“I have no special talent. I am only passionately curious” - Albert Einstein

As we have mentioned in our first letter, we will talk a lot about Commerce, Commodities & Shipping, Finance & Crypto as we are very interested in learning and interpreting what sells, what ships and what finances the world transactions. Once our research becomes extensive, we will break the newsletters into each specific areas of focus.

Around us:

1. Yesterday was Thanksgiving and it is never too old to review the history of the same. Happy thanksgiving to all.

2. FIFA Soccer World Cup 2022 - FIFA World cup 2022 kicked off on 20th November 2022. The 2022 FIFA soccer world cup wasn’t short of controversies. The most important thing about any sport is to bring people together and spread happiness and the act of winning drives two sides to compete till the end of 90th minute.

Short Summary of the interesting things leading to world cup 2022:

• Origins of Soccer - Soccer is the world's most popular sport. But who invented it and what is its history?

• Since FIFA, the governing body for international soccer, awarded the 2022 World Cup to Qatar in 2010, the tournament has been ensnared in a tangled web of scandals.

• The numbers neither FIFA nor Qatar will not want us to see in the lead to the soccer world cup

• John Oliver’s last week tonight was insightful and funny to say the least describing the Qatar World Cup.

• Controversies leading into the world cup is something FIFA has taken a lot of heat over the recent few years but this is not the first time and we are less learnt unless we explore the history of FIFA.

Our thoughts: Too many countries and FIFA have vested interest in making it what it can be and hence politics, gaming, sponsorships and the economic impact the game can have in the hosting nation is no less lucrative across the world. For the all the bad outside the stadium, there is a game that is being played inside the stadium and two countries are competing throughout the world cup. So jump into your seats and support the players within the stadium. All tournament long, match balls will contain a sensor that collects spatial positioning data in real time — the first World Cup to employ such a ball-tracking mechanism. For now we are excited about VAR.

2. Democrats kept control, winning at least 50 seats to Republicans’ 49.

Our thoughts: Population is more in the center than left or to the right. A population not very inclined to the abortion rights being retracted have pulled it away from a complete red wave. A population has also seen the amount of spending for the war to be unacceptable bringing the far left to the middle. A population worried about the Trump contesting again for 2024 has left them leaning to the middle and so do we have households in splits as to where they align their loyalties.

3. Musk: Exposing Twitter's Internal Discussion Of Hunter Biden Laptop Story "Necessary To Restore Public Trust"

   Our thoughts: Is this a battle of the Left and the right? Is Elon Musk really a supporter of free speech or is he leaning right? Why is this the most important thing for 2024? What is public trust & will it be restored any more here than what we have if we move the other side? Will we make good decisions along the way?

4. Bob Iger is back. Let us leave the rest to this thread:

   Not long ago, this had occured:

Food for thought: Interesting to read what had happed in the past.

4. Is this the end of crypto? Are we at the beginning or the end.

UPDATE: ‘drop dead’ date for Genesis bankruptcy decision is Wednesday. The previously undisclosed $1.1B promissory note from Genesis to DCG still exists. Lack of liquidity and loan losses at Genesis still exists.

Our thoughts: We said this last week. We are doubling down on need to increase focus and productivity. It is time to build. Get back to keeping your heads down and running hard. It is a time like none other and the winter may be quite long.

5. FTX: A tiring story for generations to review, assess and have their own conclusions.

Our thoughts: Everything about FTX is a tiring read and let us leave it at here for a different day to write a longer read on the same.

Interesting Info:

We get caught up in a lot of things. Very often we don’t zoom out or zoom in and don’t address the central problem and are deceived by what we see and listen and these are very much applicable in today’s world and situation of all things that matter. This is one of my favorite subjects of all time.

Courtesy: Abraham Wald’s findings described by Eddie Woo.

Special Day of this week:

ON THIS DAY: On this day in 1783, the last British troops evacuate New York City. Later that day, Washington marches into the city at the head of the triumphant Continental Army.

Commerce:

“Commerce is the equalizer of the wealth of nations” - William E. Gladstone

We decided to talk about Black Friday, its origins, what it changed in the world and everything most families in the US look forward to on this day.

All of us today attribute “Black Friday” to all the sales, store openings, what deal can I get? and thanks the retailers that have Black Friday Ads all over the country. Let us go back in time before we discuss the current state of affairs on a Black Friday.

In the 1950’s, the term “Black Friday” was referred to the chaos by the police of Philadelphia the day after Thanks Giving as people from sub-urban areas flooded to the city as a precursor to an Army-Navy football on Saturday. This created a lot of chaos and and nightmare due to shoplifters making hay of the merchandise at stores and creating a headache for police officials. The cops could not take day offs and had to work long hours. The crowd, traffic and trade was so large that additional help was needed by cops to maintain harmony.

Indeed, in another archived clip from a piece titled “Tips to Good Human Relations for Factory Executives,” which was published in a 1951 issue of Factory Management and Maintenance, the author describes rampant absenteeism the Friday after Thanksgiving:

“Friday-after-Thanksgiving-itis” is a disease second only to the bubonic plague in its effects. At least that’s the feeling of those who have to get production out, when the “Black Friday” comes along. The shop may be half empty, but every absentee was sick ― and can prove it.

It’s not clear whether Black Friday was a common expression as early as 1951 or if the author of the article was simply being clever, but one thing’s for sure: Not a whole lot of people were fans of that day.

By 1961, “Black Friday” had caught on in Philadelphia, to the extent that the city’s merchants and boosters tried unsuccessfully to change it to “Big Friday” in order to remove the negative connotations. The term didn’t spread to the rest of the country until much later, however, and as recently as 1985 it wasn’t in common use nationwide. Sometime in the late 1980s, however, retailers found a way to reinvent Black Friday and turn it into something that reflected positively, rather than negatively, on them and their customers. The result was the “red to black” concept of the holiday mentioned earlier, and the notion that the day after Thanksgiving marked the occasion when America’s stores finally turned a profit. 

The Black Friday story stuck, and pretty soon the term’s darker roots in Philadelphia were largely forgotten. Since then, the one-day sales bonanza has morphed into a four-day event, and spawned other “retail holidays” such as Small Business Saturday/Sunday and Cyber Monday. Stores started opening earlier and earlier on that Friday, and now the most dedicated shoppers can head out right after their Thanksgiving meal.

Source: BlackFriday

Leave your comments and we will discuss this in more detail next week and why is this anymore important for commerce.

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Money, Finance & Investing:

A recession can occur due to various reasons and most of the time you don’t know what is going to hit you till it actually hits you. There are several bubbles in the making the one that is inflated to a large degree tends to be the first to burst open. Few people saw the banking crisis in 2008-09. Few people saw the Y2K in the 2000s.

There are though leading indicators that make recessionary like conditions to be created such as now where the job losses are on the uptick. The interest rates are rising and their impact usually is seen only when they stop rising.

The US money supply (M2) has gone up every year since 1959 and this is probably the first calendar year in which money supply has fallen in the last 60+ years Source: (M2 Supply).

In readable numbers:

Source: Charlie Bilillo

The conditions now are nothing like we have seen in the past. As interest rates go up, earnings go down and cost of capital goes up. As earnings go down, companies are forced to cut costs and forced to cause reduction in force (RIF). RIF causes less spending and causes inflation to cool down while economy is impaired. Growth rates are directly seen adjusted in the economy and the overall GDP is impacted and comes recessionary conditions. Let us look at interest rates across the world.

“Interest rates are to asset prices what gravity is to the apple. When there are low interest rates, there is a very low gravitational pull on asset prices.” - Warren Buffet

Market Data & Flash updates that could impact Supply Chains:

• Equity Markets: Dow Jones Industrial Average: 34,347 ; Nasdaq: 11,226 ; S&P: 4,026 Food for thought: Overall the markets have been a tad little up over the last week. Will profit booking, tax harvesting and portfolio adjustments cause a rally be end of December? Are we headed to cooling off of inflation followed with some rally.

• The US Federal Reserve released the minutes of the FOMC (Federal Open Market Committee) on Thursday, sparking expectations of a cool-off in the aggressive rate hikes.

• Minutes from FOMC suggest a substantial majority of the committee support a slowing of the pace of tightening soon

• Crypto Markets: Bitcoin: $16,504, Ethereum: $1,199

Crypto Market & NFTs - Wild West Innovation

Source Ethereum Quarterly Report

The Ethereum dashboard is attached in the source.

• Nike announcement of Swoosh suggests a lot of interesting things to come in the near future for Ethereum.

• Nike has generated $93 million to date in primary NFT sales and another $92 million worth of NFT trading royalties. Every retailer and commerce player will look into this in more detail and we can see more participants in the coming years.

• Circle adds support for apple pay. Commerce adoption of crypto is in full swing.

• Adidas is no slower than Nike. It unveils its first NFT wearable Virtual Gear, on Ethereum.

• Ethereum number of addresses holding 100+ ETH hits a 20 month high.

  

Shipping: What’s happening in Bulk?

• Interesting developments in Dry bulk with China economy behaving differently.

• China has seen record spike in COVID cases leading to more lockdowns leading to higher dry bulk prices while the overall pricing remain soft.

• Snapshot of Spot Freight Rates, Supply-Demand Trends, Port Congestions

• Everybody on the planet is subject to some form of Covid now or in the near future. It would be quite bold to possibly evade it.

• Interest rates do have a large impact on shipping build as well.

• Are shipping rates no more falling down?

Our Thoughts: We really don’t know how to read the bulk markets. Bulk industry has been sluggish and we some corrections but is this dead cat bounce? Are we headed to rising prices long term? Food for thought: Under $3K from $20K below Pre-covid numbers a good thing or bad thing?

What can we do better? Leave us a comment. We are here to learn, get better and give you the insights needed for you to succeed in Commerce, Shipping & Finance long term.

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What’s new at Sagisu

• The Vault: We are currently live with “The Vault”. Feel free to download it. We would love to get your feedback to build the Future of Ownership.

• The Vault is powered by a multi-party computation (MPC) based web 3.0 (for lack of better term) wallet that will bring ownership of assets and features that can be used cross border for Global Trade.

The Vault

What’s are we learning at Sagisu

History and Evolution of the Bill of Lading

The Bill of Lading is the successive document to its predecessors, the Medieval Law Merchant and the Lex Mercatoria (New Law Merchant).

The Medieval Law Merchant, established around the 11th century, comprised a relatively efficient legal regime for trade beyond local borders. It functions included; enabling merchants to escape conflicts between various local customs and rules, and to avoid submitting to the authority of judges attached to pre-existing jurisdictions (the courts of feudal manors, city states, local gilds, the Church).

The jurisdiction manifested fundamental principles such as:

·      Good faith (promises must be kept)

·      Reciprocity (exchange for mutual benefit)

·      Non- discrimination between locals and foreigners at the site of exchange

·      Third party dispute agreement

·      Conflict resolution favouring impartiality agreements

These were some of the earliest policies in the mercantile system.

The first document on merchant law was written by Gerard Malynes and was published in England in 1622, called Consultudo Vel Lex Mercatoria. It stated that issues involving commerce should be governed by a separate set of laws to be followed by all nations and particularly held by England. Lex mercatoria, which was also termed as New Merchant Law, set the precedent for standardization in the maritime industry. After the seventeenth century, Lex mercatoria, became part of English common law and established the first modern negotiable instrument that would later develop into present day bill of lading.

Previously, the bill of lading was invented in the 13th century and its functions were gradually created by the practical needs of substantial and tangible evidence of contract for all primary parties (i.e. shipper, carrier and consignee) alongside technical development over time. It’s also widely accepted that Italy is the birthplace of the bill of lading, because of the growing economies of the Italian city states due to the sea commerce between Italy and the Roman Empire in Constantinople. Its first copy was written in 1564.

The initial functions of the bill of lading during its inception were:

·      a receipt for goods received by master or ship owners

·      Through the centuries it has developed into a receipt containing the contract of carriage between shipper and carrier,

·      And it acquired the third characteristic later on, negotiable document of title.

The bill of lading was once called a “bill of loading”.  Originally merchants in the old days didn’t really have a need for a bill of lading when transporting their goods, because merchants were often also the master of the ship or they would travel at sea with their merchandise. This wasn’t a very practical system. With commercial activity increasing in the world and merchants staying at shore, such transportation documents needed to be generated to prevent disputes and to serve as a proof of shipment to protect both shipper and consignee. Masters of the vessels had to be attended with clerks when receiving goods. These clerks were a member of the crew and their most important duty was to accurately record the cargo received in a parchment book or register while the master, shipper and another witness were present. The bill of lading which was originally a copy of the book of lading was produced to guard against the loss of the only record of the cargo in case a ship was lost. In such case the shipper would often be at the mercy of the master to clarify what the cargo consisted. Since the merchants didn’t accompany the cargo anymore, there was also a need for separate documentation that they could keep with them, and later another copy would also serve as proof that the party demanding the cargo at destination was in fact the consignee.

Evidence and Examples of the Evolution of the Bill of Lading

Through the centuries, many protocols and rules shaped the characteristics of today’s modern bill of lading, limitation of the parties, practices of bill of lading exchanges, shipper’s consignee’s and carrier’s legal rights.

Hague Visby rule (which is an International Convention for the Unification of Certain Rules Relating to Bills of Lading) is an example of the evolution of its function these rules have been ratified and incorporated into the domestic legislation of many countries in the Caribbean region.

Another of these International conventions includes the Carriage of Goods by Sea Act which is described as a UK statute that repeals and replaces the bill of lading act 1855. Over the years there have been many types of bills of lading used in the shipping industry which came about as a result of evolution of purposes depending on transportation.

Examples of these are:

·      Clean bill of lading

·      Unclean bill of lading

·      Negotiable bill of lading

·      Combine transport bill of lading etc.

The Initial Formalization and Convention of the Bill of lading

         A simultaneous development took place in the British dominions and the United States, whose ocean trade depend heavily on the United Kingdom ship owners. It was in these countries, therefore, that the struggle between ship owning and cargo interest reached a point of crisis and as a result legislations were amended to remove the chaos and abuse produced by unlimited freedom of contract.

         After considerable discussion among, the representatives of leading ship owners, underwriters, and bankers of a big maritime nation, a set of rules were drafted by the maritime law committee of the international law association at a meeting held in Hague 1921 which came to be known as the Hague rules. These rules constituted the various Bills of lading. The Hague rules were officially called the ‘International Convention for the Unification of Certain Rules Relating to Bills of Lading’. 

         The rules were not immediately adopted. The rules were amended in London at a CMI (Comite Maritime International) conference in 1922. Agitation for legislative action on the lines of rules was held in Brussels 1922. A draft convention was drawn up in 1923 and eventually an International Convention was ultimately signed on August 25, 1924, at which time the Bill of Lading became a formal document of the Mercantile System.

         The Brussels convention was not conceived as a comprehensive and self sufficient code, regulating the carriage of goods by sea, but was intended, merely, to certain rules relating to the Bill of lading. It’s most important effect perhaps was that the carriers can no longer contract out of or avoid certain defined responsibilities. The Hague Visby Rules revised the Hague Rules concerning limitation of financial liability; resulting in the Brussels Protocol of 1968. 

REFERENCES

Organization as Author

Seine Maritime. (2003). Glossary of Port and Shipping Terms. Retrieved from: http://www.seinemaritime.net/

United Nations Conference on Trade and Development. (2013). Review of Maritime Transport. Retrieved from : http://unctad.org/en/publicationslibrary/rmt2013_en.pdf

Unknown Author

How to Import Export. (2014). Importance of Bill of lading in international trade. Retrieved from: http://howtoexportimport.com/3-Reasons-under-Importance-of-bill-of-lading-in-in-45.aspx

Article in Journal Paginated by Volume

Sweet, A.S. (2006). The new Lex Mercatoria and transnational governance. Journal of European Public Policy, 13, 627 –646. Retrieved from: file:///C:/Users/SAM/Documents/COLLEGE%20NOTES/Commercial%20Shipping/LexMercatoriaTransnationalgovernance.pdf

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“A ship in harbor is safe, but that is not what ships are built for…”

- John A. Shedd

As we have mentioned in our first letter, we will talk a lot about Commerce, Commodities & Shipping, Finance & Crypto as we are very interested in learning and interpreting what sells, what ships and what finances the world transactions. Once our research becomes extensive, we will break the newsletters into each specific areas of focus.

Around us:

1. FTX - A contagion that has spread wild in the crypto industry. There are some summaries of what happened and what will transpire in some great threads that we have linked here in hyperlinks.

Short Summary of the issues:

• Centralized Exchange went bust as it was unable to come up with the capital needed for customer withdrawals.

• FTX had built its own token FTT that saw a bank run and the collapse of their balance sheet in the last two weeks.

• Relationship between related companies murky and no adequate corporate controls.

• FTX filed for bankruptcy last week and second order effects of an exchange going down is still to be seen.

• How insane and far reaching is this? A teacher in Ontario, Canada has his pension fund impacted as Ontario Teachers Pension Fund was one of the investors. Sequoia Capital, one of the best venture firms in the world backed FTX and wrote down the entire investment to zero. Temasek (A Singapore state run investment company), wrote down $275Mn to zero. The impact is wide and deep.

Our thoughts: Too many people placed wrong bets, Too many companies were intertwined into the FTX umbrella. Alameda Research, a market maker, a hedge fund, a FTX company was behind a lot behind the collapse due to wrong doings of the past (3AC, LUNA etc second order effects). A million customers ( mostly retail) being impacted may be one of the biggest scams since Madoff and Enron.

I just read FTX's Chapter 11 First Day Affidavit. In it, the appointed restructuring CEO John Jay Ray III, who oversaw Enron's bankruptcy proceedings, calls FTX's case the worst of his career. Its contents are shocking. It was shocking to read the newly appointed CEO words:

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

[THESE ARE NOT CONCRETE NUMBERS]

Liabilities: -8.8bn

Liquid assets: 900m

Less liquid: 2.037bn

Illiquid: 3.2bn

liquid hole: -7.9bn

illiquid hole: -2.66bn

2. Republicans take control of the House of Representatives for the mid term.

As of Nov 16th,

Our thoughts: Power is down right split. We expected a red wave which like any common man would have expected to only realize that the country is very much in the middle where there is disapproval of current government and leadership, but there is hesitancy to the red wave shift to the right completely. Senate continues to be controlled by the Democrats. De Santis winning in Dade county may offer a new leader in the republican party. A hardcore blue region flipping completely suggests a new era. Democratic win in the Pennsylvania suggests we are not yet there for the red wave. We probably need new candidates running for 2024 on both sides.

3. TRUMP: "In order to make America great and glorious again, I am tonight announcing my candidacy for President of the United States." Yes. He is back officially on to the race to 2024.

Food for thought: US Constitution. Amendment 14. Section 3.

4. RIF: Mass layoffs were in this week and last week.

Current List of Mass Layoffs: 1. Amazon: Laying of 10,000+ this week 2. Twitter: 50% of workforce 3. Snapchat: 20% of workforce 4. Meta: 13% of workforce 5. Credit Suisse: 5% of workforce 6. Apple: Hiring freeze 7. Disney: Hiring freeze.

Our thoughts: It is time to build. Get back to keeping your heads down and running hard. It is a time like none other.

5. Twitter: God knows what is up with everything there. Twitter just alerted employees yesterday that effective immediately, all office buildings are temporarily closed and badge access is suspended. No details given as to why.

Our thoughts: Twitter is a great platform. A PE style acquisition and force fitting a new work culture to drive greater productivity and avoid a failure is what is driving Elon to make such hard changes. Change is always hard while Failure is harder.

Interesting Info:

We get caught up in a lot of things. Very often we don’t zoom out or zoom in. Our significance in the world can only be described in no better than this video of 1977.

Special Day of this week:

ON THIS DAY: On this day November 14th in 1966, Muhammad Ali knocked out Cleveland Williams. One of the best sports photos of all time, by the great Neil Leifer

Why is this even important? On the evening of November 29, 1964, 2 years before the fight, Williams was shot in the stomach by a highway patrolman, for supposedly resisting arrest. The .357 magnum bullet moved across his intestines and lodged in his right hip, doing immense damage to his colon and right kidney. He underwent four operations over the next 7 months which resulted in the eventual removal of his right kidney and a loss of 60 pounds, which he later recovered by doing weight-lifting. Williams later said that "I died three times on that operating table." The bullet left vestigial damage: a partial paralysis of some hip muscles and a severely weakened right hip joint. Despite this incident, Williams returned to the ring in 1966 and won four consecutive fights before facing Ali.

Commerce:

“Peace, commerce, and honest friendship with all nations...entangling alliances with none”
― Thomas Jefferson

Jimmy Donaldson (Mr.beast) - A man who connected commerce and content in an incredible way using youtube.

A new wave of commerce that is centered around creators and their community and ecosystems are being formed and some have touched scale. A great example is Mr. Beast. Here is his youtube channel growth over the years.

2023 - 13,265,311,414

2022 - 8,184,185,544

2021 - 3,324,451,660

2020 - 2,099,879,911

2019 - 464,282,517

2018 - 122,441,813

2017 - 5,482,596

2016 - 202,000

2015 - 125,634

2014 - 41,148

2013 - 7,000

2012 - 15,000

July 28th: Today over a million people celebrated 100,000,000 subscribers with me

Mr Beast has hit 50M followers on Tiktok & 16M on Twitter. At the age of 24, he has around 111M followers.

Why does this story matter?

• PewDiePie has been YouTube's most subscribed creator since 2013. The fact that MrBeast has replaced him at the top signals the end of an era.

• For MrBeast, this is the fruition of consistently understanding what YouTube's algorithm wants. From his first million subscribers till now, it didn't take him that much time.

• MrBeast's success is calculated, and it is a lesson for aspiring creators.

MrBeast channel has over 18.6 billion views

Over the years, Donaldson has uploaded 730 videos on his channel. The channel now has a whopping 18.6 billion views. His videos are liked 4.2 million times on average. He has four other channels, namely MrBeast Gaming, Beast Philanthropy, Beast Reacts, and MrBeast 2. They amount to another 77 million subscribers.According to Social Blade, he makes $3 million/month from YouTube ads alone.

MrBeast was YouTube's highest-earning creator in 2021

MrBeast was YouTube's highest-earning creator in 2021 with approximately $54 million. According to Axios, he has been trying to raise $150 million for his business at a roughly $1.5 billion valuation.

Source: Link on the header attached.

Most recent acts suggest he declined a $1Bn acquisition offer for his Youtube channel. The most important thing about Mr Beast that none of us in commerce understand is that everything is built around content. He makes the best videos. Period. He wants to make the best content and is laser focused on the content, story and the product that is built for months and months on the story and the product before it is shot, edited and goes live. The obsession to content is stunning and that obsession has a pull effect on everything else he is doing on commerce. The modern commerce is here.

At 13 years of age, he said I am going to be a youtuber. I am going to die trying. I am going to figure it out. I am going to make the best video possible. Nobody in and around him in 100 or 200 miles was a creator on youtube. People thought he was crazy. He was 13 and hardly earnt $100 a month at 17 but ten years into it, he still loves making videos.

The main goal is to make the best video possible and not be the best creator on youtube. Our thoughts: Mr Beast could become at the least a $100Bn+ brand and there is every reason to say they could be 10X more.

“The superior man understands what is right; the inferior man understands what will sell.”
― Confucius

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Money, Finance & Investing:

“I met with some of the biggest banks in the world who told me they don’t have any liquidity” because of rising interest rates, Ben Miller CEO of Fundrise said in his podcast. “This is going to play out. The question is, how bad will it be?”

Is the world order changing? Has the world changed in the past? Did we move from the Roman Era to Dutch Era to British Era to the land of opportunities?

Changes in world order are visible when governance increases, ease of doing business goes down, innovation goes down, productivity is flat or is not growing and governments or power centers print a lot of money to finance ambitions mostly in defense, military and printing money unabated beyond controls that are equivalent of crossing the rubicon.

Market Data & Flash updates that could impact Supply Chains:

• Equity Markets: Dow Jones Industrial Average: 33,745 ; Nasdaq: 11,146 ; S&P: 3,965 Food for thought: Overall the markets have been flat over the last week. Nasdaq continues to drop as compared to S&P and DJIA. Technology bearish continues to be the trend with interest rates going up and cost of capital going up with growth being harder and more expensive to finance.

• Our thoughts: Inflation seems to be cooling off atleast in the shipping industry. What costed $3000 per container had gone to $20,000 per container and seems to be back below $3000 per container. Flipside, the consumer sentiment is not something that is showing any slowdown in spending. What is visible in consumer spending across, sectors including

• Our thoughts: There seems to be a glut of inventory due to supply that was planned in excess due to supply chain constraints in LA and other ports. All the squeeze seems to have cooled down or is trending to go down per shipping that is an indicator for the future. Where can you get an yield of over 100% unless the industry is going to go through a massive revenue and profits drop off which the overall market sentiment is in the maritime industry.

• Crypto Markets: Bitcoin: $16,612, Ethereum: $1,207

  Crypto Market & NFTs - Wild West Innovation

  Source Ethereum Quarterly Report

  The Ethereum dashboard is attached in the source. The network continues to run amidst all adversities. Can a network or a protocol as such fail is a question that we need to wait and watch.

  • More the number of use cases that enter into the protocol, the lesser the chances of failure. A complete flywheel effect can push the network far and beyond unless the community of users and use cases dwindle down.

  • Ethereum progress through converting from Proof of Work to Proof of Stake has been impressive that it went live without any major hiccups however the cloud over the entire nascent industry is a like the 2000s when the internet was not understood and a lot of companies went bust.

  • Our thoughts: I was getting to select my engineering in 1998 and the lack of understanding of computers, programming & internet at that suggested me go down the track of Mechanical Engineering considering it to be an evergreen field. Y2K would end the internet industry then and we could not see far and beyond Y2K. Fast forward, today we cannot see ourselves keeping our smartphones down. So where will the blockchain & crypto industry go next?

  • The Ethereum transaction fees does not seem any absurd now than before. The charts below is an interesting view of the transaction fees.

    

    Shipping: What’s happening in Bulk?

• One of the dry bulk analyst/trader: The declining volatility in the #Capesize market is not a great sign: Suggests we are finally sliding into proper oversupply. Time to close the books and return in February?

  

• Most Chinese steel producers have seen their profit margins on sales shrink significantly since mid-Oct, with the profitability rate among steel mills nationwide hitting another new low for the year on Nov 4.

  

• China's October import volumes fell m/m for most major commodities.

  

• Our Thoughts: We really don’t know how to read the bulk markets. Bulk industry has been sluggish but we have seen certain commodities where the prices in shipping bulk have stayed flat and few up north where there were previously contracted time charters. Food for thought: Long term time charters good for bad?

What can we do better?

Leave a comment

What’s new at Sagisu

• The Vault: We are currently live with “The Vault”. Feel free to download it. We would love to get your feedback to build the Future of Ownership.

• The Vault is powered by a multi-party computation (MPC) based web 3.0 (for lack of better term) wallet that will bring ownership of assets and features that can be used cross border for Global Trade.

The Vault

What’s are we learning at Sagisu

What is a Letter of Credit (LC)?

A Letter of Credit, also in its short form - LC, is an undertaking by a bank, called the Issuing Bank - which is a bank appointed by a buyer to a transaction to issue an LC to the benefit of Beneficiary, which is the seller, to make payment to the benefit of the Beneficiary mentioned in the LC upon fulfillment of all the terms and condition stipulated in the LC.

Such undertaking is irrevocable by default, unless stated otherwise. This means, as long as you are confident that you can fulfill all the terms and conditions stated in the LC, you can be pretty much assured of receiving you payment when it's due.

How Does a Letter of Credit Work?

Let’s say your business receives a big order from an overseas company. There are plenty of factors to consider, such as getting the order shipped and making sure it arrives properly and on time. On top of all of that, you also need to get paid—and you’re likely going to want a guarantee that payment will be made, especially since you won’t have much recourse to get your money if your buyer is on the other side of the ocean.

Here’s where a letter of credit is your best ally. A bank, typically located in the buyer’s country, will issue a letter of credit that spells out the buyer’s obligation to the seller. This letter specifies the amount of payment due to the seller, as well as the point in the transaction when the seller will pay for the goods. The party issuing the letter of credit (the bank) will do all of the legwork to make sure your customer has the funds to pay for what they bought and will facilitate the payment process along the way.

A letter of credit functions similarly to an escrow account, where a third party coordinates and holds onto the money needed to complete a transaction on behalf of the other two parties in a deal. This letter certifies that the buyer has good credit (hence the name) and can afford to pay for what they have purchased.

Advancements of Letters of Credit

How did it evolve? 

Letters of credit soon became the go-to instrument in international trade, because they solved the problem of trust between global traders, time zones, distances, and non-uniformity of laws and regulations across jurisdictions.

During the late 19th century and up until the early 20th century, circular letters of credit that allowed withdrawal of money from various banks around the world were the name of the game among global travelers. 

 Letters of credit played the role that travelers’ checks and credit cards played subsequently, and that digital wallets play today. 

Since the first version of the UCP – known as ‘UCP 82’ – was printed in 1933, it has been revised in 1951, 1962, 1974, 1983, and 1993. The latest version is called ‘UCP 600’, and it was amended in 2007. 

The objective of these revisions is to provide a clearer common language, and to adapt to changes in different industries, in order to unify the interpretation and the application of documentary credits.

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“The common question asked in business is ‘Why?’ That’s a good question, but an equally valid question is, ‘why not?’

- Jeff Bezos

We will talk a lot about Commerce, Commodities & Shipping, Finance & Crypto as we are very interested in learning and interpreting what sells, what ships and what finances the world transactions. Once our research becomes extensive, we will break the newsletters into each specific areas of focus.

We know that we will be wrong a lot and we love our failures and will always learn from our failures. We also believe winning is a habit.

Around us:

FTX - One name that haunts the new wild west industry today is Sam Bankman-Fried and his group of companies. A speed train that got Rekt (Wrecked) fast. Success is never last and Failure is never final. Failure is an orphan. We will write a longer post on our thinking and collate our data points over the next week.

FOMC raised interest rates again last week. Cost of capital will go up and “will inflation break?” is something we need to wait and watch. Food for thought: Consumer spending in the US at the ground level is off the charts. Every store is crowded, every restaurant is house-full, labor is short in most categories and Uber always has a wait time once you request for a ride.

A modest expectation would be that profits will dwindle down and the companies that don’t make any profits should start planning their runway over the next few years

Elon Musk completed an acquisition of Twitter and the machinery engine is being worked as the driver of the vehicle changed. Food for thought: Why did Elon Musk buy Twitter? Does he truly believe in free speech? Will it become the open townsquare? Will the bots, narratives, left and the right wings, advertisers and the newly verified community of people work well. Can scammers be verified too at $8 a month? How do you know he/she is not a scammer or a bot?

Eli Lilly and Company had to fight with multiple Verified fake accounts.

180 fighter jets this morning were seen flying in the Korean peninsula.

All over this week we have seen the grain deal go back and forth and it feels we have the grain deal back on.

Are we approaching Stage 6 as Ray Dalio mentions in his write-up last week that makes an important & interesting read and how you and I can look into the future to prepare ourselves.

US Elections always influence beyond borders. Midterms were nothing like anyone expected. The voters appear to be more in the center than left or right. What was supposed to be done and dusted is still open with a run-off. We still have not seen the sweeping red.

Interesting Info:

Sleeping in space is not as normal as we believe it would be as in our homes. Sleeping in space is an important part of a mission, with impacts on the health, capabilities & morale of astronauts and it's not easy. Even the posture, due to micro gravity, ends up by looking totally unnatural as shown in this Shuttle footage. This was recorded of NASA select TV in the 2000s. Astronauts sleeping on the Space Shuttle is kind of funny to watch. Some like their arms to float free, others like them constrained.

Now let us think about a future where we are interplanetary and Space X achieves its mission to transport 100s of people to Mars. Let us leave it at it is going to be much better than this.

Future is not bleak but always bright.

“Everyday is a second chance to do everything you have wanted to do…..”

Special Day of this week:

ON THIS DAY: At the 11th hour on the 11th day of the 11th month of 1918, World War I ended as the armistice was signed in a railway carriage in Compiegne, France, bringing to a close a conflict in which more than 10 million people died.

Commerce:

“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” - Jeff Bezos

Commerce is changing even rapidly than before. Previously brick and mortar stores mostly were built with standing up one store, followed by regional stores followed by going national. That led to the advent of technology and fulfillment capabilities leading way to omni-channel with e-commerce, mobile commerce and cross-channel strategies. Most were challenged by one big name Amazon by being obsessively customer centric.

We are at another inflection point where Google Shopping, TikTok and Facebook have built large commerce capabilities mostly driven by a use case other than commerce in their platforms without it being the first use case. Google built search and advertising leading to Google Shopping, Facebook built social media and ability for users across platforms such as Facebook, Whatsapp and Instagram where commerce/marketplaces are coming into the mix as an aftermath of engagement, advertisements and stories. The most latest has been TikTok that is arming itself for a looming e-commerce battle post acquiring users, who have become creators for the platform to creating viral loops for engagement that will probably soon be followed with e-commerce.

What is interesting is commerce has changed always in the way buyers and sellers interact and exchange goods and services.

Here is a snippet of Mr. Beast Burger Store opening (we will cover his story in the next episode):

Leave your comments and we will discuss this in more detail next week and why is this anymore important for commerce.

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Money, Finance & Investing:

Warren Buffett once said “Only buy something that you would be perfectly happy to hold if the market shut down for 10 years”

He also said “You only have to do very few things right in your life so long as you don’t do too many things wrong”

Understanding these two concepts cannot hurt:

Ray Dalio has explained the economic machine the best:

Market Data & Flash updates that could impact Supply Chains:

• Dow Jones Industrial Average: 33,606 ; Nasdaq: 11,157 ; S&P: 3,961 (At 10 AM EST) Food for thought: Nasdaq dropped by a two thousand points over the last week while the other two went up. Technology bearish is the trend with interest rates going up and cost of capital going up with growth being harder and more expensive to finance.

• Annual inflation: Turkey: 85.51% Argentina: 83% Netherlands: 14.5% Russia: 13.7% Italy: 11.9% Germany: 10.4% UK: 10.1% US: 8.2% South Africa: 7.5% India: 7.41% Australia: 7.3% Brazil: 7.17% Canada: 6.9% France: 6.2% Indonesia: 5.71% S Korea: 5.7% Saudi: 3.1% Japan: 3% China: 2.8% (Source: World of Statistics)

• Inflation could and will impact supply chains and its cost structures could swing both sides. Large swings is the current trend that we continue to see in a large set of commodities.

• PC Shipments plunge nearly 20%, Steepest drop in more than 20 years - WSJ

• Are we at the brink of the end or are we at the beginning of a new era or are we in a deep chess game? We don’t know and we will not estimate what we don’t know. We know the situation in Ukraine is grim. We know that we are at the toughest times since cold war years. We know that we are going probably have food shortages. We know that oil is probably going to become expensive.

• $60 WTI Crude vs. $7,000 Bitcoin

Crypto Market & NFTs - Wild West Innovation

Source Ethereum Quarterly Report

This dashboard attempts to show the state of the Ethereum network for a chosen quarter. It looks at the network protocol as whole in terms of price, transactions, fees, and users. It also looks at the Ethereum ecosystem through metrics such as top projects by transaction fees and transaction volumes

Shipping: What’s happening in Bulk?

• US crude oil and refined products exports surged last week to a **fresh record high**, climbing to ~11.4 million b/d. Of that, ~5 million b/d was crude. SPR Barrels are flowing overseas.

• US oil production literally swamps everyone else. Food for thought: SPR Reserves apparently have reached lower than the 90’s. We don’t know how accurate the chart is but do believe there are some macro changes in the crude oil markets and OPEC, OPEC+ relationships that will influence the macro-economic conditions.

  

• Commodities shortage and need for consumptions and reserves sends bulk shipping costs to decade high.

• Interesting take on Time Charters: Dead Weight Tonnage could be gold if you were not locked in on period charters previously. Your profits are hurt and are not able to take advantage of the gold rush in the Russian Trade relevant to bulk.

• Bruce Karsh of Oaktree: "The industry group that contributed the most to our losses is dry bulk shipping. I thought timing was perfect in 2012–13. Everything seemed right. Global economy was recovering. Historically depressed day rates were bottoming out, rising strongly."

• Iron Ore is the bed rock of commodities world. A good thread on the current situation and where the supply is moving is usually better understood in the ships that transport them and what are they moving.

What did you get done this week?

We do a lot of things but not being laser focused creates the end or the beginning of the end. The twitter saga is so well documented and is something everyone should review and reflect on their situations.

For those who don’t know, these are the actual text message exchanges between Parag Agarwal (Ex-CEO of Twitter) and Elon Musk before the acquisition. Great guys don’t necessarily mean they are great at the problem at hand. Focus. Always Focus. Period.

What did you get done this week?

• Hired a colleague after 3 years of hiatus since before Covid 19.

• Bill of Lading Web Portal development in progress (First Beta launch Next Week).

• First Newsletter sent through Substack.

• Sagisu - Reset, Re-launch under plan.

Now it is your turn “What did you get done this week?”

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What’s new at Sagisu

• The Vault: We are currently live with “The Vault”. Feel free to download it. We would love to get your feedback to build the Future of Ownership.

• The Vault is powered by a multi-party computation (MPC) based web 3.0 (for lack of better term) wallet that will bring ownership of assets and features that can be used cross border for Global Trade.

The Vault

What’s unfolding at Sagisu

Bill of Lading

Source: BL

A Bill of Lading is a Title that keeps trading parties in clear understanding who owns the title of the goods on a ship. Bill of Lading is used by Exporters, Importers, Shippers, Shipping Agents, Customs Brokers, Freight Forwarders, NVOCC and Banks along with any other party that is involved in Global Trade.

Why should a Bill of Lading Title document travel borders as a document? Why do we need Letters of Indemnity? Why do Banks and Traders need physical documents signed by the shippers for verifying ownership? How do we solve for future of ownership?

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The road to wisdom? Well, it's plain and simple to express: 
                   Err 
                        and err 
                                    and err again 
                                              but less 
                                             and less 
                                             and less"

                                                                                - Piet Hein