Cryptocurrencies at crossroads after annus horribilis

To borrow from Britain’s Queen Elizabeth, 2022 is not a year on which the cryptocurrency world shall look back with undiluted pleasure.

Crashes, contagion, collapses came in such quick succession that investors were, towards the end of the year, asking serious existential questions.

After all, the largest cryptocurrency, bitcoin, has not kept its head above water for more than a week at a time, and is down about three-quarters from last November’s $69,000 peak.

The market value of the 22,000-odd tokens and coins is now at less than a third of the peak $3 trillion in November 2021, and many of them are comatose, if not outright dead.

That’s been a brutal reality check for an industry that kicked 2022 off with dreams of widespread mainstream institutional adoption, of bitcoin supplanting even gold as the world’s inflation hedge, as well as endorsements from the likes of Tesla Inc chief Elon Musk and the wild celebration of billion-dollar non-fungible tokens.

Not only did cryptocurrencies get slammed by the Fed’s uber hawkishness, their slide also triggered the crash of a stablecoin called TerraUSD, that then wrought a ‘Lehman moment’ as funds and brokers such as Celsius and Voyager went bankrupt.

What some saw as the final nail in the crypto coffin was the collapse of Sam Bankman-Fried’s FTX exchange last month.

WHY IT MATTERS

Unlike in 2017, when bitcoin crashed just as spectacularly, there are far fewer diehard crypto buffs predicting a bounce this time.

Rather, 2022 has become the “I-told-you-so” case for regulators, who’ve largely maintained an arm’s length from the crypto world or even banned trading in cryptocurrencies.

The European Central Bank reckons bitcoin’s modest bounce this month is an “artificially induced last gasp before the road to irrelevance”.

Indeed, the one extenuating factor this year has been how mainstream finance has mostly escaped contagion. The excesses, the uncontrolled lending and fudging of billions of dollars have happened overwhelmingly within the crypto ecosystem.

At the same time, the idea that decentralised finance and private crypto coins can operate in the shadows of the traditional banking system, and thrive, now appears delusional.

As retail and institutional investors lose trust in crypto operators, a host of policymaker voices and even crypto barons are joining U.S. SEC Chair Gary Gensler in calling for regulation.

WHAT DOES 2023 HOLD?

UBS strategist James Malcolm points to the increasing correlation between cryptocurrencies and micro-cap U.S. stocks as testament to how bitcoin and other tokens could survive on the fringes, as a niche, diverse asset in investment portfolios.

“It’s wrong to say this thing is going to curl up and die completely because there are elements of it which can be useful in other areas, and there is probably a modest cryptocurrency market which will continue to thrive on the margin of financial markets,” he says.

Yet, the sort of regulation that investors need to feel safe dealing with crypto brokers and exchanges, be it transparency or capital adequacy, could take months, if not years to implement.

“Some asset managers are looking at this as a 10-15 year journey to digital assets becoming fully mainstream,” Morgan Stanley said in a note summarising the bank’s discussions with the crypto industry.

Next year could meanwhile see traditional financial world use the crypto malaise to up its game: snap up platforms and assets in the blockchain world, issue tokenised bonds and stocks or maybe even roll out more central bank digital currencies.

As UBS’s Malcolm says, it might just go to show that crypto was meant to be more “an evolutionary than a revolutionary development in financial markets.”

Source: reuters.com

Lucid Stock Rises as It Raises More than $1.5 billion

Lucid LCID –1.90% stock is rising in late trading Monday after the company said it has raised a substantial sum of money.

Monday evening, the EV startup announced it has taken in, or is about to take in, more than $1.5 billion in a couple of separate stock sales.

Lucid (LCID) sold about 56.2 million shares for about $600 million, finishing off the company’s at-the-market stock offering. An at-the-market offering allows a company to sell stock, from time to time, to raise money instead of a traditional offering where all sales are done at once and at one price.

The company is also raising $915 million in a private placement of approximately 85.7 million shares with affiliates of Saudi Arabian investment funds. The price paid for the 85.7 million shares will be the average price paid in the at-the-money stock offering. That price works out to about $10.68 a share.

Lucid stock has ranged from about $7 a share to $15 a share over the past three months.

Lucid stock is up almost 5% in after hours trading Monday at about $7.57 a share. Shares dropped 1.9% in regular hours trading while the S&P 500SPX –0.90% dropped 0.9% and the Nasdaq CompositeCOMP –1.49% shed 1.5%.

Cash is important for all EV startups these days. Most aren’t generating positive free cash flow and need external capital to continue to grow their businesses.

Lucid ended the third quarter with about $3.3 billion in cash on its books. That was expected to last until, roughly speaking, the end of 2023. The new $1.5-plus billion should last until early 2024.

Lucid will need more cash at some point in the future. Wall Street projects cash usage of about $2.7 billion and $2 billion in 2024 and 2025, repsectively.

With the new stock sales, Lucid should have roughly 1.8 billion shares outstanding, up about 8%.

Lucid stock is off about 81% year to date. Rising interest rates and inflation have hit car-related stocks harder than most in 2022. Lucid has also has problems ramping up production of its new luxury EVs. The company plans to ship about 6,500 units in 2022. In the summer, Lucid thought that number would be closer to 13,000.

Source: barrons.com

Charging infrastructure will ‘catapult General Motors to a leadership category’ in EVs: GM executive

General Motors (GM) CEO Mary Barra has never been shy about her ambition to overtake Tesla’s (TSLA) sales in an aim to become the global electric vehicle (EV) leader.

And with the advantage of having nearly 90% of the U.S. population within 10 miles of a GM dealership, a stat often cited by the company, GM Vice President of EV Ecosystem Hoss Hassani said the company’s expansive dealer program only helps to build further brand loyalty.

“That’s going to be hugely consequential to the decision of which EV people want to choose,” Hassani told. “We know that’s going to catapult General Motors to a leadership category in EVs.”

The carmaker is now calling on its network of dealers to help deploy up to 40,000 new charging stations across the U.S. GM took the initial steps in building out a national infrastructure to accelerate EV adoption last week, installing its first two level 2 chargers in Wisconsin and Michigan.

GM President Mark Reuss recently revealed that the company’s dealers serviced more than 11,000 Tesla vehicles, calling it a “growing business.”

GM’s Dealer Community Charging Program, first announced last year, calls on dealers to identify locations to install chargers, with a focus on community hubs like schools, libraries, and entertainment centers. Participating dealers are eligible to receive up to 10 19.2 kilowatt level 2 charging stations, allowing drivers to get a roughly 80% battery charge in under three hours, according to Hassani.

The program is part of a $750 million investment GM is making to rapidly expand its charging infrastructure as the company aims to go all-electric by 2035.

“Since we announced the program last year, we had a number of businesses reach out to us and say ‘I want to be a host for one of these locations,'” Hassani said. “And we think bringing everybody in, which is not just the driver of the vehicle but letting the communities participate, that is something that’s very core to General Motors’ identity and fabric in this community in this economy.”

‘GM’s ambition is to have everybody in an EV’

While higher gas prices helped EVs surpass 5% of new car sales in the U.S. this year, adoption still lags way behind European countries and China, the largest and fastest growing EV market globally.

In a recent study by Consumer Reports, more than 60% of respondents in the U.S. cited charging logistics as the key barrier to buying or leasing an EV. The current lack of charging infrastructure and concerns about the power grid’s ability to handle the EV load has also contributed to the slower adoption of electric vehicles.

Hassani said the speed and reliability of existing charging stations have been another concern. While GM’s program calls for 3,250 fast chargers to be deployed across the U.S. by the end of 2025, a majority of the existing chargers are level 2. Despite the slower rates, Hassani said they remain the most affordable option for drivers, with many offering free jolts through local businesses.

“One thing that is fundamentally different [from gas-powered vehicles] is the fact that charging is, in most cases, a daily ritual for folks at home,” Hassani said. “Whether they’re plugging it in overnight, like they do their phone, whether they’re going on a road trip — that is an experience they’re going to be having much more frequently and in a very good way.”

The Biden administration has made increasing EV charging infrastructure a key priority, calling for a $7.5 billion investment to build a network of half a million EV chargers nationwide. Just over 57,000 stations currently exist, according to data from the U.S. Department of Energy.

Building out critical infrastructure comes with an added incentive for GM, as it rapidly expands its portfolio of EVs. Hassani said the aim isn’t just to attract new EV drivers but build brand loyalty among existing customers who may not be on board with GM’s vehicles yet.

“GM’s ambition is to have everybody in an EV — not just seeing EVs in cities where we’re currently seeing a lot of adoption,” Hassani said. “That means in the heartland of the country and the middle of the country. For us, getting 40,000 chargers deployed across the U.S. and Canada in those communities that don’t have a single charger there today is hugely consequential.”

Source: finance.yahoo.com

401(k) and IRA Contributions: You Can Do Both

The Rules You Need to Know—Plus a Pitfall You’ll Want to Avoid.

Do you have a 401(k) plan through work? You can still contribute to a Roth IRA (individual retirement account) and/or traditional IRA as long as you meet the IRA’s eligibility requirements.

You might not be able to take a tax deduction for your traditional IRA contributions if you also have a 401(k), but that will not affect the amount you are allowed to contribute. In 2022, you can contribute up to $6,000, or $7,000 with a catch-up contribution for those 50 and over. In 2023, those amounts go up to $6,500 and $7,500.

It usually makes sense to contribute enough to your 401(k) account to get the maximum matching contribution from your employer. But adding an IRA to your retirement mix after that can provide you with more investment options and possibly lower fees than your 401(k) charges. A Roth IRA will also give you a source of tax-free income in retirement. Here are the rules you’ll need to know.

IRA Eligibility and Contribution Limits

The contribution limits for both traditional and Roth IRAs are $6,000 per year, plus a $1,000 catch-up contribution for those 50 and older, for tax year and 2022. In 2023, the limits are $6,500 for those under age 50 and $7,500 for those ages 50 and up.

You can split your contributions between different types of IRAs, for example by having both a traditional and a Roth IRA. But your total contribution cannot be higher than the limit for that year. Traditional and Roth IRAs also have some different rules regarding your contributions.

Traditional IRAs

Contributions to a traditional IRA are often tax-deductible. But if you are covered by a 401(k) or any other employer-sponsored plan, your modified adjusted gross income (MAGI) will determine how much of your contribution you can deduct, if any.

The following tables break it down:

IRS Publication 590-A explains how to calculate your deductible contribution if either you or your spouse is covered by a 401(k) plan.

Even if you don’t qualify for a deductible contribution, you can still benefit from the tax-deferred investment growth in an IRA by making a nondeductible contribution. If you do that, you will need to file IRS Form 8606 with your tax return for the year.

Roth IRAs

Roth IRAs provide no upfront tax benefit, and it doesn’t matter whether you have an employer plan. How much you can contribute, or whether you can contribute at all, is based on your tax-filing status and your income for the year.

This table shows the current income thresholds:

Spousal IRAs

You must have earned income to contribute to an IRA. However, there’s an exception for married couples where only one spouse works outside the home. That’s a spousal IRA. It allows the employed spouse to contribute to an IRA of a nonworking spouse and as much as double the family’s retirement savings. You can open a spousal IRA as either a traditional or a Roth account.

What if You Contribute Too Much?

If you discover that you contributed more to your IRA than you’re allowed, you’ll want to withdraw the amount of your overcontribution—and fast. Failure to do so in a timely way could leave you liable for a 6% excise tax every year on the amount that exceeds the limit.

The penalty is waived if you withdraw the money before you file your taxes for the year in which the contribution was made. You also need to calculate what your excess contributions earned while they were in the IRA and withdraw that amount from the account, as well.

The investment gain must also be included in your gross income for the year and taxed accordingly. What’s more, if you are under 59½, you’ll owe a 10% early withdrawal penalty on that amount.

Source: investopedia.com

Amazon goes TikTok. Here’s how it will work.

Amazon (AMZN) has begun rolling out a short-form video and photo feed in its app.

Though the feature, called Inspire, immediately drew comparisons to TikTok, Oliver Messenger, director of Amazon Shopping, told that it wasn’t TikTok’s success that encouraged the company to build Inspire – it was customer feedback.

“We spend a lot of time listening to customers,” said Messenger. “We have survey sessions, we have usability labs, and there are also ways within the app and website that lend themselves to actually submit feedback. This was something that we noticed people were asking for repeatedly.”

To be sure, the app’s interface certainly looks TikTok-esque. And the fact that Amazon’s wading into short-form video certainly reflects how just how popular the format has become.

However, Amazon’s Inspire is a different project than TikTok itself in key ways, according to the company. For one thing, Amazon Inspire looks to solve a longstanding pain point in Amazon’s marketplace – that it’s a place where it’s easy to find what you know you want— but hard to find something you didn’t know you wanted.

Amazon has been taking steps to solve this, particularly through its Amazon Influencer Program which allows content creators to review and endorse products on Amazon. Inspire is building on that, said Messenger.

“Customers, on one hand, were asking for this serendipitous, more open-ended way to shop,” he said. “We have this awesome section of [influencer] content that we’re continuing to get in, as well. We sort of melded the two and made it personalized and tailored.”

Inspire looks to to bolster and build on Amazon’s existing influencer content, which spans products from fitness to fashion to cooking. If you’re, say, looking for a pan, Amazon wants to help you, with the aid of its influencer content, find the right one for you.

“More immersive?”

Amazon’s not the only Big Tech name that’s looking to capitalize on TikTok’s success. Google-owned (GOOG, GOOGL) YouTube launched YouTube Shorts to compete with TikTok. In February, Meta (META) unveiled its Instagram Shorts feature globally.

Amazon’s goal: Inspire will eventually help set up a “more immersive” shopping experience on Amazon’s app, one where discovery is built-in. The company hopes this can make the Amazon Shopping app somewhere you might just, well, hang out more. For instance, if you’re looking for earrings, Amazon wants to be the place where you not only buy earrings, but where you will figure out which ones you want.

“It’s streamlined in the sense that it’s tailored to you and your interests,” said Messenger. “When you start up Inspire, we ask you: What are you interested in? What do you want to see? You can create, cite your hobbies or types of things you’re into—and your feed will learn from that.”

To get started, customers in the Amazon Shopping app will tap a “lightbulb” icon, and will then choose their interests to inform their feed.

“It’s also deliberately not streamlined in the sense that we’ll show you content that you maybe didn’t expect from a range of brands, creators, and customers in line with those interests, but it’s content that you may not…have found yourself,” Messenger added.

Amazon Inspire is currently available only to select customers; its launch began in early December. The feature will be available to all Amazon customers sometime next year, and the current goal is Q1, according to Messenger.

Inspire will, of course, be operating in an increasingly crowded short-form video marketplace; TikTok, owned by Beijing-based ByteDance, has thus far remained the platform to beat as its grown more adept at not only facilitating engagement, but at optimizing advertising, according to Insider Intelligence.

Amazon shares are down about 44% year-to-date, as of market open Thursday.

Source: finance.yahoo.com

History says the Fed can’t meet its inflation goal without a recession

Forget about a soft landing in 2023.

Should the Fed achieve its goal of reducing inflation, it’s all but guaranteeing a punishing recession next year caused by a rapidly deteriorating labor market.

As Myles Udland laid out in Thursday’s Morning Brief, Fed Chair Powell strained credulity at his latest press conference while attempting to make the case for a potential soft landing next year that sees inflation come down without the economy contracting.

Powell struggled to fit the FOMC’s own predictions about the economy next year into a narrative that avoids a hard landing — or recession.

Powell hammered home the strong job market and didn’t mince words when he said, “There’s an imbalance in the labor market between supply and demand,” noting that it will take a “substantial period” to get the labor market back in equilibrium.

At issue for the Fed has been inflation, which is currently running well above its 2% target.

In November, headline inflation as measured by the Consumer Price Index (CPI) came in at 7.1% over the prior year. In June of this year, inflation topped out north of 9%.

The Fed’s forecasts released on Wednesday showed inflation slowing next year as unemployment rises. But with inflation standing at 3.5% by year-end 2023, the Fed’s own projections show prices still rising at an unacceptable rate.

And as Alfonso “Alf” Peccatiello at The Macro Compass notes, one surefire way to bring down inflation is a recession.

Since 1960, every recession except the pandemic-induced downturn of 2020 kicked off with inflation running at 3.7% or hotter. And only in 1974 did the recession end with inflation higher than 2.7%.

Also at issue for Powell and the Fed is that despite insisting 0.5% GDP growth in 2023 offers evidence refuting recession suggestions inferred from their forecasts, the labor market outlook is less ambiguous.

The Sahm Rule is a relatively new Fed model which has correctly predicted the last nine recessions and done so much faster than they were officially declared in real time. The recession alert is triggered when the three-month moving average of the unemployment rate moves over 0.50% above its lowest low of the last 12 months.

The current 12-month low in unemployment is 3.5%. So if and when the 3-month average climbs above 4.0%, that would suggest the economy is already in recession.

Even if we mark this local low from November’s unemployment rate of 3.7% and move the Sahm Rule trigger to 4.2%, the Fed’s outlook still looks hairy. The Fed is predicting an unemployment rate of 4.6% by the end of next year, so it’s easy to see where the fault in the central bank’s argument lies.

But if we take Powell’s comments and the Fed’s forecasts together, we see any anti-recession arguments end up being mostly academic.

The goal for this Fed is to bring down inflation, and bring it down in a big way.

“Without price stability, the economy doesn’t work for anyone,” Powell said Wednesday.

“There will be some softening in labor market conditions,” Powell said. “And I wish there were a completely painless way to restore price stability. There isn’t. And this is the best we can do.”

Source: finance.yahoo.com

Glennmont Partners enters U.S. renewables market with solar joint venture

Europe-based renewable energy investor Glennmont Partners plans to enter the U.S. renewables market for the first time via a joint venture with solar developer GreenGo Energy US to develop over 1 gigawatt of solar and storage projects.

Glennmont and GreenGo Energy US, a subsidiary of GreenGo Energy Group, will develop both combined and stand-alone solar photovoltaic and energy storage projects with the first projects expected to come online in 2025.

The U.S. renewables market has become increasingly attractive for investors since the $430 billion Inflation Reduction Act was introduced this year. The huge green subsidy package has introduced production tax credits for nuclear and solar power and investment tax credits for energy storage.

Dries Bruyland, head of U.S. at Glennmont Partners, said the act also provides long-term stability for investment over the next 10 years.

“This deal with GreenGo ensures Glennmont is well-placed to capitalise on the vast opportunities in the U.S. for the deployment of solar and storage right now as we work to accelerate the energy transition in new markets,” he told.

The firm declined to disclose the value of the deal.

To help meet climate targets, many countries are providing incentives to promote the development of renewable energy sources such as solar and wind.

Energy storage is seen as essential in the energy transition as it can compensate for shortfalls in generation from intermittent renewables and be released when there is high demand.

Glennmont Partners is one of Europe’s largest fund managers focusing on investment in clean energy infrastructure. Owned by infrastructure equity firm Nuveen, it has around 3.8 billion euros ($4.04 billion) of assets under management across Europe.

Source: reuters.com

U.S. crude stocks soar by more than 10 million barrels – EIA

U.S. crude oil stockpiles rose by more than 10 million barrels last week, the most since March 2021, buoyed by releases from the Strategic Petroleum Reserve and as refiners reduced activity.

Crude inventories increased by 10.2 million barrels in the week ended Dec. 9 to 424.1 million barrels, compared with analysts’ expectations in a Reuters poll for a 3.6 million-barrel drop.

The crude stockpile figure included a 2.26 million per day (bpd) adjustment. Kpler analyst Matt Smith attributed the adjustment to exports which were considerably lower on the U.S. Gulf last week than the EIA reported.

The sharp crude build come as a recession threatens economies in the United States and Europe, worrying markets about demand for crude oil and petroleum products.

SPR crude inventories fell by 4.7 million barrels in the week to 382.3 million, their lowest since January 1984, while stocks at the Cushing, Oklahoma, delivery hub for U.s futures rose by 426,000 barrels, the EIA said.

Last week’s shutdown of the Keystone pipeline, which ferries about 620,000 bpd of crude from Canada to the United States, is expected to hit inventories at Cushing and Gulf Coast.

Refinery crude runs fell by 459,000 bpd last week, the EIA said, reducing overall utilization rates by 3.3 percentage points to 92.2% of total capacity.

“(Refiners) were just making too much product and had to pull back on the refiner utilization rate and that’s going to tempt builds,” said Bob Yawger, director of energy futures at Mizuho.

U.S. gasoline stocks rose by 4.5 million barrels in the week to 223.6 million barrels, the EIA said, compared with expectations for a 2.7 million-barrel rise.​

Similarly, distillate stockpiles, which include diesel and heating oil, rose by 1.4 million barrels in the week to 120.2 million barrels, the EIA data showed, versus expectations for a 2.5 million-barrel rise.

Net U.S. crude imports fell last week by 31,000 bpd, the EIA said.

Crude futures, already trading higher during the day, extended gains after the data release. Brent crude was up $1.23, or 1.5%, to $81.92 a barrel, while U.S. crude gained $1.16, or 1.6%, to $76.54 a barrel as of 10:45 a.m. EST (1545 GMT).

Source: reuters.com

Apple Just Launched Its First New App in Years — and It Can Transform the Way You Plan Travel

Available as of Dec. 13, with the latest iOS, Freeform is a blank canvas that you can use as a vision board to plan future trips.

Apple has launched a new tool that can help you plan your travels — and it all starts as a blank canvas. Launched at 1 p.m. ET on Dec. 13, 2022, with the latest iOS update on iPhone, iPad, and desktop, the Freeform app is an infinite whiteboard that allows users to pull in content across various sources, including websites, photos, videos, and files.

In short, it’s a digital travel inspiration board, or a vacation mood board, if you will.

The boards live in iCloud, so that you can jump in and out of them on any device whenever a thought strikes. But they can also be shared with multiple users collaborating on the same board, so they can be a constant works in progress as you figure out the details of your dream getaway with your travel mates.

Not sure if you should stay at a resort or a vacation rental? Make a pros and cons list and let everyone add their thoughts. Overwhelmed by all the things to do in a city? Block them all out with stickies and visualize your day-to-day itinerary. Juggling various restaurant choices from all your guests? Have them all share links to their picks, then choose the ones with the best reviews.

When you open up Freeform, all you see is a gigantic blank canvas. The icons across the top then provide you with the elements needed to let your creativity flow. On desktop, the first icon is Stickies, which can be color-coded, but also have alignment guides to keep your boards neat and tidy. The next element are shapes, with a library of more than 700 graphics, including a category of places (with images ranging from globes to specific landmarks like Rome’s Colosseum and New York City’s Statue of Liberty) and transportation (with planes, bridges, tall ships, and even a rocket ship — if you’re ready to blast off).

The final three icons hit all the basics: one to insert text boxes; another for photos, videos, and web links; and the final one for files. But the beauty is the ease of each one. Text boxes can easily be dragged out to adjust the size (similar to Instagram Stories). Photos and videos can be clicked to magnify into high-fidelity versions, while the preview cards of web links immediately take you to the site. And if it’s a file — for instance, a PDF of a restaurant menu or a tour itinerary — it will open right to the file.

On iPad, Freeform becomes even more of a real-life vision board as users can write and draw directly on the boards with an Apple Pencil, making it almost like a digital scrapbook. Files from Apple’s Notes and Reminders apps can also be inserted seamlessly onto the canvas. And perhaps one of the most impressive functions is that tangible items can be scanned and placed right onto the board with the phone’s camera in a single step.

The beauty of Freeform is that even though it’s perfect for travel planning, it’s also adaptable to many other projects, whether it’s a plotting out the workflow for a professional project, brainstorming ideas for that screenplay you’ve always dreamed of, or even just playing games like Hangman with pals from across the country.

“Freeform opens up endless possibilities for iPhone, iPad, and Mac users to visually collaborate,” said Bob Borchers, Apple’s vice president of worldwide product marketing, in a statement. “With an infinite canvas, support for uploading a wide range of files, iCloud integration, and collaboration capabilities, Freeform creates a shared space for brainstorming that users can take anywhere.”

As the first app that Apple has released in years, the company is thrilled to see how users take to the app and the creative ways in which they will use it — and especially all the places they’ll go. After all, the main purpose of the app is in its tagline: “Bring your ideas to life.”

The Freeform app is free to iPhone users on iOS 16.2, iPad users on 16.2, and Mac users on Ventura MacOS Venture 13.1.

Source: sports.yahoo.com

‘Avatar: The Way of Water’ is the first great high frame rate movie

Avatar: The Way of Water is a triumph. As a sequel to the highest-grossing film ever, which was criticized for its formulaic story (and the surprisingly small ripple it had on pop culture), the new movie is a genuine surprise. It’s a sweeping epic that reflects on the nature of families, our relationship to the natural world and humanity’s endless thirst for violence and plunder. Fans of the original film often had to make excuses for writer and director James Cameron’s stilted script, but that’s no longer the case for The Way of Water, thanks to additional help from Amanda Silver and Rick Jaffa (who both worked on the recent criminally under-loved Planet of the Apes trilogy).

Perhaps most impressive, though, is that James Cameron has managed to craft the best high frame rate (HFR) movie yet. Certain scenes play back at 48 frames per second, giving them a smoother and more realistic sheen compared to the standard 24fps. That leads to 3D action scenes that feel incredibly immersive — at times HFR can make you forget that the lush alien wildlife on Pandora isn’t real.

Unlike the handful of high frame rate movies we’ve already seen – The Hobbit trilogy, as well as Ang Lee’s Gemini Man and Billy Lynn’s Long Half-Time Walk – the Avatar sequel deploys the technology in a unique way. Rather than using HFR throughout the entire movie, Cameron relies on it for major action sequences, while slower dialog scenes appear as if they’re running at 24fps. To do that, the entire film actually runs at 48fps, while the calmer scenes use doubled frames to trick your brain into seeing them at the typical theatrical frame rate.

If this sounds a bit confusing, your brain may have a similar reaction while watching the film. The Way of Water often jumps from hyper-real HFR to pseudo-24 fps in the same scene — at one point, I counted around a dozen switches in a few minutes. This is a strategy Cameron has been discussing for years. In 2016, he noted that HFR is “a tool, not a format,” and later he rejected Ang Lee’s attempt at using HFR for Gemini Man’s entire runtime.

Cameron’s dual-pronged approach to HFR is bound to be controversial. Even for someone who appreciates what the technology has to offer — pristine 3D action scenes with no blurring or strobing — it took me a while to get used to flipping between high frame rate and 24 fps footage. With Gemini Man, my brain got used to the hyper-reality of HFR within 15 minutes. In The Way of Water, I was almost keeping an eye out for when the footage changed.

Despite the distracting format changes, The Way of Water’s high frame rate footage ultimately worked for me. At times, the film appears to be a window into the world of Pandora, with breathtaking shots of lush forests and lush oceans. It makes all of Cameron’s creations, from enormous flying fish-like creatures that you can ride, to alien whales with advanced language, appear as if they’re living and breathing creatures. HFR also works in tandem with the sequel’s more modern CG animation, making the Na’vi and their culture feel all the more real.

Over the film’s three hour and twelve-minute runtime, I eventually managed to see what the director was aiming for, even if his ambition exceeded his grasp. (Cameron, who has the world’s first [Avatar] and third-highest grossing films [Titanic] under his belt, and who dove into the Marianas Trench in a self-designed personal submarine, suggests you can use the bathroom anytime you want during The Way of Water. You’ll just catch up the next time you see it in theaters. Baller.)

The re-release of Avatar earlier this month also used a combination of HFR and traditional footage (in addition to brightening the picture and upscaling the film to 4K). But even though that revamp grossed over $70 million on its own, there hasn’t been much discussion about how it integrated high frame rate footage. (I saw it on a Regal RPX screen, which offered 3D but no extra frames, sadly.) There’s a better chance you’ll be able to catch Avatar: The Way of Water exactly how Cameron intended. It’ll be screening in 4K, HFR and 3D at all AMC Dolby Cinema locations and select IMAX theaters (single laser screens get everything, some dual-laser screens will only offer 2K 3D with HFR). While you could see it in 2D, why would you?

After suffering through the interminable Hobbit movies in HFR, I figured the technology was mostly a waste of time, yet another money-grab that Hollywood can use to pump up ticket prices. Director Peter Jackson struggled to recreate the magic of his Lord of the Rings trilogy, and amid production issues, he also failed to change the way he shot the Hobbit films to account for HFR. So that led to sets that looked like they were ripped from B-grade fantasy movies and costumes that seemingly came from a Spirit Halloween pop-up.

Ang Lee’s more studious attempts at using the technology, especially with the action scenes in Gemini Man, convinced me HFR still had some potential. But even he struggled along the way. Billy Lynn’s Long Half-Time Walk is a cinematic curiosity, where HFR makes slow dialog scenes appear too distractingly real. Gemini Man was cursed by a messy script and the need to be a big-budget Will Smith blockbuster.

Avatar: The Way of Water benefits from the creative failures of all of the earlier high frame rate films. For many, it’ll be their introduction to this technology, so it’ll be interesting to see how general audiences respond. Video games and hyper-real YouTube action footage have made 60fps footage far more common, so I could see younger audiences, those raised on hundreds of hours of Minecraft and Fortnite, vibing with Cameron’s vision. Everyone else will need more convincing. For me, though, I’m just glad there’s finally a high frame rate film that’s genuinely great, instead of just a technical exercise.

Source: engadget.com