Archives of “July 2019” month

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Elements of a Plan

  
Analysis, Education
  • Decide what type of participant you’re going to be
    • Investor or speculator?
    • What markets to participate in? Needs to be consistent with the characteristics and time horizon of the type of participant you choose to be.
  • Select a method of analysis
    • Don’t jump back and forth among several methods in search of supporting evidence to justify holding onto a market position.
  • Develop rules
    • Define hard-and-fast rules on what constitutes an opportunity for you, what are the entry and exit points.
  • Establish controls
    • Define the exit criteria that will take you out of the market either at a profit or loss, e.g. price order, time stop, condition stop.
    • Before you get into the market, you have to decide where (price) or when (time) or why (new information) you will no longer want the position.
    • Your exit criteria creates a discrete event, ending the position and preventing the continuous process from going on and on.

Bitcoin weekend update – lower

  
Analysis, BITCOIN
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The rot for crypto began on Friday and continued over the weekend.

On approach back towards $10,000
Not helping matters were weekend reports on US government proposals to prevent big technology companies from functioning as financial institutions or issuing digital currencies
  • will be discussed by Congress’ House Financial Services Committee
  • draft legislation “Keep Big Tech Out Of Finance Act”

The rot for crypto began on Friday and continued over the weekend.

Barclays on the FOMC – 25bp cut in July, more to come by end of 2019

  
  Analysis
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Scanning through some of the late week info from via banks, this via Barclays, in brief:

  • Powell’s testimony was dovish, surprisingly so
  • Increases confidence on 25 bp cut to come this month
  • two more 25bp cuts to come by the end of the year
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No surprise from Barclays on the July forecast, this is consensus. A further 50bps to come by year end is a bit of an eyebrow raiser though.

Citi on the FOMC, 25 bp cut this month and another by year end

Citi see an increased downside risk for the US economy …. but acknowledge:
  • that view is clearly not shared by Chair Powell
  • July … a 25 basis point cut is likely to provoke two or more dissents, 25 basis points may be the compromise policy outcome
  • Following … one additional 25 basis point cut, most likely in September

US Treas Sec Mnuchin warns that debt ceiling could be hit in September

  
  Analysis
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The debt ceiling drums are being beat again, US Treasury Secretary Mnuchin warned that it’d be hit in September.

  • “We model various scenarios for cash projections. Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes,” “it is impossible to identify precisely how long extraordinary measures [to avoid default] will last.”
The administration wants to borrow more, increase debt in the US. The usual.
House Speaker Pelosi and Senate Majority Leader McConnell want to rasiet eh ceiling as per Mnuchin’s request, but want it as part of a broader, two-year budget agreement.
Discussions on the timetable will continue this week.
The debt ceiling drums are being beat again, US Treasury Secretary Mnuchin warned that it'd be hit in September.

U.S. proposes barring big tech companies from offering financial services, digital currencies

  
  Analysis
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A proposal to prevent big technology companies from functioning as financial institutions or issuing digital currencies has been circulated for discussion by the Democratic majority that leads the House Financial Services Committee, according to a copy of the draft legislation seen by Reuters.

In a sign of widening scrutiny after Facebook Inc’s (FB.O) proposed Libra digital coin aroused widespread objection, the bill proposes a fine of $1 million per day for violation of such rules.

Such a sweeping proposal would likely spark opposition from Republican members of the house who are keen on innovation, and would likely struggle to gather enough votes to pass the lower chamber.

Even if it were to pass the full house, it would still have to pass the senate which would also likely be an uphill struggle.

Nevertheless, the draft proposal sends a strong message to large tech firms increasingly eyeing the financial services space.

The draft legislation, “Keep Big Tech Out Of Finance Act”, describes a large technology firm as a company mainly offering an online platform service with at least $25 billion in annual revenue.

“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” it proposes.

Facebook, which would qualify to be such an entity, said last month it would launch its global cryptocurrency in 2020.

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