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After the mysterious assassination of a well-known Palestinian engineer and academic in Malaysia over the weekend, Israel's defense minister issued a statement denying accusations that the Israeli spy agency Mossad was behind the killing. 

Dr Fadi Mohammed al-Batash, 35, had been living with his family in Malaysia for the past ten years and was a university professor in the field of electrical engineering. Batash was further recently employed by the Energy Authority in the Gaza Strip and had long held a position as lecturer at the British-Malaysian Institute at the University of Kuala Lumpur, according to Israel's YNet news. Israeli officials have recently accused him of being a rocket expert and downplayed his advisory work connected to Gaza's civilian infrastructure. 

Multiple international reports indicate that as Batash made his way from his home in Kuala Lumpur to a nearby neighborhood mosque for dawn prayers sometime around 6am, a motorcycle drove by and two unidentified men unleashed a volley of ten shots, at least four of which hit Batash in the head and body, killing him on the spot. 

Witnesses say the killers had European features. 

Dr Fadi Mohammed al-Batash, 35, is shown in a poster displayed during a Hamas rally. Image source: AP via Times of Israel.

Importantly, Malaysian authorities immediately classified the crime as a "targeted assassination" as others had been present at the scene but only Batash was killed. Security cameras had reportedly captured footage of the killing, and police say they have evidence that the killers had followed the Palestinian scientist for up to twenty minutes beforehand.  

Hamas immediately claimed the victim as one of their own, calling him a "martyr" but stopping short of directly pointing blame at Israeli intelligence. However, Hamas affiliated media groups did make the accusation along with Batash's own family, who issued a statement saying, "We accuse the Mossad of being behind the assassination."

Israel's YNet news described the murky circumstances behind the assassination based on local police reports:

According to Malaysian media reports, the assassins, who were described by witnesses as "white men" with "European features," were driving a powerful BMW 1100cc motorbike. Security camera footage showed they waited for Albatsh for 20 minutes until he arrived at the scene.

"Preliminary investigations found four gunshot wounds on the victim's body. Two bullet slugs were found at the scene of the incident," Kuala Lumpur police chief Mazlan Lazim said in a statement.

The police said it believes "this was a targeted killed and not a terror attack, because there were other people at the scene but the assassins focused only on (al-Batash)."

Israeli officials were quick to point to Palestinian factional infighting as the likely reason for the killing.

And Defense Minister Avigdor Lieberman emphasized Batash's role in engineering Hamas rockets, telling Haaretz: "He wasn't involved with improving the electricity grid or infrastructure and water. We have heard the announcements by the heads of the Hamas taking responsibility for the man, explaining he was involved with the production of rockets, with improving the rockets' accuracy."

Lieberman added further, "A settling of scores among terrorist organizations, among terrorists, among various factions, is something that we see from time to time. I assume that's also what occurred in this case."

Yahoo News: Malaysian forensic police cordon off the area where a Palestinian scientist and Hamas member, Fadi Mohammad al-Batsch, was assassinated in Kuala Lumpur on April 21, 2018. Image source: AFP

Meanwhile, Palestinian activists have pointed to a long history of Israeli assassinations of Palestinian, Iranian, and Syrian scientists, engineers, and notable figures living abroad.

One recent instance involved a Tunisian drone expert who was accused of designing weaponized drones for Hamas. His bullet-riddled body was found in his car near his home in Sfax, Tunisia in 2016. Some of the evidence left behind included rental cars and guns equipped with silencers

Another notable headline grabbing operation, reportedly by Mossad agents, occurred in 2010 and resulted in the assassination of a top Hamas commander who had checked into a high end Dubai hotel after flying from Syria.

An eleven man Israeli hit squad had entered the hotel while dressed in tennis gear and carrying tennis rackets, and were later reported to be traveling on fake Irish and French passports. After conducting surveillance the Mossad agents got Hamas' Mahmoud al-Mabhouh to open his hotel room door and quickly suffocated him without arousing suspicion from other hotel guests. By the time the body was discovered, the assassins had flown out of Dubai to various locations around the world and were never seen again. 

And in 2015 a secret document revealed by The Intercept as part of the Edward Snowden leaked NSA archives confirmed that Israeli agents had assassinated a top Syrian general and personal aide to President Assad in 2008 while the general dined at his family home near Tartus, along the Syrian coast.

The daring operation involved Israeli naval commandos and snipers targeting Gen. Muhammad Suleiman's house from the waters of the Mediterranean and shooting him in the head and neck. Israel considered him responsible for coordinating weapons and supplies between Iran and Lebanese Hezbollah, as well as overseeing an alleged nascent nuclear development program at Syria’s Al Kibar facility which had previously been bombed by Israeli jets

And six months prior to Syrian General Suleiman's murder, a top Hezbollah officer was killed by a joint CIA-Mossad operation in the heart of Damascus. According to former intelligence officials who confirmed the assassination plot to the Washington Post, a car bomb planted near a Damascus downtown restaurant instantly killed Imad Mughniyah - Hezbollah's international operations chief who was believed to have masterminded several terror attacks targeting Americans. 

So in spite of Israeli officials' current vehement denials, recent history suggests that Malaysian-based Fadi al-Batash's targeted killing was very likely yet another Mossad or other allied intelligence service hit.

Author: Tyler Durden
Posted: April 23, 2018, 12:20 pm

Julian Assange's twitter account has started tweeting again, but not because Ecuadorian authorities have restored his access to the Internet. Instead, his Twitter account has been taken over by a group of supporters leading the campaign to #ReconnectJulian.

Assange

In late March, the Ecuadorian government decided to suspend Assange's Internet access due to his controversial tweets in support of Carles Puigdemont, the Catalan leader who had been detained in Germany. Ecuador's new government, according to RT, was facing intense diplomatic pressure from its European ally, Spain.

Assange's supporters announced their takeover in a tweet:

Julian Assange has been gagged and isolated from visitors and communications after heightened pressure. This is on top of his six years without access to sunlight and arbitrary detention in violation of two UN rulings. Account now run by his campaign. https://t.co/cbM33Ng42C pic.twitter.com/LLeERI5knj

— Julian Assange ⌛ (@JulianAssange) April 23, 2018

Here’s a translation of a statement released by the government of Ecuador late last month when it decided to suspend Assange's Internet access, phone access and ability to receive visitors because Assange had refused to stop commenting on the political affairs of other nations.

The Government of Ecuador suspended the systems that allow Julian Assange to communicate with the outside world from the Ecuadorian embassy in London, where the citizen remains in an international protection situation for six years due to the risk to his life and integrity.

The measure was adopted in the face of Assange’s failure to comply with the written commitment it assumed with the Government at the end of 2017, for which it was obliged not to issue messages that implied interference with other States.

The Government of Ecuador warns that the behavior of Assange, with its messages through social networks, puts at risk the good relations that the country maintains with the United Kingdom, with the rest of the States of the European Union and other nations. Therefore, to prevent potential damage, the embassy in London interrupted this March 27 communications abroad to which Assange has access.

The Executive also keeps open the way to the adoption of new measures in the face of breach of commitment by Assange.

Shortly after the statement was released, supporters of Assange gathered in front of the embassy in London where they stood in solidarity for hours.

In the weeks that followed, the campaign to restore Assange's Internet access has picked up many high-profile supporters including Brian Eno, former Greek finance minister Yanis Varoufakis, journalist John Pilger and Noam Chomsky; a petition demanding an end to Assange's isolation has garnered more than 65,000 signatures.

Assange has been living in the Ecuadorian embassy in London since he sought asylum there in 2012. Assange entered the embassy to avoid extradition to Sweden which had wanted him for questioning in regard to an alleged sexual assault. Assange feared that if he was brought into custody in Sweden, it would only be a matter of time before he was extradited to the US, where he would face charges over Wikileaks' publishing of US diplomatic cables and other sensitive information, per RT.

Ecuador had granted him citizenship in December in a failed attempt to allow him to leave under diplomatic immunity. However, Ecuador's new president, Lenin Moreno, is less sympathetic to Assange's cause, considering him an "inherited problem" from the government of Rafael Correa.

The fate of Assange will become an especially sensitive issue once former CIA director Mike Pompeo, with whom Assange has repeatedly clashed, becomes Trump's new Secretary of State following his imminent confirmation.

Author: Tyler Durden
Posted: April 23, 2018, 11:56 am

Submitted by Bill Blain of Mint Partners

“Time you straighten right out, better think of the future, else you’ll wind up in jail.”

This morning we are all “cautiously optimistic”, apparently

The world reminds me of a duck: Serene and calm(ish) on the surface. Paddling furiously under the water. That’s one way to picture the current round of geopolitical manoeuvring across Asia: China-Japan, US-Korea, China-US dialogs. Forget the Trump noise, but these discussions are likely to lead to new dynamic across Asia.. If the outcome of the current games are as positive as we expect/hope, then the prospects for the global economy are pretty solid. Ducks can pivot on a heart-beat! Over the next 10-years or so we expect to see South-East Asia’s middle classes grow from around 600mm to over 2 billion – that’s an enormous market to sell into. It will be ripe with opportunity – and we have ideas, but not without challenge.

Much of what we see on the news, and read on the wires is just NOISE. It’s getting more confusing as twitterfeeds, fake-news, and rogue media provide more information than analysts can analyse to strip facts from the sturm-et-drang of “click-bait”. Noise can cause markets to go up, down, sideways and shake-it-all-about – but within the noise are clear trends. Some negative, some positive. Much to our surprise – like what’s happening in Asia -some of the noise is far more positive than we expected!  

This morning I’m tempted to check some of the stuff I’m reading about Macron.. comparing himself to Trump seems a mistake of the first-egg, but hey-ho! As for the UK – the less said about our sorry excuse for government.. the better. They’ve dug themselves into a horrible mess over Windrush…. But I’m afraid it could get worse. As the blame game deepens, the Conservatives unerring ability to do the wrong thing is coming to the fore. Apologise Now! Put right the wrongs that have been done to our citizens, and then do the decent thing by resigning. End of.

Noise can be the small stuff – like an article that flashes up quoting a “reputable” investment manager trashing the outlook for a particular stock. It gets whooshed round the market as “click-bait”: with everyone reading it, sagely agreeing and the stock plummets. Few folk bother to check the facts: that the article first appeared in some meaningless rag somewhere obscure, or the supposedly “reputable” investor actually runs a $100k “hedge fund” from his garage. Its news and views and gets read no matter how wrong it is. (Sorry if this reads like Fake-News 101 to millennials who understand modern media..!)

At the other end of the scale is Big Noise. A good example is Oil. We’ve collectively bought into three big arguments over the past few years: i) the collapse of the oil monopoly (the increasing irrelevance of OPEC), ii) the US becoming the swing producer likely to constrain prices when shale/fracking kicks in at, say, £50. iii) Oil is no longer such an important commodity as the big carbon shift continues. Our conclusion was oil prices are likely to remain lower into perpetuity. That ignores the dynamics– we’ve absorbed most of the floating oil glut of excess stocks, demand is rising in line with economic growth and cheap oil, the swing producer is more than happy to produce, and the dynamics of Russia/Saudi oil have surprised us by becoming a fixed market feature. Folk need Oil. Higher oil prices, and a good example of how the NOISE led most of us to expect something utterly different.

Which leads us to this morning’s conundrum – where are markets going? We have two things worrying us:

  • Stock Markets look due a correction – they’ve wobbled along this year, and the noise from pundits saying they look overvalued and need a price correction is thunderous. Yet, we’ve still got solid company results coming in, and an economic environment that feels solid (although more tenuous to perceive 18 months down the road.)
  • Bond markets remain overly tight – spreads between asset classes and risk look implausibly tight, get continue to ratchet in. At some point risk vs return has to be considered, yet default rates remain low.

We’re all aware why markets are so tight. Too much money chasing assets as a result of unconventional monentary policy – QE? (I still reckon there is an enormous bill coming our way when we experience the unintended consequences and lashback of QE – but that’s a story for another morning….) Or is due to yield tourists rolling down the risk curve in search of higher returns in assets the don’t properly understand? Or is it the number of asset bubbles; like tech valuations, Fin-tech, cryptocurrencies etc that look ripe to burst?

All these things worry and concern asset managers. The big fear I’m hearing today is “liquidity” – what happens if we do get a market meltdown, bond and stock markets take a knock and we see the kind of market suspension we had in 2008? Investment managers will always tell you they are long-term investors – while keeping a time frame of a few days if markets look likely to go up/down (because that’s how their bosses measure them!).

Liquidity is whatever someone else is prepared to pay for your asset. In times of market dislocation its bound to be wide. Perhaps a better answer is not to worry about it – but choose the assets that are not only defensive, but most likely to simply get wet when the rains come and dry off quickly thereafter? Thinking back to the great bond rout of 2008 – most of the bonds that crashed far below 100 par as a result of liquidity being switched off, rose back very quickly as markets recovered.

Therefore: pick assets with duck like characteristics. They will get wet when the storm comes, but will shake their feathers remaining dry, warm and snug when the sun comes out again.. Not quite so sure about the legions of triple BBB issuers and inflated stock prices..  but…

And finally, my contribution to the “Click-Bait” world. Listening to my teenage nephews and nieces (plus my own millennials) at my parent’s Diamond Wedding party, I’m seriously worried about Facebook. They’ve already made up their minds… they understand stuff I just don’t….

Author: Tyler Durden
Posted: April 23, 2018, 11:38 am

Global stocks stumbled on Monday ahead of an avalanche of earnings in this season's busiest reporting week but the big story overnight was the spike in 10Y Yield which climbed as high as 2.9957%, the highest level since January 2014, and nearing the psychological 3% level which has triggered market spasms and more than one tantrum in the past. The move was catalyzed by Treasury Secretary Steven Mnuchin saying over the weekend that he is planning a trip to China, an indication the US is considering a truce in its trade war with China.

Citi's technical team repeats the key highlights, pointing out that we're 1bp away from the psychological 3% level in the Treasury 10y yield. "The benchmark is trading at levels not seen since 2014, and we are continuing to make fresh YTD highs. The 10s now trade at 2.99% while the 2s10s trades on the 51 mark."

If we break 3%, major levels come in here that extend up to 3.05%: this is the level where we have the 2014 high which is also the long term double bottom neckline and the long term channel top:

Not everyone is convinced that the 10Y will soar once it blows through 3% (especially not in a world which both the IMF and IIF said has record debt): "Ultimately it’s hard to see a move sustained above 3 percent on the U.S. 10-year,” Mitul Kotecha, a strategist at TD Securities, told Bloomberg TV from Singapore. “Some of the dialing down in tensions, in risk aversion, may be having some impact there as well as expectations of continued strong growth in the U.S.”

Meanwhile, rising yields are capping other risk assets and the recent sell off in Treasuries is being closely eyed by  other markets, and supporting a pretty aggressive USD bid and VIX is rallying.

Mostly as a result of rising yields and a stronger dollar, S&P 500 Index futures turned lower, tracking moves in the Stoxx Europe 600 Index which failed to capitalize on an unexpected beat in the April PMI prints, while earlier the MSCI Asia Pacific Index also started off the week in the red.

In global stocks, MSCI’s world index fell 0.25% after Asia shed 0.5% overnight and Europe then slipped 0.2% as results from Switzerland’s biggest bank, UBS, disappointed. S&P futures also pointed to a modestly lower open.

Meanwhile, traders are on edge because in addition to earnings - more than 180 companies in the S&P 500 are due to report results this week, including Amazon, Alphabet, Facebook, Microsoft, Boeing and Chevron - traders also received the latest round of advance economic surveys that should show in the coming days if economic softness in the first quarter was just a passing phase linked to wintery weather and the Lunar New Year holidays in Asia. Readings from Japan, France and Germany were all relatively reassuring. Japan’s PMI data firmed as output and domestic demand picked up, France got help from its services sector, while Germany came in above forecast despite weaker new orders numbers.

  • EU Markit Manufacturing Flash PMI (Apr) 56.0 vs. Exp. 56.6 (Prev. 56.6)
  • EU Markit Services Flash PMI (Apr) 55.0 vs. Exp. 54.8 (Prev. 54.9)
  • EU Markit Comp Flash PMI (Apr) 55.2 vs. Exp. 54.9 (Prev. 55.2)

“It’s a good reading, it’s still encouraging,” said Chris Williamson, chief business economist at IHS Markit, of the combined euro zone numbers, which he said pointed to quarterly GDP growth of 0.6 percent.

Helping the spike in yields is the recent sharp reversal/short squeeze in the dollar as the dollar; the BBDXY index gained a fifth day, rising 0.5% on Monday to the highest level since March 1, and is now up by 1.4% since Wednesday’s close, the most on a three-day basis since December 2016. In addition to the squeeze of near record dollar shorts, a "Europe-based trader" quoted by Bloomberg says dollar bids represent both unwinding of medium-term trailing stops and fresh positions, while another trader said that interbank names are seen selling the euro and the yen.

Elsewhere in FX, the EUR/USD slipped for a third day, down to a two-week low of 1.2226 while GBP/USD reversed an earlier gain to drop below 1.4000 handle as chances that the BOE may not move in May, together with renewed concerns over the Brexit front, weighed on pound sentiment. USD/JPY rose to trade above 108.00 for the first time since mid-February: option-related offers below that level capped for a while, before stops above the figure were filled. As Citi notes, some big levels have been broken in FX today:

  • EURUSD is through Friday’s low at 1.2256 and is less than 30 pips away from the 100d MA at 1.2206.
  • USDJPY has broken the 108 handle and now through 108.13. The reverse head and shoulders target of 109.36 looks feasible according to CitiFX Technicals.
  • AUDUSD trendline comes in here at 0.7634 as we find fresh YTD lows.
  • NZDUSD testing the 200d MA at 0.7185. From here, there are a few levels to eye with 0.71500 and 0.7111.
  • USDCAD levels in 1.2720-80 including the 55d MA at 1.2767 seem to have been broken. Through 1.2800, there are plenty of levels from the March rally.
  • USDNOK MTD highs are at 7.8990, and the 100d MA at 7.9284. EURNOK looks more mixed, with the 100d MA not until 9.6721.
  • GBPUSD: The pair has broken through the 1.40 handle and looks like we could test the 100d MA at 1.3850. However GBP may stabilize against EUR here, with all the notable MA levels converging ahead.

It was a busy weekend in geopolitical news, with North Korea surprising the world on Saturday stating that it would immediately suspend nuclear and missile tests, scrap its nuclear test site and instead pursue peace and economic growth, a development which Trump quickly latched on to as evidence of yet another mission (nearly) accomplished. Additionally, talk of a trip by the U.S. Treasury Secretary to China also fueled hopes that the recent trade tensions between the world’s two biggest economies may be thawing.

In overnight central banks news, the Nikkei reported that the Bank of Japan has shown signs it is tapering its ETF purchases in order to trim what it sees as an outsize profile in the equity market. Meanwhile, BoJ Governor Kuroda said the Bank of Japan must continue very strong accommodative monetary policy for some time in order to
reach 2% inflation. However, he may not have the choice, as dark clouds continue to gather over the head of this boss and over the weekend, the approval of Japanese Prime Minister Shinzo Abe’s cabinet dropped in polls conducted by the Yomiuri and Mainichi newspapers to the lowest level since 2012.

Oil prices edged down in the cross-currents but were not far from their highest since late 2014. The market had wobbled on Friday when Trump tweeted criticism of OPEC’s role in pushing up global prices, but quickly steadied. Oil prices dipped in Monday trade with WTI down 0.6% at USD 68/bbl. In addition to echoes from Trump's anti-OPEC tweet, the modest weakness followed Baker Hughes reporting an increased rig count on Friday, which is now at its highest level since March 2015. The strengthening dollar is also weighing on gold with the yellow metal down 0.5% on the day. Some OPEC specific news coming from the Azerbaijani energy minister who says the country joining OPEC is not on the agenda.

It's a busy week (full preview to follow), with some of the key events as follows:

  • French President Emmanuel Macron begins a three-day visit to the U.S. Monday
  • U.S. manufacturing and services sector PMIs. Later this week: GDP and jobless claims.
  • Earnings season continues. Among those reporting: Alphabet/Google, Amazon.com, Samsung and Credit Suisse.
  • The European Central Bank has a rate decision on Thursday. Investors will watch for any sign that officials are preparing a shift in stimulus plans for their June meeting.
  • Bank of Japan announces its latest policy decision Friday and releases a quarterly outlook report.

Bulletin Headline Summary from RanSquawk

  • US 10 year treasury ticking towards 3.00% yield
  • Upward pressure on the USD pushing down commodities
  • Looking ahead, highlights include US existing homes sales, ECB’s Coeure and BoC’s Poloz

Market Snapshot

  • S&P 500 futures down 0.2% to 2,667.25
  • STOXX Europe 600 down 0.2% to 380.98
  • MSCI Asia Pacific down 0.4% to 173.19
  • MSCI Asia Pacific ex Japan down 0.5% to 564.10
  • Nikkei down 0.3% to 22,088.04
  • Topix down 0.02% to 1,750.79
  • Hang Seng Index down 0.5% to 30,254.40
  • Shanghai Composite down 0.1% to 3,068.01
  • Sensex up 0.5% to 34,579.62
  • Australia S&P/ASX 200 up 0.3% to 5,886.01
  • Kospi down 0.09% to 2,474.11
  • German 10Y yield rose 4.1 bps to 0.631%
  • Euro down 0.3% to $1.2254
  • Italian 10Y yield fell 0.3 bps to 1.524%
  • Spanish 10Y yield rose 1.9 bps to 1.301%
  • Brent futures down 0.5% to $73.66/bbl
  • Gold spot down 0.7% to $1,327.23
  • U.S. Dollar Index up 0.4% to 90.66

Top Overnight News from Bloomberg

  • U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing. Mnuchin said he’s “cautiously optimistic” of reaching an agreement with China
  • President Trump tempered his optimism on North Korea on Sunday, saying that “only time will tell” how things turn out. U.S. lawmakers sounded skeptical about promises made by Pyongyang ahead of possible historic talks between the countries leaders
  • North Korea will freeze nuclear and intercontinental ballistic missile launch tests from April 21, state-run media Korean Central News Agency said Saturday; The leaders of the two Koreas are set to hold their first summit since 2007 on Friday
  • Approval of Japanese Prime Minister Shinzo Abe’s cabinet dropped in polls conducted by the Yomiuri and Mainichi newspapers over the weekend.
  • French President Emmanuel Macron’s arrival in the U.S. kicks off a crucial week for European leaders in an uphill battle to convince Donald Trump to stay in the Iran nuclear deal
  • “If conflict increases, there will be less growth, more inflation,” says Federal Reserve Bank of San Francisco President John Williams in an interview with El Pais published in Spanish
  • Has an invisible hand stepped in to support the Indian sovereign bond market? Traders are abuzz with speculation over the identity of the buyer or buyers behind the $862 million of purchases Friday
  • U.K. PM Theresa May’s inner circle thinks she could be forced to accept staying in the EU’s customs union because Parliament will reject her plan to withdraw from it when the issue comes to a vote in the House of Commons, according to one official. Such a move could trigger a challenge to May’s leadership from Brexit campaigners in the Conservative Party
  • U.K. Chancellor of the Exchequer Philip Hammond has indicated a willingness to look abroad when he begins his search for a successor to Bank of England Governor Mark Carney
  • Eurozone April Flash composite PMI 55.2 versus estimate 54.8

Asia equity markets began the week lacklustre after last Friday’s losses on Wall St where all majors declined on continued tech weakness and losses in Apple amid concerns regarding iPhone demand. However, overnight pressure was contained in the AsiaPac region amid a further improvement of the geopolitical climate in the Korean peninsula after North Korea announced it will stop nuclear and ICBM testing, as well as begin dismantling a nuclear test site in the north of the country. ASX 200 (+0.3%) and Nikkei 225 (-0.3%) were mixed with weakness in Japan the result of last week’s flows into JPY. Elsewhere, Shanghai Comp. (-0.1%) and Hang Seng (-0.5%) were choppy amid a lack of drivers and a neutral position by the PBoC which injected CNY 80bln via reverse repos to match maturing operations, although underperformance was observed in Hong Kong names. Finally, 10yr JGBs were lower amid spill over selling from USTs and as yields tracked the upside in their US counterparts, in which the US 10yr yield printed its highest since January 2014. PBoC injected CNY 80bln via 7-day reverse repos for a daily net neutral position.

Top Asian News

  • Sudden Modi-Xi Meet Signals Diplomatic Thaw Between Neighbors
  • Bond Traders in India Hope Mystery Buyer Is the Central Bank
  • Ping An Good Doctor Aims to Raise as Much as HK$8.8b in IPO
  • Noble Group Board Becomes Battleground as Goldilocks Fights
  • New Hong Kong Tech Darling Hawks IPO With Rare Valuation Metric

European equities opened on the back foot this morning (Eurostoxx 50 -0.2%) following the dampened tone from Asia. Switzerland’s SMI is underperforming as index heavyweight UBS (-3.1%) lags following earnings. Sector wise, consumer staples underperform while Reckitt Benckiser (-2.2%) are at the bottom of the FTSE 100 following a downgrade at Raymond James and a target price cut at JP Morgan. In terms of stocks specifics, Fresenius (+0.6%) shares are higher following the terminations of the Akorn merger amid data breaches. Fresenius Medical (-3.6%) is at the foot of the DAX 30 following a revenue target cut for this year. Capita (+10.1%) is the best performing in the Stoxx 600 following earnings and reports the company is to raise GBP 701mln in a 3 for 2 rights issue entirely underwritten by Citigroup and Goldman Sachs.

Top European News

  • May Is Said to Face Cabinet Pressure Over Brexit Customs Union
  • Poland Shatters Fragile Peace With Its Jews After Holocaust Law
  • Euro-Area Economy Stays in Lower Gear as Order Growth Weakens; German Growth Momentum Rebounds After First-Quarter Slowdown
  • How China Bought Up A Swath of Europe When Nobody Was Looking

In FX, firmer US rates are certainly fuelling the latest Dollar revival and the Greenback’s broad gains, but latest conciliatory noises from NK on the nuclear front are also undermining the traditional safe-haven currencies. The index is now comfortably above 90.500 and 90.600 resistance, looking at 90.750 next. JPY/EUR: Both on the brink of breaking out of recent ranges, with Usd/Jpy up through 108.00 offers, a big barrier and resistance extending to 108.20, but capped just ahead of stops reportedly lying between 108.25-30, while Eur/Usd has breached last  Friday’s 1.2250 low having failed to reach 1.2300 in wake of better than forecast Eurozone flash PMIs, and is now also below the next downside technical support level at 1.2235, eyeing 1.2200. CAD: Usd/Cad looks is revisiting 1.2800+ on the aforementioned supportive Greenback narrative and contrasting Loonie weights in the form of last Friday’s CPI data and a still cautious BoC, although latest NAFTA reports indicate a deal could be reached in early May. The range has been 1.2750-1.2805, and the recent peak is circa 1.2820 (February 9). GBP: Losing traction around the 1.4000 level after last week’s heavy losses on a mixture of UK data misses and dovish or less hawkish BoE policy guidance from Governor Carney. Looking to test chart support around 1.3960 while Eur/Gbp is nudging up towards the high of a 0.8745-75 range.

In commodities, oil prices dipping in Monday trade with WTI down 0.6% at USD 68/bbl. This follows Baker Hughes reporting an increased rig count on Friday, which is now at its highest level since March 2015, suggesting increased US production putting downward pressure on the fossil fuel, as well as tweets from the US President suggesting oil is “artificially high” due to OPEC. The strengthening dollar is also weighing on gold with the yellow metal down 0.5% on the day. Some OPEC specific news coming from the Azerbaijani energy minister who says the country joining OPEC is not on the agenda.

Kicking off the week today will be the flash April PMIs due to be released in Europe and the US. Other data worth flagging is US existing home sales data for March. Away from that French President Macron is due to begin a three-day visit to the US, while the ECB's Coeure is scheduled to speak in the afternoon. UBS and Google are the earnings release highlights.

US Event Calendar

  • 8:30am: Chicago Fed Nat Activity Index, est. 0.3, prior 0.9
  • 9:45am: Markit US Manufacturing PMI, est. 55.2, prior 55.6
    • Markit US Services PMI, est. 54.1, prior 54
    • Markit US Composite PMI, prior 54.2
  • 10am: Existing Home Sales, est. 5.55m, prior 5.54m; MoM, est. 0.18%, prior 3.0%

We wonder whether this week will finally host the 10 year Treasuries at 3% party? The sell off continued on Friday with yields closing at the highs for the session at 2.96% (+5bps) - the highest since January 2014. This was in spite of a Trump tweet bomb where he accused OPEC of artificially driving up prices. This morning in Asia, yields have crept up another c1.5bp and edging us closer to this landmark. Elsewhere equities are trading mixed with the ASX200 up 0.42% while the Nikkei (-0.30%), Kospi (-0.19%) and Hang Seng (-0.36%) are down as we type. Datawise, Japan’s April Nikkei manufacturing PMI firmed 0.2pts mom to 53.3.

Back to yields, in terms of what might attract us or repel us to the 3% mark we have a busy week with the ECB and BoJ holding policy meetings and the latest flash PMIs out around the globe today as well as a first look at Q1 GDP in the US. European PMIs in particular will be closely watched given the recent sharp deceleration.

With regards to the two big central bank meetings this week the ECB (Thursday) is the more interesting. While no change in policy is expected all eyes will be any hints or signs that officials are preparing the ground for an announcement in June that stimulus is to come to an end by the end of the year. Weaker data of late and some slightly dovish ECB commentary perhaps means that risks are tilted to the downside so the market will likely be on the watch in Draghi's press conference. Ahead of this today sees the flash PMIs. In Europe the consensus is for a continued moderation with the manufacturing print expected to nudge down another 0.5pts to 56.1 (which would be the lowest since February 2017) and the services a more modest 0.3pt decline to 54.6. European data surprises have been hovering at multi-year lows of late so Europe could do with some stabilisation soon to avoid stoking fears of a sharper downturn. It’s possible that the easing trade war tensions and healthier sentiment in the last week or so won’t yet be in these numbers though.

In terms of earnings this week, 181 S&P 500 companies are scheduled to report including some of the big tech heavy hitters like Google (today), Facebook / eBay / Twitter (Wednesday), Microsoft / Amazon / Intel (Thursday). Also worth highlighting are earnings reports from Verizon, Caterpillar and Coca-Cola on Tuesday, AT&T and Boeing on Wednesday and Exxon Mobil and Chevron on Friday. Earnings season also picks up in Europe with 121 Stoxx 600 companies reporting including the likes of UBS today, Credit Suisse on Wednesday and Volkswagen, Total and Royal Dutch Shell on Thursday.

Last but by no means least, the big political event this week is likely to be the summit held between South Korea President Moon Jae-in and North Korea Leader Kim Jong Un in the demilitarized zone between the two countries on  Friday. Over the weekend, President Trump seemed to have softened his expectations as he tweeted “we’re a long way from conclusion on North Korea….only time will tell”. Away from that, French President Macron is due to travel to the US on Monday for three days and is scheduled to meet US President Trump on Tuesday. German Chancellor Merkel is also due to meet Trump on Friday.

Turning to trade, tensions appeared to have eased further over the weekend as the US Treasury Secretary Mnuchin said he’s “cautiously optimistic” on reaching a trade agreement with China and that “a trip (to China) is under consideration”, but declined to comment on potential timing. On the other side, China’s Ministry of Commerce said it would welcome such a visit. Elsewhere, the PBOC’s Governor Yi reiterated that the recently announced measures to open up China’s financial sector will be “implemented either in the next few months or by the end of this year”. Finally, the Russian Finance Minister Siluanov has met with Secretary Mnuchin and sought “clarifications” on the US sanctions, without elaborating more.

Now recapping other markets performance from Friday. US bourses weakened further, weighted down by tech and consumer staples stocks (S&P -0.85%; Dow -0.82%; Nasdaq -1.27%). The VIX rose for the third straight day to 16.88 (+5.8%) while the Stoxx 600 was marginally lower. In FX, the USD index gained for the fourth consecutive day (+0.42%) while the Euro and Sterling fell -0.46% and -0.62% respectively. WTI oil edged up 0.10% to $68.40/bbl on Friday.

Elsewhere, European government bonds firmed and partly reversed Thursday’s losses with yields on 10y Bunds and OATs both down c1bp while Gilts outperformed (-4.1bp), partly due to BOE Governor Carney’s dovish talk on a potential rate hike in May. Notably, the Bloomberg implied odds of a May rate hike in the UK fell 31ppt to 46% on Friday.

Moving onto central bankers speak. The Fed’s Williams reiterated that it makes sense to keep raising rates through next year given an improving economy and noted that if growth slows, the USD could get “dramatically stronger”. In Europe, the ECB’s Villeroy said the greatest medium term risk is “incontestably protectionism”. He added that if tariffs increased by 10% and became the norm, then “global GDP could decrease by at least 2%”. Elsewhere, Bloomberg cited unnamed sources which noted the ECB see scope to wait until their July meeting to announce their plans on ending QE, in part to allow more time to judge the impacts of the recent economic slowdown.

In the world of DB Research, our US economists find that if the Fed continues to raise rates according to their forecast and the term premium does not recover, the yield curve would invert by the end of 2019, potentially as early as June of next year. However, several factors, including higher inflation and the unwind of central bank balance sheets, should help lift the term premium and delay an inversion. Overall, they argue that because a low term premium has contributed to the flat yield curve, the negative signal from the yield curve should be discounted some. However they acknowledge that the growth negative signal from the yield curve could build by the time we get to 2020.

Before we take a look at today’s and this week’s full calendar, we wrap up with other data releases from Friday. The Euro area’s April consumer confidence was above market and rose 0.3pts mom to 0.4 (vs. -0.1 expected) – the highest since January which was the two decade high. Elsewhere, Germany March PPI was slightly below expectations at 0.1% mom (vs. 0.2% expected), leading to an annual growth of 1.9% yoy.

A look at the day ahead: kicking off the week today will be the flash April PMIs due to be released in Europe and the US. Other data worth flagging is US existing home sales data for March. Away from that French President Macron is due to begin a three-day visit to the US, while the ECB's Coeure is scheduled to speak in the afternoon. UBS and Google are the earnings release highlights.

Author: Tyler Durden
Posted: April 23, 2018, 11:04 am

From Bloomberg macro commentator, Richard Breslow

The Markets Are Speaking and No One Is Listening

It almost never works out when commentators assure us this week or next week will be the big one. All will be revealed. Then we move on to the next hugest event. Which goes to show, with many exceptions, that it’s usually the surprises that pack the most bang for the buck. They haven’t been analyzed to death with all the reasons at the ready to explain any deviations from forecast to be trotted out. If there wasn’t weather, we’d have to invent it.

So, fully aware that I’ll no doubt regret it, we are in for a very interesting patch. With, as far as I can see, an awful lot of traders ignoring the price action in favor of the preferred narrative. And resolutely positioned against what seems the pull of the tides. An unusually resolute stance in a year when things have been going merely so so for asset managers. I can only surmise that being “flexible” hasn’t worked to plan so traders are choosing to stand their ground. Good luck with that.

There’s no arguing that the world has plenty of problems to go around. But the not even dead-cat bounce in equities, emerging markets or the likes of the Australian dollar from headlines about Treasury Secretary Mnuchin considering a trip to China to work on trade differences and China cautiously welcoming the gesture shouldn’t be ignored. Positioning is working against traders right across the board. And looking at the charts, stale positions, which are growing not shrinking, are not on the side of the path of least resistance.

Take CFTC positioning with a grain of salt. Especially if you only look at the top line. But it struck me that with all the news flow, geopolitical and relative monetary policy related, the dollar short position increased last week. Yet you don’t have to be a dollar bull to wonder why. The dollar index isn’t out of the woods, but support levels look a lot clearer than resistance. The more inclusive Bloomberg dollar index paints a similar but even more constructive picture. Even the supposedly impregnable emerging market currency indexes are noticeably sagging.

The euro and yen, both of whose central banks have meetings this week are giving a wonderful presentation of currencies looking to probe their downside. Yet there’s no shortage of wishful thinkers opining on “someday when they get going.”

The S&P 500 future last week tried and failed to surmount resistance marginally above 2700. Don’t dismiss the protective reaction functions but we know now the clearly defined topside challenge. Which as of last week became even more formidable. And watch the ever creeping higher and much ballyhooed 200-day moving average. Eventually the ever- hopeful earnings season will begin to wind down. It’s one thing to challenge support on a headline. Another if it happens just because.

As for bonds, using an investment thesis of, it has to stop somewhere, is a very QE view of the world. Several times over the weekend, I read about bond vigilantes. I reject the characterization. The sellers who have driven yields to multi- year highs aren’t protesting monetary and fiscal policy developments. They are embracing them.

Trading off news is what we do. Trading off the sheer weight of flows, however is the better way to make money.

Author: Tyler Durden
Posted: April 23, 2018, 10:16 am

WikiLeaks has hit back against a multimillion-dollar lawsuit filed by the Democratic National Committee (DNC), announcing over Twitter that they are seeking donations for a counter-suit, noting "We've never lost a publishing case and discovery is going to be amazing fun," along with a link which people can use to donate to the organization. 

The Democrats are suing @WikiLeaks and @JulianAssange for revealing how the DNC rigged the Democratic primaries. Help us counter-sue. We've never lost a publishing case and discovery is going to be amazing fun:https://t.co/E1QbYJL4bB

More options:https://t.co/MsNZhrTzTL pic.twitter.com/VbPp7FTNq3

— WikiLeaks (@wikileaks) April 20, 2018

Discovery is a pre-trial process by which one party can obtain evidence from the opposing party relevant to the case. The Trump campaign, which is also named in the DNC filing, says the lawsuit will provide an opportunity to "explore the DNC's now-secret records."

Hours after the Washington Post broke the news of the lawsuit, President Trump tweeted "Just heard the Campaign was sued by the Obstructionist Democrats. This can be good news in that we will now counter for the DNC server that they refused to give to the FBI," referring to the DNC email breach. Trump also mentioned "the Debbie Wasserman Schultz Servers and Documents held by the Pakistani mystery man and Clinton Emails."

Just heard the Campaign was sued by the Obstructionist Democrats. This can be good news in that we will now counter for the DNC Server that they refused to give to the FBI, the Debbie Wasserman Schultz Servers and Documents held by the Pakistani mystery man and Clinton Emails.

— Donald J. Trump (@realDonaldTrump) April 20, 2018

In a statement which goes into the various items they'll be pursuing in court, the Trump campaign said the following: 

While this lawsuit is frivolous and will be dismissed, if the case goes forward, the DNC has created an opportunity for us to take aggressive discovery into their claims of 'damages' and uncover their acts of corruption for the American people," 

If this lawsuit proceeds, the Trump Campaign will be prepared to leverage the discovery process and explore the DNC's now-secret records about the actual corruption they perpetrated to influence the outcome of the 2016 presidential election. Everything will be on the table, including:

How the DNC contributed to the fake dossier, using Fusion GPS along with the Clinton Campaign as the basis for the launch of a phony investigation.

Why the FBI was never allowed access to the DNC servers in the course of their investigation into the Clinton e-mail scandal.

• How the DNC conspired to hand Hillary Clinton the nomination over Bernie Sanders.

• How officials at the highest levels of the DNC colluded with the news media to influence the outcome of the DNC nomination.

• Management decisions by Debbie Wasserman Schultz, Donna Brazile, Tom Perez, and John Podesta; their e-mails, personnel decisions, budgets, opposition research, and more.

What's interesting is that of all the sources the DNC cites in their massive lawsuit - the Steele dossier they paid for isn't one of them

The DNC suit has drawn criticism from prominent Democrats who would like to restore dignity to the party - such as Claire McCaskill (MO), Jackie Speier (CA) and former Obama White House adviser and CNN commentator David Axelrod - who suggested in a Friday tweet that the "ill-timed" combination of "Comey's flamboyant roll out" and the DNC lawsuit are playing into President Trump's strategy of portraying the investigation against him as a "partisan vendetta."

All of these sideshows—Comey’s flamboyant roll out; this @DNC lawsuit—seem spectacularly ill-timed and abet @POTUS strategy of portraying a sober and essential probe as a partisan vendetta.
Everyone should chill out and let Mueller do his job.https://t.co/e1edkIcrmr

— David Axelrod (@davidaxelrod) April 20, 2018

DNC Chair Tom Perez defended the lawsuit on Sunday, which alleges a wide-reaching conspiracy between the Trump campaign, WikiLeaks founder Julian Assange, Russia and others to interfere with the 2016 election. Perez said that the DNC filed the suit "in a timely manner under the statue of limitations."

"I don't know when Director Mueller's investigation is going to end, nor would I ever ask him because I want him to do a good, thorough job," Perez continued, adding that he's confident the lawsuit will get a jury trial. 

Perez told ABC News's This Week on Sunday that if the defendants think they can "relitigate all their wild theories" - likely in reference to the litany of bombshell revelations contained within the emails published by WikiLeaks, they will be sadly disappointed. 

"(T)here's this thing called Rule 11, where you get sanctioned for trying to do things like that," he said. "That's why we have a civil justice system. You can't fire this judge who will preside over the case. You can't pardon defendants in a civil case. I think it's so important for the American people to see the truth here."

When asked on Meet the Press Sunday whether Hillary Clinton was Hillary Clinton's idea, he responded "You'll have to ask Secretary Clinton." 

DNC head Tom Perez refuses to say whether lawsuit against @WikiLeaks was really Hillary Clinton's idea and how much it is going to cost Democrats https://t.co/whrfnl9Ned

— WikiLeaks (@wikileaks) April 22, 2018

Despite the fact that the DNC's bank account is running on empty, Perez says that the party "can't afford not to" pursue the lawsuit.

"It's hard to put a price tag on preserving democracy," he continued, also acknowledging that he doesn't know how much money the lawsuit will cost the organization.

As a related aside, Julian Assange has been blocked by Ecuadorian authorities from using the internet for nearly a month due to his comments on the Catalonia separatist movement - depriving him of his ability to opine on topics or defend himself. The hashtag #ReconnectJulian has appeared in response, while supporters conducted a 10 hour online vigil in response. 

Julian Assange has now been without visitors, phone or internet for nearly a month. Don’t let this become normalized https://t.co/hZuZOaam5F

— Cassandra NoWar Fairbanks (@CassandraRules) April 22, 2018
Author: Tyler Durden
Posted: April 23, 2018, 9:33 am

Authored by Daisy Luther via The Organic Prepper blog,

Immigration is an issue that causes tempers to flare. Many Americans want our borders to be firmly closed to outsiders, especially if those outsiders are brown. Having lived in and been welcome in another country, and having brought my children to the United States, obviously, I’m pro-immigration.

But only to a point.

We had to jump through a lot of expensive hoops to legally be in the countries where we moved. I don’t think that the hoops should be as expensive as they are, but I definitely believe that some requirements must exist. We can’t allow an unchecked influx to upturn our culture.

Alternatively, many Americans want to welcome any and all refugees and immigrants, forming sanctuary cities – and even sanctuary states – that reject our immigration laws.

The law prohibits state and local police agencies from notifying federal officials in many cases when immigrants potentially subject to deportation are about to be released from custody.

Administration officials argued that the state measures not only hinder their ability to carry out federal law, but also put immigration agents and communities at risk.

The other laws administration officials seek to challenge make it a crime for business ownersto voluntarily help federal agents find and detain undocumented workers, and create a state inspection program for federal immigration detention centers. (source)

During the election, Democratic candidate Hillary Clinton said it was our humanitarian obligation to take in refugees.

“We cannot allow terrorists to intimidate us into abandoning our values and humanitarian obligations. Turning away orphans, applying a religious test, discriminating against Muslims, slamming the door on every single Syrian refugee—that’s just not who we are. We are better than that.” (source)

Europe has opened their doors generously but now, they are filled with areas of high risk and looming flashpoints. Let’s take a look at what has happened in Sweden, where unchecked immigration has created a public safety crisis.

Sweden’s migrant problem

Sweden is a Scandinavian country of about 10 million people. The Swedes had a reputation of welcoming immigrants and refugees, but the arrival of 165,000 refugees in one year has caused them to take another look at their policies.

Sweden has been famously known for its welcoming attitude toward refugees and its commitment to family reunification. Until recently, it had the most generous immigration laws in Europe.

In 2014, Prime Minister Fredrik Reinfeldt made a famous speech urging Swedes to “open their hearts” to refugees seeking shelter. A year later, the population of just 10 million welcomed 165,000 asylum seekers to Sweden — more per capita than any other European nation.

The unprecedented number of newcomers has challenged the Swedish economy and has contributed to instability in the country’s historically stable government.  (source)

But a strained welfare system isn’t the only issue with the influx of refugees.

The crime in Malmo and Stockholm has skyrocketed. You can read about it in these articles:

Violence against women has also increased dramatically.

According to the Swedish Crime Survey, compared to 2015, attempted rape against girls 15 – 17 was up 46 percent in 2016.

Rape of teens in that same date and age range is up 19 percent.

Attempted rape of girls under 15 increased 16 percent; rape of young girls in that same age increased by 26 percent.

Rapes against adult women increased by 7 percent.

Around that same time, in 2015, more than 160-thousand people applied for asylum in Sweden from war-torn countries in the Middle East and Africa. (source)

The politically correct laws of Sweden mean that the perpetrators cannot be described to the public, including their ethnicity. The women of Sweden have had to change how they live or risk attack.

In the southern city of Malmö, local media reports there have been four reported gang rapes since November 2017.According to reports, all four happened overnight in the early-morning hours.

As of this posting, there were no arrests, which has left some feeling alarmed.

Here are some women who describe their thoughts on the reports:

  • “I mean, I don’t walk a lot at night.”

  • “I wish it wouldn’t be that way, and I’m terrible about the rapes.”

  • “I know it’s very bad things happening here.”

(source)

@PeterSweden71 is a journalist who has been documenting horrific crimes for a few years now. Here are a few of his tweets from JUST ONE DAY, April 19th, 2018.

The fact that much of the crime is committed by migrants in a no-go zone is swept under the rug, which is pointed out in this article in Sputnik News (a Russian government-controlled news agency).

Unsurprisingly, Snopes also rebuts the link between immigrants and increased crime.

Here’s what the police officers have to say about it.

Swedish law enforcement tells a different story.

Peter Springaire, a police officer of 47 years was investigated by prosecutors for “inciting racial hatred” due to his viral post on Facebook.

I’m so fucking tired. What I will write here below is not politically correct. But I don’t give a shit. What I am going to say to you all taxpayers is forbidden to give us state employees…

…Here we go; this i have handled Monday-Friday this week: rape, rape, aggravated rape, överfallsvåldtäkt, extortion, extortion, abuse of justice, illegal threats, violence against police, threats to police, drug law, felony narcotics crime, attempted murder, Rape again, blackmail again and assault.

Suspected perpetrators; Ali Mohamad, mahmod, Mohammed, Mohammed Ali, again, again, again christoffer… what is it true? Yes a Swedish name crept into the outskirts of a drug law, Mohammed, Mahmod Ali, again and again.

Countries representing this week’s all crimes: Iraq, Iraq, Turkey, Syria, Afghanistan, Somalia, Somalia, Syria again, Somalia, unknown country, unknown country, Sweden. Half of the suspects we can’t know for sure because they don’t have any valid papers. Which usually means they lie about nationality and identity.

Now we’re just talking örebro municipality. And these crimes occupy our utredningsförmåga to 100 %. (source)

And Springaire isn’t alone. Watch the clip below. A friend in Sweden has confirmed that the English subtitles are indeed accurate. If a picture is worth a thousand words, then this video is worth a million.

The people in the video have no interest in listening to the police or abiding by the laws. Their goal is to intimidate and do whatever they please.

A cautionary tale

Before the flurry of frenzied accusations begins, I’m not being a racist to point out the fact that some areas of Sweden have been completely taken over by people who have no interest in assimilating into the culture of their host country. The stories above clearly illustrate this is the truth.

While our population is much larger than that of Sweden, we risk similar issues with a flood of immigrants flocking en masse to condensed areas. This isn’t to say that we should never accept any refugees. We’re a country that was built on immigration. But, we can be compassionate without being foolish.

I’m not talking about building walls and slamming the door in the faces of travelers. I’m not talking about mistreating those from different cultures, and I certainly don’t want to see the United States take part in the same kind of insanity that resulted in the internment of Japanese-Americans during World War II.

But we need to ask better questions of those who want to relocate to our country. We must make sure that the people whom we invite in are coming because they’re excited about being Americans. We want to invite people who want to make our country better and stronger.

We don’t want a surge of people who refuse to abide by our laws or who wish to enforce their religious beliefs on others.  Our constitution guarantees us not only the freedom OF religion but also the freedom FROM religion.

Sweden is a cautionary tale. Right now Europe is full of these warnings but many still refuse to heed them.

As the old saying goes, those who do not learn from history are doomed to repeat it.

*  *  *

Note: I was hesitant to write this article because I know that some people will not examine this by the facts presented, but will be outraged that I dared to draw a conclusion that may not be politically correct. I urge you to get past your reflex to accuse me of racism and speak to the facts. Tell me how to avoid a problem like they’re facing in Sweden.

Author: Tyler Durden
Posted: April 23, 2018, 9:00 am

CTAs and quantitative funds are just starting to recover from the historic drubbing they endured during the February "volocaust" when stocks and bonds fell simultaneously in defiance of the funds' carefully calibrated assumptions about asset-price correlations.

CTA

And with speculative traders still struggling to fill the void left by the death of XIV (and many desperate to repair the damage done to their bank accounts) one $13.6 billion money manager called Direxion is launching a product that is sure to become the next daytrader darling. It's called the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares, and as one might deduce from the name, it allows traders to bet on daily fluctuations in a robotics and artificial intelligence index. The company runs other leveraged funds in different sectors.

The fund will compete with the $2.4 billion Robo Global Robotics & Automation Index ETF (ROBO) and the Global X Robotics & Artificial Intelligence ETF (BOTZ).

However, the company offered a disclaimed when approached by Bloomberg: The fund is "not suitable for all investors and should be utilized only by investors who understand the risks associated with seeking daily leveraged and inverse investment results, and intend to actively monitor and manage their investments."

As one might expect, the fund will charge a staggeringly high fee of $12.20 for every $1,000 invested to cover operating costs and "acquired expenses". Its base management fee is 75 basis points.

The only question now is how long it will take to go to zero?

 

Author: Tyler Durden
Posted: April 23, 2018, 8:15 am

Authored by Bruno Maçães via The Cairo Review,

Russia aims to position itself as a leader among energy-producing equals in Eurasia. Since 2015, Russia has sought to play a more active role in the Middle East, setting its sights on the region’s energy resources to achieve this strategic goal...

Having abandoned any attempt to join the Western global political order, Russia seems to have quickly found a new self-image: as the center and core of the Eurasian supercontinent, it can reach in all directions and provide a bridge between Europe and China on both ends. In this context, the Middle East has emerged as a central axis of Russia’s strategic concerns, perhaps for the first time in the country’s history.

In his recent book What Is Russia Up To in the Middle East?, Dmitri Trenin shows how the Middle East was always marginal to Russian geopolitical interests. When progressing south, Russian military expansion had its eyes on the Balkans or Istanbul, in some periods extending to British India, Afghanistan or northern Iran, but a serious push beyond those areas was never considered. Against Ottoman Turkey, Russia waged twelve wars. It took the czarist army half a century to prevail over the mountaineers of the North Caucasus. Russia also conquered Central Asia and invaded Afghanistan, a military adventure that left little appetite for a return to the heart of the Muslim world. But neither the Russian Empire nor the Soviet Union had ever fought directly in Arab lands. In 2015, something genuinely new and unexpected took place. Russia stepped into the Syrian conflict.

Any exercise considering what the Kremlin’s intentions and goals might have been has to start by noting how Syria offered a unique opportunity for promoting Russian strategic interests. By 2015 the United States had exhausted all choices there and showed signs of disinterest and disengagement. A Russian military intervention would constitute something of a revolution in global affairs. For the first time since the end of the Cold War, a country other than the United States would be projecting military force far away from its borders without consulting or involving Washington in the decision.

Syria had never been considered important for Russian national interests, but in the new global landscape that would quickly change. After all, Syria was a critical issue for Turkey and Iran. The refugee crisis was affecting the European Union in powerful ways and China saw the Syrian corridor linking West and Central Asia to the Mediterranean as potentially decisive for the “Belt and Road” initiative, its project of trade and infrastructure development across the Eurasian supercontinent.

With every other major actor reluctant to get involved in the Syrian civil war, Russia had an opening—not to solve the political and humanitarian crisis but to become the most important factor in any future solution.

Once these initial elements were considered, more interesting possibilities started to appear. Between 2013 and 2015, the Russian economy had been under extreme pressure, not so much because of the sanctions imposed after the Ukraine crisis but as a result of the precipitous fall in energy prices. As a major oil and gas producer, Russia had neglected to prioritize energy geopolitics, paying a steep price for that. While China, highly dependent on inward energy flows, had spent decades extending its influence and leverage in Central Asia, Africa, and South America—preparing for all possibilities and diversifying energy supply routes—Russia knew it had more energy resources within its borders than it could ever need and customers were forever assured a more or less mechanical result of a growing and more balanced global economy. But that set of assumptions neglected how other producers can hit your interests by manipulating market prices.

By 2015 the Kremlin was certain that the United States and Saudi Arabia were deliberately lowering oil market prices to squeeze Russia and Iran. With their budgets so highly dependent on oil revenues, Iran and Russia could be effectively pressured into limiting their expansionist agendas. One could even hope that they would become more inclined to abandon their nuclear ambitions, in the case of Iran, and aggressions against Ukraine, in the case of Russia.

At the end of 2015, a 10 percent cut in public spending in Russia was the best evidence of the growing stress from the pincer movement of international sanctions and low energy prices in an economy that depends on crude at $100 a barrel. Faced with a direct challenge, Russia decided that the Middle East was now the arena where its future would be decided.

One Map, Three Regions

In October 2017, Rosneft Chief Executive Officer Igor Sechin took the unusual step of presenting a geopolitical report on the “ideals of Eurasian integration” to an audience in Verona, Italy. One of the maps projected on the screen during the presentation showed the supercontinent—what Russian circles call “Greater Eurasia”—as divided between three main regions. For Sechin, the crucial division is not between Europe and Asia, but between regions of energy consumption and regions of energy production. The former are organized on the western and eastern edges of the supercontinent: Europe, including Turkey, and the Asia Pacific, including India.

Between them we find three regions of energy production: Russia and the Arctic, the Caspian, and the Middle East. Interestingly, the map does not break these three regions apart, preferring to draw a delimitation line around all three. They are contiguous, thus forming a single bloc, at least from a purely geographic perspective.

Sechin’s map has a number of other interesting elements. As noted already, Turkey is left on the European side of the line delimiting the energy production core in the west. The same is true for Ukraine, which although unavoidable in this context is still an unusual inclusion in a map sanctioned by the highest echelons of Russian state power. If one looks at the world through the prism of energy geopolitics, then Ukraine is a European country—a consumer, not a producer.

Some of the most persistent foci of conflict in the contemporary world are located on the delimitation line between regions of energy production and energy consumption: eastern Ukraine, northern Iraq, Syria, Afghanistan, and North Korea. The fact may not be entirely coincidental. Many of these transition zones have become valuable prizes in the global fight for energy resources, with major powers often supporting rival internal factions in their bids for influence and control.

In other cases, the “foci of conflict” are transit hubs for energy flows, determining who has control over them in case of future conflict. More interestingly, transition zones are often fault lines between different political and economic models. It seems to be the case, for example, that the attempt to create a form of personal rule in Syria in the absence of oil wealth created the need for sectarian politics.

Sectarianism—the persistent promotion of mistrust and conflict between different ethnic or religious groups—functions as an alternative to oil, a form of compensation for the lack of oil resources such as those at the disposal of royal families of the Arab Gulf. It provides the ruling elite with a third method of obtaining consent from the governed, distinct from both oil patronage and the social rights of a developed democracy. Lost between two competing models, Syria has been unable to develop a genuinely stable variety of consensual politics.

The map illustrates an important point about Russia’s new self-image. From the point of view of energy geopolitics, Europe and the Asia Pacific are perfectly equivalent, providing alternative sources of demand for energy resources. Russia has been struggling to abandon its traditional orientation toward Europe, hoping to benefit from the flexibility of being able to look both east and west to promote its interests. It seems that Sechin and Rosneft can place themselves in that position much more effortlessly.

Sechin’s map subtly makes one final—and decisive—point. As you consider the three areas it delimits, it becomes apparent that two of them are already led and organized by a leading actor: Germany in the case of Europe and China for the Asia Pacific. Production chains within these highly industrial regions are increasingly managed by German or Chinese companies, which tend to reserve the higher value segments for themselves. Their spheres of influence extend to all important inputs, with one glaring exception: energy. In order to address this vulnerability, the two regions of energy consumption will be attracted to the core region, where they need to ensure ready and secure access to energy resources. And their efforts may well be made easier by the fact that the core region of energy production lacks a hegemon capable of ensuring its survival as an autonomous unit in the Eurasian system.

One further and decisive factor must be mentioned here. As the United States drastically increased its oil and gas production over the last ten years—a result of the shale gas revolution—its role in global energy geopolitics started to shift. Two trends have become dominant.

First, Washington no longer sees the Middle East as critically important for its safety and prosperity. What was a constant of American foreign policy for almost a century now seems open to revision. If domestic supply can now take the place of imports, the United States is less pressured to invest in peace and stability in the Middle East. It is not difficult to speculate that its response to the Syrian civil war would have been different—much more active and resolute—before the shale gas revolution. This fact naturally opened opportunities for Russia, already discussed above.

Second, the new energy abundance in the United States might justify using energy as a geopolitical tool—steering energy flows and influencing market prices so as to reward friendly states and punish others. As we have seen, the Kremlin grew convinced that the United States was doing just that with regards to Russia and Iran. Attempts to use energy markets to drive geopolitical outcomes reinforced Russia’s conviction that it needed to acquire higher levels of dominance in global energy markets, pushing it to intervene more actively in the Middle East.

It is from this perspective that Russia’s renewed interest in the region must be understood. By consolidating all three energy-producing regions under its leadership, Russia can take the decisive step in shaping the new Eurasian system. Its interests lie more decisively in organizing a common political will for the core region than in recovering the old dreams of integration with Europe.

That the Syria military intervention is now regarded as a success—while the intervention in Ukraine led nowhere—may point to the fact that the former, but not the latter, took into account the facts of geopolitics.

On the one hand, Russia feels at home in the Middle East. The pursuit of shifting goals against a background of persistent chaos or state disorder appeals to Russian strategic culture and its early success in Syria was quickly put to use. Suddenly Russia became an important interlocutor for every country in the region. Turkey, Iran, Saudi Arabia, Iraq, and Israel all have significant interests in Syria, so they all need Russia, the new effective overlord above Bashar Al-Assad. On the other hand, Russian leverage in Europe and China depends on the extent to which Moscow is able to increase its control over energy production. Efforts after 2013 to engage China as a growing destination for its energy exports suffered from the obvious difficulty that China had already developed a diversified pool of suppliers and was therefore in a position to dictate purchasing terms that Russia found unattractive.

That a deal was finally reached with Saudi Arabia at the end of 2016 to collectively reduce oil production and give a boost to global oil prices is a direct result of Russia’s ability to influence decisions in the Middle East. Less than a year later, the agreement achieved its objective of raising oil prices to a level of $60 per barrel. King Salman’s visit to Russia in October 2017 was the first ever by a Saudi monarch. With Russia facing a new set of sanctions, Moscow now appears interested in exploring new sources of investment and capital. They may well include Saudi Arabia, following the announcement of more than $3 billion in potential investment deals upon the king’s visit.

Energy Diplomacy

In two other maps, Sechin proceeded to show how energy projects offer the best example of Eurasian integration. Major companies from Europe, Russia, China and elsewhere typically pool capital and expertise, investing in exploration and refining projects from Scotland and Egypt to Vietnam and Indonesia. Eurasian integration implies the participation of energy consumers in energy production through investments in the shareholder capital of producers. Rosneft is a good example, with 50 percent of shares owned by the Russian state and stakes from BP, Qatar Investment Authority, Glencore, and CEFC China Energy.

Moscow’s attempts to spread itself across the Middle East can be understood through a series of deals signed in the last two years. The oil and gas giant LUKOIL, the second largest company in Russia after Gazprom, is in negotiations to start production at the newly discovered Eridu field in Iraq. Gazprom Neft, Gazprom’s oil arm, has taken exploration blocks in Iraqi Kurdistan while also operating the Badra field in southern Iraq. Rosneft has signed cooperation agreements in Kurdistan and Libya and has bought a 30 percent stake in Egypt’s giant Zohr offshore gas field.

The very same day he delivered his speech on Eurasian geopolitics, Sechin announced that Rosneft would take control of Iraqi Kurdistan’s main oil pipeline, boosting its investment in the autonomous region to $3.5 billion, despite Baghdad’s military action sparked by a Kurdish vote for independence. The move helped shield Kurdistan from increasing pressure from Baghdad.

Two weeks later, Sechin went on to sign a preliminary pact with the National Iranian Oil Company, the first step before a binding deal to participate in Iran’s oil and gas projects over the next few years, with investments totaling up to $30 billion and a production plateau of 55 million tons of oil per year.

Four Russian oil companies have even begun negotiating for opportunities in Syria, a venture driven as much by politics as by commercial interest. The aim is not to explore and extract Syria’s modest petroleum reserves, of course. By actively participating in rebuilding and operating Syrian oil and gas infrastructure, Russian energy companies will be in control of a critical transit route for Iranian and Qatari oil and gas heading to Europe, bringing two rival producers closer to its orbit and tightening its stranglehold on the European gas supply. In 2009, Qatar proposed to run a natural gas pipeline through Syria and Turkey to Europe. Instead, Al-Assad forged a pact with Iran to build a pipeline from the Persian Gulf and then through Iraq and Syria and under the Mediterranean. This project had to be postponed because of the war. When it is resumed, Russia will be in control.

It is in the very nature of the Eurasian system described by Sechin that the core energy production region—provided it is sufficiently united and organized—will benefit from its central position, being able to pick and choose between east and west in order to obtain the most favorable terms. Russia and the Middle East are now part of the same geopolitical unit. It took the Russian military intervention in Syria for the world to start to come to terms with this reality.

Author: Tyler Durden
Posted: April 23, 2018, 7:30 am

German Green Party member Rebecca Harms has initiated an open letter calling on EU governments to stay away from the FIFA World Cup taking place in Russia in June.

Sixty Members of the European Parliament from 16 member states and 5 different political groups are supporting the call.

The letter (in full below) reads that the poisoning of a former Russian spy in Britain last month “was just the latest chapter in Vladimir Putin’s mockery of our European values.”

Citing “indiscriminate bombings of schools, hospitals, and civilian areas in Syria; the violent military invasion in Ukraine; systematic hacking; disinformation campaigns; election meddling; trying to destabilize our societies and to weaken and divide the EU.”

Concluding that:

“All this doesn’t make for a good World Cup host."

Additionally, Harms said on Friday that Putin is responsible for the occupation and war in Ukraine.

Harms letter - and the backing of a growing group of MEPs follows White House representatives warning British and American fans to think twice before going to the World Cup in Russia.

The official said: “We won’t have the same ability to protect our citizens or even just deal with the regular consular affairs.

“If you get into any kind of difficulty there then we just won’t have the wherewithal. People have accidents. They get ill, they need to be medivacked out.”

The official also warned of the threat of Russian hooligans promising to hunt down English fans in the streets and even “kill”.

*  *  *

OPEN LETTER

To all EU governments,

We, Members of the European Parliament, call on you, as representatives of the people in the European Union, to join the governments of Iceland and the UK in not attending the 2018 FIFA World Cup in Russia.

The Salisbury attack was just the latest chapter in Vladimir Putin’s mockery of our European values: indiscriminate bombings of schools, hospitals and civilian areas in Syria; the violent military invasion in Ukraine; systematic hacking; disinformation campaigns; election meddling; trying to destabilize our societies and to weaken and divide the EU - all this doesn’t make for a good World Cup host.

While we agree that sport can help build metaphorical bridges, as long as Putin is blowing up real ones in Syria, we cannot pretend this World Cup is just like any other major sporting event.

As long as Putin is illegally occupying Crimea, holding Ukrainian political prisoners and supporting the war in Eastern Ukraine we cannot pretend that this tournament’s host is our welcoming neighbour.

And as long as political dissidents and the free press are in constant danger in Russia and beyond, we cannot turn our backs on them to shake Putin’s hand in a football stadium.

Three days after the 2014 Winter Olympics in Sochi, Putin invaded Ukraine, and the world watched in dismay. This time, we can make things right by not cheering at his grave violations of human rights at the 2018 World Cup.

The world is looking at Europe in these difficult times. Our governments should not strengthen the authoritarian and anti-western path of the Russian President, but boycott the 2018 FIFA World Cup in Russia and raise their voices for the protection of human rights, of democratic values and peace.

Sincerely,

Adaktusson, Lars (EPP, Sweden)
Andrikiene, Laima (EPP, Lithuania)
Auštrevičius, Petras (ALDE, Lithuania)
Boni, Michal (EPP, Poland)
Bové, José (Greens/EFA, France)
Buzek, Jerzy (EPP, Poland)
Childers, Nessa (S&D, Ireland)
Delli, Karima (Greens/EFA, France)
Durand, Pascal (Greens/EFA, France)
Eickhout, Bas (Greens/EFA, Netherlands)
Fjellner, Christofer (EPP, Sweden)
Fotyga, Anna (ECR, Poland)
Gabelic, Aleksander (S&D, Sweden)
Giegold, Sven (Greens/EFA, Germany)
Griffin, Theresa (S&D, UK)
Guteland, Jytte (S&D, Sweden)
Harms, Rebecca (Initiator of this call, Greens/EFA, Germany)
Hetman, Krzysztof (EPP, Poland)
Heubuch, Maria (Greens/EFA, Germany)
Hökmark, Gunnar (EPP, Sweden)
Jadot, Yannick (Greens/EFA, France)
Jávor, Benedek (Greens/EFA, Hungary)
Jazłowiecka, Danuta (EPP, Poland)
Joly, Eva (Greens/EFA, France)
Kalinowski, Jarosław (EPP, Poland)
Kelam, Tunne (EPP, Estonia)
Kozłowska-Rajewicz, Agnieszka (EPP, Poland)
Kudrycka, Barbara (EPP, Poland)
Lambert, Jean (Greens/EFA, UK)
Lewandowski, Janusz (EPP, Poland)
Łukacijewska, Elżbieta (EPP, Poland)
Macovei, Monica (EPP, Romania)
Moody, Clare (S&D, UK)
Olbrycht, Jan (EPP, Poland)
Pabriks, Artis (EPP, Latvia)
Pietikäinen, Sirpa (EPP, Finnland)
Pitera, Julia (EPP, Poland)
Plura, Marek (EPP, Poland)
Rivasi, Michèle (Greens/EFA, France)
Ropé, Bronis (Greens/EFA, Lithuania)
Rosati, Dariusz (EPP, Poland)
Sargentini, Judith (Greens/EFA, Netherlands)
Siekierski, Czesław (EPP, Poland)
Smith, Alyn (Greens/EFA, UK)
Šojodrová, Michaela (EPP, Czech Republic)
Staes, Bart (Greens/EFA, Belgium)
Štětina, Jaromír (EPP, Czech Republic)
Szejnfeld, Adam (EPP, Poland)
Tarand, Indrek (Greens/EFA, Estonia)
Telička, Pavel (EPP, Czech Republic)
Thun und Hohenstein, Róża Gräfin von (EPP, Poland)
Trüpel, Helga (Greens/EFA, Germany)
Turmes, Claude (Greens/EFA, Luxembourg)
Vaidere, Inese (EPP, Latvia)
Valero, Bodil (Greens/EFA, Sweden)
Wałesa, Jarosław (EPP, Poland)
Ward, Julie (S&D, UK)
Wenta, Bogdan (EPP, Poland)
Zdrojewski, Bogdan (EPP, Poland)
Zwiefka, Tadeusz (EPP, Poland)

Author: Tyler Durden
Posted: April 23, 2018, 6:45 am
HungryFEED can't get feed. Don't be mad at HungryFEED. SimplePie reported: cURL error 60: SSL certificate problem: unable to get local issuer certificate

Elite Forex Blog - Market Research & Analysis

Back in the summer of 2015, Deutsche Bank mistakenly paid $6 billion to a hedge fund client in a “fat finger” trade on its foreign exchange desk. The embarrassed bank recovered the money from the US hedge fund the next day, and quickly accused a junior member of the bank’s forex sales team of being responsible for the transfer while his boss was on holiday; as the bank further explained, instead of processing a net value, the person processed a gross figure: "That meant the trade had too many zeroes" a staffer helpfully explained.
Fast forward to today when Germany's largest bank has done it again.
According to Bloomberg, a routine payment at Deutsche Bank "went awry" (or as the article notes "was flubbed") last month when the bank with the €48 trillion in derivatives...
... mistakenly sent 28 billion euros ($35 billion) to an exchange as part of its daily derivatives margin transfers.
While the error was quickly spotted and no financial harm was suffered by the bank which has made clusterfucks into its business model, it represents a terrific case study why one should never confuse gross and net derivative exposure: as Bloomberg adds, the "errant" transfer occurred about a week before Easter as Deutsche Bank was conducting a daily collateral adjustment. The delighted - if only for a short time - recipient of the massive transfer was the Deutsche Boerse AG’s Eurex clearinghouse, in whose account the sum landed.
“This was an operational error in the movement of collateral between Deutsche Bank’s principal accounts and Deutsche Bank’s Eurex account,” Charlie Olivier, a spokesman for Deutsche Bank, wrote in an emailed statement. “The error was identified within a matter of minutes, and then rectified. We have rigorously reviewed the reasons why this error occurred and taken steps to prevent its recurrence.”
Of course, Deutsche Bank vowed the same "rigorous" review took place after the 2015 FX transfer fiasco and clearly nothing changed. Actually no, what changed is that Deutsche Bank has been a chronic underperformer, its stock crashed in 2016 to levels below the financial crisis amid speculation about its solvency, and just last week the bank's latest CEO was fired for what really amounted to incompetence.
Surely a pattern is emerging.
Indeed, as Bloomberg adds, "the episode raises fresh questions about the bank’s risk and control processes, at a time when lenders are faced with increased scrutiny from regulators. It’s another embarrassment for Deutsche Bank at a time when it is undergoing a change of leadership in the wake of its third straightannual loss."
And while the "glitch" took place during the last days of now ex-CEO John Cryan's tenure, it will surely be seen as another wrinkle for the bank's new chief executive Christian Sewing who even before this news already had a mountain to climb, as Deutsche Bank is the worst performing member of the Stoxx 600 banks index this year, with the shares having fallen 26% YTD.
Also, in light of the latest debacle, one wonders if the transfer had anything to do with the recent ouster of bank COO Kim Hammonds, who reportedly called Deutsche Bank "the most dysfunctional company" she’d ever worked for.
Finally, adding insult to injury, as we reported over the weekend Deutsche Bank was asked by the ECB to simulate a "crisis scenario" and an orderly wind-down of its trading book, making the German lender the first European bank to receive such a request from the ECB, which is reportedly using Europe’s largest investment bank as a "guinea pig" before it sends similar requests to other banks.
Then again, other European banks don't have €48.3 trillion in derivatives they would need to wind-down overnight.
Posted: April 19, 2018, 6:39 pm
From www.globalintelhub.com 4/14/2018
Syria has been bombed which calls for a deep analysis of what's going on here.  As we explain in our book Splitting Pennies - what really backs the US Dollar is BOMBS.  Wall Street and the MIC (Military Industrial Complex) are inextricably intertwined, whether you are an armchair intellectual or an investor it's important to understand this economic relationship.
The latest action in Syria is that policy in action.  Let's take a step back and understand this critical but boringly predictable development in Syria, the players involved, their respective relevant histories, and what markets can expect.
First let's look at War Inc. or the Military as a business, or as we have outlined in a detailed article "Cult of War" (a good primer read if you're not up on this topic).  With 800 Billion + per year and a likely real spend of well over a Trillion USD, the US taxpayer needs to get something for their money.   The Military is in a constant state of self-justification.  The US outspends the enemy by such a large figure, there are stockpiles of bombs, planes, tanks, guns, logistic supplies, boats, aircraft carriers, satellites, and just millions of expensive assets getting dusty.  The US could fight World War 2 on 2 fronts and a war in Space and still have assets left over.  There are hundreds of military bases, millions of personnel, it has become just a massive super entity above Presidents, above the Elite, above Governments.  By itself, as a form of Artificial Intelligence, the Military will do anything to prove the need it serves and survive.  The glaring problem - no enemies!  The number of real enemies is dwindling.  But Syria has been on the CIA's hit list for some time, controlling key Oil transport sites and other resources.  Not to mention Israel has wanted to destroy the unfriendly regime for a long time.  Cult of War needs to create conflicts of any size, it's a 'use it or lose it' mentality.  There's no better training drill than the real thing.
The False Flag
False Flag operations are when a government or other body will secretly stage an event to make it look like it was the enemy, thus providing justification for war.  False flag operations obviously need to be handled with laser like precision (ideally, but in reality such as in 911 they are botched).  One of the first significant False Flags in American modern history is the sinking of the Lusitania, staged apparently by warmonger Winston Churchill in an attempt to bring the ruffian Americans into World War I:
The Lusitania set sail for Liverpool on May 1st, 1915 from New York harbor. It was carrying millions of rounds of ammunition and shrapnel. The previous captain Daniel Dow had resigned because of mixing civilian passengers with munitions. The ship was to have a British battleship escort called the Juno but was recalled before the rendezvous in spite of the knowledge that a Uboat was active in the path of the Lusitania.
False Flag operations are nothing new, Hitler burned down the government building and claimed to be able to catch the terrorists and restore order in Germany, finally naming himself Chancellor.  Every powerful regime has a False Flag that they 'own' in order to justify their 10 year run in power.  Their time is limited, people forget, so a new event is necessary every few years, custom tailored to the situation.
This false flag was planned and executed by MI5 (British Intelligence), although the details of the operation are as yet unclear.  What is clear is that it is a Hollywood style staged event which was put together in the last minute with many mistakes and inconsistencies (they didn't have a script supervisor!) as pointed out by countless fact-based witnesses and other governments:

Speaking with EuroNews, Russia's ambassador to the EU, Vladimir Chizov, said "Russian military specialists have visited this region, walked on those streets, entered those houses, talked to local doctors and visited the only functioning hospital in Douma, including its basement where reportedly the mountains of corpses pile up. There was not a single corpse and even not a single person who came in for treatment after the attack.""But we've seen them on the video!" responds EuroNews correspondent Andrei Beketov."There was no chemical attack in Douma, pure and simple," responds Chizov. "We've seen another staged event. There are personnel, specifically trained - and you can guess by whom - amongst the so-called White Helmets, who were already caught in the act with staged videos."  "All these facts show... that no chemical weapons were used in the town of Douma, as it was claimed by the White Helmets."  “All the accusations brought by the White Helmets, as well as their photos… allegedly showing the victims of the chemical attack, are nothing more than a yet another piece of fake news and an attempt to disrupt the ceasefire,” said the Russian Reconciliation Center.
Of course, US warmongers will say that the Russians are protecting the Assad regime.  There's plenty of video and other evidence for internet sleuths to sort through in the coming days.  But we have seen this so many times before we can guess the outcome fairly easily.  It was a false flag, done by the British, in a sad and pathetic last attempt to save what remaining Elite aristocrats have over the masses, post Brexit.  Although actual war is unavoidable in Syria now, one possible outcome of this is a populist movement against such politics, as is happening in Hungary.
Support of the US Dollar
So what's the real reason the US chooses Syria to bomb and not Greenland for example?
1. The Petrodollar (via comment on The Gateway Pundit):
“The Chinese have recently issued the gold backed Yuan, which they, and others, have vowed to use to sell/purchase oil (amongst other things).  The last two nations that tried to introduce a currency to compete against the petrodollar were Libya and Iraq. The US needs that pipeline through Syria even more than ever now, especially if they are to compete for European gas/oil markets (presently controlled by Russia and their pipeline) and the Chinese Yuan.  But i’m sure none of that has anything to do with it…”
Syria is not only close to the Chinese they are also working closely with Russia.  All of this is a non-USD system they are building, not controlled by DC.  So of course, it has to be destroyed.  This is outlined in great detail in the book Splitting Pennies. 
It's not only about Syria itself, you see.  The GDP of Syria won't make a difference on the USD.  It's about stopping a revolution.  If Syria uses a Russian - Chinese financial and energy system perhaps it will spread to Jordan, Lebanon, and who next?  If half the world is suddenly using a Yuan denominated trading market, it would threaten US hegemony.  So all alternatives need to be stopped in their tracks, period.  That isn't an opinion it is the policy in DC based on research by companies like RAND.
Trump Politics
Trump seems to be a victim of the international cabal that was a step ahead of him the whole time.  In the opinion of this author, Trump is not a 'plant' from the beginning meant to deceive the voters.  The UK is the master planner of this operation, including but not limited to the false flag.  When domestic attempts by the deep state to derail Trump failed, they realized a coordinated effort from abroad was a better approach, one that Trump would be defenseless against, as his experience in international politics is zero (before getting into the White House).  Hence, Trump's involvement in this quagmire is meant to ensnare him in a series of decisions that will weaken his domestic position, alienate his base, while achieving goals of the War Party, Zionists, the Oil industry, and other interests in this confluence.  Trump was forced with a choice:  pick sides, choose the Russian facts (there was no chemical attack) or the British lies.  Being attacked by the domestic media by idiotic yet influential forces, staging a dangerous trade war, and coming to the conclusion of a Russian collusion investigation, backed Trump into a corner.  If he had chosen to side with Russia, it could have backfired and blown up in his face.  Democrats, Leftists, and other Trump enemies would have pounced on the issue accusing him of being Putin's lap boy all along.  Being that this is Trump's first rodeo, he doesn't have the complex knowledge base or pool of advisers to deal with this strongly and independently.  In fact he hasn't been able to build a strong team of advisers independent of deep state snakes working against him.  This is not his fault, it is just the reality of how intertwined everything is in DC.  "Drain the Swamp" is a great marketing slogan, and a noble idea - but implementing it may prove impossible.  And on the surface, everyone loves the hero story - an evil monster gassed innocent people, and we are 'saving' them.  This is a great excuse to spend billions on bombs we don't need and use them.  He bought the party line of the MIC "We have to bomb the village to save it":
“The United States will be a partner and a friend, but the fate of the region lies in the hands of its own people.”
“Tonight, I ask all Americans to say a prayer for our noble warriors and our allies as they carry out their missions. We pray that God will bring comfort to those suffering in Syria.”
God will bring comfort to those we are bombing?  Really?  Can he be any more offensive?
This is the beginning of a series of events that Trump cannot dig himself out of.  The MIC won't stop until the majority of Syria is destroyed and key resources are controlled by US forces.  Some of us remember in the 90s there was 'chatter' that the NeoCons were planning a false flag in a major US City that was 'nuclear' - whether that was 911 or an event that never happened we'll never know.  But one thing is clear - they have the weapons, so they will kill all that stand in their way.  Whether he is one of theirs or is being manipulated by them is irrelevant for his base which was largely anti-establishment and anti-war, anti-globalist, which he has proven to be the opposite.
World War 3 
With the ascent of Russia, China, and smaller states building their armed forces without reason, it is only inevitable that they are used.  War between China, Russia, the US and allies is inevitable.  But wait - it's not what you are thinking!  There will not likely be strikes on US, Chinese, or Russian soil.  Rather, as in the Hunger Games, war games will be played in theaters such as the South China Sea, Syria, and other hotspots.
World War 3 will likely last 50 - 100 years, like the cold war, it will be an going unresolved war in places like Syria.  Flare ups and skirmishes will be the extent of the action.  Nukes may be used but tactical nukes in a limited, regional capacity.  PROBABLY.  Of course, it could completely spiral out of control.  But deep analysis indicates not.  There needs to be just enough war to justify the military and not enough to destroy it.  In the same way the MIC needs a war to justify its own existence, a complete obliteration of a major player would also be an endgame (including but not limited to a humanitarian outcry if a major city was destroyed in one bombing such as London or Berlin.)
Remember folks there was only one country that has used nuclear bombs to kill millions and that country is the United States of America.
The War Inc. model - 2 new players
China and Russia are both copying the War Inc. model from the United States.  Both countries do not have any real threats (except from the United States, but as a game) with the exception of terrorism.  Japan has no army and is not a threat to China.  China has destroyed all the regional competitors and has no real major state enemy.  Domestic politics may be a bigger threat to China than any foreign military (as China was once a chaotic, multi-state region).  China is a little bit like the Soviet Union, but through the prism of their culture of course.  The point is multi-ethnic super states usually collapse given enough time, as there are competing domestic interests at play.  That is China's focus not to be a military power, their external show of force is to play the American game.  America needs an enemy.  The China 'copy and paste' model, a threat to the IP of US tech companies, is also at play with War Inc.
Russia MIC
Russia is an interesting case here.  During the Soviet Union Russia was a defense oriented country that did little in foreign countries outside of the Iron Curtain.  After decades of high quality propaganda, at a cost of tens of billions of dollars, Russia realized that if they wanted to be a major player in the world and participate in the new growing economic power center they needed to switch to Capitalism, which they did in 1991.  This was a hard shift, it is difficult for those outside Communist countries to understand what it means to 'switch' from a state controlled economy to 'free market' economy.  Russia's markets were so free in the 90s it led to massive growth by organized crime which was borderline legit business (they were like the Robber Baron's of the industrial age in USA).  Basically Russia is 80 years behind the US, socially.  Since 1991 Russia has taken all the advice given to them by their Western economic advisers.  They have implemented a stock market, there are entrepreneurs in Russia starting businesses on a daily basis, they even have a Silicon Valley style incubator in Moscow Skolkovo (and others - see more info on starting a venture in Russia here).  Russia has implemented many reforms in their plan to make Russia a market leader.  They have a long way to go, their manufacturing standards have become a joke when Putin opened the door of a Russian car and the handle came off.  But the world seems to forget that this was the 'Communist' country that the West sold on a better, capitalist life.  One of the trimmings of a Capitalist society is War Inc.  The partnership between Syria and Russia is a natural one; there are critical oil pipeline routes in Syria and Syria is a Christian foothold in a predominantly Muslim region.  Russia didn't invent the War Inc. model however it is now operating it based on a business plan that was sent to them by Washington during the Cold War.   It should come as no surprise that they are doing what they were convinced to do by Capitalist Generals in Washington.  Billions upon billions were spent on Hollywood produced propaganda programs including films, radio (Air America), Television programs, news, and later internet campaigns.  They are influenced by reports such as "What the bombing of Syria means for your 401k" and other reports.  Russia is playing the role of War Inc. - a model copied directly from US interventions in Iraq and other places (Iraq is most similar).  There is no real skin in the game for either country, Syria is just a proxy state to be used and abused for the war profiteers.  This is the first time Russia is playing this role and it is playing it well.  It wouldn't be surprising if Russian and US generals were exchanging encrypted communications on their competing computer game theory simulations while contemplating their next moves with each others open feedback.
Vacuum dirt analogy
Why are vacuum cleaning manufacturers honest and politicians are not?  Because when you buy a vacuum, you immediately see how it works (the dirt and particles are caught in the transparent tank).  If a vacuum didn't work or had poor suction it would be immediately apparent and people would return them or complain.  Politicians control the information flow, especially during war, because they have power.  This is especially true of government employees who are publicly elected.  In private business there is a lot of oversight and ultimately you will fail or succeed, you can't lie to investors quarter after quarter.
Armchair Intellectuals and the Great American Hobby
Finally, there is this class in America not sure how to describe them, perhaps "Saturday Night War Experts" - they support any show of US force.  They are mostly middle aged males with health issues, mostly on multiple prescriptions, they enjoy watching infographics explaining the differences between cruise missiles and smart bombs, right after their 5th glass of Merlot.  This class isn't completely handicapped, but they choose to spend their free time sitting in Lazyboy chairs watching Fox News and other sources during wartime.  When they're not tuned in, they enjoy to debate with their friends different methods how the US could use its arsenal to completely destroy Syria or "Make it GLASS" as I'm sure all readers have heard someone say once.  This grotesque hobby is what gives those in DC power to enact such measures.  You don't read headlines that Norway has unilaterally destroyed Sweden.  In New Zealand for example there is a ban on Nuclear anything.
The info trade
During the last Iraq was there was an interesting correlation between US strikes, war actions and info, and the US Dollar.  It was caused by speculators not real money flows.  War is information and the markets live on information.  All markets will be impacted by this war, it can even be a trading strategy by itself.  Defense stocks will have a boost on successful missions.  Key victories will lead to USD being bid up.  It's a busy time and there's a lot happening.  War traders must be tuned in 24/7 as the smallest bit of info that hasn't hit the wires yet can cause markets to move.  Traders need to become information junkies.
Don't skip over the obvious facts that are staring us in the face.  This is the beginning of World War 3 - but don't worry - it's good for the economy.  Game on!
To read about the inner workings of this system checkout Splitting Pennies.  Support great journalism and shop at www.ubuy.me and invest at www.alphazadvisors.com  You read this quality analysis free - please share this article especially to friends with a TV!
Reference articles
Posted: April 15, 2018, 3:18 pm
The SEC's highest-ranking official appears to be softening his sentiment toward ICOs.
At a Princeton University event Thursday, SEC chairman Jay Clayton went so far as to reject the idea that all ICOs are fraudulent, answering "absolutely not" to a question centered on whether his agency's actions against the founders of blockchain projects amounts to such an admission.
Clayton's remark came during a talk on "Cryptocurrency and Initial Coin Offerings," one that was notable given his past statements, including his most famous issued in February, in which he said that he believes "every ICO" he's seen qualifies as a security. Indeed, Clayton opened the talk by telling the assembled students he believes that "distributed ledger technology has incredible promise for the financial industry."
The SEC chairman went on to argue that the steps taken by the agency in recent months could actually help the industry mature overall.
He told attendees:
"Is the approach taken in Washington by the SEC adversely affecting distributed ledger technology in other areas? My quick answer is that my hope is that it's actually helping - because this technology is being used for fraud and to the extent that it's being used for fraud, history shows that government comes down harshly on that technology later."
Clayton continued: "I think if we don't stop the fraudsters, there is a serious risk that the regulatory pendulum - the regulatory actions will be so severe that they will restrict the capacity of this new security."

Utility token debate

Elsewhere, Clayton discussed the evolving terminology of the industry.
One of the issues with token sales, he remarked, is the attempt to classify them as so-called "utility tokens," which would ostensibly free them from any kind of designation as a security. As such, he reiterated his view that almost all token sales purport to sell such products, despite the fact that they are actually securities.
If a startup is "offering something that depends on the efforts of others, it should be regulated as a security," he told the gathering of students on Thursday.
Clayton used an analogy to describe the difference between a utility token and a security token.
"If I have a laundry token for washing my clothes, that's not a security. But if I have a set of 10 laundry tokens and the laundromats are to be developed and those are offered to me as something I can use for the future and I'm buying them because I can sell them to next year's incoming class, that's a security," he explained.
Still, he suggested that such a definition can evolve over time.
"What we find in the regulatory world [is that] the use of a laundry token evolves over time," he continued. "The use can evolve toward or away from a security."
Further, nations may experiment with sovereign cryptocurrencies, while startups might develop different kinds applications with the underlying technology, he added.
Whether a token qualifies as a security could also change as the industry evolves, he said, adding:
"Just because it's a security today doesn't mean it'll be a security tomorrow, and vice-versa."
Jay Clayton photo by Mahishan Gnanaseharan for CoinDesk
Posted: April 6, 2018, 7:14 pm
Bitcoin in USD is down to 7,000 which is really a huge number when you think about it, but HODLrs who got in at more than 10,000 are feeling the pain, those who got in with leverage above that are freaking out, many wiped out.  And the thing about Bitcoin although there are hundreds of better alternatives, Bitcoin remains 40%+ of the market cap of the entire crypto currency universe.  As we explained in our groundbreaking book on this topic Splitting Bitsand on Zero Hedge in an exclusive article, we believe the only possible creator of Bitcoin is the US Government itself, specifically the NSA.  Because of the size of the Bitcoin market now, and the new paradigm created, the creator of Bitcoin is relevant.  People are borrowing against their 401k to invest in Bitcoin or start their own crypto, and we don't even know the identity of the creator of this phenomenon?  We know, it's the NSA - but the NSA is an organization.  Saying it's the NSA is a bit like saying it was the CIA that killed JFK.  Well the CIA certainly couldn't possibly kill anyone because it's an entity, people use guns and guns kill people, not entities.  It would be interesting indeed to unmask the real creators of Bitcoin, if they haven't been retired or disappeared on their GS-15 package.  Perhaps they are living it up with the witsec family, or have changed their face and are pursuing their hobbies whatever they may be.  Whoever it is, it is likely a dead a buried secret.  Who knows how the market would react if the real creator came forward and ultimately liquidated the millions of bitcoin on the market.  (For those of you who don't know, there are 42,000 zombie addresses of Bitcoin meaning they are not used but storing Bitcoin which can be seen publicly on the network, see here.)  Wait a minute - 42 is the meaning to life, according to an AI computer that was built to answer the age old question 'What is the meaning of life?' 
Could it be that what Adams really means is that 42,000 Bitcoin is the meaning of life?  Now we're getting somewhere.  42 Million is the meaning of life.  Where are all the numerology nutjobs when you need them?  3/30/2018 / 42 = 78,619.
Bitcoin is genius, perhaps the most intelligent creation of the digital age.  It served several purposes:  it's a perfect marketing engine (it allowed small investors to potentially earn a big return, the only asset to do so although many have claimed this), it created a new paradigm of digital currency, it changed the way the entire world looks at banking and trading, it has caused the entire tech sector to reshift it's business, all at a cost of likely a few million dollars.  If you follow the thinking that Bitcoin was in fact a child of an NSA lab, you have to continue the thought that the US Government and more specifically the military is the first real form of Artificial Intelligence.  Billions of dollars are invested every year and we all complain about waste, and there is waste - but there is also Bitcoin.  And unlike many successes of the intelligence apparatus, they will never be acknowledged, there will never be a statue in DC with the creator, never a parade.. But such is the life of a spook.  They signed up for it.  But the monetary rewards and the real intellectual pleasure of watching this game play out are so rewarding well it cannot be bought with money.  Some things in government service are priceless, this is one - thank you Mr. Mathematician!  You are the real hero, and heroes (likely it was a team effort).  There are some names on their 1996 paper but anything that is visible electronically in reference to the NSA can be assumed to be inaccurate, misleading, an intentional disinformation, or in any case a dead lead.  But it's worth having a look - click here to read it.
Certainly no one is going to find out anything by searching Google!
So more to the point, Bitcoin going lower before it goes higher, if it ever does.  Real price of BTC/USD could be $100 or $200 - maybe $500.  In a market where money is chasing any higher returns than offered by the traditional markets - bubble psychology took off and fueled a historical hockey stick that will never repeat in crypto.  It can only repeat in some other format - like Quantum computing or if Elon Musk finds Helium 3 on the moon for example.  Something really value-shifting.  Aliens admit that 90% of valley technology came from them.  Bitcoin isn't going to $1 Million, at least it's not likely, but then again we have been shocked by the race to $10,000 and $20,000.  Remember investors that the only thing that drives the price of any asset higher is buyers.  The buyers have stalled and there have been waves of big sellers.  Bitcoin isn't going to be used as a replacement of the US Dollar any time soon.  It may be the dream of some Elite Globalists as a one world currency but it's not happening.  Bitcoin is flawed, slow, and only secure if you use it properly which no one does of course except maybe a few hackers.
Other new Cryptos which are designed better, have more appropriate designs which can empower their niche to flourish have much better chances for long term survival.  But as many know, this is nothing new or innovative, in the United States during the Wildcat currency period there were thousands of active currencies in the United States.  
Bear in mind the real value of Bitcoin is only what investors decide, just as they decided to drive it higher they can drive it to zero.  There is no intrinsic value in Bitcoin itself, as Roubini candidly pointed out recently.  
Posted: March 31, 2018, 1:54 am
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
—Ernest Hemingway
Military spending is the second largest item in the US federal budget after Social Security. It has a habit of increasing significantly each year, and the proposed 2019 defense budget is $886 billion (roughly double what it was in 2003).

US military spending exceeds the total of the next ten largest countries combined. Although the US government acknowledges 682 military bases in 63 countries, that number may be over 1,000 (if all military installations are included), in 156 countries. Total military personnel is estimated at over 1.4 million.
The reader could be forgiven if he felt that a US military base was rather unnecessary in, say, Djibouti or the Bahamas, yet the US Congress will not allow the closure of any military bases. (The Bi-partisan Budget Act of 2013 blocked future military base closings under the argument that they’re all essential for “national security.”) And Congress has a vested interest in keeping all bases open and consuming as much in tax dollars as possible (more on that later).
Of course, those bases need to be kept well-stocked with small arms, tanks, missiles and aircraft. Yet, in spite of the admittedly incredible number of US military bases across the globe, the additional stockpile of weaponry is so great that the government has difficulty finding places to put it all.
One storage location is pictured in the photo above - Davis-Monthan Air Force Base in Tucson, Arizona. In spite of the size of the photo, it shows only a portion of the aircraft located there. (And bear in mind, such aircraft often cost over $100 million each.)
If asked, the military states that, although these aircraft are in dead storage and many have never seen any use whatever, they might possibly be called up for service, “if needed.” Of course, if they’re needed, they’re unlikely to be of use if located in Arizona. And, in addition, they may not be useful for warfare, as war technology has moved on since the days when such aircraft designs were suitable.
It’s been said that generals are forever fighting the last war, and this is certainly true. Even a layman can observe that such conventional aircraft will never see use, as they serve no purpose in modern warfare.
And yet, these storehouses are being dramatically added to every year.
This year, production will be increased for the F-35 and F/A-18 aircraft. To get an idea of the cost of such expansion programmes, the F-35 Joint Strike aircraft alone will cost $400 billion for 2,457 planes. However, most of this cost will be for development and testing, not the planes themselves.
To save you the arithmetic, that’s about $162 million per plane. (I’m guessing that Henry Ford might have been able to produce them a bit more cheaply. It’s difficult to imagine what they could possibly be made out of to justify their extraordinary price tag.)
But, even though a staggering amount of money is spent on such aircraft, only to then send them to storage facilities at some point, why not, at the very least, sell off the surplus cheaply or scrap them and close down the costly bases that warehouse them?
Well there’s a bit of a snag there. If they were to be scrapped, it would be necessary to admit that they weren’t really necessary. And if they weren’t necessary, why were they purchased?
It may well be that the answer lies in the fact that the military industrial complex is a major political contributor, paying heavily into the campaign funds of both political parties.
It’s probably safe to say that, in doing so, they’re likely to expect something in return, and of course, that’s just what they get. As stated above, the “defense” budget is far beyond what it would cost to defend the US, and ridiculously so.
However, as far as the military industrial complex is concerned, the ideal situation might be for the US to enter into a policy of perpetual warfare with vaguely-stated military goals, and to do so on many fronts globally. If Congress were to approve a budget that would allow for that, the amount of kickback to the military industrial complex would not only be maximized, but it would be ongoing, from one year to the next.
So, is that what has occurred?
Well, if we look back at say, World War II, the most costly war in history, we see a war that was fought on three continents and cost the lives of between fifty and eighty million people, yet it was concluded a mere four years after the US joined.
By comparison, the undeclared war with Afghanistan has been a minor one, costing roughly 150,000 lives. Again, based upon arithmetic, as compared to World War II, it should theoretically have taken just over two months to conclude, yet to date, it’s been ongoing for seventeen years, and its daily cost has far exceeded that of a world war.
So, are we to conclude that the US military has become so inept that it can’t fight a war and win, no matter how much firepower they have and no matter how much time it takes?
If this is not the case, then there’s only one other conclusion to draw. (As Sherlock Holmes often said, “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.”)
In this case, what remains is that winning the war is not the objective and, in fact, never was the objective. The objective would be to consciously create perpetual warfare; to extract billions in tax dollars each year from the electorate, in order to pass the revenue on to the military industrial complex in the form of armaments contracts. Whether those armaments are needed, or even useful, would be of minimal importance.
In recent years, the US military has gone far beyond its original concept of “defense.” It’s invaded more countries than ever before in its history, often with no direct provocation whatever, on the basis of “making the world safe for democracy.” (It should be borne in mind that invading a country, largely destroying it, then installing a puppet government is not exactly “democracy.”) In addition, these have not been actual “wars,” as, under US law, only Congress can declare war and has not done so since 1942.
In addition, the “enemy” in each case has been vague indeed. The US is not at war with any country specifically, but with “terrorism,” a non-specific enemy, one that’s even more vague than George Orwell described when writing 1984.
If nothing succeeds like success, it’s also true that nothing exceeds like excess. If this thought is troubling now, it will be even more troubling when the US makes good on its threat to attack North Korea, a small country next door to China, or to invade Iran, an ally of both China and Russia.
When the fur really starts to fly, it will be highly doubtful if the American taxpayer is able to pony up the further cost of a true world war, which would be far beyond what they’re shouldering at present.
And, since the loser in a war is almost always the country that runs out of money first, and the US is for all purposes broke, the outcome of such a war would not be in favour of the US.
*  * *
You don’t have to sink with the US… There are practical steps you should take to prepare—before America makes a dangerous military move. Get the details straight from Jeff in our guide to Surviving and Thriving During an Economic Collapse.
Posted: March 27, 2018, 2:21 am


The world is a wild place.  Why go into a store and subject yourself to a number of risks and dangers, including but not limited to catching a cold – when you can do all your shopping from the comfort of your own home!  Things like Amazon Prime now make online shopping very easy.  Even without prime, you can get free shipping with a minimum cart size (usually $45).  Amazingly, they’ll ship anything from toilet paper to batteries.  There’s another consideration; price.  It’s possible online to quickly price check, and sometimes even exploit coupons, discounts, and other offers easier.



Posted: March 27, 2018, 2:06 am
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, in order to take additional steps with respect to the national emergency declared in Executive Order 13692 of March 8, 2015, and relied upon for additional steps taken in Executive Order 13808 of August 24, 2017, and in light of recent actions taken by the Maduro regime to attempt to circumvent U.S. sanctions by issuing a digital currency in a process that Venezuela’s democratically elected National Assembly has denounced as unlawful, hereby order as follows:
Section 1.  (a)  All transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order.
(b)  The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the effective date of this order.
Sec. 2.  (a)  Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.
(b)  Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3.  For the purposes of this order:
(a)  the term “person” means an individual or entity;
(b)  the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
(c)  the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches of such entities), or any person within the United States; and
(d)  the term “Government of Venezuela” means the Government of Venezuela, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (PdVSA), and any person owned or controlled by, or acting for or on behalf of, the Government of Venezuela.
Sec. 4.  The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including promulgating rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to implement this order.  The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions to other officers and executive departments and agencies of the United States Government.  All agencies of the United States Government shall take all appropriate measures within their authority to carry out the provisions of this order.
Sec. 5.  For those persons whose property and interests in property are affected by this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures taken pursuant to this order would render those measures ineffectual.  I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 13692, there need be no prior notice given for implementation of this order.
Sec. 6.  This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Sec. 7.  This order is effective at 12:15 p.m. eastern daylight time on March 19, 2018.
DONALD J. TRUMP
This should come as no surprise, however we should understand the higher play here.  As we explain in Splitting Pennies - the US Dollar is backed by bombs.  There is an underlying subtle threat - use US Dollars and drink Coca Cola or we'll bomb you.  It is good for business.
Let's just take a step back one generation, does anyone remember this news?
A bizarre political statement by Saddam Hussein has earned Iraq a windfall of hundreds of million of euros. In October 2000 Iraq insisted on dumping the US dollar - 'the currency of the enemy' - for the more multilateral euro.
The changeover was announced on almost exactly the same day that the euro reached its lowest ebb, buying just $0.82, and the G7 Finance Ministers were forced to bail out the currency. On Friday the euro had reached $1.08, up 30 per cent from that time.
Almost all of Iraq's oil exports under the United Nations oil-for-food programme have been paid in euros since 2001. Around 26 billion euros (£17.4bn) has been paid for 3.3 billion barrels of oil into an escrow account in New York.
The Iraqi account, held at BNP Paribas, has also been earning a higher rate of interest in euros than it would have in dollars.
At the time of the change the UN issued a report saying that the move could cost Iraq up to £270 million. Independent experts questioned the value of buying into a plummeting currency.
'It was seen as economically bad because the entire global oil trade is conducted in dollars,' says Fadhil Chalabi, executive director of the Centre for Global Energy Studies.
It seems that anyone who attempts to thwart US Dollar hegemony ends up getting bombed.  It may be all a coincidence, we will see shortly.  The big question is - 
IS VENEZUELA NEXT?
The country is in a de-facto state of war anyway, with rampant inflation, pirates and robbers controlling the streets, and an underground Crypto mining industry that's keeping some away from starvation, on the down low:

There are stories of the government confiscating computers and mining equipment from people. Tell us about this.

Yes, sometimes the police squad that visits your place decides to seize your mining equipment, and there is absolutely nothing you can do about it.

What do they do with the equipment?

Rumor has it they install them on government facilities.
So the Venezuelan government, in its desperate need to generate funds in a chaotic environment with a worthless domestic currency, has launched the boldest Cryptocurrency project to date, a government & commodity backed Crypto.
While the politics are hardly comparable, the US narrative is fairly consistent since the success of operation PBFORTUNE in 1954.
Operation PBFORTUNE, also known as Operation FORTUNE, was the name of a covert United States operation to overthrow the democratically elected Guatemalan President Jacobo Árbenz in 1952. The operation was authorized by US President Harry Truman and planned by the Central Intelligence Agency. The United Fruit Company had lobbied intensively for the overthrow because landmark land reform enacted by Árbenz threatened its economic interests. The coup attempt was also motivated by US fears that the government of Árbenz was being influenced by communists. It involved providing weapons to the exiled Guatemalan military officer Carlos Castillo Armas, who was to lead an invasion from Nicaragua. The coup was planned with the knowledge and support of Anastasio Somoza GarcíaRafael Leonidas Trujillo and Marcos Pérez Jiménez, the US-backed right-wing dictators of Nicaragua, Dominican Republic and Venezuela respectively, as well as the United Fruit Company. However, the US State Department discovered that details of the plan had become too widely known.[1] US Secretary of State Dean Acheson was worried that the coup attempt would damage the image of the US, which had committed to a policy of non-intervention, and so terminated the operation.[2] Operation PBFORTUNE was a precursor to Operation PBSUCCESS, the covert operation that toppled Árbenz and ended the Guatemalan Revolution in 1954.[3]
For those of you who are just joining us, the US has led a global Empire since World War 2 and been the exclusive power in the world economically and militarily (although, when you dig deeper, the US is just a tool the real owners are mostly non-US).
If we are looking at things statically, today's EO fits the same pattern as a number of others pre-invasion.  With Russia being completely and 100% cleared of any wrongdoing, hacking, meddling, and social media botting - US war mongers are desperate to find a new enemy.  Venezuela fits the bill as South America has been the local playground for spycraft since the creation of the CIA.
IS VENEZUELA NEXT?
We shall see in the days ahead.  Sunken boats, terrorism, strange things in Miami - who knows.  Maybe this time it will be something digital.  Venezuela will be blamed for 'hacking' into something, or a building in Miami will collapse.  Lots of rich Venezuelan consultants ready to help their hosts to go down and reclaim what was taken from them by the communists.
"We have been shamelessly threatened by the most criminal empire that ever existed and we have the obligation to prepare ourselves to guarantee peace," said Maduro, who wore a green uniform and a military hat as he spoke with his army top brass during a military exercise involving tanks and missiles. "We need to have rifles, missiles and well-oiled tanks at the ready....to defend every inch of the territory if needs be," he added. 
This is part 1 of a series IS VENEZUELA NEXT?
Posted: March 19, 2018, 10:34 pm
Like many traders, I read Market Wizards as a kid. If you don’t know it, it’s a collection of interviews with the most legendary traders of the 1980s.

Market Wizards

Back when I first read it, I really had no idea what the hell I was doing. I read it, thought I got it and moved on.
But I didn’t get it.
The reason was simple. I didn’t have the life experience and wisdom to understand it. That would take many, many more years.
A few months ago I picked up my old, dog eared and highlighted copy and started thumbing through it. I expected to snag a few quotes and move on but pretty soon I found myself hooked, reading it cover to cover all over again.
Two things struck me immediately.
  • First, I’d highlighted all the wrong things.
  • Second, I saw instantly how much these men were alike.
No matter where they came from or how they got started, they all remembered one devastating loss early in their career. They all started with little to no idea what they were doing. All of them transcended false beliefs and developed an amazing ability to adapt and change their minds in a flash.
Their styles, politics and temperament all varied widely but the rest of their lives followed a remarkably similar path.
That’s when I realized I was seeing something bigger, a meta-pattern, a pattern of patterns.
Call it the journey of the great trader.
So what is that path and how can you follow it?
Let’s take a close look.

Number One: Start Out Clueless

No matter how good anyone gets at something they always start out clueless. Maybe trading is some innate gift but that doesn’t matter at all at first. Everyone starts at step one.
Nobody starts off a superstar.
Maybe it’s my fault

This Wizards excerpt from Michael Marcus is typical of most traders.
“Q: Did you know anything at all about what you were doing? Had you read anything about commodities or trading?
A: No, nothing.
Q: Did you even know the contract sizes?
A: No, we didn’t.
Q: Did you know how much it was costing you per tick?
A: Yes.
Q: Apparently, that was about the only thing you knew.
A: Right. Our next trade, in wheat, didn’t work either. After that, we went back to corn and that trade worked out better; it took us three days to lose our money. We were measuring success by the number of days it took us to lose.”


You see the same story again and again. Somebody hears about how they can get rich quick in the market. Their friend tells them or they read a story about some king of Wall Street or the newly crowned crypto rich and they leap in hoping to make a quick buck, their eyes filled with stars.
Even if they do have some idea about the basic rules, like setting good stops and choosing a position size that won’t wipe them out they almost always ignore it.
Paul Tudor Jones, a super aggressive, hard charging trader, tells the tale of a horrible early trade where he made a spur of the moment “macho man” cotton buy leaving him seriously vulnerable. Immediately the other pit traders knew his mistake and he did too. The big whale of the cotton market started dumping on him almost instantly, driving the price down hard and locking him in.
He learned the hard way “Never play macho man with the market” as he wiped out 70% of his equity in a single trade.
Every single person thinks they’re smarter than the market. Even if they read the time honored rules of the best of the best they’re thinking “those don’t apply to me, I’m different.”
And that takes us to step two.

Number Two: Make the Same Mistakes as Everyone Else

Think you’re immune to making the same mistakes everyone else does?
You’re not. But don’t worry, you’re in good company.


Nobody is immune.
Inevitably new traders don’t understand why the rules are there to protect them even if they know the rules. Maybe after their clueless stage they read a few books or listen to some smart sounding traders on Twitter or take a course.
The problem is they don’t really understand what they’re reading and hearing. They can’t process it yet because they don’t have the experience to see the wisdom in it, even if they understand it partially at the intellectual level. Knowledge can’t be passed on passively. It has to be earned through personal experience.
And when you don’t understand the rules, what happens?
You screw up.
And what are some of those rules?
1) Don’t overtrade.
2) Keep your position sizes small.
3) Set stop losses.
4) Don’t make snap decisions.
5) Don’t get too high or too low emotionally.
Those are just a few of the essential pearls of wisdom that every trader eventually figures out.
Eventually.
The hard way.
In the beginning everyone just glosses over them.
Legendary currency trader Bruce Kovner tells a classic story about snap decisions. Kovner made his original money hedging spreads on contracts. He’d be long one contract and short another to reduce the risk but as soybeans rocketed to new highs in the 1970’s his broker got caught up in the euphoria and called him wild with greed:
“Soybeans are going to the moon…You are a fool to stay short the November contracts. Let me lift your November shorts for you, and when the market goes limit-up for the next few days, you will make more money.”
He agreed. Limit-up is a circuit breaker on the markets. If they went too high or too low the contracts locked and nobody could trade them. You were stuck. Limit-up meant you were making the absolute most money possible. Limit-down? You were losing the most money possible and even worse you were stuck and you couldn’t sell out.
Kovner perfectly describes the crazy euphoria every early market apprentice feels:
“It was a moment of insanity. Fifteen minutes later, my broker calls me back, and he sounds frantic.
‘I don’t know how to tell you this, but the market is limit-down! I don’t know if I can get you out.’ I went into shock. I yelled at him to get me out.”
By sheer luck he managed to get out when the markets ticked up past limit-down for a few minutes but not before eating a massive loss.
Afterwards, Kovner talks about the sickness every trader feels when they make a horrific trade and the market eats them alive.
“I was up about $45,000. By the end of the day, I had $22,000 in my account.”
And that brings us to our very next step on the journey of trader enlightenment.

Number Three: Take a Big Loss

Every single trader will eventually experience a catastrophic, heart breaking loss. Many of the best traders went completely belly up, more than once. The original great speculator, Jesse Livermore, lost multiple fortunes.


Kovner tells us the gut wrenching sickness of losing big money in the market.
“I went into emotional shock. I could not believe how stupid I had been — how badly I had failed to understand the market, in spite of having studied the markets for years. I was sick to my stomach, and I didn’t eat for days. I thought that I had blown my career as a trader.”
Michael Marcus tells a similar story of a disastrous sugar trade.
“Q: How much did you lose on the trade by the time you liquidated?
A: I lost my own $30,000, plus $12,000 of the $20,000 my mother had lent me. That was my lesson in betting my whole wad.”
Every trader has a story like that to tell. For me it was NEO. I got in late in the bull run and bet big. I just knew it was going to the moon and a few days later I was riding high and I nearly doubled my money.
China started threatening the big exchanges. It seemed every single weekend there was a brand new story attacking crypto, a big banker saying it was worthless or insane, China cracking down, or another country looking to ban trading.
It didn’t take long for the markets to panic.
And there was no worse coin to hold at the time than a Chinese coin. That’s exactly what NEO was, red Chinese through and through.
I watched my wins vaporize over the course of two days and I just froze. I panicked. I liked the coin and the project, I thought it would turn around so I just hung on as it went down and down and down.
In the end I lost 68% of what I put in.
I was sick to death. I couldn’t sleep or eat for days. Working out didn’t help. Getting a massage didn’t help. Alcohol didn’t help. Whacking it didn’t help. Nothing helped.
Only one thing could fix it. The next step.

Step Four: Reflect and Come Back Stronger

Once you finally experience that soul crushing loss it’s not long after that you realize it was the absolute best experience of your trading life.


If you’re smart and you’re focused you start looking at everything you did wrong. You go over it with a fine tooth comb. You question all your beliefs and ideas. No longer are you willing to just take things at face value. You want to know what works and what doesn’t and so you finally get serious.
Paul Tudor Jones remembers reflecting on his mega-loss and getting so depressed he wanted to quit. But then it hit him:
“It was at that point that I said, ‘Mr. Stupid, why risk everything on one trade? Why not make your life the pursuit of happiness rather than pain?’
That was when I first decided I had to learn discipline and money management. It was a cathartic experience for me, in the sense that I went to the edge, questioned my very ability as a trader, and decided that I was not going to quit. I was determined to come back and fight.”
Real loss equals real wisdom.
Without that loss none of the lessons make any sense to you whatsoever. You’ll think you’re different and that the rules don’t apply to you.
But they do. They apply to everyone. No exceptions.

Step Five: Learn the Age Old Lessons the Hard Way

What is it about the human mind that makes us learn all our lessons the hard way? We read the great wisdom of the ages and promptly ignore it.

Be like water, my friend.

Maybe that’s just the meaning of life? We all have to go through the same struggles and make our own mistakes and live the great story again and again.
After my big NEO loss I reflected on everything I’d done wrong and it hit me like a diamond bullet between the eyes. I realized I didn’t know how to make decisions when I was under fire. I just froze like a deer in headlights. I knew the market had turned and that NEO was going down and I should get out but I couldn’t pull the trigger.
Internally, I just couldn’t accept the loss. I was in denial. I was a good trader and careful or at least I thought I was but now I was faced with a new reality.
I wasn’t as good as I thought I was. And I couldn’t accept the reality in front of me. I couldn’t put it behind me and move on.
I should have sold that NEO shit stack long before it cost me a big chunk of change. Instead I road that loser all the way into Hell instead of cutting my losses.
As Tudor Jones says “losers average losers.”


People love to hang onto losers. They love the pain. Oh they won’t admit it but they do. Pain is drama. And people love drama.
Either that or they imagine the market merely lost its mind for a minute. The project is a good project. Things will turn around.
Except more often then not they don’t turn around or they turn around too late and because you held so long you can’t make up that loss.
And it doesn’t matter if gold is good or a company is good or a project is good. Sometimes that doesn’t mean a damn thing to the market and it just tanks. Saddling up that bomb and cowboy riding it to the bottom is always a disaster.
NEO taught me the most important lesson of all.
More importantly I now understood the lesson:
“Cut your losses, let your winners run.”

Step Six: Money Management

The ancient wisdom really boils down to two words: Money management.
Cutting losses is one of those key principles that everyone has to learn. It’s not enough to simply trade the market, you have to know you’re going to get things wrong a lot of the time. And that means you have to protect your money at all costs.
That’s just basic probability.
Paul Tudor Jones says “I am always thinking about losing money as opposed to making money…I have a mental stop. If it hits that number, I am out no matter what.”
Money management comes down to a few critical principles:
1) Keep your position sizes small to minimize risk
2) Ruthlessly cut your losses.
3) Always use stops.
4) Don’t use too much leverage
5) When you start losing, start trading smaller.
6) When you go on a bad streak, get out of everything and take a break.
7) If you get in a bad trade, get out immediately because you can always get back in later.
All of these principles work in tandem to protect your money.

Don’t throw good money after bad

I learned this the hard way yet again just the other day, when I went a little too heavy on a leveraged position after a strong winning streak.
The mistake was easy to see in retrospect.
What blinded me at first was that I’d gotten masterful at setting my stops. One of my tricks is to set a limit stop price far above or below the trigger so it always gets filled. I’d never had a stop not fill and I’d never gotten liquidated. I don’t get liquidated because I use just enough leverage to make a difference but not enough that the market would only have to move a few percentage points to kill me off.
I put in my trade, set my stop and went to bed.
When I woke up in the morning and checked in I saw I was down 29%. My stop never triggered. I wasn’t liquidated because I hadn’t over-leveraged but it didn’t matter.
I was sick to my stomach.
So what did I do?
Number two, ruthlessly cut loses.
After a few minutes of feeling sorry for myself and thinking I should hold on because maybe it would come back I shut that stupid voice up and sold. I cut that loss immediately. I took it and moved on.
That’s when I understood once more that all the principles work together in concert.
If the position size had been smaller the overall loss would have been smaller. But because I hadn’t used too much leverage I hadn’t gotten liquidated so I was still very much protected.
Low leverage, small positions and stops all work as one. Sometimes one of these risk management tools fail you and the others kick in to help. It’s like the seat belt and the airbag.
Sometimes the seat belt isn’t enough but the airbag is there to save you.

Step Seven: Stop Following Others

It may seem strange to say that I don’t follow other traders or the news but I don’t follow any of them anymore. I may occasionally glance at a chart of a trader who I really respect and see if it matches with my sense of the market but it’s incredibly rare. I might also check in with a trader who I know well and who’s had success over the long run.
And then I just do what I want anyway.

You can go your own way.

In the end you have to follow your own light.
You have to get so good that you trust your own analysis above all else. When you make a mistake you need to know you’re strong enough to figure out what it was and fix it the next time.
If you’re meant to be a good trader you will be. It’s as simple as that.
Ed Seykota is one of the best traders profiled in Wizards. He says is best:
“It is a happy circumstance that when nature gives us true burning desires, she also gives us the means to satisfy them.”
If you have that burning desire to trade and to win, you’ll find a way and you won’t need to follow anyone else once you get your feet wet.
I have my school of traders but my main lesson to them is simple. Learn from me and then move on. Become your own master. Don’t sit at the feet of gurus your whole life.
As for the news? Nothing but poison. Turn it off as fast as you can.
I highly, highly recommend every single human being take a news fast for a month. Disable anything related to news on your phone feed. Unfollow everyone on Facebook. Don’t read the Twitter stream. Get a site blocker for when you’re working and use it frequently.
I guarantee you, you will not miss out on anything. If something really, really big happens you’ll hear about it because people will talk about it. If it’s not big enough to be on everyone’s lips it’s not worth hearing about.
Here’s another thing I guarantee. You will be mentally, emotionally and spiritually healthier by an order of magnitude. Your anxiety will decrease as will your confusion and fear.
You’ll probably end up extending the news fast indefinitely. I know I did.


I could care less about Google News or which coin some random person on the Internet thinks is going to the moon tomorrow based on astrology and hope. Probably the last time I followed news was during the China crisis. And if I had to do it all over again, I wouldn’t read a word of it this time. I do occasionally read one magazine that I like with strong, consistent journalism but even that is less and less frequent, maybe once a month or every few months and mostly because there is one story I want to read in depth.
When you give up on the news you’ll be in fine company.
Ed Seykota said “eventually I became more confident of trading with the trend and more able to ignore the news. I became more comfortable with the approach.”
I have not met a single good trader who is a news junky even though the average trader is a hopeless news junky. They want a reason for the market to go up or down. They can’t face that it’s random chaos and the push/pull of a billion emotional monsters.
So writers come up with a good reason for why the market made a move. Interest rates changed. A trade war looms. A big soybean shortage struck. Some of these are probably factors but it’s really impossible to use that news in any effective way 99% of the time. The other 1% of the time it is but so what? Is it really worth watching 99% white noise to get that?
Even worse, news is about conflict and tragedy. It’s about pain and suffering. It’s about extraordinary events.
But the more you watch it the more you think those extraordinary events are normal events.
Plagues happen every day. People get shot up around the corner every few seconds. A baby is butchered every ten minutes in your town.
If you’re born in an insane asylum and everyone is screaming all the time you think it’s normal.
It ain’t normal.
You’re hearing about statistical outliers and it does nothing but warp and derange your mind.
The news is poison.
Bite your arm, suck that venom and spit it out for good.

Step Eight: Develop Your Own Style

If you make it this far, you’ve come to the final step on the journey of trading mastery.
What’s that?
Develop your own system.


I used to study Kung Fu. I noticed that most people were obsessed with lineage. Who was the great master that taught their great master in an unbroken line over five hundred years? Did the system change? Was it passed down perfectly and directly?
I soon realized this kind of thinking was total madness. Of course the system changed. Each master learned new lessons through his own life experience and added that to the system. It he didn’t, he was no master. In fact, he probably sucked horribly if he just photocopied what his teacher taught him and passed it down to you.
And I also found myself thinking about the first person in that line of legendary martial artists. If you go back far enough, eventually you get to someone who started the system. That brings up one inevitable question:
Who taught them?
The answer is obvious.
Nobody.
They taught themselves.
And that is what the absolute best of the best do in all fields. They don’t follow. They create.
The old Kung Fu masters didn’t just learn from someone else and regurgitate it. They took what they learned and modified and improved it. They studied nature and themselves. They watched the movement of snakes and birds and they tried to tease out the secrets of those animal powers. They wanted to move as fast as a snake and strike like a tiger. They had everything they needed by observing the world around them.
You must become the master. When you get there you’ll find there’s nobody handing out a belt. You’ll be the final judge in your journey.
And that means eventually you’ll need to develop a trading style that perfectly fits your own personality, your own strengths and weaknesses. If you’re just following someone else’s picks blindly you won’t have to strength to stay in a trade when the going gets really rough. That kind of confidence only comes from within.
To do that you’ll have to look deep inside and figure out what you really want from the world.
As Ed Seykota says, “Everyone gets what they want out of the markets.”
Some people like to lose. Some people like to play the Martyr. Some folks like to be popular. Others love to be contrarians and bet against the crowd. Still others like to sound smart at parties. But they don’t like to make money. They might even think it’s dirty or evil and they self sabotage.
Whatever your weakness the market will happily feed it to you. If you love the excitement of winning big and then losing it all and making it back again, you’ll get that too.
Ed went further: “I think that if people look deeply enough into their trading patterns, they find that, on balance, including all their goals, they are really getting what they want, even though they may not understand it or want to admit it.”
But the best traders do want to make money. They have a deep passion for the markets and a burning desire to win. To do it they all come to the same understanding eventually by reflecting deeply and transcending their own human limitations to become the best of the best.
And when they do they’re ready to walk their own path, a lonely path, but a joyous one too:

Yoda from The Empire Strikes Back

The path of the master.
They no longer need to read any more books or listen to anyone else or follow anyone else’s star.
They become their own guiding light.
They live and die by their own decisions. When they win they don’t get too high. When they lose they don’t blame anyone but themselves.
And they don’t need any outside validation or praise or judgement.
That’s because after all that time and effort and suffering, they finally knowwhat they’re doing. It’s not arrogance. It’s an internal compass that is unflinchingly accurate, developed only through dedication, perseverance, persistence and passion.
It’s earned over time. A long time. Nothing else can give it to you.
It can’t be bought, bargained for, or cheated. There are no short cuts and there never will be.
And all the praise and validation the legendary trader will ever need will show up in the only place that matters.
Their bank account and crypto wallet.
https://hackernoon.com/the-eightfold-path-of-the-legendary-trader-11b304db97c2 
Posted: March 18, 2018, 1:15 am
Import taxes of any kind are a stupid idea, we will succinctly explain why.  Until this idea, Trump has had a fairly good track record if judged only by the correlation to the stock market.  The import tax is the first major mistake, and shows that he really doesn’t understand international finance and has not been able to hire a decent advisor to explain him that the world has changed in the last 50 years.  We explain this and more in our ground breaking work Splitting Pennies. 
Trade Wars are not a new thing in fact they’ve been a tool of state sponsored mercantilism since the beginning of time; tax or ban foreign goods in order to spur the domestic economy.  There’s a small problem though.  The world is today completely intertwined, interconnected, and intermingled.
Did you know, that Budweiser, a company which is more American than apple pie, is owned by InBev, a Belgian company?  Did you also know that of the 15 Budweiser breweries outside of the United States, 14 of them are in China?  So what does that make Budweiser – American, Chinese, or European?
forex
Regarding the car industry, nearly every Asian manufacturer makes cars right here in USA.  Kia, Hyundai, Toyota, the list goes on and on.  So we all know that Toyota is Japanese.  Or is it?  Land Rover is British, but it was bought by Ford, a US publicly traded company (F).  Ford’s most complex robotic factory is in Brazil.  Ford operates in nearly every country in the world, and their business is sustained by a sophisticated foreign exchange operation managed on their treasury desk.  Ford notoriously hired Muslims, Blacks, and other workers that had trouble finding jobs at other companies.  Who owns ford now is a global mix of citizens from every country in the world, foreign governments, and you can rest assured municipal pension funds, state pension funds, all own a piece of this American icon (F).  So what is American, anyway?
Trump’s heart is in the right place, the idea of rebuilding USA’s manufacturing base, creating jobs at home, reducing ‘offshoring’ – should be a priority of America first and it makes economic sense.  But the way to accomplish it is not through import taxes or to start a trade war.  Companies like Apple (AAPL) need to be incentivized in other ways to move their factories from China to Kansas.  Grants, tax incentives, government if then contracts (for example if Apple moved its phone manufacturing to USA the government could require USG employees to use iPhone for Security reasons.)  Or another solution, we can cut the military budget in half, and instead of building missiles and bombs, we can build technology parks in places like Kansas where there is plenty of cheap land.  We can build factories and retask soldiers to do non-military functions like planting trees or building the useless wall with Mexico.  We should invest in robotic factories and state of the art design organizations, like they have in Europe and Korea.  Farming can be hydroponic and automated.  There are thousands of ideas, and thousands of people who have thousands of ideas and who are capable of implementing them.  But we are not listening to those people, or supporting them.  USA has plenty of natural resources, real estate, and most importantly business innovation motivation to act as a natural global incubator for global business.
Instead of import taxes we should incentivize more foreign businesses to move here, such as by creating foreign ‘tax havens’ like Delaware, and providing privacy to foreign entities who would otherwise go to Switzerland or the Cayman islands.
The tax reduction plan was a huge win for Wall St. and Main St.  The idea of import taxes is the opposite.  We should encourage business growth not stifle it.  There are other more intelligent ways to spur the domestic economy.  We explain this and more in our ground breaking work Splitting Pennies. 
Posted: March 11, 2018, 10:50 pm
(Bloc10.com 3/4/2018) — During the period of Russian History known as the “Mongol Invasion” foreign Khans (rulers) imposed taxes based on a financial system calculated by male conscripts to the army.  The mongols imposed a military system of economy where everything was looked at from the perspective of the military.  When a town’s taxes were calculated, they cared not about money but how many able men could serve in the Khan’s army.  Although merchants still paid taxes in the form of money (similar to our ‘sales tax’) towns, provinces, and other municipalities such as the grand duchy of Nizhni Novgorod paid their taxes in soldiers, roughly 5% of the total population.
With new Cryptocurrencies lacking novel ideas for backing, one only needs to look at Medieval European history for many practical examples.  Why should all Cryptos be tied to the electronic world?  In fact the opposite needs to happen, if Crypto is going to move beyond the high tech crowd.  New Cryptos need to have real world purposes, serve multiple economic use-cases, that fit aptly like a puzzle piece into the existing model.  The idea of Cryptocurrency is security and efficiency, not to reinvent the underlying business model.  Ultimately, the financial services sector should be like a utility that allows the real sectors to grow and innovate.  What has happened in the last 50 years has been the opposite, Wall St. has become an industry by itself, charging fees and taxing real industry and stifling growth.
At Bloc10 we are innovators and developers, not principals.  We want to develop your Blockchain project as a vendor and allow you to grow your business naturally (organically).  Ideally, you won’t even notice that we exist!  It’s your project.  Grow your business, and Get Bloc.
Photo taken from George Vernadsky’s “A History of Russia”
Posted: March 4, 2018, 6:09 pm

January 18, 2018

Paul Schott Stevens
President & CEO
Investment Company Institute
1401 H St., NW, Suite 1200
Washington, DC 20005
Timothy W. Cameron
Asset Management Group – Head
Securities Industry and Financial Markets Association
1101 New York Avenue, NW, 8th Floor
Washington, DC 20005
Re: Engaging on Fund Innovation and Cryptocurrency-related Holdings
Dear [Mr. Stevens/Mr. Cameron]:
As you know, the U.S. investment fund market is one of the most robust, varied and successful markets for investment products in the world. Its success can be attributed, in significant part, to the commitment of fund sponsors to responsible innovation and continuous improvement of the products they offer. This commitment is especially important because many of America’s Main Street investors rely on registered funds to help them build toward education, retirement and other important goals.
Flexibility to innovate is also a key feature of the Investment Company Act of 1940. As the Division with primary responsibility for regulatory policy regarding registered funds, we seek to foster innovation that benefits investors and preserves the important protections that Congress established in the 1940 Act. Over the years, dialogue between fund sponsors and the Division has facilitated the development of many new types of investment products that have expanded choice for investors. Exchange-traded funds and money market funds are notable examples.
Recently, the growth in cryptocurrencies and cryptocurrency-related products has attracted significant attention, and we have seen interest among sponsors in offering registered funds that would hold these new digital products. As we have in the past, the Division stands ready to engage in dialogue with sponsors regarding the potential development of these funds. We believe, however, that there are a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to retail investors.
We appreciate that proponents of cryptocurrencies and related products have identified a range of potential benefits. We are also aware that critics of cryptocurrencies have raised various concerns regarding transparency of information, trading, valuation and other matters related to the nature of the underlying assets. In addition, the innovative nature of cryptocurrencies and related products, as well as their expected use and utility in our financial markets, means that they are, in many ways, unlike the types of investments that registered funds currently hold in substantial amounts. In light of these considerations, we have, at this time, significant outstanding questions concerning how funds holding substantial amounts of cryptocurrencies and related products would satisfy the requirements of the 1940 Act and its rules. To facilitate the start of our dialogue, we have identified below a number of these questions, and we invite you and any interested sponsors to engage with us in detail on these. While we have identified the questions below, we note that the cryptocurrency markets are developing swiftly. Additional questions may arise from these developments.[1]

Valuation

Mutual funds and ETFs must value their assets on each business day in order to strike a net asset value (“NAV”). Appropriate valuation is important because, among other things, it determines fund performance, what investors pay for mutual funds and what authorized participants pay for ETFs (and what they receive when they redeem or sell). Would funds have the information necessary to adequately value cryptocurrencies or cryptocurrency-related products, given their volatility, the fragmentation and general lack of regulation of underlying cryptocurrency markets, and the nascent state and current trading volume in the cryptocurrency futures markets?
How would funds develop and implement policies and procedures to value, and in many cases “fair value,” cryptocurrency-related products?
How would funds’ accounting and valuation policies address the information related to significant events relevant to cryptocurrencies? For example, how would they address when the blockchain for a cryptocurrency diverges into different paths (i.e., a “fork”), which could result in different cryptocurrencies with potentially different prices? How and when would funds recognize such information in their NAV?
What policies would a fund implement to identify, and determine eligibility and acceptability for, newly created cryptocurrencies offered by promoters (e.g., an “air drop”)? How might a fund account for those holdings if the fund chooses to claim such cryptocurrencies?
How would differences among various types of cryptocurrencies impact funds’ valuation and accounting policies?
How would funds consider the impact of market information and any potential manipulation in the underlying cryptocurrency markets on the determination of the settlement price of cryptocurrency futures?[2]

Liquidity

A key feature of open-end funds, such as mutual funds and ETFs, is daily redeemability. Funds must maintain sufficiently liquid assets in order to provide daily redemptions. Under the new fund liquidity rule, rule 22e-4, funds will be required to implement a liquidity risk management program.[3] Under the rule, among other things, funds must classify their investments into one of four liquidity categories and limit their investments in illiquid securities to 15% of the fund’s assets.[4] A fund’s liquidity classifications should be informed by the market depth of its holdings (that is, whether trading varying portions of a position in a particular portfolio asset is reasonably expected to affect the liquidity characteristics of that investment) as well as other relevant market, trading and investment-specific considerations.
What steps would funds investing in cryptocurrencies or cryptocurrency-related products take to assure that they would have sufficiently liquid assets to meet redemptions daily?
How would funds classify the liquidity of cryptocurrency and cryptocurrency-related products for purposes of the new fund liquidity rule, rule 22e-4? For example, would any of these products be classified as other than illiquid under the rule? If so, why? How would funds take into account the trading history, price volatility and trading volume of cryptocurrency futures contracts, and would funds be able to conduct a meaningful market depth analysis in light of these factors? Similarly, given the fragmentation and volatility in the cryptocurrency markets, would funds need to assume an unusually sizable potential daily redemption amount in light of the potential for steep market declines in the value of underlying assets?
How would a fund prepare for the possibility that funds investing in cryptocurrency-related futures could grow to represent a substantial portion of the cryptocurrency-related futures markets? How would such a development impact the fund’s portfolio management and liquidity analysis?

Custody

The 1940 Act imposes safeguards to ensure that registered funds maintain custody of their holdings. These safeguards include standards regarding who may act as a custodian and when funds must verify their holdings. To the extent a fund plans to hold cryptocurrency directly, how would it satisfy the custody requirements of the 1940 Act and relevant rules? We note, for example, that we are not aware of a custodian currently providing fund custodial services for cryptocurrencies. In addition, how would a fund intend to validate existence, exclusive ownership and software functionality of private cryptocurrency keys and other ownership records? To what extent would cybersecurity threats or the potential for hacks on digital wallets impact the safekeeping of fund assets under the 1940 Act?
While the currently available bitcoin futures contracts are cash settled, we understand that other derivatives related to cryptocurrencies may provide for physical settlement, and physically settled cryptocurrency futures contracts may be developed. To the extent a fund plans to hold cryptocurrency-related derivatives that are physically settled, under what circumstances could the fund have to hold cryptocurrency directly? If the fund may take delivery of cryptocurrencies in settlement, what plans would it have in place to provide for the custody of the cryptocurrency?

Arbitrage (for ETFs)

ETFs obtain Commission orders that enable them to operate in a specialized structure that provides for both exchange trading of their shares throughout the day at market-based prices, and “creation unit” purchases and redemptions transacted at NAV by authorized participants. In order to promote fair treatment of investors, an ETF is required to have a market price that would not deviate materially from the ETF’s NAV. In light of the fragmentation, volatility and trading volume of the cryptocurrency marketplace, how would ETFs comply with this term of their orders?
Have funds engaged with market makers and authorized participants to understand the feasibility of the arbitrage for ETFs investing substantially in cryptocurrency and cryptocurrency-related products? How would volatility-based trading halts on a cryptocurrency futures market impact this arbitrage mechanism? How would the shutdown of a cryptocurrency exchange affect the market price or arbitrage mechanism?[5]

Potential Manipulation and Other Risks

In a recently issued statement, Chairman Jay Clayton noted that concerns have been raised that cryptocurrency markets, as they are currently operating, feature substantially less investor protection than traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.[6] The Commission has also discussed concerns relating to the risk of fraud and manipulation in cryptocurrency markets in orders denying exchange proposals to list the shares of commodity trusts that would hold cryptocurrency.[7] In addition, a number of recent media reports have highlighted a range of possible vectors for potential manipulation of cryptocurrency markets. Although some funds may propose to hold cryptocurrency-related products, rather than cryptocurrencies, the pricing, volatility and resiliency of these derivative markets generally would be expected to be strongly influenced by the underlying markets.
How have these concerns informed your responses to the foregoing questions concerning, for instance, valuation and liquidity?
How would you weigh these concerns in considering whether offering a proposed fund is appropriate for the wide range of investors, including retail investors, who might invest in the fund? Would investors, including retail investors, have sufficient information to consider any cryptocurrency-related funds and to understand the risks?
Have you discussed with any broker-dealers who may distribute the funds how they would analyze the suitability of offering the funds to retail investors in light of the risks discussed above? Are there particular challenges investment advisers would face in meeting their fiduciary obligations when investing in cryptocurrency-related funds on behalf of retail investors?
* * *
The resolution of many of the questions we have raised in the context of a product seeking to register under the 1940 Act will also be important to the ongoing analysis of filings for exchange-traded products and related changes to exchange listing standards by the Division of Corporation Finance, the Division of Trading and Markets and the Office of the Chief Accountant. In addition, questions concerning what regulatory structure or structures apply to the market for the underlying instrument will be relevant to the requirements of both the 1940 Act and the Securities Exchange Act of 1934, including applicable accounting, audit and reporting implications. We have been and will continue working closely with the other Divisions and Offices as we analyze these significant issues.
The preceding questions have focused on specific requirements of the 1940 Act and its implications for registered offerings of funds intending to hold cryptocurrency or related products. There may be registered offerings under the Securities Act of 1933 by entities holding similar products and pursuing similar investment strategies. Those entities would have to comply with the registration and prospectus disclosure requirements of the Securities Act.
Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products, and we have asked sponsors that have registration statements filed for such products to withdraw them. In addition, we do not believe that such funds should utilize rule 485(a) under the Securities Act, which allows post-effective amendments to previously effective registration statements for registration of a new series to go effective automatically. If a sponsor were to file a post-effective amendment under rule 485(a) to register a fund that invests substantially in cryptocurrency or related products, we would view that action unfavorably and would consider actions necessary or appropriate to protect Main Street investors, including recommending a stop order to the Commission.
I appreciate your assistance in sharing our views on this subject with your members. We look forward to engaging with you and your members on these important questions, and we invite you to contact Barry Miller at (202) 551-6725.
Sincerely,
Dalia Blass
Director
Division of Investment Management
U.S. Securities and Exchange Commission

[1] This letter addresses issues arising from funds potentially focused on cryptocurrency-related products. We note, however, that other types of digital assets and related products could present similar issues.
[3] See Investment Company Liquidity Risk Management Programs, Inv. Co. Act Rel. No. 32315 (Oct. 13, 2016), available at https://www.sec.gov/rules/final/2016/33-10233.pdf.
[4] The 15% illiquidity standard is consistent with past Commission statements regarding funds’ liquidity standards. However, the Commission’s new rule strengthened the compliance controls under the standard, including requiring reporting to a fund’s board and to the Commission regarding breaches of the 15% illiquid limit. Most funds would be required to comply with the new rule’s liquidity risk management program requirements on Dec. 1, 2018, while fund complexes with less than a $1 billion in net assets would be required to do so on June 1, 2019.
[6] SEC Chairman Jay Clayton, Statement on Cryptocurrencies and Initial Coin Offerings (Dec. 11, 2017), available at https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11.
[7] See, e.g., Securities and Exchange Commission, Order Disapproving a Proposed Rule Change (Mar. 28, 2017), available at https://www.sec.gov/rules/sro/nysearca/2017/34-80319.pdf.

http://www.sec.gov/divisions/investment/noaction/2018/cryptocurrency-011818.htm


https://www.sec.gov/divisions/investment/noaction/2018/cryptocurrency-011818.htm 
Posted: March 1, 2018, 2:50 am
On Monday morning we reported that a number of traders - currently or formerly employed by UBS, HSBC and Deutsche Bank (as usual, no JPMorgan US banks were touched) - would be perp-walked and charged in an unprecedented cross-agency crackdown between the CFTC, DOJ and FBI seeking to punish spoofers of futures. This was confirmed moments ago by a CFTC press release which announced criminal and civil enforcement actions against three banks and six individuals involved in commodities fraud and spoofing schemes.
Here is what got far less publicity: it wasn't just any futures that were spoofed - all the banks and traders busted were charged for spoofing the precious metals market, i.e. gold and silver. We bring this up because there are still the occasional idiots out there who say gold and silver were never manipulated.
The banks in question, and their penalties:
Deutsche Bank will pay a $30 million civil monetary penalty and undertake remedial relief. The Orders finds that "from at least February 2008 and continuing through at least September 2014, DB AG, by and through certain precious metals traders (Traders), engaged in a scheme to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX), and by trading in a manner to trigger customer stop-loss orders."
UBS will pay a $15 million civil monetary penalty and undertake remedial relief.  The Order finds that from "January 2008 through at least December 2013, UBS, by and through the acts of certain precious metals traders on the spot desk (Traders), attempted to manipulate the price of precious metals futures contracts by utilizing a variety of manual spoofing techniques with respect to precious metals futures contracts traded on the Commodity Exchange, Inc. (COMEX), including gold and silver, and by trading in a manner to trigger customer stop-loss orders."
HSBC will pay a civil monetary penalty of $1.6 million, and cease and desist from violating the Commodity Exchange Act’s prohibition against spoofing, after an Order found HSBC engaged in numerous acts of "spoofing with respect to certain futures products in gold and other precious metals traded on the Commodity Exchange, Inc. (COMEX). The Order finds that HSBC engaged in this activity through one of its traders based in HSBC’s New York office."
For those keeping count, this is roughly the 4th time HSBC has been found guilty of manipulating markets after the bank nearly lost its charter and swore it would never manipulate markets again.
* * *
And here are the 6 traders who spoof and otherwise manipulated the precious metals market:
  • Krishna Mohan
The CFTC today announced the filing of a federal court enforcement action in the U.S. District Court for the Southern District of Texas against Krishna Mohan of New York City, New York, charging him with spoofing (bidding or offering with the intent to cancel before execution) and engaging in a manipulative and deceptive scheme in the E-mini Dow ($5) futures contract market on the Chicago Board of Trade and the E-mini NASDAQ 100 futures contract market on the Chicago Mercantile Exchange.
  • Jiongsheng Zhao
The CFTC today announced the filing of a federal court enforcement action in the U.S. District Court for the Northern District of Illinois against Defendant Jiongsheng Zhao, of Australia, charging him with spoofing and engaging in a manipulative and deceptive scheme in the E-mini S&P 500 futures contract market on the Chicago Mercantile Exchange (CME).
  • James Vorley & Cedric Chanu
The CFTC announced the filing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois against James Vorley, a U.K. resident, and Cedric Chanu, a United Arab Emirates resident, charging them with spoofing and engaging in a manipulative and deceptive scheme in the precious metals futures markets.
  • Jitesh Thakkar & Edge Financial Technologies
The CFTC today announced the filing of a federal court enforcement action in the U.S. District Court for the Northern District of Illinois, charging Jitesh Thakkar of Naperville, Illinois, and his company, Edge Financial Technologies, Inc. (Edge), with aiding and abetting spoofing and a manipulative and deceptive scheme in the E-mini S&P futures contract market on the Chicago Mercantile Exchange (E-mini S&P).
An amusing tangent: recall that according to court docs related to the prosecution of "May 2010" flash crash scapegoat Navinder Sarao, the former S&P spoofer allegedly asked the abovementioned founder of the trading-software company Edge Financial Technologies Inc. to modify a program to allow him to automate some trading functions.
The CFTC and Department of Justice said in their complaint that those modifications were designed to help him spoof the markets more efficiently.
It gets better: as the WSJ reported, the now arrested Jitesh Thakkar, the founder of Edge Financial and a former member of a CFTC technology-advisory committee, said in an interview that the CFTC had sent [Sarao] a letter asking him to retain all documents related to Mr. Sarao.
“I’ve spoken out against spoofing,” he said. “We didn’t create anything that does anything illegal.”
Two years later Thakkar was arrested for just that, but it also now appears that Thakkar may have used Sarao's algo himself.
* * *
Finally, our old friend, Andre Flotron, formerly of UBS, who as we reported on several prior occasions was arrested and charged with gold-rigging after a lengthy career of doing just that at the largest Swiss bank:
The CFTC announced the filing of a civil enforcement action in the U.S. District Court for the District of Connecticut against Andre Flotron, of Switzerland, charging him with engaging in a manipulative and deceptive scheme and spoofing in the precious metals futures markets on a registered entity.
* * *
Meanwhile, the S&P500 manipulation by the Fed and spoofing by HFTs continues apace, and will as long as the market keeps levitating because it is only when stocks crash, that the fingerpointing begins.
Posted: January 30, 2018, 3:07 am

Summary

tZero ICO is about to disrupt markets.
KODAKCoin perhaps the first large company launching a Crypto.
KODAKCoin will trade exclusively on tZERO's platform.
KODAKCoin itself is not important, what is important is this is the precedent for hundreds of other big corporate coins.
It's amazing how many rumors and trash talk can keep a genie in a bottle. But in the next 60 days, not Trump himself could stop this genie from coming out of Overstock.com's (NASDAQ:OSTK) bottle and when it does, it will make Crypto history. There's nothing new here, this story has been going on for some time - but we're now nearing the climax, the singularity. And it's happening now!
Recently, we authored an article talking about how Overstock is the perfect Blockchain play and we still believe it is.
But since our article things have changed for the better, and we want to focus on the tZERO ICO.

Read the full story at: https://seekingalpha.com/article/4140678-tzero-ico-make-overstock-wall-street-favorite
Posted: January 28, 2018, 12:44 am

Summary

TZero has been working on this technology for years - it is launching, not developing.
Few legitimate options for stocks that are deep into Blockchain technology.
Alternatives such as IBM are not as pure Blockchain plays as OSTK.
For those of you who are 'now' looking at Blockchain, see this article on Seeking Alpha we authored in March of 2016 urging investors to go long Overstock.com (OSTK) which we did, and profited nicely. Like the whole move with Bitcoin, it would have taken patience to sit and hold through the process, now almost 2 years. Things take time to build, develop, and grow. Now we're on the precipice of what we believe is the 'real' bull run for crypto, that being the regulated run. Until now, there hasn't been really a way to buy or invest in cryptocurrencies or businesses in a regulated way. Now there're futures on regulated exchanges, and the TZero ICO.
Posted: January 1, 2018, 6:24 pm
If you look from a systemic perspective, Bitcoin has been nothing more than another electronic asset bubble, while not a QE tool explicitly used by the Fed - it has accomplished the same thing, but much faster.  What took decades and years for QE to do in other markets, Bitcoin did inside of a few months.  While it's true that Bitcoin only goes up because US Dollars (USD) and other fiat currencies buys, the net effect is a near infinite velocity of money.  One subtle problem the Fed has dealt with perhaps more than inflation and others is Velocity of money, which is in steady decline since the credit crisis:
Basically, Velocity of money is how quickly money is 'spent' and moved around the economy.  Trillions of QE money on banks balance sheets is not helpful for the economy.  The Fed knows this, but is limited in its creativity.  Interestingly, if you look at the above chart when Velocity of money was in peak decline, it is about the time Bitcoin was introduced.  We have exposed how we believe anonymous forces inside the US Government are if not completely, somewhat responsible for the creation of Bitcoin, and in the very least participated in the design.  This isn't a conspiracy theory, it is macro analysis.  Who was the most capable group who had the world's best cryptographers, mathematicians, and huge budget? (NSA).  Who had an economic need for Bitcoin to solve the problem of Velocity of money (The Fed).  
Cash has the distinct advantage of being anonymous. You can put cash under your mattress or in a vault, and no one knows about it except you. A national cryptocurrency would make it far more difficult for criminals to hoard money because all transactions would be recorded in the government ledger. If a transaction was deemed illegal, the parties to the transaction could be identified. This is also true with bitcoin, whose ledger is viewable to anyone. Despite the negative press about bitcoin being used for illegal transactions, bitcoin is not anonymous, and criminals who use it often do not understand that their transactions are being recorded.
There is another reason for governments to like the idea of a national cryptocurrency: strengthening the power of monetary policy to help manage the economy.
We published this insight in multiple articles months ago and in our book Splitting Bits: Understanding Bitcoin and the Blockchain.
The WAPO story is clearly setting the stage for something, as WAPO has become the goto CIA mouthpiece for PsyOps and other agencies in "Big Intel." 
That's it, now go spend your Bitcoin!
For a detailed breakdown how the financial system really works, checkout Splitting Pennies.
Posted: December 22, 2017, 9:57 pm
In 2015 we wrote Splitting Pennies to show the world what the FX market really is.  Splitting Pennies is a metaphor, for what the global FX money markets have become.  It is a holistic, systemic overview of the global financial system, with practical examples and pitfalls to avoid.  Since then, Bitcoin has become so popular we conceived Splitting Bits, the logical sequel in the Splitting Finance series.  Now you can get both on Kindle or Paperback from Amazon - See www.splittingpennies.com for more info or go here and buy it.

Posted: December 22, 2017, 9:56 pm
Although Bitcoin is electronic and moves quickly, the real world doesn't.  Since Bitcoin (which is colloquially BTC/USD) has been in the news, millions have decided to put their own money into the Crypto world and press their luck.  So here's what's driving the price.  Let's say you want to buy Golem, it's not offered on Coinbase, you need to first get an account at Bittrex or Cryptopia which are only fundable in Crypto.  That means if you are not a hacker or computer expert, you need to first connect your Coinbase account to your bank account at Wells or BOFA and then buy BTC paying the egregious 7% fee (which ironically is similar to an FX transaction).  Then, and only then, you can fund your Bittrex with BTC and buy XRP or whatever.  So this is driving the price of BTC higher, as there is precious little supply of BTC.  We call this in FX 'real money flows' - as DB noted recently, Japanese men have become 'crypto day traders' - but the real upward pressure is by using BTC as a base/funding currency, which is only beginning.  Crypto exchanges are experiencing huge bottlenecks, which means this squeeze has only started.  This week the price of BTC/USD can run up 100% or more due to this demand.  

That means, millions of people investing thousands of dollars, is driving the price of BTC up, and will likely continue to do so, until there are viable alternatives, which there will be.  Currently BTC is really the only choice for many - although it is slow, inefficient, and feature poor.

Posted: December 17, 2017, 2:00 am
Elite E Services 12/10/2017 - As a Forex CTA for 12 years, we were happy to learn the CME will offer a Bitcoin futures contract, and called the CME to learn more.  Unlike most of these Bitcoin outfits, the CME has an office, a phone, which is answered, and we were routed to the correct person.  We don't want to name names as we still wait a response from legal about the publication of information (which will likely not happen before the contract goes live) so we will speak only generally about this contract and comment on what some of the market is saying:

 The problem, of course, boils down to Bitcoin’s volatility, something we flagged after the CME announced circuit breakers early last month.
Having taken a gamble on bitcoin futures, which are set to begin trading by the end of the year, the CME is now seeking to avoid the consequences of what has emerged as both the cryptocurrency's best and worst selling point: its unprecedented volatility…While the CME already uses daily vol limits on most other markets, including crude, gold and market futures, to temporarily halt trading when price swings get out of control, the CME has never before dealt with something like bitcoin
In June, Bloomberg showed how Bitcoin’s 30-day volatility had risen to 100%, which was comparable (at the time) with one of the most volatile financial instruments they (and we) could probably think of - a three-times levered ETF in junior gold miners.

The price of Bitcoin (notably, BTC/USD) has been exploding all week basically with the market expecting that with regulated futures contracts, it will bring institutional money into the Crypto market.  While that may be true, this futures contract is not exactly a conduit, as it is 'cash settled' which means effectively 'not settled' or 'self-cleared'.  CME will match buyers and sellers and not have any connection to any Bitcoin exchange or other clearing facility.  At the end of the day, each contract will have a profit or loss, against each other.  Crypto Market Makers could at their own risk, provide liquidity on-exchange and lay off risk independently, through the exchanges.  But practically, why would they?  Just to soak up 'newbie' liquidity from the moms and pops now able to trade the futures contract through their IRA?  Something certainly doesn't add up here, and given the chaos and volatility we saw all week, we are expecting at best, a total market meltdown; at worst, they may cease trading the contract.  There is certainly a lot of money waiting in the pipeline for the moment the contract goes live.  And it's not the only one, CBOE has a contract too, which is the first one which will go live.

Traders wait in anticipation this week to see how the market will react to the first regulated Crypto contracts.

To get in on the action checkout some Bitcoin resources we've added to our website by clicking here.  If you want to learn more about Bitcoin from the perspective of digital currency, which we've been doing for 15 years, checkout Splitting Bits - Understanding Bitcoin and the Blockchain.


Posted: December 10, 2017, 7:53 pm
If Jay Gould were alive today, he would've traded bitcoin.
Perhaps the most blatant hypocrisy perpetrated by bitcoin evangelists is their insistence that bitcoin and other digital currencies represent a return to a truly democratic financial system beyond the control of banks and other special interests, where players small and large can earn enormous profits simply by HODLing.
Of course, this idealistic take couldn’t be further from the truth. As Bloomberg points out, the markets for bitcoin and most of its cryptocurrency clones more closely resemble the US equity market of the Gilded Age, where a handful of powerful traders and brokers colluded to move prices in their favor. And because securities laws at the time were virtually nonexistent, the big players minted suckers with impunity.
According to Bloomberg, about 1,000 so-called “whales” control 40% of the bitcoin in circulation, giving them unrivaled leverage over the broader market. And because there are no laws explicitly banning collusion in digital currency markets, only the most blatant pump-and-dump operations risk being prosecuted as fraud.
And with the price skyrocketing like it has in recent days, the incentive for these traders to begin taking profits has never been more pressing.
About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. (Brown is a contributor to the Bloomberg Prophets online column.) What’s more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.

“I think there are a few hundred guys,” says Kyle Samani, managing partner at Multicoin Capital. “They all probably can call each other, and they probably have.” One reason to think so: At least some kinds of information sharing are legal, says Gary Ross, a securities lawyer at Ross & Shulga. Because bitcoin is a digital currency and not a security, he says, there’s no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes.
As Bloomberg explained, the manipulation in bitcoin is extreme because many of the big players know each other from having been involved in the digital currency space since its infancy. Add to this the fact that the risks are incredibly asymmetrical – there’s tremendous upside in terms of profits if they can successfully pull it off. And the chances of them drawing the scrutiny of law enforcement are relatively low.
“As in any asset class, large individual holders and large institutional holders can and do collude to manipulate price,” Ari Paul, co-founder of BlockTower Capital and a former portfolio manager of the University of Chicago endowment, wrote in an electronic message. “In cryptocurrency, such manipulation is extreme because of the youth of these markets and the speculative nature of the assets.”

The recent rise in its price is difficult to explain because bitcoin has no intrinsic value. Launched in 2009 with a white paper written under a pseudonym, it’s a form of digital payment maintained by an independent network of computers on the internet‚ using cryptography to verify transactions. Its most fervent believers say it could displace banks and even traditional money, but it’s only worth what someone will trade for it, making it prey to big shifts in sentiment.
Case in point: Some of these so-called whales admitted in an interview with Bloomberg that they regularly incorporate what would in the equity market be considered material nonpublic information into their trading strategies.
Like most hedge fund managers specializing in cryptocurrencies, Samani constantly tracks trading activity of addresses known to belong to the biggest investors in the coins he holds. (Although bitcoin transactions are designed to be anonymous, each one is associated with a coded address that can be seen by anyone.) When he sees activity, Samani immediately calls the likely sellers and can often get information on motivations behind their sales and their trading plans, he says. Some funds end up buying one another’s holdings directly, without going into the open market, to avoid affecting the currency’s price. “Investors are generally more forthcoming with other investors,” Samani says. “We all kind of know who one another are, and we all help each other out and share notes. We all just want to make money.” Ross says gathering intelligence is legal.
And investors who buy into smaller tokens are at an even greater disadvantage.
Ordinary investors are at an even greater disadvantage in smaller digital currencies and tokens. Among the coins people invest in, bitcoin has the least concentrated ownership, says Spencer Bogart, managing director and head of research at Blockchain Capital. The top 100 bitcoin addresses control 17.3 percent of all the issued currency, according to Alex Sunnarborg, co-founder of crypto hedge fund Tetras Capital. With ether, a rival to bitcoin, the top 100 addresses control 40 percent of the supply, and with coins such as Gnosis, Qtum, and Storj, top holders control more than 90 percent. Many large owners are part of the teams running these projects.
Unsurprisingly, Bloomberg managed to find someone to defend the status quo: Whales won’t dump their holdings, this person argued, because they “have faith in the long-term potential of the coins.” This strikes us as a naïve assumption.
Some argue this is no different than what happens in more established markets. “A good comparison is to early stage equity,” BlockTower’s Paul wrote. “Similar to those equity deals, often the founders and a handful of investors will own the majority of the asset.” Other investors say the whales won’t dump their holdings, because they have faith in the long-term potential of the coins. “I believe that it’s common sense that these whales that own so much bitcoin and bitcoin cash, they don’t want to destroy either one,” says Sebastian Kinsman, who lives in Prague and trades coins. But as prices go through the roof, that calculation might change.
While the concentrated holdings of the modern bitcoin market should give potential investors pause, in some ways, it's not all that different from the modern equity market. As we pointed out back in September, the Bank of Japan owns a staggering 75% of the domestic ETF market. Increasingly, equity ownership in the US and around the world is becoming increasingly concentrated in the hands of central banks, sovereign wealth funds and the largest asset managers like BlackRock, Fidelity and Vanguard.
While the whales can exercise unrivaled influence over the price of bitcoin, they aren't the only players in the bitcoin market with a natural inclination toward self-dealing. As Bill Blaine pointed out, nearly every bank knows bitcoin's extraordinary gains are a crowd delusion fuelled by the extraordinary promise of free wealth.
Yet, many will be willing to trade and settle them for their clients – largely retail. So, while the bitcoin bubble has (for now) blessed hundreds of thousands of mom and pop investors with spectacular returns, these gains will only continue as long as the cartel allows them too.
Posted: December 9, 2017, 4:19 am
By 
The whispers among employees had been around for years. They finally heard some facts during a conference call in June led by managers in Wells Fargo WFC +3.17% & Co.’s foreign-exchange operation: Some of its business customers had been cheated, according to two employees who were on the call.
An internal review showed that out of roughly 300 fee agreements based on anything from informal handshakes to emails to signed documents, only about 35 companies were charged the actual price they had been offered for currency trades handled by Wells Fargo, the employees say.
The phone call was part of a continuing cleanup that has led Wells Fargo to fire four foreign-exchange bankers and federal prosecutors to open their own investigation of the operation, people familiar with the matter have said.
“Wells Fargo remains committed to our foreign exchange business,” the bank said in a statement Monday. “If we find a problem, we fix it.” The bank said its foreign-exchange business is “under new management.”
The business is tiny compared with foreign-exchange operations at J.P. Morgan Chase & Co. and Citigroup Inc. but could become another huge headache for the San Francisco bank, still grappling with fallout from the sales-practices scandal in its retail operations. The scandal led to last year’s abrupt retirement of Wells Fargo’s chief executive, a $185 million regulatory settlement and numerous federal and state investigations, which are continuing.
Wells Fargo retail employees had to hit lofty goals to keep their jobs or get bonuses, which led some employees to open potentially 3.5 million accounts with fictitious or unauthorized customer information from 2009 to 2015.
Foreign-exchange employees got bonuses based solely on how much revenue they brought in, say more than a dozen current or former Wells Fargo employees. No other big bank in the U.S. calculated bonuses of currency traders in such a defined and individual way. Wells Fargo said Monday that it began making changes to those compensation plans earlier this year.
The bank also charged some of the highest trading fees around, according to current and former employees. For more than a decade, customers were sometimes charged anywhere from 1% to 4% on basic transactions such as converting euros to dollars and complicated trades like hedging.
Those percentages can be at least two to eight times higher than the middle-market industry average of 0.15% to 0.5%, depending on the trade, customer and volume, according to foreign-exchange bankers throughout the industry.
Wells Fargo disputes the descriptions of its foreign-exchange fees by current and former employees. The bank said Monday its fees in 2016 had a weighted average of 0.09 percentage point across all transaction sizes. Clients served by its middle-market banking team were charged a weighted average of 0.18 percentage point, according to Wells Fargo.
Some foreign-exchange bankers at Wells Fargo relied on the fact that customers often didn’t bother to double-check how much they were charged, fee levels weren’t straightforward, and complaints could be batted away, the current and former employees say.
‘Time fluctuation’
One former Wells Fargo manager says employees would tell customers who expressed surprise at the size of a trading fee that market prices were different at the moment when the transaction was executed and blame “time fluctuation” for any difference.
The bank’s foreign-exchange customers have included telecommunications firm CenturyLinkInc., vehicle-parts supplier Federal-Mogul Holdings Corp. and nonprofit groups such as the National Bone Marrow Donor Program.
Regulators have been investigating the foreign-exchange business at Wells Fargo, including a big trade involving Restaurant Brands International Inc., the owner of Burger King, Tim Hortons and Popeyes Louisiana Kitchen, according to people familiar with the matter.
A Burger King in Tokyo. The fast-food chain’s owner got a refund from Wells Fargo after disputing a trade handled by the bank.
A Burger King in Tokyo. The fast-food chain’s owner got a refund from Wells Fargo after disputing a trade handled by the bank. PHOTO: KIM KYUNG-HOON/REUTERS
The trade resulted in a loss to Restaurant Brands, people familiar with the matter have said, which led to a dispute between the Oakville, Ontario, company and the bank. The dispute centered on how bank employees handled the trade, rather than its pricing. Wells Fargo refunded about $900,000 to Restaurant Brands, people familiar with the refund say.
The foreign-exchange business’s problems run far deeper than what is known inside Wells Fargo as “the Burger King trade” or what has been previously reported. The extent of the trouble seems to have become apparent to top Wells Fargo executives earlier this year.
Small FryForeign-exchange spot contracts as apercent of a bank's total derivativesportfolioTHE WALL STREET JOURNALSource: Office of the Comptroller of the Currency
Bank ofAmericaCitigroupJ.P. MorganWells Fargo0%102030
The business was moved in early 2017 from Wells Fargo’s international division into its investment-banking and capital-markets operation. Since then, executives have changed internal systems, added more stringent rules around pricing and required more frequent compliance checks, current and former employees say.
Issues with the Burger King trade were found following those checks and customer complaints, people familiar with the matter say. The continuing internal review of Wells Fargo’s foreign-exchange operation is separate from the review sparked by the sales scandal, some of the people said.
A compliance training session in early November detailed what Wells Fargo called “approved margins” for different volumes of foreign-exchange transactions, according to an internal document reviewed by The Wall Street Journal. Employees say fee levels remain higher than industry norms, and some compensation practices aren’t due to change until next year.

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Foreign-exchange trading has been a problem area for many banks. In 2015, several large U.S. and European banks agreed to multibillion-dollar settlements with U.S. regulators and pleaded guilty to criminal charges filed by U.S. authorities over alleged collusion among currency traders.
Bank of New York Mellon Corp. agreed in 2015 to pay $714 million to resolve allegations it defrauded pension funds and other clients by overcharging them on currency transactions.State Street Corp. agreed in 2016 to pay $530 million to settle similar allegations.
Both banks admitted giving some clients far worse pricing on currency transactions than the banks implied the clients would get.
The Journal reported in October that the U.S. Attorney’s Office for the Northern District of California is investigating the Restaurant Brands currency trade and has subpoenaed information from Wells Fargo.
Potential issues related to that trade also are being examined by the Federal Reserve, the Journal reported. Examiners from the Office of the Comptroller of the Currency are auditing Wells Fargo’s foreign-exchange business, according to employees at the bank. A Wells Fargo executive says the audit is “normal course of business.”

Payment Plans

Some current and former Wells Fargo employees say its charges on foreign-exchange trades encouraged employees to cheat customers.

Fees for some currency trades
Industry average
Wells Fargo
Fee: 0.15 - 0.5%
Fee: 1% - 4%
For a $10 million trade
Fee:
$100,000 - $400,000
Fee:
$15,000 - $50,000
How Wells Fargo compensated bankers
If a banker had a revenue target of $5 million
and brought in $6 million ...
Revenue target: $5 million
Revenue that exceeded target: $1 million
.. the banker would earn a bonus of $100,000,
or 10% of the $1 million
Bonus
Source: People familiar with the bank
Current and former bank employees say its pricing practices were rooted in a culture and compensation system that looked to maximize revenue. Bonuses were defined as 10% of revenues exceeding revenue targets.
If a banker’s revenue target was $5 million and the person brought in $6 million, he or she would earn a $100,000 bonus, or 10% of the additional $1 million in revenue. Bankers typically received such bonuses twice a year in cash, rather than stock, as part of a signed contract, they added.
It’s rare among foreign-exchange groups in other banks to have so-called defined-bonus plans focused on individual earnings, according to people in the industry.
After Wells Fargo moved the foreign-exchange business into its investment bank earlier this year, managers began telling employees that bonuses would become “discretionary” by the end of 2017. Under this more typical arrangement, management would decide employee bonuses, and bankers wouldn’t know exactly how much they would receive. It would be based on a variety of factors, not just revenue.
Wells Fargo has 18 foreign-exchange sales and trading offices, including in New York, San Francisco, Charlotte, N.C., London and Hong Kong. A few hundred people work in the group world-wide.
Current and former employees say Wells Fargo’s foreign-exchange customers are largely midsize businesses that don’t tend to trade in large volumes. As a result, those clients don’t have the same insight into the market as larger firms that are more-active traders.
Some Wells Fargo clients have complained to the bank. In November 2016, Ecolab Inc., a water, hygiene and energy company based in St. Paul, Minn., bought and sold currency in a so-called swap arranged by the bank, according to people familiar with the deal. These people say Wells Fargo collected 1% on one part of the $100 million deal.
Ecolab contested the fee charged by Wells Fargo on a transaction arranged by the bank.
Ecolab contested the fee charged by Wells Fargo on a transaction arranged by the bank. PHOTO:ARIANA LINDQUIST/BLOOMBERG NEWS
After Ecolab compared the full trade, including fees, to overall market prices, the company contested the bank’s fee. Wells Fargo refunded hundreds of thousands of dollars to Ecolab in December 2016, according to current and former employees.
A spokeswoman for Ecolab confirmed the details of the trade and said it was the only fee issue Ecolab had with Wells Fargo.
Fee issues arose for some Wells Fargo clients even when they had a pricing agreement. The bank agreed within the past 18 months to a specified rate with data-management firm Veritas Technologies LLC, according to bank employees. After making one trade on behalf of Veritas, Wells Fargo bankers told Veritas that the bank’s fee was 0.05 percentage point higher than the agreed rate, the employees say.
Unusually high fees
The result: The bank made an extra $50,000 on a $100 million trade, the employees say. Wells Fargo later made a refund to Veritas, according to people familiar with the matter. A Veritas spokeswoman declined to comment.
Wells Fargo’s foreign-exchange business also charged unusually high fees for trades with different currency conversions, known as “Bswift” transactions, current and former employees say.
“And if anybody did complain, it was an easy tap dance,” one former employee says. He says employees would say the pricing had been done automatically by the bank’s computer system so “there’s no accountability for the spread.”
Wells Fargo sent an internal email Nov. 2 detailing new guidelines for Bswift transactions, according to a copy of the email reviewed by the Journal. The guidelines include specific handling and pricing procedures for those trades.
The operation also charged high fees to other parts of Wells Fargo. Wells Fargo Rail, which leases locomotives and railcars, and the bank’s corporate-trust division are often charged 1% to 1.5% on currency transactions, according to current and former employees.
The bank’s foreign-exchange management often celebrated big trades and the money they made for the bank, the current and former employees say. Sara Wardell-Smith, who led the foreign-exchange group, emailed the group to hail big trades, naming clients and spelling out revenue generated. The employees say managers used to encourage employees to ring a brass bell in the San Francisco office when the bank made a lot of money on a trade.
In mid-October, the bank announced that Ms. Wardell-Smith would lead its financial institutions group in the Americas region, according to a memo reviewed by the Journal and confirmed by a bank spokeswoman.
Current employees say the move was viewed within Wells Fargo as a demotion, coming just months after Ms. Wardell-Smith had been promoted to co-lead the bank’s division focusing on trading of rates, currencies and commodities. She didn’t respond to requests for comment.
The other co-leader, Ben Bonner, now leads that group on his own and is overseeing foreign-exchange trading, a bank spokeswoman confirms.
Mr. Bonner has been working with other executives to fix the problems in the currency business, according to several current employees.
Last month, the bank sent a memo to foreign-exchange employees that instructs them not to create informal or oral pricing agreements. The memo, reviewed by the Journal, also said employees are “responsible for ensuring customers are not misled regarding” pricing.
Current and former employees say some Wells Fargo employees expressed concerns about pricing practices to top executives before the bank’s internal cleanup efforts began earlier this year. Some employees say they were reluctant to press for sweeping changes, citing what they saw happen to one manager in the foreign-exchange operation about a decade ago.
During a meeting of foreign-exchange managers in the mid-2000s, Cathy Witt said it wasn’t right to celebrate high fees by ringing a bell, people familiar with the situation say. Ms. Witt, an employee in the bank’s Chicago foreign-exchange group, warned that Wells Fargo could become known as a “bucket shop,” a derisive term for a disreputable finance firm, some of the people say.
A few weeks later, Ms. Witt was summoned to a meeting in St. Louis, told that her comments had been offensive and demoted on the spot, according to people familiar with the matter. She also was told to apologize to other managers for her unprofessional behavior, the people say. She later left the bank.
—Aruna Viswanatha contributed to this article.
Posted: November 28, 2017, 8:51 pm
Update: Bitcoin's surge continues as Asia re-opens, pushing the cryptocurrency above $9500 as Korea's second largest bank tests Bitcoin vault and wallet services for its clients.
As Coinivore reportsShinhan, the second largest commercial bank in South Korea by market valuation in the country is testing a Bitcoin vault and wallet service for its customers that is expected to be released by mid-2018.
A representative of Shinhan Bank told Naver News, a media publication in South Korea in an interview that the bank will launch a Bitcoin vault and wallet platform in response to recent hacking attacks of leading South Korean cryptocurrency exchanges including Bithumb.
“Shinhan is testing a virtual bitcoin vault platform wherein the private keys of bitcoin addresses and wallets are managed and issued by the bank. The bank intends to provide the vault service for free and charge a fee for withdrawals,” the representative said.
In 2016 the bank reported a total of US $192 billion in assets and over 13,000 employees according to News Bitcoin. The bank stated that the service wouldn’t be ready until the second quarter of 2018 but has begun testing the network for the services.
The service will incur zero fees to deposit Bitcoin to store in their cold storage instead a slight fee will be taken during the withdrawal process. They will also be rolling out a mobile app that will contain a dashboard for viewing stats and deposit information for their customers.
 
It’s unclear whether or not Shinhan will offer Bitcoin brokerage and trading services to enable their existing clients and customers to purchase or sell Bitcoin.
South Korea has been a hub for cryptocurrency and somewhat of a safe haven for established digital currencies since, unlike other countries, they have embraced digital currency as a means for change. Earlier this month, Choe Heung-sik, chief of the Financial Supervisory Service (FSS), stated that the South Korean government would not impose strict regulations on cryptocurrency exchanges in the foreseeable future.
“Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges. Supervision will come only after the legal recognition of digital tokens as a legitimate currency,” Choe said.
Truly allowing the growth of Bitcoin, as of this writing, South Korea holds the largest markets in Bitcoin exchange Bithumb with a volume traded of $356,126,000 today at the time of this writing.
*  *  *
Update: Bitcoin has continued to soar intraday - now topping $9,300 - with a total market cap over $156 billion, leaving the cryptocurrency worth more than Merck, Disney, and GE.
Coinivore notes that the digital currency, once a toy for computer nerds, is now soaring in price, triggering a new gold rush. Is it just another bubble, or a glimpse into a radically different financial future?
As Rick Falkvinge, CEO of BitCoin Cash and founder of the Swedish Pirate Party, warns “bitcoin is an extinction-level event for banks” and probably governments too...
*  *  *
As we detailed earlier, less than 24 hours ago, we noted that Bitcoin had broken above the recent resistance level around $8,300 and hit a fresh all time high of $8,650, observing that the world's biggest cryptocurrency by market cap is now rising at a pace that has put the $10,000 price target by both Mike Novogratz (and Jose Canseco) firmly in its sights. It didn't take long however for bitcoin to find a new round of eager buyers, and in early Asian trading, a burst of buying out of Korea's Bithumb exchange, has sent bitcoin surging another several hundred dollars higher, and around midnight ET bitcoin had surpassed $9,000, sending its market cap to $150 billion, making it more valuable than corporations like Siemens, Mastercard or McDonald’s.
The sharp gains come as the combined market capitalization for all cryptocurrencies also peaks at new highs – currently standing at just shy of $300 billion.
At this rate of appreciation, the crypto may hit the key psychological level of $10,000 in under a week. Needless to say, the long term chart is about as exponential as it gets, so as usual, buyer beware.
Bitcoin started the year just above $1,000, and the YTD gain is now over 900%, which however pales in comparison to Ether's nearly 5,000% YTD return and Litecoin's 20x.
However, it's not just Asian demand as CoinTelegraph reports that in a sign of growing mainstream acceptance, digital currency exchange Coinbase now boasts more accounts than brokerage firm Charles Schwab.
According to its website, Coinbase has 13 mln users while the number of Schwab brokerage accounts stood at 10.6 mln as of the end of 2016. These numbers don’t paint a complete picture, since the amount of assets controlled by Schwab certainly vastly exceeds those of Coinbase users. Nevertheless, the actual number of users indicates a massive volume of adoption, as the public begins to dabble in cryptocurrencies. Coinbase user numbers have grown by 167% this year.
One month ago, Mike Novogratz was the first to predict a $10,000 price in 6 to 10 months. It may come in that many weeks instead.  As a store of value, Novogratz likened bitcoin to digital gold, and said the technology is beginning to make "more and more sense" as we move increasingly into the digital. Novogratz continued to say that, while bitcoin is a bubble, the mania is justified, because it is a technological advancement that promises to fundamentally alter our lives.
"I can hear the herd coming" Novogratz said.
And bubble or not, Novogratz concluded eloquently on the extreme nature of cryptocurrencies' potential...
“Remember, bubbles happen around things that fundamentally change the way we live,” he said. “The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”
Bitcoin is set to become "the biggest bubble of our time," he added, and could reach $10,000 very soon due to fast-building interest. In retrospect, he may be right much faster than even he anticipated.
    Posted: November 27, 2017, 3:37 pm
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    Posted: November 21, 2017, 5:15 pm
    (GLOBALINTELHUB.COM) — 11/10/2017 We’d just like to note here that amidst Bitcoin’s historic rise there’s been a flurry of announcements with few ‘releases’ of finished products.  In fact only one company in the US, TZero, has a real regulated product that’s ready to go (which we noted as early as March 2016, but who was listening back then?).  Only one major Forex Broker, IC Markets, is offering 5 Crypto pairs in the MT4/5 platform.
    Let’s take a look at what Bitcoin in Meta Trader 5 looks like:
    forex
    Amazing, when you put it like that, it looks like FX!  That’s because Bitcoin and Ethereum are Currencies, no different from the Euro and Yen from a trading / investment perspective.  Obviously, there are the fundamental differences that Crypto is not backed by a Government, but that can change soon.  Traders can sign up free to see this screen above by clicking here: Open an account with IC Markets
    So we all know someone who bought Bitcoin in 2011 or several years ago – so what?  Today BTCUSD is down.  So what?  Like is the fashion with many bubbles, it seems that traders have become irrational.  The big question that we have at Elite E Services is that – why jump into something completely risky and unknown when there are proven systems with a long track record that are independent of market movement, like Magic FX.  The point is that it will take time for such algos to be developed for Bitcoin, the market is just starting to mature and evolve.
    We did something, we didn’t just announce that we have plans to get into Bitcoin – we wrote a book.  A sequel to our Splitting Pennies it’s logically called Splitting Bits – your user guide for the regulated side of Bitcoin and Blockchain which are posed to cannibalize half of the world’s banking industry.
    Calling all traders – this is a traders market!  Now is the time to start building your bots!  The real wave of the Crypto market is going to be the investment grade products, such as the Bitgos (Bit-Algos).  We’re launching a marketplace for them, stay tuned..
    Posted: November 13, 2017, 4:49 pm
    Elite E Services has teamed up with IC Markets to provide non-US and US-QEP Forex clients with the ability to trade BTC/USD in MT4.  For those of you who are not familiar with Bitcoin or MT4 you can read our books Splitting Pennies and the sequel Splitting Bits.

    Open an account with IC Markets
    Posted: November 6, 2017, 7:25 pm
    Last week, WSJ stoked fears that the Feds might be ramping up another probe into abuse and manipulation in the foreign exchange market when it reported that Wells Fargo had abruptly terminated four bankers from its FX business and transferred another. Now, Wall Street’s paper of record is reporting that Federal prosecutors are investigating Wells for abuses in its FX shop - but the scope of the investigated is limited to one disputed trade.
    According to WSJ, prosecutors have subpoenaed information from Wells and from the recently fired bankers as they investigate a trade and ensuing dispute between Wells and one of its clients, Restaurant Brands International Inc.
    RBI owns several fast-food franchises, including Burger King, Tim Hortons and Popeyes Louisiana Kitchen. In an amusing twist, both companies count Warren Buffett’s Berkshire Hathaway as one of their largest shareholders.
    In a statement, Wells Fargo said it “learned of an issue associated with a foreign exchange transaction for a single client. The matter was reviewed, the client was promptly notified regarding the issue, and Wells Fargo leadership took steps to hold accountable the individuals who were involved. Wells Fargo remains committed to our foreign exchange business, meeting our clients’ financial needs in an ethical way, and ensuring ongoing review of this and all business operations.”
    The foreign-exchange issue revolves around a trade made within the past three years that included positions running into the billions of dollars, the people said. The trade resulted in a loss to Restaurant Brands, the people added, which led to a dispute between it and the bank. WSJ pointed out that the investigation into Wells Fargo’s foreign-exchange business, which is housed within its investment bank, are separate from sales-practices issues that rocked the bank more than a year ago. Wells Fargo is planning to refund Restaurant Brands hundreds of thousands of dollars related to the trading loss, WSJ's sources said.  The Federal Reserve is also looking into the issue. Specifically, Federal prosecutors are looking into the sequencing of the trade in question and whether it could have involved so-called front-running, some of the people familiar with the matter said. That should send a chill down the spine of the fired bankers, as earlier this week a US jury found a former HSBC currency trader guilty of fraud related to front-running a large trade that netted the bank some $8 million in profits. The US is also in the process of extraditing another UK-based FX trader to face front-running related charges in the US.
    Last year, a wide-ranging investigation into abuse and front-running in the global foreign-exchange market led to a rash of settlements worth billions of dollars involving Barclays and a handful of other global banks. 
    While probes like this are never convenient, the investigation comes at a particularly trying time for the bank and its management. Earlier this month, WFC CEO Tim Sloan received a widely publicized tounge lashing from Massachusetts Senator Elizabeth Warren during Congressional testimony (Sloan became the second straight Wells CEO whom Warren said should resign during a public hearing). He has also participated in a handful of media interviews lately as he tries to burnish the bank's once-wholesome reputation and bolster its lagging share price, which has never quite recovered from last year's cross-selling scandal.
    However, as WSJ explains, front-running is often difficult to gauge given the ambiguity around pre-hedging strategies in currency trading. Typically a bank must purchase currency as part of a trade and price it differently than it would price a stock. Wells Fargo’s investment-banking, securities and markets division, known as Wells Fargo Securities, is a fraction of the size of its U.S. big-bank peers, as is its foreign-exchange business. The bank doesn’t break out financial results or metrics for that group or its foreign-exchange business.
    And while the investigation is the latest embarassment for the bank, which over the summer disclosed that it had overcharged mortgage and auto-loan borrowers, there is, at least, one mitigating factor: Unlike the retail banking scandal, which stoked widespread public outrage, few Americans understand how the foreign-exchange market works - indeed, many don't even realize that such a market exists. This means that even in the worst-case scenario, Wells's brand should remain untarnished from this latest scandal.
    The US Attorney’s Office for the Northern District of California is leading the investigation.
    Posted: October 27, 2017, 8:15 pm