Don't look now, but the 10 year treasury just hit 4.02%. Thats what, 35bps since the fed "cut" rates. 
*Investors Blog*
- Thread starter Warstud
- Start date
Yes, the ETF is separate from the underlying. The dealer cannot hold the coins during the create or redeem, according to the prospectus. An unaffiliated third party has to hold the coins. The etf is no different than any other etf based upon an underlying that may or may not be a security.
Hey mate, I'd refer you back to my original post. Notice my heavy use of quotes:
"Legitimate institutions are now holders of crypto or crypto derivatives, and those institutions are very much "backed" by the Federal Reserve, indirectly or otherwise. Ergo, some coins are definitely "backed" by the Fed. Maybe not literally, directly or explicitly, but not trivially either. Hence why I said "not entirely true"."
Nobody said bitcoin was explicitly FDIC insured. However, the big banks and proprietary arms of various institutional gatekeepers of our financial system are now players in the crypto space. It's been legitimized and is here to stay, for better or for worse. Look no further than FDIC insurance kicking in to bailout SVB crypto contagion as just one example of probably many more to come. In fact I suspect the bank failures are just starting.
Cheers.
Edit: The SIPC thing is interesting isn't it. SIPC has never protected against the decline in value of your securities, crypto or otherwise.
Edit 2: I should clarify but I thought it was just obvious that no, if you go buy crypto of sorts, the Federal Reserve isn't going to explicitly bail you out. That only works for the TBTF institutions. But I think people can safely make proxy investments via ETF's at this point as it's here to stay and the banks want their cut.
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Believe what you will. There is no direct or indirect guarantee. Trying to be helpful here but some folks don’t like being told. Have a good day.
No worries mate. This whole discussion stemmed from my response to your post:
"Further, keep in mind that no digital coin has a central bank standing behind it to make markets in a panic"
I maintain that this isn't **entirely** true, for the reasons I outlined and for many more, including the fact that you can be sure the Fed will bail out the stock market in a panic, and these days crypto and stocks are very directly correlated. Will the Fed directly make markets in bitcoin on Coinbase? Of course not. Would Citadel? Of course.
QE tends to find its way into the crypto space. The market cap is still so very very small with tons of room to grow. In fact it's only a small fraction of the total market cap of gold for example. I think at present it's like a couple trillion in crypto vs $15 trillion or more in gold. ERC20 tokens will definitely be the beneficiaries of any further Fed printing and debt monetization.
So there really is an implied underwriting of some of the more established crypto protocols I think.
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Whatever lets you sleep at night. As I said, some folks don’t like being told certain things. Take care.
No worries! Folks should definitely make whatever investment decisions are best for them. My old man refuses to ever invest in crypto. He's a baby boomer and like most, missed the boat and just can't let it go.
I actually agree with you 100% but am comfortable with avoiding crypto as an asset class. I do not believe people understand the custodial risks.
Well that's a separate discussion. Which custodial risks are you referring to? The complexity of owning crypto in cold storage?
That's why the recent spot Bitcoin ETF's are so popular. They invest directly in bitcoins as the underlying asset so you don't have to.
Gee, another record close? Who'da thunk it.
JP Morgan calls it: A Soft Landing
Dow jumps 400 points to a record on Friday, S&P 500 closes above 5,800 for the first time:
JP Morgan calls it: A Soft Landing
I thought soft landing was 2% inflation. If inflation is going back up, wouldn't that be no landing - aka inflation is persistent?
Here's the general definition of a soft landing.
I think we can agree, it's good news. And not what a lotta prognosticators have been prognosticating.
I am just trying to understand the definition of this talking head term "soft landing". If your going to have a meaningful discussion, you need to know the definitions.
I thought "soft landing" meant low inflation without significant job loss / or going into recession. Were nowhere near 2% inflation, and unemployment does seem to be increasing - at least if you actually look at the QECW - which is an actual report not survey.
Either way I am still not sure you can go into recession with fiscal policy printing 7% GDP. Perhaps they will prove me wrong. I doubt it - they will print 20% if need be.
But don't worry. I am completely invested in equities - because I am in on the joke, not because I think Costco deserves a 50X P/E.
Stock market is not a great forward indicator. It has done well right up into a recession, it has collapsed with no recession, and all points in between. Equities go up when there is excess liquidity - ie more buyers than sellers. With 54% of large caps indexed, and the rest of the world sending there liquidity here, it could continue going up for a very long time irrelevant of what the real economy does.
The other reality is the government can not afford for the market to collapse. A market collapse would mean a huge decline in tax revenue since so much of it comes from capital gains taxes.
My bet is it continues up - but that doesn't mean the real economy is doing great.
It's more of a forward looking indicator of the economy than not. If the economy forward look is dismal and the economy isn't dong well in real time, the stock markets are not going to keep going up and breaking all time record highs over and over. This is what I'm talking about. Note the info in the red box. It takes major chaos (ie, Great Depression, WW2, chaos in the 1990s and the pandemic) to cause the actual economy to not correlate very well to the stock market.
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Agree 100 percent. The stock market is going up because the returns on real money are effectively zero after inflation, or negative, have been that was since the GFC, and must remain that way given that our politicians treat our currency like Monopoly money. This is why you see assets like digital coins going up too, but unlike stocks which at least have cash generating businesses supporting them, even if the valuations are high, the coins are effectively Dutch tulips, unless you are a member of a junta running a rogue state like Iran, North Korea, Russia, etc. or perhaps a terrorist group like Hamas - then they are indispensable tools to avoid terrorist financing and AML requirements. (Last year the WSJ reported that Hamas and Hezbollah used bitcoin to receive financing from Iran and other sponsors, and then used that money to fund the slaughter of innocent people and cause a war.). The digital ledger technology underlying the coins will prove useful in time in my view.
It actually is not. Yes once in recession the market goes down. But it predicts nothing early, which is supposedly the definition of "forward looking"
The GFC recession started in December 2007 - according to the NBER, but the market didn't really sell off until the Lehman moment, in September 2008, 3 quarters late. They had ample warning - like Bear Stearns in March.
The 2000 recession started Q1 2000, but the .com bubble burst not until March, so already in recession.
It goes on and on - I think I have posted the data here somewhere at some point.
Fed economists themselves have researched this and found no correlation. https://fredblog.stlouisfed.org/201..._term=related_resources&utm_campaign=fredblog
I am not giving anyone advice, however since the above is true, it simply shows that the stock market does not predict anything. So fading the stock market in "anticipation" of recession would seemingly be a bad idea even if your recession prediction ended up being correct.
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I think you're missing the forrest for the trees. Sure, very specific goals for inflation and unemployment are given for a soft landing which we may or may not get to, but close can be close enough. If the goal is 2% inflation and we're at 2.5%, ok, not at the goal but it's not 10% either. I think a simpler definition is we aren't in an all out recession and that's the idea behind the soft landing concept. Can this change? Sure, if unemployment continues to go up and inflation continues to go up but what if it's not an issue for 2-5 years? Is that not just a new economic cycle? Would you then say the current cycle wasn't a soft landing?I am just trying to understand the definition of this talking head term "soft landing". If your going to have a meaningful discussion, you need to know the definitions.
I thought "soft landing" meant low inflation without significant job loss / or going into recession. Were nowhere near 2% inflation, and unemployment does seem to be increasing - at least if you actually look at the QECW - which is an actual report not survey.
Either way I am still not sure you can go into recession with fiscal policy printing 7% GDP. Perhaps they will prove me wrong. I doubt it - they will print 20% if need be.
But don't worry. I am completely invested in equities - because I am in on the joke, not because I think Costco deserves a 50X P/E.
My point is today looks much better than most anticipated but next month, year, 2 years from now who knows?
So the definition is were better off today than we expected to be at this instant in time? Sounds like a political slogan not a economic definition - Are you better off now than you were a year ago?
I don't really care what we call it. But if were going to be at 2% inflation and low unemployment, then I am going to lock in my 60/40 portfolio with maybe a little international now and go fishing.
Headline inflation is at 2.5% only because petroleum is down 15% over the last year, and core is still 3.5% and rising, and only that low because decrease in new and used cars (because no one can afford them). So, oil likely isn't going up, but likely not down either (unless global growth slows more), and anything resembling a service keeps going up due to increasing wages. So if corporate margins are compressed they will stop hiring (already have). This sounds a lot different investor wise than what the "soft landing" was previously advertised to be.
If in a year from now inflation is 3.5% and unemployment is 5%, then I am going to want to fade bonds and be overweight stocks, gold and maybe bitcoin if your so inclined.
So the definition matters a lot to investors. .
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