Cyber Traders welcome back on this lovely Thursday. What's today's date? Ah, you know what today is today is young Kapoor No wonder why it's so slow in today's market. Jesus. I was like, why is it so so I was dropping my son off to school this morning He's his dad. We're gonna be late. We'll be late. I'm like, why you gonna so don't worry about we're not gonna be late I go there. There's no one in the parking lot. I'm like, man, are we getting here like super early or whatever But yeah, it looks like it's gonna be a slow day in the market markets down up about 27 points right now But listen yesterday was incredible.   So we can share it with everyone INDP Who had fun with that stock yesterday? That was just off the charts. Look at that thing beautiful Look at that thing we're in from like $11 all the way up to about 29 bucks. All right, that is day trading at its best and listen on Listen, I screwed up on the trade. I bought it at 16. I sold it at 17 You know what I mean? And then we're into 21, but that's not you know, you can't look at this and Be the person like oh, but it ran to 28. Well, how about the guy who bought it at 28? All right, and now that things back down to 13. Remember being a good day trader is We're very conservative. We just want to make our money for the day and that's it It's the bulls and bears eat is the pigs get slaughtered but I sent out an email to all the students in here and I like to let me know how you did I listen. This is the kind of relationship we have with you I want to know and want to hear the good thing if you if you didn't make money, that's okay Let me know, you know, you bought it at bad price. You know what? That's not a bad thing because Let us explain to you and this is why you're a student of Cybertrain University Let us know so we could educate you remember. I always tell you Here at Cybertrain University when I like all the people and all the schools out there and other trading rooms We don't teach you how to make money We teach you how to stop losing it when you learn how to stop losing money Then the winners end up just taking care of themselves. All right, that's the big thing that you have to worry about it's the losers everybody has an issue with and You always hear people break about all their winners, but nobody talks about how to control those losses But anyway, it was a great winner. It was a lot of fun and you guys do really well on it Yesterday I did well. I typical Monday, you know, I got myself into a pickle on Monday I was making money. I was and you remember I was making money on actually. I'm sorry I was breaking even on Monday and then I got a little cocky. I jumped in this one position I had bad luck going right against me. Boom. I just lost my days pay on that And then I had to meet I made it back all yesterday So I'm kind of like even for the week, but and I could have made a lot more money But you know, I'm like, you know what? I was getting around past that certain time We're not supposed to trade and I said that's it So anyway, that's that was one of the nice movies yesterday. What couple of the ones to that did really well RR Was it spelt it wrong? Hold on a second What was it again? It was RRP I've spelt the wrong. That's what it was RP RP Rn Fat fingers so RP Rn also moved pretty nicely there. You could see it that that stock got halted so many times Let me just blow this up right here. So you could see it that thing just right in the middle of the day I don't know what the hell happened with this thing. It was unbelievable going into the close But this thing reffin 380 shot up rent a 530 Nasty slingshot when right back up you could see the writing on the wall right there It wanted to blow right through it and literally what was that the last 10 minutes it ran from $5 Going to half the hours right up to almost six bucks. So AP AP Rn was also a really nice one IR NT another nice movie yesterday a little on the expensive side, but I went from 26 all the way to 38 another nice mover actually she's actually back on the watch list too. She's going on this morning too The AR NT remember we just don't day trade here.  So, you know, Savo was one of them too that we traded yesterday. We did pretty well That was another idea. I made a lot of money on this stock yesterday. I ended up chasing it Probably all the way up to here went to 42 But but then you could see how the thing just ran to about 45 that was a little expensive The reason why I like this stock too because and and you know what one of you brought it up yesterday This stock had a major support level look at the long-term chart It was testing big support levels going back in May April March the stock was a hundred fifty dollars stock It's now about a hundred points. So one of the one of the good things I like about that So I've actually did a swing trade on the straight So I'm like right there. Um, I gotta break that 45 though. If it breaks that 45 distinct. Is it 45? Well, it's pretty that's a lot right there. It's right here. That's a lot Yeah, if it breaks that 45 we could talk about 48 to 55. So it's a little expensive Just don't trade too many shares of it. All right And he was also another nice stock that we traded yesterday to and he had a really nice move a lot of you remember this stock It ran from like $4 it ran all the way to 12 and it was a nice move right around 11 o'clock just came out of nowhere and Literally went from 580 all the way up to about 670 did a little a little bit of a shake right there Boom went to about 680 did a shake boom went up to about 7 did a shake shot up all the way to 780 Remember I always tell everybody that you know listen the best time to trade the first down the last hour But some of you you know from different parts of the world coming a little late and that's okay. So when that happens There's always something that moves in the middle of the day All right, you can always pick up where we left off The goal is and the way we train you you make your damn dates But you make your days pay you do your journals you make sure we review them without without with our instructors You know and you and then you just work your way up because it's all about numbers start small and we go from there. All right, so Let's forget about yesterday. Now. Let's go back to what the hell is going on today So we got a lot of mixed off going on today with the market on you could see that there's you know it is it is a holiday it's a Jewish holiday here and But it's it was young young poor right? Yeah, young poor today. So With that said, you know, a lot of people you know living in New York very big Jewish community a lot of people on Wall Street You know, so I'm not expecting to be a very exciting. You probably even look at the option calls There's not that many earnings announcements and options. So kids are all from school has a lot to do with it No matter what holiday it is. So and not only that doing it on a Thursday. Guess what? People taking off tomorrow making a really long weekend.  So that's what's really what happening and By that falling on a Thursday. I might even think tomorrow might be slow.   All right So what's moving this morning? We got we got TMC that's moving that we found this morning That stock had a nice little push in pre-market Right around 6 30 this morning. It ran from 13 up to about 1550. She's kind of flat line. You know, she's a new IPO So kind of flat right there. Thank you very much my Martha. Thanks a lot guys. Thanks a lot Larry. Yep More than welcome. Thanks a lot Don And then What is it every 10 years you do it then it's the 60 and then you know, I can't believe I'm doing this for 25 Years more more than 25 years.  Always love it's so exciting INPT we already know about INPT Ah INDP what am I doing this morning? That stock obviously has got also a very nice push right there So we got a nice little push from that stock in pre-market 4 a.m. The stock was trading early It came right back down to about 1050 this stock. Look at that. Look at that with this the same stock that we traded yesterday She's moving this morning. We know the stock is pretty volatile. Look at the tier sizes very very thin If you want to trade it just please don't trade a lot of shares of it You can make a lot of money pretty quickly if the stock if you trade a hundred shares a stock moves a dollar Which is a lot hundred dollars is not you know, it's not the end of the world, you know The stock is moving in dollar intervals. So there's a category five. So if you're not a category five trader Please stay away from it. All right. It was fun yesterday and You know, it's time to move on with something else If you know, but if we like it, we'll see how it opens up But as of right now want to be a little cautious on it. What do I got going on here? I'm typing in the wrong window for crying out loud PHIO So here's another stock very cheap little stock had a nice little gap up early in pre-market eight o'clock. She just dropped She got some nice support levels here at 210 See how that works out cheap little stock pharmaceutical stock, but I don't like how it's trending. It's breaking lowers I'm gonna put this on the on the B-list another one. I'm gonna throw on the B-list this thing also nice little move up 220 went to 325 She's holding here pretty strong right here at the support levels She built some nice nice orders after a 19 million chairs in pre market starting from seven in the morning to here If it holds here, it's good. If not the stock is gonna go right back down, you know, probably to 225 but Cheap got good tier sizes.  What else we got here? We have just two more OP It's not a great morning. I'm just telling you right now. This stock also it's expensive. It's not expensive It's a new IPO that came out the stock was at 875 stocks doing really well But when there's new IPO that means it doesn't you could see six Almost six million shares are a trading pre-market. That's a lot. So this stock is gonna be a volatile one But just don't trade too many shares of it But we're gonna keep an eye on these support levels at 16. You got these resistance levels right around 18 IR NT Another one same story. It's expensive though. It's $44, but this thing ran to $60 in pre-market game right down to 42 So you could see like How people blow up their accounts if you start trading thousand share lots. Listen, these guys are trading hundred share lots It's okay to do that But with that said the stock is a fast-moving stock. It's a level one It's got resistance levels right here around 45 see if it breaks it But just don't get too crazy. Don't trade too many shares of it. All right, so that pretty much does it so So with that said Terrence, thank you very much Barb Tim. Thank you very much appreciate it Andrea, thank you very much. I'm still young puppy. That's what he's saying in in the in the on YouTube. So anyway Thank you. I really appreciate it and listen It's just another day, right? It's another day But let's go out there and try to make money today. Don't get too crazy today Like I said today's is a holiday kids are all from school If there's something the only thing I like about trading on a holiday like today is that if something does move You're gonna, you know, it's just gonna make it the trend is a lot easier You're not gonna get a lot of shakes as much as we have so that pretty much we're gonna look for that All right guys. Good luck today. Oh one more thing. We got two other people We've got one person brought something up on YouTube and was asking me right there Fouls look at you check out these two stocks. Absolutely the PM the PMC be alright So that one it looks awesome great call on that one and that one's definitely going to top of the list right there I'm really curious who you know, what's going on with level four actually reason why I didn't find it That thing just popped at 9 a.m. If you look at it really really nice move on that one It could be a gap fill if it could break this up for 20 and then you got the The Lkco yeah, that one's got a nice little fowl still flag right there and That one it's got resistance out of buck 60 really nice two stocks. I like those a lot good good. Good call SK SK 36 on YouTube very nice now. He's got to go pop over didn't see what's going on level four. All right I'll put Chuck I'll put it. I'll put in a watch list. I'll put in a watch list So thanks everybody let's get ready for the market opened up if you're watching us on YouTube Facebook live We'll be back here at 230 you could always join us by like a single friending us if you're watching this recording We're here live every morning at 9 a.m. Or you could always do a trial and join the room for a week Everyone the cyber group prove remember you see something you say something or everybody happy trading. Good luck And we'll see let's start commentary. Let's know a little bit when the market opens up


You too, good morning. This video is going to be extremely quick because I'm pulling up now, but just a quick reminder for those of you who didn't know or maybe forgot or just weren't aware that between today and tomorrow, it is national cut down day. It's time for teams to trim their rosters to 53 men. So it's going to be a lot of guys, a lot of people are moving around, getting shipped, getting traded, getting cut. Everything's going to be happening over the next couple of days. It's not quite as crazy as free agency is, but it does tend to get a little wild because teams are trying to do what they can at the very last minute to get rid of some players, to acquire some players, to just make some stuff happen. So just wanted to give y'all a heads up. A lot of people that you might like on your team may not be there in the next two days. So be prepared for some. Some teams are going to have some people that you're just going to be sad to see them go. And we'll see what happens over the next two days, really, with your team, my team, all teams. So I just had to come through and let y'all know that real quick. I'm here at work now. I appreciate y'all. Make sure you subscribe if you haven't already and we out, man. See you soon.


There's just one way to handle the killers and the spoilers, and that's with the US Marshal and the smell of gun smoke. The story of the violence that moved west with young America. The story of a man who moved with it. Matt Dillon, United States Marshal. There's no note anywhere. You sure of that, Chester? Nothing, sir. I looked again all over. Well, it's two days now. This isn't like Doc.  It may be, but he's always left word before. Well, what do we do, Mr. Dillon? I don't know. I might start asking people, Chester. Try the saloons in the store and maybe the depot, huh? All right, Mr. Dillon, I'll go right now. All right. Well, I do, Declare. What?  Askal getting us all worried about him.  Matt? Well, you had us worried, Doc. That's all? You've been gone two days. I know. Next time, leave word, Doc. I will. I surely will. If I can. Well, it'd sure save us a lot of pressure. No, wait a minute. What do you mean, Doc, if or you can? Just that. If they let me, I'll leave word. Come on inside, Doc. You want to tell me about it? I can tell you part of it, the least important part. I made a promise about the rest. You know how it is, Matt. No, but you tell me. Well, the other night, Wednesday it was, I was peacefully asleep on my couch when a couple of riders tromped right into my office. They said a man was hurt somewhere out past Fort Dodge, so naturally I got up and I went along with them. Well, then why didn't you leave a note and say so? They didn't tell me exactly where we was going, Chester, but they sure told me not to leave any note. They told you what? Let him talk, Chester. Now, of course, I figured in. There must have been a shooting, but my job is to take care of everybody, sinner and save the like. And so when finally we got to this place the next day, that's part of what I promised not to tell you, Chester. But like I was saying, there was a young man there who'd got himself shot in the back. The bullet lodged right in his spine and I dug it out and I did all I could for him. And then I just sat there for quite a spell. And then I put my things away and I walked out into the other room. How is it? I did what I could. What do you mean? He's dead. The shock of extracting that bullet was too much for him. It's a bad place to spy on them. You killed him, huh, Doc? No. No, I didn't kill him.   Murderers do.  That boy wouldn't have lived more in a couple of days with that bullet where it was. And whoever put it there, murdered him.  Not yet. Doc, tell me something. You know that boy in there? I do. Sure. And the three of us here, you know any of us? Him. I've seen him around somewhere. Dodge, I guess. Well, that settles it. He ain't walking out of here.  Know his name, Doc? No. No, I don't. Of course, it might come to me. Let me think. Now, you don't understand, Doc.  Now, you're trying to remember his name. That's just going to make it worse.  Oh, no. I shot that boy and he tried to get away.  I'm a doctor. Since there's nothing more I can do here, I've got to be available to other patients. I've been away too long. No, what are we arguing about? How soon do we shoot him to bed? What kind of a man are you, anyways? Don't you know I'm the only doctor within a hundred miles of Dodge? Right now, it's one too many. Now, wait a minute. I'm kind of thinking that Doc's right. He ain't like an ordinary man. But, Doc, it's almost like he ain't quite human somehow. He's human enough to tell what he knows that hard-headed, marshally-gutten Dodge. Then we'll have him on our tail and we'll never get our 20,000. Uh-uh. I figure it's us or the Doc. I'm not interested in what you figure, mister. Right this minute, there may be some woman having a baby and needing me real bad. There may be several folk needing me for help. He's right. We can't kill him. I can't. You'll do what I say and nothing else here. Doc, listen to me. If I let you go, will you promise not to tell about anybody you recognized here? And if I don't?  Well, I suppose you would. All right. I'm here as a doctor and nothing else. I promise. Word of honor, Doc? That's my word of honor. Okay, get out. One other thing, Doc. What? You break your word. You tell anybody where this place is or who you saw here and we'll get to you. We'll kill you no matter where you try to hide. I gave him my word, didn't I? Sure, but don't forget what I said anyway. Don't forget for one minute.  That's quite a story, Doc. And you played it right smart if you ask me. Who were they, Doc? We'll tell us. Well, I only recognized one of them, Chester. Besides the man they'd shot. Sure you said.  No, Chester, you don't understand. And I gave him a word I wouldn't tell. Yes, but that was just so you could get away. Well, they shot me for sure otherwise, but still I gave my word. It don't matter how or why.  I know. Leave him alone, Chester. But Mr. Dillon... Yes, sir. Matt. Yeah, Doc? Wouldn't you do the same if you were in my boots? I'd be a hard choice, Doc, but... Yeah, I suppose I would. Why any man would? At least why is any man a honor would? I guess I wasn't really thinking about it that way. Yeah, well, I'm going to get some sleep. Matt. That was a good boy they murdered. I hope they hanged for it. Oh, Dad blasted him. How are we ever going to find him, Mr. Dillon? I don't know, Chester. We don't even know who they killed. It's funny we haven't heard about it. Maybe nobody's missed him yet. Just think. Doc could lead us straight to him right now. That isn't making the Doc happy, Chester. No, sir. It sure isn't. I'm going over to the Texas Trail, Chester. I'll be back later. Yes, sir. Hey, Sam, bring me over a bottle and a glass, will you? Oh, how you kidding? You want some help for that bottle? Yeah, sure. I'm only going to have one. You can finish it. Sit down. My reputation's bad enough without my trying to get around carrying a bottle of whiskey in me. There you be. Oh, thank you, Sam. Here's to luck. Yeah, I could use some. Well, you didn't come here to drink a bottle of rye, Matt. What's on your mind? Well, Kitty, I was sort of wondering if maybe you'd heard any talk about anybody being missing lately? Missing? Who? Well, just a point. I don't know who. Well, you're sure not on much of a trail, are you, Matt? Well, a man was shot and he's dead. And I don't know who he was or who did it or where. All I know is that it happened. Well, I'll be darned. Well, Matt, I don't know a thing I've heard that had helped. I'm sorry. Yeah, it was just a chance. You know, it's not often a man gets shot around here without everybody knowing about it. Well, I'm glad for that much anyway. Well, thanks, Kitty. Well, good luck, Matt. Yeah, take it easy with that bottle. Yeah, I'll save it for you. So long. See you, Matt. I've been asleep for six straight hours. Mr. Dillon, he sure must have been tired. Yeah. Here, Chester, take these letters down to the depot for me, will you? They've got to be in Washington next week. Santa Fe pulls out in an hour, sir. I'll put them right in the mail car. Why, Jake Worth, why, you haven't come into dodge in the last six months, and I know of it. I'm here now, marshal. Huh? Trouble, Jake? I'd call it that. Well? You know that cottonwood, the big one down at Brandy Bend? Yeah. There's a hole cut down by the roots at the north side of it. I put a sack in that hole this morning. It's got $20,000 in it. That's a lot of money, Jake, even for you. It isn't if Hank gets back all right. Hank? That's your youngest boy, isn't it, Jake? Yeah, 18 last month. Yeah. And that's ransom money here. Boy's been kidnapped, huh? He didn't show up the other night, marshal. Next morning, I found a note tacked on the corral said to leave the money or they'd kill him. Oh, come on, Jake. We'll try to get there before they pick up the money. No, marshal, I won't take any chances. They'd shoot him sure if we did that.  You should've come here first, you know. You didn't hear what I said, marshal. I won't take the chance. All I want now is for you to watch for anybody who turns up rich around here. Jake, I want you to listen to me. Now you listen to me, marshal. Nobody is going to do a thing till Hank's back safe on the ranch. Not one dang thing. Jake, if they killed Hank, you'd want him hung, wouldn't you? I'll hang him myself if it comes to that. I'll hunt him down like wolves. All right, then let's go. Let's get on to Brandy Ben and wait for him. No.  He's shot him. And he's dead. What are you talking about? Where is he? I don't know. And how come you know he's dead? I can't tell you. Marshal, I've had about enough of this. We're wasting time here. Come on, Jake. I'll tell you what I can on the way to the river. Are you better by heaven or one of a saint never going to get to the river? Jake Worth was known as a hard, hot tempered man, but he was straight as they come. He'd made one fortune in Texas cattle and another in buffalo hides, and now all he wanted was his ranch and his three sons to work it with him. The worst were good men. They didn't cause any trouble, and they worked hard. It was hard to tell, Jake, but without mention in dark, I said what I could. And when we reached the Arkanses, we hit our horses in the clump of bush and worked our way on foot up to the big cottonwood, and I stood up and walked out into the open. What are you doing, Marshal? You going crazy? Come on, Jake. You used to hide now. That's him there, isn't it? That's Hank. I'm afraid so, Jake. He's a young boy and his whole life to live yet. Why did they do it? They gave him the money. Why did they do it? I'm sorry, Jake. Marshal, I've been kind of confused by all this. I swallowed your story on the way down here, but I want the truth now, every bit of it. That's all I know, Jake. Hank tried to break and went up and shot it, but we'll get him.  I don't know who they are. Don't lie to me, Marshal. You know a lot you're not telling me. What's going on with you? I've told you all I can, Jake. That's my boy lying there, Marshal. He's been murdered. And if I didn't know you so well, I'd begin to think maybe you had something to do with yourself. Not just a minute, Jake. I know you're upset. Then why don't you tell me? Because the man who told me about it had to promise not to name anybody. That's why. What man? Who is he? Get it out of him if I have to cut it out. Yeah, I know. That's why I can't tell you who he is. What kind of a lawman are you, anyway? I've told you all I can, Jake. No. No, you haven't. Marshal, I don't believe your story about nobody. He promised nothing. You know who done it. And you're going to tell me or I'm... Don't try it, Jake.  I can't. Me and my boys can. And I'm giving you 24 hours to name those men and then we're coming to Dodge. There'll be blood spilt, Marshal. Jake, I give you my word. I don't know who did it. I don't believe you. I'll help you take your boy home now. Go on back to Dodge. I'll manage here. That's a bad mistake, Jake. 24 hours, Marshal. We'll find you wherever you'll be. Jake, I won't. So long, Jake. He will return for the second act of gun smoke in just a moment. But first, 300,000 volunteers are needed for the Ground Observer Corps. This spare time activity serves as a vital supplement of the Air Defense Command radar network, which has certain unavoidable blind spots due to the curvature of the earth. Men and women from Teenage Up are urged to become ground observers. Get in touch with your nearest Civil Defense Center. Now for the second act of gun smoke. No use arguing with him. The man's grief had destroyed his reason. And the worst of it was, I knew his sons would do whatever Jake told them to do. Unless I could stop it somehow, I'd have to shoot it out with three good and perfectly innocent men for no reason at all. I thought about it all the way back to Dodge, and by the time I got there, I had an idea. I went up to Docs and talked it over with him. All right, man. I'll do whatever I can. It might not work, Doc, and you'll be exposing yourself to a lot of danger. Have you thought about that? I have. I've also been thinking about the men who killed Hank with. Well, we could wait till they start spending their money, or one of them gets drunk and maybe talks too much somewhere. We could, but meantime, you and the Wursel have a gunfight.  All right, then, Doc, let's go. I want to get to the ranch before dark. Yeah, maybe Jake's cooled off by now. Enough not to start shooting on sight anyway. Yeah, we'll soon find out. Come on. Out here since Mrs. Worth died. Oh, that must be four or five years ago. Well, the place sure has changed, hasn't it? Yeah. I don't see anybody around, do you? Maybe they saw us first. Maybe they're hit out. I hope not. See, Matt, I got an idea.  Then they'll know you're come peaceable. I can't take a chance like that, Doc, not with Jake in his state. But I won't shoot unless I have to. He who lives by the sword. Look, Doc, I'm doing everything I can to avoid this thing. I'll kill all three of them if I have to. All right, Matt, I understand. It's far enough, Mark. Watch him, boys, if he makes a move, shoot. Yes, Mark. Jake, I came here to stop a shooting, not to start one. You can stop it, Marshall.  If I knew, I'd be on his trail, Jake. I'm not sure of that at all. What's Doc doing here? Tell him, Doc. I took the bullet out of Hank. He died soon after. What? That's right, Jake. Now come down here where we can talk like friends, and I'll explain it to you. Stay where you are, boys. Let's hear it. Well, they got me out of bed. Jake and they led me out into the country. Hank had been shot in the back, and I extracted the bullet. But it was no use. He'd have died anyway. There were three men there, and I recognized one of them. Who was he? Well, I had to promise I wouldn't tell, Jake. Or they'd have killed me. That don't matter. Now think about it a minute, Jake. Doc gave him his word. And you're asking him to break it. Now think about it for a minute. I'm thinking. Thinking about my boy, too. Hank's dead. You can't help him now. Shot in the back, and a coward who did its run free. You want to help get him, Jake? Don't ask fool questions, Marshall. Of course I want to get him. Listen to me. Those men told Doc if he talked, they'd kill him. Yeah, and they meant it, too. All right, so I got an idea now, Jake. We'll spread it around. But Doc has identified the killer. The news will reach him soon enough. In the meantime, I'm going to lay low. And I'll have Chester tell everybody that I've ridden out after them. Go on. Then we'll just wait. One or two, or maybe all three of them will come into Dodge to kill Doc some night soon. They still might get away. And I'll deputize you and your boys right now and you can wait for them with us. You'll have to stay hidden like me, of course. We won't mind that. Now that we get a chance at them, we won't. All right, good. Funny thing, though. What? A man like Doc here, rather than break his word, he'll make himself a target for those killers. Yeah. Look, Jake, Doc and I are going to go back to Dodge now. I'll see that the story gets started, and then the day or two, you and your boys can write in. But separately, though. Otherwise, it might cause talk. I understand. And come straight to Doc's. We'll get there. A few days, Doc never left his office. I figured that it'd make him look scared and draw the killers right into our trap. The rest of us sat around in his back room and waited. Chester kept us supplied with food and coffee, but he began to get pretty restless cooped up like that. And by the fifth night, we were being real careful with one another and over-polite. But on the sixth night, about midnight, we got our game. Mr. Dillon? I think it's them. They just rode up on the street, three of them. They're tying up outside right now. They acted too deliberate like for ordinary writers, so I run up the back way to tell you. Doc, come on in. What do you want me to do, Matt? Take cover in here and stay out of sight. Yeah, whatever you say, man. Let's go downstairs and meet them, Marshal. No, we might just scatter them that way. Now, listen.  Jake and I'll wait in the Doc's office. But don't jump that man. We'll be going to action up here.  I got it, sir. All right, then move fast. Come on, Jake. Now what? Well, we'll just wait here in the dark. Good. I'll fix Doc's blanket on the couch here so they don't think he's in it. Get back in the corner, Jaker. We'll be shooting each other. Get out of here. What? Wait. He ain't here. What?  You're under arrest, both of you. It's a trap! Got one of them. Doc, I'm all right. Doc, you can come on out now. Light the lamp, will you, Doc? All right. Yes, you're right, Matt. I'd like the lamp. Okay, Mr. Dillon. Yeah, come in, Chester. Hey, Mr. Dillon. He tried to get away when he heard you up here, but he ran smack into one of the worth boys. He's dead. Yeah. Well, I don't know either one of these men. Doc, you can tell us now, is one of these the man you recognize? Uh, let me see here. This one here. I remember later I treated him for a broken nose sometime back. I never didn't know his name, though. He came up on the, uh, up the trail with a herd, I think. I don't matter now long as you're all dead. Oh, well. Bring the other bodies up, Chester. I'll do the autopsies quick, and I'll get them out of here. It's about time I got something out of all this. Okay, Doc. I'll fit you. Well, Jake, uh... I'm satisfied, Marshal. I mean, the boys will be getting back to their ranch now. Sure. Marshal, I... Yeah? I doubted you. I'm sorry for that. Forget it, Jake. No. Now, it's best I remember a man shouldn't make mistakes like that. Well, there was no harm done. The way it worked out. Uh, I'll... buy you a drink before we leave, Marshal. I think I'd like that, Jake. Come on, let's go. Gun smoke under the direction of Norman MacDonald's stars William Conrad as Matt Dillon, U.S. Marshal. Tonight's story was specially written for Gun Smoke by John Meston with music composed and conducted by Rex Corey. Featured in the cast were John Daener, with Lawrence Dobkin and Harry Bartell. Parley Bear is Chester, Howard McNeer is Doc, and Georgia Ellis is Kitty. Gun smoke is heard by our troops overseas through the facilities of the Armed Forces Radio Service. Join us again next week as Matt Dillon, U.S. Marshal, fights to bring law and order out of the wild violence of the West in Gun Smoke, taking over the CDS Radio Network.


The Cube at EMC World 2014 is brought to you by EMC. Redefine VCE. Innovating the world's first Converged Infrastructure solution for private cloud computing. Brocade. Say goodbye to the status quo and hello to Brocade. We're back, this is Dave Vellante and this is the Converged Infrastructure Spotlight at EMC World 2014. This, of course, is the Cube. We go out to the events, we extract a signal from the noise. Dave Hardis here, he's the Executive Vice President and COO of Presidio, and he's joined by Manu Thomas, who is the Vice President of Solutions, one of the lead architects at this solutions provider and partner of VCE. Gentlemen, welcome to the Cube, good to see you. Thanks, great to be here. Thank you for having us. Dave, let's start with you. Talk about, let's start with Presidio. What's the company all about and how long you've been around and what's your specialty? So we've been around since 2004. We're a pretty large size, over a $2 billion integrator here in the US. We focus primarily with data center cloud technology as well as security, mobility, collaboration and core network infrastructure. So you operate primarily customers in the US. And what kind of industry size of customer paint a picture for us? So I would say anywhere between that 1,000, 2,000 seat all the way up through the Fortune 100. We do service customers internationally, but our primary sales and marketing is happening here in the US. Vertically, we cut across, oh I think the solutions we're bringing to market are very horizontal in nature, so there's probably no vertical that we're not playing in in some manner of fashion, some more than others, but really, if you're a consumer of IT and IT is a strategic party of business, the city is there for you. Vanu, so I want to turn to you as the lead architect, one of the lead architects at the company. A lot has changed since 2004, obviously. One of those big changes was, of course, converged infrastructure. I mean, up until that point, you had new architectures, things like thin provisioning and data deduplication, a lot of so-called feature products that were interesting, but not really necessarily game-changing. And then on comes this notion of converged infrastructure. Talk about how that has affected how you architect solutions. Yeah, that's a great question. So I think, fundamentally, what we are seeing in the industry out there is this move towards cloud-based solutions. The customers want faster agility, time to market, and they want to try and leverage cloud-based solutions. What we've seen in the converging infrastructure space, especially with VCE, is it really plays into that particular strength.  So we're able to bring the converging infrastructure quicker to market, quicker time to deploy for the customers, and in turn, it helps them be quicker and more agile with their customers, and it enables them to grow their business much faster. Did you all have to change your business somewhat? A lot of the nasty, heavy lifting that was being done when you had to do your own compute and storage and networking, you guys would presume we'd do a lot of that for customers. When you first saw VBlock come out, you'd say, oh boy, now they're sort of going after our business, or did you say, okay, it's a natural evolution of systems, we'll just keep going up the stack. Talk about that a little bit, Dave. That's the natural evolution of our industry, really. If you think about it, you can go back to PCs. There was a whole industry around kitting together pieces and parts to make PCs, but they evolved into, you just, who'd buy a clone? The homebrew club. Yeah, no, clone PCs. Our job as integrators is to constantly be moving up that stack. So we embraced it from the get go, from the initial launch of the first VBlock back when it was Acadia, it looked to us like it was a good trade. So yeah, we might lose a little bit of professional services to kid all this together, but the ability to take something that robust in terms of a solution to market so that we can start really moving from virtualized infrastructure to true private cloud and hybrid cloud infrastructure, you really need conversion infrastructure, VBlock underneath that to do it right. So it was great for us. We just had two gentlemen from Apollo on, they talked about how essentially what they were doing was replicating cloud infrastructure within their on-premise environment. Is that what people are doing with your solutions? And I wonder if you could, so talk about that a little bit more, because everybody's been talking about doing that. I remember we've been talking to, it's converged infrastructure since we first saw it back in 2009, and that's what everybody wanted to do, but when you really started to peel the onion, they weren't doing it yet. But it feels like here we are in 2014, IT is finally closing that gap with that notion of cloud. Is that fair, and can you talk about it and talk about any examples? Yeah, so the fundamental premise, again, I go back to this is people wanted to go to the cloud because of a couple of reasons, right? They wanted the quicker time to market, which I mentioned, there was a perceived notion of it being cheaper. And then the third reason that they wanted to do it is when they wanted a particular resource, they would get it on demand. So what VCE did with the convergent infrastructure is they bought couple of those critical components inside the private cloud. One of the biggest concerns with the public cloud was the whole security notion and the performance notion. With the VCE infrastructure, you're able to now bring those same advantages that you had with the public cloud, but then in a more secure and having better performance considerations. But what we've also done at Presidio is, Dave mentioned this earlier, we've also given an add-on on top of the VBlock, which is the ability for us to do full-fledged management orchestration on top of a VBlock and also be in a position to offer capacity on demand with the VBlock. So we could essentially mimic a public cloud inside a private cloud environment with the security and the performance features. So can we talk about security a little bit? I get two, we do a lot of these CUBE interviews, right? You get two ends of the spectrums. You just said that you can do it more secure than you get in the public cloud. I wonder if we could unpack that a little bit. Why is on-premise and why are your clients able to build something that's more secure than the public cloud, I could say. Public cloud has all these resources, all these PhDs running around, giant scale, they spend tons of money on security. Why is that? Well, to begin with, the public cloud infrastructure is built on a premise of multi-tenancy. So for them to make the efficiencies, the cost efficiencies work, they essentially have to put multiple customers under one single physical infrastructure. Now, what they claim is the fact that there is adequate security between those tenants. So it's like saying Coke and Pepsi existing on the same infrastructure.  And can you then ask the public cloud provider to show you all the security technologies and architectures and methodologies they've used to protect that asset? I don't think they really want to delve into that.  All right, I'm feeling secure today. Talk to me tomorrow. And all the technology, all the process will not change the fact that if you're in a multi-tenant environment, you have exposure not only to other providers but to the greater operation that's there. Whereas in a hybrid cloud, I mean, I'm sorry, a private cloud, you can control your own destiny and there's no one to point to but yourself in terms of where does the buck stop? And then to be able to take advantage of those public cloud capabilities, maybe you don't have them on-prem, you don't have the resource or maybe it's an elastic sort of resource, that's where a hybrid cloud comes in. And Venue was talking about our city of managed cloud offer where we can come in and we can create this orchestration layer for you and we can have private cloud service catalog items for you, your unit's development environment, your SAP environment. And then if you need to get to salesforce.com or some sort of public cloud capability, we can build that into your service catalog. So we don't have this rogue IT thing happening where business units are doing whatever they want. They come to the service catalog. If it's not in the service catalog, we'll put it in the service catalog so there's command and control across there and to press. The vast majority of public clouds are multi-tenant. The one I can think of that's not is ServiceNow. And actually if you look at their numbers, they're substantially better than the other public cloud suppliers. If you line them up to Amazon, Workday, Salesforce, et cetera, the ServiceNow non-multi-tenant is actually superior. What about availability? Is that a factor or can you architect around that in the public cloud? So if you look at, and I'm going to use Amazon Web Services as an example, even if you look at what their CTO has said, he basically said, look, infrastructure, we don't build infrastructure that's highly available, highly redundant. We expect the applications to be able to do that high availability and high redundancy. So in the case of public cloud, what we've seen with many of our customers is when they actually migrate the legacy application, it breaks, right? And we've already seen a lot of instances when these applications fail in the public cloud because the public cloud infrastructure, number one is multi-tenant so it's got that security problem but it's not built as a resilient and reliable infrastructure. They expect the application to essentially do that work for them. So now you're talking about our customers having to rewrite their legacy applications and that's a significant investment. Yeah, you're not seeing a lot of high volume transaction processing going on in the public cloud. I mean, yet anyway, it's going to take a long time to launch those applications. It's mainly dev and test right now that we see. You know, at the same time, I wonder if I get your opinion on this. We used to say the same thing about VMware, remember? It wasn't that long ago, we were saying, oh, VMware are largely test and dev and Merit said, we're going to go after every workload, any application and they've seemingly done that. Well, that happened with the public cloud or is it a different animal in your view? I don't think the public cloud is going away. I think it will grow almost concentric circles. We've always built highly available infrastructure. We'll continue to do that and we'll always use service providers.  Yeah, yeah, sure. And before that, we called them service bureaus, right? So that's- Time-sharing. Yeah, the model, you know- I've been around a long time. Yeah, me too, right? Got the hairline to prove it. But they, you know, they're going to, those services will evolve and they'll grow and they'll be integrated. And again, this is the natural maturity of our business and our industry. We're not doing this to make it more complex. We're doing it to take advantage of new capabilities. Another interesting thing that came out of the Apollo case study was in terms of the organizational structure, they essentially said, we brought in the capability and then it catalyzed an organizational change. Do you find that a lot with the customers?  Maybe if you do that, you'll never bring in the converged infrastructure. If you bring in the converged infrastructure, is it like breaking some eggs and actually catalyzing an organizational change? How are organizations changing as a result of this new technology? So what we've seen is organizations who essentially waited and then said, let's try and figure out our people and process before we actually bring these converged infrastructure technologies. They've been waiting for a long time. What we've seen is, and when they've been waiting, they've seen the emergence and the birth of the shadow IT and the rogue IT and things like that.  We've sort of seen that sort of, let's push this converged infrastructure, this private cloud thing, really start making changes for our clients. Excellent. Well, thanks for coming on theCUBE. Dave, I'll give you last word. EFC World 2014. We're seeing massive changes. We're hearing all the software defines the federation and flash changes, converged infrastructure. What's the sort of bumper sticker that you'd put on? EMC World 2014 from Presidio standpoint. As you're pulled away from Las Vegas, what's the bumper sticker say? Yeah, I think we're enabling the private and hybrid cloud. Great, excellent. Dave, Benu, thanks very much for coming on theCUBE. Thanks for having us. Pleasure to have you guys. Thank you. Keep it right there, everybody. We'll be right back with our next guest. This is day two. We're live at EMC World 2014, almost at 2012. We'll be right back.


So good afternoon everybody and welcome to this first session of the conference on the relation between monetary policy decision making and financial markets. So I'm a man. I mean, you will so I'm the director general for market operations at the city. And, and this first paper that Michael power will present is really looking at an alternative explanation for the fed information effect. This is a paper that, you know, the Liberty adopts, I think a mid busting approach and gets into the crux of a question that we as financial market professionals ourselves routinely with is, you know, what is exactly the information content of central bank decisions. Yeah. And does the central bank know more than the market, or is it just reacting differently than expected to the same set of information. And in other words, should we read into a fed decision or any other central bank more than it says, and I'm delighted to have with me, Michael power, one of the authors to present the paper. So Michael, you are a professor of financial economics at the University of Hamburg since 2020, but you started your career after your PhD from the University of California San Diego as a central banker. Yeah. And you were senior economist and research advisor at the Federal Reserve Bank of San Francisco for about 10 years. Your research focuses on the interactions of financial markets with the macroeconomy and monetary policy and your work has been published in leading economic journals, including the American economic review, the review of financial studies and the journal of business and economic statistics. Michael, the floor is yours for presenting your paper. You have 30 minutes and this would be followed by 10 minutes of Q and a with the audience on the chat. Yeah, thank you so much for the kind introduction. Toughly to follow here with such a great presentation by Ken Rogoff. I'm going to go ahead and share my slides here. I think you all should be seeing that and hopefully you can hear me all right. Okay. This is work with Eric Swanson. We both used to be at the Federal Reserve Bank of San Francisco for a number of years and the motivation here is really coming from, you know, our experience at a central bank where we were kind of doubtful of this story of central bank information effects that there is so much superior private information at the central bank about the economy. Certainly, we as forecasters were looking at the private sector just as as much as maybe the private sector was looking to the Fed. And so we were looking at the forecast and thought, you know, there's highly resourced and experienced and experts looking at the same data that we are looking at. And so we were skeptical of the story that the Fed is superior in its knowledge and forecast of the economy. And so we dug into the data to kind of see whether this evidence on these information effects is really as solid as it seemed. And so we found that it is actually not. So we came up with an alternative explanation for this evidence. Okay, but it's all about these monetary policy surprises that are widely used in empirical macroeconomics. So those are essentially rate changes around FOMC announcements or ECB announcements. Think about, you know, money market futures rates, take a handful of them with maturities of several months to several quarters, and the 30 minute changes around the announcements. And then people usually take maybe the first principal component of these rate changes to summarize what's going on. Now, the usual assumption is that these are predetermined and unpredictable. So then you can use them because they're econometrically exogenous to estimate the causal effects of monetary policy. For example, on financial markets, and a number of papers have done that. And more recently, people have even used this to estimate the impact on the macroeconomy using things like structural VARs with external instruments and so forth. Okay, so let me just make sure my volume is high enough here. Okay. All right, so now there is this really puzzling recent evidence that the response of macroeconomic survey forecasts seems to go in the wrong direction. So for example, a tightening surprise, so an increase in these futures rates around an announcement would, according to standard New Keynesian theory, lead to a negative response of output, employment, and inflation. And so you'd think that survey forecasters would revise down their outlook for these variables in response to a tightening surprise. But what a number of papers have actually shown is that the survey forecasts respond positively to the monetary policy surprises. Maybe most prominently a paper by Nakamura and Steinsen in the QJE has shown that real GDP growth forecasts respond positively to these monetary policy surprises. There is some related evidence about the stock market that I may or may not have time to talk about. But an explanation for the evidence, for the puzzling evidence from surveys, as well as for the evidence on the stock market is a fed information effect. Okay, so what does that mean? That really means that kind of independent of the actual policy action and its impact on the economy, the central bank conveys private information about the economy and directly affects beliefs about the economic outlook with its announcement. Okay, so as an example, if you have a tightening surprise, so interest rates jumping up as a response of the announcement of the central bank, then this might be seen as good news for the economy because it could be seen as signaling a more optimistic outlook of the Fed, the central bank. And so forecasters and investors might then revise up their outlook, taking that signal on board from the central bank. Now, these information effects are really strong than that has really dramatic implications for both empirical macro, but also the practice of monetary policy. I mean, just to sketch them, you cannot use policy surprises, these rate changes anymore to estimate the causal effect of monetary policy in the economy because you have these confounding information effects. And they would be really hard to account for because by their nature they are unobserved. And for the practice of monetary policy, and you certainly see concerns like this in policy discussions, for example, in the minutes of the F1C meetings. In practice, it might mean that surprises may have counterproductive effects. And so policy makers might be less inclined to surprise financial markets than in the absence of such information effects. All right, so we propose an alternative explanation in our paper of this evidence based on what we term a Fed response to news channel. Now, what this means is that, well, of course, survey forecasts and monetary policy actions both respond to macroeconomic data and macroeconomic news. But if the monetary policy surprises are also systematically related to the state of the economy, then you have a problem in these regressions and the basic underlying assumption of a lot of empirical work using these surprises is violated. You basically have an omitted variable and we'll show that that matters a lot. So our evidence is, first of all, going directly back to the survey regressions and showing that economic news is an omitted variable and accounting for it changes the results dramatically. We also did our own survey of professional forecasters. We went to the blue chip panel and asked these forecasters how they respond to monetary policy and our results suggest that they respond in a very conventional way and that there's almost no evidence at all for the possibility of information effects from the forecasters themselves. We revisited some of the financial market evidence and we don't see any convincing evidence there that there's systematic information effects. And we also revisited some of these forecast accuracy comparisons is the Fed really a better forecaster than the private sector. It does not seem like it. So overall, we find no evidence for information effects in FMC announcements. And we have a story for why monetary policy surprises may be systematically related to macro news that is based on incomplete information about the monetary policy rule. But that is kind of not crucial for the main points I'm trying to make here. Okay, so let's look at this survey evidence. Okay, so this is the regression that Nakamura and Steinsen ran revisions in forecasts for GDP growth are regressed on their monetary policy surprise. They just use the first principle component of changes in these futures rates around the announcement. Okay, so under the assumption that this policy surprises exogenous, this would estimate the causal impact on the forecasts and standard theory implies that the impact should be negative. And and puzzlingly they estimate positively and significantly positive as coefficients. Okay, so we're going to revisit this here in our sample. We updated the data. We looked at different surprises, different macro variables. And overall, we also find this puzzling sign, GDP growth and inflation respond positively to a tightening surprise. In the upper panel, we use this Nakamura Steinsen surprise. So the first principle component of futures rate changes around the announcement in the bottom panel. We used the more commonly used target and path factors that were proposed by Gerkinak second Swanson in 2005. And for the unemployment rate is the other way around. Okay, so there is something there, but it is really not very strong. There's some warning flags here. This these results are often insignificant. They change a lot over different sub samples and their statistical relationship is very weak. The R squares are sometimes round to zero or generally between, you know, one and 5%. And so this is very noisy. But still overall there seems to be something there that we need to look at a little bit more closely. By the way, we of course replicated Nakamura Steinsen's results and looked at different samples and investigated how this changed with the sample choice. Okay, so our story is that there are economic news that are affecting both the FOMC action and the survey forecasters, right? So you have a good employment report. The surveys are respondents are going to revise up their outlook in this example. And the Fed is of course generally going to respond by increasing the policy rate on the margin if there are good news. Now if it responds systematically more than expected. So if there is a systematic hawkish monetary policy surprise when there is good economic news, then you have a problem with these survey regressions. Because then you have an omitted variable bias. Okay, so the usual regression is the I showed before, but there's also these economic news and omitted variable. Now you have a bias from your econometrics 101 class. If the news are correlated both with the dependent variables of the survey forecasts, which of course they are, right? There's no question about it. We have extensive evidence of this also in this paper, but it's really not surprising. And I'm going to skip that evidence here in the interest of time that economic news, economic data affect the survey forecast. So beta is of course not zero. But the more puzzling issue here is you also need the news, the data, the macro data to be correlated with the policy surprise systematically. The usual assumption is that this policy surprise is not correlated with data timed before the announcement. And here this, I'm a little sloppy with the notation here, but these news are all measured before the announcement, before announcement T. So known at the time of the announcement and the policy surprise is the change in rates around announcement T. And so we find that gamma is also not zero. So let me show you that. And then I'll include these news into the baseline regression and show you that there's a big bias in theta. Okay, so this is the data in Nakamura Science and then already kind of tells the story. There are big positive, you know, revisions to the outlook on the upper right that were also that also saw big hawkish policy surprises. So they're systematically hawkish surprises when the economy is doing very well in the late 90s, 2003, 2004. And on the other side of this, these most influential observations in the lower left were times when the economy was doing very poorly. So of course, the outlook kept being revised down and the forecasters, that's not surprising. But what is surprising is that there were systematically large dovish or easing surprises. Now, there seems to be this omitted variable here, the state of the economy, whether there's good or bad news about the economy that explains this positive correlation and not a causal effect from the announcement surprise to the macro forecasts. Remember, that is the story that several papers are telling. There's a causation from the monetary policy announcement to the macro forecast. And we're saying, look at this picture. There's an omitted variable that affects both of these. Okay, so this is the one I'm going to skip. Right.  All right, so three different regressions for three different kinds of policy surprises, the target and path factors, and the Nakamura-Sanson surprise. And without going through each of these individual predictors, I'm just going to summarize this evidence as saying these policy surprises are predictable with information before the announcement. The predictability is very strong and some other samples that goes up to 40% are squared. This is in line with some evidence that the next presenter, Anna Seeslack, published in a 2018 RFS paper. We kind of revisit this, look at a few more predictors, find a little bit stronger evidence, but very much in line with Anna's findings. Now, but what we conclude here is that there is a problem with the basic survey regressions. We have to control for these macro news. We took these financial indicators, by the way, because they really nicely summarize all kinds of news that we couldn't possibly all put into a regression. The first one, for example, is the change in the S&P 500 log. So it's a return over roughly the quarter leading up to the day before the FOMC announcement. So that is a positive return. That is usually a time when there's a lot of good news. And that then systematically and strongly predicts a hawkish policy surprise, which is puzzling from, you know, kind of like a standard theory perspective. Okay, so this is the key result on the survey regressions. The top panel just reiterates the basic results of the univariate regressions or, well, the regressions without any controls. So you have these kind of puzzling coefficients that sometimes are significant, not a very strong relationship though. But if you include these controls, then essentially all of the coefficients flip signs, the magnitudes are equally large, if not larger than before. And often, strongly significant. The R-squared, of course, is very large because of the controls that we include. So you estimate these also much more precisely the effects of monetary policy surprises. So here, the upshot is if you control for the state of the economy, for the economic news, then monetary policy surprises have a totally conventional impact on macroeconomic forecasts, okay? So we think that this is a better estimate of the causal effect of monetary policy on macro forecasts. And that it suggests that information effects, while we can't rule them out completely, are not strong enough to make these coefficients zero or even have the puzzling opposite sign than conventional theory would predict. And the coefficients here, I'm not going to go through the units and the sizes and the quantities, but they're generally in line with what you'd find from standard textbook monetary economics models and estimates of the effects of monetary policy on the macroeconomic. Now, why are monetary policy surprises predictable? We really think it's because of learning about the policy rule. We don't think it's a risk premium story. Risk premiums are really too small in these near term futures. It's not crucial for our story, but we think that it's incomplete information about the policy rule. There's some supportive evidence and I have some evidence in her paper, a recent working paper by Mike Schmeling and co-authors also suggests that the market underestimated the Fed's responsiveness to macro data, systematically underestimated, which is exactly what we need to explain our results, okay? But I'm going to leave it at this, you know, this does have really strong implications though for applied work. You cannot use monetary policy surprises as an exogenous instrument if they're correlated with the state of the economy. So you need to account for that, for example, by taking either controlling for the news as we're doing here, or by projecting out the news and just taking the residual of the monetary policy surprise. So this is important for this literature. Okay, so I want to say a few words about our own little survey. The nice thing about financial data is that you can really isolate the effects of the FOMC. That's why there's a lot of papers using event studies, Kutner, Gokainaxx-Wanson, Bernanke and Kutner many more, because you can be pretty sure that you have a causal impact there. But surveys are kind of annoying. They are monthly, quarterly. We wish we had daily surveys. Our solution to this problem of low frequency surveys is to ask the forecasters directly about how the FOMC announcements affect their forecasts. We tracked down the chief economists of the entire blue chip panel and sent them our short questionnaire. How do you revise your macro forecast and response to these different components of the FOMC's policy action? We also asked them about how they revise in response to the SEP forecasts. I didn't include that here, but it's just shocking. They never respond to the SEP forecast, which is really a problem for the information effect story, because that says the Fed has better forecasts or better knowledge, or at least somehow useful knowledge, somehow not a perfectly correlated signal. So people should take it on board, but they don't. At least that's what they tell us. Okay, but back to the policy action. What if there's a hawker surprise and either the target rate or the statement or the dot plot? Forecasters either don't revise their forecast or they revise it downward, which is the standard direction for a hawker surprise. Everything here is mirror image for a double surprise and everything is parallel for the other macro variables. A handful said that the direction depends on other factors. But that would be the only forecasters that you might count in the camp of sometimes potentially some information effects. Even with this generous counting, you'd have 31 to 5 against information effects from our survey. Now remember, this is exactly the survey forecasters that are delivering the data that are used in the regressions that are the information effect regressions, if you will. So we think this really undermines those kinds of regressions. Okay, so I think I may have two or three minutes to talk about financial market evidence. So this is a table with the 10 most influential observations in the Nakamura Steinsen regressions. So these are the ones in the upper right and the lower left of my scatter plot. These really drive, like, sorted by their effect on the T-sit to see if you include them versus exclude them. Right, so of course, you know, the policy surprise in the third column and the GEP forecast revision in the fourth column have the same sign. These are the most influential observations. Now, what did the stock market do around these observations? It essentially always went in the standard direction of a tightening surprise causing lower stock prices and vice versa. Okay, there's only one exception here in March 2001. And similarly for exchange rates, exchange rates also went kind of the standard textbook direction of a tightening surprise appreciating the dollar. Right, so this kind of high frequency evidence suggests that these announcements did not actually contain strong information effects. If you look at the tight window, in that instead what caused this positive correlation between this policy surprise and the macro forecast was the state of the economy. Summarized here in the last column with this Brave Butters Kelly macro indicator from the Chicago Fed where negative value shows the economies in that state and vice, is in that, is in that shape and vice versa. Okay, but that was basically our story for explaining the survey response. Okay. Now, let me just say that when we regress this, you know, we put it this way. Information effect story does not say the stock market response necessarily has to have the opposite sign. It just says because of how stock markets work and discount rate news and cash flow news. It's just, it just says there should be a weaker response if information effects are there. Okay, so maybe they are just weaker, although still of the conventional sign. What we did here is we kind of split the sample into the most influential observations. So presumably, they would have big information effects and show a weaker stock market response. But that is not the case. It's at least as strong, not stronger than for the other observations in the sample. Okay. All right, so let me conclude. Let me just conclude here. I think that overall we see quite extensive evidence against information effects in FOMC announcements. Okay, so we haven't looked at ECB announcements. We also haven't looked at other policymaker speeches like chair, chairman speeches, chairwoman speeches. I'm trying to find some more information effects there. So maybe there's something there, but certainly around FOMC announcements, there doesn't seem to be any convincing evidence for information effects. The standard survey regressions have a big problem. They have an admitted variable bias. And if you count for these admitted variables, then you resolve the puzzle that has been documented in several papers. And additional evidence, I talked about our survey, I talked about financial markets, and I just want to emphasize again that the Fed is not a better forecaster than the professional forecasters. If you look at the blue chip forecasts, for example, and so that is also undermining the story of a better informed Fed. Now, we find that the policy surprises are exposed. Now, this is not a real-time out-of-sample forecasting exercise. It's just a correlation in the sample. Exposed, they're correlated with economic news. And this correlation is consistent with the market underestimating the responsiveness of the Fed. For macroeconomics, this means, for empirical work in macroeconomics, this means that monetary policy surprises should not be treated as exogenous. Ideally, you would want to project out macro news. Eric Swanson and I are working on a follow-up paper that we hope to present at the NBR macro annual next year, where we do this analysis. So revisiting local projections or structural VR estimates of the effects of monetary policy, it's important to account for this channel that we document here in this paper. And I talked about the implications for monetary policy communication. It's not a concern from our evidence, at least, that surprises would have counterproductive effects because of revealing information effects. So we think that's a first-order issue for monetary policy communication. That is all I have at this point. Thank you very much.


Hello and welcome to this session in which we would look at the equity section part 2 of 2 simply put in the prior session We looked we looked at the equity method part 1 of 2 So this is the second part of the equity method already covered the fair value the cost accounting the cost method in in previous session We're gonna cover consolidation in depth basically this topic talks about when do we use those? Accounting method to account for investments Remember depending on our degree of control. This is basically a review up to 20% If you control up to 20% of the company your two options are the fair value and the cost method if you control between 20 to 50 and remember we learn about that this rule is not really 100% applicable in the real world sometime you might control less than 20 you would use the equity method sometime more than 20 and not use The equity method in the real world, but as far as we're concerned between 20 to 50 This is what we use the equity method and if you control 50 Percent plus this is where we'll use consolidation and once again sometime you may not have to have 50 control plus to use Consolidation sometime you might have 50 control plus to you and you don't use the consolidation We talked about those different situation in the prior session those are the exceptions Those are where the case is not really clear. You have to actually look at the control This topic is extremely important whether you are an accounting students or a CPA candidate studying for the CPA exam So I strongly suggest you take a look at my website far hat lectures calm Most likely most likely you do have a CPA review course if you're studying for the CPA exam That's fine. I don't intend to replace your CPA review course My explanation is to be a useful addition to your CPA review course Help you understand the material that are provide you with alternative explanation and alternative resources Exercises through false multiple choice to help you understand your risk to try me is one month of subscription You try it. You like it. You keep it. You don't you cancel. You lost $30 your maximum gain is passing the exam Are you willing to take that risk? And if not for anything take a look at my website to find out how well or not while your university doing on the CPA exam I do have resources for other courses as well if you are an accounting student Also connect with me on LinkedIn if you haven't done so and take a look at my LinkedIn recommendation like this recording connect with me on Instagram Facebook Twitter and Reddit import to we're gonna be reporting change to the equity method Reporting investing income from sources other than continuing operation, which is part of it will be OCI reporting investing losses and Reporting sale of an equity investment. So what happened once we sell the equity investment starting with the reporting of change To the equity method. What happened? What are we talking about here? Well, you might start with less than 20 percent at first when you invest in a company Then you might add more and more to your investment to get to a point where you control where you own between 20 to 50 and remember once you own 20 to 50 that the the equity method will kicks in now You have to use the equity method because less than 20 We you have to use the fair value. So fast. It requires you that you do a prospective Treat this as a prospective approach Prospective means easy. You don't have to go back and change the prior year You have to take whatever you did up to this point and start using the new method Which will be the equity method going now from non equity to equity So this basically we're Requiring the cost of the new investment simply to be added to the current investment Gaining amounts when you purchase a new investment it gets added just like when you buy an investment It's recorded at cost for example, January 2020 alpha company exchange $84,000 cash for 10% ownership in Bailey. So we assume we have no significant influence We use the fair value and this is the data for Bailey company So this is January 1st. This is the fair value when we purchased it This is the book value and At the end of the year They the fair value was 890,000 therefore our investment is worth 89,000 how do I know this we own 10% we have to adjust it to fair value. So this is the investment January 1st, 2021, which is the following year. We purchased an additional 30,000 This is plus 30,000 not 30,000 additional 30% plus 30% Well, we had 10 plus 30 were up to 40 and we paid 267 let's take a look at the journal entry because now we have significant influence 40% should have give you significant influence now investment in Bailey 267 credit cash 267 this is to record the initial investment on January 1st, 2021 the carrying amount of the asset and the liability equal to the fair value except for an undervalued Which patent so we have an undervalued patent by 175,000 that has a 10-year life. What does that mean? It means the assets the fair value of the assets were the same as the book value Okay, the book is I'm sorry the same as the book value to 89,000 except for one Except for one asset, which was undervalued by 175,000. Okay What does that mean? Well when we started this come when we purchased this company when we started this purchase the snoop purchase the value of the company was 890,000 times 10% I told you the value was 89,000 now We are going to add 267,000 to this asset which will give us a total value book value of 356,000 Now the book value of the assets are 715,000 this is the book value and we own 40% 715 times 40% it's going to give us 286,000 well we have an access of 70,000 and what did we say this access? It's going to be Allocated to it's going to be allocated to the Patent and what's going to be it's going to be and it's going to be Expensed amortized over 10 years so 70 divided by 10 is 7,000 and this is the computation This is the computation. Okay. Now. What's going to happen is this? Let's assume Bailey reports their income of 130,000 and declare the dividend of 50,000 What do we have to do? Well, we're going to have to increase our investment by the income. Well, how do we do so? Well? We debit investment in Bailey and let's take a look at this if we take if we take 130,000 times 0.4 which is our ownership. It's going to give us 52,000 52,000 so why did we record 45,000? Well, we record 45,000 because we also have a patent Remember at an access cost of 70,000 divided by 10 we have to amortize 10,000 so when we amortize 10,000 52 minus 7 it's going to give us 45 so simply put we combine the two entries Otherwise, we had to debit equity and invest the income 7,000 credit and investment in Bailey So we have to do really is to do this as if we're going to break it down into two. This will be 52,000 Then we have to debit equity Investee income 7,000 credit Investment in Bailey 7,000 and those two together will give us the entry that we have of of A 45,000 but all we did is we combined them also for the dividend we debit dividend receivable 20,000 credit investment in Bailey 20,000 when we receive the cash we debit cash Credit dividend receivable. So this is how we account for this. So how do we report investees? other comprehensive income and irregular items those items they bypass the income statement OCI is Bypass the income statement and irregular items could be discontinued operations. How do we report for this? Okay, OCI you need to know what this is other comprehensive income It's earning that bypass net income earning or losses for that matter Accumulated derivatives net gains or losses you need to be familiar with those from intermediate accounting foreign currency translation adjustment search Certain pension adjustments. So what we do we either have a loss or a gain But we don't report on the income statement We report in the equity section of the balance sheet also we could have again as I said as a regular items We could have this continued operation So the equity method require us that the investor record its share of investees OCI Which is included in the balance sheet as? Accumulated other comprehensive income a OCI. So if they have OCI we have to absorb part of that OCI Okay, for example, big company purchase 30% of the voting stock of small company We have significant influence no access amortization resulted from this investments That's fine in 2020 they reported income of half a million excellent. We debit investment 150 credit equity investing in income 150. This is for the 30% I'm sorry for the 30% of half a million now small company also reported notice 80,000 in OCI from pension and other adjustments gain. So they have a gain of 80,000 well, what does that mean? Well, if I've small company reported this OCI our share of that OCI is 24,000 we debit investment in small company. We credit OCI other comprehensive income of investee We have to absorb 30% of that simply put now if we had a discontinued operation Let's assume small company discontinued one of their operation and they either have a gain or a loss That gain or a loss will be reported as a regular income. It's not reported separately Although it's reported separately on the income statement, but what we do is it will be part of the regular income Impairment and equity investment is something else that we have to deal with as part of our equity investment Okay, what is impairment impairment is when the company suffer a permanent loss in the value of the investment So you purchase an investment, but it's a permanent loss permanent loss It's gonna go down and there's no chance it's gonna go up now Why would that happen reason for impairment? We have made a lot of reasons for impairment many many reasons But could be you lost a major customer and that's your major customer and as a result You know the investment and this company because would they rely on this customer?  They cannot recover changes in economic conditions Could COVID could be one of them loss of significant patent or other legal rights So you used to rely on a patent or some legal right and you lost those Damage to the company's reputation and many others. Okay, what do you have to do a loss in value? Which is other than temporary other than temporary means permanent because if it's temporary You don't do anything if it's temper if it's permanent it shall be recognized You just have to book the loss. Okay, evidence of the loss might include But would not be necessary limited to the absence of the ability to recover the carrying amount of the investment Or the inability of the investor to sustain earning capacity that would justify carrying the amount of the investment So simply put there's a test for impairment And if that test is if you pass the test of impairment, you have to absorb the losses You have to absorb Impairment losses. You have to record them once, you know that they are Permanent not temporary because sometimes also because because of gov. Maybe your investment will go down But it's only temporary but because if it's COVID and it's permanent then you have to write it down you have to write down your investment take a loss and Sometime you could have you have to reduce your investment to zero now Why would the investment would be reduced to zero? Well, you have to understand how the equity investment work And the equity investment when you purchase the investment you record it at cost then in subsequent years you might have Net income and when you have net income, it's gonna increase the investment Well, if you suffer, let's assume you suffer a loss. Well, when you suffer a loss, it's the opposite So this is how you would treat a loss. A loss would reduce your investment. So when you have a loss, you're gonna debit loss from Investee and you're gonna credit the investment. This is what we're talking about here You debit the loss and you credit the investment. So you have a loss, but the investment will go down now also What could happen remember when we receive dividend dividend also? Reduces the investment Also, what we learned if you have an impairment just basically treated the same thing loss from impairment debit investee Investment gets a credit also. It's gonna go down. So what happened if over the over the years you would drew money You incurred NL net loss and you incur impairment Whatever you have if you incur if you have more More credits than debits. Well, you could have a negative balance. You cannot have a negative balance You could reduce it down to zero and they cannot have a negative balance and keep track of that account separately Until you recover you bring it back to zero then you bring it back to the box So it could be reduced down to zero due to losses dividend payout and payment losses and also what happens sometime is you can sell your equity investments So the investor can choose to sell all of it or part of it. It doesn't really matter if a sale occur You know the equity continue to be applied until the transaction date up to that date That's establishing the appropriate carrying amount of the investment Assuming that the after the sale you still have significant influence You just keep on going if this if you stop to have significant influence after the sale then from the sale date You have to treat it as a fair value. Let's assume and you go down to fair value Okay, the investor reduces the balance by the percentage of the shares sold assuming you're selling part of it The best way to illustrate this is to work an example Assume top company owns 40% of the outstanding shares of bottom company, which is an equity investment Any access cost over top shares bottom is considered goodwill. So we have goodwill We don't have to worry about reducing the access the asset balance is 320,000 is of January 1st 2021 bottom report net income of 70,000 during the first six months of 2021 and the clear cash dividend of 30,000 Excellent. What do we have to do now? We have to debit investment in bottom increase for that six-month net income of 28,000 which is 70,000 times 40% and Increase our equity income by 28,000 don't have to do the same thing with the dividend debit a dividend receivable Debate a credit investment and income then when we receive the cash debit cash credit receivable Remember again, we can remove the receivable debit cash credit investment. Okay now bear in mind the balance was 320,000 at the beginning of the year add the 28 for the income subtract 12 from the From the dividend you end up with 336,000 as of the date of the sale So this is important because we have to determine what happened after this balance after the date Okay, so they're telling you the income is 70,000 and 30,000 if they don't tell you the income for the for the first six Month is that much they give you the yearly income then you have to prorate per year Which is you allocate half to the first six months and the other half assuming you're using the equity method for the following six Month if you lose the equity method now use goodwill because you sold so many Then you basically ignored net income for subsequent period because now you're using the fair value method Assuming July 1st, which when the balance was 336,000 you sold 10,000 of the 40,000 shares Which is one fourth and you received 110,000 and you reduced your ownership from 40 to 30 because you had 40 So you still using the equity method. Let's take a look at the journal entry. Well, you received cash 110 One fourth if we take 336 divided by 4 One fourth is 84,000 so you sold something that's worth 84,000 for 110 you have a gain of 26 now if you sold it for less than 84. Let's assume you sold it for 80,000 Let's assume you sold it for 80,000 Then you would have a let better than again, you'll have a loss of 4,000 you have you would have a loss of 4,000 Okay, but you did not you sold it at a game. Therefore, you have a gain After the seal is complete we were gonna keep using the equity method because we're still above 30% If the sale let's assume you sold rather than 10 you sold all the way up 225 and you reduce your ownership to 15 now you'd have to use the fair value How would the fair value be used simply put you're gonna take the remaining whatever the the 15% the 15% of the 336 336 times 15% this will be your balance as of July 1st Which is 15% of the company you still have 15,000 shares at the end of the year You would look at the fair value of those 15,000 shares and you adjust them you ignore net income You ignore dividend because you will start to use the fair value method Okay, so the remaining book value becomes the new cost and you just keep going No Retrospective adjustment it's all prospective so you don't have to worry about going back and changing the prior years and The end we looked at the beginning of the session if we change from the equity method change to the equity method If we went from fair value to equity Also, it's considered Prospectively, which is easy. You don't have to back. You don't have to go back and change any prior years Again at the end of this recording I would like to remind you that if you are a CPA candidate check out my website for hat lectures calm I can be useful addition to your CPA review course. I can explain the material Differently your risk is one month. Don't shortchange yourself.