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

    IOTA Takes Step Towards Decentralized Network

    This article by Sead Fadilpašić for cryptonews.com may be of interest to subscribers. Here is a section:

    IOTA is continuing its path towards the so-called 'Coordicide' - the death (that is, the removal) of the Coordinator, which is a node run by the IOTA Foundation for network protection and transaction confirmation. The goal of this act is to make the network decentralized.

    In order to "solve blockchain’s biggest issues with scalability and decentralization," as the Foundation said in their announcement, they are launching the first testnet of the decentralized network. It is a new protocol called Pollen.

    Pollen's goal is to enable the community, researchers and developers to "test and validate the concepts of IOTA 2.0, which will serve as IOTA’s Coordinator-free network," the press release said. People can now test and work independently on the components such as rate-limiting, Mana (reputation-based system), and Fast Probabilistic Consensus (new consensus algorithm that doesn't need the centralized Coordinator).

    "IOTA has spent the last year researching a solution that will ultimately replace its current network in the first half of 2021," they said.

    Whether the Coordinator will indeed be killed in the first months of 2021 is "always hard to say," Dan Simerman, Head of Financial Relations at the IOTA Foundation, told Cryptonews.com. "Right now IOTA's actually ahead of schedule, so it’s very well possible it could be sooner. But, IOTA always like to be safe and ensure things are at their best."

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    Growth of Working-Age Adults Hasn't Kept Up With Graying America

    This article by Alex Tanzi for Bloomberg may be of interest to subscribers. Here is a section:

    The aging population is pushing up the insolvency dates of the major trust funds that many seniors reply on. The CRFB now sees the Medicare Hospital Insurance trust fund going bust by 2023, and the combined Social Security trust funds depleted by 2031.

    Almost 13 million Americans are older than 80, and the number of centenarians almost doubled from 2010 to more than 100,000 last year, according to the data.

    The aging of America and low births mean that the U.S. dependency ratio has increased. The ratio looks at the size of the population younger than 15 (60,570,846 in 2019) and the 65-and-older population (54,058,263) and how their combined size compares to the population age 15 to 64 (213,610,414).

    In 2019, the dependency ratio showed that for every 100 people of working age, there were almost 54 other Americans potentially needing support.
     

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    Email of the day - on island reversals

    Looking at the daily charts of the Dow Jones and S&P there appears to be potential "island reversals". Do these "islands" carry much weight in charting terms?

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    The 'Fed story' will win out over second wave and election fears, UBS says. It's time for investors to get off the sidelines

    Thanks to a subscriber for this article by Callum Keown for MarketWatch. Here is a section:

    The analysts, led by chief investment officer Mark Haefele, said three narratives were currently driving markets; the ‘Fed story’ — ongoing central bank stimulus — the second-wave story, and the U.S. election story. Fears of a second coronavirus wave have come to the fore in recent days, with spikes in Beijing, Germany and a number of U.S. states. The UBS team said that U.S.-China tensions fed into the election narrative, which would come into focus over the next four months.

    “Overall we see the second-wave and U.S. election stories as contributing to market volatility as headlines feed investors’ hopes and fears about the speed and strength of the economic recovery. But it is the Fed story that will endure over the medium term,” they said in a note on Monday. They said they were positive on the outlook for both equities and credit, preferring USD high yield, Asian high yield and USD-denominated emerging market sovereign bonds as well as stocks in sectors that have so far lagged behind the market.

    “Against this backdrop, we think the most important thing an investor can do is to be invested, rather than sitting on the sidelines. As earnings are likely to recover in the second half of the year and excess liquidity continues to support risk assets, we see further upside potential in global equities, in particular among sectors that have lagged the rally so far,” they added.

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    The New Weapon in the Covid-19 War

    This article by Michael Lewis for Bloomberg may be of interest to subscribers. Here is a section:

    Back in 2003, when the original SARS virus started killing people in Hong Kong at a frightening rate, DeRisi sequenced its genome. But the process was too slow and expensive to be of practical use. “It’s 50,000-fold cheaper now than it was for SARS,” he told me. “What cost me $10,000 to do in 2001 now costs a penny.” And so we might now test for the virus in a way that gives us a picture that you can’t get from more conventional random sampling. Explore how the virus works in one neighborhood and you can apply what you learn to others. “Our state government should be doing this,” said DeRisi. “It should be asking: What are our social relationships and which ones lead to the transmission of disease? That’s what you would do in a rational society.”

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    The Anatomy of a Rally

    Thanks to a subscriber for this memo by Howard Marks for Oaktree which may be of interest. Here is a section:

    Questions like these can’t tell us for a fact whether an advance has been reasonable and current asset prices are justified. Buy they can assist in that assessment. They lead me to conclude that the powerful rally we’ve seen has been built on optimism; has incorporated positive expectation and overlooked potential negative; and has bene driven largely by the Fed’s injections of liquidity and the Treasury’s stimulus payments, which investors assume will bridge to a fundamental recovery and be free from highly negative second-order consequences.

    A bounce from the depressed levels of late March was warranted at some point, but it came surprisingly early and quickly went incredibly far. The S&P500 closed last night at 3,133, down only 8% from an all-time high struck in troubled-free times. As such, it seems to me that the potential for further gains from things turning out better than expected or valuations continuing to expand doesn’t fully compensate for the risk of decline from events disappointing or multiples contracting.

    In other words, the fundamental outlook may be positive on balance, but with listed security process where that are, the odds aren’t in investors’ favor.

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    Daily Observations

    Thanks to a subscriber for this note from Bridgewater which includes a number of interesting discussion points on the outlook for stock market returns over coming months. Here is a section:

    More early data revealed from landmark CRISPR gene editing human trial

    This article by Rich Haridy for NewAtlas may be of interest to subscribers. Here is a section:

    The very first patient treated with CTX001 is now at a 15-month follow-up point, and the data suggests the therapy is still efficacious with no long-term complications detected. Nine months on from treatment the first sickle cell disease patient is also displaying promising results, free of any sickle cell-related adverse events.

    “In my 25 years of caring for children and young adults facing both sickle cell disease and beta thalassemia, I have seen how these diseases can adversely affect patients’ lives in very significant ways,” says Haydar Frangoul, from the Sarah Cannon Research Institute. “I am encouraged by the preliminary results, which demonstrate, in essence, a functional cure for patients with beta thalassemia and sickle cell disease.”

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    Consolidation happens fast

    Thanks to a subscriber for this report by Tony Dwyer for Canaccord which may be of interest. Here is a section:

    Amazon Faces a Sharp Challenge from Walmart and Shopify

    This article by Tae Kim for Bloomberg may be of interest to subscribers. Here is a section:

    The announcement adds another major player to Shopify’s growing alliance against Amazon.com Inc.’s e-commerce dominance. Last month, I wrote how Shopify CEO Tobi Lutke has often said his company’s goal was to “arm the rebels” against the Amazon empire. The Walmart deal comes just weeks after Shopify signed a partnership with Facebook Inc. that allows Shopify’s merchants to sell on the social-media giant’s platforms under the newly launched Facebook Shops initiative. Before these moves, the aggregated online sales of Shopify’s U.S. customer base already ranked as the second-largest in the country after Amazon, according to the company. And now with Walmart on board and the expanded deal with Facebook, they mark significant steps to expand Shopify’s eco-system, making its platform a more viable and an attractive alternative to sellers.

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