Don't look now, but the 10 year treasury just hit 4.02%. Thats what, 35bps since the fed "cut" rates.




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.Some ETF's do actually hold the coins. Some hold futures contracts. I think that is what you are inferring? Although letting wall street hold your bitcoin is an oxy moron, but I digress.
Hey mate, I'd refer you back to my original post. Notice my heavy use of quotes:The ETF is not the underlying security, it is a separate thing. If you read the prospectus for those products, the creations and redemptions cannot be done directly by the broker. This is different than a traditional etf where you can show up with the basket of the underlying and get the shares.
As far as the FDIC goes bitcoin is NOT insured. If the bank held it, like a wine collection, the FDIC will seize it as part of the estate to be liquidated or otherwise sold to recoup its costs. But like the wine collection, other assets are not insured. They are owned by the bank pre liquidation and the FDIC comes to possess and dispose of those assets as receiver. That is NOT insuranc. In SVB, the FDiC used its systemic risk exception to insure over the limit accounts because many of those accounts were corporate accounts that for instance held payroll money. The companies using SVB unfortunately did a poor job of managing their exposure to a single institution. More prudent firms, when they have over the limit cash, will either hold treasuries, engage in overnight treasury repo with the big institutional dealers or banks, or sweep it. Point is insuring only up to the limit with SVB would have had knock on effects, that was the argument. But the FDIC insured all the cash in the accounts, period. Similarly if the broker failed SIPC would return your security, the ETF. But if it was worthless because bitcoin had gone to zero or the custodian had the bitcoin stolen from it, you now have a worthless security that would be returned. SIPC is not insuring the bitcoin directly or the value of the bitcoin.
Again, I don’t want to tell people what to invest in. But crypto of any sort is generally not going to be directly held by a federally regulated or insured institution and it is not going to be insured. Go in with your eyes open in this respect.
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.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.
No worries mate. This whole discussion stemmed from my response to your post: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.
Whatever lets you sleep at night. As I said, some folks don’t like being told certain things. Take care.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 that fact that you can be sure the Fed will bail out the stock market, and these days crypto and stocks are very directly correlated.
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.
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.Whatever lets you sleep at night. As I said, some folks don’t like being told certain things. Take care.
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.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.
Well that's a separate discussion. Which custodial risks are you referring to? The complexity of owning crypto in cold storage?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.
I thought soft landing was 2% inflation. If inflation is going back up, wouldn't that be no landing - aka inflation is persistent?Gee, another record close? Who'da thunk it.
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
Here's the general definition of 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?
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.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.
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.If the stock market trend is always heading upwards breaking new records, then it's not because of a gloomy future outlook or major real time bad news situations.
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.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.
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.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 actually is not. Yes once in recession the market goes down. But it predicts nothing early, which is supposedly the definition of "forward looking"It's more of a forward looking indicator of the economy than not.
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.![]()
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 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?
My point is today looks much better than most anticipated but next month, year, 2 years from now who knows?