Tag: Bitcoin (page 1 of 27)

Think Bitcoin Is A Bubble? Here’s Your Chance To Short It

Has the fact that the price of a single bitcoin has risen nearly eight-fold so far this year prompted you to turn bearish on the world's most valuable digital currency?

Well, here’s your chance to short it. 

A Swiss asset-management firm called Vontobel launched a new futures product on Friday that will make it easier for retail investors to short bitcoin.

Bitcoin of course recently bounced back to all-time highs after a more-than $1,000 drop last week. Traders who were short made a killing on their positions. But cashing in on the drop would’ve been far easier with new futures products designed to let customers bet against the bitcoin price.

The contracts, which will trade on the SIX Exchange, will enable investors to profit even if the currency – which has proven vulnerable to vicious selloffs – falls in value. According to Reuters, the company will release two mini futures, a type of derivatives instrument that represents a fraction of the value of standard futures, making it easier for retail traders to access the market.

According to Eric Blattmann, head of public distribution of financial products at Vontobel, the news comes at a time when traditional traders are simply looking for more options when it comes to trading cryptocurrencies.

Swiss investment solutions provider Leonteq Securities AG also announced the launch of a separate product. Leonteq’s product has a two-month maturity, while Vontobel’s is longer, but investors can of course exit their positions early since each product will trade on an exchange.

He said in statements:

"We have seen big demand for our long tracker certificate from investors interested in playing the upside potential of bitcoin and now they have also the possibility to hedge their position or go short."

Manuel Durr, head of public solutions at Leonteq, said clients appreciate being able to open long or short positions in bitcoin.

“The initial feedback has been extremely positive,” said Manuel Dürr, head of public solutions at Leonteq. “Clients do very much appreciate the possibility of choosing between a long or a short investment in bitcoin.”

The move comes after US derivatives exchange CME Group announced it would start trading bitcoin derivatives next month.

Already, New York-based startup LedgerX is offering live cryptocurrency futures trading, with $1 million traded in its first week.

While some exchanges have allowed customers to open short positions on margin, the Vontobel contract has become the easiest way for retail traders to short the digital currency. We wonder: Could this help inject more two-way volatility and slow, or perhaps even reverse, bitcoin's meteoric rise?

But if you’re looking to short the world’s most valuable digital currency, The Vontobel mini-futures are probably your best bet.

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Financial Times: Sell Bitcoin Because The Market Is About To Become “Civilized”

On 31 October 2017, we discussed the announcement that the CME Group was responding to client interest and launching a Bitcoin Futures contract before the end of this year. CME stated that the contract would be cash settled based on the CME CF Bitcoin Reference rate, a once-a-day reference rate of the US dollar Bitcoin price at 4.00pm London time. In the run-up to the launch of the futures contract, the Financial Times has written a piece on the likely impact of futures trading on the Bitcoin price.

The title of the piece makes the FT’s view clear, “Prepare to bet against bitcoin as it becomes civilised”. We disagree with using the word “civilised” in this context (see below), but here is the FT’s take. 

In recent years, bitcoin has been the wild west of the financial world. Now, however, it is being civilised — a touch. In the coming weeks, the Chicago Mercantile Exchange plans to start listing bitcoin futures, with a centralised clearing mechanism. Cboe Global Markets may follow suit. That will enable investors to bet on the coin’s future value without actually holding it — just as investors can use the Chicago exchange to bet on hog prices, say, without ever handling a pig.

To its credit, the FT reflects the concerns from some CME participants that there is insufficient regulatory oversight and Bitcoin’s stratospheric vol could lead to significant losses for some traders.

Is this a good idea? Some of the CME’s members do not think so. This week Interactive Brokers, an important clearing firm in the exchange, took the extraordinary step of using a newspaper advertisement to ask for more regulatory oversight. It fears that bitcoin is potentially so volatile that these futures will create huge losses for traders, which might then undermine the health of the CME and hurt other brokers, given its part-mutualised structure. The CME — unsurprisingly — dismisses this as poppycock: it argues that any risks will be contained by rules that allow traders to charge more so as to generate fat margins (of about 30 per cent) and thus absorb losses, and by circuit breakers that would stop a trade in the event of wild price swings.

Our suspicion is that CME Group has seen the volume of Bitcoin trading and is determined to get its “cut”, whether or not some of its members take some big hits or not. It can deal with those issues if or when they occur. Anyway, the FT moves on to the more interesting subject of the impact on Bitcoin’s price. We should note that when the futures contract was announced the price surged more than $100 to a then all-time high of $645.

But while the regulatory debate bubbles on, there is a more immediate question facing investors: bitcoin prices. Until now, it has been an article of faith among bitcoin evangelists that if — or when — the currency became more “civilised”, this will boost the price. After all, the argument goes, assimilating bitcoin into the mainstream investment world should boost its appeal and demand, making it more valuable.

As the FT alludes to in the articles title, it expects the Bitcoin price to fall.

It is highly likely there will be an opposite effect. Until now, investors have not had an easy way to bet against bitcoin — the only “short” was to sell coins. But the CME futures contract will let investors place those negative bets. You do not need to be a conspiracy theorist to imagine that some bitcoin cynics will be doing just that.

To support its case, the FT cites the example of Japan launching equity derivatives in 1989, just before the bubble burst.

Think, for example, about Japan. Before the mid-1980s, its stock market seemed to exist on a planet of its own, subject to its own valuation rules. But when Japanese equity derivative contracts were launched, and then integrated within the wider global market system as a result of financial reform, that sense of “otherness” broke down. The change in how Japan was seen through a comparative investment lens was not the only reason for the 1990 Nikkei crash, but it contributed.

We have a slight problem with using this as an analogy for Bitcoin. Firstly, an ultra-hawkish BOJ-governor was nominated in mid-1989 who announced his intention to crackdown on house price inflation and the shadow banking system which was facilitating much of the leverage. Secondly, all bubbles burst and Japan’s was extreme. For example, depending on whether you use the highest per square metre property deal in the Ginza district, or one in the Chiyoda district, the land underneath the Imperial Palace was valued between $852 billion and $5.1 trillion at the time. Futures trading, we would suggest, played a tiny role.

The FT cites the launch of trading in the ABX Index prior to the sub-prime crisis, as another example.

So too with US mortgages. Until 2005 or so, outsiders could not easily assess or price the risks of America’s subprime mortgages: mortgage-backed bond prices were opaque, and the only way to short the market was to sell bonds. But when mortgage derivatives, such as the ABX index, were launched, it suddenly became easy to make negative bets. Then, the ABX index was published in newspapers, such as the Financial Times, in 2007, creating a visible barometer of sentiment. That helped a sense of panic to feed on itself after 2008.

Once again, we would suggest the FT is confusing the impact of derivatives with an inevitable reversion of market price of an asset in a bubble as expectations regarding the outlook changed. In the case of sub-prime, housing prices in the US had never fallen, then they did, the AAA-ratings of the bonds were manifestly incorrect and the dramatically overpriced sub-prime bonds were pledged as collateral in all manner of other risky, leveraged trades.

From our perspective, the impact of the futures launch is difficult to gauge as it depends on the interaction of two opposing forces.

Firstly, as cryptocurrencies gradually become accepted as an asset class, more institutional money is likely to enter the sector and holding long futures positions is one way to do it.

 

Secondly, as the article notes, Bitcoin futures will be settled in cash, which means there is potential for the volume of futures trading to vastly outweigh the buying and selling of “actual” Bitcoins. If this occurs, then the “tail can wag the dog” as price discovery is dominated by futures trading. This permits all manner of market abuse via naked short selling by investors, major banks and any “official” players who deem it necessary to manipulate the Bitcoin price.

For this reason, we don’t agree that adding a futures contract will necessarily “civilise” Bitcoin, indeed, it might have the opposite effect.

The second scenario precisely describes the state of the “gold” market today. According to the Reserve Bank of India’s estimate, the ratio of “paper gold” trading to physical gold trading is 92:1, meaning that the price of gold on the screens has almost nothing to do with the buying and selling of physical gold. This makes the gold market and, therefore, the gold price something of a mockery. As Zero Hedge has highlighted time after time, the gold price has frequently been subject to waterfall declines, as huge volumes of gold futures are dumped on the market with no regard for price. See "Gold Slammed After Someone Pukes $4bn Notional In Gold Futures" on 10 November 2017. Perhaps the FT journalist, Gillian Tett, could write an article on gold, instead of Bitcoin, explaining how the price of the former – a widely viewed indicator of financial risk – is being suppressed by derivative trading. Indeed, Tett was present at a private dinner in Scott’s of Mayfair several years ago when the Gold Anti-Trust Action Committee gave a presentation on exactly the same process which she expects to lower the Bitcoin price.

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Gold Gains As Stocks Slide, Yield Curve Crashes, & Dollar Dumps

Economic Data continues to surprise to the upside (compared to what had been terrible expectations)…is this as good as it gets?

But credit, the yield curve, and now stocks are not loving it…

 

Small Caps were the only major index green today…

 

The Dow and S&P 500- fell for the 2nd week in a row – something they haven't done for 3 months…Small Caps best on the week (followed by Nasdaq thanks to yesterday's panic buy)…

 

Futures show the crazy moves this week better..

 

VIX was slammed late on today in a desperat ebid to get the S&P green on the week…

 

But while stocks rebounded briefly, FX carry wasn't…

 

And nor was the bond market…

 

Big week for tax-related stocks…

 

SFIX went public today at $15…

 

While US HY bond prices ended the week higher (thanks to yesterday's melt up)…but still remains well below its 200DMA…

 

US HY spreads rose for the 4th week in a row…

 

European HY Fund assets crashed to their lowest since June 2016…

 

Treasuries were mixed on the week with the front-end higher in yield and back-end lower….

 

The US Treasury yield curve crashed almost 10bps this week – the biggest flattening since Dec 2016 to its flattest since Nov 2007

 

Note that is the flattest 2s10s since Oct 2007… The last 3 times it was this flat, the US economy was in recession…

 

The Dollar Index had its worst week in over 2 months, dropping to 1-month lows… (this is also the first consective weekly decline in the dollar index since July)

 

Yen and Euro strength weighed the most on the dollar this week… (AUD and CAD were weaker as oil slipped)

 

USDJPY was clubbed like a baby seal this week (worst in 2 months) – (today was USDJPY's worst drop since May). It seems 114.000 to 112.00 is the corridor…

 

Gold had its best week in over a month, surging back above its 50DMA towards the $1300 level…

GOLD

 

Bitcoin had another big week – getting as close to $8000 as possible… (up 45% from its lows last weekend)…

 

Finally, we note that in the weeks since MbS launched his 'corruption' crackdown in Saudi Arabia, only one asset has really shone…

 

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“Did Mike Pence Buy A Diet Dr.Pepper For A Woman That Was Not His Wife?”

Authored by James Howard Kunstler via Kunstler.com,

If only abortion were retroactive, we could suitably deal with monsters like Senator Al Franken (D – MN), who apparently ventured to apply a breast adjustment to a female colleague asleep on the military airplane winging them home from USO duty in Afghanistan. This was back in the day when Senator Franken was a professional entertainer, a clown to be precise, but his career shift to politics has rendered all his prior clowning anathema.

Will he slink out of the senate in disgrace with (ahem) his tail between his legs? Or will he bunker in and wait until the mega-storm of sexual accusation roars on to strand some bigger, flashier fish on the shoals of ignominy?

Perhaps we’ll soon learn that Warren Buffet repeatedly shagged his notoriously over-taxed secretary in the Berkshire Hathaway janitor’s closet.

Or that Mike Pence once bought a diet Dr. Pepper for a woman who was not his wife!

Seems to me this storm could roar and roil on until ninety-plus percent of the men in America are exposed as sex monsters and expelled from every workplace in the land. And then America can feel good about itself again. At least until the bond market blows up, or Kim Jung Fatboy sends a rocket over Rancho Cuckamonga.

But in the meantime, this scourging of male wickedness raises some interesting questions about human dynamics vis-a-vis workplace dynamics.

I (for one, apparently) find it amusing that people are shocked to learn that sexual favors are swapped for career advancement in show business, where sheer narcissism buys more than Bitcoin. The remedy, I suppose, will be to put an end to show business – except its doing a pretty good job of accomplishing that itself, especially the art-form formerly known as the movies. But what about the gazillion other less-glamorous business activities out there: the actuarial suites, the dental offices, the WalMart middle management departments?

I would begin with the recognition that human sexuality is a pretty potent and mischievous component of basic biology. In, say, the much maligned “cis” world of gender relations, people in the workplace surely feel a fairly constant cognitive tug of awareness that they are in the presence of the opposite sex. If nothing else, there is the pheromone thing: the involuntary wafting about of hormonal chemicals that signal sexual possibility, though not necessarily opportunity. It may be considered primitive and inconvenient, but it’s there anyway.

That being so, one obvious question is: what happened to manners, the once-conventional device for managing impulse control.

Narcissism does explain a lot, since that mental state prompts the treatment of other people as mere objects of utility rather than persons on a transect of mutual respect. But in the new sexual harassment workplace regime, a mere polite inquiry of romantic interest might provoke punishment, so that even an unmarried true gentleman asking a female co-worker out for a drink after work might be construed as a firing offense.

Offendedness has gone viral in America these days.

The rewards are a pretty sure thing for the offendee, ranging from simple brownie points to the offendedness powerball lottery of a $32 million payoff for getting seriously roughed up by a wealthy mug such as Bill O’Reilly. My guess is that the suppression of even gentlemanly approaches to women only pushes things to that darker and harsher edge of the gradient of male behavior, where the latent chimpanzee lurks.

It’s inconceivable to me that we are going to eliminate sexual mischief on-the-job as long as men and women are mixed together in work that can be done by anybody. The situation would be less toxic if genuine misbehavior was reported to bosses or to the police directly, instead of waiting twenty years to call up MSNBC, and if asking for a date, or proffering a compliment, were not treated as vile and inexcusable.

Of course, once all the predators are cleaned out of the corporate C-suites, we’ll still be stuck with a spectacularly trashy contemporary culture, saturated with inducements for all kinds of theoretically decent people to behave badly. Mainly what’s being accomplished in the current hysteria is reinforcement of the idea that the weaker sex is just that, but with a raging denial that they require some kind of protection.

* * *

This seemed particularly timely…

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Bitcoin Nears $8000 After SegWit2x Fork

Despite miner support dropping to a mere 7% the SegWit2x fork is being attempted and for now there is no major impact aside to note that Bitcoin is rising on the day – testing $8000 for the first time.

Bitcoin is now up 45% from its lows last weekend…hitting $7997 this morning…

As Spencer Bogart (@CremeDeLaCrypto) notes, today's Bitcoin rally looks like a rotation out of other crypto-assets and into Bitcoin to make sure they receive coins on both sides of the Segwit2x fork, which has seen a small resurgence of interest. Most detrimental to BCH.

It's been quite a ride…

  • $0   – $1000: 1789 days
  • $1000- $2000: 1271 days
  • $2000- $3000: 23 days
  • $3000- $4000: 62 days
  • $4000- $5000: 61 days
  • $5000- $6000: 8 days
  • $6000- $7000: 13 days
  • $7000- $8000: 14 days

Source: JackFru1t

As Cryptovest reports, the relative date of the SegWit2X hard fork came on November 17, at 2:50 GMT+2 time. 

Block 494,784 and the next block was mined by AntPool, a miner that did not signal support for SegWit2x. No peculiarities were seen in the new blocks.

After the block was passed, there were no immediate news on performing a fork from any known entity. But a few hours before the block, some expected the event would go through and a minority chain would appear, supported by a fraction of miners.

At least 48 hours may be needed to see if mining is happening and at what hashing power and speeds.

According to CoinDance, the new chain could not survive: 

At the same time, an entity called Bitcoin2X may be the force behind the new chain. Yet it is unknown if actual blocks would manage to appear. 

At the very least, the hard fork day may have frozen some resources on Coinbase, GDAX or other exchanges around the time of the potential network split, to avoid problems with moving the coins in conditions with unknown replay protection.

*  *  *

Specifically, with regard the SegWit2x fork, Coinbase issued a statement clarifying some of the details:

There have been a number of developments with Bitcoin Segwit2x since our last update.

Coinbase is actively monitoring this situation and will make every attempt to allow customers to benefit from this fork if it results in a safe and functioning network. No action is required and all funds stored on Coinbase remain safe.

Last week, the Segwit2x development team announced they would no longer continue with the project.

In addition, a significant portion of miners and other community leaders withdrew their support for the fork. However, despite these developments, a small number of miners may attempt to go forward with a fork.

We wanted to provide clarity about the potential outcomes of the fork and what Coinbase will do in each scenario.

To protect customer funds, Coinbase will disable Bitcoin sends and receives at 2 am Pacific Time on November 17th, and disable buys and sells an hour before the fork, which is currently predicted to occur between 6am to 8am Pacific Time on November 17th. All functionality will be re-enabled shortly afterwards.

Scenario 1: network is unusable

If support for the fork remains at current levels, or decreases, the Bitcoin2x network will be unusable. Coinbase will not support withdrawals or trading as it will not be possible to move these assets. Currently we believe this is the most likely scenario. If the network gains support at a later date, we will enable Bitcoin2x withdrawals from the platform.

 

Scenario 2: network is usable

If transactions are being confirmed at a reasonable speed, and miner support is strong, we will allow Coinbase customers to withdraw Bitcoin2x. We will not immediately enable buys and sells as previously stated, but we may enable them at a later date.

We operate by the principle that our customers should benefit to the greatest extent possible from hard forks or other unexpected events. We have invested significant resources to make sure we can prepare for each scenario, and if there is a stable and functioning network we will give customers access to Bitcoin2x funds.

We continue to work on Bitcoin Cash and are on track for January 1, 2018.

*  *  *

Finally, Jeroen Blokland provides an excellent chart summarizing reality for 'Bitcoin' as it forks…

 

So the full value of the original Bitcoin is approaching $9,500.

http://WarMachines.com

As Bitcoin Nears $8000, American Investors Plan To ‘HODL’ Until It Hits $196,000

Overnight saw the price of Bitcoin surge to $7997 following Zimbabwe chaos and defaults in Venezuela, rebounding from 'the world is ending' $5555 last weekend.

However, if American investors are to be believed, the cryptocurrency has a long way to go before they are selling

As CoinTelegraph reports, a new survey among Americans indicates that the average investor will not coimpletely exit Bitcoin until its price hits $196,000…

image courtesy of CoinTelegraph

LendEdu commissioned a survey in November 2017 of 564 Americans who had invested in Bitcoin. While surveys have been done in the past to gauge the awareness of the general public about Bitcoin, this survey focused on American Bitcoin investors and their sentiments.

We have come a long way from 2015, when 65% of Americans surveyed didn't know what Bitcoin was. The questions asked in the survey ranged from their reasons for investing in Bitcoin to when they would sell all their Bitcoins.

Sell all your Bitcoin?

The average price at which the survey respondents said that they will sell all their Bitcoins is $196,166 per Bitcoin. This represents 30x the value of Bitcoin prevailing at the time of the survey. It is to be noted that this is the price at which the respondents will sell all their Bitcoins. Almost a third (32.62%) have sold some of their Bitcoins since they started investing. It is tempting to book profits, given how the price of Bitcoin has rallied in the last year.

Most of the respondents plan to hold their Bitcoins at least one year, with only 16.49% planning to sell sooner than that. According to the survey, 21% of Bitcoin investors plan to hold on to their coins for at least seven years, and 11.7% say they will hold the currency for 10 years or longer.

Store of value or speculative investment?

While pundits debate whether people are investing in Bitcoin because they treat it as a store of value or as a speculative investment, the survey results indicate something completely different. According to LendEdu:

“The most popular selection, chosen by 40.78 percent of respondents, was "I believe Bitcoin is a world changing technology." It is interesting to see that the plurality of Bitcoin investors are backing the technology as the primary reason for investing. Often, financial professionals speculate that Bitcoin investors are chasing a big payout.”

It seems that the naysayers are wrong, and these aren’t merely “greater fools” chasing huge gains. Instead, American Bitcoin investors are apparently sophisticated enough to realize the value of the project’s technology.

The next largest group of respondents see Bitcoin as something akin to digital gold:

“The second most popular reason why investors liked Bitcoin, chosen by 21.81 percent of respondents, was for the possibility of long term storage of value of it. Many financial professionals often compare Bitcoin to precious metals like gold, silver, and platinum. For centuries, investors have used precious metals as a way to diversify away from government backed currency.”

Worried About Safety

Another big takeaway from the survey is that almost half (44.15%) of the respondents were worried about the technological safety of their Bitcoins. This isn't surprising, considering high profile cases such as Mt. Gox. That exchange, the largest in the world by volume, went bust and its former CEO was arrested in Japan on embezzlement charges. He has pleaded not guilty.

In addition to the ill-fated Mt. Gox, numerous other exchanges have faced security problems. Multiple exchanges have been hacked and their customers’ Bitcoins have been lost. While Bitcoin holders can follow certain practices like keeping their Bitcoins in cold storage to increase security, the survey shows that ordinary investors continue to worry about the safety of their coins.

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India’s Continued War on Gold Causes a Monstrous Increase in Silver Imports

 

India’s Continued War on Gold Causes a Monstrous Increase in Silver Imports

Written by Nathan McDonald, Sprott Money News

 

India's Continued War on Gold Causes a Montrous Increase in Silver Imports - Nathan McDonald

 

For anyone that has followed my writing for some period of time, you will remember the series that I wrote, which broke down India’s war on gold and how it was going to fail in its goal – and fail spectacularly it did.

 

 

This series went on and through time, my initial estimations were proven correct – the officially reported number of gold imports did indeed crash, but this was simply because the black market exploded. Smuggling of gold into India increased dramatically and all kinds of innovative ways of getting the metal into the country at reduced costs were created. The free market exerted its will and as always, won the day.

 

 

Undoubtedly, there was some reduction in imports, but not as much as the government of India was hoping for. Yet, there was one other prediction that was made during this time period, of which has also been proven correct through time. The demand for silver was going to explode.

 

 

India in the past has had a history of being the largest importer of the yellow metal, which it has only recently been dethroned from. Their appetite for gold is insatiable and therefore it was only logical to assume that a large percentage of the funds intended to flow into gold, were going to go to the next best thing: silver.

 

 

This has and continues to prove to be the case. As reported, imports of silver in September exploded higher, increasing by a whopping 152% year over year! This is coming on the back of an already significant surge seen in the month of August.

 

 

566.778 tons of silver were imported throughout the month of September, up from 225 tons in September 2016. This is a massive and huge increase, indicating that India’s appetite for precious metals not only remains strong, but is increasing, despite the government’s best efforts to clamp down on it. In fact, this was the highest level seen since 2009.

 

Meanwhile, in the West, precious metals continue to be scorned and ridiculed, cast aside and forgotten as the latest and greatest thing continues to siphon funds out of this market. Cryptocurrencies, led by Bitcoin, continue to drain funds that would otherwise have gone into the precious metals space.

 

This is not entirely a bad thing, unless you are fully committed to the precious metals space. As many of you know, I have been a long time supporter of Bitcoin, writing about its value from its infancy. But, still, as I have always stated, it is no replacement for gold and silver, which have stood the test of time for over 10,000 years and will continue to do so for the foreseeable future. They are two different assets and
play two different roles in the protection of your portfolio.

 

I expect 2018 to be the year of gold and silver’s resurgence after the monumental explosion seen throughout this year in the price of Bitcoin. This will be a price increase that has made many feel like they have “missed the boat”, which will cause them to search for other opportunities.

 

I expect the West to once again wake from its slumber and take cues from countries such as Russia, China and India, who continue to take prudent steps and diversify into hard assets.

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

 

India’s Continued War on Gold Causes a Monstrous Increase in Silver Imports

Written by Nathan McDonald, Sprott Money News

 

http://WarMachines.com

Frontrunning: November 16

  • Senate Panel Approves Tax Plan as GOP Leaders Gird for Fight (BBG)
  • U.S. towns, cities fear taxpayer revolt if Republicans kill deduction (Reuters)
  • After House Victory, Tax-Overhaul Fight Now Goes to Senate (WSJ)
  • Analysts flee Wall Street with gallows humor as research changes loom (Reuters)
  • Tesla Unveils ‘World’s Fastest Production Car’ and Electric Big Rig (BBG)
  • Bitcoin Emerges as Crisis Currency in Hotspots (BBG)
  • Ivanka Trump and the fugitive from Panama (Reuters)
  • Murdoch Empire in Play as Suitors Line Up for 21st Century Fox Assets (WSJ)
  • Franken Case Puts Both Parties in Bind on Misconduct Response (BBG)
  • Crime Wave Engulfs Sweden as Fraud, Sexual Offenses Reach Record (BBG)
  • Google Has Picked an Answer for You—Too Bad It’s Often Wrong (WSJ)
  • Saudi Arabia swapping assets for freedom of some held in graft purge: sources (Reuters)
  • Metal recyclers prepare for electric car revolution (Reuters)
  • Despite Big Push From Beijing, Electric Cars Struggle in China (WSJ)
  • Harvard’s Days as the World’s Richest School May Be Numbered (Reuters)
  • Sears Dials Up Discounts to Record Levels as It Copes With Slump (BBG)
  • Zimbabwe’s Mugabe Makes First Public Appearance Since Military Takeover (WSJ)
  • Hassett Bets on 3% U.S. Growth That Summers Sees in Fairyland (BBG)
  • Two Weeks of Frenzied Negotiations Led to Bank-Relief Deal (WSJ)

 

Overnight Media Digest

WSJ

– The House of Representatives passed a bill that would usher in the most far-reaching overhaul of the U.S. tax system in 31 years, a plan that would reduce the corporate tax rate to its lowest point since 1939 and cut individual taxes for most households in 2018. on.wsj.com/2j1JjUr

– New suitors are circling Twenty-First Century Fox Inc , affirming that the media empire built by Rupert Murdoch is now in play. Comcast Corp has approached the media company. Verizon Communications Inc and Sony Corp are also kicking the tires. on.wsj.com/2j0i38O

– A federal judge declared a mistrial in the corruption trial of U.S. Sen. Bob Menendez, giving the Democrat a political lifeline and preserving his party’s control of the seat for the near future. on.wsj.com/2j1LebB

– Meredith Corp has made a takeover bid for storied magazine publisher Time Inc in the range of $17 to $20 a share, according to people familiar with the situation. on.wsj.com/2j0Ht6p

– An activist investor in Barnes & Noble Inc has proposed a transaction that would take the bookseller private with the help of current shareholders and a hefty dose of borrowings, an effort that could face formidable obstacles. on.wsj.com/2j0EvP6

– Emerson Electric Co boosted its takeover offer for Rockwell Automation Inc, ratcheting up an effort to bring its reluctant rival to the negotiating table and forge a new giant in industrial automation. on.wsj.com/2j21qd2

 

NYT

– With 227 Republican votes, the House passed the most sweeping tax overhaul in three decades on Thursday as U.S. lawmakers seek to enact $1.5 trillion in tax cuts for businesses and individuals and deliver the first major legislative achievement of President Donald Trump’s tenure. nyti.ms/2hDqQRs

– The cable company Comcast Corp is in preliminary talks to buy entertainment assets owned by Twenty-First Century Fox Inc, including a vast overseas television distribution business. nyti.ms/2hxkbof

– Tesla Inc has aimed to reinvent the automobile and the way electricity is generated for homes. In a presentation by its chief executive, Elon Musk, Tesla unveiled a prototype for a battery-powered, nearly self-driving semi truck that the company said would prove more efficient and less costly to operate than the diesel trucks that now haul goods across the country. nyti.ms/2zJPgzU

– The senior American diplomat at the United Nations climate talks in Germany told world leaders on Thursday that the United States would remain engaged in global climate change negotiations even as it planned to exit the Paris agreement “at the earliest opportunity.” nyti.ms/2ySE1Bd

– The Federal Communications Commission voted on Thursday to allow a single company to own a newspaper and television and radio stations in the same town, reversing a decades-old rule aimed at preventing any individual or company from having too much power over local coverage. nyti.ms/2zN7YpA


Britain

The Times

* Prudential Plc is scaling up its ambitions in Asia with plans to open a fund management venture in China and to double in size in the region every few years. bit.ly/2jxRjAk

* WPP said it was prepared to increase its stake in Asatsu-DK, one of the largest marketing services companies in Japan, to about a third after requests from other shareholders. bit.ly/2jwULvg

The Guardian

* The business secretary, Greg Clark, has been urged by the GMB union to block the proposed merger of German energy group Innogy’s British unit, npower with SSE’s British retail supply business .bit.ly/2jxZCMG

* The chief executive designate of GKN, Kevin Cummings, has been ousted from the FTSE 100 company weeks before he was due to take up the top job at the aerospace and engineering firm. bit.ly/2jz3GvX

The Telegraph

* Jaguar Land Rover has quietly started testing driverless cars on British roads that are simultaneously being used by the general public, in a clear indication that Britain’s biggest manufacturer is determined the country will play a leading role in the race to develop autonomous vehicles. bit.ly/2jyNx9Z

* The Serious Fraud Office has made its first charges against Unaoil employees in relation to a corruption scandal that has engulfed the oil and gas industry. bit.ly/2jy7he2

Sky News

* The boss of U.S. investment bank Goldman Sachs, Lloyd Blankfein, has used his latest Twitter post on Brexit to suggest a second referendum is held. bit.ly/2jyVwnr

* The GMB union’s Scotland secretary, Gary Smith, has told Sky News a dispute threatening 1,400 jobs is a battle for the future of skilled manufacturing in Scotland. bit.ly/2jy60U4

The Independent

* Rail passengers on the UK’s leading long-distance network face disruption and cancellations after Virgin Trains staff belonging to the RMT union voted to strike by a majority of 10 to one. ind.pn/2jvIwil

* Retail sales continued to grow in October according to the latest official data, easing some of the fears of a plunge in consumer spending. A survey of retailers by the CBI had suggested the fastest rate of decline in sales in October since the UK’s last recession in 2009. ind.pn/2jyWfFb

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After Slamming Bitcoin As A Money Laundering Tool, JPMorgan Busted For Money Laundering

Score one for the poetic irony pages.

Two months after JPMorgan CEO Jamie Dimon lashed out at bitcoin, calling it a “fraud” which is “worse than tulip bulbs, warning it won’t end well”, will “blow up” and “someone is going to get killed” and threatened that “any trader trading bitcoin” will be “fired for being stupid” as it was merely a tool for money-laundering, today Swiss daily Handelszeitung reported that the Swiss subsidiary of JPMorgan was sanctioned by the Swiss regulator, FINMA, over money laundering and “seriously violating supervision laws.”

As the newspaper adds, the Swiss sanctions relate to breaches of due diligence in connection with money laundering standards. In other words, JPMorgan was actively aiding and abeting criminal money laundering.

The report further notes, the Finma decision was issued on June 30 and should have been published the following week but JPMorganm tried to prevent the publication of the judgment. More recently, the Federal Administrative Court dismissed the appeal.

In response to money-laundering violation, JPM said that in support of safety and soundness of global monetary system, “we have made and continue to make significant enhancements to the firm’s AML program to ensure we are meeting regulatory expectations,” according to an emailed statement sent to Bloomberg.

Unfortunately, JPMorgan also said that it can’t, or rather won’t, provide further details since the Finma resolution from June 2017 isn’t public.

This means that anyone wondering if Jamie Dimon’s bank was using (and thus trading) bitcoin to circumvent Swiss anti-money laundering regulations, will just have to ask Jamie Dimon in person during his next public appearance.  

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Bitcoin Surges Near $8000 Record Highs After Venezuela Default

We have already discussed the hyperbitcoinization of the Venezuelan economy and it appears, judging by the most recent surge, that tonight's 'official' default events for the sovereign (and PDVSA) have triggered a further rush to the 'safety' of a decentralized store of wealth…

As we noted previously, Venezuela’s worsening economic collapse has created something of a social experiment in the use of a digital currency as a de facto currency – a phenomenon that’s also playing out in troubled Zimbabwe.

According to TheNational.ae, bitcoin adoption in Zimbabwe is seemingly skyrocketing as the country’s economic situation looks bleak. So much so, that one bitcoin is trading at nearly $10,000 on the Golix.io exchange, while the global average is, at press time, of $5,642.00.

 

According to a local trader, bitcoin isn’t just being bought by individuals, but by businesses with bills to pay. The country adopted the U.S. dollar back in 2009 as its fiat currency, as the Zimbabwean dollar had lost nearly all its value.

 

At press time, LocalBitcoins Zimbabwe has people buying bitcoin at the global average, and some buying the cryptocurrency for cash for well over $10,000 in the country’s capital. Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.

And as inflation in Venezuela has spiraled further out of control – by one estimated, it peaked above 2,400% in September – more Venezuelans are resorting to mining bitcoin, litecoin and other digital currencies as a means of coping with the country's out-of-control hyperinflation and surviving in a country where staples like food and medicine are scarce.

And then, moments after ISDA found that Venezuela had triggered its Credit Default Swaps by failing to repay its debt on time, Bitcoin surged over $500 to new record highs just shy of $8000.

With the collapse of the economy and now default, Venezuelans are running out of options. Bitcoin – just like gold – will come as a saving grace to many people. It has kept food on the tables of families, helped Venezuelans escape the distraught nation, and acted as a voice of rebellion against the oppressive government. But how Maduro’s regime will proceed remains to be seen.

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Nasdaq, Bitcoin Surge To Record Highs As China Saves The World

IP surges (thanks to hurricanes), Congress passes a tax bill that has no hope of passing the senate, but a huge Chinese liquidity injection sends stocks soaring and proves…

 

Seemingly thanks to a Risk Parity rebound…

And a huge China liquidity injection…

“The increase in cash additions will help soothe market sentiment,” said Qin Han, chief fixed-income analyst at Guotai Junan Securities Co.

And indeed it did: US equity markets soared today… (Small Caps and Trannies best, Dow and S&P lagged but up big)

 

Which sent Nasdaq back to record highs..

 

VIX was pushed back under 12 but that is well above the 10 handle when stocks last hit these highs… NOTE the weak close in S&P futs (after running stops)…

 

Stocks decoupled from bonds…

 

And Stocks decoupled from FX…

 

And Stocks even decoupled from VIX…

 

HYG (High yield bond ETF) also surged most in 8 months… NOTE it filled the last two days gaps lower…

 

Having ripped off its most oversold since March (note the perfect cymmetry with today's move.. and what happens next)

 

Treasury yields were higher on the day… (with a notable selkloff late in the day)

 

But until the last 30 mins, the curve had drifted very modestly lower…

 

The Dollar Index drifted lower on the day – despite the yield, stock gains…

 

Gold managed very small gains on the day but WTI Crude fell lower (testing $54 handle twice)

NOTE – WTI futs are rolling to Jan 18.

 

Gold remains the best performer since Saudi unleahsed its chaos…

 

Finally, we noted that Bitcoin has ripped over 40% higher off the weekend's lows – back to previous record highs…

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Leonardo Painting Sells For A Record $450 Million (Or 62,500 Bitcoin)

How do you know we are living through the biggest bubble in history? Simple: when a painting, doesn’t matter who the artist is, doesn’t matter who rare and prized, sells for half a billion dollars.

A rediscovered painting by Leonardo da Vinci broke the record price for art at an auction on Wednesday night, selling for just over $450 million (or a bargain basement 62,500 bitcoin to the Chinese money launderer who bought it) at Christie’s in New York. The last da Vinci in private hands sold nearly 4 times above its estimated price after a fevered, 90-minute long round of bidding. It is widely believed to be the most expensive piece of art ever sold.

The 500-year-old “Christ as Salvator Mundi,” which was originally estimated at $100 million, was the star of Christie’s evening sale of postwar and contemporary art, what Bloomberg described an unconventional move by the auction house because of its vintage. The previous auction record for an Old Master painting was held by Peter Paul Rubens, whose “The Massacre of the Innocents” fetched $76.5 million in 2002.

“Salvator Mundi,” Latin for Saviour of the World, was one of only 15 surviving works by Leonardo da Vinci and depicts Jesus Christ in a flowing robe, holding a crystal orb and raising his right hand in benediction.

The 67.5cm tall portrait, which once belonged to England’s King Charles I in the 17th century, disappeared around 1900. In 2005, it was bought at an estate sale and, after six years of research and restoration, attributed to da Vinci, the first such rediscovery in more than 100 years. Before the auction, Christie’s secured an irrevocable $100 million bid by an anonymous investor meaning it was sure to sell.

The painting, called “Salvator Mundi,” Italian for “Savior of the World,” is one of fewer than 20 paintings by Leonardo known to exist and the only one in private hands. It was being sold by Russian billionaire Dmitry Rybolovlev’s family trust. The fertilizer king purchased it for $127.5 million in 2013 and it’s been at the heart of an international legal battle. Rybolovlev assembled a $2 billion trove with the help of art entrepreneur Yves Bouvier, but in recent years has been selling off works from the collection, often at steep discounts.

Well, even he will be happy with the 250% return in just 4 years. Also happy will be Christies: the $450 price also includes $50.3 million in premiums paid to Christie’s for its services by the buyer.

Jussi Pylkkanen, auctioneer for the evening, opened bidding on the piece at $70m and offers rapidly vaulted higher, according to the FT. Gasps broke out throughout the salesroom in Rockefeller Centre when an offer hit $200m. Bidders interested in the Da Vinci — lot 9 of the evening’s sale — were given special red paddles in the salesroom, a move the auction house attributed to the work’s high worth, although much of the action was fuelled by phone bidders.

Some more details on the painting’s troubled recent history:

Following its rediscovery and sale in 2013, the painting was at the centre of a legal feud between current owner Dmitry Rybolovlev, the Russian billionaire and owner of AS Monaco football club, and Yves Bouvier, the owner of Natural Le Coultre, one of the largest fine art storage and shipping specialists.

 

The protracted legal battle centred around claims that Mr Bouvier allegedly bought the painting for $80m and sold it to Mr Rybolovlev for $127.5m, a near $50m difference. A small group of critics have even questioned the painting’s authenticity.

After its original disappearance, the painting was acquired in 2005, badly damaged and partly painted-over, by a consortium of art dealers who paid less than $10,000 (8,445 euros). The art dealers restored the painting and documented its authenticity as a work by Leonardo.

Christie’s says most scholars agree that the painting is by Leonardo, though some critics have questioned the attribution and some say the extensive restoration muddies the work’s authorship. Christie’s capitalized on the public’s interest in Leonardo, considered one of the greatest artists of all time, with a media campaign that labeled the painting “The Last Da Vinci.” The work was exhibited in Hong Kong, San Francisco, London and New York before the sale.

* * *

Other paintings on offer on Wednesday evening included works by Mark Rothko, Jean-Michel Basquiat, Keith Haring, Cy Twombly, and Andy Warhol. Christie’s said it was in part the inclusion of the 32ft Warhol painting Sixty Last Suppers, which riffed on Da Vinci’s famed The Last Supper, that the house attempted to secure ‘Salvator Mundi’ for auction. ‘Sixty Last Suppers’ features a black-and-white silkscreen grid of 60 prints of ‘The Last Supper’ and was among the last works created by Mr Warhol before his death in 1987.

And just to confirm that everything around you is indeed one giant bubble, the exquisite piece of modernist “art” you see below, sold for more than $46 million.

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Bitcoin Price Soars To $13,000 In Desperate Zimbabwe

We noted in June that Zimbabwe's cash crisis continued unabated.

Those awaiting cash transfers at a bank may wait a month to be cleared and, even then, the transfer may be refused.

The Standard, Zimbabwe’s leading Sunday newspaper, ran an article at the time entitled, “Black market thrives, as banks run dry.”

Some highlights from that article:

HARARE’S Road Port has become the unofficial bank of last resort, never short of cash, no queues and a multicurrency platform. The money market at this busy bus terminus now plays the role that the formal banking sector has failed. It is effectively making a mockery of the Reserve Bank of Zimbabwe (RBZ).

This points to the nature of black markets. They thrive based upon fulfilling an existing need, not upon government control. They therefore replace whatever services the official market fails to provide.

“Top government officials, supermarket owners and service stations were behind the thriving black market, which is never short of cash.”

And now it appears many Zimbabweans have found an alternate way to store/transfer wealth away from Mugabe's prying (and confiscatory) eyes.

In September we noted the hyperbitcoinization occurring in Zimbabwe. In October, Zimbabwe demand started to impact the global price of the cryptocurrency, and two weeks ago we noted the doubling of the price of Bitcoin in Zimbabwe as uncertainty about the nation's stability sent citizens into a decentralized currency that was out of Mugabe's reach.

image courtesy of CoinTelegraph

Now, after the military coup confirms the average joe's fears, Bitcoin is trading at over $13,000 on Zimbabwe exchange Golix – a premium of over 80% over the USD exchange price as demand surged.

 

And the order book is full…

Bloomberg reports that demand for bitcoin in Zimbabwe has surged amid a shortage of hard currency.

Golix processed more than $1 million of transactions in the past 30 days, compared with turnover of $100,000 for the whole of 2016, according to data on the exchange’s website.

Zimbabwe doesn’t have its own currency, with the government adopting the U.S. dollar and South African rand, among others, as legal tender in 2009 after hyperinflation rendered the local dollar worthless.

According to a local trader, bitcoin isn’t just being bought by individuals, but by businesses with bills to pay.

Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.

*  *  *

As CoinTelegraph noted previously, Zimbabwe is beginning to act like an interesting case study for what happens when a country begins to collapse around its monetary system – it is also being witnessed in Venezuela.

Moving money out of Zimbabwe is starting to become impossible, and as people try and flee monetarily out of the crumbling state, they are finding refuge in Bitcoin.

Soon, banks in Zimbabwe have stated that Visa debit cards would no longer be usable for international payments without prior arrangements and pre-funding with hard currency.

“You will be required to make prior limit arrangements with the bank,” Stanbic said in a message to depositors last week.

Econet Wireless has also stopped foreign payments on its MasterCard linked EcoCash mobile money debit card.

Bitcoin as a refuge

Because of the decentralized nature of Bitcoin, there is no impact on it from this political upheaval, in fact, it is only benefiting from it. The Bitcoin premium of almost 100 percent is not because of the political issues, rather the high demand surrounding worry of collapse.

Bitcoin again shows its potential and power when the banking system again shows its potential for mass collapse and hysteria.

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Forget Bitcoin: This Nanocap Stock Is Up 500% Today (& Nobody Knows Why)

Forget Bitcoin; ignore Roku… it's time to look at nano-cap medical device-maker CHF Solutions – which is up almost 500% today on absolutely no news whatsover…

$10mm market cap, CHF Solutions, Inc. distributes health care products. The Company provides commercialization of medical devices for the treatment of fluid overload, heart failures, and other cardiac diseases. CHF Solutions serves customers in the United States.

Efficient markets… (halted 14 times so far)

Over 100x the average volume and as Doug House explains, no particular news accounts for the action.

Two days ago, it filed an amendment to a prospectus for a potential offering of preferred stock, common stock and warrants.

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