News
Fake Gold, 83 Tons of It 2020-06-29 -
Careful out there, Simple Aristocrats! : "83 Tons Of Fake Gold Bars: Gold Market Rocked By Massive China Counterfeiting Scandal"
All that is about to change with the discovery of what may be one of the biggest gold counterfeiting scandal in recent history. [...] Well, apparently everything as at least some of 83 tons of gold bars used as loan collateral turned out to be nothing but gilded copper. That has left lenders holding the bag for the remaining 16 billion yuan of loans outstanding against the bogus bars. And as Caixin adds, the loans were covered by 30 billion yuan of property insurance policies issued by state insurer PICC Property and Casualty and various other smaller insurers. [...]
Meanwhile, Kingold defaulted on 1.8 billion yuan of loans from Dongguan Trust with an additional 1.6 billion yuan due in July. The 83 tons of purportedly pure gold stored in creditors’ coffers by Kingold as of June, backing the 16 billion yuan of loans, would be equivalent to 22% of China’s annual gold production and 4.2% of the state gold reserve as of 2019. In short, more than 4% of China's official gold reserves may be fake. And this assume that no other Chinese gold producers and jewelry makers are engaging in similar fraud (spoiler alert: they are.)
Google Doesn't Honor the Incognito Mode : Sued for 5 Billions USD 2020-06-18 -
From cnet (via the web archive) :
Google faces $5 billion lawsuit for tracking people in incognito mode [...]
"Google tracks and collects consumer browsing history and other web activity data no matter what safeguards consumers undertake to protect their data privacy," reads the complaint. The search giant surreptitiously collects data through Google Analytics, Google Ad Manager, website plug-ins and other applications, including mobile apps, according to the complaint.
Some options for de-google-ing yourself available here. From that list, we particularly like : the Tor Browser, PeerTube, NewPipe, Jitsi, Tutanota, GoAccess, Leaflet, and for fonts : Squirrel and Helper. Look them up when you get the chance. Looking forward to using those last font tools here as soon as possible.
(Canada) Government-controlled blockchain for citizen ID (with biometrics!) coming... 2020-06-17 -
This should end really well : government of Quebec (canadian province) to embark on a 5-year project to create a "government-controlled blockchain" (!!!) for a citizen ID (with biometrics!), everything included : banks, road rules violations, etc. In 2005, it wanted to create a complete digital health dossier for every citizen, to be released in 2010 for about 563 million CAD. Result : 2020, more than 2 billion, not done yet. Defund the State lunacy. Bullish Bitcoin.
Going To Hell in a Handbasket 2020-06-16 -
It's too much. At this point, one has to laugh. The Fed's money printer going Brrrrrrr, protests everywhere, historical monuments being destroyed, media censorship, "deplatforming", "cancel culture", a coronavirus second wave, trade wars, currency wars, etc, etc.
This will not end well. Luckily, we have Bitcoin. Defund the system. Stay humble, stack sats.
"When Rome is burning, history does not care which factions are more wrong. Zoom out, the solution does not lie within the Empire. Opt-out, exit, leave. Build and drive #Bitcoin adoption. Buy, hodl. That's the most effective thing you can do. And it's enough." - Adam Back
U.S. Senate Intel Chairman Learns about Privacy and Cellphones 2020-05-14 -
A Simple Aristocrat values his privacy. The US Senate Intelligence Committee Chairman might need to rethink the way he uses his smartphone. Backups on the "iCloud" are also not a very smart way to go.
(half-tongue-in-cheek) If even the Senate Intelligence Committee Chairman can't do a little insider trading, what is this world coming to??? Normally, those insider trading laws should apply to the plebs, not the elite. This is getting weirder by the day.
There is a silver lining : this FBI "overreach" red-pills everybody into understanding the perils of smartphone use and unencrypted communications and backups.
The seizure represents a significant escalation in the investigation into whether Burr violated a law preventing members of Congress from trading on insider information they have gleaned from their official work.
To obtain a search warrant, federal agents and prosecutors must persuade a judge they have probable cause to believe a crime has been committed. The law enforcement official said the Justice Department is examining Burr’s communications with his broker.
Such a warrant being served on a sitting U.S. senator would require approval from the highest ranks of the Justice Department and is a step that would not be taken lightly. Kerri Kupec, a Justice Department spokeswoman, declined to comment.
A second law enforcement official said FBI agents served a warrant in recent days on Apple to obtain information from Burr’s iCloud account and said agents used data obtained from the California-based company as part of the evidence used to obtain the warrant for the senator’s phone.
A Billionaire Here, a Billionaire There... 2020-05-13 -
A billionaire here, a billionaire there, eventually you're talking real money! Recently, we had Paul Tudor Jones seeing the light about Bitcoin. Billionaire Chamath Palihapitiya is also becoming even more vocal about his interest in Bitcoin.
The billionaire investor said in a tweet Monday night that "THE MARKET IS TOO DAMN HIGH.
[...] "Billionaire investor Chamath Palihapitiya said that there is "no doubt" the economy is disconnected from the stock and bond markets in a Tuesday morning interview with CNBC. "We have completely divorced the economy from the stock and the bond markets, and the Fed has been the principal agent of that obfuscation," he said. [...] the current stimulus measures only inflate asset prices, and that doesn't do anything to fix the economy." [...] Where should investors put their money in a deflationary supercycle? Bitcoin, according to Palihapitiya, who commented on recent news that Paul Tudor Jones is buying the cryptocurrency."Now all of a sudden even [Paul Tudor Jones] is looking at bitcoin and the reason is because we are in this massive deflationary cycle. I still struggle to find anything that is as uncorrelated to anything and to everything else than bitcoin," Palihapitiya said.
The 'Rona', the Lockdowns, the Deficits and the Money Printing. 2020-05-09 -
Even this humble Simple Baron has been quite surprised by the magnitude and speed of governments' reactions to the Rona. Where do we go from here? The Permanent Traveler idealogy will probably have to reinvent itself. Quite a few restaurant and bar owners too. Quite a few hundred million people too. The Rona's asymptomatic carriers, reinfection and reactivation capacity can really mess up your day. The liberty you thought you had by law, constitution and natural birthright as a human being? Some seem to disagree. But let's look at the bright side of this situation : governments are red-pilling entire populations. Contradictory advice from one day to the next. "Reputable" sources contradicting each other daily. Blatant censorship by all social media companies. Unsurmountable deficits and debts (corporate, governmental, individual...). Unlimited money printing. Red pills all around. Let's learn to enjoy this mess. Good will come out of this. Breathe and take in the enormity of what is currently going on. Then come back to earth, hug the ones you can, keep in virtual touch with the others, remind yourself "this too shall pass", stay humble, plant carrots if you can and "stack sats" (shoutout to Matt Odell).
The Fed Quietly Bailing Out Hedge Funds2020-01-22 -
A fascinating explanation of the current mess created by the Fed :
How is that relevant to clearinghouses… thus hedge funds… thus repo… thus liquidity… thus the Fed…. thus QE4? Clark explains:
In 2019 there were many signs that the Japanese were perhaps beginning to step away from US debt markets, which made me very bearish. Yet US corporate debt continued to trade very well, which ultimately was the main support for US markets. As I looked more and more closely at clearinghouses, I realised the way they priced risk, and the provided leverage through compression, meant they were the grease that kept the US debt markets operating, and in fact kept spreads much tighter than they should be.This brings us to the punchline, namely the reason why clearinghouses have emerged as the weakest link in the Frankenstein monster of a market that the Fed has created over the past decade, and why the Fed is, quietly, preparing to backstop hedge funds and clearinghouses themselves during the next crisis. Or rather 944 trillion reasons. Here is Clark's conclusion:
Regulators, clearinghouses and central banks have published notes saying that clearinghouses are safe and the problems in the Swedish exchange in 2018 were due to one rogue trader. But when the biggest clients of the clearinghouses, banks, say there is a problem, then I suspect they are right. I spent the Christmas period trying to prove that compression is dangerous, and the best nugget I could come from was from the biggest interest rate clearinghouse in the world, LCH.
In a pamphlet on their website, pushing the benefits of “Compression with Swap Clear”, in the 12 months to October 2019, LCH did a record 944 trillion USD (11x world GDP) of compression. LCH also provide an estimate of the amount of capital this saved members (i.e. banks) under Basel III, a princely 37 million USD. To restate, USD 944 trillion of compression, yielded the banks USD 37 million of regulatory capital saving.Which leads to the 944 trillion dollar question asked by the Horseman CIO: “If the banks are not benefitting, who is?”
His answer:
“Leverage funds with huge interest rate derivative positions. And who is on the hook if they blow up? The big banks who are on the other side of the trade, as they would be forced to recapitalise the clearinghouses.”In other words, if enough liquidity is drained, mutual assured destruction between funds and banks will almost instantly follow. And since banks are now aware of the risk and are trying to reduce their exposure, it is very hard if not impossible to see how this can be unwound “without triggering all the other bad financial structures and malinvestment that QE has produced.”
It also explains why the Fed had to get involved, if under the guise of saving the repo market, when in reality the Fed was once again bailing out the banks and levered funds that are facing trillions of dollars in losses should one clearinghouse go under, as the cascade of resulting events would lead to a domino effect where one counterparty after another failed, and one clearinghouse after another has to be bailed out, initially by banks, and ultimately by the Fed.
Lagarde : "We Should Be Happier To Have A Job Than To Have Savings"2020-01-19 -
There you have it folks. You don't need your savings (according to the good folks at the ECB). They're telling you that you should be happy they let you keep your job (if that…).
It reminds me of what Russell said :
Russell here reminds us of the wording of an old Duchess:
“What do the poor want with holidays? They ought to work.”
High Stock Market Valuations2017-07-26 -
Good to know : What is keeping the stock market valuations high? Corporate buybacks fueled by cheap (printed) money.
"What this means is that since the financial crisis, there has been only one buyer of stock: the companies themselves, who have engaged in the greatest debt-funded buyback spree in history."
Website Launch2017-05-15 -
Website Launch. After years of hesitation, finally.