Global Economic Disruptions

Globalization, automation, and inequalityoh my!

Whats up? Well, not much. Traders are selling anything they think is risky as Covid-19, the disease caused by a novel coronavirus, spreads. There are too many unknowns to calculate how much the virus will knock off corporate profits and economic growth, which means investors are looking for safety.

The US stock market was gaining earlier this year even as concerns about the epidemic intensified. That went into reverse on February 20, when the S&P 500 began five-straight days of declines, according to FactSet data. Since then things like oil and copper, which tend to be linked to economic growth, have tumbled. Other risky assets like junk bonds and, well, bitcoin have also taken a spill. Gold and top-shelf government bonds are among the few assets that are rallying.

To put the stock markets drop into context, its worth noting that US equities were trading at record highs this year.

The crisis is hitting growth expectations particularly in Asia and Germany, fears of a pandemic spreading, a supply chain leading to disruption and some inflation at a time when some equity markets were very expensive, Sebastien Galy, senior macro strategist at Nordea Asset Management, wrote in an email. Fears of a pandemic are likely overblown in Europe and the US, but it is leading business to re-adjust.

High grade government bond yields, which move inversely to prices, have steadily dropped. Ten-year US Treasuries yield about 1.3%, a record low, compared with about 2.7% a year ago. Investors are agreeing to lose money by owning similar-maturity German and Swiss government bonds, which yield -0.5% and -0.8% respectively, according to FactSet data.

Traders are increasing their bets that the US Federal Reserve will cut interest rates in the coming months to keep the economy from stalling. The problem is that the central bank doesnt have much ammunition to fight a coronavirus-induced slowdown. Policy makers are targeting a rate of 1.50% to 1.75%, leaving little leeway before rates hit zero. The ability of the Fed and other central banks to stimulate the economy when interest rates are already so low is debated among economists.

Perhaps one of the biggest worries for investors and regulators is a massive build up of corporate debt. Regulators in the US and Europe have beensounding the alarm about $3 trillion in leveraged loansa loose term that refers to junk bonds and loans that have a higher risk of default.

If coronavirus concerns stall economic growth, it could set off a series of defaults among these companies, driving up unemployment and further weakening the economy. Investors yanked $1.6 billion from a popular exchange-traded fund for junk bondsthe iShares iBoxx USD High Yield Corporate Bond ETFduring the week that ended Feb. 25, according to ETF.com.

In a super-low rate world, the threat will not be that great for highly-rated, well-capitalised borrowers, but there are plenty of others who have increased leverage in recent years, Kit Juckes of Societe Generale wrote in an email. As the virus spreads to more countries and more companies report supply chain problems, more companies are going to struggle.

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How bond, stock, bitcoin, and copper markets are reacting to coronavirus - Quartz

Bitcoin has hit a three-week low and fears of a global recession are rising as a result of the continued spread of coronavirus

Fears over the prospect of a coronavirus pandemic are impacting the financial services sector and hampering global economic growth.

Today it was reported that stock prices had slumped due to investors' panic over the continued spread of the virus, which has infected more than 82,000 people and killed more than 2,800.

As of this morning, it was reported that European equities had slumped - the FTSE 100 was down by 1.9%, the Euro SYoxx 50 down by 2.3% and Germany's DAX down by 2.3%.

Concerns around coronavirus are also reportedly behind fluctuatingBitcoin prices, too. As of the morning of 27 February, Bitcoin was down 10.08% for the week, sinking below $8,700, representing a drop of nearly $2,000 in two weeks.

Discussing Bitcoin's market fluctuation, CEO and co-founder of crypto social trading platform HedgeTrade, David Walsen, said that "during the first weeks of the coronavirus, Bitcoin acted as the uncorrelated asset that it has often been during economic and political upheaval, showing strong growth."

However, he explained, the last few days "took their toll on crypto's most important digital asset".

This week, investors have warned that coronavirus could push the world to the brink of a global recession. It was reported by Bloomberg that former Federal Reserve Chair, Janet Yellen, Told the assembled audience at a Brookings Institution event in Michigan that "we could see a significant impact on Europe, which has been weak to start with, and it's just conceivable that it could throw the United States into a recession."

Similarly, Nigel Greene, founder and CEO of deVere Group, has warned that investors must take action sooner rather than later to build strength and safeguard their wealth.

Greene said that "coronavirus has struck at a time when major economies, including Japan, Germany, India and Hong Kong are are already facing a serious downturn." He added that "investors have largely been caught off guard by the serious and far-reaching economic consequence of the coronavirus.

"Clearly, this will hit global supply chains, economies across the world and ultimately government coffers too. Until such time as governments pump liquidity into the markets and coronavirus cases peak, markets will be jittery, triggering sell-offs."

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Coronavirus: impact on bitcoin price and possible recession - FinTech Magazine - The FinTech & InsurTech Platform

In "LUSH," now showing in Lane Community Colleges Roger Hall Gallery, Lillian Almeida, Milla Oliveira and Sal Strom collectively engage rich material and intense processes to communicate our shared humanity through texture, colors, weight and form. Their pieces are meant to anchor observers in the physical world, expressing the corporality of their existence.

CAFE 541 recently sat down with Strom, a Newport native and multi-decade local artist who has continually used creation and destruction in her work. Below is an edited version of that conversation.

Have you ever taken part in a group kind of presentation like this before?

I've actually done quite a few of those. I used to show at a bunch, but after my brain tumors, I took a break and started doing video for six years. I've made three-minute videos, where when youre at international film festivals and you're onstage, if someone goes to the bathroom or blinks, they miss your work.

In San Francisco, that one was really cool. It was called 20 by 120 and it was 20 different artists and you have 90 seconds to present. Thats really fun because it's just like bam, bam, bam and they have to make their point in 90 seconds. You get that elevator pitch down.

I did video for six years because after my first brain tumor, I was cognitively kind of dead. I just learned video right before it, but after my brain tumor, I didn't remember any of it. So, it's really good for me to have to use that cognitive part of my brain and it's hard. It took me two days to do 10 seconds (of film) because my video is collage and totally experimental. In one, I interviewed over 100 World War II veterans and then I cut down their audio to three minutes. That's the core to me making sure my work involves other people.

And why is that?

I don't just stand in the world alone. I think that art should have a meaning. Before my first brain tumor, I worked in my studio alone all the time with the music on super, super loud and just having a great time, but after, I just felt that it wasn't meaningful. I didn't even want to do art anymore. It seemed like a narcissistic thing to do. Then I got (a Master of Fine Arts) and they teach to you to deal in far more socio-political work and that you can't make money with. So, I'm trying to get back into the selling stuff.

My next show is at a Bitcoin conference at the end of March. And that will be totally different because everything is for sale in Bitcoin.

Bitcoin is prominent in ("LUSH"). What prompted that? Can you explain that a little bit more?

Whenever I do a show, I usually do it in a big series. The World War II one was really about my dad and connecting with him. At that time I was not so excited about living and so I wanted to know how other veterans that were in that situation what they thought the next thing that comes after this life. My favorite one was this one guy who said, Do you remember being born? And I said, No. And he goes, What makes you think you remember dying? and I thought that that summed it up.

The night of my opening, the end of 2017, my girlfriend from New Zealand that I met in like, 1981, came down to see it. We went to dinner afterwards and she was talking about her son doing this thing called Bitcoin and she didn't know what it was.

I researched it and ended up loving working with it. You're working with like cyberpunk people and you're working with all this young energy and technology. I love working with young people.

At your show, you used your dress from your daughter's wedding inside a piece. It seems like a lot of your work is about breaking stuff down, deconstructing it and creating something new. Could you tell me a little bit more about what motivates that?

I'm totally a minimalist. I do a lot of art residencies, so I got rid of my apartment and I wasn't really living anywhere. And when you're a minimalist, you don't have a lot of room to store things and I just don't like having stuff. I'm not an obsessive person at all. If I do a show, it's so much about the process. Once its done, I literally tear it up. I love to tear things up. I like (my work) best once it's torn and then it makes all these shadows on the wall and they have a life of their own. It's kind of like its breathing without me.

Why do you think people are so hesitant to interact tactically with art, to touch stuff?

It's what we've always been told not to do. You go to museums and galleries and their signs saying, "Don't touch the art." And so I want people at my shows to actually put their hands on my art and they have a really hard time doing it. I literally have to put their hands on the art to get them to touch it.

To view videos of Strom's work and hear audio of her chatting with CAFE 541, go online to registerguard.com. Follow Matthew on Instagram @CAFE_541. Email him mdenis@registerguard.com.

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CAFE 541: Eugene artist Sal Strom talks about bitcoin, minimalism and living with brain tumors - The Register-Guard

Chamath Palihapitiya, the billionaire chairman of spaceflight company Virgin Galactic, has recommended that everyone hold Bitcoin (BTC) as a form of crisis insurance.

Speaking on CNBCs Squawk Box, Palihapitiya said he believes that everybody should probably have 1% of their assets in Bitcoin.

Palihapitiya said that Bitcoin comprises a fantastic hedge, as every other financial instrument is correlated [...] except Bitcoin, which is fundamentally uncorrelated.

When you see the amount of leverage the financial industry is running, and you think about all these dislocations and all these exogenous things that are happening that you can't predict, there's a lot of risk to the downside, and it will be great that an average individual citizen, of any country in the world, has an uncorrelated hedge.

However the billionaire former Facebook executive rejects the theory that economic woes resulting from the coronavirus outbreak will drive the crypto markets into a bull trend.

I dont think when [...] you wake up and see a coronavirus scare and the Dow down 2,000, you should not be going in and buying Bitcoin - that is an idiotic strategy, he said.

The Bitcoin is a safe haven narrative has certainly taken a battering this week with BTC tumbling up to 13% in 36 hours in tandem with the stock markets due to fears over the impact of the coronavirus. In contrast gold has performed well in its traditional role as a safe haven, gaining 0.5% in recent days to trade for $1,648.82 per ounce.

Palihapitiya suggests that a better approach than trying to profit off short term market trends is for investors to put a small percentage of their net worth into Bitcoin as insurance.

I think a reasonable strategy is to say 1% of my net worth should be in something completely uncorrelated to the world and how the world works. You quietly over some period of time accumulate a position and then just never look at it again and hope that that insurance under the mattress never has to come due. But, if it does, it will protect you.

Palihapitiya is a longtime Bitcoin supporter and his company, Virgin Galactic, began accepting Bitcoin for its $250,000 spaceflights duringNovember 2013, becoming one of most high-profile companies to accept BTC at the time. Palihapitiya told CNBC that it has received 7,957 registrations of interest since conducting the first flight in December 2018, which equates to to $2.39 billion in potential ticket sales.

The rest is here:
Virgin Galactic CEO: Everyone Should Have 1% of their Assets in Bitcoin - Cointelegraph

Canada decides a CBDC is unnecessary while the Twitterati debate BTC as a safe haven and the six-year anniversary of Mt. Gox brings reflection.

Bitcoin (BTC) is having a terrible, horrible, no good, very bad day. Many are using the dump - which from a timing perspective aligns with a broader market sell-off on coronavirus fears - as a way to diminish the bitcoin as a safe haven narrative.

In this episode, @nlw revisits that narrative and argues it is uncomfortably bunched up with the uncorrelated asset narrative, or, as Chamath Palihapitiya calls it, schmuck insurance.

This episode also covers:

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Is Bitcoin a Safe Haven or 'Schmuck Insurance'? - CoinDesk - Coindesk

Finland's customs agency has been struggling with what to do with a horde of bitcoin (BTC) it fears could end up back in the hands of criminals if sold off.

Finnish Customs, known locally as Tulli, has been trying to offload a total of 1,666 bitcoin for several years, even drawing up a plan in September 2018 for a public auction of the digital coins. But officials have concerns that a sale would attract the wrong kind of attention and could even put the agency's own security at risk.

Speaking to local media, Tulli Director Pekka Pylkkanen said: "From our point of view, the problems are specifically related to the risk of money laundering. The buyers of [cryptocurrency] rarely use them for normal endeavors."

Tulli confiscated the bitcoin trove following a successful bust of an online dark market in September 2016. At the time, bitcoin traded at around $570, meaning the 1,666 BTC was worth approximately $950,000. With prices now just under $9,200, it's worth closer to $15 million, according to CoinDesk's Bitcoin Price Index.

At bitcoin's all-time peak near $20,000 in December 2017, the cache would have been worth almost $33 million.

Tulli isn't the only government authority having to decide what to do with confiscated bitcoin, usually with dollar-values many times greater than when they were first seized. The U.S. government, which has seized hundreds of millions of dollars worth of bitcoin over the years, has hosted multiple online auctions for confiscated bitcoin.

Bitcoin confiscated by the Belgian authorities was sold by an online auction house in early 2019. Later that year, U.K. police used the same auctioneer to sell more than $290,000 worth of cryptocurrency it had seized from a teenage hacker.

In 2018, the Finnish government barred customs officials from trying to sell seized bitcoin on exchanges or trading platforms, instead ordering the agency to hold any confiscated digital assets in a secure cold storage solution.

Pylkkanen's claim that most crypto holders use them for illicit purposes isn't supported by the numbers. A November report from blockchain analytics firm Elliptic suggested $829 million in bitcoin, just 0.5 percent of all transactions, were linked to the dark web.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

The rest is here:
Finnish Authorities Have $15M in Seized Bitcoin But Don't Want to Sell It - CoinDesk - Coindesk

When social media giant Facebook revealed it would this year release its answer to bitcoin the cryptocurrency community was stunned.

The subsequent international backlash against Facebook's libra served as both vindication for bitcoin and a cause for concernhow would governments allow bitcoin to exist if Facebook's libra could not?

As early backers of the project abandoned it, many thought libra was dead in the water. But Facebook, and its headstrong leader Mark Zuckerberg, aren't ready to give up yet.

Facebook's co-founder and CEO, Mark Zuckerberg, was called before the U.S. House Financial Services ... [+] Committee last year ahead of Facebook's planned libra launch this year--something that boosted the bitcoin price earlier in the year.

Last week, Facebook's independent Libra Association revealed its newest recruit, adding a member for the first time since many of its biggest corporate backers jumped shipmost of which would see their core business undermined by libra, for what that's worth.

Vodafone, for example, pulled out of the Libra project last month to focus on its own digital payments system while the involvement of former Libra Association members Visa, Mastercard, and PayPal was always something of a mystery.

Facebook itself is not part of the Libra Association, a governing council for the cryptocurrency libra, though its subsidiary Calibra, effectively a digital wallet for the libra token, is.

Now, however, Canadian e-commerce platform Shopify, which boasts around 1 million businesses from 175 countries on its digital platform, will join other Libra Association members in contributing at least $10 million and operating a node that processes transactions for libra, a so-called stablecoin, meaning it will float against a basket of traditional currencies.

"As a member of the Libra Association, we will work collectively to build a payment network that makes money easier to access and supports merchants and consumers everywhere," Shopify said in a blog post.

The official reason many of the Libra Association's founding members bailed out of the project was due to the ferocious regulatory response to the projectU.S. president Donald Trump tweeted his opposition to it and broader cryptocurrencies, including bitcoin while his Treasury secretary branded bitcoin a "national security risk."

Meanwhile, in the months following libra's unveiling, central bankers around the world leaped into action, promising their own digital currency initiatives were well underway and the need for technology companies like Facebook to do what they had so far failed to was unnecessary.

The bitcoin price, which had been sent sharply higher in the first half of 2019 as rumors swirled that Facebook and other Silicon Valley giants were eyeing bitcoin, crypto, and blockchain, faultedlosing around half its value in just a few short months.

The Libra Association has not rested on its laurels, however. It's been working on addressing regulators concerns and has always said it plans to work closely with regulators ahead of libra's launch.

The bitcoin price soared last year ahead of Facebook's unveiling of its libra cryptocurrency project ... [+] but fell as the regulatory backlash grew.

Following the news Shopify would join the now 21 company-strong Libra Association, Libra's head of policy and communications Dante Disparte said the group was "proud" to welcome its newest member and talked up the troubled initiative.

"Shopify joins an active group of Libra Association members committed to achieving a safe, transparent, and consumer-friendly implementation of a global payment system that breaks down financial barriers for billions of people," Disparte said.

If libra, still slated to launch this coming June, is able to achieve these ambitious goals even bitcoin's biggest supporters will find it far harder to convince others that the world needs bitcoin.

Original post:
The Biggest Threat To Bitcoin Is Back On Track - Forbes

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So much for bitcoin as a haven. As financial markets around the world are in turmoil because of the spread of coronavirus, the cryptocurrency is plunging.

The worlds biggest digital currency is down 6.4% in the past 24 hours, according to CoinDesk. At one point earlier Wednesday, it had fallen 7.3%, which was the biggest daily drop since Oct. 23, when bitcoin plunged as Congress grilled Facebook CEO Mark Zuckerberg about his companys plans for a digital currency.

Bitcoin is down about 10% since Monday and has dropped around 15% in the past seven days.

Wednesdays decline took bitcoin to about $8,684, well below the $9,000 price level that many crypto observers thought would provide technical support.

Quantum Economics founder Mati Greenspan wrote in an email to subscribers Wednesday that after $9,000, $8,200 was the next support level for bitcoin.

On Tuesday, he offered a theory for why bitcoin was dropping at the same time stocks were plummeting. Stocks, he reasoned, were falling because of concerns that an economic slowdown would cause a substantial drop in corporate profits. Bitcoin however, is not a safe haven against declining profits, he wrote. Its a safe haven against inflation, geopolitical strife, and central banks. So far, the stocks dont seem to have realized any of these threats.

Write to Ben Walsh at ben.walsh@barrons.com

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Bitcoin Isnt Much of a Haven Asset Right Now. Heres Why. - Barron's

Warren Buffett, the legendary investor known as the Oracle of Omaha, isn't a fan of bitcoin, previously branding it "rat poison" and a "mirage."

This week, Buffett, 89, who built his fortune and career betting on well-performing stocks, promised he would "never" own bitcoin or any other cryptocurrency as they have "no value"despite the combined cryptocurrency market boasting a market capitalization of over $260 billion, double where it was this time last year.

Bitcoin's epic 2017 bull run and subsequent crash, which saw the bitcoin price soar around 2,000% in under 12 months and catapulted it into mainstream consciousnesses, was fueled by so-called fear of missing outand if aging investors like Warren Buffett ever admit to buying bitcoin you should probably take it as a sign the crypto market is again getting overheated.

Billionaire Warren Buffett, the legendary investor known as the Oracle of Omaha, has previously ... [+] invested in game-changing technology but isn't interested in bitcoin or cryptocurrencies.

"Cryptocurrencies basically have no value and they dont produce anything," Buffett, the world's third richest person with a net worth of around $90 billion, told CNBCs Squawk Box.

In terms of value: zero. I dont have any cryptocurrency and I never will," Buffett said, speaking after the release of his annual letter to Berkshire Hathaway shareholders and adding he has finally ditched his flip phone for an iPhone but he only uses for calls.

"I really dont take technology advice from somebody who uses a flip phone or doesnt use email," quipped Anthony Pompliano, co-founder and partner at bitcoin, crypto and blockchain investor Morgan Creek Digital.

Buffett, a self-admitted Luddite who has generally avoided the tech sector, is, however, notoriously bullish on iPhone-maker Apple despite being burnt by a badly-timed bet on ailing tech giant IBM over the last decade.

Some in the cryptocurrency sector have attempted to sway Buffett's thinking on bitcoin and crypto, with Justin Sun, the founder of cryptocurrency tron and chief executive of file-sharing company BitTorrent, winning a $4.5 charity auction to dine with the Oracle of Omaha last year.

"When Justin and four friends came, they behaved perfectly and we had a very friendly three-and-a-half hour dinner and the whole thing was a very friendly exchange of ideas," Buffett said, adding Sun failed to change his mind on bitcoin or crypto.

The bitcoin price exploded over the last few years, making bitcoin easily the last decade's best ... [+] investment.

"Buffett made his billions in a world that doesn't exist anymore," Mati Greenspan, the founder of bitcoin and cryptocurrency analysis outfit Quantum Economics, wrote in a note.

"Whoever the oracle of the next generation will be, my feeling is that they'll have a much keener understanding of emerging technology and will be less reliant on baseless fiat money."

Toward the end of 2017, many long-term bitcoin and cryptocurrency investors and supporters were hounded by distant family members and acquaintances who wanted to jump on the bitcoin gravy train.

Now, following a significant pull back in the bitcoin price over the last two years, many bitcoin bulls are hoping the next surge higher could be just around the corner.

If that surge ever comes, watch for interest from the likes of Buffettand if they want to get in, maybe it's time to get out.

Read more here:
If Billionaire Investor Warren Buffett Ever Buys Bitcoin You Should Probably Sell - Forbes

Stocks have seen two days of steep losses amid concerning new reports about the spread of coronavirus to countries like Italy, Iran, South Korea and Switzerland. The Dow Jones Industrial Average (^DJI) fell by more than 1,000 points on Monday, its worst day in two years. On Tuesday, stocks fell again, for two-day losses of more than 1,800 points.

Bitcoin and other cryptocurrencies had a brutal two days as well, calling into question a popular pitch some crypto believers push: that cryptocurrencies are a safe haven, an asset class that offers stability and wealth preservation during periods of heightened uncertainty and market volatility.

Amid the rout in equities on Monday afternoon, bitcoin (BTC) was down by more than 3%, ether (ETH) was down 3%, XRP was down 5% and bitcoin cash (BCH) was down by nearly 7%, creating a sea of salmon-pink on our Yahoo Finance cryptocurrency heatmap, which displays the entire crypto market as a series of color-coded boxes, with the color reflecting each coins movement in the past 24 hours and the box size representing each coins market cap.

On Tuesday, coins fell again, with bitcoin down more than 3% and ether, XRP, and bitcoin cash each down by nearly 6%.

Yahoo Finance crypto heatmap as of 4:30pm EST on Feb. 25, 2020, at the time of the stock market closing bell. (Cryptocurrency markets never close.)

Of course, two down days do not make or break a market trend theory, and bitcoin believers argue that bitcoin has proven itself as a store of value over the longer run.

Even after Monday and Tuesday, bitcoin is up 34% in 2020 so far, and it is up 640% in the last three years. Bitcoin skeptics, on the other hand, will always compare the asset to its all-time-high of nearly $20,000 at the end of 2017, a level it has not neared since.

The coronavirus is exactly the kind of health crisis that should, in theory, boost the value of bitcoin and cryptocurrencies. In the past, bitcoin has risen during bank crises in countries like Greece, a sign that people without access to the banking system do see it as an alternative option.

Even before coronavirus, news out of China was already a major driver of cryptocurrency trends in the past six months as Xi Jinping has made clear his aim for China to develop a state-backed cryptocurrency, something that Facebook CEO Mark Zuckerberg has warned about and that even Fed Chair Jay Powell has been watching.

SHANXI, CHINA - FEBRUARY 24: (CHINA MAINLAND OUT)The bank workers sanitize the cash to kill the novel coronavirus on 24th February, 2020 in Taiyuan,Shanxi,China.(Photo by TPG/Getty Images)

Bitcoin is often called digital gold, but the price of gold rose this week while stocks and bitcoin fell. It might be most correct to conclude from the last two days that crypto looks uncorrelated to equities, but the jury is still out on whether it is a safe haven asset.

This is still a very nascent, volatile asset class, says Frank Chapparo of bitcoin news site The Block. If Im an investor and I want predictability in my portfolio, Im not going to be outsized allocating to bitcoin and other digital assets. Now, that doesnt mean that this narrative of bitcoin being a hedge against global economic insecurity or political insecurity [is wrong]. Thats still something that could play out over the next ten, fifteen, twenty years.

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Bitcoin tumbles along with stocks amid coronavirus, questioning 'safe haven' theory - Yahoo Finance