Displaying items by tag: JP Morgan

People have been asking me, "How did you manage to score such a monumental crypto patent before all of these billion and  trillion dollar companies?". The answer is actually quite simple. I understood what crypto and blockchain were, early on.

These videos were all made in the first week of 2014 - over 7 years ago - before the birth of Ethereum!

Foresight and understanding enabled me to see what many others couldn't or didn't. That was back in 2013. Fast forward to 2021, and some of the biggest names on Wall Street still don't have a clue. This means that I still have a distinct advantage!

Reuters reports: Bitcoin is 'economic side show' and poor hedge against stocks: JP Morga

For one, you know there's a problem if someone is trying to value a paradigm shifting, inter-industry protocol by using its "production costs"! 

It shows a blatant misunderstanding of how platform-based, paradigm shifts behave - or even of what they are.

Let's take a look at using that logic as applied to the last protocol-based paradigm shift.

What is the "production cost" of the Internet? We can back into that by quantifying the complete operating costs of those entities that actually supply the Internet.

  1. The Blended Telecomm net profit margin is 8%
  2. Global broadband revenues are $395B (alternative source).
  3. Thus, rough, all-in cost of production is about $363B ((199% - 8%) * $395B).

This is the Internet Protocol's applied production cost (the cost to actually use the value of the protocol in real life) - $395B.

Now, how much is the Internet worth? A common sense view...

At a glance

  • The value of the internet is difficult to assess, but economists believe its services are worth much more than the cost of internet subscriptions.
  • It presents a significant consumer surplus, which is the gap between how much something is worth to us and how much we pay for it.
  • Deeply ingrained in society, it is almost impossible to put a monetary value on the internet.

The internet became a global commercial network in the 1990s. Less than three decades later, it is everywhere. Now that we’ve created it and come to rely on it, we inevitably wonder: what is it worth?

Well some studies say in excess of $10 trillion, others $7.8 trillion - all account for.... just the US! As the US is roughly 20% of global GDP, multiply that by 5, and.... you will find that $40 to $50 trillion is a lot more than the cost of production at $395 billion. But wait...

As excerpted from "How Much is the Internet Worth?"

... Most recently, yet more economists – this time Erik Brynjolfsson, Avanish Collis and Felix Eggers – tried yet another tack: in 2017, they asked people already on the internet whether they would give up a particular internet service in return for money.

On average, respondents said they would forgo services such as search engines for US$17,530, email for US$8414 and maps for US$3648.

This study tells us a lot about what people value most about the internet. It also gives us a figure for internet consumer surplus across the US: almost US$8 trillion a year in an economy with a US$20.5 trillion economy.

Source: Internet Association data from BEA.

Source: Internet Association data from BEA.

 Indeed, a real-world example now shows what happens when you remove internet access. India’s government turned off internet access in Muslim majority Kashmir in August 2019 in a bid to reduce public protest. The effect even in this poor region was immediate: pharmacies quickly began to run out of medicine; students could not study; news about the region dried up, even within the region itself. The New York Times quoted one local as saying: “There is no life without internet, even in Kashmir.”

At this point, Greenstein says, valuing the internet is a task for which economics lacks the tools.

“It’s no longer a partial equilibrium,” he explains. Or in plainer English: “It’s not a well-grounded question anymore.”

The internet, it seems, is now too deeply ingrained in our society to be assessed with mere money.

Why am I comparing the Internet to Bitcoin? Because I truly understand what Bitcoin, distributed ledger protocols, and the crypto industry are really about. It's the underpinnings of a global value transfer network that has the real potential to easily dwarf the Internet Very much like the Internet exists as the result of its underpinnings in information transfer protocols (IP, or Internet protocol), it is a utility with unprecedented global reach and ability.

It is not a commodity, nor an investment or a security. It is much too monumental to be measured in mere materialistic, one-dimensional Wall Street parlance. Big banks, regulators, investors, the media - many have this all wrong. This is how I was able to score the patent. I knew what it was that I was patenting., while nearly everyone else was looking at price charts and thinking money remittances. Granted, that was almost 8 years ago. Fast forward to today, have the big investment houses learned their lesson?

The Ultimate Flip Flop: JP Morgan Validates Cryptocurrency

www.linkedin.com › i-told-you-jp-morgan-phil-nagy
 
Feb 21, 2019 — I hate to say, “I told you so”, but JP Morgan…I told you so. They just announced that they're creating their own cryptocurrency to use in house ...

JP Morgan Continues Crypto Flip-flop Amidst Square's $50M ...

coincrunch.in › 2020/10/16 › jp-morgan-continues-cry...
 
Oct 16, 2020 — The latest statement by JP Morgan on the price of Bitcoin has left multiple in dilemma. But is this something to worry about?

JPMorgan Completes Surprise Bitcoin Flip—And Calls A Price ...

www.forbes.com › sites › billybambrough › 2020/06/13
 
Jun 13, 2020 — JPMorgan, one of Wall Street's biggest banks and up until recently an outspoken bitcoin critic, has changed its tune on the world's number one ...
Missing: flipflop ‎| Must include: flipflop

JPMorgan Flip-Flops Again, Says Bitcoin May Hit ... - LaptrinhX

laptrinhx.com › jpmorgan-flip-flops-again-says-bitcoin...
 
Jan 5, 2021 — Back at the start of November, JPMorgan quant NIck Panigirtzoglou - perhaps tasked with being the skeptic in-house bitcoin strategist ...

zerohedge على تويتر: "JPMorgan Flip-Flops Again, Says ...

twitter.com › zerohedge › status
 
Jan 4, 2021 — JPMorgan Flip-Flops Again, Says Bitcoin May Hit $100,000 "But Such Price Levels Would Be Unsustainable" ...

Bitcoin May Never Go Above $ 40,000 Again, JP Morgan ...

www.reddit.com › CryptoCurrency › comments › bitco...
 
Jan 27, 2021 — 1.7m members in the CryptoCurrency community. The official source for CryptoCurrency News, Discussion & Analysis.

 

JPMorgan Flip-Flops Again, Says Bitcoin May Hit $100,000 ...

remarkboard.com › jpmorgan-flip-flops-again-says-bitc...
Back at the start of November, JPMorgan quant NIck Panigirtzoglou - perhaps tasked with being the skeptic in-house bitcoin strategist - predicted that based on ...

 

In the meantime, JP Morgan advisory customers, with friends like these, who needs enemies???.

  

Now, I'm not a Bitcoin maximalist, nor do I even think that Bitcoin is the most valuable crypto, but that doesn't mean that I will just sit back and ignore the spread of misinformation! If you want to know what I'm into, then just Imagine having the keys to the internet back in 1995. Well, that's where I feel we are in 2021, with the same Luddite movement acting the role o f the naysayer! For my take, read "A Most Powerful Invention Comes to Life"

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Published in Latest Analysis

Let's get something straight right off the bat. We all know there is a certain level of fraud sleight of hand in the financial industry. I have called many banks insolvent in the past. Some have pooh-poohed these proclamations, while others have looked in wonder, saying "How the hell did he know that?"

The list above is a small, relevant sampling of at least dozens of similar calls. Trust me, dear reader, what some may see as divine premonition is nothing of the sort. It is definitely not a sign of superior ability, insider info, or heavenly intellect. I would love to consider myself a hyper-intellectual, but alas, it just ain't so and I'm not going to lie to you. The truth of the matter is I sniffed these incongruencies out because  2+2 never did equal 46, and it probably never will either. An objective look at each and every one of these situations shows that none of them added up. In each case, there was someone (or a lot of people) trying to get you to believe that 2=2=46.xxx. They justified it with theses that they alleged were too complicated for the average man to understand (and in business, if that is true, then it is probably just too complicated to work in the long run as well). They pronounced bold new eras, stating "This time is different", "There is a new math" (as if there was something wrong with the old math), etc. and so on and associated bullshit.

Let's get something straight right off the bat. We all know there is a certain level of fraud sleight of hand in the financial industry. I have called many banks insolvent in the past. Some have pooh-poohed these proclamations, while others have looked in wonder, saying "How the hell did he know that?"

The list above is a small, relevant sampling of at least dozens of similar calls. Trust me, dear reader, what some may see as divine premonition is nothing of the sort. It is definitely not a sign of superior ability, insider info, or heavenly intellect. I would love to consider myself a hyper-intellectual, but alas, it just ain't so and I'm not going to lie to you. The truth of the matter is I sniffed these incongruencies out because  2+2 never did equal 46, and it probably never will either. An objective look at each and every one of these situations shows that none of them added up. In each case, there was someone (or a lot of people) trying to get you to believe that 2=2=46.xxx. They justified it with theses that they alleged were too complicated for the average man to understand (and in business, if that is true, then it is probably just too complicated to work in the long run as well). They pronounced bold new eras, stating "This time is different", "There is a new math" (as if there was something wrong with the old math), etc. and so on and associated bullshit.

 My reveiw and opinion of JP Morgan's Q4 2009 is ready for download JPM 4Q09 review JPM 4Q09 review 2010-01-19 01:48:27 1.16 Mb. I have made it available to all readers, but I sugguest that paying subscribers follow the appropriate links to see how appropo the assumptions regarding revenue and loss trends were in the forensic analysis. I have excerpted some of the review below:

Monday, 18 January 2010 23:00

It's HELOC Deja Vu,All Over Again

 A little more than a year and a half ago, I penned "A little more on HELOCs, 2nd lien loans and rose colored glasses",:

I syndicate my work across various sites on the web and occasionally go through the comments to see what people think. I get viewers of all types, from first time investors and the curious to multi-billion dollar portfolio managers and directors of analytical departments of the bulge brackets. It is the guy in the middle, the arm chair investor that seems to throw some of the wierdest comments, though. One of which was, "banks are more complicated than HELOC exposure and LTVs and it will take more than that to determine a bank short". Well, that comment is partially true. Today's banks are much  more complex than LTVs and 2nd liens, but when these risky products on the downturn are multiples of your tangible capital, it really doesn't take more than that to start causing some severe solvency issues. You can have a trillion dollars in assets, but if you have $20 billion in equity with $100 billion in investments that will take a 50% loss, you are underwater by $30 billion. You can talk about these banks using terms such as "complicated", "complex", "fancy" and all of the other high falutin' adjectives that you can think of, but at the end of the day, if you lose more than you own you are insolvent. Now, that's a simple concept and it works quite well for my investment pursuits. This is coming from a guy who use to design offshore, option embedded structured products to fund illiquid private sector liabilities for things such retiree health care risks. Having some experience in the structured product arena, being an entrepreneur, and simply having to balance the family budget, I have come to learn - without a doubt - that complicated usually means less valuable. Either that, or it means an opportunity to charge the client more through lack of transparency in the pricing and profit structure.

Following the geographic default graph for HELOCs reproduced from the last posting, you see the two states that have been in the news the most lately have big spikes in my pretty little graph.

 My reveiw and opinion of JP Morgan's Q4 2009 is ready for download JPM 4Q09 review JPM 4Q09 review 2010-01-19 01:48:27 1.16 Mb. I have made it available to all readers, but I sugguest that paying subscribers follow the appropriate links to see how appropo the assumptions regarding revenue and loss trends were in the forensic analysis. I have excerpted some of the review below:

Monday, 18 January 2010 23:00

It's HELOC Deja Vu,All Over Again

 A little more than a year and a half ago, I penned "A little more on HELOCs, 2nd lien loans and rose colored glasses",:

I syndicate my work across various sites on the web and occasionally go through the comments to see what people think. I get viewers of all types, from first time investors and the curious to multi-billion dollar portfolio managers and directors of analytical departments of the bulge brackets. It is the guy in the middle, the arm chair investor that seems to throw some of the wierdest comments, though. One of which was, "banks are more complicated than HELOC exposure and LTVs and it will take more than that to determine a bank short". Well, that comment is partially true. Today's banks are much  more complex than LTVs and 2nd liens, but when these risky products on the downturn are multiples of your tangible capital, it really doesn't take more than that to start causing some severe solvency issues. You can have a trillion dollars in assets, but if you have $20 billion in equity with $100 billion in investments that will take a 50% loss, you are underwater by $30 billion. You can talk about these banks using terms such as "complicated", "complex", "fancy" and all of the other high falutin' adjectives that you can think of, but at the end of the day, if you lose more than you own you are insolvent. Now, that's a simple concept and it works quite well for my investment pursuits. This is coming from a guy who use to design offshore, option embedded structured products to fund illiquid private sector liabilities for things such retiree health care risks. Having some experience in the structured product arena, being an entrepreneur, and simply having to balance the family budget, I have come to learn - without a doubt - that complicated usually means less valuable. Either that, or it means an opportunity to charge the client more through lack of transparency in the pricing and profit structure.

Following the geographic default graph for HELOCs reproduced from the last posting, you see the two states that have been in the news the most lately have big spikes in my pretty little graph.

Tuesday, 27 October 2009 00:00

The Next Step in the Bank Implosion Cycle???

Of the many issues that I have been warning about concerning banks, their balance sheets and the risks that they take, one of the (and there are a few) most underappreciated is the currency risk of the "mother of all carry trades". See Roubini Not Alone in Fearing Dollar Carry Trade and Roubini Sees `Huge' Asset Bubbles Growing in `Mother of All Carry Trades'.

Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini.

“We have the mother of all carry trades,” Roubini, who predicted the banking crisis that spurred more than $1.6 trillion of asset writedowns and credit losses at financial companies worldwide since 2007, said via satellite to a conference in Cape Town, South Africa. “Everybody’s playing the same game and this game is becoming dangerous.”

The dollar has dropped 12 percent in the past year against a basket of six major currencies as the Federal Reserve, led by Chairman Ben S. Bernanke, cut interest rates to near zero in an effort to lift the U.S. economy out of its worst recession since the 1930s. Roubini said the dollar will eventually “bottom out” as the Fed raises borrowing costs and withdraws stimulus measures including purchases of government debt. That may force investors to reverse carry trades and “rush to the exit,” he said.

“The risk is that we are planting the seeds of the next financial crisis,” said Roubini, chairman of New York-based research and advisory service Roubini Global Economics. “This asset bubble is totally inconsistent with a weaker recovery of economic and financial fundamentals.”

As has been the case at least twice in the past, I am in agreement with the man. The amount of bubbliciousness, overvaluation and risk in the market is outrageous, particularly considering the fact that we haven't even come close to deflating the bubble from earlier this year and last year! Even more alarming is some of the largest banks in the world, and some of the most respected (and disrespected) banks are heavily leveraged into this trade one way or the other. The alleged swap hedges that these guys allegedly have will be put to the test, and put to the test relatively soon. As I have alleged in previous posts (As the markets climb on top of one big, incestuous pool of concentrated risk... ), you cannot truly hedge multi-billion risks in a closed circle of only 4 counterparties, all of whom are in the same businesses taking the same risks.

Click to expand!

bank_ficc_derivative_trading.png

See the following for a backgrounder on my opinion before we move on to the risks of currency volatility and interest rate swaps in the "Too Big To Fail, but Too Big to Let Survive Intact" club:

 

Tuesday, 27 October 2009 00:00

The Next Step in the Bank Implosion Cycle???

Of the many issues that I have been warning about concerning banks, their balance sheets and the risks that they take, one of the (and there are a few) most underappreciated is the currency risk of the "mother of all carry trades". See Roubini Not Alone in Fearing Dollar Carry Trade and Roubini Sees `Huge' Asset Bubbles Growing in `Mother of All Carry Trades'.

Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini.

“We have the mother of all carry trades,” Roubini, who predicted the banking crisis that spurred more than $1.6 trillion of asset writedowns and credit losses at financial companies worldwide since 2007, said via satellite to a conference in Cape Town, South Africa. “Everybody’s playing the same game and this game is becoming dangerous.”

The dollar has dropped 12 percent in the past year against a basket of six major currencies as the Federal Reserve, led by Chairman Ben S. Bernanke, cut interest rates to near zero in an effort to lift the U.S. economy out of its worst recession since the 1930s. Roubini said the dollar will eventually “bottom out” as the Fed raises borrowing costs and withdraws stimulus measures including purchases of government debt. That may force investors to reverse carry trades and “rush to the exit,” he said.

“The risk is that we are planting the seeds of the next financial crisis,” said Roubini, chairman of New York-based research and advisory service Roubini Global Economics. “This asset bubble is totally inconsistent with a weaker recovery of economic and financial fundamentals.”

As has been the case at least twice in the past, I am in agreement with the man. The amount of bubbliciousness, overvaluation and risk in the market is outrageous, particularly considering the fact that we haven't even come close to deflating the bubble from earlier this year and last year! Even more alarming is some of the largest banks in the world, and some of the most respected (and disrespected) banks are heavily leveraged into this trade one way or the other. The alleged swap hedges that these guys allegedly have will be put to the test, and put to the test relatively soon. As I have alleged in previous posts (As the markets climb on top of one big, incestuous pool of concentrated risk... ), you cannot truly hedge multi-billion risks in a closed circle of only 4 counterparties, all of whom are in the same businesses taking the same risks.

Click to expand!

bank_ficc_derivative_trading.png

See the following for a backgrounder on my opinion before we move on to the risks of currency volatility and interest rate swaps in the "Too Big To Fail, but Too Big to Let Survive Intact" club:

 

Monday, 19 October 2009 00:00

I'm Not Defending JP Morgan, but...

I was perusing ZeroHedge the other day (a fine, rabble rousing rag after my own heart), when I came across a guest post accusing JP Morgan of some funny stuff. Those that follow me know that I really believe JPM to be highly overrated. In reviewing the authors allegations, he may actually be on to something in regards to portions of the AML stuff. In order to truly ascertain the extent, if any, I would have to dig a little further, which I don't have the time to do right now.

I feel he is jumping the gun on the general liquidity argument though. No disrespect intended to the man, for anyone willing to break out a calculator and dispel the "this is the best thing since sliced bread" propaganda and disinformation is cool in my book.

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