TwoCitiesCapital

Now out of all the COIN that I added @ $48. A double in a month.

Seeing as most crypto buyers are men, are we to understand that they likely know more about the tokens? And thus sales to men are securities and sales to women are not?

So you're saying if I sell my Fairfax as a collectible, to someone dumb enough to buy it as such, that Fairfax stock seizes to be a security? Which would also imply that I owe no capital gains on the transaction, right? All because the buyer bought it under certain representations that may, or may not have been, true? The "reasonable" belief of profit comes from the legal entitlements of what is being bought/sold. Not because of some verbal/nonverbal understanding of the parties participating in the transaction. If that is the case, every single transaction for any single thing needs to be reviewed by a court to determine if its a security based on the "understanding" of the parties involved. This is such a stupid interpretation - the identity of the buyer determines their acumen which in turn determines if the underlying thing being bought and sold is a security rather than any characteristic of what is being bought and sold itself.

Ripple wins case against SEC for XRP sales to public, but XRP sales to institutions are still considered an unregistered offering of securities/investment contract?!?! How does the identity of the buyer change whether or not what is being bought or sold os a security? If you sell to an institution, it's a security. If that institution turns around and dumps those exact same tokens on the retail public via an exchange, it's NOT a security?!?! What is wrong with these people?

Surely the intended title was "software"?

PPI came in @ 0.1% YoY. Much of 2022 was spent w/ PPI above CPI which is what led margin contraction as companies couldn't pass through price increases that were quite as large. Now for much or 2023, we've had CPI above PPI which could point towards margin expansion as prior prices increases are outpacing current input prices. I still expect corporate earnings to contract, but it could be the weakening of the dollar and the flip in the PPI/CPI relationship gives us a small reprieve while we wait for drop in consumer spending.

Hilarious. Who'd have thought?!?!

I mean, it was @ 4.25% in October so not sure what taking out 4.08% does, or means, if anything. If we get another hike out of the Fed this month, I can see the 10-year hitting 4.25% again - and again would view it as an opportunity to add duration and high quality spread product (like mortgages).

I'm actually thinking the recessionary scenario is better for Fairfax than status quo now that they're locking in duration. Having $1B+ per year in stable interest income and/or billions on capital gains from Treasuries in a rate cur scenario gives them plenty to work with in the case of credit dislocation. This will be especially true if they start pairing down the TRS position prior to any recession taking away a potential liquidity drain from a dropping share price. Credit spreads haven't budged yet, but the pace of bankruptcies in the US is currently at levels that have previously seen 8-10% HY spreads (currently at ~5). If the Fed keeps hiking, I'd expect the pain will become more acute and we could see absolute mayhem in corporate spreads - IG and HY. That environment would give Fairfax the potential to reinvest gains/income at significantly higher rates than the 4-6% currently available to them

Hard to say. Was hundreds of millions, if not billions, in foregone income. There's also the potential opportunity cost of the compounded returns on those dollars. During this period of time they also sold and repurchased subs to fund growth - they could've sold less, or at a higher valuation, if they had higher book values and could've been better capitalized to write more business when the market did get harder post-covid. How much does all that equate to versus the last 12-15 months of higher interest income and not writing down intermediate bonds? Hard to say. But this time around, I'm glad that they're locking in some of the winnings instead of pressing the bet.

+1 My preference would be that they STOP taking huge swings on the bond portfolio. Selling everything and moving to short term bonds in 2016 meant shareholders missed out on a ton of interest income from 2016 - 2022. They appeared right upfront, but then missed the turn, and we sat at declining interest income to near 0 for 6 years without any real tangible benefit to book value and etc. I don't mind them taking active bets in fixed income, but to push the ENTIRE portfolio on a single view is crazy to me - even if the largest risk was giving up 100% of upside as opposed to the risk of loss. I'm glad to see them reducing the size of this massive bet on rates given that they missed the turn last time around.

Historically, you've gotten single digit P/Es. Probably won't be that severe again, but I could see them coming back below the 16x average from the current 20+ which would be another 25+% decline assuming earnings remained stable - But as 2022 demonstrated, earnings will likely lag inflation and thus contract corporate margins and profits until it slows and their prior price hikes can flow through to the bottom line.

That's what I was getting at. Not that SVB had been subject to the same public stress tests as the SIFI banks, but they WERE regulated by the same agency and oversight (though held to different rules). But the point is, even though the agency responsible for their regulation was ALSO the one responsible for raising rates, at no point did they say "what happens when we raise rates and should that be considered in these banks governance and regulations". I don't think you're gonna glean much from the stress tests this time around because nobody is asking what happens if the system hemorrhages deposits for the next 6-months, credit losses rise 1-2 pts, and treasuries are at 6% and still hampering bank liquidity. And even if you take all of that into account - it's still probably NOT going to help you identify where the panic starts which is all that really matters for these liquidity driven failures.

This was my thinking as well. How many of the stress tests showed SVB failing before it did? These are only good as a confidence builder if we assume deposits remain static. As it stands, they're not and system wide deposits decrease basically every week. With the Fed jawboning additional rate hikes, the hemorrhaging will continue and will be felt unevenly across the industry. There will be more failures and I doubt that these stress tests will necessarily help you identify which one.

Clumsy wording, but mayhaps correct given that the industry has been underestimating the frequency and/or cost of extreme events for the last 20+ years. Perhaps this is an admission that 0.4% is what the models predict, but that it will be MORE frequent than that given the increasing frequency of large scale disasters relative to the insurance industry history

Earnings have been falling. Whether they continue to do so or not remains to be seen, and whether it accelerates or not as leading indicators suggest, remains to be seen, but directionally bears have been right on earnings and economic fundamentals. Both have continued to deteriorate and fall and have been for a few quarters now. All that we've really been wrong on so far is that stocks would reflect those deteriorating fundamentals. And while the last 6 months or so have definitely called that into question, I dunno if I'm comfortable saying "yea, fundamentals don't matter. Buy stocks whatever the valuation at whatever the fundamentals because they always go up" as my investment strategy. I've been re-adding materials and energy names that I trimmed heavily in 2021/early 2022 at prices significantly below what I locked in before. I'm getting paid 6-8% in the low risk fixed income that I'm in. And While crypto dragged down last year despite excellent asset allocation/stock selection otherwise, this year it's carrying the portfolio back up so... I'm content to wait.

That's just simply not true. Otherwise we'd have all seen the spike to 130k... And Huobi isn't even top 10 per your own list. KuCoin is barely there (and not terribly familiar with why KuCoin is considered problematic TBH)

Based on these figures, Coinbase Pro and Kraken are ~20-25% of the volume with the Cayman Islands and Seychelles taking the rest (of the top 10). If we're assuming that most of the trade volume on Binance is fake, we should be excluding it from the calcs on % of total volume. As far as Binance being the 800 lb gorilla, I dunno if it "matters". Liquidity on Binance was so low BTC spiked to 130k a day or two ago. That spike wasn't reflected on other spot exchanges NOR did it seems to impact futures markets and contracts. I don't see how Binance is such a systemic problem if they're not being used in the reference basket for spot prices and trading aberrations like spikes to 130k aren't impacting other exchanges. Secondly, you said that the SEC didn't approve BTC futures but the CFTC did, in part, because of the sophisticated investors who trade derivatives. But the SEC DID approve the Futures based ETF without having similar reservations about spot-price manipulation which impacts the futures reference price. If it's sophisticated investors trading the actual futures, who did the SEC approve the ETF for? They also just approved a 2x leveraged BTC futures ETF: https://www.coindesk.com/policy/2023/06/23/leveraged-bitcoin-futures-etf-to-start-trading-tuesday-sponsor-says/ Who do you suppose that was approved for? The concept that spot prices are too manipulated to have a spot ETF, but to not trade leveraged and double leveraged derivative products that have the same spot reference is insane.

+1 I expected to see 100+k this last cycle, but obviously didn't make it. Hard to say where we might top out, but I think 150k, give or take, would be well within historical limits. Only question is does adoption accelerate if an ETF is approved which could push us beyond that. We'll see in 2025.

It's funny that is what you take from the historical booms/busts. Because what I've taken is every bottom in BTC has been higher and every top has been higher and adoption has continued to explode despite price action. Sounds like a secular growth trend to me. Naysayers have had 14 years to be right and they're still waiting. Would also add, if you truly believe that the trade volume at Binance is nearly all fictitious, then we're already at the point where trading is dominated by western regulated exchanges - sounds like an ETF should be imminent, no? No reason we can't define the spot markets the ETF looks at for NAV/price to be those that remain.

I use Ledger for my hardware wallet purposes. I've had no issues with them. Might change in the future as additional functionality/competitors are released, but at the time I bought it Ledger/Trezor were basically the only options anyone recommended. Perhaps this is where the exchange from Citadel, Fidelity, and Schwab that was just announced fits in. If Binance gets shut out of the US, much of it's volume will likely move to Coinbase, Kraken, and this new venture. I dunno how dated the 62% figures are, but supposedly Binance has lost 70-80% market share since the SEC filing so I imagine that migration is already occurring and Binance is no an insignificant portion of crypto volume. That would also explain the "flash pump" to 130k on Bitcoin that Binance had yesterday - no liquidity left available on the exchange.

Even those who haven't held off might prefer the tax treatment in retirement accounts - as well as the commission-free nature of many brokers. I'm fairly certain it's here to stay and adoption will only continue. I don't have the technical aptitude to understand exactly how BlackRock and Fidelity's requests differ from all those that came before, but I have to imagine they're not just submitting the same stuff expecting the same outcome as everyone else.

I'm gonna guess you haven't been sky diving, eh? It's a thrill! You could literally make this argument about anything though. Planes? At one time we're pretty dangerous. Upside was getting somewhere faster. Downside was death. Why ever travel by plane?!?! Interstate highways? Upside is getting somewhere faster. Downside is likelihood of a high speed accident increases significantly. Why risk death/dismemberment/paralyzation when you could just get there slower? I tend to think this argument is better applied to fat tails and generalized to populations than any one instance/person. I.e. nuclear safety regulations need to consider the consequences of infrequent, but catastrophic, failures. Car makers? Not so much.

First BlackRock and now Fidelity. We'll see if they're successful where others have failed, but the big dogs joining the fights seems to suggest the tide may be turning. https://coingape.com/fidelity-investments-reportedly-filing-blackrock-type-spot-bitcoin-etf-acquire-grayscale/ Also, as an owner of GBTC with hefty exposure from steady trading/accumulation over the last 18 months, I'm here for a buy-out and the resumption of being able to exchange shares at NAV.