Baltic Dry Index. 1792 +23 Brent Crude 63.31
“When the music stops, in terms of liquidity, things will be
complicated. But as long as the music is playing, you’ve got to get up and
dance. We’re still dancing.”
Citigroup
chief executive Chuck Prince, July 2007.
Rejoice, bubble
futures commenced trading in Chicago last night, appropriately on the eve of
the ninth anniversary of the arrest of America’s biggest ever Ponzi Scheme fraudster,
Bernie Madoff. Only in America, as they say. Way to go Chicago-based CBOE
Global Markets exchange.
"Finance
is the art of passing customer segregated funds from hypothecation to hypothecation
until it finally disappears."
December 11, 2017 / 1:03 AM
Bitcoin futures surge past $18,000; Asian shares firm
SYDNEY (Reuters) - The craze for cryptocurrencies entered a new chapter
on Monday as bitcoin futures rocketed by one-fifth of their value at a
closely-watched launch, while Asian shares climbed amid optimism about global
growth.
The
most-traded contract on the Chicago-based CBOE Global Markets exchange XBTc1
opened at $15,460 in New York on Sunday evening, before leaping to a high of
$18,700 - a gain of 21 percent. They were last quoted at $17,550 a premium of
more than $1,600 to the price on Gemini Exchange.
The futures are cash-settled contracts based on the auction price of
bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by
virtual currency entrepreneurs Cameron and Tyler Winklevoss.
The cryptocurrency has boasted a gravity-defying 15-fold gain since the
start of the year, attracting institutional interest and no small amount of
question marks.
The acting governor of the Reserve Bank of New Zealand on Sunday said
bitcoin appeared to be a “classic case” of a bubble.
“With a bubble you never know how far it is going to go before it comes
around,” Grant Spencer told TVNZ.
Some market participants believe the fallout across other financial
assets from a potential bursting of the bubble will be limited.
“Bitcoin’s market capitalization is currently around $240 billion, which
is much smaller, say, than the value of gold outstanding,” said Andrew
Kenningham, economist at Capital Economics.
“If the price of bitcoin fell to zero today, the paper losses would be
equivalent to a 0.6 percent fall in U.S. equity prices. As most investors have
bought bitcoin at much lower prices, the relevant losses would arguably be
smaller.”
Asian shares were buoyant following strong U.S payrolls data and
better-than-expected Chinese trade data on Friday.
----Currency
market investors were cautious ahead of a big week for policy meetings
globally, with the Federal Reserve the only major central bank expected to
raise interest rates. The Bank of England and the European Central Bank are
likely to hold rates steady.
More
Bernard Madoff
---- On December 10, 2008, Madoff's sons told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme, and quoted him as describing it as "one big lie".[14][15][16] The following day, FBI agents arrested Madoff and charged him with one count of securities fraud. The U.S. Securities and Exchange Commission (SEC) had previously conducted multiple investigations into Madoff's business practices, but had not uncovered the massive fraud.[7]On March 12, 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme. The Madoff investment scandal defrauded thousands of investors of billions of dollars. Madoff said he began the Ponzi scheme in the early 1990s. However, federal investigators believe the fraud began as early as the mid-1980s[17] and may have begun as far back as the 1970s.[18] Those charged with recovering the missing money believe the investment operation may never have been legitimate.[19] The amount missing from client accounts, including fabricated gains, was almost $65 billion.[20] The Securities Investor Protection Corporation (SIPC) trustee estimated actual losses to investors of $18 billion.[19] On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum allowed.[21][22]
More
In other news, a sea change
is coming, starting later this week.
Investors Told to Brace for Steepest Rate Hikes Since 2006
By David Goodman
11 December 2017, 00:01 GMT
Wall Street economists are telling investors to brace for the biggest
tightening of monetary policy in more than a decade.
With the world economy heading into its strongest period since 2011,
Citigroup Inc. and JPMorgan Chase & Co. predict average interest rates
across advanced economies will climb to at least 1 percent next year in what
would be the largest increase since 2006.
As for the quantitative easing that marks its 10th anniversary in the
U.S. next year, Bloomberg Economics predicts net asset purchases by the main
central banks will fall to a monthly $18 billion at the end of 2018, from $126
billion in September, and turn negative during the first half of 2019.
That reflects an increasingly synchronized global expansion finally
strong enough to spur inflation, albeit modestly. The test for policy makers,
including incoming Federal Reserve Chair Jerome Powell, will be whether they
can continue pulling back without derailing demand or rocking asset markets.
“2018 is the year when we have true tightening,” said Ebrahim Rahbari,
director of global economics at Citigroup in New York. “We will continue on the
current path where financial markets can deal quite well with monetary policy
but perhaps later in the year, or in 2019, monetary policy will become one of
the complicating factors.”
More
“Call
it the Goldman Sachs test. If this is something Goldman would do to its
clients, don't do it."
Felix
Salmon.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
The
world is a place that’s gone from being flat to round to crooked.
Mad Magazine.
You Can Trade Bitcoin Futures. But Should You?
By Annie Massa
10 December 2017, 19:00 GMT Updated
on 11 December 2017, 01:46 GMT
Trading in bitcoin futures opened today on Cboe Global Markets
Inc. Its rival, CME Group Inc., will soon follow suit. It’s a milestone in
the acceptance of the digital currency by the world of mainstream investing,
spurred in part by bitcoin’s meteoric rise this year. Skeptics still abound, however,
including executives at some of the world’s largest banks. For the doubters, at
least there’s this silver lining: Futures trading may add an opportunity to burst what they see as a bubble.1. How does bitcoin normally trade?
On a network of unregulated exchanges, which have their own prices for the digital currency -- and a long history of problems that range from service crashes to hacks and thefts. Buying and holding bitcoin is essentially a bet that its value will rise further. Not everybody who wants to get involved in this market thinks so.2. What does it mean to trade bitcoin futures?
Futures contracts -- which derive their value from some underlying thing like corn, wheat, or in this case, a digital currency -- oblige a buyer to pay for something at an agreed-upon price at a certain date in the future. They can be used to make a bet on which way the market for a product is going to move. They can also be used to short a market, or bet that prices will fall.3. Who’s going to be offering futures contracts?
Three of the largest U.S. exchange companies, all overseen by the Commodity Futures Trading Commission, are debuting bitcoin futures contracts. Cboe is getting its contract to market first. CME will begin offering a competing product on Dec. 18. Nasdaq Inc. is planning to introduce bitcoin futures next year. The other major U.S. exchange player, Intercontinental Exchange Inc., has not yet announced any plans to do so. “We may be stupid for not being first on that,” Jeff Sprecher, CEO of ICE, said at an investor conference this month.4. Why are they doing it?
Exchanges want to offer what investors want to trade, and a lot more people want to trade in the bitcoin market than even a year ago. Coinbase, a large bitcoin exchange, was overwhelmed by heavy traffic as bitcoin soared toward $10,000 in late November. CME, which as recently as October hadn’t made a decision on how to address cryptocurrencies, ultimately decided the allure was too much to resist. For traders, bitcoin offers an entirely new landscape to navigate. One hallmark of bitcoin trading is unpredictable price swings, a stark contrast to the eerie calm that’s settled over other financial markets, including U.S. equities.5. What are the risks?
Not everyone thinks derivatives based on bitcoin are ready for prime time. One worry is the volatility that so far has been a key feature of the digital currency market. Just three days before Cboe’s product was slated to be introduced, bitcoin had one of its wildest sessions ever: On Coinbase’s GDAX exchange, prices zoomed up to almost $20,000 from $16,000 in only about 90 minutes, before crashing back down.6. So are bitcoin futures a bad idea?
Some big traders think futures may be premature. The Futures Industry Association -- a group of major banks, brokers and traders -- said the contracts were rushed without enough consideration of the risks. In an open letter to the exchanges, the group questioned whether they would be able to adequately police market manipulation in bitcoin. The group said the exchanges should have sought more industry feedback on margin levels, trading limits and stress tests for the system before beginning trading. Cboe and CME are requiring traders to set aside an unusually large pile of cash to serve as collateral to back purchases.7. What is bitcoin, anyway?
This simple question draws a surprising amount of debate in the investing world. While bitcoin advocates call it a currency, the CFTC views it as a commodity. Skeptics view it as a commodity without any intrinsic value, with demand driven by novelty and the scarcity imposed by bitcoin’s software protocols, which will cap its production. Some analysts think it will trade more like a volatile stock, while others expect it to develop into a new asset class entirely. These arguments are being debated among trading desks at banks and hobbyists alike.
More
There can be few
fields of human endeavour in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
John Kenneth Galbraith.
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?
China Starts World's Biggest Floating Solar Project
Bloomberg NewsChina Three Gorges New Energy Co. started building the 150-megawatt project in July and part of the plant has connected to the grid, according to a Dec. 10 statement. The project features panels fixed to floats on the surface of a lake that formed after a coal mine collapsed, according to the unit. The entire facility is expected to come online by May 2018.
Floating solar is getting bigger in China, where ground-mounted projects aren’t used to full capacity because of grid congestion. About 5.6 percent of solar power generation was idled in the first three quarters, according to data from the National Energy Administration.
Before
construction of China Three Gorges’ plant, China’s biggest commissioned
floating solar project was a 40-megawatt farm
by Sungrow Power Supply Co. in the same
province, according to Bloomberg New Energy Finance.
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
Central banksters, with apologies to Cary Grant. To Catch A Thief.
Once again another year draws
to a close. If you are one of the regular reader 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.
21st
century adage: Is that true or did you hear it on the BBC?
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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