David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Coinbase Is Largest Dollar Bitcoin Exchange

    This note from Bloomberg may be of interest.

    Coinbase is the largest market globally for trading Bitcoin in US dollars, according to multiple sources including CoinMarketCap, which may make it a market of significant size in the SEC's eyes. The largest Bitcoin trading markets are currently on Binance, but both are stablecoin pairs with Tether (USDT) and TrueUSD (TUSD). Coinbase's USD trading pair is third and at least 3x as large and liquid as No. 2 USD exchange Kraken. Coinbase also has multiple other Bitcoin pairs in the top 50, including USDT, EUR, ETH and GBP.

    Combining the assumed Coinbase surveillance sharing agreement (SSA) with the regulated CME Bitcoin futures market might constitute oversight in an aggregate market of significant size. This is before adding potential other SSAs with spot exchanges such as Gemini.

    Read entire article

    London Water Crisis Exposes 'Broken Britain' Danger for Sunak

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Thames Water sits at the center of decades of struggles over the size of the British state. The water industry was privatized in the late 1980s under then-Prime Minister Margaret Thatcher, who remains idolized by the Tory right-wing for her efforts to shrink the public sector.  

    Yet taking utilities out of state hands remains controversial, especially now that people can see the leaking pipes and sewage flows themselves. Complaints have been fanned by dividends paid by service providers alongside reports that underinvestment is contributing to problems.

    Voters are “fed up to the back teeth with this company that not only pumps sewage into our precious River Thames, but also we’ve seen sewage flooding our streets in recent times of heavy rainfall,” Munira Wilson, the Liberal Democrat MP for Twickenham in southwest London, told Parliament. “This is indicative of underinvestment by the company in fixing leaks, and being stripped to the bare bones while lining the pockets of executives.”. 

    Read entire article

    Brazil Central Bank Signals Rate Cut as Lula Piles Pressure

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Latin America’s largest economy is showing mixed signals, with stronger agriculture production while other sectors grow modestly, policymakers wrote in their minutes. With more resilient activity, central bankers raised their estimates for neutral rates, which neither stimulate nor restrict the economy, to 4.5% from 4% previously. 

    “They are opening the door slowly, cautiously, given the uncertainty that remains around inflation targets,” said Cristiano Oliveira, chief economist at Banco Pine. “If current 3% goals are kept unchanged, rate cuts will begin in August.” 

    Investors are awaiting a decision on long-term inflation targets later this week, when Campos Neto, Haddad and Tebet will meet to set the goal for 2026. 

    “Decisions that induce the reanchoring of expectations and that raise confidence in inflation targets would contribute to a faster and less costly disinflation process, allowing monetary easing,” central bankers wrote in their minutes. 

    Lula’s first two picks for the bank’s board are likely to participate in August’s rate decision meeting, with former deputy Finance Minister Gabriel Galipolo seen as an advocate for lower borrowing costs.

    Read entire article

    Australia's Budget Surplus Swells on Jobs, Exports Strength

    This article from Bloomberg may be of interest. Here is a section: 

    The budget surplus, Australia’s first since just before the 2008 global financial crisis derailed the nation’s finances, comes as Chalmers faces pressure to tighten spending further to slow inflation. 

    And

    A survey by JWS Research published in the Australian Financial Review on Tuesday found 75% of those surveyed said cost-of-living was a major issue the government needed to address, ranking its performance to date as below par.

    Chalmers reiterated that he expects Australia’s economy will slow significantly in the coming year as higher borrowing costs drag on activity. The RBA forecasts inflation will only return to the top of its target in two years’ time.

    Read entire article

    Nvidia Leads Chip Selloff After Report on US Tightening AI Curbs

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    Nvidia this year designed less-capable chips that fall under thresholds that require a license from the Commerce Department before export to China or other countries of concern.

    Washington is now weighing action as soon as next month to expand the curbs to include those lower-powered semiconductors, the Wall Street Journal reported, citing anonymous sources.

    Such a move underscores the Biden administration’s determination to contain China’s technological rise and could stoke tensions between the two countries. The US is increasingly concerned about Beijing’s technological ambitions, including around the use of AI in military and scientific advances that could tilt the geopolitical balance. 

    While that’s likely to hurt Nvidia’s and AMD’s business with the world’s No. 2 economy, the two chipmakers remain at the forefront of a surge in AI development that’s driving investment from the US to Europe and China. From Microsoft Corp. to Baidu Inc. and ChatGPT developer OpenAI, companies around the world are buying their products to train the next generation of artificial intelligence services.

    Read entire article

    Brookfield Trumps Buyout Titans With $50 Billion Deal Spree

    This article from Bloomberg may be of interest. Here is a section: 

    The investment firm also isn’t shying away from putting some of its assets on the block. It’s seeking more than £4 billion in a sale of UK holiday resort chain Center Parcs, according to people familiar with the matter. Brookfield is also exploring the sale of a stake in an iconic office tower in the heart of Dubai’s financial district, Bloomberg News reported this month. 

    Brookfield has been hunting for bigger deals after bringing in around $100 billion of fresh money across its various businesses over the past 12 months. It’s been actively raising money for property, infrastructure, private equity and credit strategies in a bid to boost its fee-bearing assets under management to $1 trillion. 

    Large investors are becoming more selective on which private equity funds they’ll back, and buyout firms can’t count just on cheap financing or revenue growth to deliver returns any more, according to Brookfield’s Ranjan. 

    “You have to generate those returns and create growth through operational improvements,” he said. “As an industry as a whole, we’re back to ‘roll up your sleeves’ private equity.”

    Read entire article

    Is It Time to Cancel the Recession Altogether?

    This article from Bloomberg may be of interest. Here is a section: 

    Yet the forecasting consensus still sees a 64% probability of recession in the next 12 months. They’re not giving up on the downturn thesis, just pushing it back.

    At some point during a long streak of consistently underestimating month-to-month data, shouldn’t we all reconsider whether economists’ overarching narrative may simply be wrong, not just early? For the past 15 months or so, economists and strategists have been obsessed with Federal Reserve history and the yield curve. The historical record, of course, showed that Fed increases and inverted yield curves tend to signal a recession not so far down the road, and that may have blinded some analysts to the signs of strength that were right in right in front of them.  

    Households and businesses emerged from the pandemic with strong cash balances and modest debt burdens that have made them extremely resilient to higher interest rates. The jump in mortgage rates cooled housing activity, but it didn’t sink prices because homeowners — many with mortgages below 3% that they were in a fine position to keep servicing — were in no rush to sell. Meanwhile, the job market remained strong thanks to a pent-up demand for labor that has continued to buoy US consumption. 

    Can this continue?
    If the pessimists have one thing working in their favor, it’s resilient core inflation and a Fed that’s determined — perhaps overly so — to bring it back to its 2% target. If you believe that demand is keeping inflation high (and there’s some evidence to that effect), then all of this economic strength will simply poke the bear (in this case Fed Chair Jerome Powell). Powell has the tools to break the economy’s back if he decides he wants to. But at the moment, the outlook looks remarkably sunny. And recent history has shown we should pay attention to the economic reality before us and not get overly fixated on history and hypotheticals.

    Read entire article

    Email of the day on AI and trading

    Now that AI is playing a major part in investment and trading plans, do you subscribe to this way of trading

    Read entire article