The Biden victory party is over, and now the hangover sets in...
There's a definite risk-off vibe to markets this morning.
A short pause in the early excitement or the start of the big selloff?
Probably the first one to be honest.
Feel free to abuse us on Twitter if it's the start of anything more.
As it's Friday, let's be original (lazy) and go with the Stimulus Hopes Falter narrative.
Republicans bludgeon Biden's big stimulus plans
Senate Republicans vowed Thursday that President Joe Biden’s coronavirus relief bill will not get 60 votes, daring the White House to either compromise with the GOP or use partisan procedural tactics to evade their filibuster.
“We’ve already given $5 trillion,” said Sen. Tommy Tuberville (R-Ala.). “It’s too high. It’s too vague ... I don’t want to just throw money out there.”
Some Democrats acknowledge what Biden is presenting will not be embraced by the Republican Party and say his proposal is just the first step toward an eventual compromise with the GOP.
The alternative is to scrap efforts at bipartisanship and try and pass Biden’s first legislative agenda item unilaterally, which could always be a fallback plan.
“Some of the elements will draw very strong bipartisan support,” said Sen. Tom Carper (D-Del.), a close Biden ally. “What we need to do is just work hard to find a good principled compromise.”
Talks are unlikely to get serious until March when some of the measures in the previous package will expire...
Away from the stimulus chatter, tax increases are also on the agenda (although just as tricky to reach agreement on), with Bloomberg reporting Yellen Leaves Door Open to Tax Increase on Wealthy Americans
Bitcoin - Is This The End?
After all, Bitcoin did drop below $30,000 in an 'Ominous Sign for Crypto Rally'...
“Being Bitcoin, a 10% range intraday is a mere flesh wound to the digital asset, in a world where tradable versus investible is seriously blurred,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte.
The digital coin could “easily be $35,000 again tomorrow or could drop through $30,000 and test notional support at $27,000.”
This volatility is normal for Bitcoin.
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Cryptos Won’t Work as Actual Currencies, UBS Economist Says
It's an argument over definitions more than anything else.
A “proper currency,” as Donovan termed it, can be a stable store of value, providing certainty that it will be able to buy the same basket of goods tomorrow as it buys today. That confidence is derived from central banks’ ability to reduce supply when demand is falling. There is no such mechanism for switching off supply on most cryptocurrencies, and therefore their value can slide -- leading to a collapse in spending power.
“People are unlikely to want to use something as a currency if they’ve got absolutely no certainty about what they can buy with that tomorrow,” Donovan said in the video.
While some argue about what defines a currency, Utrust spotted a problem that needed solving...
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While we're on the crypto bandwagon, a few headlines did the rounds recently...
Tether Regulation Proposal ‘Apocalyptic’ for Crypto
The proposal for greater regulation of stablecoins like Tether may well change the dynamics of the crypto market and, but Dan Held (Kraken) has written an excellent piece debunking the Tether 'FUD'.
Don't fear Tether
Whenever Bitcoin has a bull run, naysayers try to cope with missing the boat by rationalizing why it will fail through “Fear, Uncertainty, and Doubt” (FUD).
Most of these are completely unsubstantiated, but annoyingly persist as negative narratives Bitcoin must fight against.
"The amount of energy needed to refute bullshit is an order of magnitude larger than to produce it.” - Brandolini's law
It's well worth a read.
Back to the global economy....
Thought you'd heard the last of Brexit, didn't you?
We're keeping the nostalgia alive in the latest edition of Media Hysteria Meets Reality
That man won't be happy reading this today...
Brexit deal gives Nissan a competitive advantage, boss declares
Chief operating officer Ashwani Gupta says trade deal that avoids export tariffs safeguards Sunderland plant and tens of thousands of jobs
“Brexit for Nissan is a positive. We’ll take this opportunity to redefine the auto industry in the UK. In certain conditions, our competitiveness is improved. For some of the cases, it is at par. It depends on which car, but competitiveness is definitely improved in electric vehicles.”
"Sunderland is one of the top three plants in the world for competitiveness for Nissan. Brexit gives us the competitive advantage in the UK and outside."
Economics > Politics
Looking ahead, it's PMI day! (Are PMI's useful or useless?)
The PMI's will give us a snapshot of how things are evolving with the latest series of lockdowns.
The rest of the data should be minimal impact or well out of date (looking at you Canada - two months to release the retail sales for November?)
Keep an eye out for Biden 'delivering remarks on his administration’s response to the economic crisis and sign executive orders' at 19:45 GMT too.
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