Bitcoin up $1,000 after truce

As I wrote earlier this week, the bitcoin truce put a floor on the price of the cryptocurrency.

On Sunday, July 16th bitcoin traded at $1,860 just prior to the public acknowledgement that the two factions (the miners and the programmers that maintain the blockchain) had come to an understanding on the immediate future of bitcoin.

Saturday morning the price has soared to $2,850, that’s a $990 round trip in six days.


Bond vigilantes are not going to wait until Labor Day to act

It’s a Friday in July and the commuter parking lots I share with Wall Street and banking executives are pretty much empty.

What this means is I get a front row spot, but it also means the black boxes take on a larger role in today’s trading.

Stocks are down in pre-market slightly as volatility index has a 9 handle, meaning all is quiet, go ahead and take the day off, nothing to see here.

The bond market however, is squeezing even tighter as the 30-year note moves to 2.7 percent handle. This is a more important move for the markets, as Fed chief Janet Yellen and ECB’s Mario Draghi talk about paring down their holdings in US debt securities.

The moves in bonds is negative for all the markets since yields will collapse as prices rise and it will spill over to equities whether through reduced confidence and/or reallocation to cover bond losses.

This is the reason Yellen & Co. fear the bond vigilantes, which want to force the Fed to curtail selling off its balance sheet and continue to roll over profits into buying new issuance.

The timing of this move in the bond markets coincides with the slow season of late July through Labor Day, when everyone comes back from vacation. So to have these moves now, tells us this Fall could be messy in the bond pits.

Just look at the three-month T-bill auctions, which its maturity coincides with the debt-ceiling deadline went upside down this week, suggesting there is growing fear Washington is not getting how shaky these markets are.

Yellen’s opioid comments smack of hypocrisy

Fed chief Janet Yellen in Congressional testimony suggested that the opioid epidemic hitting the Ohio Valley states and elsewhere could be attributing to the historically low workforce participation rates for men.

While drug use and abuse is a public policy program, the Fed has dipped its toe into the debate with Yellen telling Congress, “I do think it is related to declining labor force participation among prime-age workers,” Yellen told Senators last week about the crisis.

However here is the key idea. “I don’t know if it’s causal or if it’s a symptom of long-running economic maladies that have affected these communities and particularly affected workers who have seen their job opportunities decline,” Yellen continued.

While the Fed was bailing out the banks with its once-in-a-lifetime QE programs, middle America was running out of unemployment benefits, on the verge of losing their homes and struggling to stay afloat.

To stave of a further crisis, the Obama Administration loosened requirements for workers to go on Social Security disability. Look at the data of new disability enrollees during the 2009-2011 period.

In 2009, Social Security disability claims jumped 21 percent over the year prior. In 2011 the feds were paying more than 23 million Americans some type of disability claim. That’s about 7 percent of the overall population, and 16 percent of the workforce, according to publicly available data. None of this data takes into account private workers’ compensation cases.

Of course you still needed to prove you were injured on the job and part of that claim almost automatically was having to be put on pain medication for an injury sustained in a manufacturing job like most of the employment opportunities in the Ohio area.

There are recent stories of doctors in the area prescribing millions of opioid pills over the period in question. This is what happens when the treatment is discontinued, but the addiction is too strong.

So it seems a bit disingenuous for Yellin & Co. to say if their job creation policy shortcomings — the low participation rates of males in the Cleveland Fed’s area — may be attributed to opioid addiction of the workforce.

Other Fed regional banks have touched on the issue as well.

“Manufacturing contacts in Louisville and Memphis reported difficulties finding experienced or qualified employees, with some citing candidates’ inability to pass drug tests,” the St. Louis Fed reported in the July 12 Beige Book. The Boston Fed published research in September on the link between local economic despair and opioid use in New England.

The Fed knows how to administer stimulus to the banks when they get strung out on outrageous lending binges, but it has a tougher time with the victims of that policy when they need to numb from the pain of easing.

Who is the real power over our energy?

How will Washington and Wall Street dictate the future of technology?

From robots to self-driving cars, these emerging automation will be coming because of the money that is behind these futuristic tools.

Self-driving cars — although it’s the antithesis to the America’s love affair with the car — will be pushed ahead by the insurance companies through reduced rates or better yet prohibitive rates for drivers.

The employment of robots will not only be exempt from taxes and fees but may get subsidies from the feds to usher in wide adoption of robots, much the same way as Internet retail was regulated to be tax-free to level the existing playing field.

While Washington and Wall will push these technologies, there are perhaps others that will be surpassed by these same entities due to money behind the existing programs.

Let’s look at alternative power that is anything other than electric. The US is so dependent on the dollar being used as the reserve currency for crude purchases, there is no way an alternative could be deployed.

If you look at the number of wars and foreign entanglements the US has engaged in since it went off the gold standard in 1971, you get the idea of why oil will never be replaced despite plenty of development in alternatives from zero-point to over-unity machines.

Just look at the Arab gas embargo that occurred right after the US came off the gold standard and there were long lines at every gas station in the US and you only could get gas every other day. That was the beginning of the petrodollar hegemony.

So why is electric ok? Well it uses crude for most of its energy source, so it’s the ecology-light alternative. You are putting the emissions further away from you at the power plant versus your driveway.

If you are interested in these alternative energies look up zero-point energy and over-unity machines. And these are small leaps compared to what may be totally surpassed by black projects within the federal government.

Is there a truce in bitcoin civil war? Price rise says yes

Is the bitcoin civil war reaching a truce?

Only through price discovery can we decide that. The cryptocurrency has been in a battle between the two camps involved in the decentralized digital currency that has been beating it down since hitting an all-time high in mid-May of more than $3,200.

The new bitcoin software was unveiled over the weekend as the miners (those who look for the code on the net) and the developers known as Core (which maintain the code and keep it stable, bug-free).

The new software, called SegWit2x, is seen as a compromise between the two camps. As truce talks continue, through adoption of the code, bitcoin’s price rebounded from $1,750 over the weekend to trade Tuesday morning $2,265.

Part of the software fix was to help scalability of bitcoin as well as speeding up payment transfers to help with payment systems, which other lesser cryptocurrencies have going for them.