Baltic Dry Index. 1547 -41 Brent Crude 63.95
If
anything can go wrong, it will
Murphy’s
Law.
Today how bitcoin and
cryptocurrency mania trumped Trump’s tax cuts. It’s just like gold fever in
1979-1980, except there’s no gold. I can remember the long lines of gold and
silver heirloom sellers snaking through the NYC World Trade Center and out into
the street, desperate to get into the gold and silver merchants offices to sell
the heirlooms for melt weight. Manias are wonderful times to observe life.
Just like long
forgotten Bre-X, I think the cryptocurrencies are a scam of epic proportions,
though as of this morning, no one has yet fallen out of a helicopter. January perhaps?
People
don't make the same mistake twice, they make it three, four, or five times.
Murphy’s
Law of Manias.
Asian markets quiet as bitcoin makes noise
Published: Dec 19, 2017 11:30 p.m. ET
Bitcoin’s wild swings after a morning plunge occupied center stage in
Wednesday’s trading session in Asia, as equities markets didn’t move much
through midday.The cryptocurrency’s price BTCUSD, -3.15% — which had been trading just below $19,000 Tuesday — fell $2,000 in an hour to $15,600, according to CoinDesk. It then bounced up and down in a roughly $1,000 range, and was recently around $17,000.
Analysts blamed the swings on money moving from bitcoin to an alternative cryptocurrency called bitcoin cash. One of the biggest exchanges, Coinbase, started trading bitcoin cash on Wednesday morning — but halted activity after just four minutes.
Bitcoin cash’s price surged nearly 50% to about $3,250, according to Coinmarketcap.com. It is up more than 10-fold since its debut in August.
Given the relatively wider acceptance of bitcoin, the correction is liable to attract those who’ve been watching its price surge of the past several weeks with both awe and disbelief, said Kay Van-Petersen, a global macro and crypto strategist at Saxo Capital Markets in Singapore.
More
Bitcoin plunges more than $2,500, bounces back somewhat, as bitcoin cash surges on trading news
Published: Dec 20, 2017 12:02 a.m. ET
Wild swings after Coinbase says it will start bitcoin-cash trading
The price of bitcoin plunged about 14% — more than $2,500 — Tuesday night after cryptocurrency trading site Coinbase said it would allow its customers to buy and sell its rival offshoot currency, bitcoin cash.In a matter of hours, the price of bitcoin BTCUSD, -2.09% dropped from $18,125 to as low as $15,578. Bitcoin later rallied somewhat and was trading within a $1,000-range; it was last at $16,875 Tuesday night. Bitcoin futures BTCF8, -4.81% were last trading at $17,425, off more than $700 from the afternoon. Bitcoin cash, meanwhile, rallied more than 50% to all-time highs above $3,300. It was last trading at $3,303, according to CoinMarketCap.
“Sends and receives are available immediately,” Coinbase said in a blog post Tuesday announcing bitcoin-cash trading. “Buys and sells will be available to all customers once there is sufficient liquidity on GDAX. We anticipate that this will take a few hours.”
However, Coinbase and its GDAX exchange late Tuesday suspended bitcoin-cash trading after just four minutes until 9 a.m. Pacific time Wednesday, apparently until traffic settles down and liquidity is established.
Read: Bitcoin once again the ‘world’s most crowded trade’, fund managers say
Bitcoin cash was created by a split from bitcoin on Aug. 1 by a faction of disgruntled developers, and allows virtual miners to process transactions in larger units — 8 megabytes rather than the 1-MB bitcoin blocks. The fledgling cryptocurrency has expanded 10-fold since then, and is now the third-largest by market cap, at $55.6 billion, according to CoinMarketCap.com.
More
Crypto Mania Rages With Bankruptcy, Stock Suspension, ETF Plan
By Jeremy Herron and Lily Katz
Updated on 19 December 2017, 21:57 GMT
The wave of cryptocurrency news turned into a tsunami
Tuesday.
Before traders broke for lunch in New York, a Korean crypto exchange went bust after getting hacked; a stock unheard of 24 hours earlier surged even after its CEO gave a rambling defense of its business; U.S. regulators halted a coin trader’s stock on suspicion of manipulation; alt coins from ether to iota reached new highs; and an app maker tripled after buying a bitcoin ATM patent.
The frenzy of crypto news is reminiscent of the heady days of the dot-com bubble, when stories of mailroom millionaires sparked a rush to list anything remotely related to the internet. That’s not to say the digital currency craze has to end any time soon. Tuesday even brought a sign that it’s just getting started: A unit of Cboe Global Markets filed to list a bitcoin exchange-traded fund.
Here’s a roundup of the day in crypto:
Trading Suspended
U.S.
regulators temporarily suspended trading in Crypto Co. over concerns that the
stock is being manipulated after it surged more than 2,700 percent this month,
making paper billionaires out of top executives. Crypto is the product of a reverse
merger with a company that made water and radio-wave resistant sports bra
pockets, according to a November filing. Last week it issued stock to
accredited investors at $7, a 97 percent discount to the prior day’s closing
price.
Rally Resumed
Just
when there looked to be a limit to the mania, LongFin Corp. captured the
attention of the masses. The stock’s four-day rally reached 2,600 percent on
Monday, earning its chief executive an appearance on CNBC. The interview did
not go well for him as he got into a heated debate with the anchors, telling
them, “you don’t understand.” Overnight LongFin shares stumbled...but they
resumed their ascent in regular trading, rising as much as 23 percent before
ending the day little changed.
Belly-Up Exchange
South Korean coin exchange Youbit became a casualty of hackers, saying it will close and enter bankruptcy after a cyberattack. Korea has emerged as a sort of ground zero for the global crypto-mania, with so many Koreans embracing bitcoin that the prime minister recently warned that cryptocurrencies might corrupt the nation’s youth.Riot Offering
Riot Blockchain Inc., a stock virtually unknown three months ago, had a secondary offering as its shares pushed their gain since September to 700 percent. The company issued 1.64 million restricted units at a purchase price of $22.50 each. The stock closed Monday at $36.47. Short-seller Citron Research said yesterday it was betting against Riot, citing “full mania.”
More
Good News! You Are a Bitcoin Millionaire. Bad News! You Forgot Your Password
Distraught investors go to extreme lengths to recover their lost cryptocurrency, including hypnosis and ‘brute force’ attacks with a supercomputer
By Alison Sider and Stephanie Yang
Many who bought bitcoin years ago now find themselves sitting on an untouchable bounty.
More
In other news, it’s
the end of the road for asset managers. Donald Trump’s big day.
World's Biggest Pension Fund Says AI Will Replace Asset Managers
By Yuko Takeo and Shigeki Nozawa
14 December 2017, 21:00 GMT
Hiromichi
Mizuno was named chief investment officer of Japan’s Government Pension
Investment Fund,
the world’s biggest manager of retirement savings, in 2014. He has since led a
push to increase equity holdings and advocated for incorporating ESG, or
environmental, social and governance, factors into investing.
Question: What are the biggest changes in the investment world you see
coming in the next five to 10 years?
Mizuno: Adoption of technology, including AI and ESG integration into
all asset classes. I believe artificial intelligence will be able to either
replace or enhance the asset managers’ work, particularly for short-term
trading.
Question: What are the implications?
Mizuno: Asset managers have to adjust their conventional business model.
Investors will be more focused on the long-term investment theme, as AI will
take over the short-term trading. In other words, investors will shift their
focus to the long-term sustainability of their portfolio, and more focus on
their investment themes like ESG.
Question: Do you see a lot of jobs being cut as a result?
Mizuno: I wouldn’t be surprised if a lot of people lose their jobs
because AI replaced their routine. But I also believe in human wisdom. I think
the long-term thinking and the ESG-like non-numerical, non-quantitative
information will continue to require human interpretation. I believe AI will
release the human resource to do something else.
More
Republican tax bill clears Senate and heads back to House for final vote
Published: Dec 20, 2017 1:23 a.m. ET
Congressional Republicans were on the verge of sending a historic tax
bill to President Donald Trump, after the Senate passed a massive overhaul of
the tax code early Wednesday and the House was expected to approve it later in
the day.
The Senate passed the bill 51-48 after amending the measure the House
passed Tuesday. Sen. John McCain, an Arizona Republican, was absent for health
reasons.
In a surprise development, the Senate’s parliamentarian found minor
provisions that broke budget rules, forcing lawmakers to strip them out and
requiring the House to vote again. House leaders have scheduled a new tax vote
for Wednesday morning.
Applauding the passage of the bill in the Senate, Trump said in a tweet
that if approval goes ahead in the House, a news conference at the White House
is planned for around 1 p.m. Eastern.
More
A
falling object will always land where it can do the most damage.
Murphy’s Law of Gravity.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
New
systems generate new problems.
Murphy’s Law of Technology.
We’re all going to get rich, RICH!!!
Short Seller Says Naive Bitcoin Traders Open a Pathway to Profit
By Lily Katz
18 December 2017, 19:26 GMT
As
newly launched derivatives contracts draw pros into the bitcoin market, a short
seller still sees a massive inefficiency -- and a chance to profit off naïve
traders.
The Bitcoin Investment Trust, a publicly traded vehicle whose bitcoin
holdings are worth $1,601 a share, nonetheless trades at a price more than
double that amount, according to data compiled by Bloomberg.A savvy trader could in theory mint money by betting that gap will shrink. Futures contracts introduced over the past week by Cboe Global Markets Inc. and CME Group Inc. provides a way to do that: Buy the futures, short sell the Bitcoin Investment Trust.
That’s precisely what Andrew Left, a short seller at Citron Research, is doing, a fact he reiterated via tweet on Monday morning. “Citron would not be pounding table if not appropriate,” he wrote. “Thank you for the 70 percent profit.”
He
then followed that up with comments on Bloomberg Television. “There’s an
incredibly naïve investor base behind this who doesn’t want to check the extra
boxes off to open a futures account,” he said. The gap between the trust’s
price and holdings “has to do with investors out there that do not know what
they’re doing.” Left also said that the current challenge for investors
interested in shorting the trust is finding shares to borrow.
The futures are already showing signs of efficiency. When they debuted a
week ago, Cboe’s traded for a price as much as 13 percent higher than the price
of bitcoin -- a wide gap indicating an immature market. But that’s since
narrowed to about 1.3 percent. CME’s futures started trading Sunday night and
have a similar arbitrage spread.Read More: Bitcoin Futures Are Dangling a Free Lunch for Starving Arbs
It is impossible to make
anything fool proof because fools are so ingenious.
Murphy’s Observation.
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section. Updates as
they get reported. Is converting sunlight to usable cheap AC or DC energy
mankind’s future from the 21st century onwards?
Graphene in zero G promises success in space
Graphene enters microgravity
Date:
December 16, 2017
Source:
Graphene Flagship
Summary:
Experiments testing graphene for two different space-related applications have
shown extremely promising results.
In a successful collaboration between the Graphene Flagship and the
European Space Agency, experiments testing graphene for two different space-related
applications have shown extremely promising results. Based on these results,
the Flagship are continuing to develop graphene devices for use in space.
"Graphene as we know has a lot of opportunities. One of them,
recognised early on, is space applications, and this is the first time that
graphene has been tested in space-like applications, worldwide," said
Prof. Andrea Ferrari (University of Cambridge, UK), Science and Technology
Officer of the Graphene Flagship.
Graphene's excellent thermal properties are promising for improving the
performance of loop heat pipes, thermal management systems used in aerospace
and satellite applications. Graphene could also have a use in space propulsion,
due to its lightness and strong interaction with light. The Graphene Flagship
tested both these applications in recent experiments in November and December
2017.
The main element of the loop heat pipe is the metallic wick, where heat
is transferred from a hot object into a fluid, which cools the system. Two
different types of graphene were tested in a collaboration between the
Microgravity Research Centre, Université libre de Bruxelles, Belgium; the
Cambridge Graphene Centre, University of Cambridge, UK; the Institute for
Organic Synthesis and Photoreactivity and the Institute for Microelectronics
and Microsystems, both at the National Research Council of Italy (CNR), Italy;
and industry partner Leonardo Spa, Italy, a global leader in aerospace,
operating in space systems and high-tech instrument manufacturing and in the
management of launch and in-orbit services and satellite services.
"We are aiming at an increased lifetime and an improved autonomy of
the satellites and space probes. By adding graphene, we will have a more
reliable loop heat pipe, capable to operate autonomously in space," said
Dr Marco Molina, Chief Technical Officer of Leonardo's space line of business.
After excellent results in laboratory tests, the wicks for the loop heat
pipes were tested in two ESA parabolic flight campaigns in November and December.
"We have good tests done on earth in the lab, and now of course because
the applications will be in satellites, we needed to see how the wicks perform
in low gravity conditions and also in hypergravity conditions, to simulate a
satellite launch," added Prof Ferrari.
More
How Electric Vehicles Could Sink the Texas Grid
Analysis shows why utilities need to think hard about future energy systems.
Jason
DeignDecember
19, 2017
Simultaneous charging of just 60,000 next-generation electric vehicles could
one day threaten the Texas grid, an analysis has shown.Based on a 100-kilowatt EV battery with a five-minute charge time, which could potentially be the standard for EVs in three or four years, demand from 60,000 cars charging at once would equate to 70 gigawatts, said analysts from GTM’s parent, Wood Mackenzie.
That’s the same as the current peak demand for the whole of ERCOT, said Prajit Ghosh, Wood Mackenzie’s head of Americas power and renewables research.
The calculation, carried out as part of research for a Wood Mackenzie report on the impact of EVs, shows how important it will be for grid operators and other stakeholders to stay ahead of the vehicle electrification trend, Ghosh said.
“The idea that electric vehicles are a big disruptive force, that’s mainstream,” he said. “As you sift through the micro issues you understand there are forces that can [affect] the pace at which electric vehicles can grow.”
Grid load is one of those issues: 60,000 might sound like a
lot of cars to be charging simultaneously, but it is only a quarter of a
percent of the 24 million vehicles that the Texas Department of Motor Vehicles says it registers
every year.
At current charging rates, that level of EVs wouldn’t dent the grid. “If
you charge a 100-kilowatt-hour battery in one hour, the instantaneous demand
that comes out of it is 100 kilowatts,” Ghosh explained.
The challenge comes as EV manufacturers move toward their goal of
increasingly fast charging. “If you assume a 100-kilowatt battery gets charged
in five minutes, it means an instantaneous demand of 1.2 megawatts,” said
Ghosh.
“What that means is that as we get more and more electric cars on the
system, we’ve got to think about how we manage this charging. You can have
lithium-ion batteries that charge in minutes. But the physics of charging won’t
change. That is a fundamental truth.”
Failure to properly account for these effects could lead to a situation
where, for example, EVs increase rather than decrease the demand for fossil
fuels by upping the requirement for peaking power on the gird.
More
Unintended Consequences
by
Rob Norton
The law of unintended consequences, often
cited but rarely defined, is that actions of people—and especially of
government—always have effects that are unanticipated or unintended. Economists
and other social scientists have heeded its power for centuries; for just as
long, politicians and popular opinion have largely ignored it.
The concept of unintended consequences is one of the building blocks of economics. Adam Smith’s “invisible hand,” the most famous metaphor in social science, is an example of a positive unintended consequence. Smith maintained that each individual, seeking only his own gain, “is led by an invisible hand to promote an end which was no part of his intention,” that end being the public interest. “It is not from the benevolence of the butcher, or the baker, that we expect our dinner,” Smith wrote, “but from regard to their own self interest.”
More
Friendly fire - isn't
Murphy’s Law of War.
Once again another year draws
to a close. If you are one of the regular readers of this six days a week
update that helps support my efforts with the occasional donation via the
Paypal button, once again I sincerely thank you. If you are a regular reader
who finds the LIR informative, interesting, occasionally amusing or entertaining,
please consider making a small donation via the Paypal button on the LIR
website. For obvious reasons in our new age of almost rampant fake news, I want
to keep the LIR advertising free. But in any event thank you for reading and
sending in helpful suggestions.
Homer:
I want to share something with you: The three little sentences that will get
you through life. Number 1: Cover for me. Number 2: Oh, good idea, Boss! Number
3: It was like that when I got here.
The other Homer.
The monthly Coppock Indicators finished November
DJIA: 24,272 +243 Up. NASDAQ: 6,874 +289 Up. SP500: 2,648 +189 Up.
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