Welcome to this early morning session, my name is Magdalena Skipper, I'm Editor-in-Chief of Nature which is a weekly science journal. And before I introduce my panel, I'll just very briefly set the scene for what we're going to discuss here. So of course you will well know that the focus of our discussion here is very beautifully framed with really an invitation to consider what happens when humankind overrides evolution. And it's an interesting thing to consider because of course when we think about it, we think about synthetic biology, we think about new biotechnologies, but in itself humans modifying evolution or trying to modify living organisms that are around us is of course not a new concept. For a very long time in human history we have engaged in trying to modify organisms around us, of course through classical breeding, you will be very familiar with examples from agriculture, be they plants that we consume today, our food crops, of course animal stock, but of course our very loved pets, they are all products of us trying to override and interfere with evolution in some way. But this is just the background in which to situate our discussion today. And so to discuss the much more rapid interference, if you like, with evolution, I have here today, I'm going to start from my right, Kevin Esvelt who is assistant professor at MIT labs and head of a sculpting evolution group. Next to him is Verna Baumann who is an economist by training and CEO of Bayer and over on the far right is Beth Shapiro, she is professor in the department of ecology and evolutionary biology at University of California, Santa Cruz. So thank you very much for joining in this discussion and I'm going to start with a general question to all of you actually. Why is it that we need to or we want to override evolution or engineer living organisms? I think, as you said, this is not something that's new to humans. The earliest records of us trying to change the way that species, the trajectory of different species evolution from the archaeological record date back some possibly 30,000 years with the first evidence of domesticated gray wolves or dogs in the fossil record. And since then, I think much of our motivation has been to come up with more efficient ways of turning carbon and nitrogen into more people. And the better we get at using what limited resources we have to produce enough food to keep us fed, the bigger our population is growing and the more we need to come up with newer, more efficient ways of going through this same process. And this has brought us to this stage now where we're using biotechnology which really is a step change, I think. It's not the same thing as we've been doing. It's not the same thing as classical breeding and I think it's a bit disingenuous to say that it is. But that's, yes, to meet our needs, our growing needs as a growing population. That's right. And so, of course, this is one particular avenue where we've been overriding evolution. There are other aspects of it. Would either one of you like to comment on this further? Yeah, I mean, I can only second what Beth has been saying. What we are doing is we are looking at your solving problems in order to actually benefit consumers and patients alike. And what we are trying to do is, of course, to do it in the most efficient way possible and then also to use new technologies in order to solve problems that were not solvable before or where problem solving took an awfully long period of time. If you look at traditional breeding on one side and then using, let's say, biotechnology to go and do precision breeding where we look at very, very specific expressions of a certain property of a plant that we can then precisely enact or actually deactivate. And that's what we are in for business, but that's also what the company is all about and many of our peers are about. We are trying to solve problem solving problems to actually serve the community and the people better. Yes. And that is what this is about. It's about attempting to build a better world. You say, why defy evolution? For the same reason we defy gravity. Should humanity fly? Well, evolution is similarly an emergent law of nature. That is, when you have replicating information with variation, you get evolution. But being an emergent law, it's amoral. If we expect the world to be a better place in line with our highest ideals and the journey that we have been bequeathed by our ancestors, not just turning matter into more people, but to making people's lives better and possibly making animals' lives better. That's an end to which we haven't always turned our skills with selective breeding is engineering animals to exhibit improved well-being in so far as we can tell. Is that something we should do? And in the past we've been limited to our domesticated animals. But now by looking to new technologies and learning tricks from nature, we think that we might be able to alter wild organisms too. Is that something that we should do for ourselves or for them? So this is very interesting. You've jumped in right at the very thick end of the debate here. Thinking about evolution being agnostic of morality. What we're talking about here is designing. So think about design being in some level opposed to evolution. I'm going to park this for a second because I'd like to come back to it. But let's take a step back and think a little bit more. Let's set the scene for the kinds of things that we're talking about and the kinds of tools that we have to play with essentially today. So in the examples that we've just used here, we mainly stuck to agriculture which touches on aspects of health, for example, through nutrition. But there are other aspects that we can talk about. Let's say specifically associated with human health and disease, spread of infectious agents. Would anyone like to comment, maybe give an example of what kinds of things we could do today or certainly advance further in the future? I think your work touches most closely on this kind of thing. I suppose although... I'll chime in. You can take some. Well, evolution of course applies to pathogens as well. And so many of you have probably heard of the crisis of antimicrobial resistance. Now this is one that we probably can solve. Most of our antibiotics we discovered in nature. They're the tools with which microbes wage war against each other and we've merely adopted that same strategy. And that's one where we do need to change incentives in order to reward companies for pursuing new antibiotics. But we also need to think about how we leverage our new discoveries to prevent those pathogens from acquiring resistance. And this also applies to viruses. So with respect to infectious disease, bacteria are frightening, but ultimately we do have reserve antibiotics against most of them. It's the viruses that we really struggle with. And there's a lot of exciting new therapies for viruses that could help prevent pandemics. And that's what I'm particularly excited about. That we might be able to avoid not just the repeat of 1918 influenza but of the far worse pandemics of the past. I mean, there are other diseases many of you will know that a lot of diseases are just driven by single gene defects. Monogenetic cause diseases such as cystic fibrosis, such as hemophilia. And the question is, we asked ourselves a question a few years ago, what would be the holy grail for us as a pharmaceutical entity in best serving our patients? And of course it's not the next best therapy for chronic disease. The holy grail is to move from a chronic condition to cure. And then the question is, are there new technologies out there that would allow doing that? Could we eventually cure people who are not curable today because they were born with a genetic defect that cannot be corrected? Today we have that possibility. But I think this brings up Kevin's point about incentives.  I would not necessarily agree with that. I think the bigger question behind it is, what is the right system to incentivize research and development and pushing the boundaries for the greater good of humankind? And then how do we sustain a system that is actually dependent on sourcing that goes into research and development? Without the funding, we cannot move anything forward. And we are of course a for-profit entity, but beyond profit there's something that I would call purpose. And companies and organizations thrive when they know what they exist for. And we don't exist as many of our peer companies. We don't exist primarily in order to make profit. We exist because we help solve problems that we can solve with the expertise and the means that we have at hand doing that. So I do not necessarily think that it's a fair representation to say, well, you know, once you can cure a chronic disease which kills an income stream that spans the life of a patient, you would actually prevent doing that. Actually, the contrary is true. The question then is, what is the appropriate compensation for that? That is a much bigger question. I agree with you. So very interestingly, our consideration of overriding evolution in the context of health has now moved from, you know, I mentioned nutrition, so that was a sort of link with the first topic we touched on. Then we talked about infectious agents themselves, what we haven't touched on yet, for example, are vectors of disease, such as, for example, mosquitoes and other tend to be insect vectors that carry these pathogenic agents. But we moved through your contribution here to overriding our own evolution, engineering ourselves. When we're talking about chronic diseases, you mentioned monogenic or sometimes mistakenly called genetically simple diseases where you can modify cells in a body. But of course, I think most of us are aware of events that unfolded just over a year ago now when the general press, and there was much discussion about germline engineering of the next generation. So let's touch on this a little bit.  Let's talk about engineering ourselves, and then we'll come out again to talk about engineering us and other organisms in a population context, because that's been quite an important aspect. Who'd like to pick up that particular thorny issue? Nobody, actually. Correct. With the notable caveat that my laboratory does not work directly with anything in humans, but I did play a minor role in developing a tool you may have heard of called CRISPR. So CRISPR is again one of those gifts from nature on a silver platter. It's a molecular scalpel that we can program to cut and therefore edit virtually any piece of DNA in any organism. And so theoretically with CRISPR, we could go into the genome of, say, an embryo and this is what was done in China a couple of years ago. So not theoretically. Not theoretically. But what is interesting, of course, is that most of these diseases that are cystic fibrosis and the like are single gene and they can be prevented using current technologies that don't require going in and editing. In fact, there's comparatively few genetic disorders that require us to go in and edit. And it's also usually unwise for technical reasons to edit an embryo. And that's why it was premature. Not only was it, I personally think it was unethical to do it in secret and there were questions about whether it was misleading to the parents, whether there was truly informed consent. But certainly it was a black mark on the entire field of science that it was done in this secretive way without public consent. Now that goes both ways because does anyone here know someone who was born through in vitro fertilization, IVF? Yeah. When IVF was first rolled out, about 90% of the public opposed it. So we do need to be careful because public attitudes do change. On the other hand, there's a difference between saying no, we won't do it because a lot of people disagree and being totally open about why we think it's a good idea, listening respectfully to people's reasons to do otherwise, and then concluding that this is really the business of, say, in this case, the parents. So I think one of the most promising aspects to come out of that unfortunate episode which really did decrease trust in science is that the World Health Organization has announced that they will host a registry for human gene therapy, that all clinical trials involving any kind of gene therapy in a human should be registered and therefore people will know what's going on. And that allows everyone to have a voice. Not necessarily a vote, but at least a voice. And of course it ensures transparency of the process. There's a few things that come to my mind on that topic. First of all, the question, does intrinsically good and bad technology exist? Can you really qualify the properties of technology? And I believe that that's not the case, very much the question on how you put it to use. You can put it to use for, I think, very, very noble courses, or you can do the opposite thereof. And what we need is, you know, we need actually both in academia and also in business.  And the issue we have is that, and that's where I think academia and business are joined at the hip, that there is less and less trust in society for the advances of technology, which makes our lives miserable. And the only way to kind of get beyond it is that we do a better job in terms of explaining what we are doing, what it is that we would do, where the red lines are, where we actively solicit regulators and actually broader societal discussion in terms of what it is we should and should not do. And as Magdalena said, one of the key elements in it is that we create absolute and ultimate transparency. And only then will we be able to manage new technologies for, let's say, better solutions in whatever area, those solutions lay. So it's interesting what you said also about creating a dialogue with the wider society. One of my favorites, so I'm originally trained as a geneticist, one of my favorite examples of where an argument has been lost as a result of lack of transparency, but lack of dialogue and engagement with the broader society is GMO, Genetically Modified Organisms. This, of course, is not a new story. It has been with us for a very long time. But I think at the time when it was unfolding, there was the discussion was left to those who were not necessarily very well informed about the subject area and Beth has something to contribute here. You know, I think there's a lot of confusion around genetically engineered or genetically modified organisms and part of the problem is this lack of consistent regulation for different types of genetically modified organisms. There's lack of consistency within countries. In the U.S., there are three different agencies that regulate genetically modified organisms and some of them have decided not to regulate organisms that could be produced naturally. That includes the USDA's decision for agriculture, whereas the FDA has decided that any genetically engineered animal is going to be regulated as a drug, a new animal drug, which has made, especially in the academic world, where there's not that much money to go through these massive trials that you might need, it's difficult to make progress. There's a fantastic program at UC Davis where they've created cattle that are polled, dairy cattle that don't grow horns. It's an animal rights, it's a single change and it is one that could have evolved in nature. They've moved an allele from beef cattle into dairy cattle and yet these animals now will be regulated as new animal drugs and they won't be able to enter the food chain despite this experiment and it seems to be grinding to a halt, which I think is a real shame. Part of this is that the loud voices, the loud anti-GM voices, drown out the science and make it very difficult to communicate that the technologies that they opposed in the very beginning are not the same technologies that are being used now. There's no nuance to that dialogue and until we can have that nuance and different consistent international regulation that capitalizes on that nuance, I see that it's going to be very difficult to move forward. Maybe if I can add to it, you have hit on a particularly bad and sad example. GMO, I think if we look at AG, it's mostly about your transgenic technologies where you take your elements of one organism and into a resident to another organism and how that opposition came about is a fairly interesting story and there's an NGO behind it.  That's how they actually started to campaign against GMO technologies and what they did was they put millions of kids into misery because one of the things that had been developed is something that is called golden rice that carries vitamin A that helps people that are suffering from malnutrition to avoid developing blindness. That's how insane the dominance of some non-government organizations are if they are campaigning for the wrong reason and certainly far away from science. History always serves us interesting examples. The trouble is that we humans are not very good at learning from history and this observation is not just limited to our conversation but I think your example of hornless cattle is really a great example of something I wanted to discuss briefly here next and that is indeed as you say that particular variant which is being engineered into cattle I had the misfortune of seeing a video of what de-horning cattle involves and I will never forget that video until the day I die. This is a naturally occurring variant in the genome of wild cattle which could theoretically be bred into cattle using classical breeding techniques. Of course there are much faster ways which is what you were talking about. Today we have technology which allows us to make such precision engineering that actually the organism which is the outcome of that process is indistinguishable genetically and genomically from a naturally existing variant. Can you comment on this from the perspective of regulation and tracing of these designed organisms which have actually been designed to recapitulate what has evolved in some setting? This is exactly what I was speaking of earlier in the US. The USDA has decided that they would not regulate organisms that are naturally occurring in this way where you could have created that organism by breeding and with the example of the cattle you could do this but it would take 20 plus generations to rebread all of the beneficial traits of being a dairy cow back into that cattle lineage if you've used traditional breeding and crossed them with beef cattle for example. It's unclear why the FDA has gone a different route and decided not to deregulate. These are not transgenic organisms in any way and this is really what most people are most concerned about. It's actually essentially it's identical to nature so you can't tell the difference and we have seen different regulators in different places go different avenues. One is of course the question on have we re-understood all the risks that's certainly an issue in Europe where even in the eggspace gene editing technologies that work inside of the genome are not regulated as identical to nature but they are regulated under the GMO regulation. The other thing in that context is that if you look at current practice the question is is current practice better? You know how maybe you don't how we get mutagenesis going. You use heavy radiation or heavy chemical exposure in order to actually get variation and then you take it from there and then the question is isn't precision breeding if you want to call it that way or precision modification that could occur naturally isn't that the much better and much targeted way to go? I think one of the great ironies the popularity of the non-GMO labels that you see at the grocery store when you wander around, they're on everything they're on salt for goodness sake which doesn't even have DNA so how could it be modified? But you see it on the bottle of ruby red grapefruit juice which is an example of a citrus fruit that was created by this radiation breeding which is as much radiation as you could think of thousands of new mutations emerge and yet these are not considered to be genetically modified or genetically engineered. Your salt comment reminds me of a label which I saw on a packet of sugar which said this is a fat free food which is exactly analogous to what you just described. Kevin? Well the thing about this is it's punishing us for knowing what we're doing and this really speaks to something deep in the human condition and unusually unduly perhaps although that's arguable suspicious of applying technology to living things that is people are more comfortable with this notion that at random most people don't know we bombard our crops with radiation and chemicals in order to mutate them create thousands of mutations that we don't characterize that don't get regulated in anything other than the most cursory way for safety that's okay but going in and doing something where we know exactly what the change is and we're not making any other changes that's not okay that requires extra regulation it doesn't make sense but that's part of the legacy of mistrust so if we want to do differently we need to change our incentives and I think that's why I'm going to push a little bit on you Magdalena you're a moderator in academia publishing in high profile journals such as Nature being the premier journal is everything and if you tell us that we can only publish in Nature if we pre-register our experiments if we say here is what we're going to do and we need to find a community that is interested in the result of this new technology and we can only publish if we do that let me tell you we will we all will and if we want to be moral if we want to see improved consideration of morality and technology development when technology is going to determine the future of our civilization people respond to incentives if you want to behave morally put yourself in a situation in which you have incentives to do so very interesting so I've made a note of this I find your suggestion very interesting so we've had a suggestion of greater transparency increased dialogue with many different stakeholders a take home message from me on Nature to push for more pre-registration of studies which I completely agree with before I let you go however since you started the trend of putting forward suggestions of what should be done I'm going to ask you both as well what would you like to see let's say in the next three years change in terms of regulation legislation technology application and one thing you Beth work on a lot is aspects of conservation which we haven't touched on here would that be perhaps one of the things you the reason that I like thinking about biotechnology and genetic engineering for conservation is I think that people fear it less than they do biotechnology for their food what they're eating and I think we have potential there's a possibility that we can make some progress to be able to communicate the nuances of these new technologies to the public more effectively through conservation and maybe that will feed back then into the agricultural realm the public want new ideas and they want new things but they also want to feel safe obviously and if we can find a way of being effective in showing people that these technologies are not dangerous we're not creating monsters most of us Kevin possibly you think through communication would that be all through communication and transparency isn't that hard because we know that simply explaining to people what we're doing isn't enough if you want people to trust it you need to get them to trust something else they need to trust either us and that trust has to be earned and transparency is one way but you can also get them to trust the process yes but you do that by being effective communicators and storytellers and scientists that people learn to respect and then they'll hope you hope that they can I guess you can take it even one step further when it comes to regulation which for a lot of us if not the majority of us really are black box we open up our regulatory processes when it comes to the registration of new agents and make it a real participative process we invite people in and say hey we don't have anything to hide and we do not only represent it to you we invite you in so be part of the journey form your own opinion find people that help you form your own opinion because that is I think the only way transparency is good making it a participative process is better because you create ownership with the people that are ultimately benefiting from the things that we are doing and in that talk the last thing I would ask for is that we get back to having more courageous politicians because many many times they know better but they don't stand by the stuff that they know in particular in the regulatory area I've seen it happen in Europe where I have conversations where actually members of government tell me we know that technology is good because that is actually bad for my next election and they go against their own regulators so what I would really ask for is to actually have some more brave and courageous politicians out there that stand for the right thing this is exactly the right place to be calling for politicians to stand up and be braver but I think it's clear that the technology we have a lot of confidence in technology is very mature we do know what we're doing we can look to the future in which we will be increasingly modifying organisms including ourselves around us for a number of different purposes but we do need to engage a much greater number of stakeholders including the general public politicians, regulators as well as of course scientists and technologists themselves thank you very much Beth, Bernard and Kevin thank you all and I'm sure that panelists will be here for a few minutes for your questions if you have any remaining thank you very much


Hello and welcome to this session. This is Professor Farhad in which we would look at asset classes, specifically the bonds market. This topic is covered on a CPA BEC section exam, CFA exam, as well as an essential or principle of investments, whether it's an undergraduate or graduate course. As always, I would like to remind you to connect with me on LinkedIn. If you haven't done so, YouTube is where you would need to subscribe. I have 1700 plus accounting, auditing, tax, finance, as well as Excel tutorial. If you like my lectures, please like them, share them, subscribe to the channel. If they help you, they might help other people and connect with me on Instagram. On my website, farhadlectures.com, you will find additional resources to supplement your accounting or your finance education, especially if you are studying for the CPA or the CFA exam. We break down asset classes into three categories, which are fixed income, equity and derivatives. Fixed income is broken down into two sub categories, money market or short term and capital market, which is long term. In the prior session, we covered the money market. In this session, we'll cover the capital market. The capital market is simply called, sometimes called the bond market or fixed income capital market is composed of longer term borrowing or debt securities than those that are traded in the money market. So when we say money market and what we covered in the prior session, money market, money market implied short term. You're investing the money for usually less than a year. When we look at the bond market or the fixed income capital market or the capital market, we're looking at longer term investments. What could be examples? What can we invest in as long term, long term capital market or fixed income? We're looking at treasury notes and bonds, which is basically Uncle Sam corporate bonds. When we lend money to corporations, private corporation, money bonds, money and state bonds for that matter. When a governmental unit raises money, mortgage backed securities, which we talked about a little bit in prior sessions and federal agency debt. Those all these bonds promise a fixed amount of income, stream of income or some stream of income that's determined by a formula. That's usually how it works. When you lend money, they either promise a specific amount or they, what they do is, is they will say it's based on some sort of a formula based on the T bill rate plus 2% based on LIBOR plus a certain percent. Let's start by looking at treasury notes and bonds. And what are treasury notes and bonds? They are debt obligation of the federal US government. So Uncle Sam is O and U money, but this money has a maturity of one year or more. And there are two types. We have the T notes are issued for up to 10 years. When you say T notes like a loan, it's for up to 10 years. And we have T bonds, treasury bonds, those are from 10 to 30 years. And if it's less than one year, remember we talked about this, it's T bill or just simply put bill, which we talked about in the prior session. Both may be issued in the increment of $100. If they come, you can, you know, lend the government $100, but they're commonly, they commonly come in the denomination of $1,000. So practically anyone can participate in these bonds and they usually pay interest on a semi-annual basis. It means twice a year they pay interest. The interest is called the coupon.  So attach that piece of paper as a coupon. And what you do is you show the coupon and they will give you the payment based on that coupon. Let's take a look at this bond to illustrate the concept of how we read bonds. This bond, we're going to look at this bond as an illustration. This bond mature in 2020, specifically May 31st, 2020. So if you lend the government money a long time ago, I don't know, because remember bonds, they go from 10 to 30 years. On May 31st, 2020, you're going to get back the par value or sometime it's called the face value. So if let's assume you bought one bond for $1,000, you're going to get your $1,000 back. This is how much you will get if you wait until May 31st, 2020. This bond pays 1.5%. This is called the coupon rate. What does that mean? It means if you have a bond, you multiply it by 1.5% per year, you will get $15 per year. Now, this payment will be broken down usually into two annualized installment, $750 and $750. Now, we need to understand the bid and the ask. What is the difference between the bid and the ask? And this is from a dealer perspective. Bonds are traded as a percentage of the price. So this is the price. This is the bid price. And this is the ask price. Bid price, it means if the dealer wants to buy the bond from you, they will pay you 100.347%. If they want to sell it to you, they will sell it to you for 100.3203%. What does that mean? Let's take a look at this in a moment. So the bid price is this much, 100.3043. So the bonds are traded in the domination of a thousand. So if you have one bond, we're going to assume one bond for a thousand. Prices are quoted as a percentage, of course. So you'll take a thousand. So the bid price, they will buy it from you. They will buy it from you for a thousand. If you have one bond times 100.3047, they will buy it for $1,003 and I'm going to round 0.47. Let's make it five pennies. They don't usually round that I'm going to round because it's one bond. If they want to sell you this bond, if they want to sell you this bond, it's a thousand dollar and they will sell it to you. The price is 100.3203. It's $1,003 and approximately 20 pennies. The difference between those two is 15 pennies and this is the commission or the spread between the bid and the ask price that the dealer makes because the dealer want to buy it, they will bid it. The bidding price is lower than the ask price because when they want to buy it, they want to buy it at a lower price and sell it at a higher. That's how they make the profit. The change column, it means 0.1719. That's a percentage change based on the year to maturity that's earning yield yield to maturity is 1.394. Now, what is the yield to maturity? We're not going to cover the yield to maturity now, but you just want to have an idea what's the yield of maturity. The yield to maturity is the measure of the annualized rate of return to an investor who buys the bond for the ask price and hold it until maturity. Hold on a second. Are you saying that I will earn 1.394 percent on this bond if I buy it, but the bond pays 1.5? It doesn't make any sense. Yes, it does. Remember, you're buying the bond for $1,003.20. You are not buying it for $1,000. The 1.5 percent is based on $1,000. So when we computed this $15, I said 1,000 times 1.5 percent. But if you buy the bond today, you're going to be paying $1,003.20. Now, why am I paying more? This bond is selling at a premium. Premium means you are paying more than $1,000, more than its face value. Now, why would you do so? Because of changes in interest rate, because of topics we have to discuss later on. All you have to know now is how to read the bid, how to read the ask, and the coupon. We'll talk about bonds much more in details, believe me. Later on, we find exactly how to compute this yield 1.394, and how do we come up with this change in the yield from the prior closing day? Another type of bond is inflation-protected treasury bond, because remember, in the economy, we have inflation. That means as inflation goes up, your purchasing power loses value. So if you have $100 today, this $100 today, if you go to a coffee shop, and if the coffee is for $2 a cup of coffee, you can buy 500 cups of coffee. Let's assume you still have this $1,000, and now the cups of coffee became $4 to make it simple. You still have the same money. Now you can only buy 250 cups. So your $1,000 lost value. Why did it lose value? Because of inflation. Because if inflation is higher, then all the prices are higher, the same amount of money buys you less. So what happened? The government says, guess what? We are going to create a bond, and that's going to be inflation-protected. It means if inflation goes up by 1% per year, we'll pay you 1% more per year. But listen to this. If inflation goes down 1%, we'll pay you less 1%. So those are inflation-protected treasury bond. Treasury means government bond. Bonds that are linked to an index of the cost of living in order to provide their citizen with an effective way to hedge inflation risk. And we do have this in the U.S. based on the inflation rate. So the consumer index, the consumer CPI, the consumer price index, we have something in the U.S. called CPI. If CPI goes up and you have a bond, your rate will go up. If it goes down, your rate will go down. And in the United States, for the past decade, more than a decade, we practically have no inflation. So in the U.S., inflation-protected treasury bond, they're called TIPS for short, treasury inflation-protected securities. The principal amount of these bonds is adjusted in proportion to the increase in the consumer price index. They're based on something called the consumer price index that comes out on a monthly basis. So they provide a constant stream of income in real dollars. So it's the same amount, although it's a different amount, but in terms of a real amount, let's assume they promise to pay you 2%. But if inflation goes up, if the inflation is 2 and they promise to pay you 2, but the inflation now is 3, they'll pay you 3%. Although they pay you more, but as far as inflation, your money is the same. So you would earn basically the same. And the real interest rate you earn on these securities are risk-free if you could hold them to maturity. So there's no risk in holding these bonds. They're kind of risk-free because why their treasury bond? Every time there's treasury involved, it's risk-free. That's another type of bond. We do have other types of government or federal agency bond. And here, think about Fannie Mae and Freddie Mac and Jenny Mae. Those are government agencies. They issue their own securities to finance their activities. Think of them their government, but they issue bonds. It's like a private company. They borrow money for themselves. Now, why? Because Congress think that some industries don't get enough money from the private sector. So what they do, they create a federal agency to raise money for that sector. So public policy reasons to channel credit to a particular sector specifically, the housing, that Congress believe is not receiving adequate credit through normal private sources. So the government says, we're going to create our own corporation and issue bonds to kind of help the housing market. And here's some examples of them. The Federal Home Loan Bank, they can issue bonds. Fannie Mae, the Federal National Mortgage Association, the Government National Association, Jenny Mae, and Freddie Mac, which is the Federal Home Loan Mortgage Corporation. So what they do is they issue their own bonds and you can buy their bonds. And they take this money to finance the housing activity in the country. So the debt of the federal agencies was never explicitly ensured. It's assumed that the government will come in and they will cover their debt. That's assumed. Those beliefs were validated when Fannie Mae and Freddie Mac encountered severe financial distress. We talked about this in the prior session, that these two companies, they didn't go out of business, but basically the government took them over because they couldn't pay their bill. Now, bear in mind, with both firms on the brink of insolvency, the government stepped in and put them into what's called conservatorship, which is they took them over, assigned to the Federal Housing Finance Agency to run the firms. So basically they became kind of government. But they did not, but they did in fact agree to make good on their firm's bond. So what they did is, as they said, it's assumed that they will back up their bond and indeed they backed up their bond. Now outside the US, we have what's called international bonds and we kind of covered them a little bit when we talked about money market. So many firms borrow money abroad. So you have a US company or a European company or an agent company. They want to borrow money from, you know, a European company wants to borrow money on Wall Street or a US company wants to borrow money in London. So many firms borrow money and many investors buy bond from foreign issuers. So in addition to your national market, initial to your national capital market, there's a thriving international capital market, largely the central location for it is London. We have what's called the Euro bond is a bond denominated in the currency other than that of the home currency. Now when we say Euro bond, people think it's in euros. It doesn't have to be in euros. Usually it's in US dollar, but it's let's assume a European company wants to raise money in US dollar or an Asian company wants to raise money in US dollar and they want to sell bonds in US dollar. We call it Euro bonds. It doesn't, it's not actually in euros. It just, it's bond denominated in a currency other than that of that country. That's what it is. For example, a dollar denominated bond sold in Britain. So it's a dollar denominated bond, but it's sold in Britain. It's a Euro bond. Euro yen bond, which is kind of similar, yen denominated bond sold outside Japan. So if there's any bond sold in the yen currency, but outside of Japan, it's called Euro yen. So it's just, it's really a misnomer. Since European country is called the Euro, the term Euro bond may be confusing. It's best to think of them as simply international bonds. That's basically what they are. They don't have, they're not in euros. They're not in euros. In contrast, the bonds that are issued in foreign currency, many firms issue bonds in foreign countries, but in the currency of the investor. That's also, that's also the case. For example, a Yankee bond is a dollar denominated bond sold in the US by a non US issuer. So you have, for example, a Japanese company coming here and selling bonds, okay, a dollar denominated bonds, but it's not a US company. It's called Yankee bond. That's another type of bond. We also have Sumera bond, our yen denominated bonds sold in Japan by non Japanese issuer. So if a US company goes to Japan and wants to sell bonds, raise money in the Japanese market, it's called Sumere bond. So if you want to invest in them, that's fine. You will invest in them. Now let's shift gears and talk about municipal bond, municipal bonds or local government bond. Simply put, the local government, for example, the municipality, a county, a state, they want to raise money because they need money to operate the business, to pay the police force, to pay the firefighters, to expand whatever, whatever the need is to conduct social services. Those are the municipal bond. So those are tax exempt bonds. Tax exempt, tax exempt means they are not taxed on the federal government. Now why not? Here's, here's the concept. The concept is the US government, the federal government is responsible for helping municipalities. So what the US government says, look, we can't give you money, but if you borrow your own money, we're going to give you a tax advantage. And what's the tax advantage? The people that give you money to, to conduct your business, we will not tax them. So you, your local, let's assume you live in town in a town called ABC and ABC town issue bonds and you purchase from that town, you know, $10,000 worth of bonds. The bonds are paying, let's assume 10% per year. So you will get $1,000 per year in interest. Here's what happened. This $1,000 is tax free. The US government says because the minus ABC, ABC municipality, you know, is trying to raise money, we're going to encourage investors to give you money. We will not, you will not have to pay, the investors will not have to pay taxes on that money on the federal level. Okay. We have two types of municipal bonds. We have what's called the general obligation bonds that are backed by the full faith and credit of the issuer. So for example, my town, my township, let's assume my township, Westchester wants to raise money, they can issue what's called the general obligation bond. Simply put, you give them the money and your trust are going to give you the money back. Why? Because they have tax and power, municipalities and counties, they have a tax and power. There's another type of bonds that are also considered the municipal bonds, it's revenue bonds. These are different. So let's assume the city of Philadelphia wants to put an airport, okay, which they do have an airport actually. What they do is they issue bond, they borrow money, they borrow like $500 million in terms of bond. Now what happens is you're going to get your money from the proceeds of the airport, okay, are issued to finance a particular project and are backed either by the revenue from that project or by the municipal agencies operating the project.  When a state wants to open a road, what they do is they borrow money and they would say you're going to get revenue from the tolls because everybody that drive on that road, they'll have to pay a certain amount of money once they get on this road or once they exit. Therefore, your revenue is from that money. So the revenue bond, they're based on the revenue from a certain activity. The riskier then general obligation because general obligation bonds, because general obligation bonds, the government, they can tax you. They simply, they don't have a reason. You don't have to use the airport. You don't have to use the hospital. They can just simply increase your taxes. They have the power to do so. We also have what's called an industrial development bond. That's kind of a revenue bond that's issued to finance commercial enterprises, such as the construction of a factor that can be operated by a private firm. Now, you have to keep in mind these bonds gives the firm access to municipal, municipal ability to borrow a tax exempt rate. So sometimes what happens is a municipality wants a company to operate under business. So they give them this kind of this status. They're called industrial development.  But remember the federal government here, they limit the amount of these bonds that might be issued because because if they issue a lot of them, then the federal government would lose money because if these bonds are tax free and all these people are getting the interest, but the government is not getting their share, well, that's kind of a form of abuse because the municipality is using their power that the federal government gave them to help private industries or private companies, investors not to pay taxes. So that's why the government would limit those or they review them on regular basis to make sure they're not being abused. Their status is not being abused. Also like Treasury bond, municipal bond very widely in maturity. A great deal of them, the majority of them, they are they are short term tax anticipation notes. What does that mean? It means the municipality, they need the money for this year to pay for expenses before they collect the taxes.  So it's anticipation of their anticipating the tax. They just want to borrow money on a short term basis. And sometimes they borrow the money for long term investment, like let's say they want to build a stadium. Well, well, you're gonna borrow money on a long term basis to to finance large capital investments and they could have a maturity up to 30 year. But remember the key feature in this municipal bond that their tax exempt status and this is what gives them an advantage. Okay, investors pay neither federal nor state taxes on the interest proceeds. This is a great advantage. However, they give you a lower yield because you don't have to pay taxes. That's the whole purpose of the government trying to help them. Therefore, they will offer a lower yield. So rather than saying we're gonna give we're offer 6%, they will offer 4%. And a lot of people will prefer to buy the 4% municipal bond rather than the 6% corporate bond because you pay no taxes. But now we have to find out are you an advantage if you if you buy these bonds. So let's talk about the taxation aspect of this. So one way of comparing bonds is to determine the interest rate on the bond, taxable bond that would be necessary to look to find out what's the after tax return equal to that municipality. So remember, let's go back to the 6% into the 4%. This is the mini bond or that's seven and four. It doesn't matter. This is the mini bond.  Well, the reason you might buy the bond at 4% is because the 4% is tax free. So although you would earn 7%, then you have to pay taxes, your net proceeds is less. So we have to find out. So we have to derive the value after the tax, after the tax. And to solve for this, we have two equations we can do it. So we have to find the rate. This is the rate. This is the rate a taxable bond would need an offer in order to match the after tax yield on the tax to the tax free municipal bond. Let's take a look at an example. That's the way the best way to do it. So the rate is to look at your corporate rate times one minus the tax equal to the return on the mini bond. Or if you have the mini bond, you will take the mini bond and you will divide it by one minus the tax rate to find the corporate. So there's two ways to do it. And let's take a look at some numbers and see hopefully this make sense. So let's assume we have this table here. Let me pull my calculator because it's very important to look at this. Let's make sure it sticks here. So let's assume you are offered 2%. You are offered 2%. 2%. So 2% is the mini bond rate. This is the mini bond rate. And let's assume your tax rate is 30%. So if you are being offered 2% money rate, okay, so municipality is offering to pay 2% and your tax rate is 30%. If somebody comes to you and tell you, look, I have a corporate bond. How much will I have to pay you to give me money? To give me money rather than to go to the 2%. What you do is, okay, my rate is 30%. Simply put, I have my mini bond is 2%. This is 2%. If the mini bond is paying me 2%, you have to pay me 2 divided by one minus the tax rate. One minus 0.3 is 0.7. So you have to pay me 2.86%. In other words, the money is paying to define the corporate or the private bond. The private bond will have to pay 2.86%. Now, if my tax rate is 40%, if my tax rate is higher, then you have to pay me 3.3. How did I find 3.3? Here's why. 2% is the money. I'm going to take 2%. Now I'm going to divide 2% 0.02 divided by 0.6, 1 minus 0.4 is 0.6. So let me write the formula here. It's 0.02 minus 1.4 divided by 0.6, which is, you have to pay me. The corporation will have to pay me 3.33. Now, you're saying, why would I have to pay you 3.33? Because if you pay me 3.33, then I'm going to have to pay 40% in taxes. So I'm only keeping 0.6. So this times 0.6, that's going to give me exactly 2%. So that's why you could either use this formula or use this formula or use this formula, depending on what you are giving. So if I came to you and I said, okay, let's work an example here. If I came to you and I said, suppose your combined tax bracket is 30%. That's your tax bracket. Would you prefer to earn 6% taxable return, which is corporate bond, because it's taxable, or a tax-free yield of 4%. Well, here's the money. I know the money is 6, and I'm sorry, I know the money is 4%. The corporate is 6%. Now, what I have to do, I have to turn, I have to find out how much would I earn on this corporate after taxes. Well, to find out how much do I earn after taxes, it's 6% times 1 minus 0.3. So I'm going to be keeping only 70% of my return. So 6% times 0.7, that's going to give me 4.2. Which one would you prefer? Would you prefer to earn 4% or would you prefer to earn 4.2? And the answer is, in this situation, you will take the corporate bond because the corporate bond is earning 4%. Let's assume the tax rate was 40%. Now let's change this, keep this, let's change this, let's change the numbers. It's 6% times 1 minus 0.4, 6% times 1 minus 0.4. Well, 6% times basically 0.6, and that's going to give me 3.6. Now, if my tax rate is 40%, I'll prefer the municipal bond because my net return on the corporate is 3.6. So simply put, the higher your tax return, the higher your tax return, the more benefit is the municipal bond to you. You have more savings in the municipal bond. Now, the second question is, what's the equivalent taxable yield of the 4% tax-free yield? So simply put, you are earning 4%. How could you compare the 4% to the corporate 6%? You will take the 4% 0.04 divided by 1 minus 0.3. So if I take 0.04 divided by 0.7, this bond is only earning 5.7%. So this mini bond, remember the original, the original problem, we always prefer the corporate because the municipal bond is earning me equivalent taxable yield of 5.6, but the corporation is paying me 6%. Therefore, I will go with the corporation. Now, if my tax rate is 0.4, if my tax rate is 0.4, now if I go with, let me clear this, 0.04 divided by 0.6. Now I'm, sorry, 0.04 divided by 0.6. Now I'm earning 6.66. Now I have a better return than the corporate bond if my tax rate was 40% rather than 30. Again, in illustration, both ways, that if you have a higher tax rate, you can benefit more from your municipal bond. Let's talk about corporate bond. Corporate bond is corporate bond when the corporation borrows money. That's how they do. It means by which private firms borrow money directly from the public. So this is one way for corporation to raise money is bonds. They also pay interest, typically semi-annually, doesn't have to, but usually they do, semi-annual coupon over their life and return the face value to the bond holder.  The risk you're then treasury bond, obviously, because they are private. The risk of the fault is higher. Government don't go out of business, but businesses do go out of business. So there is a real risk of the fault when you buy a corporate bond. Therefore, you have to check the rating, whether there are AAA, AA, AAA, triple b, double b, so on and so forth. And we'll talk about bonds later on. But here we're going to talk about few types of bonds, just as an overall picture, we have secured bonds. They have specific collateral backing them in the event of a firm bankruptcy. For example, you lend the company money, but they will tell you, look, if we don't pay you, we're willing to sell this building to pay you back your money. Therefore you are secured secured is better than unsecured unsecured means they're also called before what it means they're also called the venture it means there's no collateral look you're giving us the money and your trust will pay you back there's no collateral and there's subordinate the venture which have a lower priority claim of the firm asset in the event of in the event of bankruptcy those subordinated the venture it means well look you're going to be the last online to get your money which is very risky we have what's called callable bond at the option of the corporation so the corporation can call the bond what does it mean callable bond that means the company have the option to purchase the bond from the holder at a predefined at a stipulated predefined price so you gave them the money today six months from now they can come back and they give you they have you have to accept their money your money back and they will take away the bond why because they have the right to call it the bond was callable they would let you know up front look at any point in time we can buy it back usually they will pay you a premium they will pay you more than what you pay but there's always the risk if they give you back this money and interest rate goes down you lose because you cannot find an alternative investment simply put let's assume you lend you you lend $100,000 to a company that's paying you 10% but the bond is callable well that's fine 10% is a great return then suddenly interest rate went down to 6% if the bond is callable the company might give you back 105,000 take away your bond now you have back 105,000 but the interest rate is 6% so you cannot find an equivalent alternative investment to invest your money and this is what usually happens when interest rate goes down the company will call the bond and we'll talk about this later on we have what's called convertible bond this this convertible bond is at the bond holder option so now you have the bond in your hand you have the option to convert the bond into stocks so simply put you go from you go from a lender to an owner in the company and we'll talk about all these bonds later on including how to value a bond but this is just just to let you know the bonds bonds come in many different flavors and in many different denomination now let's talk about mortgage and asset backed securities well what are they well securities that are backed by something what is something well it's either a mortgage like a loan or some other asset we'll talk about this so simply put you go to the bank you get your loan they give you the money you give them a piece of paper with the loan now this loan is backed by your home so what the bank will sell this loan they will create an asset out of this loan and this asset is also backed by the loan therefore the asset is the asset is called asset backed securities it's backed it's supported by the loan on the home simply put the home itself so it's either an ownership claim and a pool of mortgage it doesn't have to be one mortgage a pool of mortgage or an obligation that is secured by such a pool so simply put they issue a bond and they're saying if we if you don't get your money we would sell the asset in this pool whether it's home or cars or anything else and give you back your give you back your money so this the bond is backed so there's a collateral but that collateral is some type of an asset okay so there are a major component of the fixed income market they're most passed through traditionally comprised conforming mortgages so most of these asset backed securities especially the mortgages they used to be they used to be comprised of conforming mortgages now what is conforming mortgages it means the people who took the money out they're credit worthy credit worthy mean they have a good credit have a good credit means they're gonna pay their loan if they pay their loans the investor is safe okay the person that bought that asset backed securities should be safe so so most of them Freddie May and and Fannie Mae and Freddie Mac they could not buy them unless they are confirming mortgages then at some point the government told these companies look we want to encourage people to buy homes in an effort to make housing more affordable to low income household the government sponsored enterprises they were encouraged to buy subprime mortgages so the government told Fannie Mae and Freddie Mac look we know you like to only buy safe mortgages but some people they cannot buy a home because they don't qualify but if you buy their mortgage the lender might be willing to buy them well to lend them money and as a result we have the subprime mortgage debacle where people were getting money to buy a home the loan was sold to Fannie Mae and Freddie Mac the bank did not care whether they can pay or not because Fannie Mae and Freddie Mac is carrying the loan what happened these loans turned out to be a disaster with trillion of dollars of losses spread among banks hedge funds whoever touched these loans losses as well as Fannie Mae and Freddie Mac and this is what the subprime mortgage crisis is all about where asset backed securities which would lousy assets basically the assets were not good because the homeowners could not pay their bill and this is a picture of private issuers versus federally federal agencies and pastro so notice the private issuers they're smaller they're smaller and notice they peaked in 2008 then they went down and now they're flattening out I don't know what's happening in 2017 2018 there's there is some talking that they're spiking up again so the point is these private issuers they don't care why because once they sell the bond they don't have to worry about the the credit worthiness of the of the board also it's common these days for car loan student loan and home equity loan which is the second second mortgage as well as credit card loans and even that of private firms to be bundled in a pastro means they take these loans they bundle them in bonds they put them all in bonds and they sell the bonds to investors and basically the investors get their money from the people who owes the money to the bond to the bond holder then the investor gets their money from these people so as long as the people are paying their car loans the investors is happy as long as the students are paying their student loan the investor is happy and notice here the student loan is increasing notice there was a small amount of student loan back in 96 now it's a large amount of student loan old also equipment loans against equipment credit card loans automobile all of those are asset backed securities as they're considered asset backed securities I don't know how much is you know what can you do if this if a student loan default if the students defaulted under loan what's the asset backed securities the asset is is the student cannot default once you remember once you have this student loan even if you file for a bankruptcy you can get out of it so that's what that's what the people what's that's what the investors are banking on so you always have to pay something you always have to pay something but I'm not sure about the credit card loan there's really no most credit card loan they're unsecured so you really cannot call them in my opinion asset backed securities credit card loans anyhow this is we talked about the bond market in the next session we would look at another asset classes which is the equity securities as always I would like to remind you to like this recording share it put it in playlist put it in playlist and don't forget to visit my website farhatlectures.com for additional resources whether you are an accounting finance student studying for the CPA or the CFA exam good luck study hard and stay safe especially if you are still in through the still living through this coronavirus


So here's the problem to be solved. A lot of people want to do demonstrations of their iPad in a video screencast, but it's almost impossible to capture a good image. Enter the application reflection from reflectionapp.com. Reflection allows you to mirror your iOS devices screen directly onto your Mac using a USB cable and AirPlay. It's really, really tricky. Go on over to the website to check out exactly how that part of the puzzle works. But I'm going to offer you one more trick than just telling you about this super cool app. First of all, you can see right here that I am using my iPad and I'm able to go in and out of applications and look at my folders, that kind of thing, and everything looks great. But you'll notice that you can't see me tapping. Right now I'm going to tap on entertainment again. You saw that, but you don't always see taps. Let me give you an example. Let's go into utilities and I'm going to open up the App Store. Now I'm going to tap on fantasy baseball in the upper left, but watch what happens. You didn't actually see me tap that. I click search and if you're watching carefully you could see that I went backwards. I also can't move my finger around and actually point at anything for you. You just see the effect that I'm actually clicking on it. So let's use a little trick I just figured out. We're going to open settings and under general we're going to go to accessibility and this is the trick. We're going to go, we're not just going to turn voice over on. We're going to turn voice over on under triple click home and the reason to do that is voice over is a little tricky to get used to and if you turn it on it's kind of hard to get back out of it if you don't know how to use it. So we're going to go ahead and set triple click home to be voice over. Let me go back. So now at the bottom you can see here, sometimes I can show you a little bit, triple click home is set to voice over. I'm going to go to the home button and now I'm going to hit my home button three times. Okay, now that would get, that would get annoying after a while. So what we're going to do is I'm going to double tap the screen with three fingers. Okay, so now the speech is off but you're going to gain a benefit of what I want to show you. Notice how I can move my finger around and I can show you different icons. See how every icon has a little box drawn around it. So that's a big difference that I can really highlight something without actually activating it. So now let me go up back to Utilities and you do have to get used to using voice over because I can't just tap it now because voice over doesn't react that way. I have to double tap. So now let's go down into the App Store, double tap again. And now this time I'm going to be able to show you exactly what I'm pointing at. So I can point at Fantasy Baseball. I can move around here. I can go to Twitter later Pro down to Zombie Checkers over to Smart Drawings. I can even highlight this description here or highlight the price. So you can see that I can give you a lot more feedback about what's going on on screen. Now this does depend on the developer to have done a good job with accessibility. Sometimes I've noticed the little boxes don't actually land on the things you're trying to read. So this might not work with every application but I think it might make screen casting a little bit better result if you use voice over on the iPad or on the iPhone or iPod Touch when creating a screen cast. So I'm going to hit triple click home one more time and it'll turn off. Thank you and I hope you appreciated this little tip to show you how to do a screen cast using Reflection App but voice over to help you highlight things on the screen.


Hey friends today is Thursday September 29th Hurricane Ian hit Florida last night me and Gracie hunkered down here at our place in Celebration Florida and now it is cleared up enough that I figured I'd come on out show you guys some of the damage in the area Maybe grab a bite to eat at the waffle house and then drive around the Walt Disney World resort because right now Disney World is closed I don't know when they plan on reopening Anyhoo, let's go do this My prayers go out to anyone that was affected by this hurricane especially people down on the coast You know I seen some video and it looked like it got really bad here on 192 You can see we have a lot of flooding actually in the area and I can see some wild turkeys actually in the water over here And some fishes too. There's actually some fishes in this parking lot here I'm not too sure if I can catch them for you, but I can see them actually sticking their head up right here The reason I said maybe we'd go get something to eat at the waffle houses because they use waffle house kind of as an index on how severe a Storm actually is you know I mean if waffle houses start closing down and it's very severe and last night 21 waffle houses closed in Florida the one that is closest to me I think it's still open and they have like generators like they're there They're built to withstand these hurricanes like if you guys look it up like hurricanes and waffle house have a long running Tradition so maybe we'll try to get some coffee there because I stocked up on all the necessities I got bottled water. I got some canned soup, but you always forget something and in my case forgot the coffee cannot forget that One of the things I noticed was this gigantic billboard and it has Mickey Mouse's glove on the bottom here And it got taken away by the hurricane It was a big advertisement for Epcot like all right here and you could see it's dangling right there actually So the winds must have been too fierce on the other side. It says Hollywood Studios that's still intact But this one this one didn't make it Most of all of the businesses are all shut down except for a couple of Unlikely places that are still open some grocery stores some Disney gift shops even the ticket places the places That sell the discounted tickets. They're actually open right now Other than waffle houses, like I said, there's a couple of these Disney gift stores that are still open I don't know if they actually have like food items in there They might have like a beverage cooler or something like that But there are some people in their shopping you got to get the Disney souvenirs at a cheap rate And then you can see some of the signage from some of the buildings already flew off here, too I don't even know what that says, but that's a that's a heavy heavy sign Me and Gracie have been seeking shelter at my house for probably I think well over 24 hours since yesterday morning And we only came out just to let her try to go to the bathroom, which wasn't happening It was either the rain or the loud noise that she didn't like it at all I know a lot of people wanted to go to Disney and stay at a resort and stuff like that But like we're we live really close anyway And I'd rather like save those rooms probably for people that are gonna be you know coming in from the coast You know I mean people that are seeking shelter away from like Tampa and stuff like that I've even offered my couch to some of my Tampa friends, you know what I mean? And now I feel like it's clear enough that we can go explore around The big part of the hurricane is over and I don't know what kind of damage we have I mean, I'm not sure it's not I'm sure it's not as nearly as bad as like I said the coast But I'm sure there's some trees down some flooding a lot of garbage and debris And I'll try to show you guys a little bit of everything You can see we got a couple of trees down right here And probably a couple more very soon doesn't look good for those I thought this would be a fun video to show you guys what it's like You know going to Wapa house seeing what it's like after a hurricane But also to update you guys on how me and Grace are doing I got tons of messages from a lot of people out there Thank you so much. I felt so loved and cared for And it's a good way to keep you guys updated and let you know that we are okay So I might not keep it up I might actually just take it down and you know after a little bit Because I just like I said it's a good way to just send out a nice message You'd be like hey me and Grace you're good. We did good and here's some delicious waffles You know stuff like that. This is what I think about Honestly basically this parking lot this road right here And then the road on the other side of it are just completely flooded Oh someone's going to drive through this It's pretty deep. I think they're questioning it now They're like should I do it? I wouldn't drive through it I think they're going for it Oh boy Don't do it. It's really deep. Good good It's I mean I would say this is probably three feet right now Maybe four. I'm good. I'm happy especially in the car Now an SUV probably could make it But I wouldn't want to see anyone to get any damage to their cars Now it's time we start making our way over to Wapa house To see if we can get something to eat And fun fact I know what it's like To actually work in a restaurant during a state of emergency And even through a hurricane I've done that before I've worked in the restaurant industry for like 10 plus years And I've done it up north during blizzards I've done it down here in Florida during hurricanes And it is challenging So please be respectful to the service workers out there You have no idea what they have to go through I know they get forward to coming out to these days And you know making a lot of money But it's at a big cost as it is And this is the first major hurricane that I'm not actually going to be there So I'm very grateful And I'm going to make sure to take care of all of the service industry workers That are out there working for us today Giving us food and stuff like that And yeah I'm hungry So we'll see if we can get a table Here is a look at the Wafa house And there's about 50 people waiting to get inside You can see there's almost nowhere Like everyone's just standing up They got people over here So the wait time's probably like an hour or two I mean they're usually fast We'll see if we can hop in and maybe go to the bar Because it's just me you know I'm sure they probably have like a limited menu And like a time limit Because I feel like I mean they have a small seating area anyway And there's probably no takeout It's probably all just dying in But we'll figure it out and see how long it takes now Success My name is on the list And I look like there was like 20 names before me So we'll see how long it goes But it does look like they had some storm damage Because half of the tables are blocked off Because it's flooded You can see they actually have like three of the boots here That are actually down because they're flooding an area And you got a little wet floor sign there Here is a look at the limited menu They have a little bit of a price increase Not too much though It's still actually very affordable A waffles $4 And all-star specials $10 And it makes things a little bit more easier and efficient So I'm happy that they do this I mean anyone that's out here working right now They deserve good tips So you got to treat them really well Real simple order Two pecan waffles A hash brown Sausage Coffee And orange juice I'm good to go That's all I need A couple of cool facts to throw out about Waffle House They don't have a POS system They actually call everything out And they have a special system to mark the plates To let people know what goes on which plate Which is kind of fast And I think they aim for like under five minutes Like on their check time So it's really fast Good food fast, you know Waffle more quick than that Every Waffle House has one of these touch tuned machines too And they have their own music on here Oh yeah, Waffle records right here Look at this And these are all like songs that Waffle House produced I feel good What is this one? I feel good at the Waffle House Sounds like a fancy song right there But they have tons of different ones I love that Isn't that so cool? A lot of people don't even know I mean they have regular music too But they have their own Waffle House like label Look at this piping hot coffee right here Just what we need A little cream A little sugar Definitely need the sugar I almost got you there That's all That's the stuff we need That's the good stuff That's getting the spot right there That's what you need Believe it or not, this isn't my first time vlogging here at a Waffle House How crazy is that? And here it is Look at this The Waffle House Classic Or the Paging Mr. Morrow Waffle House Classic I love these peat cam waffles I think they're so good The sausage, the hash brown Let's just take a look to see Look at these Precious beauties So good Also I got a little hit of Mickey happening here too It's important You got to put a little bit of syrup on there Not a lot of syrup Just a little bit of syrup Not a lot Just a little Not a lot Just a little Just a little tiny pinch of syrup And that's all you need Just a little bit Just a little And you always have to do the combination bite A little bit of everything Just like that Perfection And of course you got to get a little hash brown action in there A little hash browns A little pecan This is so good Let me know if you guys have ever eaten at a Waffle House I mean it's like a stingful And like I said it's the go-to food For hurricane season here It's the only food I also like how Waffle House has very thin waffles I don't like the Belgian style waffles I like these little thinny thin things They're very good Like you know what I mean? The Belgian ones are too fluffy You know I like the little thin crispness I'm throwing in the towel I only have like two bites of waffle left Can't do it though So good I needed that I've been eating a lot of soup Waffle House did the trick So amazing And the whole entire crew was so fun and lively You can tell that it was getting very stressful for them There was a line up the door probably 24-7 They never closed So during the worst part of the hurricane Waffle House was open I mean in this area it was open I know that a lot of them closed down by the coast But it's still a lot And the food was amazing I always love a good Waffle House trip I think you guys know that Now I'm going to hop in the car and drive through Disney And see what it's like you know Also we got to check on Gracie You want to come out and go to the bathroom? Huh?  But come on Let's go Let me see Come on Gracie is my dog And it was really rough on her Because I couldn't get her to go outside And go pee or go to the bathroom And she wouldn't do it in the house So she just sat there very uncomfortable I think the last time I got her to go to the bathroom Was around four o'clock And then I immediately took her out this morning at six I tried several times in between But it was so windy And the sound and the rain She literally like would get down from the stairs And just run back up And she wasn't having it So now she's feeling a lot better But I'm happy that we had each other To comfort each other You know what I mean?  Right there yep I don't blame you It's okay Oh here comes the rain Oh it's coming It's coming here let's go Come on We gotta get out of here Come on Gracie Hop in We did it Now it's time we actually go drive around Walt Disney World a little bit Now I'm not going to go like explore At the resorts and stuff like that Just drive up the main road And probably back down I know that they're doing Super cheap affordable meals For people that are staying at the resorts Which is really good Because if you're staying at a resort You really don't want to be paying $59 to go eat at like Boma or Chef Mickey's I hear they're doing it like $20 Which is amazing Because like I said a lot of people Come to Disney for uh like Rescue for to get away from the coast So Disney is known for helping people out And doing amazing uh hurricane rates And also for cast members That are working around the clock And hurricane duty They're actually staying in the resort itself So I don't want to go you know Use up any of the resources there I'd rather just kind of drive up and down And see what it's like And you know just kind of assess it And you know what I mean And show you guys at the same time Here we go we're coming up under the Walt Disney World Archway I don't know if you can see it too good Because of the wipers But there she is The most magical place on earth Now I did hear that Epcot had some severe flooding And it looks like they closed down the roadway here Yeah look I can see the flooding on the outside Wow Oh actually we have some drop signs here too Look it Holy moly Looks like all the lights are on for the Magic Kingdom All green lights Oh you can see the tarps actually blowing too I don't know if they're gonna have people here to Check us or not We'll see I don't know Nope I think we're just strolling right on up Welcome to Magic Kingdom Please proceed to your destination Thank you Here are all of the campers from Fort Wilderness They actually brought them all over here And parked them at the Magic Kingdom Probably a lot better to be here than actually over there There's a little bit more of a controlled environment But that's really cool At least they had a plan in place you know I didn't realize there was that many people Like camping out at Fort Wilderness right now That's a lot One of the things that I just noticed Is they took away all of the sky liners Because of the weather Because of the hurricane And I kind of was just driving by And I was like wait There's no sky liners in the air So there's no sky liners in the air It's literally just empty And I haven't seen it like that since they were first built We're here at the Speedway gas station Next to the boardwalk and Epcot And you can see there's nothing up there No sky liners in sight And it goes all the way down So they're all probably at that central location Just sitting there That is so like I never even thought about it Because this is the first year there's a hurricane With the sky liner I believe As I was driving around It didn't seem like there was a lot of like damage damage Which is really good I'm very happy about that And I hope it's the same for a lot of places out there Now I think we're just going to go back to Hanging out at the house I mean there's nothing you can really do right now Everything is still closed in preparation Most of it will start opening back up I think Disney is set to open back up tomorrow Along with Disney Springs And yeah I mean I want to spend more time with my Gracie girl I'm so happy I had her She literally cuddled me all night And I was like oh it's okay You know what I mean? She's like dad Dad Like she was like right on me Every time you heard like the Like roar of the hurricane She's like just pressing up against me I just felt so warm So we're gonna go back and check in with her And would you look at this The moth is still here Holy moly I don't know if I should touch Oh it just moved It's still alive It's just hanging out here Seeking refuge from the hurricane What'd you think Gracie? I think this was Gracie's second hurricane Was this your second hurricane? This one was fun huh? You want to treat? You want cookie? Cookie? Gonna take it and run? Oh no you need it right there huh? That's how you make my carpet all crummy And I guess with that We are all done here Like I said I pray for everyone that was affected by the hurricane And I know there's still gonna be some time To get things fixed back up You know?  Absolutely I'm so lucky that we really weren't affected by it here We didn't even lose power Like I was real shocked by that And yeah It was another hurricane down in the books here in Florida I'm sure I'm gonna come across a lot more You know? This is one of the things you have to take as caution When you decide whether or not you want to move to Florida But I love my life I love living down here You know?


Item number SCP-1006 Object Class Safe Special Containment Procedures SCP-1006 is contained within a 213-meter radius in ████ National Park and should be checked bi-weekly. Civilian access is to be denied by means of an endangered species cover story. Relocation of SCP-1006 is strongly discouraged due to the fragility of individual members and their sensitivity to habitat changes. Observation post-45 has been set up within the containment zone, and supplies SCP-1006 with various audiobook versions of communist and classical literature at SCP-1006's request, as well as black ink and poster board as necessary. All personnel entering the containment zone are required to wear level C hazardous materials protection due to presence of fine particulate contaminants. Upon departure, a standard decontamination procedure, as per document SFP-0371-D-B-07, is to be undertaken to prevent uncontrolled spread of SCP-1006. Description SCP-1006 is an organized collective of unknown species of the genus Oradeus. Individual members have achieved sapience through unknown means, and have established a rudimentary system of government resembling Marxist Communism. The original mass of SCP-1006 was discovered on April 1, 19 ██ by a hiking couple, who alerted park authorities. The Foundation took over after the discovery of written propaganda inside a central web, along with evidence of marked use of extremely simple tools, webs resembling faces of passers-by, and simple attempts to block off the area via fallen branches. SCP-1006 is a social community, with some members maintaining the web, and others apparently chosen to maintain the agenda of the whole. Once supplied a source of black ink and poster sheets, SCP-1006 will communicate with humans by creating signs written in English. These communications are largely centered around demands for dismantling of Western imperialism, a scathing critique of the bourgeoisie, and a request for less mosquito spraying in the surrounding area of the park. The head of the government is a large spider that resembles a wolf spider, taking out refuge in the largest tree of the cluster. Communication has been relayed with the spider, who views the outside world as something that belongs to us that is merely being maintained by the bourgeois humanoids. It has given its name as benevolent leader. SCP-1006 is currently located in a cluster of black oak trees, within a massive and complex central web, and several secondary webs. The webs appear to be very well maintained, with damage being constantly repaired.  Closed study by arachnologists and sociologists have discovered that the members of SCP-1006 utilize a central collective think tank that passes on ideas of the benevolent leader to the collected numbers through complex frequencies in the web. Addendum The skeletal remains of a male human being were found in the area of the web, surrounded by dead insects in a variety of small shiny objects such as bottle caps and pebbles, along with the occasional pocket watch and bits of metal and apparent reverence. SCP-1006 does not allow the skeleton to be disturbed, but passive analysis indicates that the male died decades prior from a blunt trauma to the back of the head. The skeleton located near the body identifies him as a known political radical, reported missing from the nearby town of ██████, Texas, in 1976.