Webinar tomorrow night; Nikola memes; NNOX; Global banks process trillions in dirty money; New Yorkers Are Fleeing to the Suburbs
1) As I mentioned in yesterday's e-mail, I'm hosting a webinar tomorrow evening at 8 p.m. Eastern time with my colleagues Enrique Abeyta and Berna Barshay to discuss the coming November election and its likely effect on the stock market.
Trust me, you won't want to miss it.
We only do events like this when we're in unanimous agreement on something that: a) is out of consensus... and b) offers a huge opportunity to profit.
For example, the last webinar we did was on March 24 – the day after the market bottomed – when we pounded the table with the message that "this is the best time to be an investor in more than a decade."
The 10 stocks we recommended that night are up an average of 59%, led by an astonishing 381% gain for Penn National Gaming (PENN), versus 33% for the S&P 500 Index.
Tomorrow night, we'll share our predictions for the outcome of the election... and we'll explain how to profit from it.
The event is free to attend, but you must register in advance – you can do so right here.
2) With shares of electric-truck maker Nikola (NKLA) down nearly 20% yesterday (on their way to zero), funny memes are popping up all over. Here are two short video clips:
- A clip from the movie, The Wolf of Wall Street, entitled "Trevor Milton meeting with the SEC to explain $NKLA and how their business works"
- A clip comparing Nikola to the 1937 Hindenburg disaster
3) Speaking of total frauds...
In Thursday's e-mail, I wrote about Andrew Left of Citron Research releasing a scathing report on medical imaging company Nano-X Imaging (NNOX): A Complete Farce on the Market – Theranos 2.0. Today, Carson Block of Muddy Waters Research added his voice to the choir with this report: MW is Short Nano-X Imaging. Excerpt:
We are short NNOX because we think it is a much bigger piece of garbage than Nikola will ever be. There are important similarities, though. Nikola rolled a truck down the hill to try to prove it's real. NNOX almost certainly used somebody else's chest images to try to make its ARC machine look real. Both Nikola and NNOX try to legitimize themselves by using the halo of respectable companies. Nikola gave a bunch of stock away to GM. issued options for 1.2 million shares at $2.21 per share (worth ~$32.1 million) to the president of SK Telecom after SK Telecom happened to invest in NNOX.
But NNOX gets much worse. A convicted felon, who crashed an $8 billion market cap dotcom into the ground, was seemingly instrumental in plucking NNOX out of obscurity and bringing its massively exaggerated story to the U.S. NNOX touts distribution partnerships that supposedly amount to $180.8 million in annual commitments. Almost all of the company's partnerships give reason for skepticism.
Another halo NNOX is using to try to legitimize itself is that of "Nobel Peace Prize-nominated" Hadassah hospital. We are convinced that this partnership has been greatly misrepresented. As background, the chairman of NNOX's audit committee is the chairman of the board of Hadassah. He also received options exercisable at $2.21 per share. We have tried multiple routes to understand what exactly is happening with the ARC at Hadassah, yet we have been unable to get anybody to even confirm that the device is operating at the hospital. Some investors are apparently under the impression that data from studies at Hadassah forms the backbone of NNOX's 510(k) submission. However, that misunderstands the timeline of events and the submission process.
If NNOX's claims are achievable, it seemingly will come as a shock to most of the radiology profession. We interviewed five radiologists who were familiar with NNOX's claims. Not a single one expressed credulity of NNOX. Four of the radiologists – without any prompting – compared NNOX to Theranos. The ARC appears to be little more than a futuristic movie prop. In fact, an Israeli company that designed a pickup truck used in the movie Jurassic World claims credit for its design.
We conclude that NNOX has no real product to sell other than its stock.
4) Kudos to Buzzfeed for this outstanding piece of investigative journalism: The FinCEN Files. Excerpt:
A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins.
And the U.S. government, despite its vast powers, fails to stop it.
Today, the FinCEN Files – thousands of "suspicious activity reports" and other U.S. government documents – offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks' own employees.
Here's a summary in the Washington Post: Global banks process trillions in dirty money despite suspicions, investigation finds. Excerpt:
Trillions of dollars in money connected to criminal activity are sloshing through global banks. The banks and U.S. authorities know it, and they're not doing nearly enough to stop it.
These revelations come from the bombshell leak of more than 2,500 secret documents, most of which banks provided to the federal government over the past two decades.
BuzzFeed got hold of the records – the so-called "FinCEN Files," referencing the nickname for the U.S. Financial Crimes Investigation Network, the Treasury Department office that collected them in the first place. The outlet then shared them with 108 other news organizations around the world.
Taken together, the files depict a stunningly widespread phenomenon of criminals, corrupt officials and terrorists taking advantage of lax banking oversight. "These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them," BuzzFeed's team writes. "Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks' own employees."
And five banks in particular – JPMorgan Chase, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon – "kept profiting from powerful and dangerous players even after U.S. authorities fined these financial institutions for earlier failures to stem flows of dirty money," the International Consortium of Investigative Journalists writes.
5) As I wrote in my August 18 e-mail, in response to James Altucher's essay (entitled "NYC IS DEAD FOREVER. HERE'S WHY”), "I think New York will bounce back, as it always has." But articles like this worry me... New Yorkers Are Fleeing to the Suburbs: 'The Demand Is Insane'. Excerpt:
Since the pandemic began, the suburbs around New York City, from New Jersey to Westchester County to Connecticut to Long Island, have been experiencing enormous demand for homes of all prices, a surge that is unlike any in recent memory, according to officials, real estate agents and residents.
In July, there was a 44% increase in home sales for the suburban counties surrounding the city when compared with the previous year, according to Miller Samuel Real Estate Appraisers & Consultants. The increase was 112% in Westchester, just north of New York City, and 73% in Fairfield County, Conn., just over the state border.
At the same time, the number of properties sold in Manhattan plummeted 56%, according to Miller Samuel.
The suburban demand, driven in part by New York City residents who are able to work remotely while offices are closed, raises unsettling questions about how fast the city will be able to recover from the pandemic. It is an exodus that analysts say is reminiscent of the one that fueled the suburbanization of America in the second half of the 20th century.
Best regards,
Whitney