There have been rumors that the Chinese Central Bank (PBoC - People's Bank of China) would limit or eliminate margin trading in Bitcoin. It is now official, sort of...

In social media and mainstream media, I often hear Donald Trump quoted (by himself, and others) as an extremely successful, self-made man. As an entrepreneur for nearly all of my life, hailing from a working class family - with a strong bent for numbers and analysis, I questioned this. 

Nearly a year ago, I warned subscribers of consequences stemming from the ECB's negative interest rate program. Here's an exceprt from our resarch report titled  pdf European Banking Macro Issues for March 2016 (843 KB) .

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In its March 2016 report The Bank for International Settlements warns of “great uncertainty” if rates stay negative for a prolonged period.  The report also states the likelihood of a currency war of competitive devaluations if more central banks use negative rates to pace up their economy.

Europe’s central bank launched a large scale program for asset buying referred as Expanded Asset Purchase Programme (APP) in March 2015 — six years after the U.S. embarked on quantitative easing. The APP included the purchase programme for public sector securities to the existing private sector asset purchase program. 

The EAPP consists of

• third covered bond purchase programme (CBPP3)
• asset-backed securities purchase programme (ABSPP)
• public sector purchase programme (PSPP)

ECB started buying Covered bonds and asset-backed securities through two separate programs namely ABSPP and CBPP3 programmes which were started in October 2014 and November 2014, respectively, amid declining inflation and growth.  However, growth had not rebounded with inflation drifting downwards through the end of 2014 and into early 2015. This prompted the ECB to launch a major asset purchase program referred as public sector purchase programme (PSPP) through which the Central Bank would buy euro-denominated, investment-grade securities issued by Euro area governments and European institutions. ECB aimed to purchase €60 billion of assets through these three programs combined together.

In March 2016, ECB announced the addition of corporate sector purchase programme (CSPP) to APP in order to purchase euro-denominated bonds issued by non-bank corporations established in the euro area.

I hate to be the one to break bad news to you, but most of the pop media/mainstream media financial pundits that I hear and see opine on bitcoin have absolutely no idea what the hell they are talking about.  This article will be the piece that strips the pretense of knowledge away from all of those other "smart guy" media types.

So, the stock market, bond market and real estate markets are all at all-time highs. Everything is Awesome! You know better than that. You see, when the bond market wakes up (that has happened already, btw), the resultant higher rates will drag the rest of Wonderland back into reality. Where do you think those steadily increasing EPS counts have been coming from? The cheapest credit every simply tempts management to do some of the dumbest things every....

We have looked into insurance companies' performance last month in regards to our bearish real estate thesis. A small comederie of companies are suffering losses and/or declining profits as we've exected. This is due primarily to increases in their expense and reduction in revenue.

Bitcoin has dropped precipitously, and as is usual, we have the cacophony of instant digital currency pundits cackling about as if they had a clue. This is the inaugural post for the re-opening of BoomBustBlog's proprietary research (fresh paid content will be added over the next 24 hrs) and as such I want to kick it off with an indepth analysis of my Twitter stream on Bitcoin from this week.

Banks are showing thin NIM, yet many of the big banks are able to boast stable if not slightly improving credit metrics. This doesn’t make sense considering the explosive growth of real estate development and prices amid an environment of much slower income growth. When comparing income growth to real estate price and rent growth, an obvious bubble seems to appear. The answer seems to lie in financial engineering. Once the credit metrics of the bank's loan and loan products deteriorate (that is, when the financial alchemy once again fails to turn MBS lead into AAA gold), they will pull back on financing, putting a hard stop brake on inflationary home purchasing, and there goes the bubble pop!

During the financial crisis of 2008, money market funds who subjectively agreed to hold their NAV (net asset value) unit prices at $1 “broke the buck”. That is, the unit of share of the fund fell below $1 (the $62.5 billion Reserve Fund, to be specific, one of only two funds to “break the buck”), which was a significant problem for the investors who used (and considered) said money market funds as cash in the bank. All of a sudden, everyone’s cash account at the Reserve Fund just dipped in value. Uh Oh! This caused short term credit to literally freeze, worldwide, because others were concerned that their bank-like security and liquidity was no longer that secure nor liquid.

Regulators stepped in to make sure this didn’t happen again by demanding that all money funds who do not invest in sovereign securities (those entities who “should” be able to print their own monies, but we’ll get into that in a later post) allow their NAV to freely float with market prices.

The result? Money flew out of prime money funds into perceived safer vehicles.