jump to $2M/Per Month in 90 days using my strategies… AND if you combine my FB Group Strategy with my Sales Letter strategy, you’re going to become UNSTOPPABLE.
SO what I want to show you today… is a slightly more laid back strategy… that ANYONE can use to produce a crazy amount of cash.
It’s called the “Authority Group Funnel”. It’s different from the Sales Letter Funnel… the Sales Letter Funnel is action packed and works well if you’re already good at sales.
But if you’re not very experienced in sales and you still want to make a ridiculous amount of money every month… What you need is The Authority Group Funnel.
I was able to generate 400 Leads in 1 month… and make $35.8k in profit. And it only cost me $5K.
After adding this funnel to my agency along with the Sales Letter… we’re VERY close to adding $300k/month in revenue - both funnels COMBINED!
Now maybe $5k is a lot of money for some of you to throw at an experiment… but if you can even spend $50/day on Ads… this will be a very promising experiment.
There’s nothing to worry about…
Because in this post I’m going to give you a STEP-BY-STEP strategy on EXACTLY how to execute this…
I can pretty much guarantee that you will make at least 2X your money back - minimum!!
So let’s get to it…

WHAT IS THE AUTHORITY GROUP FUNNEL?

A group funnel is essentially running Facebook Ads to a lead magnet and sending your leads to join a Facebook Group –– they can only get the Lead Magnet inside the group…
But why do you need a Group? Simple answer: To build a community that trusts you.
Whether you sell low ticket, mid ticket, high ticket, real estate, options trading, forex trading, courses, marketing agency, info products, coaching, consulting, services, web dev, design, photography… etc etc etc….
... the list is endless – it’s MUCH easier to sell to a community that TRUSTS YOU!
Here is a fact: People buy from people they trust. Period.
The product and service is important – BUT if they don’t like you, or your brand, or your company, they will NOT buy from you!
You can go out and test this as much as you want.
You can create the best offer in the world, you can create the best product in the world… but if people don’t like and trust you… they will NOT buy from you..
It’s as simple as that…
So what we’re doing with a Facebook Group, is filling it up with RELEVANT people who need your services and setting up systems inside the group that wins their trust.
I will talk about how to build authority, a good reputation, and create trust with your audience…
So why do you need a Group for this? Well… because organic REACH and ENGAGEMENT is much much better than a business page.. You see, you can have a million followers and likes on your business page - but it won’t reach that many people…
BUT a FB Group filled with relevant folks has much greater reach than a business page.
SECONDLY, the cost per lead is much much cheaper (for HIGH quality leads) than a webinar or sales letter…
I do not consider “Lead Form Ads” as a good campaign objective for any lead gen (except a few niches)... and you can read my other posts on why that is…
Now let’s understand the basics of a Group Funnel.

UNDERSTANDING THE BASICS:

You need 3 levers to make this work: 1) A Lead Magnet 2) Facebook Ads 3) Facebook Group
You send cold traffic to a Lead Magnet… and they can only get the lead magnet inside the group…
But I want you to FOCUS.
And I don’t just mean focus on this post (which you should anyway)… but I mean I want you to align your focus on ONE and one thing only – Revenue.
Unless you have a laser sharp focus on revenue… you will never make money.
AND the reason I mention this at this point in this post, is because HOW you design your lead magnet is CRUCIAL.
You see… what you get on the front, is EXACTLY what you get on the back.
In this case… your front end is your lead magnet… and your backend is your product/service.
A lead is literally WORTHLESS if you cannot convert it into cash…
...which is why the idea of “Lead Generation” the way it is taught and sold is a scam.
What you really want is Revenue Generation. Who gives a crap about 400 leads if you’re making 0 dollars.
So your LEAD SOURCE needs to be SO STRONG… that they want to work with you on the backend. Which means they see you as a superior solution in the market and they want to buy from you..
​

DON’T MAKE CRAPPY LEAD MAGNETS

Now MOST lead magnets on the Internet are crap… people give away crappy info, and guess what? They get crappy Leads…
And if you’re gonna give away crappy info then you deserve to get crappy leads.
If you want top-tier clients… guess what? You need to give people top-tier info.
So FOCUS on revenue.
If you focus on revenue, you will focus on customer acquisition… if you focus on customer acquisition you will focus on the quality of your pipeline…
If your lead flow and lead pipeline is crappy… you’re not gonna make money… or even worse, you will get shitty clients who you will have to slave away your peace of mind for.
We don’t want that.
SO, in order to build a high quality pipeline –– build a HIGH QUALITY LEAD SOURCE.
Which means, your lead magnet needs to be top-tier.

MAKE A LEAD MAGNET SO GOOD THEY CAN’T BELIEVE IT’S FREE…

Your lead magnet can be anything –– free book, free report, free guide, free course etc… there’s a million Lead Magnet examples…
The important thing is, the QUALITY of that lead magnet.
High quality Lead Magnet = High Quality Leads. High Quality Leads = Great Clients + Great Revenue.
Simple.
Here’s the anatomy of a high quality lead magnet: 1) Give them information that makes a transformational shift in their thought process. 2) Give them information that makes them experience “aha moments” 3) Give them information that makes them wonder “Wow why didn’t I think of that before”
This will FORCE you to think out of the box… so yeah it's hard work - but big money don’t come easy.

HOW TO CREATE AN OPT-IN PAGE…

Now that you have a GREAT lead magnet… and you feel positive that it’s going to attract high level clients…
… you need to build an opt-in page.
Now look, you wanna put some effort into this…
DON’T be lazy and create an opt-in page with just a headline, just a jpeg of your lead magnet and a just form with some bullets that say “this is what you will find inside….”
Don’t just do that… that’s a lazy approach!
If you look at opt-in pages in the market right now… 99% of opt-in pages are literally the same shit…
They do the same layout, same design, same format…. Literally 0 innovation!
Don’t be like those people.
If you’re reading this far – I can already tell you’re a smart person, you’re an action taker and you want to hustle to make a lotta money.
Good..
Don’t listen to what these courses teach you… there’s a good reason I don’t listen to “Gurus”
All gurus teach you the same rehashed bullshit… and their “students” flood the market with substandard copycat techniques and guess what — markets become NUMB to your marketing.
So don't listen to Gurus!
Listen to yourself, your own gut, your own intuition… lean on yourself.. AND your creativity!
Marketing is, believe it or not, a CREATIVE pursuit.
Now THIS is how to make a SOLID opt-in page that converts cold traffic to high quality leads…

SALES LETTER STYLE OPT-IN PAGE…

You need the prerequisites.. 1) Headline 2) Image 3) Form 4) Bullets
Okay that's done
NOW… you need to give them VALUE.
Understand this, you are not the only person or business in the world that is using a lead magnet to get leads in your market..
Understand this, your market is inundated with ads from your competitors
Understand this, they are NOT obligated to give you their name, email and phone number - so why should they?
UNLESS…
... you make a compelling case for them to want your lead magnet.
And unfortunately, a strong headline and strong bullets are not enough in this day and age of marketing…
Those are just the basics…
Now further to that… you need to make a COMPELLING case for them to want to get your lead magnet…
Do you know why I got a multimillionaire to grab my lead magnet and then turned him into a high paying client?
Because I wrote some “sales copy” further to the prerequisites on the opt-in page… that made him feel like “WOW… this is different”
What that does is… it builds trust, reputation and authority from the get go.
Now, this copy doesn’t have to be too long… you could write 800 words of copy and you’re good.
BUT when you support your prerequisites with some good copy… not only do you get MORE leads..
… you also get BETTER leads.
Imagine getting “GOOD LEADS” in abundance.. For $2-$5 per lead!
AND you have their name and phone number..
Now you take them to the next step…

NEXT STEP AFTER OPT-IN PAGE…

Once they fill out the opt-in form to get your Lead Magnet… you send them to a “thank-you” page..
Only this time it's different…
Instead of a thank you page… we call it the “LAST STEP” page..
This is where the magic happens –– on the last step page, you offer them ONE MORE FREE THING.
And that free thing should supplement the original lead magnet… it’s the lead magnet multiplier…
And the catch is — if you want the lead magnet + multiplier COMBINED then click on the link below and access it from my Facebook Group.
You need to have these documents ready in your Facebook Group so when you accept their membership - you can tag them in the post and they should get access to the docs.
Here’s the thing.. The lead magnet and the multiplier should be SO GOOD that they want to join your group to get those docs…
HERE’S THE RESULTS I SAW:
Out of 400 leads ––> 325 people joined my group. That’s a 81.25% Leads to Group join rate!!!!
HERE’S THE STATS ON THE FB ADS: Out of 789 landing page visitors ––> 400 opted-in That’s a 50.69% Landing page conversion rate!!!
If you think these numbers are crazy high…
Let me tell you I thought so too… but then it just re-established and confirmed HOW much significance GOOD copywriting has..
If you can write really good copy…
... and if you can give your market something of value – something that’s different, interesting, exciting AND beneficial…
… you’ll be surprised how many clients you can get.
- You have NO idea how many clients are out there waiting for you - You have NO idea how much potential you have..
You can literally make 50X more money than you are making right now…
So let’s talk about the next steps…

THE FACEBOOK GROUP

This is where you make the money…
First things first… as soon as those leads come in, you want to dial those numbers and talk to them…
I cannot teach you sales in this post (this post has gotten longer than I originally expected anyway lol)
But yeah you need to dial those numbers and get to know them etc. etc..
Now the contents you post INSIDE your group is where the money is..
The important thing to understand is that, now that they’ve joined your group… you need to create engaging content inside –– that’s valuable to them… and that makes them wanna reach out to you.
Rule of thumb: you need to post value inside the group 2-3 times a week. Quick tip: If you go live in your group... your reach increases a LOT more and your group engagement shoots up.
There are THREE things you want to establish and build for yourself inside your group: 1) High Value 2) Authority 3) TRUST
- They need to view you as high value - They need to view you as an authority in your space - They need to view you as a TRUSTWORTHY person
Those 3 components are all you need to get top-tier clients.
High value, high authority, and high trust levels... AND that can only come from effort..
There is NO magic pill in this world that can help you build high value, high authority and high trust..
There is NO course or system in this world that will automate that for you
That comes from hard work and commitment …from grit and determination …from power and the will to succeed …and from the intense desire to make a lot of money.

Expectations

I did not make $35.8k from 400 leads because it was easy… I made that money because I worked hard on those leads – I did the hard things (trust, authority, value).
I pushed myself beyond the limits to convert those leads into sales…
I’ve given you the roadmap… now you gotta execute.
Happy to answer any questions if you face any obstacles along the way –– post it in the comments below and I will help you.
Literally AMA. Good luck :)
P.S: If you want a structure on how to run FB ads and the campaign setup… just read my previous posts. I've written a lot of material on that.

Happy Friday, Barkada --

The PSE gained 209 points (!!) to 6681 ▲3.2%

Congrats to arkitrader for winning the P500 Grab Food voucher! Word of warning: the voucher expires on August 23, so GET EATING! Thanks to everyone who entered!
Thanks to Aanin, Rommel O, Jing, and Tanker0921 for the meme appreesh!
*** PROGRAMMING NOTE *** MB will be taking a 2-week vacation, starting August 18. I'll be back with daily market updates starting the morning of September 1!
Shout-outs to Trullalau, Pao, Mevu, Xavu, Xame, Zarklufi, nnjtrader, RmB3, LanAustria, ERVIN, Stephen Chiong, Pat Really, Bien EC, E B, Jonathan Burac, Lance Nazal, Erudite Troglodyte, Rolex Jodieres, Makisig Tan, Jupitel Thunder, Ronald, mArQo, Palaboy Trader, Chip Sillesa, Neil Perry, Jules Alviar, Isabel, Dividend Pinoy | PGG, Just’n, Monreg#1977, Jr Martin, bren, meloi, arkitrader, Jose Mateo, leaf, Michelle, Sharon, and Jing for the retweets, and to Jayvee Menil, Padilla GJ, Evolves.co, Marvin Rodriguez Gonzaga, Marvin Quezon, and Mike Ting for the FB shares!

▌In today's MB:

• ABS-CBN halted after it acquired a huge stake in TV5
• Converge Q2 profit ▲16% y/y, but growth guidance halved
• PLUS: Quick takes on 2GO, CEB, and JFC

▌Daily meme | Subscribe (it's free) | Today's email

▌Top 3 MB indices:

 Fast Food ▲6.41% MiddleClass ▲5.16% NEET ▲3.78% 

▌Bottom 3 MB indices:

 Crony ▼0.96% REITs ▲1.47% Hedgy Metal ▲2.26% 

▌Main stories covered:

• [NEWS] ABS-CBN halted after it acquired a huge stake in TV5... ABS-CBN [ABS 11.98 ▲5.09%] [link] disclosed that it signed a deal with TV5 to purchase 34.99% of TV5’s common stock for ₱2.16 billion, plus a convertible note worth ₱1.84 billion that converts into common shares after 8 years and gives ABS an interest in TV5’s common stock that will cap out at 49.92%. All of the shares acquired by ABS were primary, meaning that the money paid by ABS will go directly to TV5, not TV5’s shareholders, to fund TV5’s capital and operational expenditures. The companies were careful to highlight that the deal does not pass control of TV5 and its franchise to ABS, as MediaQuest and PLDT [TEL 1811.00 ▲1.74%] will still retain ultimate control of the company, even if ABS converts its note to common shares in 8 years’ time. Commissioner Gamaliel Cordoba, head of the National Telecommunications Commission (NTC), said that ABS would have to “clear violations and obligations” before proceeding with its investment in TV5.
  
  • MB: Given the incredible amount of political capital that Duterte and his allies spent to have ABS’s franchise renewal hopes killed, it’s not surprising to see and hear the breathless opposition to this deal coming out of the woodwork from the moment the acquisition was announced. What happened to ABS was entirely political, and what will happen to it going forward will, unfortunately, also be entirely political. From a business perspective, this is the right move for ABS. It has a huge catalog of content that it is still struggling to monetize at any rate close to what it once did, and a current stable of talent and production staff capable of churning out current and live TV on a national scale. This kind of deal gets ABS one step closer to getting its content back in front of Filipino audiences, and more importantly to shareholders, gives ABS the chance to profit from the sale of ads. We don’t have insight into how ad sales will be dealt with by TV5, but that has to be a massive component of the deal signed between the two companies. There’s a lot of political junk to come that will make this story linger for some time yet.
• [Q2] Converge Q2 profit ▲16% y/y,... Converge [CNVRG 20.95 ▲3.20%] [link] Q2 net income was ₱1.98 billion, up 16% from Q2/21 profit of ₱1.7 billion, and up just 1% from Q1/22 profit of ₱1.97 billion. CNVRG’s subscriber count increased to 1,817,115, but the rate of that quarter-on-quarter increase has slowed considerably, from 7% in Q1 to just 1% in Q2. CNVRG thinks that it will reach 2 million subscribers by the end of the year. CNVRG execs said that some of its market sectors were “prone to certain shocks”, implying that cost inflation may have played a significant role in the dramatic slowdown that CNVRG has seen so far this year. The company downgraded its own revenue growth projections for 2022 to just 25-30%, down from the original 50%, saying that “it’s hard to be overly bullish given the reality of what we see today”. While its Q2 performance is not the kind of “hypergrowth” result that the market is accustomed to seeing from CNVRG, the exec team said that it still represents “very solid revenue growth”.
  
  • MB: It’s not often that one could look at a wildly profitable business that is still undergoing double-digit quarterly growth and think, “man, they’ve had a super tough year”, but that’s exactly what I thought when I saw the earnings report and the quotes from CNVRG’s management team. It’s clear that they are looking at the numbers and are worried about what the rest of the year has in store. CNVRG added just 15,000 customers in Q2, and for the company to reach 2 million by the end of 2022, it needs to add another 183,000. That’s a quarterly average of around 91,500 new subscribers, which would normally have been an easy target for the company to hit, but that Q2 subscriber add is shockingly low. Average revenue per user (ARPU) is also in the process of tanking, having fallen from ₱18,247 in Q2/21 to just ₱11,114 in Q2/22. That’s a 39% drop. So, the company is still growing, still adding subscribers, and still generating more profit, but the amount of new subscribers has slowed dramatically, and the amount of profit it takes from each of its existing customers has fallen almost 40% over the past year. Maybe there will be an uptick as schools start up again for Q3, but it’s pretty worrying to see “inflation” causing this much demand destruction for something as basic and productive as home broadband internet. Is CNVRG the dead canary that the rest of the market should be paying attention to, or is it just an odd result that will stand on its own as the funny confluence of so many complicated factors? The stock is down 23% since this time last year, and down 48% from its October high of almost ₱40/share.
• [NOTES] Quick takes from around the market...
  
  • 2GO Group [2GO 6.60 ▲4.10%] [link] Q2 net income Q2 profit ▲135% y/y to ₱108 million, on significant growth in topline shipping and logistics revenue, and effective cost control measures to bolster the bottom-line. The SM Investments [SM 845.00 ▲4.45%] subsidiary reported that its H1 shipping revenue was up 67% y/y, with the sub-components of sea freight revenue and passenger revenue up 54% and 155% respectively. The logistics side of the business posted a 22% gain. MB: Looks like Dennis Uy was forced out of his stake in 2GO just a little bit too early; if he were able to hold on for another quarter, instead of liquidating in late Q1, he’d have been able to sell at the improved valuation of a company that was actually turning a comfortable profit with considerable growth prospects. Perhaps that’s bad logic, though, since 2GO hasn’t turned an H1 profit since Uy bought into 2GO back in 2017. Maybe the Curse of Dennis would have prevented 2GO from having such a glorious Q2 and he’d still be waiting to fire-sale the stake for working capital until this day. The huge uptick in passenger revenue is interesting, and I’d like to see if that is replicated across all passenger ferry companies.
  • Cebu Pacific [CEB 45.20 ▲5.12%] [link] Q2 profit ▲71% y/y, as the company trimmed its Q2 net loss to just ₱1.6 billion, up from the ₱6.5 billion net loss it suffered in Q2/21. CEB reported that flights were up 350%, and passenger volumes were up 562%. These gains were somewhat offset by the ballooning cost of fuel, which pushed CEB’s operating expenses up to ₱16.8 billion, an 85% increase over the same time period last year. CEB says that it remains “cautiously optimistic” that it can return to profitability once domestic demand is “robust” and “international borders continue to open.” MB: I feel like this is a real result for CEB, not like the “fake” profitability that Philippine Airlines [PAL 6.00 ▲1.69%] posted for Q2 that is dependent on the special negotiated lease holidays that will end in less than a year. So while the company is still losing a crazy amount of money, the trajectory is at least not terrible. Don’t get me wrong: there are still so many problems for commercial air travel that it probably deserves its own dedicated day, but at least the CEB team is doing what it can to position the airline to be in the right configuration assuming there are no more black swans and things reopen in a relatively even fashion.
  • Jollibee [JFC 233.00 ▲6.88%] [link] Q2 profit ▲186% y/y, ▲27% q/q, 1H ▲352% y/y. JFC’s Q2 profit of ₱2.8 billion is a significant step forward both year-on-year, and quarter-on-quarter. Worldwide sales were up in a big way, both system-wide (+44.8%) and same-store (32.6%), with the biggest, most material improvements coming from JFC’s stores here in the Philippines thanks to easing of restrictions and menu price adjustments. JFC’s worst-performing region was China, which delivered a -28.1% sales growth for the quarter. Overall, JFC did over ₱73 billion in Q2 sales, and ₱133 billion in H1 sales, aided by global expansion, acquisitions, and beneficial forex adjustments. MB: For as valuable as the CBTL acquisition has become, and for as much as JFC’s business model has changed with the addition of new brands, the true strength of the company still lies in its ability to sling chicken and burgers in its backyard. As Philippine demand continues to recover, JFC and its shareholders should also continue to reap the benefits of all the money moves that JFC has been making throughout the pandemic. It’s hard to say exactly which quarter we’ll be able to look at JFC’s financials to see what it actually looks like when it's firing on all cylinders, but I get the impression that it depends more on what’s happening in China than on anything else.

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Correction- freebies AND protecting the environment
Sri Lanka is on the edge of bankruptcy, in spite of having our double GDP per capita 2 years back. They cannot afford to buy fuel, power, paper, medicines, anything. As the govt is almost bankrupt, they are unable to import anything. And they depend on imports for everything.
I asked in SL sub and these were the answers I received on how things turned so bad so drastically there:

It's a cascade effect. The stupid decisions were allowed to grow without any actual fixes.
They basically printed money, took loans and pegged the rupee to the USD. They did absolutely nothing to stimulate the economy.
In the middle of all this they went ahead with construction projects given to foreign contracts for a large amount of forex.
They continued to maintain subsidies even though govt revenue was crashing beyond belief. This lead to insane debt increases for almost every state/govt institution.
Now our currency is in a free-fall and we have 2.7bn in foreign reserves while we have 4bn in debt repayments this year. Our local industry is crushed under the rising running cost and our exports are struggling.
The trade deficit is still bad even though we barely open LCs to import (we don't even have enough dollars to import essentials).
This is basically like a patient with a wound on his leg, ignoring it when it starts becoming infected. Basically wears a sock with some perfume to hide the leg until one day the leg becomes gangrenous and has to be amputated.

You know what this reminded me of? This took me back immediately to the freebie politics of Kejriwal, DMK/AIADMK & Congress. It took me back to the leftist assholes who stopped development & modernisation of agri-sector by investment of pvt corporates in name of freebies of MSP (even though these laws wouldn't have stopped MSP). It took me back to "good hearted" "educated" liberals & lefties supporting the demand for universal MSP which will require 2 times the current central budget. This took me back to what we were almost on the verge of facing in India in 2013- those who are old enough will remember the 10% inflation, plummeting INR & skyrocketing Current Account deficit & Govt deficit. This takes me back to each & every industry & economic activity blocked by lefties- from steel production BY POSCO in Odisha to currently Jharkhand govt threatening to stop coal production to Maharashtra govt stopping irrigation projects inaugrated by Modi to the likes of Disha Ravi campaigning for Second response:

Because this country's main source of income is tourism. That went with bombings and then covid and then our genius president banned fertilizer which destroyed agriculture export (tea and rubber mostly) and made the government have to spend close to a billion USD on food imports and print money for compensation.
Now the remaining industries like textiles are getting destroyed by the power cuts/fuel shortage and import ban preventing import of raw materials

You know what this took me back to? It took me back to stopping of all industrial activities in name of pollution by our foreign funded bleeding-heart commies. It took me back to 10,000crore+loss to public exchequer by environmental activists & MVA in case of a single infra project alone-Aarey metro shed. Tens of thousands of crores of public money wasted and a project indefinitely stalled in name of trees. Now multiply this by hundreds and this is the loss & poverty we have suffered because of our leftists crusade for trees & animals & "tribal rights". Just like SL economy went down the drains because of benefic policies by their politicians of banning fertilisers & caring for nature. Now people are dying of hunger & lack of medicines.
Third response:

our present and past governments took huge loans and spent them on importing consumer goods/vanity projects that do not make income without any plans to repay them.. Then our president who was a petrol shed attendant in USA decided to convert the agriculture of the whole country 100% organic literally in 24hrs amid covid pandemic while lockdowns were severely affecting industrial production. Then the government decided to reduce the direct taxes and same time gave 100000 government jobs(when there was no necessity and most of the new employees don't even have a place to sit in government offices and basically waste time without any productivity).To top it all no.1 imbecile was selected as the chairman of the central bank. And I forgot to mention while we were low on foreign currency government imported nano urea from India paying several times its retail price and we also paid for Chinese organic waste/organic fertilizer which was brought to the harbor and then returned back to China.
Factually speaking this is going to happen anyway if not managed properly given the direction SL was heading to. Because our exports lesser than imports anyway in past 20+ years. SL spent more than the earning by borrowing and loans. Former Central Bank in 2019 predicted this disaster perfectly - https://twitter.com/BRI_SL/status/1190501715897769984
So what fast forwarded this disaster? 1. Dollars earned from Tourism got affected - 2018 political coup - 2 PMs at the same time & some countries issued warning to tourists bit recommended to travel to Sri Lanka, 2019 Easter attack, 2020 to now Covid
Tax cuts - Government cut direct cuts, so no money to run the government. So printed rupees.
PRINTED TRILLIONS of RUPEES which lead to devaluation. Even a school student with basic knowledge of economics knows effects of money printing. But current Central Bank Governor went on record saying "Money Printing does not cause Inflation" 🤦
When rupee devalued against dollars, Central Bank forcefully maintained exchange rate at 1$ = 200 LKR without letting market decide. Black market exchange rates went around 250/-, 260/-. So the expats didn't send their to Sri Lanka. So big portion of dollar didn't come here.
Since no dollars can't do imports, thus power cuts, fuel crisis, liquid gas crisis, etc.
Adding further to this, fertilizer ban caused massive short fall in harvest yield. So food prices sky rocketing.
LOANS AND CORRUPTION: SL took so many loans at commercial rates and spent on unrealistic projects which won't give any revenue to pay back.
Borrowing from ISBs 5-7 year loans at commercial rates (6% - 7%) is one of the stupidest decisions. Current regime even cancelled MRT project happening through Japan's loan which is more flexible and at almost no interest (0.5%) with a pay back period around 20 years.
Sri Lanka is screwed every possible way as IT HAS TO PAY 13+ BILLION USD in next 10 years to ISBs. In addition, Need several billions of USD to import fuel, medicine and essentials.

To put everything in short: If you vote for the govt to dole out cheques which its ass can't cash, common people will be the ones to suffer. If you support blockading of economic generation activities like industries & mining, common people will be the ones to suffer.