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The four corners of the new space economy – TechCrunch

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It’s gotten to the point now where a handful of angel investors can put a space company on the map. But the same changes that have made the industry accessible have made it increasingly complex to track its trends. By default, all space startups are exciting, but companies vary widely in risk, capital intensity and maturity. Here’s what you need to know about the four main areas of the new space economy.

Launch: playground of billionaires and forward thinkers

Perhaps simply the most exciting industry to be a part of today, orbital launch service has gone from a government-funded niche dominated by a handful of primes to a vibrant, growing community serving insatiable demand.

There’s a good reason why it was dominated for so long by the likes of ULA, whose Delta rockets took up a huge majority of missions for decades. The barrier to entry for launch is huge.

As such there are three ways to enter the sector: brute force, stealth, and novelty.

Brute force is how SpaceX and Blue Origin have managed to accomplish what they have. With billions in investment from people who don’t actually care whether money is made in the short term (or with Bezos, even in the long term), they can perform the research and engineering necessary to make a full-scale launch platform. Few of these can ever really exist, and participation is limited when they do. Fortunately we all reap the benefits when billionaires compete for space superiority.

Stealth, perhaps better described as smart positioning, is where you’ll find Rocket Lab. This New Zealand-based company didn’t appear out of nowhere — look at its timeline and you’ll see scaled-down tests being conducted more than a decade ago. But what founder Peter Beck and his crew did was anticipate the market and work doggedly towards a specific solution.

Rocket Lab is focused on small payloads, delivered with short turnaround time. This avoids the trouble of competing against billionaires and decades-old space dynasties because, really, this market didn’t exist until very recently.

“Responsive space, or launch on demand, is going to be increasingly important,” Beck said. “All satellites are vulnerable, be it from natural, accidental, or deliberate actions. As we see the growth and aging of small sat constellations, the need for replenishment will increase, leading to demand for single spacecraft to unique orbits. The ability to deploy new satellites to precise orbits in a matter of hours, not months or years, is critical to government and commercial satellite operators alike.”

Rocket Lab’s tenth launch, nicknamed “Running Out of Fingers.”

Investing in Rocket Lab early on would have seemed unexciting as for year after year they made measured progress but took on no cargo and made no money. Patience is the primary virtue here. But investors with foresight are looking back now on the company’s many successful launches and bright future and marveling that they ever doubted it.

The third category of launch is novelty: entirely new launch techniques like SpinLaunch or Leo Aerospace. The term may not inspire confidence, and that’s deliberate. Companies taking this approach are high-risk, high-reward propositions that often need serious funding before they can even prove the basic physical possibility of their launch technique. That’s not an investment everyone is comfortable making.

On the other hand, these are companies that, should they prove viable, may upend and collect a significant portion of the new and growing launch market. Here patience is not so much required as extra diligence and outside expertise to help separate the wheat from the chaff. Something like SpinLaunch may sound outlandish at first, but the Saturn V rocket still seems outlandish now, decades after it was built. Leaving the confines of established methods is how we move forward — but investors should be careful they don’t end up just blasting their cash into orbit.

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More signals of a Roaring '20s rebound for Canadian economy when pandemic ends – CBC.ca

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Gloomy headlines about the collapse of the Canadian economy, which faced its worst retreat since records began, may have obscured some startling new evidence for a strong rebound.

As we reported on Tuesday, the impact of the COVID-19 pandemic put Canada’s economy into a tailspin, making 2020 the worst year on record, with gross domestic product declining by 5.4 per cent.

But other data out this week, including some buried amidst those latest bleak GDP numbers, tells a different story. It shows that high levels of savings and government income support have bolstered the economic well-being of households — notably among the youngest groups and those with lower incomes.

At the same time, one fresh measure of consumer confidence shows Canadians more willing to go out and spend than at any time since 2018.

It all adds a little more evidence to the widely touted theory that, just like following the 1918 flu pandemic, the Canadian economy is heading for something like the Roaring Twenties — a period of economic, social and artistic innovation as people break out of cabin-fever mode.

Relentless joie de vivre

“What typically happens is people get less religious. They will relentlessly seek out social interactions in nightclubs and restaurants and sporting events and political rallies,” Yale University medical sociologist and physician Dr. Nicholas Christakis said on the CBC Radio program White Coat Black Art earlier this year.

“There’ll be some sexual licentiousness. People will start spending their money after having saved it. There’ll be joie de vivre and a kind of risk-taking, a kind of efflorescence of the arts, I think,” Christakis told host Dr. Brian Goldman.

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Like many others, Christakis in January foresaw the impact of the coronavirus lingering late into 2021, as the World Health Organization suggested herd immunity remained far away. But despite fears of more insidious variants, with a new flood of vaccines and signs of a sharp decline in cases south of the border, others have expressed greater optimism.

“By the time we get to the summer, we’re going to be in a different place,” Dr. Bonnie Henry, British Columbia’s provincial health officer, said last week. “In the coming months, we’re going to be able to do all those things that we have been missing for the last year.”

Bank of Canada governor Tiff Macklem has also weighed in on the side of a rebound beginning this year. Tuesday’s GDP figures showed the economy already starting to recover in the last three months of 2020, but that was before the most recent lockdown.

Despite beginning the year “in a deeper hole,” Macklem has forecast a strong revival in 2021 that would continue into next year, bolstered by the COVID-19 vaccine and low interest rates.

Not just for the rich

One criticism of the Roaring Twenties idea was that poorer households whose jobs have been most affected by the pandemic would be left out. But a report from Statistics Canada released on Monday dispelled some of those fears, demonstrating that the gap between the richest and poorest actually declined in the first nine months of last year.

“Although the everyday experiences of particular households may have differed, on average, the gap in household disposable income between the lowest- and highest-income earners declined,” the Statistics Canada report said.

In March 1929, the well-heeled strut their stuff at President Herbert Hoover’s inaugural ball, at the Mayflower Hotel in Washington, D.C. Before the year was over, the Roaring Twenties would come to an end and the Great Depression would begin. (Library of Congress/Handout via Reuters)

In fact, the data showed that “disposable income for the lowest-income households increased 36.8 per cent, more than for any other households.” Canada’s youngest households saw their net worth rise by 10 per cent. That may be a good sign for the economy once restrictions are reduced because unlike the rich or old, poorer and younger households are in a phase of life that requires them to spend more and save less, recirculating their money into the economy.

Besides government income-support programs, another reason for the increase in well-being is that families across Canada who already owned real estate have seen their wealth increase, even if the amount they owe has stayed the same.

Some studies have shown that “the wealth effect” — in other words, the feeling of being richer — can encourage people to spend more, but if people just sit on their savings, worried about the future, it won’t help the consumer-driven economy.

That’s why other sets of data out this week showing an increased willingness to spend adds a little more impetus to the Roaring Twenties argument.

Consumer-confidence measures use different methodologies to derive their results. The Conference Board of Canada — while seeing a rise in its index for February — still sees a ways to go before reaching pre-pandemic levels.

But a weekly index issued by Bloomberg and Nanos Research seems to show that consumers are ready to go shopping as confidence hits levels not seen since 2018.

If young people feel well-off once the pandemic ends, they’ll want to get out and kick up their heels, spreading money out into the wider community. Data from Statistics Canada shows that during the first nine months of 2020, the youngest households saw their net worth rise by 10 per cent. (Shannon Stapleton/Reuters)

“Anticipation of a vaccination rollout, even if not perfect, may be having a halo effect on the mood of consumers,” company boss Nik Nanos said in a release of his latest data on Monday. “Consumer confidence, as measured by the Bloomberg Nanos Canadian Confidence Index, continues on a positive trajectory and has hit a three-year high.”

Even if Canadians remain more restrained than in the 1920s post-pandemic revival, a new urge to go out and spend will spread the wealth, helping the economy to get back in gear.

Follow Don Pittis on Twitter: @don_pittis

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Australian economy storms ahead as COVID recovery turns 'V-shaped' – The Guardian

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By Swati Pandey

SYDNEY (Reuters) – Australia’s economy expanded at a much faster-than-expected pace in the final quarter of last year and all signs are that 2021 has started on a firm footing too helped by massive monetary and fiscal stimulus.

The economy accelerated 3.1% in the three months to December, data from the Australian Bureau of Statistics (ABS) showed on Wednesday, higher than forecasts for a 2.5% rise and follows an upwardly revised 3.4% gain in the third quarter.

Despite the best ever back-to-back quarters of growth, annual output still shrank 1.1%, underscoring the havoc wreaked by the coronavirus pandemic and suggesting policy support will still be needed for the A$2 trillion ($1.57 trillion) economy.

The Australian dollar rose about 10 pips to a day’s high of $0.7836 after the data while bond futures nudged lower with the three-year contract implying an yield of around 0.3% compared with the official cash rate of 0.1%.

“The ‘V-shaped’ nature of the recovery is everywhere to see – economic growth, the job market, retail spending and the housing market,” said Craig James, Sydney-based chief economist at CommSec.

James expects the economy to rebound 4.2% in 2021.

Data on credit and debit card spending by major banks as well as official figures on retail sales, employment and building activity point to a strong start for this year.

Marcel Thieliant, economist at Capital Economics, expects GDP growth of 4.5% in 2021, “which implies that allowing for the slump in net migration due to the closure of the border, the economy will suffer no permanent drop in output as a result of the pandemic.”

SUPPORT STILL NEEDED

Australia’s economy has performed better than its rich-world peers thanks to very low community transmission of COVID-19 together with massive and timely fiscal and monetary stimulus.

Its economic output declined 2.5% in 2020, far smaller than a 10% drop in United Kingdom, falls of 9% in Italy, 5% in Canada and more than 3% in the United States.

“Our economic recovery plan is working, and today’s national accounts is a testament to that fact,” Treasurer Josh Frydenberg said in a news conference. “The job is not done,” he added.

“There are challenges ahead. But you wouldn’t want to be in any other country but Australia as we begin 2021.”

To help blunt the economic shock from the pandemic-driven shutdowns, the Reserve Bank of Australia (RBA) slashed interest rates three times last year to a record low 0.1% and launched an unprecedented quantitative easing programme. The government announced a wage subsidy scheme to keep people in jobs while banks deferred payments on home loans and cut borrowing rates to help boost credit growth.

On Tuesday, the RBA re-committed to keep three-year yields at 0.1% until its employment and inflation objectives are met, which policymakers don’t expect until 2024 at the earliest.

Indeed, Wednesday’s data showed there was barely any domestic-driven inflation in the economy with the biggest price rises coming from commodity exports.

The RBA has repeatedly said the unemployment rate must fall to around 4% from above 6% now to help drive wages growth above 3% and for inflation to pop back into its 2-3% target band.

“Stimulus and support measures are still very much required,” CommSec’s James said. “Spare capacity will remain in the job market for a few more years, keeping the cash rate anchored at 0.1%.”

($1 = 1.2780 Australian dollars)

(Reporting by Swati Pandey; Editing by Sam Holmes)

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TSX boosted by better-than-expected GDP data

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(Reuters) – Canada‘s commodity-heavy main stock index rose on Tuesday, tracking a rise in oil and bullion prices and as data showed faster-than-expected annualized GDP growth.

* At 9:45 a.m. ET (14:45 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 61.85 points, or 0.34%, at 18,361.47.

* Canada‘s economy grew at an annualized rate of 9.6% in the fourth quarter, beating analyst expectations of 7.5% as a result of a large change in business inventories, Statistics Canada said on Tuesday, while December’s real GDP edged up 0.1%.

* Nine of the index’s 11 major sectors were higher, led by the healthcare sector.

* The energy sector climbed 1.7% as U.S. crude prices were up 0.4% a barrel, while Brent crude added 0.3% ahead of an OPEC+ meeting this week where producers are expected to ease supply curbs as economies start to slowly recover from the coronavirus crisis.

* The financials sector gained 0.6%, while industrials fell 0.3%.

* The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.4% as gold futures rose 0.1% to $1,724.7 an ounce

* On the TSX, 134 issues were higher, while 76 issues declined for a 1.76-to-1 ratio favouring gainers, with 25.43 million shares traded.

* The largest percentage gainers on the TSX were Spin Master Corp, which jumped 24.4% after quarterly earnings report and Aphria Inc, which rose 8.8%.

* Cascades Inc fell 3.5%, the most on the TSX, while the second biggest decliner was Lundin Mining, down 2.3%.

* The most heavily traded shares by volume were Suncor Energy, up 2%; Medipharm Labs, down 20.6%, and Great-West Lifeco, down 0.2%.

* The TSX posted 7 new 52-week highs and no new lows.

* Across all Canadian issues there were 27 new 52-week highs and one new low, with total volume of 55.03 million shares.

 

(Reporting by Devik Jain in Bengaluru; Editing by Shailesh Kuber)

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