Witness Drops Bombshell at House Hearing: Hedge Funds Are Getting “100 Times” Leverage on Crypto

Yesterday, the House Financial Services’ Subcommittee on Oversight and Investigations held a critically important hearing on the crypto craze that has engulfed U.S. financial markets. The hearing was titled: “America on ‘FIRE’: Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?”

Before the witnesses could testify, the Republican Ranking Member of the Subcommittee, Congressman Tom Emmer of Minnesota, delivered Alice in Wonderland opening remarks that downplayed the legitimate concerns of the hearing and effectively characterized crypto as the best innovation since sliced bread. (Emmer is a former registered lobbyist in Minnesota and his Congressional campaign coffers are stuffed with money from the financial services industry.)

It didn’t take long, however, for that farcical assessment to collapse under the weight of testimony from a Wall Street veteran, Alexis Goldstein, who is the current Director of Financial Policy for the nonprofit group, the Open Markets Institute.

Goldstein was asked by Congresswoman Maxine Waters about a survey released earlier this year by the accounting firm, PwC, which indicated that 1 in 7 hedge funds have 10 to 20 percent of their total assets under management invested in crypto. (Equally frightening, the same survey found that 86 percent of the hedge funds currently investing in crypto intend to deploy more capital by the end of this year.)

Goldstein responded that the public has already witnessed this year the collapse of the family office hedge fund, Archegos, which demonstrated that when banks have prime broker relationships with hedge funds it can create losses at the banks, which hold federally-insured (taxpayer-backstopped) deposits. (Large global banks lost more than $10.4 billion when Archegos defaulted on its margin loans to the banks in March.) Goldstein explained:

“If hedge funds get farther into crypto, they don’t care about direction. They’ll go long, they’ll go short. They can use leverage. There are lots of cryptocurrency exchanges like FTX and Binance and many others that allow people to use insane amounts of leverage – 100 times to 1…So what happens if a huge number of hedge funds have prime broker relationships with too-big-to-fail banks [and] all happen to be in similar crypto positions, whether it’s long or short and there’s massive volatility in the market. They may have to sell some of their other assets. It may lead to margin calls in their non-crypto assets which could lead to forced liquidations and sort of redound to the banks themselves in the form of counterparty risk.”

Not to put too fine a point on it but counterparty risk is what led to the financial contagion that crashed Wall Street in 2008, leading to the worst economic crisis in the U.S. since the Great Depression of the 1930s. (For a nightmare snapshot of what insane leverage and interconnectivity looked like at that time, here’s a chart of Goldman Sachs’ derivative exposure to other banks as of June 2008.)

Waters then asked Goldstein if there was any transparency on which specific hedge funds held the largest positions in crypto and who their counterparties are. Goldstein responded that crypto is not currently reported on the 13F forms that hedge funds are required to file with the SEC so regulators are currently “totally in the dark.”

Hmmm. Darkness and 100 to 1 leverage. What could possibly go wrong?

moar

https://wallstreetonparade.com/2021/07/witness-drops-bombshell-at-house-hearing-hedge-funds-are-getting-100-times-leverage-on-crypto/

>>68096

Japan gives up on restarting workplace vaccine program

Japan will abandon restarting its highly touted mass vaccination campaign at workplaces and universities because demand for the doses has far exceeded supply, government sources said.

Inundated by applications from companies and universities, the government stopped accepting new ones as of 5 p.m. on June 25. The inoculation campaign uses the Moderna vaccine. Taro Kono, the administrative reform minister who is in charge of the COVID-19 vaccine rollout, has said Japan will not order additional supplies of Moderna vaccines. At a news conference on June 29, Kono said he “will announce a policy of some kind” this week. The announcement will likely be the decision not to restart that vaccination program, according to the sources.

The government started scrutinizing the applications to see if companies and universities have requested more doses than they need. But a top official of the prime minister’s office said, “It is difficult to continue using Moderna vaccines for the workplace project.” The government has promised to distribute 50 million doses of the Moderna vaccine, enough to inoculate 25 million people, by the end of September. Of that volume, 33 million doses are expected to go to companies that can inoculate at least 1,000 people as well as universities. The application process began on June 8, and some companies and universities started inoculating staff and students from June 21. As of 5 p.m. on June 25, applications for about 36.42 million doses were filed in the company-university program. According to the sources, the remaining 17 million Moderna doses are expected to be used by local governments. “Any leftover doses should be diverted to the mass vaccination programs of local governments,” the official at the prime minister’s office said. Applications for about 12 million doses have been approved for local governments’ mass vaccination sites, while applications for another 12 million or so doses have been received but approval is pending.

To cover the expected shortage of Moderna vaccines for these sites, the government will divert Pfizer vaccines from municipal governments’ vaccination programs.

http://www.asahi.com/ajw/articles/14384199

Fed's Bullard warns inflation could be higher than expected in 2022

St. Louis Fed President James Bullard says US central bank needs to begin tapering discussion.

A recent burst of inflation could prove more long-lasting than expected as the surging U.S. economy faces widespread bottlenecks that have severely disrupted the global supply chain, a Federal Reserve official said on Thursday. St. Louis Fed President James Bullard predicted that prices for most goods and services will continue to climb in 2021 and 2022 after companies were thrown off by the speed of the economic recovery from the pandemic and the wave of pent-up demand among consumers who are flush with cash. "Those things I don't think are as easy to fix as some people think," Bullard said during an interview with FOX Business' Maria Bartiromo. "We're going to see continuing price pressure well into 2022."

Bullard's comments come as policymakers at the U.S. central bank grapple with how to handle conflicting economic data: While inflation is on the rise – in May, the government reported that consumer prices for goods and services rose 5% in May from a year prior, the fastest year-over-year jump since 2008 – job growth has been mostly lackluster. There are still some 9.3 million Americans out of work.

During their two-day, policy-setting meeting in June, Fed officials unanimously voted to hold interest rates near zero, where they have sat since March 2020, and committed to keep purchasing $120 billion in bonds each month. But updated economic projections released by the Fed showed that officials expect to raise rates twice, to about 0.6%, by late 2023, in part due to heightened expectations for inflation.

"The risk here for us policymakers is that there's still upside risk to inflation," Bullard said. "Even though we're going to have higher inflation this year, it could even be higher than we anticipated, and it could be higher than we anticipated next year. We have to be ready for that situation."

The Fed gave no signs in June that it was imminently considering scaling back its aggressive bond-buying program, even though policymakers raised headline inflation expectations to 3.4% for 2021 – a full point higher than the March forecast. But Bullard suggested on Thursday that it was time for officials to "get moving" on the tapering discussion. "The U.S. economy is really roaring forward coming out of this pandemic," he said. "We're getting bottleneck and inflation concerns, and I think we're going to have to be attentive to those concerns."

Longer-term projections show that Fed policymakers expect inflation to settle around 2% in the future. Although Chairman Jerome Powell has said price spikes "could turn out to be higher and more persistent than we expect," he's maintained that any inflation acceleration is temporary.

https://www.foxbusiness.com/economy/feds-bullard-inflation-expectations-2022

>>68115

>>68121

a gimme a few

>>68134

eberbody been doing it moar or less.

If you want to keep that up going forward no issues here.

Not a big deal to do it though been doing 2x day lately or when they are finished

Just depends on wut going on here.

>>68138

I'll keep doing qrb until you say not to

>>68141

all yours AAA

>>68143