Category Archives: Intel

Why Are Big Banks Interested in Bitcoin?

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I was reading a Reuters piece on Bitcoin (which for the record I think is a combination of sci-fi fueled fantasy and scam ponzi scheme) when I saw this interesting revelation:

Workers at Morgan Stanley (MS.N) and Goldman Sachs (GS.N) in London and New York have been visiting online Bitcoin exchanges as often as 30 times a day, according to documents seen by Reuters. Neither bank wanted to comment.

Employees at almost all the major international banks and numerous trading and investment firms have shown interest.

Bitcoin has become the Wild West of finance, with a proliferation of websites offering loosely regulated replicas of the services familiar to those in the financial industry.

There is a Bitcoin stock exchange, where companies can make initial public offerings and pay dividends in Bitcoin.

One website offering Bitcoin options trading was ‘listed’ this month for an implied valuation of half a million dollars.

Perhaps the most notorious is Bitcoinica, a platform offering margin trading, short selling and stop orders run by 17-year-old Chinese high school student Zhou Tong.

Users can leverage their bets up to a ratio of 10:1 on Bitcoinica, meaning they can lose more than their initial investment.

Zhou Tong, who is professionally advised by a forex trader and the head of a Singapore-based algorithmic trading firm, now lends his name to international slang.

To be “Zhou Tonged” is to be wiped out financially.

The chorus of a YouTube rap laments a Bitcoin day trader rash enough to hold a position with no stop loss protection: “It’s so silly, how come you just lost funds? You got Zhou Tonged!”

Sounds like Bitcoin is seen as yet another way banks can keep themselves afloat using
“exotic financial instruments” to separate suckers from hard earned cash. I guarantee you people who got “Zhou Tonged” have to cover their losses in non-bitcoin.

Let’s be honest, Bitcoins are just another attempt by people to create “creds” they can trade on the “Matrix” ala 90s cult phenomenon Shadowrun. That franchise, (now devolved into an Earth First! inspired morality tale) still influences transhumanism, neo-primativism and the remnants of the cyberpunk culture today and with Bitcoin and other online currency movements you can see the influence just as clearly. It’s interesting to note that Bitcoins are often used on sites to make illegal purchases – like drugs and illegal firearms. This is a fad based on late 90s cyberpunk pretensions not a sound investment.

Which makes Morgan Stanly and Goldman Sachs looking into this troubling. Either they see the potential to rob more people in an effort to prop up institutions that should have been bankrupt long ago or they are even less astute with money than we assume. Either way if you deal with them or Bitcoin you should be worried.

Americans Facing Higher Canadian Oil Prices Thanks to Obama

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Canadian Prime Minister Stephen Harper is showing a lot of backbone and common sense in his reaction to the Obama administration giving the green hell for wanting to build an oil pipeline that would have created thousands of jobs and made us much less dependent on oil imports from our enemies. I wish we had leaders like this here:

WASHINGTON, D.C. — Even if President Barack Obama approved the controversial Keystone XL pipeline tomorrow, at least some Canadian oil would still flow to Asia, according to Prime Minister Stephen Harper.

In a public one-on-one interview here with Jane Harman, head of the Wilson Centre think-tank, Harper said Obama’s rejection of the controversial pipeline — even temporarily — stressed Canada’s need to find other buyers for oilsands crude.

And that wouldn’t change even if the president’s mind did.

“Look, the very fact that a ‘no’ could even be said underscores to our country that we must diversify our energy export markets,” Harper told Harman in front of a live audience of businesspeople, scholars, diplomats, and journalists.

“We cannot be, as a country, in a situation where our one and, in many cases, only energy partner could say no to our energy products. We just cannot be in that position.”

His wide-ranging question-and-answer at the influential non-partisan think-tank — which also touched on border security, trade, the Arctic and Syria among other topics — followed a meeting with Obama and Mexican President Felipe Calderon at the White House for the sixth North American Leaders’ Summit.

Harper also told Harman that Canada has been selling its oil to the United States at a discounted price.

So not only will America be able to buy less Canadian oil even if Keystone is eventually approved, the U.S. will also have to pay more for it because the market for oilsands crude will be more competitive.

“We have taken a significant price hit by virtue of the fact that we are a captive supplier and that just does not make sense in terms of the broader interests of the Canadian economy,” Harper said. “We’re still going to be a major supplier of the United States. It will be a long time, if ever, before the United States isn’t our number one export market, but for us the United States cannot be our only export market.

“That is not in our interest, either commercially or in terms of pricing.”

Obama is of course claiming that this is the fault of Republicans but the reality is he thought Canada would knuckle under and sit on billions of dollars of oil as a favor to Obama. Now China, an increasingly belligerent threat that is already a match for America in terms of military manpower and might, will have even more cheap oil to build their force projection capabilities. The liberals and greens in Hawaii and on the West Coast will get bombed first so i don’t really care.

But more expensive Canadian oil means food price will start climbing even faster in the future so factor that into your plans now. Store food.

h/t Hot Air

Meredith Whitney About to Say I Told You So

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When Meredith Whitney predicted a muni bond meltdown people said it couldn’t happen even though many of our city and state governments are broke. When it didn’t happen in the time frame Whitney predicted people decided she was full of it. But she’s about to have the last laugh:

A “tidal wave” of defaults in the municipal bond market is still building and will eventually hit the United States, says Wall Street analyst Meredith Whitney.

Many U.S. cities, towns and municipalities are insolvent but are treading along similar to how Greece did for years before officially defaulting.

In late 2010, Whitney told 60 Minutes that municipal defaults could run up into the hundreds of billions of dollars although that hasn’t happened. Maybe not officially, but insolvency is a deepening problem, and defaults are still on the way.

“You have Stockton (Calif.) that is on the brink of bankruptcy. You have five cities, including Detroit, which is on the brink of insolvency. It’s fascinating, because there’s been so much back-room political maneuvering to keep these cities from going bust,” Whitney tells CNBC, pointing out how California is trying to pass legislation to prevent municipalities from declaring bankruptcy.

“So there’s been every effort on the part of the states to prevent this tidal wave of defaults, which is going to happen sooner or later. It’s happening at an accelerating pace.”

Taxes are rising, social services are being cut and fiscal shortfalls will keep widening.

“They’re not called technical defaults. It took how long for Greece to become a technical default, so they’re insolvent, they’re not paying their bills,” says the founder of the Meredith Whitney Advisory Group.

“You’re either willing to see it or you’ll shut your eyes, and if people want to tell me, ‘Oh, I was wrong,’ because this hasn’t played out, stay tuned.”

Get ready for America to look like a giant Detroit.

 

WW III Watch: Russian “Anti-Terror” Troops Land in Syria

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Not of course to be confused drunken barbarians Russia sent into Georgia a few years ago specifically to spread terror. These Russian troops are anti-terror specialists which is convenient since Assad is saying he’s fighting terrorists.

Which is of course true since the insurgency is a Muslim Brotherhood/Al-Qaeda supported government overthrow. But Syria is a Baathist (National Socialist) dictatorship so either way the victor will be an enemy of the West. We should be staying out of this one and building up our forces for the inevitable world war that will start once the MB announces the formation of a new caliphate, but we’re apparently pursuing a policy that would require sending 300,000 troops in. Smart power!

From The Blotter:

A Russian military unit has arrived in Syria, according to Russian news reports, a development that a United Nations Security Council source told ABC News was “a bomb” certain to have serious repercussions.

Russia, one of President Bashar al-Assad’s strongest allies despite international condemnation of the government’s violent crackdown on the country’s uprising, has repeatedly blocked the United Nations Security Council’s attempts to halt the violence, accusing the U.S. and its allies of trying to start another war.

Now the Russian Black Sea fleet’s Iman tanker has arrived in the Syrian port of Tartus on the Mediterranean Sea with an anti-terror squad from the Russian Marines aboard according to the Interfax news agency. The Assad government has insisted it is fighting a terrorist insurgency. The Russian news reports did not elaborate on the Russian troops’ mission in Syria or if they are expected to leave the port.

[…]

RIA Novosti, a news outlet with strong ties to the Kremlin, trumpeted the news in a banner headline that appeared only on its Arabic language website. The Russian embassy to the U.S. and to the U.N. had no comment, saying they have “no particular information on” the arrival of a Russian anti-terrorism squad to Syria.

Moscow has long enjoyed a cozy relationship with the Assad regime, to which it sells billions of dollars of weapons. In return Russia has maintained a Navy base at Tartus, which gives it access to the Mediterranean.

Last week Russia’s Foreign Minister Sergei Lavrov said Russia had no plans to send troops to Syria.

[…]

Russia’s Defense Minister Anatoly Serdyukov denied reports that Russian special forces were operating inside Syria. He did say, however, that there are Russian military and technical advisors in the country.

U.S. State Department spokesperson Victoria Nuland said the U.S. government had not heard of the reports of Russian troops in Syria and declined to comment.

This is an escalation of the situation in the middle east. With Obama firmly in the corner of the Brotherhood/Al-Qaeda take over of the region it will be a matter of time before the “revolutionaries” ask America for support against the increasingly belligerent and imperialistic Russians. Then all hell will break loose.