Tag: news

A UC Irvine study has revealed that people who drink moderate amounts of alcohol or coffee, and people who are overweight in their 70s, live longer than their skinny teetotalling counterparts.  

Using data collected from 14,000 people in a 1981 Leisure World Cohort Study (LCWS), along with 1,600 participants who have enrolled in The 90+ Study launched in 2003, researchers from the UC Irvine Institute for Memory Impairments and Neurological Disorders set out to determine factors associated with longevity, such as; 

• What factors are common in people who live to age 90 and beyond?
• What types of food, activities or lifestyles are associated with longevity?
• How many people in their 90s or older have dementia or memory loss – and how does that affect the elderly?
• Do the brains of people in their 90s show evidence of memory loss and dementia – and can people change their risk of dementia through diet, exercise or supplements?

In addition to determining that overweight people in their 70s who drink moderate amounts of alcohol or coffee live longer, researchers also found that over 40% of people aged 90 and older suffer from dimentia, while nearly 80% have some type of disability.

Learn more about the study (or even participate in it) here.

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Authored by Mac Slavo via SHTFplan.com,

The Centers for Disease Control and Prevention is warning of a respiratory virus that is currently attacking both children and adults. The CDC says that everyone should watch out for Respiratory Syncytial Virus or “RSV.”

RSV may start out by noticeable symptoms that are very similar to those of the common cold and most people will recover in less than two weeks believing they only had a cold. Some symptoms are coughing, wheezing, loss of appetite, runny nose, and a fever.  Those symptoms are very similar to those of the common cold, and most people have actually had RSV before possibly believing it to be a cold.

RSV can spread when an infected person coughs or sneezes. You can get infected if you get droplets from a cough or sneeze in your eyes, nose, or mouth, or if you touch a surface that has the virus on it, like a doorknob, and then touch your face before washing your hands. Additionally, it can spread through direct contact with the virus, like kissing the face of a child with RSV. -CDC

However, the CDC says that RSV can be serious for infants and the elderly. As of now, the government agency says there is no vaccine to prevent the virus either. There is a medicine that can help protect some of the babies. This medicine (called palivizumab) is a series of monthly shots.

RSV is the most common cause of bronchiolitis (inflammation of the small airways in the lung) and pneumonia (infection of the lungs) in children younger than 1 year of age in the United States. It is also a significant cause of respiratory illness in older adults. But the virus is rather common. According to the CDC’s own website, almost all children will be infected with RSV by their second birthday, building natural immunities to the infection.

Should you be terrified of RSV? Probably not.  The CDC is well-known for the fearmongering to get people to take a flu shot every year (regardless of its efficacy) and often attempts to scare the public into accepting their notions that common illnesses are dangerous.

But, there are ways to help prevent RSV, and these will also help prevent common colds and the flu as well.

• Wash your hands often. Wash your hands often with soap and water for 20 seconds, and help young children do the same. If soap and water are not available, use an alcohol-based hand sanitizer that contains at least 60% alcohol. Washing your hands will help protect you from germs.

• Keep your hands off your face. Avoid touching your eyes, nose, and mouth with unwashed hands. Germs spread this way.

• Avoid close contact with sick people. Avoid close contact, such as kissing, and sharing cups or eating utensils with people who have cold-like symptoms.

• Cover your coughs and sneezes. Cover your mouth and nose with a tissue or upper shirt sleeve when coughing or sneezing. Throw the tissue in the trash afterward and wash your hands.

• Clean and disinfect surfaces. Clean and disinfect surfaces and objects that people frequently touch, such as toys and doorknobs. When people infected with RSV touch surfaces and objects, they can leave behind germs. Also, when they cough or sneeze, droplets containing germs can land on surfaces and objects.

• Stay home when you are sick. If possible, stay home from work, school, and public areas when you are sick. This will help protect others from catching your illness.

You could also consider naturally boosting your immune system to help give your body a leg up should you be exposed to the virus or actually come down with any “winter time” illness, such as a cold or the flu.

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On December 30, Tokyo will begin reducing tariffs and easing quotas on products sold by US’ largest agriculture competitors — including Australia, Canada, Chile, and New Zealand, as part of the new 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP), the Wall Street Journal reported.

President Trump had removed the US from the TPP last year, alleging it would have crippled American manufacturers by minimizing duties on US imports of automobiles.

Tokyo will slash duties to other countries on Feb 1 by implementing the European Union-Japan Economic Partnership Agreement (EPA) that would offer the 28-country bloc’s agricultural products to Japan, a move that could dramatically reduce US market share into the island nation in the Pacific Ocean. 

Japan, unlike China, is not playing the retaliatory tariff game with the Trump administration. Instead, they are accelerating a market-opening agenda with more than three dozen countries (ex. the US). 

The new free trade push by Japan “threatens to cut into US market share and depress profits for US agriculture exporters by granting preferential access to…internal competitors,” a May report by the Agriculture Departments warned.

At a recent public hearing, a coalition of US agriculture trade groups sounded a similar alarm.

“Japan is our largest, most reliable and valuable market,” buying about half its imported wheat from Americans, said Vince Peterson, head of US Wheat Associates. “But today we face imminent collapse,” he said, as competitors will start taking American market share and sell their products at an effective tariff rate nearly 10% below those facing US producers.

Peterson told government officials the US “has not sold one kernel of wheat” to China for several months because of the trade war. 

The US Meat Export Federation estimated that Japan’s new trade agreements (ex. the US) could severely damage American beef and pork exports, with expected losses of more than $1 billion within five years. 

The Trump administration has said they aim to correct that “emerging disparity by laying the groundwork to negotiate America’s own free-trade agreement with Japan,” the Journal reported, adding that a new deal would reopen markets for American farmers.

However, those negotiations with Tokyo are not scheduled to start until mid-January — after both the Pacific and Europe trade deals take effect. 

US producers have already reported steep declines in business as a result of Trump pulling out of the TPP as Japan explores new markets. 

Kevin Smith, a vice president at Seaboard Foods LP, a Kansas-based pork producer, said his business is  “already seeing a decline” as longtime Japanese customers “develop new supply chains so they can be fully prepared to take advantage of the tariff reduction opportunities.”

The Journal notes that US farmers are horrified about the loss of market share because Japan has been one of their largest export markets. 

American producers are the most significant food exporters to Japan, with at least 25% market share, ahead of the EU’s 13%. 

Japan imported $11.9 billion in American agricultural products in 2017, making it their fourth-largest foreign market, after China, Canada and Mexico.

And while president Trump has argued that, overall, TPP would have harmed the American economy, for now due to lack of proper deterrence and countermeasures in place, it appears that like pulling out of TPP has forced even more pain upon America’s struggling farmers who had export routes into Japan, and who may soon need another bailout from the administration. 

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Authored by Charles Hugh Smith via OfTwoMinds blog,

While wages have supposedly gone up 3.4% in 2018, taxes and fees are rising at much higher rates.

Here’s a list of tax and fee increases hitting residents of one of the counties I call home; the list includes taxes/fees raised in 2017 and 2018:

1. Property taxes: between 6.5% and 10%, depending on the property class

2. Gasoline tax (county), from 8.8 cents to 23 cents, phased in over 3 years

3. General excise tax, up 6.3%

4. Garbage fee (commercial): up 27%

5. Sewer fees: up 44%

6. Electricity (base rate): up 7.4%

7. Annual vehicle safety inspection fee (state): up $5.81

8. County water service: up 8%

9. Accommodation fee (a.k.a. hotel tax) (state): up 10%

I may have missed a few, but you get the idea: while wages have supposedly gone up 3.4% in 2018, taxes and fees are rising at much higher rates. (Given that the Consumer Price Index underweights increases in big-ticket costs such as healthcare and college, the 3.4% gain is suspect; those households exposed to giant leaps in expenses likely lost ground).

I understand local governments are caught in a vise: wages and benefits to their employees make up the majority of their expenses, and those costs are mandated by union contracts and/or state-level agreements.

Many local governments cut services in the Great Recession rather than raise fees and taxes, and so now that the economy has “recovered,” they’re rushing to raise revenues to restore services or deal with the backlog of projects set aside during the lean years.

But none of that makes it easier for households and enterprises getting hit by fast-rising fees and taxes. The above list is just the tip of the iceberg: how much does a simple parking ticket cost you now? In many locales, what once cost $15 is now north of $60.

How about the cost for a copy of an official document at the County Records office? In many locales, what was once a nominal fee is no longer nominal.

We all know public pensions are often underfunded, or dependent on outsized stock market gains, which means the increases in local government taxes and fees are just getting started.

*  *  *

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Yesterday, we reported that Russian President Vladimir Putin supervised the final test launch of a new hypersonic missile system that he alleges can evade US missile defenses will be deployed in 2019, as part of Russia’s military modernization effort. “This is a great success and a big victory. This is a wonderful, excellent gift for the country for the New Year,” Putin said.

“Russia was forced to develop the Avangard (hypersonic glider) after the US withdrew from the Anti-Ballistic Missile Treaty in 2002,” Putin explained, adding, “the Trump administration’s plan to scrap a treaty on medium-range missiles could lead to a new arms race.”

Putin had previously announced the hypersonic missile project back in March, when he first praised its abilities at the annual state of the nation speech to the Federal Assembly. At the time, he said the glider could travel at Mach 20. 

Besides that, not much information has been publicly released about the hypersonic glider, but Russia made it known Wednesday that the final test was completed and deployment was imminent for 2019.

Shortly after the test, Russia’s Deputy Prime Minister Yury Borisov told Rossiya 24 TV channel that the new glider could strike a target at 30,000 km/h or 19,000 mph, reported RT.  Borisov said the excellent mobility makes the Avangard one of the hardest targets to hit. He explained: “There’s almost no missile that can shoot it down at such speeds.”

It is tough for missile defense systems to predict the glider’s trajectory, which means the glider can penetrate Western missile shields without a problem. “Any missile defense becomes useless, it is very tough to detect and hit the projectile,” Borisov said.

During the Wedsenday test, the defense ministry said the Avangard glider was fired from the Dombarovsky site in southern Russia and struck a target at a missile range in the Kamchatka Peninsula. The weapon performed in-flight maneuvers and accurately hit its intended target.

A video was released by the ministry showing the first phase of the test, when the Avangard glider was launched. The missile’s job was to catapult the hypersonic glider into the atmosphere; the ministry did not release footage of the glider smashing into a target at Mach 20. 

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If President Trump needed an ulterior motive to keep his partial government shutdown alive for the foreseeable future, this is it. Since the shutdown began, Trump has argued that federal courts should not be exempt – which means the many legal challenges to Trump administration policies should be frozen for the time being.

But according to Bloomberg, federal judges are pushing back, arguing that some of the court challenges involve issues of public safety – or are otherwise finding excuses to keep the challenges moving forward in spite of the administration’s wishes.

In one case, a district judge is refusing the administration’s request to delay briefings in a challenge to Trump’s new asylum policy, which requires asylum applicants to present themselves at legal points of entry to have their claims heard.

“Government functions may continue” when they relate to “the safety of human life or the protection of property,” Moss wrote Thursday. The judge cited a government report indicating that a large proportion of the federal government’s immigration employees, including 91 percent of Customs and Border Protection workers, should continue working during shutdowns.

The government is also pushing to move ahead with a case filed in San Diego challenging its family separation policy.

“Although we greatly regret any disruption caused to the court and the other litigants, the government hereby moves for a stay of all deadlines” until funding resumes, the U.S. said in a typical request filed Dec. 26 in a suit in San Diego challenging the administration’s family separation policy.

A federal case involving the implementation of a federal monitor for the Baltimore Police Department is also moving ahead despite the adminstration’s attempt to shut it down.

But a high-profile Maryland lawsuit involving the implementation of a consent decree for civilian oversight of the Baltimore Police Department won’t stop. Chief U.S. District Judge James Bredar in Baltimore called the shutdown a “dispute internal to one party” and directed Justice Department attorneys “to find the means by which to continue their participation in this litigation on a timely basis regardless of their client’s internal issues.”

“Deeply serious matters involving the safety and well-being of the citizens of Baltimore are at issue in this case, and the court is determined that implementation of the previously entered consent decree will not be impaired or delayed by this sort of collateral issue,” Bredar wrote in a Dec. 26 order.

The administration had better luck in Washington and San Francisco. In SF, the administration’s appeal of a decision throwing out its asylum restrictions along the Mexican border will move ahead.

The government had better luck in Washington before U.S. District Judge Emmet Sullivan, who granted a request to put a case on hold in a two-sentence ruling on Dec. 26. The judge directed the Justice Department to notify the court “when appropriations are restored or if a continuing resolution is enacted.”

The U.S. is pressing ahead in at least one instance. The Trump administration on Dec. 26 filed a notice in an appeals court in San Francisco that it will seek to reverse a judge’s order blocking it from implementing asylum restrictions on the Mexico border.

State AGs are also pushing for a challenge to an administration policy that they say would undermine (recently gutted) ObamaCare (though appeals to a Texas judge’s ruling will need to wait).

A coalition of a dozen state attorneys general also opposed a government request to delay a Jan. 2 deadline for a crucial joint filing in an Obamacare-related lawsuit. The attorneys general challenged a Trump administration plan that would allow small businesses to join together to offer cheaper health-insurance plans — a move the states say undermines some of the protections required under Obamacare.

The states said there’s a “reasonable likelihood” that the “protection of property would be compromised” as a result of the financial harm the new rule will cause to their group and individual health insurance markets.

“Indeed, that disruption was both the anticipated and the intended purpose of defendants’ rule-making,” the states said. The Department of Labor, the defendant, “should not be delayed in moving forward with their litigation of this critical case,” they said.

Unfortunately for Trump, the DOJ has already declared that the shutdown won’t delay the Mueller probe.

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Homeland Security Secretary Kirstjen Nielsen says that the United States will take “extraordinary” protective measures when it comes to immigrant children in custody, after a second Guatemalan child died in custody. 

Neilsen will travel later this week to the US-Mexico border to observe medical screenings and conditions at Border Patrol stations, according to AFP. 

New from @DHSgov: Secretary Kirstjen M. Nielsen Statement on Passing of Eight Year Old Guatemalan Child pic.twitter.com/ft7RK1RpPR

— Sahil Kapur (@sahilkapur) December 26, 2018

“In response to the unprecedented surge of children into our custody, I have directed a series of extraordinary protective measures,” she said, following the “deeply concerning and heartbreaking” death of eight-year-old Felipe Gomez, who collapsed after running a high fever while traveling with his father Agustin Gomez from the Western Guatemalan indigenous Chuj Maya community near the Mexican border. 

Gomez was detained with his 47-year-old father at a crossing in El Paso, Texas, on December 18 and had been transferred to a New Mexico medical center showing signs of sickness on Monday, the CBP said.

Staff diagnosed him with a cold but later discovered a fever. He was discharged at midday, with prescriptions for ibuprofen and the antibiotic amoxicillin.

The boy was later sent back to the hospital suffering from nausea and vomiting. He died shortly before midnight on December 24. –AFP

Guatemala has called for an investigation into the boy’s death, the cause of which has not been determined. Customs and Border Patrol (CBP) says that they would “ensure an independent and thorough review of the circumstances.” 

The first death of a migrant child happened on December 8, when seven-year-old Jakelin Caal Maquin became sick on a bus traveling from a New Mexico port of entry to Lordsburg, New Mexico. Her father said he has “no complaints about how Border Patrol agents treated him and his daughter,” adding in a statement through his attorneys that he was “grateful for the many first responders that tried to save young Jakelin’s life in New Mexico and Texas.” 

Nielsen has asked experts from the Centers for Disease Control and Prevention to investigate “the uptick in sick children crossing our borders” and to identify what further steps border hospitals should take in preparation, her statement said.

Nielsen added that she has asked the US Coast Guard medical corps to assess and “make appropriate recommendations” about Border Patrol medical programs, and has sought additional medical professionals from the Department of Defense. –AFP

The United States is unable to cope with the thousands of migrant arrivals, US Customs and Border Protection Commissioner Kevin McAleenan said on Wednesday. “We need help from Congress. We need to budget for medical care and mental health care for children in our facilities,” he told CBS News. 

In the last two months, the Border Patrol has apprehended 139,817 people on the southwest US border, compared with 74,946 over the same period a year earlier, said Nielsen. Over 68,500 were “family units,” and approximately 14,000 others were unaccompanied minors, she said, adding that the system has been pushed to a “breaking point.” 

Guatemalan migrant Augusto Mendoza, who brought his one-year-old son on the journey to El Paso, told AFP that he would “never” consider making the journey again. 

“It’s been very, very hard. I would never think about doing it again, I regret it for my son,” said Mendoza – whose wife and children were separated from him at the border and released from detention on Christmas day. 

Medical challenges

DHS officials say that all children in border patrol custody will now be given comprehensive medical examinations, backing McAleenan’s commitment to “secondary medical checks,” with an emphasis on those under 10-years-old. 

“It is now clear that migrants, particularly children, are increasingly facing medical challenges and harboring illness caused by their long and dangerous journey,” said Nielsen. 

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Authored by Ryan Everson via The College Fix,

A private school has been accused of numerous unethical practices to help its minority students gain acceptance to prestigious universities including Harvard, Stanford, Princeton, and Yale, and these universities are refusing to clarify how they were fooled by the fraudulent records or how they plan to improve their admissions process to prevent it in the future.

T.M. Landry College Prep, a school in Breaux Bridge, Louisiana, has in recent years drawn the attention of several major programs including the “Today” show, “Ellen,” and “CBS This Morning” due to many of its students’ having been accepted at many of America’s most prestigious universities. Numerous students were presented as having surmounted difficulties at home to achieve outstanding grades in challenging courses and earn impressive honors in extracurricular activities.

A recent bombshell report in The New York Times revealed that much of these accomplishments were false.

“In reality, the school falsified transcripts, made up student accomplishments and mined the worst stereotypes of black America to manufacture up-from-hardship tales that it sold to Ivy League schools hungry for diversity,” the paper reported.

Those schools, however, are refusing to comment on their application processes, declining to say if and how they will improve their administrative procedures in order to safeguard against future fraud.

The College Fix reached out to eight prestigious universities that have accepted Landry graduates to ask about their application vetting processes. None were willing to comment. At Yale, an individual named Isaac responded to The Fix’s query to the admissions office and said: “Unfortunately, I’m not able to speak on behalf of the admissions office for your publication.” It is unclear what role this individual plays in Yale’s admissions. Further queries were not returned.

Princeton University declined to answer questions about its application process, though the school did offer comments concerning Landry. Spokesman Mike Hotchkiss said:

“We are very troubled by the report and the allegations of fraud. First and foremost, we are concerned for the affected students and their families. We remain committed to attracting and supporting talented students, including students from groups that have been underrepresented in higher education and denied the opportunities they need to flourish. Every one of our students is a valued member of our community.”

Hotchkiss told The Fix that this was “the only comment we are making on Landry at the moment.”

Brown, Stanford, Dartmouth, Cornell, and Wesleyan all failed to respond to The Fix’s queries.

According to The New York Times, Landry recorded grades higher than those actually earned and gave its students credit for rigorous classes they did not take. The school also provided inaccurate letters of recommendation which listed falsified extracurricular accomplishments.

The Times reported that officials at Landry were guilty of physically abusing students, failing to keep students in their proper classrooms throughout the day, and advising parents to lie about their incomes to receive more favorable financial aid packages. Some Landry students even testified that the founder of the school, Tracey Landry, shut a child with autism in a closet.

In the midst of this scandal, the Landry College Prep website still boasts about the school’s 100 percent graduation rate and the 25 million dollars in scholarship money earned by the school’s graduates. The website advertises that the school is for “outside-of-the-box thinkers.”

A “Testimonial” section on the Landry College Prep website currently reads: “Coming soon.”

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With market action becoming increasingly surreal and the panicked, vertigo-inducing bear market rallies (or a $64 billion pension fund reallocation into stocks in a historically illiquid market) reminiscent of the chaos observed at the depths of the financial crisis, it is only appropriate that some of the quotes Bloomberg picked for its daily wrap piece which commemorated the biggest intraday reversal since 2010, be just as surreal.

“Investors are becoming desensitized,” Bryce Doty, SVP at Sit Investment Associates, told Bloomberg, then continued the verbal poetry: “It’s like watching ‘Pulp Fiction.’ Halfway through, the violence doesn’t even bother you anymore.”

He’s right, although whereas the market “violence” in past weeks was one directional, this week it has developed a twist to trap both the bulls and bears, and while the latest Dow swing (of nearly 1000 points) was only slightly bigger than the average up-and-down move last week, back then equities were tumbling in the direction of a bear market. So fast forwarding to the post-Christmas chaos – which this website explicitly warned about when last Friday we warned to “Brace For Seismic Volatility” – strategists are starting to ask: if days like these are now normal, is there a context in which the whole three-month rout starts to feel routine?

There are the optimists like Jim Kelleher, director of research at Argus Research, who said market turmoil that happens when the economy is holding up reminds him of past stock declines that ended gently.

Unless evidence emerges of deep global growth erosion, what’s going on now “will prove to be shorter and more shallow than the declines experienced in ‘classic’ bear markets.”

Others are not so sure: “Investors are wondering if this will be a crash,” said Dave Campbell, a principal at San Francisco’s BOS, who nonetheless still managed to put a favorable spin on events.

“The risks are there, but they’re always there. They’re more heightened but it’s not the most likely outcome. The economy continues to grow – maybe a little more slowly – but next year markets will have hit their lows and we’ll be on the rebound.”

Then there are those who echo what we asked yesterday, namely if this is only a bear market rally, although granted a very furious one: as Bloomberg writes in its second end of day wrap, “on the surface, the rally is good news for investors searching for a bottom after a three-month sell-off sent the S&P 500 to the brink of a bear market. But days like this are rarely good omens.“

Here’s the problem: as we discussed last night, since 1990, every comparable reversal – with a few exceptions – came during the 2008-2009 bear market.  According to Bloomberg data, in eight previous bear markets the S&P 500 experienced rallies of greater than 2.5% more than 120 times as the benchmark plunged from peak to trough. From the collapse of Lehman to the financial crisis bottom in March 2009, the S&P 500 rallied more than 4 percent on 13 different occasions.

“This is not the kind of price action you see in normal bull markets,” said Robert Baird equity sales trader Michael Antonelli. “This is just a face ripping short cover rally. I am 100 percent not saying we are in a situation like 2008 now, but look at October 10, 2008 to October 13, 2008: the market rose nearly 12 percent in one day. October 27 to October 28, 2008, it rose 11 percent.”

In other words, as Bloomberg notes and as Antonelli said yesterday, much as the market has shown the impetus to rally, “violent action like this normally don’t bespeak a healthy market.” The latest bounce happened during a holiday week when prices are typically susceptible to swings because of low liquidity, which in the context of the ongoing $64BN pension rebalancing, makes sense that we would see a massive swing higher as the market at times goes offerless.

Jeff deGraaf, co-founder of Renaissance Macro Research, may have summarized trader sentiment best:

“How much do we trust the market’s message, up or down, over this holiday week? About as much as we trust uncle Albert to drive home after Christmas dinner.”

And speaking of a Pulp Fiction market, at least there is no friction as investors are getting used to the whiplash: Thursday marked the ninth time this quarter where the S&P 500 reversed an intraday move of at least 1%. That’s the most since August 2011, when S&P downgraded the U.S. sovereign rating, sending stocks also within points of a bear market.

Which begs the question: having failed to firmly enter bear market territory, are we in a bear market?

As Bloomberg also writes, bear markets that go way past 20% tend to be associated with “secular transitions,” things like the excessive valuations of the dot.com bubble. Near-bear markets, however, are more common around technology transitions or one-time disruptions, according to Argus Research. The one going on now is occurring next to high consumer and small business confidence, solid industrial activity and low interest rate and energy inputs.

There is another silver lining to the current constant whilpash: “only” half of the 14 bear markets that took place since World War II occurred during a prolonged economic contraction, LPL Research showed. Sell-offs when the economy contracts are bad, with the S&P falling 37% on average. The ones that come when growth is positive level off at 24%.

Bear markets in a recession take 34 months to make new highs.

Bear markets in a non-recessionary environment take only 11 months. https://t.co/ok2Tw5HaRP pic.twitter.com/vKWpotYOrw

— Ryan Detrick, CMT (@RyanDetrick) December 27, 2018

“In the end, the largest market corrections take place during recessions. Will we have a recession in 2019? We don’t think so,” LPL’s optimistic Ryan Detrick told clients. “The bottom line is that you can have bear markets without a recession.”

Which, of course, is bad news if the violent rally of the past two days is indeed only due to a massive pension reallocation trade, as the “bad” kind of bear market lasts an average of 556 days and is much worse than 20%, according to Argus. The mean peak-to-trough decline during recent bear markets has been around 35%.

Alternatively, if stocks are indeed trying to find a bottom and can reverse their recent downtrend, the current “bearish duration” would be short, at less than 90 days.

Until we know for sure, better strap in… or is that strap on?

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Authored by Andrew Romans via CoinTelegraph.com,

The way I see it, investors in 2017 – and specifically in Q4 – wanted to buy Bitcoin (BTC) and Ethereum (ETH) for the sole purpose of exchanging it for specific ICO tokens they wanted to invest in. The buyers of Bitcoin and Ethereum did not want to own Bitcoin or Ethereum. They wanted to buy the newly issued initial coin offering (ICO) tokens, but they needed to buy Bitcoin and Ethereum as a short way to get what they ultimately wanted. The owners of Bitcoin and Ethereum did not want to sell. They were watching the price of their holdings increase, so why would they? They were also believers in Bitcoin and Ethereum. So, in a “bid-ask world,” the price went up.

image courtesy of CoinTelegraph

Then, those startup companies that completed their ICOs became whales, which began — as a group — to unload their tokens in December and January, thereby flipping the dynamic of the huge demand for Bitcoin and Ethereum to all sellers of Bitcoin and Ethereum. After the New Year’s hangover faded, the startups needed to exchange their crypto for fiat in order to pay engineers and build their startups.

Then, it was a run-on-the-bank panic. Pressure from the United States regulators in Q3 and Q4 of 2017 resulted in a slowing and near total halt of ICOs by early 2018. After that, ICOs either stopped or radically slowed. New token issuers began to accept fiat without the need to pass through Ethereum, which killed more demand and left only sellers and “hodlers” and no buyers. In a “bid-ask world,” the market tanked. An interesting dynamic of the current market is that the prices of all cryptocurrencies are highly correlated to each other. Just look at the price of any token on CoinMarketCap, and you will notice a perfect correlation among the prices of most of them. Bitcoin and Ethereum go up and down together, and most other tokens are correlated in the same way. It shouldn’t be that way, but without any banks analyzing and reporting on these startups — the way they do for Apple, Amazon, Microsoft, etc. — that’s the way it is for now. So, Bitcoin can raise or drop the price of your token, but it now appears that gravitational pull works in both directions.

In 2018, something else developed. It became clear that all of these funded ICOs were not diligenced by real tech experienced angels or VCs — they were mostly not tokens you would really want to invest into. Previously, all of these coins were correlated to the rising price of Bitcoin and Ethereum, but now it is dragging them down. They are all correlated, and the big section of the overall market cap is sinking the ‘crypto ship’ in general.

image courtesy of CoinTelegraph

What will happen is that all of these weak startups will eventually be flushed out, and we will be left with some decent and even amazing companies. Today, the consumer retail investors of Southeast Asia and around the world are no longer gambling and throwing cash at the latest ICO to pitch at some blockchain event — or at least not at the volumes of Q4 2017. It used to be 20 percent institutional (VC) investors and 80 percent retail. Now, it’s 80 percent institutional investors, if not more. It makes sense to me that, if strongly branded VCs like a16z, Pantera Capital and 7BC.VC invest into a startup from their wide funnel of investments after conducting VC-grade due diligence, consumer retail investors will want to invest — following the VC’s lead in jurisdictions where this complies with local securities law (or, in the U.S., if the startup filed an S1, Reg A+, etc.).

Now is the time for the arrival of experienced VCs to raise real VC funds, generate large volumes of deal flow, process that deal flow with fully centralized and decentralized teams qualified to conduct proper due diligence, fund the best ones, as well as help these portfolio companies execute and manage investor risk via diversification and portfolio construction. We have seen a return to sane equity funding — and not just for tokens. Investors now own equity and tokens. Some “pure play” decentralized cases require only tokens — but again with real, old-school due diligence — before just throwing money around. We are also seeing a return to market valuations, rather than a team of high school dropouts seeking a $50 million or $100 million pre-money valuation without ever having met a payroll or accomplish any substance prior to getting that kind of valuation.

The new companies to be funded in 2019 – and to be listed in 2019, 2020 and 2021 – will be far better on average than the 2017 cohort, resulting in a rebound in the market. Experienced VC-backed entrepreneurs are now working on blockchain startups, which means the population of management teams has evolved beyond the original Bitcoin anarchists.

Bitcoin itself is resilient, proven by its survival of multiple Mt. Gox-type events and numerous up-and-down cycles. The long-term curve for Bitcoin is up and to the right. After the infamous coins run out of cash and disappear, the market will become much more robust. Many of the managers became delusional due to their experience of traveling the world and completing their ICOs, thinking that BTC and ETH would only go up and up while failing to exchange enough of their crypto for fiat. Not only did they have startup risk, but they foolishly added FX (foreign exchange) risk.

So, the good news is that these weak, never-should-have-been-funded startups will run out of cash sooner than expected, because their crypto is worthless when converted to fiat than they thought at the time they completed their financings. The flushing out of these coins currently weakening the market will drive the market up. Today, startups exchange their crypto into fiat the moment they get it.

image courtesy of CoinTelegraph

I also predict that we will see a few killer startups take off and generate mass adoption, which will bring mainstream users into the crypto world and — in a gravitationally correlated world — this will lift the tide of the entire market. We will probably see some video game become a huge sensation — like Angry Birds — or something that will drive the adoption of a token. I expect to see something else come along that no one ever thought of — like Skype — that everyone begins to use, which will pull huge populations into the crypto world, as the value will just simply be there.

It is imperative that all businesses move onto the blockchain so that no party can tamper with the numbers of how many “widgets” were sold or with who gets paid what. All business, government and health care data should be on the blockchain — and pretty soon, it will be unacceptable without it to enter into a business agreement and trust the other party to tell you how many widgets were sold in China, the U.S. or Africa. Once these business transactions or elections are on the blockchain and no one can tamper with the data, all sides can trust each other. The big picture here is that the market will see a major rally and long-term trend up and to the right.

2019 might be an excellent time to invest in a blockchain-focused VC fund or invest into blockchain startups taking on-board lessons from top-performing VCs that have a strong entrepreneur-experienced investment team with experience in achieving top-quartile venture capital IRR performance and cash-on-cash performance.

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