Moving 40% of all freight around the US, railroads remain just as important today as they did back during their real hey day of the early 1900’s.

Which is why the potential for a railroad labor strike continues to bubble up in the news.

1/6

A shutdown in rail freight would leave cars and engines stranded on track, costing the US an estimated $2 billion per day of shutdown.

2/6

8 of the 12 railroad unions have voted yes on the most recent compensation package, 4 no. The package included:

• 25% raise
• $11,000 immediate backpay
• $1000 per year bonus

3/6

Now I don’t think the strike will stand for a long period of time if it does happen, if any one union strikes all the unions will honor the picket line.

However, with a majority of unions approving, Congress can force the deal to go through and outlaw a strike.

4/6

Congress doesn’t want to do this because Democrats hold the house and are very Union friendly but ultimately the Democrats negotiated this deal—which is not a bad deal—for the union—President Biden stepped in directly to help negotiate it in the months before the vote.

5/6

So it stands to reason that they’ll force them to accept it should a strike happen.

On the market side, if you’re curious, railroads are some of the best performing stocks over the past decade with the majors up on average about 425%.

/fin

https://twitter.com/phlndrws/status/1595204785938071553?s=20&t=MVYILKaYAXRjb_TAvKFRpA

The AI powered and new-era fintech lending companies are in a precarious position. Wild growth numbers that were expected to carry-on in perpetuity implied that the underlying economy would continue to support underwriting on consumer loans.

$UPST $LC $AFRM $PYPL

1/7

Of course, what's happening is that these companies--who don't hold their own originations--are at the whim of their banking partners tightening up lending standards as economic conditions deteriorate. 

i.e. Pass through lenders don't control their own destiny.

2/7

They can only "give" loans that their partner banks are willing to take on as risk. This could lead to higher interest rates for borrowers who then may reject the loans. And vice versa.

3/7

Belief from a lot of investors of the past decade is to think growth is always up and to the right and that there will always be loans to originate.

Hell, UPST was founded in 2012. The start of this huge bull market.

https://twitter.com/JonahLupton/status/1523760511577329664?s=20&t=syXePiiM8KCpZcwKPdqkKw

4/7

As a bonus these new lending companies have a mountain of competition against Buy-Now-Pay-Later, CCs, and traditional lenders. There is no shortage of options in the consumer lending space.

That lack of options was the catalyst for new entrants, so now it's kinda crowded.

5/7

We could see consolidation here if inflation continues and/or the economy rolls over.

If $UPST can't make loans they can't keep up growth rates.

If the economy swings around and consumers maintain solid credit footing, there may not be consolidation...

6/7

...but margin pressure could easily remain due to competition. 

$UPST currently ~4.5x sales and profitable. But if sales slip they may regret not having done another raise at $160/share, currently sitting on $986mil in cash. 

7/7

You can read the unrolled version of this thread here: https://typefully.com/phlndrws/CYAulGk

This is one of the ultimate problems with $FB, a red flag, and a main reason why, imo, they're currently losing the social media battle.

Forcing everybody to operate within your walled garden is a mistake when your now largest competitor ( #TikTok ) allows it's content to be freely shared (and rumor has it, possibly, indexed).

Think about what it says on the internal $FB attitude... "we're so important we're going to make you go through a laborious login process to see what someone wants to share with you"

Facebook isn't reading the room and isn't truly acknowledging the competition.

You can read the unrolled version of this thread here: https://typefully.com/phlndrws/FMUDE5Z