Currency
On Wednesday, the Banque de France (BdF), the BIS Innovation Hub (BISIH) and the Swiss National Bank (SNB) announced the success of a pilot run of a wholesale central bank digital currency (wCBDC), titled Project Jura. The project, which aimed to investigate cross‑border settlement with euro and Swiss franc wCBDCs, was launched on a third‑party distributed ledger technology platform.
The experimental technology explored in Project Jura consisted of a decentralized peer‑to‑peer network of computer nodes (Corda) to validate transactions while simultaneously ensuring that all legal, regulatory and business rules of governing nations are satisfied. Then, there was the tokenization of the aforementioned fiat currencies and the Negotiable European Commercial Paper, a short-term maturity (one year or less) debt instrument denominated in euros. Finally, Project Jura looked into infrastructure networks that enable real‑time gross settlement of transactions, bond digitization and a digital assets registry.
Although the trial was successful, it does not guarantee the issuance of a wCBDC by Swiss, French or European Union authorities. The report concluded that “wCBDCs could be incorporated into novel settlement arrangements that could change the structure and functioning of capital markets, money markets and foreign exchange markets,” saying that:
“Broadening the use of central bank money through wider access or increased cross‑border settlement could catalyse these changes, as could deeper integration of currencies with other digital assets and securities.”…read more.
This is an interview with Jon “Dr. J” Najarian. Jon was a linebacker for the Chicago Bears before he turned to trading on the Chicago Board Options Exchange. He then became a member of the CBOE, NYSE, CME and CBOT and worked as a floor trader for some 25 years.
Today, he is a professional investor that specializes in options. He is also a cast member of the “Halftime Report” and “Fast Money” shows on CNBC. Jon and his brother Pete invest in and work with start-ups via Rebellion Partners, a venture consulting firm they launched in 2015.
In 2016 Jon and Pete co-founded Market Rebellion, a company focused on educating the individual investor.
Q: Hi Jon, thanks for taking the time to answer some questions for my Fringe Finance readers. Right off the bat – I have been asking this question of everyone I interview and want your perspective on what the biggest threat facing the market is right now, and why?
I think the biggest threat is that the Fed knows the inflation genie is out of the bottle and that they have this Sophie’s choice of which to address; inflation by raising rates, or a stagnating economy and new [Covid] variant.
I’m not as worried about Iran, Russia or China as I am about how the Fed deals with inflation and the economy. A fast rise in rates will absolutely kneecap the economy and take the stock market with it.
Have you and your brother ever considered crypto to be a multi trillion trojan horse that could cause systemic problems? When China exits the crypto market, could it be because they are worried about a crash – or do you think it’s just so it doesn’t compete with the digital yuan?
I know you’re not a big crypto fan Chris, but I truly believe that fiat currencies need the discipline of a legitimate competitor. Not a competitor in transactions, although that is coming, but a competitor in a store of value.
The main reason Bitcoin was created was that someone or some group (Satoshi Nakamoto) saw that governments were taking advantage of their printing presses and [their] ability to create more money out of thin air.
As crypto hovers near $3 trillion in market cap, I believe we are close to creating that true competitor to the dollar. If we have failures of repaying of debt and or other monetary issues, people, especially young people will get deeper into crypto. Could that end badly? Sure. But I think crypto has the potential to discipline central bankers.
What stocks would you avoid at all costs right now?
Sadly, much as I love our meme stock brethren, I think the GameStops and AMCs are dead money. I think they are the modern equivalent of the emperor’s new clothes.
I asked this to a respected trader last week and want your take. Listening to the Cathie Woods of the world, I have to wonder: is it truly “different” this time? Meaning, will we normalize at these PE ratios and this balance of growth vs. value? Or will PEs eventually crash back under 10 and will value be a virtue again?
I think it will be a while before we see normalized PEs. I think stuff like the metaverse will keep this party going a while longer. Perhaps a year or more. But past that, yes I think we need an adjustment back to normalcy.
You guys are options experts. What do you make of the option volume and activity in Tesla?
I think we’re both surprised by the volatile moves TSLA makes on a weekly basis. The costs of the calls and puts is among the highest among active options, as it is not uncommon to see a call or put that is trading $15 or $20 trade 20,000 or 30,000 contracts. That’s a ton of volume for a stock 1/10th the price of TSLA’s $1100.
I guess overall the reason we see so much activity is that so few people cannot afford to buy shares, so they have one choice: trade options.
Just like that other Wall Street adage, TINA , there is no alternative.
Do you think options are being weaponized to create gamma squeezes in the NASDAQ? Why or why not? And if so, what consequences could there be for this?
I think options have always been used by shrewd traders to “bully” stocks up or down.
We witnessed this in the infamous Herbalife fight between Carl Icahn and Bill Ackman. Carl didn’t have a dog in the hunt, but when he saw that Ackman was short big in HLF, he bought OTC calls and paid for them by selling OTC puts in HLF. That effectively put the squeeze on Ackman and any shorts that had joined him.
So I do think people on Reddit or Twitter could gang up, buy a bunch of calls and like GameStop (GME), never sell them. and thus, very effectively squeeze shorts like Melvin Capital.
What sectors interest you the most for long-term investments from this point, whether or not we wind up having a pullback. Is there anything cheap anymore?
I think given all the hype and dollars chasing the EV space that the best opportunities are in components for lithium ion batteries. Full disclosure, I am long one of my favorite names in the space; American Battery Tech (ABML). They recycle lithium and repurpose the lithium, cobalt and nickel from used batteries and do so without the brute force and heat that China uses to accomplish this. I also like ALB, LAC and PLL as plays to be in the cat bird’s seat for the massive demand for lithium.
How do you feel about the strength of the USD and confidence in treasuries currently?
I think the dollar actually gets stronger, not weaker over time.
The reasons are that the European Union is in worse shape, China is likely to flex more, meaning they will push things in Taiwan pretty close, but not to the point of war, which will likely make investors nervous and that nervousness [will push] them into the dollar.
Does the Fed and the Biden administration have a handle on the inflation problem? Why or why not?
That’s the easiest question of all. NO!
The administration has cut pipelines like they did with XL Pipeline and then they wonder why oil producers are not producing as much? It’s crazy how the administration doesn’t recognize cause and effect. You cut leases for oil and gas, you reduce transport (pipelines) and you wonder why our prices spike? I wonder how these people even tie their shoes.
Thanks Jon.
https://www.zerohedge.com/markets/crypto-could-become-true-competitor-us-dollar-jon-najarian
California is by far the most ambitious U.S. state when it comes to things like emission standards, EV sales, and renewable energy. California is shutting down its nuclear power plants to double down on wind and solar.
It is also importing more oil from the Amazon rainforest than any country in the world.
Ecuador accounted for a little over 24 percent of California’s oil imports as of 2020. That equaled 55,219 barrels daily, according to the California Energy Commission. Interestingly, this is a substantial increase from the previous year, when Ecuador accounted for 18.22 percent of California’s oil imports, and from the year before, when Ecuador accounted for 14 percent.
This oil from Ecuador, according to a recent investigation by NBC News, comes from the Amazon rainforest—an area that is the target of massive conservation efforts and yet remains one of the most exploited parts of the world because of its natural resource wealth.
Ecuador is home to the Yasuni National Park, which contains some of the most diverse ecosystems globally, including two uncontacted indigenous tribes. For these tribes, the government even approved a so-called Intangible Zone—a border not to be crossed in order to protect these tribes. But that was before 2019. Two years ago, the government of Ecuador approved a plan to open up Yasuni National Park to oil and gas drilling…read more.
The following was authored by members of the Gidimt’en Clan and released by Wet’suwet’en First Nation council at their request.
We are members of the Gidimt’en Clan of the Wet’suwet’en Nation, together with extended family members from other Wet’suwet’en house groups and communities, both on- and off-reserve. Our clan territories include the area where the Coastal GasLink pipeline crosses the river we call Wedzin Kwa. We are deeply hurt and angered by the conduct and statements of some of our community members and others who claim to be defending our lands and laws against the pipeline.
Our concerns are not about the pipeline itself. Some of us support it, some of us do not and some are neutral. Our issue is that our traditions and way of life are being misrepresented and dishonoured by a small group of protesters, many of whom are neither Gidimt’en nor Wet’suwet’en, but nonetheless claim to be acting in our name to protest natural gas development. On Nov. 20 and 21, we convened a virtual meeting to discuss these issues and the recent RCMP raid that was carried out on our ancestral lands.
The first thing to understand is that the collective rights of the Wet’suwet’en people to use the land and resources within Wet’suwet’en territory have for hundreds of years been managed through a system of five family based clans led by a hierarchy of leaders who hold hereditary names that have existed since time immemorial. These names are connected to specific areas within our territorial lands, called “nowh yintah,” and have been handed down for generations in a complex governing system we call “Bahlats,” or “the feast hall.”
The names and the powers of those who hold them are conferred on the basis of merit and recognition and, in our Wet’suwet’en law, follow hereditary lines. Traditionally, leaders are groomed for many years by those holding higher rank in the feast hall before progressing to greater responsibilities. Proper conduct and “wiggus” (respect) are among the many valuable lessons passed on during the grooming…read more.
Cryptocurrency exchange BitMart got hacked and lost millions of dollars.
Hackers have hit yet another cryptocurrency exchange, stealing between $150 million and $200 million in cryptocurrency.
BitMart, which bills itself as “the most trusted crypto trading platform,” announced on Monday that it had suffered a “large-scale” security breach. The company said hackers stole assets worth around $150 million in Ethereum and other cryptocurrencies.
“We are now conducting a thorough security review and we will post updates as we progress. At this moment, we are temporarily suspending withdrawals until further notice. We beg for your kind understanding and patience in this situation,” the company wrote in the announcement.
In the last week alone, hackers have stolen almost $300 million in cryptocurrency in two separate hacks: the recent attack suffered by BitMart, and last week’s web-based scam targeting blockchain “bridge” protocol BadgerDAO. This has been a really, really, bad year for cryptocurrency platforms and security, with much activity occurring in the fast-moving world of decentralized finance, or DeFi. According to one tally, 16 different crypto projects and companies have been hacked, including the crypto lending service C.R.E.A.M., which got exploited via a complex “flash loan” and lost $130 million, and the popular platform Poly Network, which lost and then recovered $600 million in a bizarre public exchange with the hacker, which the company called “Mr. White Hat.”…read more.
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