Thursday, 27 June 2019

A Analysis

 If you haven't heard, we're giving out free, fully smart contracts as a 5% rebate to anyone who purchases any of our research packages above the introductory novice $50 level. This is not your Daddy's rebate! The rebate actually gets larger as DB goes down in price. For those who may be coming late to the party, we can offer a 5x long gold (or even a long gold, short DB) smart contract rebate as well. Of course, the bulk of our research targets banks and entities other than DB, but I thought we'd make DB the subject of the rebate to drive the point home. Below is an actual contract crafted off of the price of a single share of DB for about 2 weeks.

Veritaseum 5x Short DB Smart Contract

Click here to explore and subscribe to our research. You will have to be willing to fully identify yourself and comply to the terms or our program (in essence, promise not to use the package for anything other than our rebate) in order to qualify for the rebate. Once the subsciption is paid for, email us to get started.

Oh yeah, if you haven't heard...

An Analysis of Deutsche Bank's Likely Recapitalization - German Tax Payer Bailout or German Bank Depositor Bail-in?

Deutsche Bank is going to need some money, and it's going to need some quite soon. The next two or three articles that I write will focus on why there is such a need. In a concerted effort to reduce or potentially eliminated the risk of taxpayer-funded bail-outs of European banks, the EU implemented a new “bail-in” regime beginning on January 1, 2016. As such, rules which require banks and certain systemically significant market participants in EU member states will have to write-down, cancel, convert into equity or otherwise modify certain unsecured liabilities if such steps are required to recapitalize the institution. What is the most bountiful unsecured liabilities of a bank? Read more...

 

Our next article will continue to hammer home the liklhood that DB will have to recapitalize, and where they probably WONT'T be getting the money from, as well as the likelihood it will come from someone who really didn't plan on giving it up (Ahem, depositors/savers/checking account holders). For those who are not yet convinced, peruse these related items...

The research and knowledge subscription module "European Bank Contagion Assessment, Forensic Analysis & Valuation" contains a full report of a very large European Deutsche Bank counterparty that faces a full 27% downside from current levels. It appears as if no one suspects a clue. It also contains much, much more (including at least 3 to 5 suspect banks). We can break this apart a la carte, if requested.

As excerpted:

Susceptible Bank 1: Financial Modeling

 

Americans are trained to know and to cherish the ideals of democracy and to believe in the American Dream which teaches most Americans that equal opportunity is here for all and that the chances for success for anyone lie within him/herself. None of us are taught to know and understand the American status system which is an important part of our American Dream and often makes the success story a brilliant reality. We all are trained in school to understand democratic ideals and principles and to believe in their fullest expression in American life, but we only learn by hard experience, often damaging to us, that some of the things we learned in early life exist only in our political ideals and are rarely found in the real world. We never learn these things in school, and no teacher teaches us the hard facts of our social-class system, and by extension, our capitalist class system.

We posit that one should study the basic facts of our status system and learn them through systematic, explicit training which will teach at least the adult student much of what he/she needs to know about our status order, how it operates, how he/she fits into the system, and what he/she should do to improve their position or make their present one more tolerable.

The primary drivers of social class mobility (i.e. Less stringent socio-economic stratification) are knowledge and access. Barriers to each of these is what drives socio-economic stratification and stifles social class mobility. For the extreme minority on the top of the socio-economic ladder, it is in their best interest to stifle mobility as much as possible, for mobility only represents:

  1. 1) Downward movement for them, or
  2. 2) Upward movement for those below them.

Any which way one can look at it, mobility, at best, represents displacement and lesser access, less capital, less relative status.

For those who are not members of the very top minority, socio-economic mobility usually means brighter outlooks – as long as said mobility is upward-facing (remember, mobility can be in both directions). As a matter of fact,

The primary products of Veritaseum are knowledge (through our interactively delivered research and opinion) …the lower you move down the socio-economic hierarchy, the more critical and leveraged the shift in socio-economic status becomes.... And access (through our patent-pending blockchain technologies) …

We are, in essence, the socio-economic mobility vendors.

Click here to access the Veritaseum Socioeconomic (Social Class) model... 

This model congeals basic materials about social class in America, identifies the multiple levels, and makes apparent the categories that can facilitate the movement from lower levels to higher ones, and vice versa. Its fundamental goals are to tell the reader (1) how to identify any class level, and (2) how to find the class level of any individual.

Social class enters into almost every aspect of our lives, into marriage, family, business, government, work, and play. It is an important determinant of personality development and is a factor in the kind of skills, abilities, and intelligence an individual uses to solve his problems. Knowledge of what it is and how it works is necessary in working with school records and the files of personnel offices of business and industry. What a woman buys to furnish her house and clothe her family is highly controlled by her social-class values. Keeping up with the Joneses and proving "I'm just as good as anybody else," although fit subjects for the wit of cartoonists because these slogans touch the self-regard of all Americans, are grim expressions of the serious life of most American families. The house they live in, the neighborhood they choose to live in, and the friends they invite to their home, consciously, or more often unconsciously, demonstrate that class values help determine what things we select and what people we choose as our associates.

This model provides a ready and easy means for anyone to equip him or herself with the basic knowledge of socio-economic class so that they can use this type of analysis whenever such factors are important in helping them to know a situation and adjust to it. I have used the model to help predict behavior in the investment real estate market, particularly the residential market in the NYC area where gentrification was rampant. It is now even more apropos, given the significant asset deflation, constriction and selective re-expansion of credit, and considerable shifting of wealth and resources within the US and worldwide.

The businesses of those who make, sell, and advertise merchandise as diverse as houses and women's garments, magazines and motion pictures, or, for that matter, all other mass products and media of communication, are forever at the mercy of the status evaluations of their customers, for their products are not only items of utility for those who buy but powerful symbols of status and social class. This model, and the more detailed and sophisticated one that shall follow, can greatly aid them in measuring and understanding the human beings who make up their markets. Note: This model has been geared towards the NYC Metropolitan area, hence may need to be fine-tuned for dissimilar rural, suburban or non-US areas.

The model has been built upon a modified version of the Index of Status Characteristics (I.S.C.).

 

Social Mobility

 Social class is defined (on this blog) as the amount of control one has over one's socio-economic environment. It is much more than money, although money is a large component. For instance, Barack Obama is in a higher class than Robert DeNiro or Michael Jackson, although Robert DeNiro and Jay-Z are most likely wealthier. Obama's higher class stems from his ability to exert more control over his socio-economic environment. The factors that this author uses to determine class combine (with the associated weights) to create a "socioeconomic index":

Socioeconomic Index=

(Occupation X 12) + (Income source X12) + (Income X 7) + (Wealth X 14) +

(Education X 7) + (Dwelling area X 15) + (Class Consciousness X 7) +

(Housing X 12)

As you can see, wealth is the largest contributor to the class standing, and coincidentally it is the factor that is the most at risk in this current economic climate. I believe that there will be a significant entry into the upper middle class by those who were once firmly entrenched into the upper classes! While that may not seem like a big deal to many, it is damn big deal to those who are moving down the ladder. This also means, that there will be some space for others to move (relatively speaking) up the ladder. One man's (or woman's) misfortune is another's opportunity. I believe this blog can not only be used to insure and proof against downward mobility for those in the upper strata, but can also be used by those in the lower, middle and lower upper strata to rise upward a notch or even two. Social Mobility is the name of the game in times of severe dislocation - times like we will ikely be experiencing soon.

Lower Strata

Underclass/Poor

 
 

Working Poor

 

Middle Strata

Lower Middle Class

 
 

Upper Middle Class

 

Upper Strata

Lower Upper Class

<-- 20% to 30% of Veritaseum users are here, roughly 1,000 of you! We would like to diversify and smooth this out...

 

Higher Upper Class

 

  Now, in term of wealth (not social class and influence, just wealth) we can split the upper strata into three different categories (there are only two above because of the other factors that come into play when social class or socioeconomic standing is taken into consideration). There is the poor wealthy, those guys and girls that are just a hair's breath from being pulled into the upper middle class strata due to marginal wealth. This would be the $1m to $10m net worth crowd, who rely on business profits, salary and investment returns for income. The next would be the middle strata of the wealthy, hailing between $10 t0 $100 million in Net Worth, and then there is the upper strata wealthy at above $100 million. Each of these three strata of wealth represent, in my opinion, distinct behavior tranches in terms of discretionary expenditures, investment, and politics and (what passes as, this is a story for another post) philanthropic activities.  

 

Demographic

Source of wealth

Net Worth

Lower strata wealthy (High net worth)

Service professionals, corporate executives, entrepreneurs, inheritors

Salaries, stock options, restricted stock, small business profits, investment returns

$1 m to $10 m

Middle strata wealthy (Very High Net Worth)

Corporate executives, entrepreneurs, inheritors

Business ownership, investment returns, salaries, restricted stock, stock options

$10 m to $100 m

Upper strata  (the truly Rich!)

Entrepreneurs, inheritors, very few CEOs

Business ownership, investment returns

$100 m to several $billion

A trip to practically any decent sized yacht club or recreational vehicle port reveals the relatively stark differences in discretionary spending behavior. The first strata can be found in the 36 ft. to 68 ft. yacht docks (where a captain is optional, but not mandatory and you really don't need a crew). The second strata can be found 50 ft to 120 ft docks, where captains, crews and semi-custom fiberglass boats abound. The third strata are almost exclusively in the super yacht category, where the carrying cost alone for these (basically waste of money) fully custom built hulls and vehicles are about million a year to start with. You can also see the other social economic strata as well, upper middle class in the 20 to 35 ft boats, the middle and working class in the considerably smaller fishing boats - as opposed to the ultra fast Viking and Hatteras deep sea fishers, etc. It is an interesting and instructional study in social studies and anthropology just walking along your local docks! Once you are aware of how these things break down, you will see many settings in a different light.

Many of those in the higher strata would not be there if they had to compete on a more level playing ground. Alas, elimination of said level playing ground is a goal of those in the upper strata. The problem with that is that such behavior is good for the individual in the upper strata, but bad for society in general for it prevents efficient utilization of human capital. Basically, the best people don't get to do the most things, because they are blocked by those of lesser capability but greater access - access to infrastructure and access to knowledge.

Enter Veritaseum. Our business is to supply said access. We offer knowledge...

Access our knowledge through our proprietary research, analysis and education courses.

We offer access to infrastructure through our gateways to the peer-to-peer capital markets...

If one purchases our research (anything besides the introductory course) we will offer a 5x gold smart contract as a perk. Basically, we will give you a 5% rebate in the form of a Veritaseum smart contract that pays you the price of gold (or a gold index), levered 5x up to a stated maximum. This is a perfect way to both learn and get introduced into the new P2P capital markets and smart contracts.

 

 

 

Tuesday, 13 September 2016 12:14

These Handsets are Hot!

Samsung's Note 7 release has turned out to be an absolute fiasco. The latest incident is a Note 7 alleged to have exploded and set a Jeep on fire.

Nathan Dornacher claims the Galaxy Note 7 caused the fire

This looks and sounds bad, and apparently has (or will) cost the company billions in recall expenses, reparations and replacements. Reputation risk is no small deal either. Let's face it, this looks very bad. It feels bad for investors as well, with billions of dollars of market cap disappearing. As bad as it may look, keep in mind the media is giving a less then comprehensive view of the situation. I have found roughly 35 to 40 incidences of burning or exploding Notes. If one were to divide that by the approximate amount of Note 7s sold (2.5 million), it would be roughly .0000148, or just over a thousandth of a percent. The number is not even great enough to determine that there is a problem with the Note 7 in particular. Alas, due to the social and mainstream media exposure, it has not choice but to recall. The FAA has banned use on airplanes (despite the fact you'd have similar odds of the airplane itself crashing).   

Now, I'm sure many of you may disagree with my statisctical view of the situation, but if I'm wrong then iPhones are a risk that need to be recalled as well. I

've found just as many (possibly more) cases of iPhones catching aflame and exploding than that of the Note 7 with just a cursory search.

Untitled

The major difference between the Note 7 incidences and the iPhone incidences is that people were serverely injured in many of the iPhone occurences and Apple has (at least according to my cursory research) done very little to remedy this as compared to Samsungs respones. I would chalk this up to the Note 7 incidences getting much more exposure than the iPhone incidences. 

Short Samsung long LG Veritaseum contract
 
A damaged iPhone that caught fire and burned through a man's jeans after it was bent in an accident.A damaged iPhone that caught fire and burned through a man's jeans after it was bent in an accident.

EDMONTON — Twice in the last week, an Alberta family has been forced to flee for their lives after a charging cell phone burst into flames, part of a rare worldwide phenomenon in which smartphones occasionally transform into tiny Presto logs. In Rimbey, Alta., 16-year-old Josh Schultz woke up surrounded by flames after his iPhone combusted in the middle of the night. The family managed to get the blaze under control, but not before Schulz had suffered third-degree burns, and the house had been rendered temporarily uninhabitable.Three days later, an Edmonton fourplex was evacuated in the wee hours of the morning after a charging cell phone began shooting out flames.

She said his iPhone unexpectedly began to smoke and melt, causing first- and second-degree burns. NewsChannel 5 on Your Side has been following cases of exploding smart phones for months. While it's happened across the country, this is one of the first documented cases that's occurred in the St. Louis area. "We were panicking and freaking out. I'm like 'Oh my god, my son is on fire!'" said Michelle Terry of St. Peters.

If you do a search, you can find dozens more, particularly surrounding the iPhone 6/6s series. It remans to be seen if Apple will get the negative publcity backlash that Samsung has recieved, but for some reason I doubt so. The Samsung affair was a strong opportunity to short the stock/ADR. If you missed that, we can wait around to see if the company that avoided the mistakes that Apple made and that Samsung unwisely followed. What mistake is that, do you ask? They both opted to seal in their potentially highly reacgive Lithium batteries, case of form over function. Apple should have been able to take advantage of Samsung's problems, but the iPhone 7 is just so far behind the Note 7 in terms of capability, they simple stand very, very little chance. As a matter of fact, sans a recall it's quite likely that the Galaxy Note 7 would have trumped the iPhone 7 Plus.

Very recently, a compettor of both has announced a flagship device that likely puts the iPhone 7 plus to shame and gives the Note 7 a good run for its money. That company is LG.... and guess what? It has a removable battery and an all metal, aviation grade body. A removable battery design would have saved Samsung over $1.7B, since they could have sent out new batteries in instead of recalling all devices.
Even Apple afficiandos are underwhelmed by the progress of Apple tech relative to Samsung's. While most have said the Note 7 is the best thint since sliced bread, not having it doesn't do anyone any good, and then there's that exploding thing.
LG has come up with just the right device at just the right time. According to one reviewer
Similar to previous LG phones, the more I use it, the more I like it. Also, the longer I use the LG V20 with the Note 7 now returned to T-Mobile, the possibility that I go for the V20 rather than the Note 7 increases as well.
Another reviewer detailed what makes this device ideal for a growing minority, yet influential section, or the smart phone population - the media producers (in contrast to consumers):

Made for Multimedia

Unlike the G5 and its modular system of third-party hardware add-ons, the LG V20 comes with a built-in quad-DAC made by ESS. LG reps made a swipe at the disappearing headphone jacks on some competitors—like Apple’s rumored iPhone 7 and Motorola’s Moto Z saying that the DAC can be used with high-end headphones to enjoy higher fidelity music. ESS reps in San Francisco informed me that the DAC on the V20 supplies enough power to power high-end headphones that traditionally would require an additional power source. When you load the V20 with uncompressed audio files, plugging a pair of headphones into the smartphone will give you a more high fidelity listening experience with the built-in DAC. For comparison, the modular DAC on LG’s G5 costs roughly $199, but the accessory isn’t even available for sale to date for US customers.

LG also said during its keynote that for a limited time, the V20 will ship with earbuds from Bang & Olufsen.

Better Audio Production

Screen Shot 2016-09-07 at 12.12.34 AM.png

The V20 comes with three high fidelity microphones, which LG claims will record better sounding audio files and better videos. The microphones will help to reduce audio clipping in noisy environments, LG said during its presentation. This means that you can capture clip-free audio from concerts with studio quality-like recordings, according to an LG spokesperson. LG also included its Hi-Fi Audio capture app to allow you better control of your audio recording with more fine-tuned settings.

Below is a Veritaseum Smart Cotnract allowing you to swap Samsung equity exposure (on the Korea Stock Exchange) for LG equity (KS) at 3x leverage (using a digital multiplier). No broker, risk or legacy stock exchange needed. No counterparty or credit risk to deal with.

Short Samsung long LG Veritaseum contract

thumb Slide7

Let's quote some of the last lines of my last article on Bitcoin: "Witness the drivel that comes out of the the analyst's reports (and yes, I thoroughly ridiculed each one):

  1. Theres' Something Fishy In The House Of Morgan, Pt. 2: Bitcoin Fear, Envy & Loathing
  2. Does the Mainstream Media Assist Wall Street In Hypocritical Hypothesis For Fear Of The Next Paradigm Shift?"

You see, first JP Morgan threw baseless fear tactics, then Citibank jumped into the fray. Well, guess whose next? Goldman Sachs, of course. Everybody's favorite fair game player. As excerpted from Business Insider today:

"Dominic Wilson and Jose Ursua of the firm's markets research division are first up. They argue that Bitcoin fails to meet both basic criteria of a viable currency: while there remains an outside chance for widespread acceptance as a medium of exchange, as a stable source of value, it has so far failed. That undermines the premise that Bitcoin could serve as a way of short-circuiting exchange rates in inflation-prone countries."

 And Reggie, Chief of Bullshit Patrol & Related Crimes Division chimes in with a Google search on promintent "failed" currency processors:

Bitpay user growth google searchcoinbase user growth google search

But wait a minute! Goldman's business business is growing at a fraction of this pace, and actually negative in some areas. So, if Bitcoin as a currency and payment system is a failure, what the hell is Goldmam? Of course, Business Insider goes on to report...

For most users what matters is not the comparison with other currencies, but a comparison with the volatility of the currency that they hold (dollars in the US for instance) in terms of the things that they need to buy. The volatility of consumer prices (in dollars) has been even lower than FX rates, even if measured over a period including the 1970s. Put simply, if you hold cash today in most developed countries, you know within a few percentage points what you will be able to buy with it a day, a week or a year from now.  

This is Bullshit! Say it to the more mathematically challenged, my bonus hungry friends. Let's run the math using the usinflationcalculator.com:

Dollar as a store of value

As you can see, if you measure things from the '70s as the esteemed, erstwhile Wall Street aficiaondo from Goldman recommended, then you would have less than 17% of your buying power left. Yes, bitcoin is volatile, but its volatility stems from the price going up and down, while the USD has primarily just went down. You know that saying about the frog in the slowly heated boiling pot of water, right?

In addition, both of the largest Bitcoin payment processors absorb the exchange rate volatility for their customers, or did the best of breed Goldman analysts somehow overlook this pertinent fact?

How it Works - BitPay https://bitpay.com/faq

Back to those Goldman guys...

Wilson and Ursua include this graph showing volatility of Bitcoin versus the Argentine peso, the yen, the euro, the pound, and U.S. inflation. It's not even close. 

bitcoin volaitlity

But wait a minute! If the largest payment processors absorb the volatility and market risk of their customers, then Goldman must assuredly be referring to the currencies above from an investment perspective, no?

Yes! Bitcoin is truly volatile, indeed, but the guy at Goldman are cheating, hoping that the rest of us don't know our finance and/or basic common sense. You see, they are looking at just one side of the equation - the side that favors fiat currencies and disfavors bitcoin. You see, risk is the price of reward. For every reward you seek, you pay a price in risk. The goal, as a smart investor, is to pay little risk for much reward. Goldman is trying to make it appear as if you are paying nothing but risk for bitcoin and getting little reward in return. Let's see how that pans out when someone who knows what they're doing chimes in. From the BoomBustBlog research report File Icon Digital Currencies' Risks, Rewards & Returns - An Into Into Bitcoin Investing For Longer Term Horizons:

Bitcoin risk adjusted returns

You see, with high volatility (aka, risk), it's hard to earn your cost of capital, not to menton surpass it. Isn't that right, employess of Goldman Sachs? Let me jog your collective memories, as excerpted from the BoomBustBlog post on When the Patina Fades… The Rise and Fall of Goldman Sachs???

GS return on equity has declined substantially due to deleverage and is only marginally higher than its current cost of capital. With ROE down to c12% from c20% during pre-crisis levels, there is no way a stock with high beta as GS could justify adequate returns to cover the inherent risk. For GS to trade back at 200 it has to increase its leverage back to pre-crisis levels to assume ROE of 20%. And for that GS has to either increase its leverage back to 25x. With curbs on banks leverage this seems highly unlikely. Without any increase in leverage and ROE, the stock would only marginally cover returns to shareholders given that ROE is c12%. Even based on consensus estimates the stock should trade at about where it is trading right now, leaving no upside potential. Using BoomBustBlog estimates, the valuation drops considerably since we take into consideration a decrease in trading revenue or an increase in the cost of funding in combination with a limitation of leverage due to the impending global regulation coming down the pike.

gs_roe.jpg

 

 Now that we see how hard it is to truly produce Alpha, I query thee... What do you think would happen if a financial maverick, an out of the box thinker who's different from all of those other guys, got a seed round of funding for the most disruptive product to hit the finance world since the printing press? What if that seed round was for enough money to make UltaCoin one of the best capitalized Bitcoin entities, ever - with a preferred A series coming right behind it? What would such a cash flush company do with that maverick guy whose been getting all of these trends right at the helm? Hmmmnnn!!!

Speakin' of Goldman Sachs...

I anticipate being in the market very soon for (I'm not thier yet, but hopefully very soon):

  1. CTO - Chief Technology Officer
  2. COO - Chief Opertating Officer
  3. General Counsel
  4. CMO - Chief Marketing Officer 
  5. CFO - Chief Financial Officer
  6. As well as skilled Java and Blockchain developers.

Hit me via reggie at ultra-coin.com if you have an interest in coming on board.

My Twitter Updates

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ReggieMiddleton Sranding in front of an actual African slave dungeon at Cape Coast, Ghana. This is where make African slaves were h… https://t.co/COV3w8vIri
About 22 hours ago
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ReggieMiddleton VeADIR Changelog 19.06: - Asset details charts timespan selection - Google tag manager - Deep link for trust wallet… https://t.co/kswGwcqi00
Friday, 21 June 2019 08:13
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ReggieMiddleton @gonbop Whoever wants a true stable asset, that's who! Gold is the original "stablecoin".
Tuesday, 18 June 2019 08:09
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ReggieMiddleton @tjkuba Absolutely, go buy some KG of gold, in fractions or whole, now https://t.co/ameNSGLjEe
Tuesday, 18 June 2019 08:08
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ReggieMiddleton Changelog of last VeADIR release. Who's the most powerful DiiFi (Distributed Finance) app in the world? Go see for… https://t.co/4zkJS0POgJ
Tuesday, 18 June 2019 07:41

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