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Russian Finance Minister: Bitcoin Regulation Will Arrive by Year’s End

September 12, 2017 BitNewz.net 0

TheMerkle Russia Bitcoin RegulationNot a day goes by, it seems, without an update from the Russian government about Bitcoin and cryptocurrency. Legislators in this particular country have historically had issues getting on the same page when talking about cryptocurrencies. In the latest update, Russian Finance Minister Anton Siluanov claims that cryptocurrency will be regulated by the end of 2017. Yet Another Plot Twist Involving Russia Anyone who has kept a close eye on the state of Bitcoin in Russia will have noticed there is no unified message whatsoever. Some officials have claimed Bitcoin will not be legalized or recognized in the country, whereas others have stated

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New Gas Discovery Offshore Cyprus Not Commercially Viable

September 12, 2017 Tsvetana Paraskova 0

Eni and Total have discovered gas while drilling in Cyprus waters close to the giant Zohr gas field discovery offshore Egypt, but the estimated quantity of the newly discovered field is too small to develop on its own, Cypriot Energy Minister Yiorgos Lakkotrypis said on Tuesday. The field contains less than 0.5 trillion cubic feet of gas, but the drilling proved that the Zohr-type geological model works, Lakkotrypis told reporters, as carried by Associated Press. “We’re not disappointed with this drilling,” the minister said,…

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Housing Bubble Symmetry: Look Out Below

September 12, 2017 Tyler Durden 0

Authored by Charles Hugh Smith via OfTwoMinds blog,

Housing markets are one itsy-bitsy recession away from a collapse in domestic and foreign demand by marginal buyers.

There are two attractive delusions that are ever-present in financial markets: One is this time it’s different, because of unique conditions that have never ever manifested before in the history of the world, and the second is there are no cycles, they are illusions created by cherry-picked data; furthermore, markets are now completely controlled by central banks so cycles have vanished.

While it’s easy to see why these delusions are attractive, let’s take a look at a widely used measure of the U.S. housing market, the Case-Shiller Index:

If we look at this chart with fresh eyes, a few things pop out:

1. The U.S. housing market had a this time it’s different experience in the 2000s, as an unprecedented housing bubble inflated, pushing housing far above the trendline of the Case-Shiller National Home Price Index.

2. It turned out this time wasn’t different as this extreme of over-valuation collapsed.

3. For a variety of reasons (massive central bank and state intervention, the socialization of the mortgage market via federally guaranteed mortgages, historically low mortgage rates, massive purchases of mortgage backed securities by the Federal Reserve, etc.), the collapse in prices did not return to the trendline.

4. There is a remarkable time symmetry in each phase of expansion and collapse; each phase took roughly the same period of time to travel from trough to peak and peak to trough.

5. The Index has now exceeded the previous bubble peak, suggesting this time it’s different once again dominates the zeitgeist.

6. Those denying the existence of cycles have difficulty adequately explain away the classic cyclical nature of the 2000-2008 bubble rise and its collapse, and the subsequent expansion of housing prices in a near-perfect mirror-image of the first housing bubble’s steep ascent.

Claiming that this painfully obvious time symmetry is mere randomness/coincidence is not an explanation.

7. This time symmetry suggests that the current housing bubble is close to its zenith and will likely collapse over a time frame similar to Housing Bubble #1.

The basic arguments for ever-higher housing prices forever and ever are:

A. central banks completely control all markets, including housing, and they will never let the housing market decline ever again.

B. Foreign buyers paying cash (even if the “cash” was borrowed in Asia) will continue flooding into North America, elevating markets for the the foreseeable future.

The omnipotence of central banks is a matter of near-religious certainty among the faithful, but skeptics note that central banks have played major roles in markets for decades, yet every asset bubble eventually pops despite central bank/state management of markets.

True believers note that the central state/bank interventions have greatly expanded, and that there are no limits on future interventions; central banks can create trillions of dollars, yuan, yen, euros, etc., and use this “free money” to buy assets, propping up markets indefinitely.

In this line of thinking, central banks/states “learned their lesson” in the first housing bubble and will never let the housing market collapse again.

As for foreign demand: the number of buyers from China who are desperate to turn their cash into North American real estate holdings is practically limitless.

The counter-arguments are:

1. Despite the federal guarantees on mortgages, the housing market is still dominated by private-sector borrowers and lenders. As my colleague Mish has often pointed out, central banks/agencies cannot force people to borrow money to buy homes, vehicles, etc.

If everyone who is qualified to buy a house and wants to buy a house has bought a house, then demand is limited to new households and foreign buyers.

New household formation has recovered a bit but is still at historically low levels. New households burdened by student loan debt, high rents and stagnant wages are not qualified to borrow hundreds of thousands of dollars to buy homes at current nose-bleed valuations.

While the number of foreign buyers may appear to be limitless in specific markets, counting on marginal buyers with cash to prop up markets across the board is an iffy proposition, given the potential for conditions to reverse due to global recession, capital controls, higher taxes imposed on foreign owners of vacant homes, etc.

I would argue that this time is different, but not in a healthy way. Central bank/state interventions in the market have drawn in marginal borrowers who are a few paychecks away from default, and speculators who are leveraged to the hilt to buy homes to “flip for quick profits–a strategy that collapses if qualified buyers become scarce.

Globally, housing has become a flight-to-safety asset for the global elites, a development with disastrous consequences for residents. Housing owned for investment often sits empty, effectively withdrawing much-needed housing units from the market for shelter. This investment buying reduces the pool of available housing, driving up rents and home prices, pushing shelter out of reach of the bottom 95% of wage earners in desirable urban areas.

In response, municipalities are aggressively imposing fees on investment ownership of empty dwellings. At some point, these fees reduce demand for housing in “hot” markets. Once marginal cash purchases evaporate, markets fall back to what domestic demand can support.

Housing markets are one itsy-bitsy recession away from a collapse in domestic and foreign demand by marginal buyers. This time is different isn’t always bullish.

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

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SBI Ripple Asia Brings Blockhain-Based Cross-border Payments to South Korea

September 12, 2017 BitNewz.net 0

Big changes are coming to the way how cross-border funds are transferred. SBI Ripple Asia plans a major blockchain experiment […]

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OPEC’s Output Drop: Saudis Overcompensate While Compliance Slides

September 12, 2017 OilPrice.com 0

Confirming Monday leaks that OPEC production had dipped last month, the just released OPEC report for the month of September confirmed that OPEC produced 32.755mmb/d (according to secondary source data), a drop of 79,100 bpd, and the first monthly decline in 4 months. According to the underlying data, in the last month output increased in Nigeria (+138.3Kb/d), while declining in Libya, Gabon, Venezuela Saudi Arabia, and Iraq. (Click to enlarge)While secondary sources pegged Saudi production in August at 10.022mmb/d, a drop of 10.3kb/d…

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OPEC Unfazed By Falling U.S. Oil Demand

September 12, 2017 Tom Kool 0

Despite the turbulence in the oil markets due to the previous weeks’ hurricanes, OPEC’s latest report has painted a reassuring picture, indicating that the rebalancing of the oil market may be underway. (Click to enlarge)  (Click to enlarge) (Click to enlarge) (Click to enlarge)• Data related to Hurricane Harvey is starting to come together. For the week ending on September 1, refinery inputs fell by 3.2 million barrels per day (mb/d), or 34 percent, according to the EIA. • It was the largest week-on-week decline…

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A Novel Solution for Scalable Micropayment Channels Across Bitcoin’s Network

September 12, 2017 BitNewz.net 0

Scalability represents the main problem hindering mass adoption of bitcoin. To boost the rate and speed of transactions across bitcoin’s […]

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Bitcoin Tumbles After Jamie Dimon Calls It A Fraud: “Would Fire Anyone Trading It”

September 12, 2017 Tyler Durden 0

Surprised by the sudden air pocket below bitcoin? Curious if this was caused by some new, unconfirmed Chinese crackdown on bitcoin traders, exchanges, and other money launderers?

No, the answer is Jamie Dimon, who in an angry outburst during the same conference in which he preannounced JPM’s 20% trading revenue drop, lashed out at the cryptocurrency, calling it a “fraud” which is “worse than tulip bulbs. It won’t end well”, will “blow up” and “someone is going to get killed.” Oh, and in conclusion, “any trader trading bitcoin” will be “fired for being stupid.

  • DIMON: BITCOIN IS A “FRAUD”; “WORSE THAN TULIP BULBS”
  • DIMON: BITCOIN WILL EVENTUALLY BLOW UP
  • DIMON: BITCOIN WON’T END WELL
  • DIMON: WOULD FIRE ANY TRADER TRADING BITCOIN FOR BEING STUPID

So how does Jamie really feel? 

Of course, if “a trader” bought $100,000 of Bitcoin in 2010, they’d be roughly 3x richer than billionaire Jamie, but that’s another story.

What is more surprising, is that bitcoin actually reacted to this angry outburst by the JPM CEO, sliding sharply, and dragging the entire cryptocurrency space with it.

Or perhaps not surprising at all as hundreds of JPM traders quietly liquidated their accounts moments after hearing Dimon’s threat…

Curiously, as Bitcoin sold off, gold finally saw a modest bid:

As for Dimon’s personal vendetta with the digital currency, one twitter commentator said it best:

BTC bulls: proof that “we” are a threat to the establishment + Gandhi quote
BTC bears: see? https://t.co/e2ZCmjKi3C

— Barbarian Capital (@BarbarianCap) September 12, 2017

What is ironic is that this is not the first time Jamie Dimon has lashed out at bitcoin: the last time Dimon slammed bitcoin was November 2015, at the Fortune Global Forum in San Francisco. Here’s what he had to say when asked directly about it by an audience member:

“You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

 

“Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

For those who “wasted their time” since Dimon’s threat, Bitcoin is up 1,018%.

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