Land Of The Flea

Bitcoin Exchange Loses $60M In Hack; US Regulations ‘Prevented Cold Storage Use’

"Bitfinex was previously fined $75,000 by the CFTC for failing to register as an appropriate entity for the services it offered as well as: '[F]or offering illegal off-exchange financed retail commodity transactions in bitcoin and other cryptocurrencies.' These 'off-exchange' transactions could be alluding to the storage of funds offline — commonly known as cold storage — one of the best ways to keep your funds out of hackers’ reach. If this is indeed the case then the incident could undermine calls for more regulation as cryptocurrency exchanges face a dilemma between security and compliance." Continue reading →

Continue ReadingBitcoin Exchange Loses $60M In Hack; US Regulations ‘Prevented Cold Storage Use’

Highway bill revives the Export-Import Bank after only five months

"A measure extending the bank through 2019 was included in a massive transportation bill that cleared the House and Senate Thursday and is expected to be signed by President Barack Obama. The small federal agency makes and guarantees loans to help foreign customers buy U.S. exports. Business groups like the U.S. Chamber of Commerce say it's necessary for U.S. competitiveness, since most overseas competitors rely on similar government help. But conservatives decry the bank as corporate welfare and government interference in the free market. A rarely used procedure in the House forced a floor vote on the bank over the objections of top GOP leaders." Continue reading →

Continue ReadingHighway bill revives the Export-Import Bank after only five months

Audit the Fed Legislation Sinks: Plan Accordingly

"Rand Paul and Ron Paul, the dynamic duo of anti-Fed forces, invested a lot of time and money trying to get that legislation passed. But even if it reached Barack Obama's desk, it would have been vetoed. Of course, the Fed pushed back against the legislation. Fed Chairman Janet Yellen penned a letter to senators before the vote claiming that the legislation would deprive the Fed of necessary independence. She also noted that passing the legislation might generate an inflation scare and cause interest rates to rise. One wonders if this was a subdued threat." Continue reading →

Continue ReadingAudit the Fed Legislation Sinks: Plan Accordingly

Iran to be hooked up to global banks in weeks; U.S. investors still banned

"A nuclear deal between world powers and Iran led to the removal of the curbs on Tehran's banking, insurance and shipping sectors last weekend, as well as restrictions on oil exports. But for Iran to resume business with the global banking world - for the first time since 2012 - its banks need to be linked to overseas lenders on SWIFT. The system is used to transmit payments and letters of credit. Many international sanctions relating to Iran's nuclear program were lifted but most involving U.S. measures remain in place. Non-U.S. banks may trade with Iran without fear of punishment in the United States but U.S. banks may not do so, directly or indirectly." Continue reading →

Continue ReadingIran to be hooked up to global banks in weeks; U.S. investors still banned

Saudi Arabia’s Secret Holdings of U.S. Debt Are Suddenly a Big Deal

"That question -- unanswered since the 1970s, under an unusual blackout by the U.S. Treasury Department -- has come to the fore as Saudi Arabia is pressured by plunging oil prices and costly wars in the Middle East. As a matter of policy, the Treasury has never disclosed the holdings of Saudi Arabia, long a key ally in the volatile Middle East, and instead groups it with 14 other mostly OPEC nations including Kuwait, the United Arab Emirates and Nigeria. Apart from the kingdom itself, only a handful of Treasury officials, and those at the Federal Reserve who compile the data on their behalf, have a clear picture of Saudi Arabia’s U.S. debt holdings and whether they’re rising or falling." Continue reading →

Continue ReadingSaudi Arabia’s Secret Holdings of U.S. Debt Are Suddenly a Big Deal

‘Big Short’ Genius Thinks Another Financial Crisis Is Looming

"Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed’s got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook." Continue reading →

Continue Reading‘Big Short’ Genius Thinks Another Financial Crisis Is Looming

U.S. Banks to Face $120 Billion Shortfall in Fed Crisis Plan

"The largest U.S. banks would face a $120 billion total shortfall of long-term debt under a Federal Reserve proposal aimed at ensuring their failure wouldn’t hurt the broader financial system. Banks such as Wells Fargo & Co. and JPMorgan Chase & Co. will be required to hold enough debt that could be converted into equity if they were to falter, according to a Fed rule that was approved by a unanimous vote on Friday. The Fed’s proposal, which applies to eight of the biggest U.S. banks, requires debt and a capital cushion equal to at least 16 percent of risk-weighted assets by 2019 and 18 percent by 2022." Continue reading →

Continue ReadingU.S. Banks to Face $120 Billion Shortfall in Fed Crisis Plan

The disappearing allure of the safe deposit box [2014]

"The safe deposit box, once a staple of any bank branch, has itself become an antique. Banks are reporting that safe deposit box use is on the decline, with occupancy rates dropping quickly as customers buy home safes, digitize and store documents electronically, and, in this era of conspicuous consumption, prefer to display their valuables rather than stash them away for special occasions. Jerry Pluard, the owner of Safe Deposit Box Insurance Coverage LLC, an Illinois company that insures the contents of the boxes, estimates that nearly half — 45 percent — of safe deposit boxes in the country are empty today." Continue reading →

Continue ReadingThe disappearing allure of the safe deposit box [2014]

The Secret Fed Paper That Advocated a “Carry Tax” on All Physical Cash

"Many commentators have noted that mainstream economists are calling to do away with cash entirely. It would be easy to scoff at these proposals as completely insane if the Fed hadn’t published a paper back in 1999 suggesting the implementation of a 'carry tax' or taxing actual physical cash using an expiration date if depositors aren’t willing to spend the money. The author of this lunacy is a visiting scholar with the ECB, the Fed, the IMF, and the Swiss National Bank. The fact that two of those groups have already imposed negative interest rates (ECB and SNB) should give warning that these sorts of ideas are actually taken very seriously by Central Banks." Continue reading →

Continue ReadingThe Secret Fed Paper That Advocated a “Carry Tax” on All Physical Cash

Want to play the market? Count the Fed leak weeks

"U.S. central bankers not only regularly leak secret information about monetary policy, but the leaks are so predictably timed that a savvy investor without access to the leaked information could make money just by buying stocks in certain weeks. The weeks that have excess stock-market returns are generally the same in which there are closed Fed Board meetings, and increased volatility in short-term interest-rate futures contracts suggests that it is information on monetary policy from those meetings that is driving the pattern." Continue reading →

Continue ReadingWant to play the market? Count the Fed leak weeks