Month: June 2017

Libertarians Still Arguing About Gary Johnson’s 2016 Campaign

Guess not. ||| ReasonGary Johnson’s back! (To the political advocacy game, anyway.) So, are libertarians greeting the two-time former Libertarian Party nominee for president with open arms? Not unanimously, no.

Over at Rare, the always-interesting Jack Hunter, who is close to Sen. Rand Paul (R-Kentucky), has a scathing piece headlined “Please, Gary Johnson, stay the hell away from politics.” Excerpt:

[W]hen Reason reported on Thursday that Johnson was returning to politics, I did not rejoice–I recoiled.

Johnson had his chance, the biggest chance the Libertarian Party will likely ever have in our lifetimes, and his campaign did more to diminish liberty than promote it. Johnson’s simple 2016 task was two-fold: First, present libertarianism coherently, and hopefully, attractively. Second, don’t look like an idiot.

He failed on both.

Hunter mostly leans on the “Aleppo moment” and related flubs, and while those errors were almost all self-inflicted, highlighting the candidate’s self-acknowledged limitations as a public speaker (a real hindrance when public speaking is about your only campaign weapon), I am convinced that even the most smooth-tongued of L.P. candidates (Larry Sharpe, anyone?) would have been excoriated as a gaffe-making weirdo or dunce in September 2016. Why? Because the presidential race was tightening (boy was it ever), debate season was imminent, Johnson’s poll numbers at that point had failed to experience the usual third-party summertime fade, newspapers were starting the make their general election endorsements (including for the Libertarian), and the journalistic Left was throwing everything it could think of at a guy they feared was wooing too many impressionable young’uns.

Tom Steyer would have spilled tens of millions in swing states that autumn against any Libertarian candidate polling at 9 percent, and that money would have been converted into attack pieces on any John, Austin, or Darryl. (Speaking of which, do we really think that the L.P. alternatives would have polled or media-accessed anywhere near TeamGov?) Donald Trump had several more egregious foreign policy brainfarts than “Aleppo,” and Hillary Clinton’s actual (and unapologetic) policy record helped produce the very chaos that Johnson was being criticized for not understanding, but the media didn’t care about any of that: September 2016 was Libertarian-killing season, and unfortunately Johnson offered the world a loaded gun.

That’s not to say that Hunter’s wrong about Johnson squandering the election overall; I still don’t know how best to assess that question. (Check out the Brian Doherty/Matt Welch post-election co-production “Did the Libertarian Party Blow it in 2016?” for our most educated guesses.) As that piece states in the opening, and as the intervening months have only underlined, “Objectively speaking, 2016 was the Libertarian Party’s best year ever. It was also a savage disappointment.” Libertarians will be arguing about this stuff for years.

Live it. Love it. Learn it. ||| Austin PetersenSpeaking of intra-Libertarian arguments, Charles Peralo over at Being Libertarian has a long defense of the Johnson campaign against criticism that has been leveled against it from the John McAfee/Judd Weiss ticket. In the Orlando Sentinel, State L.P. Chair Marcos Miralles gives an interesting interview, mostly about local party-building stuff, that ends on a spectacularly optimistic note: “But what I can guarantee you is that whoever the Libertarian delegates pick in 2020, that candidate will have a better result than Gary Johnson had in 2016 and will have a real chance at unseating the current president.” Meanwhile, 2016 L.P. presidential runner-up Austin Petersen has formed an exploratory committee to run for U.S. Senate from Missouri, and is promising a “special announcement” on July 4.

And in one of my favorite recent pieces of local journalism, The Free Press of Fernie, British Columbia, caught up with Gary Johnson in the middle of his epic Tour Divide bike race, spent several paragraphs detailing how he “may well be the fittest U.S. presidential candidate of all time,” before plunging the knife in paragraph nine:

The man can clearly take care of himself. He is a self-made millionaire and ultra-fit, so of course he would run for a party that endorses the survival of the fittest. If you’re wealthy and fit, Libertarianism works but if you are not, it doesn’t.

Then follows a Guernica-style hellscape of local horrors that would be unleashed should Libertarians ever come close to smelling power (“Their plan to cut regulations in transportation, accommodation and other sectors to cause the sharing economy…to destroy traditional businesses. Hotels and taxi companies would go bust, thousands would be left unemployed,” etc.). It’s a reminder, one that Jack Hunter’s old boss Rand Paul knows all too well, that for wide swaths of the public, libertarians will suffer from the Weird Man’s Burden, probed relentlessly for every policy taboo, and held to a standard of conduct that standard Democrats and Republicans rarely have to answer for.

Below re-live my shaky-cam video of Johnson flipping out at a reporter asking about Aleppo, moments before the first presidential debate last September:

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Weekend Reading: Want Some Volatility With That?

Authored by Lance Roberts via RealInvestmentAdvice.com,

Over the last couple of week’s, volatility has certainly picked up. As shown in the chart below, stocks have vacillated in a 1.5% trading range ever since the beginning of June. (Chart through Thursday)

Despite the pickup in volatility, support for the market has remained firm. Importantly, this confirms the conversation I had with Kevin Massengill of Meraglim just recently discussing the impact of Algorithmic Trading and how they are simultaneously currently all “buying the dip.” As he notes, this is all “fine and dandy” until the robots all decide to start “selling rallies” instead. (Start at 00:02:40 through 00:04:00)

But even with the recent pickup in volatility, volatility by its own measure remains extremely compressed and near its historical lows. While extremely low volatility is not itself an immediate issue, like margin debt, it is the “fuel” that when ignited “burns hot” during the reversion process.

Currently, as we head into the extended July 4th weekend, the bull market trend remains clearly intact. With the “accelerated advance” line holding firm on Thursday’s sell-off, but contained below the recent highs, there is little to suggest the advance that began in early 2016 has come to its final conclusion.

However, such a statement should NOT be construed as meaning it WON’T end as it more assuredly will. The only questions are simply when and how deep the subsequent reversion will be?

Volatility is creeping back. The trick will be keeping it contained.

In the meantime, this is what I am reading over the long holiday weekend.

Happy Independence Day.

Politics/Fed/Economy

Video

Markets

Research / Interesting Reads

 

“Life is [Stocks] are a fragile thing. One minute you’re chewin’ on a burger, the next minute you’re dead meat.” – Adopted From Lloyd, “Dumb and Dumber”

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June Gloom: Nasdaq Suffers Biggest Loss Since October As Dollar, Bonds, Economy Plunge

The thundering herd of "individuals" shifted awkwardly as June came to an end…

 

US Economic data in Q2 was the most disappointing since Q2 2011…

 

June was a rollercoaster:

  • Nasdaq's worst month since October (breaking a 7 month win streak)
  • FANG Stocks worst month (first losing month) since November
  • Dow best month since February
  • Small Caps best month since November
  • Risk-Parity Funds lost 1.6% in June – the first loss since November
  • 10Y Treasury Yield biggest rise since November
  • Treasury Yield Curve unchanged.
  • Gold's worst month since November
  • USD Index feel for 5th of last 6 months
  • WTI fell for 4th straight month (despite last 7 days up – best streak in 6 months)

Small Caps were the biggest gainers in June, Nasdaq the biggest loser… the S&P (light green) bounced of unch for June yesterday and its 40DMA…

 

The Dow manage to outperform, helped by the banks, the long bond ended June unch, Gold down, and WTI down wose but making a big comeback…

FANG Stocks could not catch a bid…

 

Notably, as both high-beta stocks and bonds are hammered in the last two weeks, so Risk-Parity funds are coming under serious pressure…

The Dollar Index tumbled in June to its weakest since Sept 2016…

 

Led by a 3.7% surge in the Loonie (JPY was 1.5% weaker against the dollar in June)…

 

Treasuries saw the biggest moves in the month… Fascinatingly, 30Y actually saw yields lower on the month even as the rest of the curve all rose (led by 5Y)…

 

By a miracle of modern algos, the 2s10s Treasury curve ended June perfectly unchanged thanks to the dramatic steepening in the last 4 days…

 

Copper had the best month of the commodity bunch as perhaps signals that China is folding on its tightening efforts are appearing…big finish to the month for crude too…

*  *  *

Ok – so having got June out of the way, this week has been full of swings too…

The Dow desperatly scrambled up to unchanged on the week, Nasdaq bouned a little but couldn't hold gains, and While Small Caps led the week, BUT when the ugliness hit at the bell, everythig plunged, Dow closed red on the week and Small Caps managed tiny gain…

 

VIX jumped back above 11 into the close as Nasdaq went red on the day..

 

And an ugly week for bonds too…

 

The Dollar Index saw its worst week in the last 7, led by strength in Cable, the Loonie, and Euro; JPY was weaker on the week…

 

WTI soared 7.3% on the week and despite Dollar weaknes, Precious metals limped lower…

 

WTI Crude is up 7 days in a row – the best streak in 6 months, bouncing off support around $42/43 again…

It seems Citi was right after all.

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Dakota Drought Sparks Biggest Spring Wheat Price Spike In 7 Years

The price of your bagels and pizzas are about to rise as the cost of so-called 'aristocrat of wheat' – Hard red spring wheat – is exploding on the back of a worsening drought in the US High Plains.

Futures soared as much as 8.5 percent on Thursday, the most intraday since 2010, after Canada cut its planting outlook and drought conditions expand in U.S. growing states. Prices are up 31 percent in June, beating the gains for 80 other commodities tracked by Bloomberg.

As Bloomberg reports, the northern U.S. has been plagued by dryness this year, and conditions for the domestic spring-wheat crop are their worst for this time since 1988. Now, traders are eyeing a smaller crop in Canada, too. The country’s government on Thursday cut its outlook for the total wheat acreage more than analysts expected and said canola plantings will top the grain for the first time ever.

“Millers will import wheat out of Canada if they can’t buy locally from U.S. farmers,” Brian Hoops, president of Midwest Market Solutions in Springfield, Missouri, said by telephone. “With smaller wheat acres and some production issues in Canada, as well, that means there’s less product there to market, and demand has not backed off from what we can see.”

 

“Basically, the crop is burning up,” said Joe Lardy, research manager at CHS Hedging, a commodities broker.

Data released Thursday by the US Drought Monitor show more than 90 per cent of the two states was in drought, with “severe” or “extreme” conditions in dozens of counties.

Spring wheat futures may reach the $8-$10 range, Societe Generale SA analyst Rajesh Singla said in a Thursday report. The Minneapolis exchange has set a trading volume record this month.

“Low elasticity of demand and substantial damage to the 2017-18 crop might keep inventories tight for a longer period of time,” Singla said.

 

“Rainfall in the next 15 days in the U.S. Northern Plains is likely to remain deficient, and the spring wheat crop might continue to wither.”

And if you like bacon on your pizza, then you have a double-whammy as Lean Hog Futures just hit a contract record high too…

It seems Yellen's rate-hikes are perfectly timed to quench the drought and birth some more piggies.

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Uber, Lyft Can Now Bring Jobs and Better Transportation to Alaska

After being forced out in 2015, transportation network companies (TNCs) like Uber and Lyft are back in Alaska. New legislation signed by the governor earlier this month will allow for ride-sharing in the final frontier without so many burdensome regulations.

In 2014, Uber clashed with the Alaska Department of Labor and Workforce Development’s Workers’ Compensation Division while operating in Anchorage. According to the state, classifying drivers as independent contractors was fraudulent and a violation of the Alaska Workers’ Compensation Act. The startup begrudgingly left in 2015 and paid a $77,925 fine to the state as part of a settlement contingent on ceasing operations. Uber had also been providing free rides for six months during unsuccessful negotiations with Anchorage city officials.

Lawmakers have warmed up to the sharing economy since then. In testimony to the Alaska House Labor and Commerce Committee on House Bill 132, Michael D. Farren of the Mercatus Center called the bill “some of the best TNC legislation I have seen to date.” Farren praised the bill for allowing cash payments for transportation services, requiring a national background check for drivers but not stipulating the type, letting drivers stay classified as independent contractors, and not establishing a licensing fee in order to operate.

The most controversial element of the legislation prevents municipalities from enacting their own ordinances to regulate transportation network companies or their drivers unless approved in a municipal election. Cities still have the right to levy a sales tax.

Representatives from local governments, which are oftentimes under the influence of the taxi lobby, are not thrilled about state preemption.

Juneau assembly member Maria Gladziszewski claims that each specific city needs to regulate transportation: “We don’t have near enough information to think this might be OK in Juneau. I think that you want to maintain local control. We have very specific transportation needs.” Others in Juneau have expressed concern that Uber would result in too much traffic during tourist season or harm existing taxi companies.

Yet, city-level regulations sometimes put the “needs” of entrenched interests over drivers and passengers alike. According to Farren’s testimony, municipalities created a patchwork system of anti-competitive regulations across the state. These measures included licensing fees, record-keeping for all trips, and caps on the number of taxis. Sometimes drivers were required to prove that a city “needed” new services above and beyond existing taxis. These regulations have made owning a taxi medallion a rather lucrative business, with medallions in Anchorage selling for $155,000 in 2013.

It seems unlikely that Juneau’s “specific transportation needs” were best met by mandating that vehicles have signs with six-inch letters or requiring all taxi entrepreneurs have permits that cost $1,700 total.

As a result, reliable transportation for Alaskans is sorely lacking. Smaller communities that taxis choose to avoid are hit the hardest. Executive Director of the Chugiak-Eagle River Chamber of Commerce Susan Gorski described this problem in a 2014 pro-Uber op-ed:

Most taxis choose to stay in the Anchorage bowl, where they can rely on lucrative fares to the airport. We have a population of 35,000 and no reliable or convenient intra-community or inter-community transportation. This situation serves taxis and taxi companies quite well. But it doesn’t serve riders in Chugiak-Eagle River, where public transportation options and population growth make an already untenable situation worse. And it doesn’t serve Anchorage small businesses, who are denied potential customers who can’t find a reliable ride downtown…Uber brings efficiency to a market that is sorely lacking.

Regulations limiting entry into the taxi industry are especially problematic in Alaska. The state currently has the highest unemployment rate in the nation—a seasonally adjusted 6.7 percent in May. Job loss has been so devastating that the economic downturn has been called a great recession and is predicted to last until 2019.

This is likely why most Alaskans are excited about Uber coming to the final frontier. Alaskan Alex Stock hopes to drive his Ford truck for Uber: “I think it’ll be a good way to supplement my income.” Stock also believes Uber will be beneficial for tourism, stating that lack of transportation “was probably the biggest concern I started hearing from tourists.”

Now that Gov. Bill Walker has signed House Bill 132, both Uber and Lyft have promised to return to the state. Lyft is starting in just three cities, Juneau, Anchorage and Fairbanks, while Uber is willing to operate wherever there are willing drivers. A smaller ride-hailing company called Tride also has plans to launch in Alaska.

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Connecticut Gov. Signs Exec. Order Taking Over Spending After State Fails To Pass Budget

With Maine looking like it will be the first state to shut down heading into the new fiscal year on Saturday morning and perhaps beating Illinois to the punch, moments ago Connecticut, as previewed last night, will also enter the new fiscal year without a budget, inviting rating agencies to downgrade it to Illinois' "barely junk" rating or perhaps making CT the first US junk-rated state.

Lawmakers and the governor had been unable to reach an agreement on a two-year budget that will cover a projected $5 billion deficit for months, and not even the threat of the new year prompted them to move as we expected.

Meanwhile, Governor Malloy signed an executive order taking over the state's spending authority which will cut most services but at least keeps the government open. From Reuters:

  • CONNECTICUT GOVERNOR SIGNS EXECUTIVE ORDER TO TAKE CONTROL OF STATE SPENDING AFTER FAILURE TO PASS FY 2018/19 BIENNIAL BUDGET
  • CONNECTICUT EMERGENCY SPENDING PLAN KEEPS STATE GOVERNMENT OPEN BUT CUTS SERVICES

As a result of the failure to pass a budget, AP reports that nonprofit social service agencies that rely on state funds are preparing for deep cuts. Democratic Gov. Dannel P. Malloy, who wanted the General Assembly to at least pass a proposed three-month mini-budget, is expected to reluctantly sign an executive order that maintains only essential state services.

Connecticut’s General Assembly failed to pass a version of the state budget on Friday, forcing Democratic Gov. Dannel P. Malloy, who wanted the General Assembly to at least pass a proposed three-month mini-budget, to sign an executive order to take control of state spending, according to the Associated Press.

Gian-Carl Casa, president and CEO of Connecticut Community Nonprofit Alliance, says agencies that help people struggling with mental illness to domestic violence are planning to lay-off staff and close programs.

The failure is the latest blemish on Malloy's record. The two-term governor has said he will not seek a third term when is current one is up at the end of 2018.

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New York Times Forced To Retract Longstanding ’17 Intel Agencies’ Lie About Russian Hacking

Authored by Caitlin Johnstone via Medium.com,

“Seventeen intelligence agencies”? – ?if you’ve been following the maniacal #TrumpRussia coverage to any extent, you’ve heard this phrase used uncritically, time and again, regardless of your ideological loyalties. Pundits, papers and rank-and-file establishment loyalists have been unquestioningly regurgitating the nonsensical line that 17 intelligence agencies confirmed Russian interference in the US elections ever since Hillary Clinton made that baseless assertion in a debate back in October.

 

The innate absurdity of the claim was immediately attacked by WikiLeaks and anti-establishment outlets who pointed out that this would necessarily need to involve full investigations from agencies like the Coast Guard, the DEA and the Energy Department in order to be true. Nevertheless, many high-profile pro-establishment outlets like Politifact and USA Today found Clinton’s claims to be 100 percent true on the grounds that James Clapper, then-Director of National Intelligence and notorious Russophobic racist, “speaks on behalf of” all 17 intelligence agencies. To this day Politifact stands by its false claim on the basis of that same spurious assertion.

It turns out, however, that in addition to Clapper’s office there were only three intelligence agencies involved in that assessment, not 17, and that the conclusions were drawn not by the actual agencies in full, but by a mere two dozen loyalists from those agencies hand-selected by Russophobic eugenicist Clapper himself. The great Robert Parry notes in his Consortium News article about this point, “as any intelligence expert will tell you, if you ‘hand-pick’ the analysts, you are really hand-picking the conclusion. For instance, if the analysts were known to be hard-liners on Russia or supporters of Hillary Clinton, they could be expected to deliver the one-sided report that they did.”

As reported by Parry, we have known about these facts since they emerged from Clapper’s racist face hole on May 8, and they were confirmed by former CIA Director John Brennan on May 23. And yet at a California technology conference on May 31, Hillary Clinton repeated the same lie she’s been spouting since October:

“Seventeen agencies, all in agreement, which I know from my experience as a Senator and Secretary of State, is hard to get. They concluded with high confidence that the Russians ran an extensive information war campaign against my campaign, to influence voters in the election. They did it through paid advertising we think; they did it through false news sites; they did it through these thousand agents; they did it through machine learning, which you know, kept spewing out this stuff over and over again. The algorithms that they developed. So that was the conclusion.”

The “17 intelligence agencies” lie had been completely, thoroughly debunked for weeks, and yet not a soul called Clinton out on her brazen lie within the establishment press. Indeed, establishment pundits like Megyn Kelly continued to repeat the lie, and have continued to do so throughout the month of June.

All this changed when CNN was sent reeling by a 1–2–3-punch combination ensuing from its horrendously propagandistic Russia coverage, which has seen three of its journalists lose their jobs and sent the network into international disgrace. All of a sudden we are seeing establishment outlets getting a lot more conscientious about what they choose to publish about the Russian Federation, and today we saw none other than the New York Times posting the very first retraction of this long-debunked lie that we have seen in establishment media.

Correction: June 29, 2017

 

A White House Memo article on Monday about President Trump’s deflections and denials about Russia referred incorrectly to the source of an intelligence assessment that said Russia orchestrated hacking attacks during last year’s presidential election.

 

The assessment was made by four intelligence agencies — the Office of the Director of National Intelligence, the Central Intelligence Agency, the Federal Bureau of Investigation and the National Security Agency. The assessment was not approved by all 17 organizations in the American intelligence community.

You just know how that went down, too; the retraction tells a complete story with a beginning, middle and end. The article’s author repeated the “17 intelligence agencies” lie without so much as a second thought, because it’s something they’ve been saying for months and getting away with?—?hey, it’s only Russia, right? They’re the Official Bad Guys so we can print whatever we want about them. The Washington Post has been getting away with telling brazen lie after brazen lie about Russia and suffering no consequences for it whatsoever, so we’ve got plenty of wiggle room here. The article passed by the editors for the same reason, but then someone up top received a complaint about the false claim in the article and immediately pulled the author into his office, yelling, “You fool! What’s the matter with you? Are you trying to get us CNNed???”

As I never get tired of reminding the brainwashed consumers of mainstream media, Russiagate is bullshit, and we fucking told you so. The entire thing was sparked off by two dozen agents hand-selected by a racist man with a racist agenda, and only persists because the US deep state wants regime change in Moscow and Damascus. This moronic conspiracy theory has been permitted to march on for far too long, and in the meantime we’ve been goose stepped to the brink of World War 3 as a result of this administration’s idiotic behavior in Syria. That’s where a real resistance needs to happen; not a McResistance to imaginary threats fed to the masses by the lying corporate media, but a real resistance to a very real and tangible threat from actions by the Trump administration and the unelected power establishment with which he is unquestionably aligned in a nation that the United States has no business involving itself in whatsoever.

Come on, America. I know you can snap out of the trance they’ve got you in. I know you’ve got it in you. Slam the brakes on the course they’ve got you on. Protest US involvement in Syria. Don’t let them Iraq you again.

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Maine To Begin Shutdown After Gov. LePage Says He Won’t Sign Budget Bill

After Maine Gov. Paul LePage delivered an ultimatum to state lawmakers, promising to provoke a government shutdown should the state's legislature hand him a budget that includes a tax increase, it appears the governor intends to keep his word.

LePage told reporters at the state capital that he won't sign anything Friday, ensuring that a shutdown will begin at midnight, because the current budget proposalwhich was endorsed late Thursday by a special panel of lawmakers but has not yet been approved by the state legislature, includes a 1.5% lodging tax increase.

According to the Bangor Daily News, the budget package currently under consideration would raise the lodging tax from 9% to 10.5%. The budget does, however, include a 3% cut to an education surtax on individuals earning more than $200,000. LePage has also taken issue with the size of the $7.1 billion budget.

To be sure, it’s not entirely certain that the budget will even make it to the governor’s desk before the day is over. That’s because LePage has asked the state’s House Republicans to oppose the deal, which was negotiated by Senate President Mike Thibodeau, R-Winterport, and House Speaker Sara Gideon, D-Freeport.

LePage has embraced brash rhetoric during the budget fight, accusing lawmakers of “trying to put a gun to the governor’s head."

“This budget they have has no prayer, and if they’re hell-bent on bringing this budget down, we will shut down at midnight tonight and we will talk to them in 10 days,” LePage said.

LePage’s comments came hours before the House and Senate were due to vote on the compromise spending plan.

Gideon, the democratic opposition leader, said lawmakers should focus on ginning up the two-thirds support that a deal would need. The governor can only legally sit on the budget for ten days before either vetoing or signing it. Once it has been vetoed, the legislature could override the governor with a two-thirds majority vote.

“If we do not do that and if the governor then does not do his job by either signing the budget or returning it to us immediately with his veto then we will be damaging the lives of too many people in this state,” she said.

Some Democrats have expressed a desire to work with the governor in eliminating the tax hike at issue in the bill.

“Senate Minority Leader Troy Jackson, D-Allagash, said during a hastily organized news conference after the governor’s comments that he will personally introduce a bill to eliminate the proposed lodging tax increase if that would spur LePage and Republicans to support the budget bill, though Gideon said she wouldn’t support any changes late in the process.

 

“If the governor has objections to the lodging tax, that’s fine,” Jackson said. “I will personally sponsor any bill he puts in that eliminates the increase in the lodging tax.”

Under a shutdown, Maine would have no authority to pay workers, meaning the state’s roughly 12,000 employees will either work or stay home without pay, LePage announced Thursday that state law enforcement, state parks, psychiatric hospitals, prisons and ferries will remain operational, but that was only a partial plan. During the state’s last shutdown, in 1991, 2,000 employees were called into work at the beginning of the shutdown.

The shutdown, though brief, could have a major impact on the state’s economy, according to BDN.

“Workers represented by the Maine State Employees Association will lose wages generating $2.5 million in daily economic impact, according to an analysis from the liberal Maine Center for Economic Policy, with $944,000 in Kennebec County alone.”

Uncertainty surrounding whether state workers will be paid next week inspired a wave of protests at the capitol.

Some of those union members were at the State House on Friday, including Kip Mitchell, 53, a Maine Department of Transportation employee who said he’s the only wage earner in a family of four who said “the uncertainty is scary.”

 

Jonathan French, 38, of Hallowell, a civil engineer in the same department, said he had worries besides his job, since his young son gets services through the Maine Department of Education’s Child Development Services program.

 

“We’re citizens, too, so we’re going to be out of work, but we’re also going to experience all the other effects of the shutdown … ,” he said. “So, it’s kind of a double-whammy for us.”

Two other states, Connecticut and Illinois, are struggling to pass budgets on Friday. Connecticut, which has seen its debt downgraded by all three of the major ratings agencies in recent months, is trying to winnow a $5 billion budget deficit that’s driven largely by overly generous benefits to state employees. Connecticut Gov. Dannel Malloy signed an executive order Friday afternoon to take control of state spending after the legislature was unable to reach a deal on the bienniel budget.

Illinois, which has been operating without a budget for two years, could see its debt rating downgraded to junk territory if it fails to pass a budget. As the situation in Illinois appears increasingly uncertain, its house speaker has said he will ask the credit agencies to defer action based on progress being made toward an accord.

Right. Good luck.

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Bitcoin to Ether: Welcome to the Vomitorium

Volatility is Not Risk….

is a true statement if you manage your bankroll properly.

via Soren K. Group and Marketslant

Volatility is mitigated by bankroll management (VaR). If a security is very volatile, then investors lessen the dollar amount invested as compared to other investments. If someone is speculating or trading, they either lower  trading volume, widen stops, or do some combination of the 2 to mitigate Volatility. This is in part to insulate other positions in the portfolio,in part to mitigate exit liquidity risk, and paramount to managing VaR.

Crypto Prices

Bitcoin to Ether: Welcome to the Vomitorium

  • Wednesday: 255 > 318 = 24% low to high
  • Thursday: 318 > 276 = 13% High to Low
  • Friday: 278 > 302 = 8.6% low to high

The last week of Ethereum trading as made more than a few people want to wretch we feel. ? So, how does that compare to its big brother  Bitcoin?

BitCoin Volatility Index

Bitcoin Volatility annualized is only 98% today. This is down from a high of 147% about 2 weeks ago according to bitmex

BVOL Index (Annualized Bitcoin Volatility)

  • 6/30/2017 .BVOL = 98.74% 
  • 6/17/2017 .BVOL = 147.44%

BVOL above uses a 30 day moving average to create their annualized Bitcoin volatility index. They do not have an Ether equivalent index. So we did our own.

Comparing BTC Vol to ETH

Using similar methodology that BVOL does we did our own rough calculations on both cryptos for an electron-to-electron comparison:

1- Ether’s vol as measured using a daily chart annualized with a 30 day rolling average is already higher than Bitcoin’s.

We see Bitcoin’s annualized volatility at around 99% down from a peak 2 weeks ago of 110%.  By comparison, using the same exact method we see Ether’s historical volatility as 130%, down from 166% on the day it Bungee jumped to 10 cents.

2- Ether’s Vol using a 10 day rolling average has exploded relative to Bitcoin’s

If one were to shorten the period form 30 days to 10 the difference and trends would be notable

  • BTCUSD = 61% down from 137% 2 weeks ago
  • ETHUSD = 137% down from 145% 2 weeks ago

What does it mean? It could mean that Ether is now entering “the show” where it will be more susceptible to comparisons to BTC. 

Via Fintek

 As we referenced a few weeks ago, there is a battle between Bitcoin (BTC) and Ethereum (ETC) for cryptocurrency supremacy.  With that, the ETC followers are now finding out what bitcoin found out a long while ago; VOLATILITY.  The one digital currency with more acceptance (deeper market) will be the survivor.

We do not subscribe to the “there will only be one” concept, but the point that ETH is now on the varsity does invite comparisons and more knee-jerk reactions.

Separately, the huge drop in  BTC Vol is worth noting for investors  and traders alike. 

BitCoin at a Crossroads?

One thing is on our radar. While much of ETH recent volatility above BTH’s has been specific to ETH the product itself, the precipitous drop in BTC vol is notable. To predict direction using volatility is something we do not do. But to handicap the potential effects in either direction we do attempt.

BTC Bullcase

BTC’s Vol slide can be viewed as bullish because more institutional  investors will be permitted by virtue  oftheir by laws to put money into it based on volatility and liquidity. so if volumes go up while volatility drops,  you havea recipe for  institutional acceptance and another run  higher. 

BTC Bear Case

Conversely, and this is especially true in markets that are mature, a drop in volatility after a run up in an asset’s price is frequently seen as a pause before a puke. This is because MOMO short term traders  lose patience with the shrinking daily ranges and puke. Silver traders understand this when they say “Sideways is bearish in Silver”. 

There are many other ways to handicap future  directional drivers using volatility as the “tell”. But these are the ones we subscribe to most. Combined with Option skewness and Implied volatility we can handicap whether or not we should get out of the way of the next move, surf the wave, or trade counter it.  And sometimes we are even right!  

But it could just be nothing to trade off of at this stage of the product’s life cycle. We are not playing here. Just watching and seeing if traditional volatility yardsticks are applicable yet.

Read more by Soren K.Group

 

Blockchain Daily News

via Blockchain Daily

Deals, Investments & M&As

Pantera Capital to Raise $100 Million In Investment For ICO Hedge Fund

Pete Rizzo – CoinDesk

The $600m market for initial coin offerings may soon be set to expand.

Investment firm Pantera Capital is launching a new hedge fund focused on investments solely in tokens that power public blockchain protocols.

FAO: Pantera was founded by its CEO, Dan Morehead, a former CFO and head of macro trading at Tiger Management, a hedge fund.

Cryptocurrencies

Burger King To Accept Bitcoin In Russia This Summer

William Suberg – The Coin Telegraph

Russian Burger King restaurants are due to start accepting Bitcoin as a payment method this summer, reports state on Wednesday.

DNT: A few days ago we covered a story about what we can buy with Bitcoin.. Maybe even sandwiches? Yes. And the list that Florin provided is growing…Great! Problem solved.  We can buy a sandwich with Bitcoin. And not only in one place.

Exchanges & Trading Venues

Sell Side Forges Ahead With Ambitions For Live Blockchain

John Brazier – Waters Techology

This week it was the turn of both R3 and the Digital Trade Chain Consortium (DTC) to announce new developments regarding their respective efforts to get DLT live in the capital markets as soon as possible.

FAO: More details about R3’s announcement can be checked in our yesterday’s edition.

Harbour, An Ethereum-based DAO For Managing Token Assets Announces Launch And Releases Technical Specifications

PR Web

Harbour introduces a democratic, community-governed framework to the blockchain ecosystem for managing and holding token assets by harnessing the wisdom of the crowd.

Circle, Blockchain And The Birth Of Social Payments In The UK

Madhvi Mavadya – Forbes

Last month, social payments app Circle made it into the top 20 UK iPhone App Store chart after a period of viral social growth and many young people have started to use the service in a social setting, in the same way Venmo is used in the US.

Vendors

SAP’s Chief Strategy Officer Thinks Blockchain Is Not A Zero-Sum Game

Saheli Roy Choudhury, Geoff Cutmore – CNBC

SAP’s chief strategy officer: Blockchain is not a zero-sum game and its implementation across various sectors is going to be an overall positive for businesses.

BitPeople

Bitcoin Exchange Operator Tied To Hacks Gets Five-And-A-Half Years U.S. prison

Jonathan Stempel – Reuters

A Florida man was sentenced on Tuesday to 5-1/2 years in prison after pleading guilty to operating an illegal bitcoin exchange suspected of laundering money for hackers and linked to a data breach at JPMorgan Chase & Co.

FAO: Anthony Murgio and his co-conspirators faced accusations of processing millions of dollars into bitcoin through the unlicensed exchange Coin.mx.

Regulation

CFTC Chief Asks Congress For More Money To Oversee Blockchain

Stan Higgins – CoinDesk

The US Commodity Futures Trading Commission (CFTC) has cited the advance of technologies like blockchain in a request to obtain additional funding for oversight activities.
FAO: Seems fair. I remember last year they asked for more funds to watch the activity of HFT (high frequency trading) firms on US exchanges.

SEC Is Still Eyeing To Regulate The ICO Market

Anthony Coggine – The Coin Telegraph

US Securities and Exchange Commission is still eyeing to enforce regulations to Blockchain companies engaged in ICO.
FAO: Interesting to watch this further. I bet they won’t be able to do it in the next 5 years. What do you think? Send me your thoughts.

Japan Looks To Blockchains For More Secure E-government Systems

Nikkei Asian Review

Japan wants to use the data storage technology behind bitcoin and similar virtual currencies to update how individuals and companies interact electronically with government, aiming to bolster information security while cutting administrative costs.
FAO: Read the first two headlines of this section. Now read the headline above. Am I the only one thinking about the growing discrepancy between western and eastern governments when it comes to blockchain?

Startups, Accelerators & Hubs

Blockchain Developer ChromaWay Launches Postchain ‘The First Consortium Database’

Ian Allison – International Business Times

Blockchain developer ChromaWay has released Postchain – “the first consortium database” – to combine the power and flexibility of mature, productised databases with blockchain database design.

Associations & Federations

World Economic Forum Publishes Blockchain Governance Taxonomy

Michael del Castillo – CoinDesk

The World Economic Forum has published a detailed white paper arguing that blockchain stakeholders should organize in a way that would dwarf even the largest consortia.

Press release here – via MondoVisione.

FAO: Today’s top story, but added in the proper section…

Analysis

Ethereum Explodes Above $300

Jonathan Garber – Business Insider

Ethereum is exploding higher Wednesday, trading up by 32% at $299.70. It hit a high of $308 earlier in the session.
FAO: Bulls take charge.

Volatile And Interesting Months Ahead For Bitcoin: Charles Hayter On Bitmain’s Hard Fork

Sidhartha Shukla – Money Control

Speaking to Moneycontrol Charles Hayter, co-founder and CEO of cryptocurrency data platform CryptoCompare, sheds light on the what Bitmain’s proposed hard fork is and what it means for bitcoin, as a technology and on its price.

Other news

Blockchain: Initial Coin Offerings Pull In Millions, But At What Cost?

Joseph N. DiStefano – PhillyDeals

Innovators who want to raise capital in a hurry, for projects based on blockchain electronic record systems and electronic currency platforms, are bypassing initial public stock offerings (IPOs) to pitch quick-buck initial coin offerings (ICOs).

Fanciful Bitcoin Banknotes Show How Digital Currency Might Look In The Real World

NBC

“In some way, the project is a loose data visualization, but I mainly wanted to make the bills be interesting on their own as artworks,” says Matthias Dörfelt, the Los Angeles-based artist who made the notes.

FAO: Florin Adrian Oprea, Editor-in-chief Blockchain Daily News

via http://ift.tt/2sao3iE Vince Lanci

Understanding The Cryptocurrency Boom (And Its Volatility)

Authored by Charles Hugh Smith via OfTwoMinds blog,

Speculative booms are often poor guides to future valuations and the maturation trajectory of a new sector.

I recently came across a December 1996 San Jose Mercury News article on tech pioneers’ attempts to carry the pre-browser Internet’s bulletin board community vibe over to the new-fangled World Wide Web.

In effect, the article is talking about social media a decade before MySpace and Facebook and 15 years before the maturation of social media.

(Apple was $25 per share in December 1996. Adjusted for splits, that’s about the cost of a cup of coffee.)

So what’s the point of digging up this ancient tech history?

— Technology changes in ways that are difficult to predict, even to visionaries who understand present-day technologies.

— The sources of great future fortunes are only visible in a rearview mirror.

Many of the tech and biotech companies listed in the financial pages of December 1996 no longer exist. Their industries changed, and they vanished or were bought up, often for pennies on the dollar of their heyday valuations.

Which brings us to cryptocurrencies, which entered the world with bitcoin in early 2009.

Now there are hundreds of cryptocurrencies, and a speculative boom has pushed bitcoin from around $600 a year ago to $2600 and Ethereum, another leading cryptocurrency, from around $10 last year to $370.

Where are cryptocurrencies in the evolution from new technology to speculative boom to maturation? Judging by valuation leaps from $10 to $370, the technology is clearly in the speculative boom phase.

If recent tech history is any guide, speculative boom phases are often poor guides to future valuations and the maturation trajectory of a new sector. 

Anyone remember “push” technologies circa 1997? This was the hottest thing going, and valuations of early companies went ballistic.  Then the fad passed and some new innovation became The Next Big Thing.

All of which is to say: nobody can predict the future course of cryptocurrencies, other than to say that speculative booms eventually end and technologies mature into forms that solve real business problems in uniquely cheap and robust ways no other technology can match.

So while we can’t predict the future forms of cryptocurrencies that will dominate the mature marketplace, we can predict that markets will sort the wheat from the chaff by a winnowing the entries down to those that solve real business problems (i.e. address scarcities) in ways that are cheap and robust and that cannot be solved by other technologies.

The 'Anything Goes' Speculative Boom

Technologies with potentially mass applications often spark speculative booms. The advent of radio generated a speculative boom just as heady as any recent tech frenzy.

Many people decry the current speculative frenzy in cryptocurrencies, and others warn the whole thing is a Ponzi scheme, a fad, and a bubble in which the gullible sheep are being led to slaughter.

Tribalism is running hot in the cryptocurrencies space, with promoters and detractors of the various cryptocurrencies doing battle in online forums: bitcoin is doomed by FUD (fear, uncertainty and doubt) about its warring camps, or it’s the gold standard; Ethereum is either fundamentally flawed or the platform destined to dominate, and so on.

The technological issues are thorny and obtuse to non-programmers, and the eventual utility of the many cryptocurrencies is still an open question/in development.

It’s difficult for non-experts to sort out all these claims. What’s steak and what’s sizzle?  We can’t be sure a new entrant is actually a blockchain or if its promoters are using blockchain as the selling buzzword.

Even more confusing are the debates over decentralization. One of the key advances of the bitcoin blockchain technology is its decentralized mode of operation: the blockchain is distributed on servers all over the planet, and those paying for the electricity to run those servers are paid for this service with bitcoin that is “mined” by the process of maintaining the blockchain.  No central committee organizes this process.

Critics have noted that the mining of bitcoin is now dominated by large companies in China, who act as an informal “central committee” in that they can block any changes to the protocols governing the blockchain.

Others claim that competing cryptocurrencies such as Ethereum are centrally managed, despite defenders’ claims to the contrary.

Meanwhile, fortunes are being made as speculators jump from one cryptocurrency to the next as ICOs (initial coin offerings) proliferate. Since the new coins must typically be purchased with existing cryptocurrencies, this demand has been one driver of soaring prices for Ethereum.

As if all this wasn’t confusing enough, the many differences between various cryptocurrencies are difficult to understand and assess.

While bitcoin was designed to be a currency, and nothing but a currency, other cryptocurrencies such as Ethereum are not just currencies, they are platforms for other uses of blockchain technologies, for example, the much-touted smart contracts.  This potential for applications beyond currencies is the reason why the big corporations have formed the Enterprise Ethereum Alliance (http://ift.tt/2qDjqQc).

Despite the impressive credentials of the Alliance, real-world applications that are available to ordinary consumers and small enterprises using these blockchain technologies are still in development: there’s lots of sizzle but no steak yet.

Who Will The Winner(s) Be?

How can non-experts sort out what sizzle will fizzle and what sizzle will become dominant?  The short answer is: we can’t. An experienced programmer who has actually worked on the bitcoin blockchain, Ethereum and Dash (to name three leading cryptocurrencies) would be well-placed to explain the trade-offs in each (and yes, there are always trade-offs), but precious few such qualified folks are available for unbiased commentary as tribalism has snared many developers into biases that are not always advertised upfront.

So what’s a non-expert to make of this swirl of speculation, skepticism, tribalism, confusing technological claims and counterclaims and the unavoidable uncertainties of the exhilarating but dangerously speculative boom phase?

There is no way to predict the course of specific cryptocurrencies, or the potential emergence of a new cryptocurrency that leaves all the existing versions in the dust, or governments’ future actions to endorse or criminalize cryptocurrencies.  But what we can do — now, in the present — is analyze present-day cryptocurrencies through the filters of scarcity and utility.

via http://ift.tt/2suYuIB Tyler Durden