Wednesday 6 December 2017

Is Bitcoin Another Madoff?

Baltic Dry Index. 1666 +04 Brent Crude 62.62
For more on the latest madness in cryptocurrencies, scroll down to Crooks Corner.
Up first Asia’s tech wobble continues. Are bitcoin and the lookalikes, draining the stock markets of “greater fools?” Has fear suddenly replaced greed?
To this old dinosaur market follower, over priced stocks have been travelling on hopium and hype all year. I think we are deep into yet another chapter in “Extraordinary Popular Delusions and the Madness of Crowds.”

Asian Stocks Tumble Amid Broad Selloff; Yen Gains: Markets Wrap

By Adam Haigh
5 December 2017, 22:04 GMT Updated on 6 December 2017, 06:07 GMT
Asian stocks are poised for the longest losing streak in two years as the technology, mining, consumer and industrial sectors led declines. Japan equities fell sharply, as did Hong Kong’s Hang Seng Index. The Australian dollar and bond yields tumbled as traders dialed back expectations for higher interest rates after growth missed estimates.

The MSCI Asia Pacific Index is set to fall for eight days, making it the longest run of losses since 2015. American shares fell, with an afternoon swoon wiping out early gains for a second straight day, as investors assessed the impact of proposed tax cuts. Ten-year Treasury yields maintained a slide to 2.34 percent, while the dollar held onto gains. The pound extended declines amid stalled Brexit negotiations, and the yen jumped.

“The adjustment mode is deepening lately in the Japanese stock market,” said Shunichi Otsuka, general manager in the research department at Ichiyoshi Securities in Tokyo. “It’s difficult to buy unless U.S. equities show firmness, even as some high-tech shares are becoming cheap.”

Australia’s third-quarter GDP climbed 2.8 percent from a year earlier versus a forecast of 3 percent, reinforcing expectations for the central bank to stand pat on rates for much of next year. The Reserve Bank of Australia has signaled no near-term policy change as household spending slows amid lofty debt levels and stagnant wage growth.

A surge in global equities that drove indexes to record highs has stalled as investors lock in profits and await catalysts that would provide reason to add to risk assets before the year draws to a close. Friday’s U.S. jobs report is the next big data release on the calendar. House and Senate lawmakers are poised to begin working on compromise tax-overhaul legislation -- a key step in their drive to send a bill with tax cuts for corporations and individuals to President Donald Trump by the end of the year.
More

Hong KongStock Selloff Accelerates as Top Performers Stumble

6 December 2017, 03:17 GMT Updated on 6 December 2017, 06:13 GMT
Hong Kong’s benchmark index fell for the seventh time in eight days amid steepening losses in some of the year’s top performers, including Geely Automobile Holdings Ltd. and AAC Technologies Holdings Inc.

The Hang Seng Index was down 1.7 percent at 1:53 p.m., poised for its lowest close since Oct. 31. The gauge has slumped more than 5 percent from a decade high reached on Nov. 22 amid concern inflows from mainland China will slow and as global equity markets retreated. Geely, AAC and Sunny Optical Technology Group Co., which have led gains on the index this year, plunged more than 7 percent on Wednesday.

Stocks in Hong Kong have turned into some of the world’s worst performers since the Hang Seng Index’s peak last month as investors cut holdings in shares that saw extreme rallies this year. Tencent Holdings Ltd., which accounts for almost a third of the benchmark’s 2017 gain, has tumbled 14 percent from its record high last month to wipe out $75.5 billion in value.

Investors are “locking in profits earlier than usual for the year and not opening any new positions until the new year,” said Andrew Clarke, director of trading at Mirabaud (Asia) Ltd.

Clarke said the profit-taking could last a while, though some investors may look at stocks like Tencent after the correction and decide to go long for next year. “Eventually, as profit taking subsides, buying for the new year will appear as people look towards 2018,” he said.

The H-share index in Hong Kong slid 2.3 percent Wednesday, while the Shanghai Composite Index dropped 1 percent, falling below the 3,300 level for the first time since August. The Hang Seng Index dropped below a key moving average.
More


Opinion: There’s overwhelming evidence that the U.S. stock market is heading for disaster

Published: Dec 5, 2017 10:40 a.m. ET
Bonfires are fun to watch, but they eventually burn out.
Human folly apparently doesn’t, so we just keep adding to the absurdities. The volume of daily economic lunacy that lights up my various devices is truly stunning, and it seems to be increasing. (You can find a previous series of charts in my free newsletter, Thoughts from the Frontline.)

Let’s take a look at a series of charts I received from my “kitchen cabinet” of friends.
The economy is more leveraged than ever
First up is Grant Williams, who sent me a monumental slide deck. Here’s an example of craziness:
more

Extraordinary Popular Delusions and the Madness of Crowds


Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today more on the Bitcoin Bubble madness. America’s CFTC regulator approves futures on Bitcoin. The equivalent of futures on unicorns. How bad will the eventual bust be? A Massive Madoff Moment, but globally.
December 6, 2017 / 3:32 AM / Updated 2 hours ago

Bitcoin surges above $12,000 to record high on relentless demand

TOKYO (Reuters) - Bitcoin extended its eye-popping rally on Wednesday, breaking above $12,000 to a record high despite questions about the cryptocurrency’s real value and worries about a dangerous bubble.
Bitcoin received a boost after Friday’s announcement by the main U.S. derivatives regulator that it would allow CME Group Inc and CBOE Global Markets to list bitcoin futures contracts.
The move opens the door to added regulation but also more mainstream adoption, as bitcoin futures and other derivatives would make it easier to trade the new asset class.
Bitcoin’s meteoric ascent of over 10-fold from below $1,000 at the start of the year has drawn regulatory scrutiny around the world.

Some high profile individuals such as Nobel Prize-winning economist Joseph Stiglitz have said the cryptocurrency should be outlawed.

“It took a long time to establish the methodology and the way bitcoin was traded. The original appeal came from the fact they were unregulated. However it’s clearly moved out of those shadows and into center stage,” said Mick McCarthy, CMC Markets’ chief market strategist in Sydney.

“We are in the throes of a bubble market, and one of the characteristics of a bubble market is that there is no way to know when the bubble will burst.”

The current craze for bitcoin, and cryptocurrencies in general, have been likened by some to the 17th century Dutch tulip mania and more recently the dotcom bubble.
More

There’s an $814 Million Mystery Near the Heart of the Biggest Bitcoin Exchange

By Matthew Leising
5 December 2017, 10:00 GMT
Among the many mysteries at the heart of the cryptocurrency market are these: Does $814 million of a digital token known as tether really exist? And what is tether’s connection to Bitfinex, the world’s biggest bitcoin exchange?

This is the state of crypto in late 2017, where questions about the companies behind the currencies are multiplying with the profits. While cryptocurrencies appeal to people who lack faith in governments and banks, the digital assets often require a blind trust in companies about which few facts are available.

Take tether. The currency, which started trading in 2015, is described as a stable alternative to bitcoin’s wild price swings. A restaurant owner who accepts bitcoin but fears its volatility could shift bitcoin into tether, which can be easier to do than exchanging bitcoin for dollars. Its price has stayed near $1 for most of its life because Tether, the company behind the digital token, says that every tether is backed by one U.S. dollar held in reserve. Since there’s $814 million of tether circulating, there should be $814 million parked in bank accounts somewhere.

Not everyone believes there is.

“Is there anything backing this?” said Tim Swanson, who does risk analysis for blockchain and cryptocurrency startups. Swanson, also director of research at Post Oaks Labs, said he fears problems with tether could hobble exchanges that trade it. “If these aren’t backed 1-to-1, then what is the contagion risk if one of these exchanges goes down?”
more

Bitcoin Only Has One Way To Go If This Is True

Dec. 4.17

Summary

I believe that Tether's surging supply is the major driver behind Bitcoin's explosive appreciation.
Tether Limited is likely issuing bogus Tethers, which is equivalent to 1 USD, which can then be used to buy Bitcoin.

Confidence in Tether Limited and active arbitrage between Tether/Bitcoin/USD allows Bitcoin to go in one way only.

The scheme will unravel if confidence in Tether Limited evaporates, or if Bitcoin rises to a point such that there is a sudden wave of selling pressure such that there can be no liquidity to complete the arbitrage.

Despite numerous indications of fraud, Tether's peg to the dollar is holding. Which begs the question, if enough people believe a lie, does it become the truth?

I remain a Bitcoin (OTCQX:GBTC, COIN, RIOT, OTC:BITCF, OTCPK:BTSC, OTCQB:BTCS, OTCQB:MGTI) skeptic as I believe that the fundamental value of the cryptocurrency is zero (read Why Bitcoin Is Worthless). However, I cannot deny that it has market value. That value has been increasing, which means that some people somewhere are buying. But who? I believe that question can be answered by Tether. Through a very clever scheme, the people behind Tether can continue to send Bitcoin into the stratosphere until it reaches a not-yet-known breaking point.
More

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? DC? A quantum computer next?

New nanowires are just a few atoms thick

Subnanometer-scale channels in 2-D materials could point toward future electronics, solar cells

Date: December 4, 2017
 
Source: Massachusetts Institute of Technology
 
Summary: Subnanometer-scale channels in 2-D materials could point toward future electronics and solar cells, report investigators.
"Two-dimensional materials" -- materials deposited in layers that are only a few atoms thick -- are promising for both high-performance electronics and flexible, transparent electronics that could be layered onto physical surfaces to make computing ubiquitous.

The best-known 2-D material is graphene, which is a form of carbon, but recently researchers have been investigating other 2-D materials, such as molybdenum disulfide, which have their own, distinct advantages.

Producing useful electronics, however, requires integrating multiple 2-D materials in the same plane, which is a tough challenge. In 2015, researchers at King Abdullah University in Saudi Arabia developed a technique for depositing molybdenum disulfide (MoS2) next to tungsten diselenide (WSe2), with a very clean junction between the two materials. With a variation of the technique, researchers at Cornell University then found that they could induce long, straight wires of MoS2 -- only a few atoms in diameter -- to extend into the WSe2, while preserving the clean junction.

The researchers contacted Markus Buehler, the McAfee Professor of Engineering in MIT's Department of Civil and Environmental Engineering, who specializes in atomic-level models of crack propagation, to see if his group could help explain this strange phenomenon.

In the latest issue of Nature Materials, the King Abdullah, Cornell, and MIT researchers team with colleagues at Academia Sinica, the Taiwanese national research academy, and Texas Tech University to describe both the material deposition method and the mechanism underlying the formation of the MoS2 nanowires, which the MIT researchers were able to model computationally.

"The manufacturing of new 2-D materials still remains a challenge," Buehler says. "The discovery of mechanisms by which certain desired material structures can be created is key to moving these materials toward applications. In this process, the joint work of simulation and experiment is critical to make progress, especially using molecular-level models of materials that enable new design directions."
More

The monthly Coppock Indicators finished November

DJIA: 24,272 +243 Up. NASDAQ: 6,874 +289 Up. SP500: 2,648 +189 Up.


No comments:

Post a Comment