Monday, 17 June 2019

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Who Am I and Why Should You Listen to Me?

If you Google (“Who is Reggie Middleton?”) you’ll see I made my name accurately calling contrarian booms and busts, specifically fundamental and forensic outliers such as the housing crash, Bear Stearns and Lehman collapse, European sovereign debt crisis, Apple share price halving, Blackberry collapsing, Google popping through Android, etc. In short, I’ve developed a knack for seeing things very differently from most other renowned “industry professionals”, and being right more often then I’m not.

All of the calls mentioned above (among about 80 others) were highly contrarian. This means that just before Bear Stearns collapsed, it was trading over $100 per share and had buy recommendations and investment grade ratings from all of the big Wall Street banks and ratings agencies. Ditto for all of the other calls. I say the things people don’t want to hear, make the trades that no one wants to make, and take (financial) positions that the “smart guys in the room” consider absurd and amateurish—until the following year.

After being “absurd and amateurish” through two global crashes, the near collapse of the banking system, a real estate black hole, and the birth of an entirely new way of computing and communicating, I’ve developed a small, but loyal following as a trends “seer” in the media.

So, What’s My Beef with Bitcoin?

In October of 2013 I finally succumbed to the requests of my clients to look into Bitcoin. Rather than read other people’s takes, I went straight to the heart of the matter—the 8-page Nakamoto Satoshi bitcoin white paper and the Bitcoin wiki.

Within minutes, my jaw dropped out of excitement and awe, particularly when I read about smart contracts. My first thought was, “Wow, I really missed the boat on this one.” While I stood by during bitcoin’s dramatic price increase, I feared I had missed a much more significant opportunity in building the next wave of social computing architecture.

Old habits die hard. I started performing my due diligence to find out who was first to market, and whether there were worthwhile investment opportunities. Shockingly, I couldn’t find a single person or company that had a viable commercial application for creating and delivering smart contracts. We have a paradigm shift that nobody was taking advantage of, while the media focused almost exclusively on red herrings like coins, Gox, and Silk Road.

I hadn’t missed the boat. It hadn’t even arrived in port yet.

Now, to save time for those who haven’t read through the links above, I will summarize it in the next section which also encapsulates the problem with Bitcoin, its supporters, and detractors today.

What is Bitcoin?

Bitcoin is likely among the most popular topics ever that practically no one knows anything about. All it takes is about 10 to 15 minutes of reading—and an additional 2 to 3 minutes of further contemplation—to start to understand its true value potential.

Ask almost anybody what Bitcoin is and you will nearly always get something inaccurate or incomplete. Responses range from Bitoin is a ponzi scheme to worthless digital currency because it’s not backed by a sovereign nation, to Bitcoin is a failed experiment because it doesn’t have a central bank. None of this is true, but where does this come from?

To find out, let’s Google the term, “What is Bitcoin?”

What is Bitcoin

Let’s start by discussing what Bitcoin is not. Bitcoin is not a digital currency. Bitcoin (with a capital “B”) is a protocol driven network and platform for programmatic value transfer and consensus-based decision making (as opposed to bitcoin with a lowercase “b”, which comprise the individual accounts of value known as the digital currency or coins). A useful synonomous descriptor would be IP (the base-level Internet Protocol), a protocal driven network and platform for programmatic data transfer. On top of the Internet Protocol are other protocol-based systems and full blown applications that rely upon them. A brief list of these can include:

  1. the World Wide Web (HTML, CSS, Javascript, etc.);
  2. e-mail (SMTP, POP, IMAP, etc.);
  3. file sharing (FTP, bittorent, etc.);
  4. YouTube, Facebook, Netflix, Amazon, Dropbox, Google Docs/Drive, etc.

The Internet is not a digital file or a digital file system. That trivializes its potential. It is a foundation for an extremely rich and diverse set of funtionality layered on top of it. That functionality constitutes a data ecosystem. Bitcoin is no less than a foundation on which can be built an extremely rich and diverse value and decision making ecosystem.

This cannot be stressed enough. Bitcoin is not merely a currency. Like packet routing in IP, the currency of bitcoins is merely one integral, but very basic application of the Bitcoin protocol. But it is capable of much, much more. For those of you who think Bitcoin is about Silk Road, Mt. Gox and Western Union payments, I’m about to blow your mind.

This is my company’s, Veritaseum, launch product—UtlraCoin. It is the world's most powerful Bitcoin wallet - yes, pure BItcoin. It is a smart contracts-based, P2P, counterparty risk free, financial asset creator, trader, and exchange—complete with leverage available of over 1000:1, with no risk of negative equity or margin calls. This product was put together by my team at Veritaseum, consisting of IP/patent attorneys, software engineers, developers, financial engineers, and financial analysts. Our team is a bit more diverse than the typical Bitcoin start-up addressing a $220+ trillion market. That's not a typo. It's trillion. With a “T”. Add up the forex, derivatives, equity, commodity, and fixed income markets daily and annual turnover, and you have captured phase 1 of our project (we have 12 other phases planned).

For the financial types among you, tell any friends you know who has read this article what the liklihood of getting a swap like this from your local broker or investment bank, whether it be Goldman, Morgan(s), or Merrill. It’s already out of their league, and we’re just getting started.

Veritaseum’s UltraCoin Wallet (pictured below) is a 100% Bitcoin-based, peer-to-peer (P2P), over the counter (OTC), financial asset trading desk, financial asset creator, and smart contract designing center. Users can trade exposure to over 45,000 tickers in all asset clases (stocks, bonds, forex, and commodities) from all major exchanges. It offers up to 10,000× leverage.

thumb What is Bitcoin - Financial Asset Trading Desk  Smart Contract

The UltraCoin Wallet allows users to swap highly customized financial exposures directly with each other with no middlemen. This smells ripe for disintermediating the Wall Street crowd, doesn’t it? No centalized exchanges, no brokers, no investment banks, no prime brokers, no clearing houses. This is just scratching the surface of the power of the Bitcoin protocol.

In addition, there are no counterparty, credit, or default risks (meaning no Bear Stearns, Lehman Brothers, Man Financials). You are never exposed to any financial entity’s balance sheet (unless you want to be by way of creating your own swap for it). Veritaseum is a software company, not a financial concern. All of your capital is either directly in your possession, or in-contract, locked in the blockchain. Veritaseum never has control, possession, or custody at any time. Press the “Track Transaction” button in the UltraCoin Wallet application and you can instantantly confirm with a third party the state of your funds any time from any location that has Internet access.

Yes, everything just stated is factual! There are bound to be many of the “smartest guys in the room” who assert that these claims are not possible. They are likely to be the same crew that allege Bitcoin is a payments system, a digital currency, or a ponzi scheme as well.

thumb What is Bitcoin - P2P Financial Asset Exchange

Below is what the fee revenue looks like upon launching the prototype, beta 1, and beta 2. The fees are small (starting from a base of zero; this not a representation that we are making a lot of money, or even any real money at all yet), but I want to illustrate what the proverbial hockey stick looks like and how this can ramp up once it really gets going.

beta revenue chart

If you’re like me, curves like that get you...excited.

Like the layers and layers built on top of the Internet Protocol, these “smart contracts” can do some rather fantastic things. If you have a couple silver hairs, you probably remember the skepticism many pundits and investors had of the Internet back in 1993. You’ve probably also guessed at how much money you would have made if you invested in the right companies back then.

Here’s a truly tough question: How much would a start-up be worth now if it patented commerce and methodogies over the Internet. My guess would be a lot. There are not a lot of guys doing this stuff now, and we believe we are the first to launch a product such as this. As businessmen, the first thing we did was to create not just one, but a portfolio of patents (pending) covering all types of higher-end methodologies using consensus algorithms, blockchain-like technologies, and smart contracts. We did this a long time ago (in tech time, that is) and are confident that not only are our applications comprehensive and solid, but quite early relative to the rest of the bitcoin is a digital currency crowd. 

There is no reason to take my word for anything. Our application is available for download now. Liquidity is low because we just launched in beta, but the screen shots that you see above are not demos. They are grabbed from my desktop running live trades with other traders right now. Get the UltraCoin Wallet for PC or Mac/Linux, the tutorial, and the UltraCoin trade designer spreadsheet for free, with no registration, account openings, muss or fuss. We don’t even ask for your e-mail address. Start trading within minutes of clicking download. No whitepapers, concepts, or theory speeches needed.

What can this Bitcoin stuff do? Well take a look at what we’ve come up with thus far:

  1. Ukraine Enters HYPERINFLATION! See How UltraCoin Smart Contracts Protect Individuals and Enable Speculators
  2. Scarily Prescient Analysis of @Grexit and the Most Advanced Application of Blockchain Tech Ever Seen As Strategy To Hedge Against It
  3. How To Apply 55x Leverage To A Bitcoin Trade Without Losing Your Shirt
  4. Translating Goldman Sachs 2015 Recommendations As UltraCoin Trade Setups pt 3
  5. Using UltraCoin to Monetize the Repercussions of Russia’s Interactions with EU & US Economic Sanctions
  6. If You Believe The Oil Bull Market Is Over, This Is How To Monetize It Through Ultra-Coin.com
  7. Using Veritaseum’s UltraCoin To Take Direct, Specific Positions On The Argentine Default For As Little As $5!
  8.  Banking Risks, Rewards & Demise: The Rise of Programmable Currencies & Smart Contracts
  9.  How Veritaseum’s UltraCoin Could Have Saved Harvard Over $1 Billion!

This is just a sampling. I want you to digest this as I prep part two of this series. It will tell the story of how we could not get professional investors to give us capital to date. Why you may wonder? That’s a good question, but I have some theories. If you can’t wait for part 2 and want to invest, e-mail me.

Otherwise, stay tuned in a few hours for “Why Almost Nobody (and I mean ALMOST NOBODY) Gets Bitcoin, Part 2 – Why Are You Pushing a Ferrari Down the Street?”

Bio

Reggie Middleton has spent the last year bringing to market a peer to peer swap platform called Ultra-Coin based completely off of the bitcoin blockchain. The platform provides an opportunity for any two parties to speculate on any publicly traded financial asset, denominated in any currency, currency pair or even in another asset as well as setting their own rules for notional amounts and time to expiration. The collateral used in trades is held in the bitcoin blockchain, thus the platform can function independently without any middlemen standing in the way of financial transaction while eliminating counterparty, default and credit risk – all while offering up to 10,000x digital leverage. Prior to working on Ultra-Coin Reggie maintained a very popular fundamental, forensic and macro analysis research blog called BoomBustBlog. The early, and very popular Research arm serviced thousands of investors and traders – both retail and institutional and has included nearly all of the global money center banks and several central banks. As an entrepreneurial investor and Financial Analyst Reggie has won all of CNBC’s stock draft competitions winning in both 2013 and 2014. He is often seen interviewed on all the major financial shows like Keiser Report, Boom Bust, Bloomberg and CNBC, and is on record for perfectly calling turning points such as the fall of Bear Stearns, Lehman Brothers, GGP, Research in Motion (now Blackberry), the housing and CRE crisis in 2007, the pan-European sovereign debt crisis and a contrarian 50% fall in Apple’s stock price as it hit $700 in 2012 – among roughly 80 other notable calls over a 7 year period.

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From the CATO institute:

Since the New Year, Ukraine’s currency – the hryvnia – has collapsed, losing 51 percent of its value against the U.S. dollar. To put this rout into perspective, consider that the Russian ruble has only lost 8 percent against the greenback during the same period.

Like night follows day, the hryvnia’s meltdown has resulted in a surge of inflation. The last official Ukrainian year-over-year inflation rate is 28.5 percent. This rate was reported for January and is out of date. That said, the official inflation rate has consistently and massively understated Ukraine’s brutal inflation. At present, Ukraine’s implied annual inflation rate is 272 percent. This is the world’s highest inflation rate, well above Venezuela’s 127 percent rate (see the accompanying chart).

...  estimate[d] Ukraine’s current annual inflation rate to be 272 percent – and its monthly inflation rate to be 64.5 percent. This rate exceeds the 50 percent per month threshold required to qualify for hyperinflation. So, if Ukraine sustains its current monthly rate of inflation for several more months, it will enter the record books as the world’s 57th hyperinflation episode. 

There are two ways to approach this through UltraCoin - one as an individual or corporation looking to hedge against the economically destructive forces of hyperinflaton, the second as a speculator looking to profit.

Thei individual looking to protect themeselves from hyperinflation can swap their Hyrvna holdings exposure for GLD - the gold tracking ETF. This would be an expensive hedge that costs less then 3 cents per every $10, and will drop down to less than half of that in volume. Of course, all that glitters is sometimes not always golden. Gold hasn't held its value as well as the inflated USD (relative to most world debased currencies) YTD, but still has done a hell of a lot better then the UAH.

Ukranian Hyperinflation hedge for individuals

For the speculatory who wishes to go balls to the wall, you can use UltraCoin to actual go long/short to distinct and separate currency pairs. The rather strong USDUAH pair would be your long exposure and you would short the UAHUSD pair. To put some spice in the mix (as if this wasn't enough) dial in 80x digital leverage. One can consider using another strengthening (or percieved to be strengthening, which is the dangerous part) curreny such as the Swiss franc on the pay (short) leg, although that would have weakened this return over the last few weeks as the CHF is weakening again. Alas, you are free to put whatever ticker in their you want and dial in whatever leverage you want. I suggest you design the trade in our UltraCoin trade modeler, first, (Excel required). 

Ukranian Hyperinflation Speculative homerun for traders   funds

As you can see, the leverage is dailed up to 80x, but P&L is capped the principal amount put at risk. What this means is you will only get (or lose) up to what you put in as a maximum (these are not binary options and do have a continuous payout that exactly mimics that of the underlying asset(s)), but you will get (or lose) it very, very quickly! This is perfect for you action junkies!

Download the tutorial.

Download the UltraCoin client for PC or Max/Linux.

Download the our UltraCoin trade modeler, first, (Excel required)

 

Monday, 23 February 2015 00:00

DACe, Disintermediation and the Death of Wall Street Featured

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“47% of all jobs will be automated by 2034, and no government is prepared.” -Economist 

“In the next 10-20 years, 58% of financial advisors will be replaced by robots and AI.”-Frey and Osborne, Oxford University.

This article's goal is to demonstrate how true those statements are. Below you will find the face of today's investment bank as pictured by the article "Yes, Goldman Sachs is a great place to work"...

140115100130-gol03-goldman-sachs-lloyd-blankfien-620xa

... and this is the face of invesment banking tomorrow:

//// Have the payee sign the resolution transaction and send it back over the wire
LetterOfCredit.signInchoateTx(new_tx, lc_tx_script_pub_key, this._payee_key_priv);
new_tx = new Transaction(LetterOfCreditTest.params, new_tx.bitcoinSerialize());
Set<ECKey>[] keys = LetterOfCredit.checkInchoateTx(orig_tx, new_tx, lc_tx_script_pub_key);
Set<ECKey> signed = keys[0];
Set<ECKey> candidates = keys[1];
Assert.assertEquals(1, signed.size());
Assert.assertTrue(signed.contains(this._payee_key_pub));
Assert.assertEquals(2, candidates.size());
Assert.assertTrue(candidates.contains(this._xch_key_pub));
Assert.assertTrue(candidates.contains(payer_key));
 

Introducing DACe 

Decentralized -  dispersed functions, powers and assets away from a central location or authority

Autonomous - self-governing; independent; subject to its own laws only

Commercial - of or relating to a system of voluntary exchange of products and services to the market

entity -  something that exists as distinct, independent, and/or self-contained

DACe (pronounced “dak-ee”) - A network-based logical business entity that replicates the functions of centralized legacy businesses and business operations profitably and at substantially lower costs through disintermediation. Disintermediation is: the reduction of rent seeking by connecting natural producers and natural consumers of products and services directly (in our case, peer-to-peer) while providing the ability for said actors to facilitate the required business functions through decentralized software designed exclusively for network-based, distributed use with appropriate failsafes for both temporary and catastrophic failures.

UltraCoin is an example of a DACe. It is essentially an investment bank/brokerage in the cloud without the bank and brokerage components. It consists entirely of computer code. It currently facilitates the trading of the exposures of over 45,000 tickers, long, short or in unique relative combinations, and can do so while offering up to 10,000x leverage without the risk of default, negative equity, non-payment or margin calls. It provides its own exchange and rents space along the Blockchain rails with which it often does business. Best yet, it is totally transparent by allowing all users to track their assets at any time, and it never, ever holds or has any control over customer assets. Your capital stays either in your wallet or the blockchain (of which I will define below) at all times. Users are never exposed to our balance sheet, or the counterparty risks inherent therein. Deals are done in basis points, negating the need for gouging to support billions of dollars annually in salaries and bonuses - and computer code has no incentive to Bernie Madoff, and abscond with your money.

 

UltraCoin’s aim is to disintermediate the banking system by congealing the business processes of Wall Street banks into software and code that lives and thrives in the cloud, and the blockchain in particular.

 

smartcontrats infographic

 

This DACe in the cloud allows disparate consumers of banking products and services to purchase said services directly from each other through UltraCoin using unbreachable smart contracts as the medium.

 

 smartcontrats infographic1

 

Through the disintermediation of investment banks and brokerages, the nominal and economic profits of rent seekers are now redistributed to consumers as “inefficiency rebates” - or extreme discounts to products and services in the absence of the rent seeking middlemen who charge for what software can now do better, cheaper, safer and more efficiently. These inefficiency rebates reallocated to consumers can be, and are substantial. Wall Street banks compensation and benefits as a percentage of revenues range from 35-50%.

 

A few months ago, I approached several of the big banks to discuss partnership, and relayed the reaction of one of them in the post, "Reggie Middleton's Open Letter of Commoditization and Disintermediation to Wall Street: Pay Attention Jamie Dimon!". Further to that point, this downloadable research document forensically describes the specific weak points in the banking business model, to wit:   Banking Risks, Rewards & Demise: The Rise of Programmable Currencies & Smart Contracts 

Stress Test on [This Bank’s] Earnings Resulting from the Introduction of Smart Contract Platforms as an Alternate Value Transaction System

We have carried out a stress test on [This Bank]’s 2013 earnings to assess the potential impact of digital currency transaction platforms on the bank’s future earnings. The revenue of the banks is categorized into interest income (net of interest expense) and non-interest income that comprises income from investment banking operations, asset management business, trading income, insurance, and other commission or fee based businesses.

Impact Analysis

[This Bank] derives more than 60% of its total revenues from net interest income, and less than 40% from non-interest income. Net interest income depends upon the bank’s net interest margin and volume of loans and advances as well as deposits with the bank. A decrease in margins and volume could significantly impact net interest income, due to [This Bank]’s heavy reliance on interest earning assets for revenue.

In assessing the impact of an alternate digital currency transaction system on the bank’s annual revenues and profitability, our analysis assumes a certain percentage of business that is vulnerable and a certain percentage reduction in fees (see below).

Key points:

  • [This Bank] could see around 3% decline in its non-interest income. The bank’s net interest income could fall by 7-8% from a contraction in its net interest margin.

  • The bank could see lower charge on account of compensation benefits for employees (due to decrease in variable pay). However, this will not be enough to offset the decline in revenues.

  • Net income could drop by as much as 21%.

Untitled.png

 

 Veritaseum’s UltraCoin is not a concept, nor a whitepaper or even a prototype. It is a functional, ongoing business in the form of a nascent start-up. Here is a snapshot of revenue ramp-up before the official launch. The provervial "hickey stick"!.

The hockey stick

Update: ...and this is what it looked like the day after this post was made...

image 5

We are on the lookout for financial and strategic partners, liquidity providers and traders. If you qualify of any or all of those, I'd love to hear from you. You can Download the UtlraCoin client here.

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The Wall Street Journal has a well done analysis of Greek debt coming due in about a week. It's a lot considering the size of the country's shrinking economy! Here's a snapshot:

Greek Debt Due from WSJ

I have explained the Greek situation in full detail for my blog subscribers back in 2010, 2011 and 2012.

For background and perspective, read Lies, Damn Lies and the EU Confiscation Of Greek Sovereignty Masked As The Bailout That Never Happened. Pay close attention to these parts...

image022

image021 copy

image034

 So, as I was saying...

 It just won't work because it doesn't solve the problem. Instead, it attempts to conceal the problem in fashion that pretends it never existed. Let's walk through this so a 5 year old can understand it.

image062
Interestingly enough, Reinhart and Rogoff, of This Time Is Different: Eight Centuries of Financial Follyfame contend "that historically, significant waves of increased capital mobility are often followed by a string of domestic banking crises". If that is actually the case, then the very goal of the Euro project was bound to bring about a sting of banking crises and all of this was actually inevitable. As excerpted:

image037

The forgotten history of domestic debt has important lessons for the present. As we have already noted, most investment banks, not to mention official bodies such as the International Monetary Fund and the World Bank, have argued that even though total public debt remains quite high today (early 2008) in many emerging markets, the risk of
default on external debt has dropped dramatically, especially as the share of external debt has fallen. This conclusion seems to be built on the faulty premise that countries will treat domestic debt as junior, bullying domestics into accepting lower repayments or simply 12 defaulting via inflation. The historical record, however, suggests that a high ratio of domestic to external debt in overall public debt is cold comfort to external debt holders.

Default probabilities probably depend much more on the overall level of debt. Reinhart and Rogoff (2008b) discuss the interesting example of India, who in 1958 rescheduled its
foreign debts when it stood at only1/4 percent of revenues. The sums were so minor that the event did not draw great attention in the Western press. The explanation, as it turns out, is that India at this time had a significant claim on revenue from the service of domestic debt (in effect the total debt-to revenue ratio was 4.4. To summarize, many investors appear to be justifying still relatively low external debt credit spreads because “This time is different” and emerging market governments are now relying more on domestic public debt. If so, they are deeply mistaken.

media-wpmu-uploads-blogs.dir-1-files-2011-05-image0032-300x400

... and this part from Saturday, 23 July 2011 The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!: I detail how I see modern bank runs unfolding

image012

Now, with a full background on how we got to where we are now we move over to Goldman's recommended defensive plays to a Grexit, as reported by ZeroHedge. Before we go on, remember my admonitions about blindly following Goldman's retail and institutional analyst recommenations:

    • If tensions turn systemic, EM assets likely to see pressure

Even as Greek concerns have escalated, risk markets have so far traded in a resilient fashion, treating those concerns as effectively isolated to Greek assets. But in previous episodes of acute Euro area stress in 2010 and 2012, a wide range of EM assets came under pressure, especially CEE FX and CDS. Hungary was the hardest hit across all asset classes.
 

    • To hedge Greek risk, long $/CEE

Among EM, $/CEE has seen the largest moves in times of Euro area stress. This has reflected a weakening EUR and EUR/CEE moving higher. Specifically, the HUF and PLN are likely to depreciate against the USD in the medium term as policymakers welcome weaker currencies in the fight against ‘lowflation’, and would move even more rapidly if Greek risks do become systemic. Locally, the entry levels are also attractive given the rally in EUR/CEE in recent weeks.

*  *  *

Hedging Greek risks in EM assets

Euro area sovereign and financial risks rising again
The nearly constant barrage of headlines reporting comments from Greek and Euro area policymakers is indicative of the renewed deterioration in sovereign risk. Greece and its Euro area counterparties continue to work within a tight schedule to avert a disorderly outcome. Our base case remains that some new accommodation will eventually be found between Greece and the European authorities. But risks of an accident remain as commercial bank deposit outflow and a shortfall in tax collections can precipitate a critical situation in the interim. Even if an agreement to extend the programme is reached this week, the gap between the demands of the Greek side and the actual programme requirements is very large.

The situation is fluid, and if an agreement is reached quickly to extend the Greek bailout, then broader asset markets (including in EM) should stay largely unaffected. But we continue to receive questions on how EM investors can consider hedging the risks of a more messy outcome – that either leads to a ‘no man’s land’ where Greece is without the funding that comes along with a programme or, in the worst case, an outright exit from the common currency. In these latter outcomes, with systemic risk likely to increase, EM assets would come under pressure.

Three weeks ago, we described how in previous episodes of Euro area turmoil, on average EM bond yields tracked the move lower in G3 yields as demand for safe assets spiked, whereas EM credit spreads widened, EM FX weakened versus the USD and EM equities came under broad pressure (see ‘Taking one step back’, EM Weekly: 15/03, January 29, 2015). That said, both EM and G3 bond yields are now at much lower levels – which makes the argument for being long EM fixed income more debatable in the current context. In this EM Weekly, we drill further down within EM FX, CDS and equities to evaluate the relative performance across countries over those previous episodes to help identify how best to protect portfolios against an escalation in Greek risks.

The EM asset experience in the 2010 and 2012 episodes of Euro area stress
Even as concerns around the extension of the Greek programme have escalated, risk markets have so far traded in a resilient fashion, treating those concerns as effectively isolated to Greek assets. But in previous episodes of acute Euro area stress, a wide range of EM assets came under pressure as risk traded poorly. Below we study the two previous episodes of Euro area stress in 2010 and 2012 to assess how different EM assets were affected on average. Euro area stresses were also elevated in 2011, but in that episode it is harder to distinguish between the impact of the Euro area worries and the US debt-ceiling crisis, which played a major role in roiling markets.

Starting with EM FX, Exhibits 3 and 4 show the average moves versus the USD and the EUR over the two periods when Euro area stresses were at their most acute: mid-April to early June 2010 and mid-March to early June 2012. Exhibit 3 shows that in these ‘risk-off’ periods, almost all EM currencies depreciated versus the USD. In relative terms, the largest average depreciations were recorded in the Central and Eastern European region (PLN, HUF, CZK), followed by a couple of the high-yielders (RUB, ZAR) in the European time-zone. The MXN and BRL were most affected in the LatAm region, whereas NJA currencies outperformed.

Most EM currencies appreciated versus the EUR (Exhibit 4), which is unsurprising given that the Euro area was the epicentre of the shocks at these times. But, notably, the CEE-4 currencies saw meaningful depreciations versus the EUR, even as the EUR itself was depreciating. The geographical proximity and the strong trade and financial linkages of the CEE region to the Euro area meant that currencies there have tended to bear the brunt of Euro area crisis episodes.

 

Goldman believes Hungary is the most susceptible to Grexit risks. Since I've only excerpted the analysis, you can get the full story from the ZeroHedge article direcly... 

$/HUF and $/PLN weakening our preferred ways to hedge Greek risks
At the current juncture the market appears to be making a couple of assumptions: first, that the ongoing disagreements between the Greek government and the Eurogroup represents the typical political posturing that has tended to take place in advance of eventual eleventh hour agreements; and, second, that in the event that agreement cannot be reached by the end of February, the upgraded EU toolkit, including the OMT and the soon-to-be-initiated sovereign QE, will keep market pressures from spilling over into the rest of the EU periphery, and by extension into the broader market.

Our read of the situation is less sanguine on both counts. An eventual agreement between the Greek government and the Eurogroup is still our base case, but we worry that the gap between the current programme on offer and what would be acceptable to a majority of the Greek parliament is very large. In addition, market pressure has often been the forcing variable in the past in helping to close this gap, so paradoxically the absence of broader market pressure is likely to make an eventual agreement that much less likely. In the event that an agreement cannot be found, and ‘Grexit’ becomes a serious possibility, we would expect systemic concerns to affect markets more broadly than currently. As Francesco Garzarelli discussed (in Global Markets Views: ‘Systemic risks posed by Greece set to peak at month-end’, February 17, 2015), even if peripheral bonds are shielded from the fallout by the ECB’s purchases, we would expect the EUR and stocks to come under downward pressure, and credit spreads to widen, reflecting the downside risks to a fragile economic recovery in the Euro area.

Given the results documented in the previous section, our preferred way to hedge these risks would be through long $/CEE positions. In previous episodes of Euro area stress, the combination of the EUR moving lower versus the USD and EUR/CEE moving higher has meant that $/CEE has tended to see the largest moves across the EM FX complex. Even setting aside Greece-related risks, our forecasts call for EUR/USD to move to 1.11, EUR/PLN to weaken to 4.22 and EUR/HUF to weaken to 320 in 6 months, as policymakers in these economies welcome or actively seek weaker currencies in their fight against ‘lowflation’. This implies that the HUF and PLN are likely to weaken against the USD in the medium term based on macro and policy considerations, and if Greece-related risks turn systemic, the weakening is likely to be even more rapid. Finally, given the rally in EUR/HUF and EUR/PLN over the past three weeks, locally the entry levels are also much more attractive.

I've excluded the portions relating to CDS, but the EM FX is more than what's needed. I'm fully aware that CDS trades and exotic forext pairs may be beyond the ken of most retail investors and likely many institutional investors as well (which is why banks get them into such precarious situations, that cost them so much to get out of, ie. How Veritaseum's UltraCoin Could Have Saved Harvard Over $1 Billion!). Alas, I digress. Those who follow me know that I clearly aim to disintermediate rent seeking in the financial space and to return said rents back to the community at large in order to let true talent, intellect, and most importantly drive (the prime determinent of success absent institutional barriers to entry, participation and geo/socioeconomic discrimination). These tweets make a good segway into how and why consumers - big and small (like Harvard who was taken advantage of by the Bank Morgans and stay at home day traders) - can now compete with Wall Street and stand toe to toe. 

Now, I will work the magic of technology and show everyone who can make it to the bottom of this article (unfortunately, that is truly only a select few) how to encapsulae the Goldman researh (which I haven't personally vetted, but does make sense on its face) in one single trade. This trade, a digital swap, is something that Goldman itself, nor any of its competitors (save Veritasuem, which is a software concern and not a financial institution) can offer you. Goldman suggests "$/HUF and $/PLN weakening our preferred ways to hedge Greek risks". A cursory look at these two pairs through both the 2012 scare and now lends credence to the Goldman assumption.

Grexit Hedge using Dual CEE Forex pairs

 So, let's take a position on both pairs with a single UltraCoin swap. This can be be modeled with Veritaseum's UltraCoin Trade Modelling Spreadsheet before actually being entered through the actual ultracoin client. Keep in mind that, as a digital derivative transaction:

  1. You can take as small or as large a position as you please. This example uses a $4000 at risk amount, you can use as little as 12 cents or as much as $300 million.
  2. The use of leverage can give you extreme buying power (up to 10,000x), but along with it is extreme risk and larger fees. At the end of the day, its still beats ANYTHING Goldman can, or would offer you. Here we have the equivalent of two forex pair swaps for $100,000 for $121. Read  How Veritaseum's UltraCoin Could Have Saved Harvard Over $1 Billion! to see how much JP Morgan and Morgan Stanley charged Harvard. Here's a spoiler, it was more than the 10 basis points they would have been charged with UltraCoin!
  3. This is a very custom swap. I'm not saying Goldman can't do it, but it's not just sitting around in their inventory, and they will charge you accordingly - with no more liquidity than is offered here, but with a LOT less transparency and safety. As a matter of fact, you always either no where your money is (in the blockchain) or have it in your possession (via your wallet), that is unless you lose it. Here's a graphic of the order placed, and to find the location of your funds at any time, just hit that "Track Transactions" button at the bottom.

Grexit Hedge using Dual CEE Forex pair UltraCoin Swap order placed

    Rest assured, Goldman, et. al. can never tell you where your funds are at any specific time. The ex-president of Goldman, Mssr. Corzine can attest that Man Financial probably couldn't either, as per Wikipedia:
    1. In 2011, MF Global faced major pressures to its liquidity over several months. Some analysts and financial commentators indicate that MF Global probably experienced a number of trading days in 2011 during which the firm's bets on sovereign debt would have required the use of customer funds to meet capital requirements, thereby maintaining operating funds and possibly overall solvency. A large part of these pressures on MF Global were a result of the firm's involvement in a significant number ofrepurchase agreements. Many of these repo agreements were conducted off their balance sheet. Also, MF Global made a $6.3 billion investment on its own behalf in bonds of some of Europe’s most indebted nations. Failure of those, and other, repo positions contributed to the massive liquidity crisis at the firm.
  1. UltraCoin is P2P software, not a brokerage firm or a bank hence there is absolutely no exposure to our balance sheet or the risks of such that my ensue. It never, at any time, even takes possession nor has control of any of your funds, thus it can never abscond with them or use them in an inappropriate manner.
  2. The only other possible (okay, credible) sales objection the Goldman team could raise to prevent their clients from defecting to a software solution as compared to their 45% of gross revenues paid as their compensation solution is that the Veritaseum solution rides on the Bitcoin blockchain, exposing users to BTC volatility. Outside of the fact Goldman would likely charge you more for the swap than the volatiity may cost you, I have modeled in a 10% drop in BTC prices, along with all the fees charged to show you what happens when the swap is constructed properly. Just follow the series of graphics below carefully and read everything.

 Grexit Hedge using Dual CEE Forex pair UltraCoin Swap

I love to talk! I'm willing to discuss anything in this article, from Grexit to Wall Street banks to the technology that challenges their hegemony, with anyone. Just reach out to me here.

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 From Wikipedia:

Plan Z during 2012

"Plan Z" is the name given to a 2012 plan to enable Greece to withdraw from the eurozone in the event of Greek bank collapse.[16] It was drawn up in absolute secrecy by small teams totalling approximately two dozen officials at the European Commission (Brussels), the European Central Bank (Frankfurt) and the IMF (Washington).[16] Those officials were headed by Jörg Asmussen (ECB), Thomas Wieser (Euro working group), Poul Thomsen (IMF) and Marco Buti (European Commission).[16] To prevent premature disclosure no single document was created, no emails were exchanged, and no Greek officials were informed.[16] The plan was based on the 2003 introduction of new dinars into Iraq by the Americans[16] and would have required rebuilding the Greek economy and banking system ab initio, including isolating Greek banks by disconnecting them from theTARGET2 system, closing ATMs, and imposing capital and currency controls.[16]

Wolfson economics prize

In July 2012, the Wolfson economics prize, a prize for the "best proposal for a country to leave the European Monetary Union," was awarded to aCapital Economics team led by Roger Bootle, for their submission titled "Leaving the Euro: A Practical Guide."[19] The winning proposal argued that a member wishing to exit should introduce a new currency and default on a large part of its debts. The net effect, the proposal claimed, would be positive for growth and prosperity. It also called for keeping the euro for small transactions and for a short period of time after the exit from the eurozone, along with a strict regime of inflation-targeting and tough fiscal rules monitored by "independent experts."

The Roger Bootle/Capital Economics plan also suggested that "key officials" should meet "in secret" one month before the exit is publicly announced, and that eurozone partners and international organisations should be informed "three days before." The judges of the Wolfson economics prize found that the winning plan was the "most credible solution" to the question of a member state leaving the eurozone.

... In February 2015 the Russian government stated that it would offer Greece aid but would only provide it in rubles.[31]

Kathimerini reported that after the 16th February Eurogroup talks Commerzbank AG increased the risk of Greece exiting the euro to 50%.[32] The expression used by TIME for these talks is "Greece and the Euro Zone dance on the precipice".[33]

Effect upon the European economy

Claudia Panseri, head of equity strategy at Société Générale, speculated in late May 2012 that eurozone stocks could plummet up to 50 percent in value if Greece makes a disorderly exit from the eurozone.[34] 

Wait a minute! That's not possible. Goldmans Sachs says to buy EU eqities because of ECB QE and NIRP! We all know Goldman Sachs is always right, that's why more than half of hedge funds are following suit...

After all, do you remember Goldman's recommendation to sell the Swiss Franc? It worked out excellente', reference When Everybody Thinks They're Right, They're Almost Guaranteed to be Wrong! I Think This Is The Biggest Bubble In World History.

Bond yields in other European nations could widen 100 basis points to 200 basis points, negatively affecting their ability to service their own sovereign debts.[34]

Hopefully with no correlation whatsoever to US-based debt, cause Goldman also recommended - Long U.S. High-Yield credit risk: The recent underperformance of the U.S.High-Yield market should prove transitory, the bank reckons. I addition, what will the ECB do after all of this QE and NIRP if bond yields spike anyway? Well.. More NIRP and QE of course!

But, as early as March 2010, other European financial economists had supported the notion a swift Greek withdrawal from the Eurozone and the simultaneous reintroduction of its former national currency the drachma at a debased rate, arguing that the European economy as a whole would eventually benefit from such a policy change : "Such an abrupt readjustment might be painful at first, but it will ultimately strengthen the Greek economy and make the Eurozone more cohesive, and thus better at confronting the difficult economic circumstances and dealing with them." [15]

Effect upon the world economy

Europe in 2010 accounted for 25 percent of world trade, according to Deutsche Bank.[34] Economic depression within the European economy would ripple worldwide and slow global growth.[34]

Immediate economic fallout inside Greece

The theory behind the readoption of an independent Greek national currency is that such a currency, freely floating on the international markets, would be able to depreciate in value and thus Greek exports and shipping services would become more competitively priced on the world market. Imports would be correspondingly more expensive, encouraging domestic production in Greece. However, persuading the Greeks and their businesses to replace their euros with a currency intended to collapse in value would be more than somewhat challenging, and current Greek debts would remain denominated in euros.

On 29 May 2012 the National Bank of Greece warned that "[a]n exit from the euro would lead to a significant decline in the living standards of Greek citizens." According to the announcement, per capita income would fall by 55%, the new national currency depreciate by 65% vis-à-vis the euro, and the recession which Greece has been in for five years would deepen to 22%. Furthermore, unemployment would rise from its current 22% to 34% of the work force, and the inflation, which is currently at 2% would soar to 30%.[20]

According to the Greek think-tank Foundation for Economic and Industrial Research (IOBE), a new drachma would lose half or more of its value relative to the euro.[17] This would drive up inflation, and reduce the purchasing power of the average Greek. At the same time, the country's economic output would drop, putting more people out of work where one in five is already unemployed. The prices of imported goods would skyrocket, putting them out of reach for many.[17]

Analyst Vangelis Agapitos has estimated that inflation under the new drachma would quickly reach 40 to 50 per cent to catch up with the fall in the new currency's value.[17] To stop the falling value of the drachma, interest rates would have to be increased to as high as 30 to 40 per cent, according to Agapitos.[17] People would then be unable to pay off their loans and mortgages and the country's banks would have to be nationalised to stop them from going under, he predicted.[17]

But what if Greece put a floor under its currency with a peg to gold and a soft redemption policy (with a borderline prohibitive premum to be paid if the drachmas were actually redeemed for the gold)? Such a floor may actually make the Drachma preferable to what would be a rapidly destabilizing euro with a guarantee of further debasement, QE and volatility to come. Under such a scenario, capital may actually fly into the drachma, particulalry of they default on current euro based debts and wipe the slate clean. Concerns about paying back euro denominated debt with the drachma are ill founded if the euro based debt faces mass defaults. Look at the chart below. Someone was at least thinking about this idea.

Below the chart is a trade setup to monetize such an event within three months.

The Grexit into Gold Conspiracy Theory

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On January 14th, 2015 I penned Toil, Trouble, Crash and Bubble! Monetizing The Biggest Crash of the Millenium? with the following graphic...

Here comes the crash

For those who think I'm doing the Doom & Gloom thing, I simply suggest you do the math. The ECB does QE2, the currency markets go bonkers as those central banks with small balance sheets run out of the way of the steamrollers (but nobody expects lower quarterly results, of course), and every fund and their aunt Petunia engage in the most thoughtful macro and intensive fundamental analysis ever possible. What's the result of this deep, introspective thinking. Chase the Fed ECB, of course!

This is what the sacrosanct advice of Goldman Sachs macro research department suggests, after all. They accurately predicted the (obvious) ECB QE program, and suggest you pile into EU equities for the same reason the rest of the fund world did - low rates mean higher stock prices, right? Well, it's not so simple. I think investors should look a little deeper and dig past the groupthink. Europe has severe structural issues that a NIRP answer will exacerbated vs. ameliorate, at least over the medium term. Yes, you get that short term pop, but then what. I don't think the Goldman nod to groupthink is a good idea. After all, they also suggest - "Sell the Swiss franc against the Swedish krona: A monetary policy divergence play." This would have lost forex traders' a fortune. Wait a minute, it did lose them a fortune, didn't it. One really should have seen it coming, for those small countries cannot outrun the ECB, and it was obvious, reference  It's All Out War, Pt 3: Is the Danish Krone Peg to Euro More Fragile Than Glass Beads? The Danish National Bank Infers So!

And as for the wisdom of piling into those equities because we're NIRPing... Professor Shiller calculates us at being at an all time, worldwide historical high in terms of real PE. Wait, but... It's different this time!

The worlds biggest bubble

 I'm looking for traders to take positions (either in agreement with, or contrary to) the research and opinion contained herein - or using your own trade setups and fundamental/macro outlook - via our UltraCoin P2P swap platform. You can use actual capital or I can give you Testcoins, basically, play money, to trade with me and my team and all I ask for is feedback on the system and the ability to quote you (which is not mandatory, but it would be nice). You can trade stocks, bonds, commodities, forex and forex pairs long or short, or swap the exposures directly for another asset, ex. S&P 500 for the LSE 100, Apple for Google, etc. Digital leverage is available, up to 10,000x worth (double digit profits/losses can be had from 11 basis points in movement, or less - so be careful), with no possibilty of a margin call since the trades are pre-funded.

Any who are interested can contact me here, and download the trading client here.

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 With bitcoin 5 day standard deviation starting to quell, many traders are losing interest as this is consdered a sideways trading market. Not to fear, bitcoin is still extremely volatile compared to just about all forex. Below is an info graphic show the components of a long BTC trade with 55x price leverage and hard set P/L parameters (ie. you can only lose or win ~the amount of capital put at risk - no more and no less. At 55x leverage for a 2 day trade, the cost/potential return ratio is maximum given a standard deviation of just over 12.5%. - as performed through an UltraCoin BTC swap.

I urge all bitcoin traders to give this a try. Be aware that one leg of the swap is teh EURUSD pair to be paid for the long BTC exposure. The reason is because (at least for longer term transactions/swaps) chances are the euro will depreciate further relative to the dollar.

If one were to take a short position in BTC, then I (personally) would pay teh USDJPY pair since it looks like Japan is not interested in having the ECB out-debase its currency. I believe Japan was the reason the ECB engaged in QE at this level in the first place. See my currency war series on the blog, or the several thousand article on BoomBustBlog for more info.

BTC trade

This is just the beginning of what is capable with bitcoin (and this is pure bitcoin, not altcoins, no tokens, no sidechains, just pure, old fashioned [at least as old as it can be considered] bitcoin) and 2.0 business models. Wait until you see the new stuff we'll be rolling out.

I implore you to download our:

There's also a lot of BTC industry research available for download as well as our blog which has some of the best fundamental and macro research available on the web. Hardcore traders, investors and speculators should check out my latest piece: It's All Out War, Pt 3: Is the Danish Krone Peg to Euro More Fragile Than Glass Beads? The Danish National Bank Infers So!

Any bitcoin-rich individuals or entities looking to provide liquidity to the system, individuals/compamies who wish to partner, accredited investors looking for a piece of the action (you have to be willing to sign and NDA, we are quite open to working with anybody), or those who simply want to shoot the breeze should feel free to contact us.

Bitcoin 2.0 An example of an UltraCoin smart contract summary

Here's some info about me, my team and what we're doing at Veritaseum:

 

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Depositphotos 22847034 800px originalI was looking at the offerings of a large US bitcoin exchange just now, after hearing that Coinbase had the highest volume of any US-based broker just weeks after opening an exchange (we’ll discuss that at a different time, since Coinbase is waiving fees meaning those users are hot money, but likely are part of the largest installed bitcoin user base in the world and growing rapidly). What I found was illuminating, at least for me since I don’t follow the offerings of BTC brokers and exchanges that closely. I noticed several of the industry (BTC exchange) leaders offer leverage, plain vanilla swaps and TRS (total return swaps - basically fixed/variable rates in major fiat denominations for cryptocurrency (BTC. LTC, DRK) exposure). I said to myself, “Wow, that’s pretty advanced.” Then I looked at the fees, and saw the swaps were priced up to and past 15%. Then, upon further research, I realized that these swaps were financing mechanisms for margin lending. The first thing that came to mind was the difference, and limitations that come with the business models of first generation bitcoin companies and second generation Bitcoin companies. Take notice in the difference of the capitalization. Lower case "b" denotes the accounts of value that the mainstream media calls digital currency. Upper case "B" denotes the blockchain-based, protocol driven services and capabilities behind the lower case "b". Generation 1.0 v. generation 2.0!

To put this into perspective, Veritaseum's UltraCoin offers user programmable swaps (ie. you can make your own CDS, TRS or plain vanilla, or even a custom swap) with exposures to not just 3 cryptos and 3 or 4 fiat currencies, butall major and most exotic currency pairs (dozens) as well as over 45,000 tickers covering EVERY major asset class (stocks, bonds, forex & commodities as well as cryptos) from exchanges throughout the world. This is all capable at a sliding scale of 10 to 25 basis points, round trip. That's the equivalent of 5 bp to 12.5 bp per trade. In addition, all of this is done without UltraCoin having any possession of your funds, whatsoever. Veritaseum (the company behind UltraCoin) is a software concern, not a financial entity, thus you have no exposure to our balance sheet. We cannot MT. Gox you and you essentially have no counterparty, default or credit risk because your counterparty is the blockchain, and you trade peer to peer vs. through a centralized exchange. Pretty big difference from the legacy systems that we're all used to, no?

The Difference between Bitcoin 1.0 and Bitcoin 2.0 Companies

To begin with, I'd like to make clear that not only is the title misleading, but all references to the same are essentially inaccurate. Bitcoin itself is still in beta stage (0.9x) thus its not accurate to refer to 1st and 2nd generations of bitcoin businesses. If anything, we're all in beta. Now that I've gotten that off of my chest... The first bold generation of bitcoin entrepreneurs (it's amazing that you can refer to companies born 2 and 3 years ago as a previous generation, it just goes to show you how fast this space is moving!) built businesses based upon bitcoin as a legacy commodity. Basically, they bought, sold, transmitted or transferred it as a unit of value. They did this because that's how everything was done for the last several thousand years in the financial services industry. Basically, they had no choice - or so they thought. Then came those who read the Satoshi whitepaper and the bitcoin wiki and saw a very different meaning. My team and I are among those entrepreneurs. We saw that bitcoins were malleable, programmable, tools with which one can use to paint upon the canvas of value. A far cry from the moving of static financial widgets from place to place. Think of moving bitcoins around (bitcoin 1.0 companies) vs programming bitcoins to act on their own according to their contractual owner's wishes (bitcoin 2.0 companies) akin to pushing a model T Ford around town vs. programming your driverless electric Tesla to go by the grocery store to pick up some fresh produce before swinging by the school to pick up your kids on the way home to meet you to take your wife (girlfriend?) out to dinner.

A Real World Comparison of Bitcoin Companies

Tickers Available

Veritaseum's UltraCoin: ~45,000+

Asset Classes Available

Veritaseum's UltraCoin: Stocks, Bonds, Commodities, Forex, Cryptos and many indices

Costs Veritaseum's UltraCoin: up to 25 bp round trip for all products (primarily smart contract swap driven)

Leverage available: Veritaseum's UltraCoin: up to 10,000x, with finite digital P/L parameters (no margin calls, no negative account drawdowns)

How does Veritaseum do it? We program the bitcoin to act according to a mutual agreement between two or more parties, then send it to the blockchain to act accordingly. These agreements are self executing, unbreakable promises known as "Smart Contracts". In this case, they are highly customizable, P2P OTC swaps, but we are working on a multitude of other products, services and solutions as well. We also supply very high level, unconflicted, independent and impartial strategy and research for our customers. Since we don't use our balance sheet and we don't act as a principal, we have no incentive to skewer the research in any particular direction.

Smart Contracts as Transaction Vehicles: The Safest Possible Way To Exchange Value

Veritaseum's UltraCoin BTC-based smart contracts are: 1. highly flexible - you design your own derivatives yourself using your own parameters via our simple graphical user interface 2. self-executing 3. autonomous 4. unbreachable: we call them, the unbreakable promise! They are backed, fortified and stored by/on the Bitcoin blockchain itself 5. uber-transparent: simple click the "trace transaction" button to find the location and historical travel path of your assets anytime, from anywhere you have an internet connection

Trading Through a Balance Sheet-Based Financial Institution vs. Distributed, Decentralized, P2P Software Concern

What I do want to accomplish is the education through the fact that the Bitcoin protocol has given rise to the genesis of a new type of company, with a new business model that can offer a totally new type of product. As you were able to see from above, Veritaseum's UltraCoin offers a very uniquer product with many if not all of the attributes that potential competitors offer, with a slew of attributes that others can't touch. This is done at 1/150th of the price and at much less risk! When dealing with Veritaseum's UltraCoin, you can never get Gox'd because we never have (nor do we want) possession of your coins or fiat - every, at any time. Because we don't user our balance sheet (we are a software company, not a centralized exchange or broker/dealer) you:

  • are never exposed to us as a counterparty, we make the blockchain your counterparty

  • never have to worry about our capital reserves or the capitalization/credit of your initial counterparty (all trades are fully funded at the outset, even a heavily levered trade at 10,000x),

  • You never have to worry about negative drawdowns, negative equity or margin calls

  • If a catastrophic event were to occur, say bi-coastal earthquake takes out our datacenters on the east and west coasts simultaneously while a meteor hits the backup center in the midwest, you will still be able to recover you funds - on your own. Since we do not have possession of your funds you don't have to worry about us absconding with them nor getting blown up with them. Each trade has a catastrophic rollback feature which will put you back into your original funding position n-time units after expiry. Unfortunately, you will not be able to complete your trade, but if two bi-coastal trades hit at the same time as meteor to the mid-west, you may not be studying that EUR short anyway :-)

This is just the beginning of what is capable with bitcoin (and this is pure bitcoin, not altcoins, no tokens, no sidechains, just pure, old fashioned [at least as old as it can be considered] bitcoin) and 2.0 business models. Wait until you see the new stuff we'll be rolling out.

I implore you to download our:

There's also a lot of BTC industry research available for download as well as our blog which has some of the best fundamental and macro research available on the web. Hardcore traders, investors and speculators should check out my latest piece: It's All Out War, Pt 3: Is the Danish Krone Peg to Euro More Fragile Than Glass Beads? The Danish National Bank Infers So!

Any bitcoin-rich individuals or entities looking to provide liquidity to the system, individuals/compamies who wish to partner, accredited investors looking for a piece of the action (you have to be willing to sign and NDA, we are quite open to working with anybody), or those who simply want to shoot the breeze should feel free to contact us.

Bitcoin 2.0 An example of an UltraCoin smart contract summary

Here's some info about me, my team and what we're doing at Veritaseum:

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Continuing the theme "Using UltraCoin To Take Positions On Goldman Sachs 2015 Recommended Global Macro Trades" (& part 2), we will focus on recommendation number 2 as sourced from the Wall Street Journal

Buy 10-year U.S. Treasurys with yields above 3% but not below 2%

The bank expects 10-year U.S. Treasurys, currently yielding around 2.3%, to trade at or above 3.0% by next June.

It may be cheating, but we've had two months to peak into the potential performance of these recommendations, and to date this one hasn't done so well. In my defense, I've been rather skeptical of the "goldilocks" perspective banks anyway, as I stated verbosely in "Using UltraCoin To Take Positions On Goldman Sachs 2015 Recommended Global Macro Trades, pt 1". To put it succinctly, despite all of the rhetoric, the US, and its banks in particular, simple can't afford for rates to cliimb materially. Here's where we stand now in relation to what GS said in November:

CBOE 10 yr note yields Now, there's still 4 months left for this trade to turn to Goldman's client's (muppets, introductory link to the article in the first paragraph for the definition of a muppet) favor. I'll leave it up to you to decide which way you want to lean, while I provide you the platform to go both ways...

 GS 2015 trade reco long 10 yr yields

As it is currently set up, this trade has a maximum win/loss of $1,200 with a capital commitment of $1,436.61. Price leveraged 200x with 300% collateral. As pictured, it is set up to go along with the Goldman recommendation. If you are contrarian, simply hit the switch button in the center of the console and the positions will be reversed to allow you to take the opposing side of this trade.

For those who are not familiar with my previous calls, reference: - 1. Reggie Middleton via Wikipedia - 1. A list of many (but not all) of my calls and mentions in the media And a simple walk through video of a sample Ultra-Coin trade: A Simple Apple Trade Using A Pure Bitcoin Wallet: The UltraCoin Client

New comers to BTC derivative trading are urged to download our:

  1. tutorial

  2. spreadsheet-based trade model to assist you designing your own custom made swaps before committing capital

    1. and of course, the UltraCoin BTC wallet for Windows - or - Mac & Linux, which doubles as the trading client. The wallets have a "Demo Mode" which allows you to trade on testnet if, after using the spreadsheet modeler, you are still not comfortable committing live coins. You can get the demo (testnet) coins here.

Feel free to contact us.

My Twitter Updates

ReggieMiddleton VeADIR access options have exploded! You can now log in or create a new account through nearly any popular browser… https://t.co/Mr4D7NM8uL
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ReggieMiddleton @eddiejRobo Veritaseum is much, much cheaper than any source available publicly online. Currently, we're selling go… https://t.co/lhqv4UeF6c
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ReggieMiddleton RT @joshthedavid: How France keeps a grip on Africa. This is why @ReggieMiddleton is important. https://t.co/UhzVcFxfdK
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ReggieMiddleton @kai_trading That is basically what we are doing now. The model has evolved over time, but still remains true. Tokenization of everything!
Friday, 31 May 2019 15:00

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